New Financial Year, New You: The Finance Broker’s Guide to FY25 Preparation

June 23rd, 2024

As we approach the end of another financial year, it’s time for finance brokers to take stock of the past year and prepare for the opportunities and challenges of the next. The transition into FY25 offers a chance to reset, refresh, and strategise for future success. 

This guide takes you through key professional and personal areas to focus on as the FY24 winds down. 

Familiarising yourself with government grants, incentives, and compliance changes is crucial for enhancing your own business operations, but also for offering valuable insights to your clients for their business. By keeping on top of developments regarding grants, taxation changes and updates to employment compliance, you can ensure your clients receive optimal guidance while maintaining compliance within your own business.

Here are a few changes that may impact your or your clients’ businesses:

Instant asset write-off

The $20,000 instant asset write-off for small businesses will be extended until June 30, 2025 (be aware, this extension is part of the Treasury Laws Amendment Bill 2023 and is still before Parliament, yet to become law) 

Small businesses with a turnover of less than $10 million will be able to claim an immediate tax deduction for eligible assets. The assets must cost less than $20,000 and be first used or installed between July 1, 2023 and June 30, 2025.

Many small businesses strategically use this initiative as part of their tax planning strategy, using equipment finance to purchase the asset, write it off immediately, reducing their tax liability, and then claim the interest on the equipment loan as a tax deduction. 

Reduction to individual tax rates

The reduction in individual tax rates effective from July 1, 2024, is a welcome change for individuals, and something anyone with employees needs to be across. In response to cost of living pressures and economic challenges, the Australian Government has implemented tax cuts across the board, aimed at easing financial burdens for taxpayers.

From July 1, 2024, the previous individual tax rates will change as follows: 

  • 19 per cent tax rate reduced to 16 per cent
  • 32.5 per cent tax rate reduced to 30 per cent
  • 37 per cent tax threshold increasing from $120,000 to $135,000
  • 45 per cent tax threshold increasing from $180,000 to $190,000.

These changes are designed to provide immediate relief while stimulating economic activity by enhancing disposable incomes. For employers, understanding these revised rates is essential to ensure the amount of tax withheld for employees is correct. 

Minimum wage increase

The National Minimum Wage is set to increase and this change may potentially impact your clients and your own compliance and cash flow management. This National Minimum Wage is scheduled to rise by 3.75% starting July 1, 2024. This adjustment will bring the weekly minimum to $915.90, equivalent to $24.10 per hour, and is applicable to employees not covered by an award or another registered agreement. Employers with award-covered employees should verify if their pay rates are due to increase.

For more information on the National Minimum Wage increase, see 2023-2024 Annual Wage Review.

Industry Growth Program

The Industry Growth Program is designed to support start-ups and SMEs in innovating, commercialising their ideas, and achieving growth. This advisory service is specifically for businesses within the priority areas of the National Reconstruction Fund (NRF), helping to increase manufacturing capability here in Australia.

If you have clients who may be able to help build manufacturing capability in the priority areas for the National Reconstruction Fund, you might like to learn more about the available grants. 

Priority areas for the NRF:

  • value-add in resources
  • value-add in agriculture, forestry and fisheries
  • transport
  • medical science
  • renewables and low emissions technologies
  • defence capability
  • enabling capabilities.

For finance brokers, continuing education and upskilling are crucial for several key reasons:

Understanding market dynamics

Financial markets and the economy are dynamic and constantly evolving. It’s important to understand financial products, market trends, economic indicators, and global events that can impact your clients. Continuous learning helps you make informed decisions and provide a high level of service to clients.

Client satisfaction and retention

In the complex world of business, it’s not uncommon to come across complex client scenarios. With the right knowledge and expertise, you can provide a comprehensive solution to your clients, without having to refer them to your peers. 

Competitive edge and career advancement

The financial services industry is highly competitive. Brokers who invest in their education and skill development can differentiate themselves from their peers, attract more clients, and retain existing ones by demonstrating expertise and reliability.

Upholding ethical standards

The finance industry places a high value on ethics and professionalism. Continuous learning can include training on ethical standards and practices, which helps maintain integrity and trustworthiness in your professional conduct.

Looking to upskill? 

While each aggregator varies, they generally offer a range of educational resources to help you upskill and keep on top of your CPD requirements. Being intentional with your training plans can have a more significant impact on upskilling, rather than merely checking off your CPD points. Have a think about areas you’d like to increase your knowledge in and then find training and educational material that suits your knowledge goals.    

If you’re specifically interested in learning more about invoice finance as a strategic solution, Earlypay offers a comprehensive workshop. This workshop provides insights into how to identify, pitch, and package invoice finance as a working capital solution. It features an interactive session with hands-on analysis of paper trails and financial documents, along with an in-depth look at structuring and pricing an invoice finance facility. By participating, you can gain practical skills to identify opportunities and diversify the lending options available to your clients, ultimately broadening your service offerings and improving your professional competence.

Register your interest today to be the first to hear about upcoming workshops in your area.

The end of the financial year is always a busy time in the finance industry, and no doubt, you’ve been dealing with high stress and long hours. It’s important to prioritise health and well-being at all times, but especially at the end of a busy stressful period at work. 

Schedule time off

Plan for a well-deserved break. Whether it’s a family holiday or a few days off at home, giving yourself time to rest and rejuvenate is essential for resetting your mind and body, so you can hit the ground running in the next financial year!

Reestablish a routine 

After a period of long hours and irregular schedules, reestablishing a consistent daily routine can help you regain a sense of normalcy and stability. Routines aren’t just important for work, consider scheduling in time for exercise, quality sleep and family time. 

Set new goals 

As you prepare for the new financial year, set both professional and personal goals. Having clear objectives can provide direction and motivation moving forward.

Seek support if needed 

If the stress of the past year has taken a toll, consider talking to a mental health professional. They can offer strategies to help you cope and build resilience.

We’re here to help

As we prepare to close the chapter on FY24, we’re here to support you and clients on your commercial journey into FY25. If you would like more information on how we can support you, please do not hesitate to get in touch with your BDM or call us on 1300 760 205.

Here’s to seizing new opportunities and achieving excellence in the year to come.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].