Businesses often hold end-of-financial-year (EOFY) sales for several reasons:


Inventory clearance:

As the end of the financial year approaches, businesses aim to clear out excess stock or outdated inventory. By offering discounts and promotions during EOFY sales, they can entice customers to make purchases and help reduce their inventory levels.

Boost revenue and cash flow:

EOFY sales provide an opportunity for businesses to generate a surge in sales and revenue before the financial year ends. This can be particularly beneficial for businesses that have experienced slower sales earlier in the financial year. The influx of cash from the sales can help improve cash flow and financial performance.

Meet financial targets:

Many businesses set financial targets or budgets for each financial year. By holding EOFY sales, they can try to meet or exceed these targets, thereby demonstrating strong financial performance to stakeholders, investors,

Tax considerations:

In some cases, businesses may strategically plan their EOFY sales to optimise their tax position. By reducing inventory or generating higher sales in the current financial year, they may be able to claim deductions for any losses or reduce their taxable income.

Marketing and customer acquisition:

EOFY sales serve as a marketing tool to attract new customers and retain existing ones. The sales promotions create a sense of urgency and excitement, motivating customers to take advantage of the limited-time offers. This can help businesses expand their customer base and build loyalty.

Competitive advantage:

In highly competitive industries, businesses may use EOFY sales to gain a competitive edge over their rivals. By offering attractive discounts and deals, they can capture market share, outperform competitors, and position themselves as the go-to destination for customers seeking end-of-financial-year bargains.

Accounting & Financial Reporting:

For accountants and financial professionals, EOFY sales have a remarkable impact on financial reporting and tax planning. The close of the financial year marks a critical juncture for evaluating the company’s financial health, valuing inventory, and ensuring compliance with tax regulations. Accountants play a vital role in helping businesses navigate the financial complexities of EOFY sales, such as reconciling revenue and expenses, evaluating the impact on the balance sheet, and strategizing for the upcoming financial year. Their expertise ensures accurate financial statements, tax returns, and the opportunity to maximize deductions or incentives, ultimately contributing to the company’s financial well-being.

Preparing for the new financial year:

EOFY sales also enable businesses to make way for new products or collections in the upcoming financial year. By clearing out older inventory, they can make room for fresh stock and capitalise on new trends or seasonal demands.


It’s important to note that the specific reasons for holding EOFY sales may vary depending on the industry, market conditions, and individual business objectives. Additionally, consumer expectations and behaviour during the end of the financial year can influence businesses’ decisions to offer discounts and promotions.