Small businesses take up 97 percent of all businesses in Australia. Running your own business has many advantages however the truth is according to the Australian Bureau of Statistics, more than 60 percent of small businesses cease operating within the first three years of starting.
ND Accounting supports hundreds of start-up businesses in Warrawong, Shellharbour and Wollongong, with clients also as far as Central Queensland and out to Western Australia. Since 2009 ND Accounting have been offering accounting and taxation services from the ground up working alongside businesses managing tax, developing business plans, managing the bookkeeping, identifying risks, putting the correct structures in place for taxation and business risk and implementing financial management systems.
With all this experience Natasha from ND Accounting has put together some tax tips that will really benefit you if you own a small business or setting up a small businesses.
- Tax tip – Make sure you have a business plan
44 percent of the small businesses that ceased operating in the first three years suffered poor strategic management. Having a business plan should take into consideration business goals, objectives, target market information and financial forecasts that you are aiming to achieve over a certain period of time.
Review this regularly and keep it updated so you can control of the direction your business is heading.
- Tax tip – Set up a bookkeeping system
Taking care of your finances is vital to the survival of your small business, especially when you may not have as much flexibility as larger businesses in terms of cash flow. Seek the advice of a qualified accountant/bookkeeper to set up a bookkeeping system suitable to your business requirement. A good bookkeeping system not only keeps your invoices and accounts up to date it also helps you understand what is happening inside your business by easily preparing financial reports. This then provides you with a foundation for making the right monetary decisions.
- Tax tip – Keep a record of work related deductions
Even with an amazing accountant who effortlessly handles all of your paperwork they will still need all invoices and receipts organised to be able to do your financial reporting correctly. Stay organised so you don’t miss any valuable deductions. Deductions must be directly related to you earning an income and include:
- Vehicle and travel expenses– including travel between work and home
- Clothing, laundry and dry-cleaning expenses
- Gifts and donations
- Home office expenses – including a percentage of internet expenses and mobile phone
- Interest, dividend and other investment income deductions
- Self-education expenses
- Tools, equipment and other equipment
- Accounting and tax agent fees
Instead of handing your accountant a suitcase full of receipts there are plenty of options for scanning, tracking, and managing your receipts. Evernote, OneNote, Google Drive all have options to scan and store receipts. There are also some amazing apps that you can also use to scan, categorise and store your invoices and receipts.
- Tax tip – Hire a good Accountant
Knowledge is power. If you don’t have a good accountant, you’re probably not being as strategic as you could be in how you manage your money and this can cost you in the long run.
An accountant is someone who offers high-level tax and financial advice. Your accountant will also lodge all of your compliance work with the tax office, including your quarterly BAS, PAYG tax and company income tax.
You can do anything but not everything so if required it is useful if your accountant can also combine the role of bookkeeping and accounting. Hiring your accountant also as a bookkeeper can free up hours each month and save you money as before an accountant can lodge a tax return the bookkeeping needs to be accurate. Unfortunately a lot of bookkeeping that gets sent to accountants needs to be re-worked.
If you need personalised advice you can contact ND Accounting on 4272 3048. Based in Wollongong, Natasha prides herself in providing professional and quality accounting, bookkeeping & taxation services to all clients, whether they are businesses or individuals.