The end of the financial year (EOFY) is fast approaching, and as a pharmacy owner, ensuring you wrap up the year efficiently is key to setting your business up for success in the new financial year. With only a few weeks left until June 30, now is the perfect time to review the key tasks that will help you maximise your deductions, ensure accurate records, and prepare your pharmacy for the year ahead.
Below is your EOFY checklist, broken down into what actions to take, why they matter, and helpful tips to guide you through the process.
1. Review and Write Off Bad Debts
Action: Take time to go through your debtors' ledger to see any debtors that require following up and/or identify any customer debts that are unlikely to be recovered. If it’s clear that these amounts won’t be paid, write them off now.
Why: Writing off bad debts before June 30 allows you to claim a tax deduction in this financial year, while also keeping your financial records accurate and reflective of what’s truly owed to your business.
Tip: Maintain a record of all your attempts to recover the debt, emails, phone calls, or letters, as your accountant will need these to justify the write-off to the ATO.
2. Adjust Owner’s Shop Accounts
Action: If you’ve made any personal purchases through the pharmacy during the year but haven’t paid for them, now’s the time to clear these amounts. You can either repay them or record them as drawings.
Why: Leaving personal purchases outstanding in your business records can incorrectly inflate your debtors and misrepresent the financial position of your pharmacy.
Tip: If you plan to repay these amounts, make the payments before June 30. Otherwise, clearly record them as drawings so they’re correctly accounted for.
3. Review and Write Off Shop Consumables
Action: Review any consumables or stock items taken from your pharmacy for business use (e.g. cleaning products, supplies used in-store) and write these off.
Why: Stock that’s been consumed internally won’t generate income, so writing it off ensures your inventory and financial records reflect an accurate year-end value.
Tip: Let your accountant know about these write-offs so they can adjust your end-of-year accounts accordingly and ensure your cost of goods sold is correct.
4. Conduct a Physical Stocktake
Action: Set aside time to do a thorough physical stocktake of your pharmacy’s inventory and compare it to what’s recorded in your system.
Why: This helps identify any discrepancies, overstocking, or shrinkage, and ensures the inventory listed on your balance sheet is accurate for EOFY reporting and tax purposes.
Tip: If doing a full stocktake isn’t practical, focus on correcting any obvious errors, especially negative stock balances or high-value items that are out of sync.
5. Ensure a Clean Cutoff in Your POS System
Action: Make sure all transactions are finalised in your point-of-sale (POS) system and that the system is closed off correctly as of June 30.
Why: A clean cutoff ensures that your sales and income figures for the financial year are complete and accurate, essential for both reporting and tax compliance.
Tip: If your system doesn’t close automatically, do a manual check to ensure everything up to June 30 has been finalised and no sales are left in limbo.
6. Count Cash on Hand
Action: Physically count all the cash in your pharmacy, including till floats, petty cash, and change floats, and record the totals.
Why: Recording accurate cash balances at EOFY ensures your financial statements reflect your true cash position, which is essential for reconciliation and audit readiness.
Tip: Send the final cash count to your accountant along with other year-end figures so they can include it in your EOFY reports.
7. Invoice and Install Assets Before June 30
Action: If you’ve purchased any assets for your pharmacy, such as new computers, shelves, or a delivery vehicle, make sure they’re invoiced and installed before June 30.
Why: To qualify for the $20,000 instant asset write-off, assets must not only be purchased but also installed and ready for use by EOFY. The business must also meet the requirements of a small business as well.
Tip: If you’ve made any last-minute purchases, check delivery and installation dates to ensure they’ll be in use before June 30, or speak with your supplier to fast-track the process.
8. Make Superannuation Payments
Action: If cash flow allows, make your June quarter superannuation contributions for employees before June 30, rather than waiting until the July deadline.
Why: Contributions are only deductible in the current financial year if they’re received by the super fund by June 30. Missing this window means waiting another 12 months to claim the deduction.
Tip: Don’t leave this to the last-minute as super funds can take several business days to process payments. Allow at least a week for the payment to clear.
9. Renew and Pay Pharmacy Registration
Action: Confirm that your pharmacy registration has been renewed and that payment has been made ahead of the due date.
Why: Without an up-to-date registration, you risk compliance issues that could interrupt your ability to operate legally and continue serving your community.
Tip: Mark this in your EOFY checklist every year and set up a reminder so you’re never caught out by the deadline.
10. Review Your Insurance Coverage
Action: Take a moment to review your business insurance policies, ensuring your pharmacy has adequate coverage heading into the new financial year.
Why: Your pharmacy’s operations may have evolved more staff, higher turnover, or changes in services offered. Your insurance should match your current business risks and needs.
Tip: Speak with your broker or insurer and flag any business changes before renewing your policy to ensure you’re not under- or over-insured.
11. Review Employee Records
Action: Check that all employee records are up to date. If any staff have left during the year, ensure their termination pay, leave entitlements, and final payslips have been processed correctly.
Why: Accurate payroll data helps you meet your end-of-year reporting requirements and ensures compliance with Fair Work and ATO obligations.
Tip: Complete and lodge your Single Touch Payroll (STP) finalisation by July 14 to meet your reporting deadline.
12. Tax Planning
Action: Meet with your advisors for tax planning.
Why: No one likes a surprise tax bill so seeing your advisor to go through tax planning strategies means they can review your expected tax liabilities and look into any measures that the business can be do before the financial year to optimise your tax position for the upcoming and future tax years.
Tip: Reflect on the upcoming goals you want to reach so when you meet with your advisor, they can help tailor tax strategies that are aligned to meet your goals.
Conclusion:
Preparing for EOFY doesn’t have to be overwhelming. By following this checklist, you’ll not only ensure your pharmacy is compliant with tax regulations, but also optimise your financial position for the upcoming year. Remember, these tasks are vital for an accurate and efficient year-end process, and will help you set your pharmacy up for continued success.
Have any questions or need assistance? Reach out to your accountant or our team, we’re here to help with your pharmacy’s financial planning and success!
