As June 30th creeps closer and closer, many South Aussie business owners are juggling the usual end-of-financial-year (EOFY) chaos, outstanding invoices, super payments, tax obligations and cash-flow headaches. This year, the experts from Universal Finance Commercial say there’s another major change on the radar that could catch businesses off guard if they leave things too late.
According to Universal Finance Commercial’s Adelaide-based finance specialists, changes to ATO interest charges and tightening lending conditions are making EOFY planning more important than ever.
“One of the biggest issues we see around EOFY is that clients need to account for outstanding tax payments, invoices or superannuation payments that are all outstanding,” shared Senior Commercial Finance Consultant Andrew Pickering.
Andrew explains that timing matters more than many realise, especially when it comes to superannuation. “Businesses must pay superannuation before the EOFY primarily to claim a tax deduction in the current financial year. Not only must it be paid before EOFY, but the payment must also clear in the account before the benefit can be achieved.”
That detail alone could make a huge difference for businesses trying to maximise deductions before June 30th.
Another major shift this year is that interest on outstanding ATO debt and payment plans will no longer be tax-deductible, something they say could significantly increase the cost of carrying unpaid tax debt.
“Businesses must understand that these charges now represent a 100 per cent out-of-pocket expense, significantly increasing the true cost of carrying overdue tax,” says Andrew.
For many businesses, especially those already under pressure from rising costs, that change could have a serious flow-on effect.
Universal Finance Commercial says one of the most common EOFY mistakes businesses make is waiting too long to seek advice or funding support. Andrew says business owners should start conversations with brokers or accountants as early as possible to allow enough time to secure the right finance solution.
And while traditional banks can take anywhere from 28 to 35 days to settle a business loan, non-bank lending options may be approved in as little as 24 to 48 hours. That flexibility can make a huge difference for businesses needing short-term cash flow support heading into EOFY.
Andrew also warns that unresolved ATO debt can impact a business owner’s ability to secure finance in the first place. “ATO debt restricts a business owner’s ability to access finance by reducing borrowing power, damaging credit scores, and flagging financial distress to lenders. Even with a payment plan, unpaid tax is often seen as a structural risk, limiting loan approvals from mainstream banks, but that is where we can assist in refinancing outstanding tax debt and making a plan with the business to ensure they can operate the business effectively.”
As EOFY approaches, the biggest advice from Universal Finance Commercial is simple, don’t leave it until the last minute.
“Act now if you need financial advice, and ask as many questions as you can during the process to ensure the solution fits the required purpose for your business.”
Find Universal Finance Commercial at 3 Dequetteville Terrace, Kent Town SA 5067. For more information, click here.
