The Most Common Mistakes Startups Make in Their First EOFY

End of Financial Year (EOFY) is a whirlwind for any first-time startup owner.

It’s exciting to close out your first year, but it’s also easy to overlook the less-obvious compliance tasks amid the chaos.

Generic EOFY checklists usually mention things like stocktakes or buying a new laptop for a tax break.

Here, we’re digging into seven of the lesser-known mistakes that Aussie startups often stumble on in their first EOFY – and how to avoid them. Most of these slip-ups are totally preventable with a bit of savvy and planning.

1. Forgetting to Finalise STP by 14 July (After Lodging All Year)

You might think you’ve aced payroll because you’ve been filing pay runs to the ATO throughout the year via Xero’s simple payroll function.

But there’s one more step that is often missed by startups: the EOFY payroll finalisation due by 14 July each year.

In the rush of July, it’s easy to forget to hit “Finalise” in your payroll software (yes, even in Xero!).

Failing to finalise Single Touch Payroll (STP) means your employees’ income statements aren’t marked as tax-ready – which can hold up their tax returns and put you in the ATO’s bad books.

Always do that final STP declaration (think of it as the year-end payroll victory lap) to keep the ATO and your team happy. If you’re unable to meet the 14 July deadline, apply for an ATO deferral rather than trying to let it slide unnoticed.

“In short, missing a super deadline not only costs you extra but also means you lose a deduction (double whammy!).”

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2. Missing Superannuation Deadlines or Using the Wrong Contribution Rates

 Superannuation is one area you can’t afford to set and forget.

The super guarantee (SG) contributions for your employees are due quarterly – and must reach the employees’ super funds by the 28th of the month after each quarter.

For example, contributions for April–June need to be paid by 28 July. Miss that deadline and you’re up for a Superannuation Guarantee Charge (SGC), which includes penalties and interest – and those late payments stop being tax-deductible.

In short, missing a super deadline not only costs you extra but also means you lose a deduction (double whammy!).

Miscalculating super is another common blunder. Remember that the SG percentage isn’t static – it rose to 11% for 2023–24 and is set to increase to 12% by 1 July 2025​.

If you mistakenly used last year’s rate (or forgot that the $450 per month minimum threshold for super was abolished in 2022), you could end up underpaying your staff’s super.

Always use the correct rate on your employees’ ordinary time earnings and double-check any rate changes each new financial year. Super is your team’s retirement nest egg – and the ATO is very unforgiving about getting it wrong.

3. Confusing Cash Flow with Profit (and Getting Blindsided by Tax)

Don’t let healthy bank balances lull you into a false sense of security.

A common mistake for new entrepreneurs is confusing cash flow with profit​.

You might have cash in the bank from big invoices paid in June, but that doesn’t mean those funds are all profit – nor that they’re all yours to spend.

Profit is an accounting concept (revenue minus expenses), while cash flow is, well, actual cash moving in and out.

It’s very possible to show a profit on paper yet have little cash on hand, or vice versa. The critical point at EOFY is that your tax bill is based on profit, not your bank balance.

For example, you might have $100k in sales and $20k in profit – that profit is what gets taxed. If you already spent the cash you’d need for the taxman (perhaps on new equipment or just keeping the business running), you’ll be scrambling when your BAS and tax payments come due.

Avoid this by planning for tax throughout the year: set aside a portion of each sale for GST and income tax, and understand your cash flow vs. profit dynamics. We recommend setting up separate bank accounts – this is how many bank accounts your small business needs.

In short, don’t assume money in the bank means “free to use” – some of it might be the ATO’s slice in waiting.

4. Failing to Properly Capture Online Sales (Shopify, Square, Stripe etc.)

Whether you are using Shopify, Square, PayPal, or Stripe to take payments, a major (and common) EOFY mistake we see is not fully reconciling those digital sales channels in your books.

Often, small businesses will just record the net payout from the platform (the lump sum deposited into the bank) as income.

In doing so, they miss out on recording fees and GST properly, and sometimes even miss some sales if multiple days’ takings are bundled together.

The result? Your income could be understated, and your expenses (fees) not captured – which means inaccurate financial records and potential tax compliance issues​.

Make sure you’re recording gross sales and fees separately.

For example, if Stripe pays you $970 after a $1,000 sale (with $30 fee), your books should show $1,000 income and $30 expense, not just $970 income.

Better yet, use integration tools or the built-in connectors in Xero to automatically pull in those sales data. As long as your integration is set up correctly (see the implications for incorrect tax settings in Shopify), you will be reducing manual errors – because, let’s face it, manually matching dozens of little transactions is bound to result in human error.

One misstep in reconciling these can turn into a real headache when it’s time to prepare BAS or income tax. The key is: don’t treat your digital sales platforms as “out of sight, out of mind.”

Reconcile every channel just like you would a bank account, so nothing falls through the cracks.

5. Assuming GST Registration Happens Automatically at $75k

Hitting that $75,000 turnover threshold in your first year is a milestone – just don’t assume the system will auto-enrol you for GST when you cross it.

We’ve seen startups mistakenly think that once they hit $75k in sales, some switch flips at the ATO, and they’ll “be GST-registered” by default.

In reality, you must actively register for GST within 21 days of reaching that threshold​. If you don’t, you’re technically trading illegally by not charging GST when you should, and you risk penalties for failing to register on time.

The rule is straightforward: you must register for GST as soon as you anticipate that your business’s GST turnover (gross income) will hit $75,000 or more. That is, it also applies if you expect to hit $75k in the first year – you don’t need to wait until you actually exceed it.

There’s no fireworks or automatic email from the ATO when you pass the mark; it’s on you to notice and lodge that registration.

The practical upshot: monitor your revenue and get that GST registration done promptly. Once registered, remember to start adding 10% GST to your prices (definitely do NOT charge GST before you are registered), lodge your BAS either quarterly or monthly as required, and keep those tax invoices in order. It’s a bit more admin, but it beats copping a fine for late registration.

6. Not Actually Reconciling Your Bank Accounts (Just “Trusting” Xero)

Bank feeds in Xero (or MYOB/QuickBooks) are awesome – they pull in your transactions automatically and save tons of time.

But don’t fall into the trap of assuming the software is infallible. A common rookie mistake is thinking that if all transactions are coded, your bank account is “reconciled” and must match the real balance.

In truth, you need to explicitly reconcile your accounts to your bank statements and ensure the final balance per Xero equals your actual bank balance.

Sometimes bank feeds have hiccups (a missed transaction, duplicate entry, or an opening balance discrepancy). If you never compare Xero’s figures to an official bank statement, you might carry forward errors unknowingly.
Regular bank reconciliations are a non-negotiable habit. They keep your financial records accurate, help detect errors or fraudulent activity, and ensure compliance with tax requirements​.

Keeping your personal and business accounts separate will also help avoid major headaches and expenses.
If Xero shows an “unreconciled difference” or you haven’t checked that the June 30 bank statement matches Xero’s balance, now’s the time to sort it out.

This might involve importing a bank statement and using Xero’s reconcile function to tick off every transaction, or simply doing a quick match of ending balances.

The peace of mind is worth it – you’ll know that your books truly reflect reality down to the last dollar. In short: trust the software, but verify with your own eyes at EOFY. It’s the final step to make sure nothing’s lurking that could throw off your accounts (or your tax return).

7. Forgetting Your WorkCover Reconciliation (or Misreporting Wages)

We’ve got three mistakes to cover for WorkCover – or workers’ compensation insurance – and they are high up on the list of the most-common EOFY tasks that slip through the cracks or result in easy errors for first-time business owners.

1. Completing an Annual Reconciliation: If you employ staff (including yourself as a working director), you’re likely required to hold a WorkCover policy and complete an annual wages reconciliation. Every year, you need to report your actual wages paid for the financial year and estimate wages for the coming year. If you under-report, you could be hit with an adjustment premium (plus potential penalties or interest). Over-report, and you’re essentially overpaying – tying up cash you didn’t need to spend.
2. Getting your Inclusions and Exclusions Wrong: Another common WorkCover error is including non-assessable amounts like superannuation or contractor payments that don’t fall under the “deemed workers,” category… or forgetting things like bonuses and fringe benefits that should be included.
3. Setting up Insurance in the Wrong State: Each state or territory has its own WorkCover authority (like WorkSafe Victoria or icare in NSW), so make sure you’re using the correct organisationn. If you have employees who are based in different states, the policy you hold for an employee must be with the organisation designated for the state where that employee is predominantly based (not the location of the office they report to).

Wrap-Up and Next Steps

Your first EOFY as a business owner is a big learning curve.

The mistakes above are easy to make, but the good news is they’re also easy to avoid once you know what to look for.

Staying on top of your EOFY obligations – from payroll finalisations to meticulous reconciliations – will save you stress, money, and those “oops” moments with the tax authorities.

If reading this gave you a pang of worry that you might have missed something, it could be a great idea to get a professional to review your accounts.