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Tax time guide for hospitality businesses

The end of the financial year (EOFY) is coming on the 30th of June and everyone is trying to figure out where the time went, it's flown by! This period can be an extremely stressful time for business owners and operators.

DISCLAIMER: All information was correct at the time of publishing. We are not professional accountants, so please make sure to get in touch with experienced and registered accountants or tax agents to help you with your business's circumstances.

With many things to get sorted it's a good idea to get on top of it and start planning ahead. That's why we’ve put together a list to help you this EOFY and take a load off your shoulders.

  1. Planning and reflecting
  2. Tax write-offs and deductions
  3. Federal Government budget impacts
  4. EOFY sales
  5. EOFY function/party ideas
  6. EOFY promotions
  7. Looking out for your staff
  8. Seek Help
  9. Accounting integrations
  10. Stocktake
  11. Review partners

1. Planning and reflecting

The EOFY is a good time to reflect on the financial year that has been and plan for the future, looking for opportunities and strategies to implement in your business. Review your goals, track your progress and set new goals.

Questions to ask yourself

  • Has the year been profitable? Compare the overall performance of the business to the previous year. OrderMate includes advanced reporting where all of this information can be viewed, allowing for more accurate forecasting and informed decisions on whether to spend now or later.
  • Are you ahead in terms of tax planning? Start early so you don't leave it all to the last minute and seek help if you need it from finance professionals.
  • How are your staff going? Have you maintained a positive work culture and been providing support to those who need it.
  • What does the future look like? It is important to have goals set in order to work towards them and keep achieving new accomplishments. Monitor the market as customer trends are constantly changing, how can you take advantage of this in your business?

2. Reduce tax - End of year write-offs and deductions

Knowing your business structure is important as each structure has its individual tax requirements, you need to understand what you’re tracking. Each business can have a very different set of taxation rules and procedures.

At tax time you can claim deductions on many business expenses, just make sure you keep records of these transactions for when it's time to claim them. Here's a list of write-offs that your business may be eligible for:

  • Wages
  • Cash registers/POS systems
  • Computers and laptops
  • Security systems
  • Insurances
  • Rent
  • Power/gas
  • Furniture
  • Laundry/cleaning
  • Marketing costs
  • Website/subscription fees
  • Donations
  • The depreciating value of any goods you own

Keeping in mind all of the deductions your business can take advantage of, it’s always a great opportunity to invest in much needed equipment that you’ve been putting off. This creates a larger tax deduction, potentially resulting in a lower overall tax rate.

If you have been considering upgrading your Point of Sale systems now is a great time to invest in OrderMate POS and claim it in this years tax return.

A WORD FROM GEARED ASSET FINANCE:

“There are a number of tax benefits that can operate with business assets and equipment finance. You should speak to your accountant or tax professional to find out exactly what these are and which ones are available to you.

Typically, you may be able to claim back the input tax related to the GST on the purchase price of your new POS system and other equipment, depreciate the value of the equipment over its life or take advantage of the current Australian Government temporary tax depreciation incentives available.”

LEARN MORE: Financing POS systems with Geared Asset Finance

Two staff members in a cafe looking at a terminal behind the counter


3. Federal government budget impacts

Instant Asset Write-off

A big tax break for small hospitality businesses is the instant asset write-off. This eligibility was expanded in 2020 as an effort to push business investments during the pandemic and has been extended until 2023. This applies to businesses that have an aggregated annual turnover of less than $500 million.

“The $150,000 Instant Asset Write-Off provides businesses with an asset write-off. Assets must cost less than the instant asset write-off threshold and be purchased and used in the year that the write-off is claimed.”

LEARN MORE: Australian Government Business

This is highly attractive to hospitality operators as they can claim this deduction straight away. To find out if you're eligible check out the ATO for more details.

Staff Training:

A 20% additional deduction is eligible for training courses helping businesses upskill and better train their staff. The course participants must engage online or in-person in Australia through external education providers who are registered in Australia.

This tax back is eligible for small businesses with an aggregated annual turnover of less than $50 million.

Technology:

It has been announced there is a new 20% additional tax deduction for business expenses and depreciating assets that support digital workplace items. This tax back is eligible for small businesses with an aggregated annual turnover of less than $50 million.

These expenses include:

  • Portable payment devices
  • Cyber security systems
  • Subscriptions to cloud-based services

Waitress in a restaurant multitasking; taking phone calls and putting an order into the POS system


4. Make the most of EOFY Sales

Many businesses hold sales in the lead up to the EOFY period, so why not make the most of them. It provides a good opportunity for businesses to take advantage of these sales and invest in products/services that they need. It would also be worth stocking up on anticipated items that will be used throughout the coming year and saving some cash by buying them at a discounted rate.

POSGear’s 20% EOFY Sale

Get ready for the upcoming financial year and buy up on top quality consumables in POSGear’s EOFY 20% OFF sale. Take advantage and stock up now on paper rolls, printers, peripherals and more! Only for limited time!

Head over to POSGear to redeem this offer. Sale ends at 5:00pm on Monday June 20, 2022. Make sure to enter the EOFY22 promo code when checking out to save 20% on your order.

* Limited time and select product ranges only.


5. EOFY function/party ideas

Hitting the EOFY is a milestone for your business, so celebrate it with your staff who have helped make it all happen. Not only are events like these fun but can also act as a good team-building activity. You want your staff to enjoy their job and workplace, activities like this can help create a better working environment.

Think outside the box and make sure everyone in your team can get involved in these activities. EOFY celebrations could include:

  • A shared brekkie or brunch out - this could be a great option if your venue opens at night and you can’t afford for staff to take the night off.
  • Activities such as mini-golf, bowling, karaoke or an escape room.
  • Take your staff out for lunch/dinner and support others in the hospitality industry by doing so.
  • Organise a bar tab at another venue to give your hard-working staff that break they deserve.
    A simple get together at your venue, ordering in takeaway pizza and playing team building games.

Hospitality team members sharing a pizza and having a laugh

We all know how hard it is to find and keep staff, so these sorts of celebrations can help lift staff morale. Creating a fun and positive work environment can help increase staff retention levels, whilst also attracting new employees to the business.


6. EOFY promotions

The EOFY is a good time to create and market promotions happening in your venue to draw in customers who are looking to celebrate with their teammates. Businesses may have some extra budget left over and are looking to spend it before the EOFY - Make them choose to spend it in your venue.

You might want to consider:

  1. Implementing a special EOFY set menu - Choose to include any stock that you have identified in your stocktake that may be getting out of hand and needs to be sold.
  2. Buy one get one free drink on arrival for the EOFY function.
  3. Providing happy hour prices for the first hour of the EOFY function
  4. You may entice groups of people to book by including no minimum spend for the function
  5. To encourage function bookings you could provide incentives for those who book before the EOFY with a voucher or a percentage off the final bill.

TIP: Find out more in the Promotions & celebrations this EOFY blog.


7. Looking out for your staff

It’s important not only to be thinking about your business and what needs to be done at tax time but also thinking about your staff. We all know how hard it has been recently in the hospitality industry to find staff and retain them. With the stress that comes from hospitality work, take a load off your employees around tax time and provide them with useful resources.

Hospitality staff looking at a screen in a restaurant setting

Staff can claim various work-related costs at tax time. The ATO website is a great resource to provide them with in order to help understand what they can claim back on tax. Hopefully walking away with some extra cash in their pockets.

Many work-related expenses can be claimed by hospitality staff such as:

  • Clothing/laundry costs
  • Car expenses
  • Self-education such as courses
  • Tools and equipment

It’s important to keep your staff happy as this results in higher staff retention and makes finding new staff less of a nightmare for you. Creating a happy and safe workplace can also be seen reflected in your employee's work - resulting in better customer service. There’s a strong statistical link between employee well-being and customer satisfaction reported on Glassdoor. It's simple, happy workers = happy customers.

TIP: Learn more in the Look after your hospo staff this EOFY blog.


8. Seek help - Get advice from experts; talk to your accountant

Knowledge is power, running a business is time-consuming and the hours are rigorous so it's not always possible to take on every task yourself. It is important to acknowledge when you need help.

Accountant holding a tablet and explaining facts and figures to a restaurant operator

Talk to experts in their fields, and get advice from financial experts on what you should and shouldn't be doing, you don't need to be alone taking on the tax burden. Talk to your account, or better yet make friends with them so they can better understand exactly what your business needs and provide you with the best advice.


9. Accounting integrations

Accounting software integrations can be a god-sent at tax time, saving you valuable time and money. The setup of these integrations is easy and can take a huge weight off your shoulders.

If you haven't had the time to integrate this financial year, now is as good time as ever to integrate and be prepared for the next financial year. OrderMate recommend the following accounting software to integration with your POS system:

Xero

Xero is a great accounting integration. It's a world-leading online accounting software built for small businesses.

  • Reducing manual data entry processes
  • Eliminates human error
  • Saves you time, so you can focus on what you do best

What's so great about Xero is all you have to do is enter your business details and then you can get started. They provide you with a real-time view of your cash flow and the ability to view this information anywhere through its mobile app.

MYOB

MYOB offers more than 50 business management solutions to support you with accounting, payroll, payments, retail point of sale, CRM and professional tax solutions. It allows you to run your business on a more efficient level saving you time by allowing you to import and export the sales and data.

LightYear

LightYear focuses on accounts payable cloud accounting products for businesses. LightYear removes repetitive tasks that you would have to be doing, chewing up so much of your time. Their mission is to help businesses thrive by delivering innovative tools which streamline processes & payments, digitise data, provide insights and connect businesses in the Lightyear Cloud.


10. Stocktake

Performing a regular stocktake is an important aspect of any hospitality business. Keep an eye on the stock you have at hand and what needs to be ordered. Through performing a stocktake you're able to identify what has been selling well and what hasn't.

Hospitality workers performing a stock take and counting their alcohol

Advantages of stocktake:

  • A better understanding of your stock levels and what you have.
  • Assure you don't have too much or little stock.
  • Identifying what you need to buy.
  • Help your cash flow by understanding what stock is slow-moving and reducing it.
  • Reduces risks of spoilage.
  • Identify if any stock has been stolen.
  • Allows you to review your pricing strategy.

TIP: Check out the Why Stock Control Matter’s blog for more information and tips.

Creating specials with items that may not be selling as you expected is a good idea to help manage your slow-moving stock without letting it go to waste. For example, a wine that's been sitting in your stock room for a while could be the included drink in the EOFY package or given away as a complimentary drink at the EOFY function.

To find out if you need to submit an official stocktake for tax purposes head to the Australian Government Business website. However, if you're a small business with less than $10 million of aggregated turnover and you estimate that the value of your trading stock changed by no more than $5,000 in the year, then you won't have to perform an official stocktake or account for the changes in your trading stocks value.

OrderMate has developed StockMate to help carry out stock takes, an advanced stock control and inventory management app to sync with your POS system. It allows for your entire stock management process to be simplified and streamlined.


11. Review partnerships

EOFY is a time for reflection, are your current partners adding value to your business as they used to? It is important to be reviewing performance and do some research of your own to see if you're getting the most competitive prices and systems. There are always new innovations and improved ways of doing things, so make sure your partners are keeping up.

In this day and age where constant technological advances are coming out, it is important to keep your eye out and make sure your business is taking advantage of them so you don't get left behind.


We wish you all the best for the end of this financial year and the coming financial year! Please reach out to us at OrderMate if we can help you with anything!

DISCLAIMER: All information was correct at the time of publishing. We are not professional accountants, so please make sure to get in touch with experienced and registered accountants or tax agents to help you with your business's circumstances.

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