Many businesses defer income made in the last few weeks of EOFY in June until the next financial year for tax reasons. Businesses also commonly write off any bad debts before June 30th so they can use them as tax deductions. Both of these habits may not be best practice. Small businesses should focus first and foremost on generating revenue and deal with the tax problems later. Writing off bad debt should be used as a last resort when a business owner is sure that the debt will not be paid. Businesses should try multiple avenues when it comes to collecting debt.
Read more: Two common traps for small businesses ahead of EOFY
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