EOFY Review: 12 Questions Every SME Owner Should Ask Before Lodging Their Tax Return

For many business owners, the end of the financial year becomes a race to gather records, meet deadlines and lodge a tax return.

Once it's submitted, there's often a sense of relief that another compliance obligation has been ticked off the list.

But the End of the Fiscal Year, or EOFY, should be much more than a tax exercise.

It's one of the few times each year when business owners have a complete financial picture of how the business has performed. It provides an opportunity to assess what's working, identify potential risks and make smarter decisions for the year ahead.

Before lodging your tax return, it's worth taking a step back and asking some important questions. The answers may reveal opportunities that could have a far greater impact on your business than any tax deduction. EOFY can also provide the foundation for a stronger financial strategy for business growth, helping you align future decisions with your long-term business goals.

Why EOFY Is More Than a Tax Exercise

Your tax return tells a story about the past.

A financial review helps shape the future.

While tax compliance remains important, focusing solely on lodging requirements can mean missing valuable insights about profitability, cash flow, pricing, costs and growth opportunities.

The most successful SME owners use EOFY as a strategic checkpoint.

Rather than simply asking, "How much tax do I owe?" they ask:

• How did the business really perform?

• What improved?

• What deteriorated?

• What needs attention next year?

  
  

The following questions can help guide that conversation.

1. Did the Business Actually Become More Profitable This Year?

Revenue growth doesn't automatically mean business success.

Many SMEs experience increasing sales while profitability remains flat or even declines.

Before lodging your tax return, review:

• Gross profit margin

• Net profit margin

• Operating expenses

• Profit growth compared to revenue growth

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If sales increased by 15% but profit only increased by 2%, understanding why should become a priority. This type of analysis often highlights opportunities to implement profitability improvement strategies that can increase margins, reduce unnecessary costs and improve overall business performance.

2. What Is Driving My Profitability?

Not all revenue contributes equally to profit.

Some products, services or customers may generate strong margins, while others consume significant time and resources for relatively little return.

Ask yourself:

• Which services generate the highest margins?

• Which customers are most profitable?

• Are there areas of the business that consistently underperform?

  
  

Understanding profit drivers helps you focus on activities that create the greatest value.

3. How Strong Is My Cash Flow Position?

Profit and cash flow are not the same thing.

A business can be profitable on paper while still experiencing cash flow pressure.

Review:

• Cash balances

• Operating cash flow

• Working capital requirements

• Upcoming financial commitments

  
  

If cash feels tighter than expected, EOFY is the ideal time to identify the cause. A structured cash flow forecasting process can help uncover potential shortfalls, improve planning and provide greater confidence when making financial decisions.

4. Are My Debtors Taking Too Long to Pay?

Late payments remain one of the biggest challenges for Australian SMEs.

As part of your EOFY review, assess:

• Debtor days

• Outstanding invoices

• Collection processes

• Payment trends

Even a small improvement in debtor collection times can significantly improve cash flow and reduce financial stress.

5. Have My Costs Increased Faster Than Revenue?

Many businesses have faced rising costs over recent years.

Wages, supplier expenses, insurance premiums and operating costs have all increased.

EOFY is an opportunity to determine whether expense growth has been properly managed.

Review:

• Labour costs

• Supplier costs

• Overheads

• Fixed versus variable expenses

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If costs are rising faster than revenue, profitability will inevitably come under pressure.

6. Are My Prices Still Appropriate?

One of the most common profitability challenges for SMEs is failing to review pricing regularly.

Many business owners set prices years ago and adjust them only when absolutely necessary.

Ask yourself:

• Have costs increased?

• Has the value you provide increased?

• Does your pricing still reflect market conditions?

  
  

Pricing reviews can often have a greater impact on profitability than cost-cutting initiatives. For many SMEs, regular pricing reviews are one of the most effective ways to improve business profitability while maintaining service quality and supporting sustainable growth.

7. Which Customers or Services Generate the Highest Margins?

Revenue alone doesn't tell the full story.

Some customers may generate substantial sales but require extensive support, administration or discounts.

Others may be highly profitable despite generating lower revenue.

Understanding customer and service-line profitability helps businesses allocate resources more effectively and focus on the right opportunities.

8. Do I Have a Cash Flow Forecast for Next Year?

Many businesses operate without a forward-looking cash flow forecast.

As a result, they often discover problems only after they occur.

Before entering a new financial year, ask:

• What cash inflows are expected?

• What major expenses are coming?

• Will growth create additional working capital requirements?

• Are there seasonal fluctuations to prepare for?

A forecast provides visibility and allows business owners to make proactive decisions. Many SMEs use business financial modelling to test different growth scenarios, assess funding requirements and understand how future decisions may impact cash flow and profitability.

9. Are There Any Tax Planning Opportunities I Haven't Considered?

Tax planning still matters.

EOFY is an appropriate time to review:

• Business structure suitability

• Timing of income and expenses

• Available concessions

• Capital expenditure plans

The objective isn't simply reducing tax.

It's ensuring tax outcomes align with broader business objectives.

Good tax planning supports strategy rather than driving it.

10. Do I Have the Right Budget for the New Financial Year?

A budget is more than a financial document.

It's a roadmap for the year ahead.

Without a budget, many businesses operate reactively, making decisions without clear targets.

A strong EOFY review should include:

• Revenue targets

• Profitability goals

• Cost assumptions

• Investment priorities

  
  

Budgets create accountability and improve decision-making throughout the year. Taking the time to focus on creating a realistic business budget can help ensure financial targets are achievable and aligned with your broader business objectives.

11. What Are the Biggest Financial Risks Facing My Business?

Every business faces financial risks.

The question is whether you've identified them.

Common risks include:

• Customer concentration

• Rising labour costs

• Cash flow shortages

• Margin compression

• Supplier dependency

• Economic uncertainty

  
  

EOFY provides an opportunity to assess these risks and develop strategies to manage them. Taking the time to identify and manage business risks can help protect profitability, improve resilience and support more confident decision-making in the year ahead.

12. What Financial Goals Should I Set for the Next 12 Months?

Many business owners focus on operational goals but overlook financial targets.

Consider setting goals around:

• Revenue growth

• Profit margins

• Cash reserves

• Working capital improvements

• Debt reduction

• Business value

Clear financial goals help guide strategic decisions throughout the year.

Why Most Businesses Miss the Opportunity EOFY Provides

The biggest EOFY mistake isn't missing a deduction.

It's treating EOFY as a compliance exercise instead of a business review.

Many owners rush to finalise accounts and lodge returns without taking the time to analyse performance.

The most valuable EOFY conversations should answer three questions:

1. What happened?

2. Why did it happen?

3. What should happen next?

   
   

These insights create far more value than simply completing a tax return.

With more than 30 years of experience as a CPA and CFO, Steven Nicholson has worked with businesses that transformed their performance by using EOFY as a planning opportunity rather than just a reporting requirement. His experienced CFO guidance has helped business owners gain greater financial clarity, improve profitability and make more informed strategic decisions.

What This Means for Your Business

The end of the financial year is one of the best opportunities to improve financial visibility.

It provides a natural pause point to review performance, identify opportunities and set priorities for the future.

Businesses that use EOFY strategically often enter the new financial year with:

• clearer goals

• stronger cash flow visibility

• better budgets

• improved profitability focus

• greater confidence in decision-making

  
  

The value comes from the questions you ask before lodging—not simply the return itself. For many business owners, seeking strategic financial advice during EOFY can help turn financial insights into practical actions that support stronger growth and better decision-making.

Practical EOFY Actions for SME Owners

Before lodging your tax return:

• Review profitability trends.

• Analyse cash flow performance.

• Assess pricing and margins.

• Evaluate customer profitability.

• Identify financial risks.

• Update forecasts.

• Build a realistic budget.

• Set measurable financial goals.

• Review tax planning opportunities.

• Align financial strategy with business objectives.

  
  

These steps can provide greater clarity and help position the business for a stronger year ahead.

Conclusion

EOFY should be more than a compliance deadline.

It should be a strategic review of your business's financial health and future direction.

By asking the right questions before lodging your tax return, you gain valuable insights into profitability, cash flow, costs, pricing and growth opportunities.

The most successful businesses don't wait until problems appear. They use EOFY as an opportunity to improve visibility, strengthen decision-making and build a clearer path forward.

If EOFY feels like a compliance exercise rather than a strategic review, it may be time to look beyond the tax return.

At GearChange, we help business owners turn financial information into practical insights that support better decisions, stronger profitability and sustainable growth. If you'd like to discuss your EOFY results, explore growth opportunities or gain clarity on your financial position, you can book a free consultation with our team to start the conversation.

FAQs

1. Why should business owners review their finances before lodging a tax return?

A financial review helps identify profitability trends, cash flow issues and growth opportunities before the new financial year begins, allowing for better decision-making.

2. What should I look at during an EOFY business review?

Review profitability, cash flow, pricing, costs, customer profitability, forecasts, budgets and financial risks alongside your tax position.

3. Is EOFY only about tax planning?

No. While tax planning is important, EOFY is also an opportunity to assess business performance and develop a financial strategy for the year ahead.

4. How can EOFY help improve business profitability?

EOFY reviews can uncover margin pressures, cost increases, pricing opportunities and operational inefficiencies that may be affecting profitability.

5. What is the biggest EOFY mistake small businesses make?

Many businesses focus solely on lodging their tax return and miss the opportunity to analyse financial performance and plan strategically for future growth.