January, 2017

How to apply for an Australian Business Number (ABN)

If you run a small business, or are about to start one, you’ll need to apply for an Australian Business Number (ABN).  Find out why you need one and how to apply for it.

An unique number for every business

An ABN is unique to each business.  It’s a legal requirement for anyone who wants to start an enterprise in Australia or who wants to register for GST (Goods and Services Tax).  Even if your business isn’t going to register for GST, you still need to apply for an ABN which you do through the Australian Business Register (ABR) – it’s free to apply. Your business will use its unique number to identify itself when dealing with the government, other businesses and the public.

You’ll be asked to provide lots of information when you apply for an ABN, including what type of entity your business is – e.g:

  • individual/sole trader
  • partnership
  • company
  • trust

Every business entity (whether a sole trader, partnership, company or trust) that applies for an ABN only needs the one number.  However, you can choose to run more than one enterprise with a single ABN – for example, a furniture shop, a curtain outlet, and a fabric supplier could all use the same number if they’re part of the same business entity.  But if any of the operations are run by a different business entity, they’d require a separate ABN.

So it’s important to choose the right structure for your business. You should always seek professional advice before before making any decisions about registering for an ABN or choosing your business structure.  We can provide you with expert advice to ensure that you meet your legal obligations and protect your personal assets.

The advantages of having an ABN

One of the main advantages is that you’ll save time and money.  That’s because other businesses are legally required to withhold tax from payments to you if your business doesn’t quote an ABN on invoices.  And in this case, they must withhold it at a rate of 46.5 percent.  So even though your business can claim back any excess tax paid in its tax return at the end of the year, it’s not ideal for your cashflow.

Having an ABN also means your business can:

  • claim GST credits (when registered for GST)
  • claim fuel tax or energy grants credits (if you qualify)
  • stay compliant and be able to lodge activity statements (BAS/IAS) with the ATO
  • confirm your business identity to others when ordering and invoicing
  • avoid pay-as-you-go (PAYG) tax on payments you receive (see below)
  • obtain an Australian domain name (for your .au website)
  • deal with other businesses more seamlessly.

Registering an ABN is a separate process to registering a business name.

Be prepared – 11 things to check before you apply

Check the list below before you begin your application process.  You’ll be asked the following questions or be required to provide the following information:

1. Do you already have an ABN?

Do you already have, or have you previously had an ABN for the entity you’re applying for?  If so, you’ll need to provide it.  If you’re unsure, use the Lookup service to check.

2. Do you use the services of a tax agent?

If  you are, you can provide their tax agent number which can be found on your income tax return.   Recording your tax agent’s number against your ABN means they can deal with the ATO on your behalf.

3. Do you have an Australian Company Number or an Australian Registered Body Number?

Any company or registrable Australian body must register with ASIC before they apply for an ABN.  Once registered, ASIC will issue you with an Australian Company Number (ACN) or an Australian Registered Body Number (ARBN).

4. What is the name of your business?

Say it’s “Joe Blogs Plumbing”, this is the legal name of your business and is the name that appears on all your official business documents or legal papers so it needs to be registered.  If you are an individual/sole trader and you don’t have a business name, use your own name.

5. What is your tax file number?

The quickest way to get your ABN online is by providing your tax file number (TFN) and the TFN of any of your business associates. If you or your associates are Australian residents (over 18) and you don’t provide all relevant TFNs, you may not get your ABN immediately.

6. What are your business locations?

These are the permanent physical premises where your business operates.  For each location you will be asked to provide:

  • street address
  • business activity details
  • phone and email contacts.

7. Who is your authorised contact?

This is either you or someone you have nominated to deal with any issues relating to your business’ ABN.  You or they must be able to make changes or updates on behalf of the business and you’ll need to provide the following details:

  • name
  • position held
  • mobile, phone and fax numbers
  • email address.

8. What are your business associates’ details?

If you have business associates, their details must be provided with your ABN application.  They may be individuals or organisations depending on your entity type.  For each associate you will have to provide:

For individuals

  • date of birth
  • gender
  • position held
  • TFN
  • residential address (if no TFN is provided).

For organisations

  • ACN or an ARBN – if applicable
  • ABN – if applicable
  • TFN (or business address)
  • date of formation (if TFN not provided).

9. What is the main activity of your business?

It  is the main source of income for your business. If you operate from multiple locations, you will be asked to provide the main business activity for each.

10. From which date do you need your ABN?

You should nominate the date when your business name was registered or when you intend to begin work.

11. Are you providing the correct information?

Before submitting your application, you need to complete a declaration stating that the information you have provided is true and correct.

How do you apply for an ABN?

There are three main ways to apply:

Three other important things to remember when applying

Chances are you’ll need to do the following (if you haven’t already done so):

1. Register for GST 

You need to register for GST if you run a business and your GST turnover is $75,000 or more ($150,000 for a not-for profit business).

If you’re not registered for GST, check each month to see whether you’ve reached the threshold, or are likely to exceed it.  If your turnover exceeds the relevant threshold, then you must register within 21 days of reaching it.  Learn more here about registering for GST.

2. Register for PAYG 

Under the pay-as-you-go (PAYG) withholding rules, you have an obligation to collect tax from the payments you make to your employees (and some businesses) so they can meet their end-of-year tax liabilities.  Learn more here about registering for PAYG.

3. Register for fringe benefits tax 

If you’re an employer and you provide fringe benefits to your employees, you may have to pay fringe benefits tax.

Some common fringe benefits are:

    • private use of a work car by an employee or director
    • paying private expenses for an employee or director – eg health insurance premiums, club memberships, school fees, holiday expenses, on-site accommodation.

It’s a good idea to register for fringe benefits tax as soon as you’ve decided you’ll provide benefits to your employees.  Learn more here about registering for fringe benefits tax.

A  better way to do business

Having an ABN will make it a lot easier to deal with other businesses, the ATO and other government agencies.  Most people will expect you to have one, plus it means you can claim tax credits and receive grants (if applicable).

If you don’t apply for an ABN, chances are you’ll need one in the near future.  Don’t just leave it on a to-do list somewhere – check the points above and apply now.

If you would like help with this, speak to us today.  We can set everything up for you and help you get your business off to the best start.  Call us on 9204 3733 and book a free no obligation meeting.  As small business specialists, we can provide you with the best advice and support.  Speak to the experts today.


Book a FREE No Obligation Review today and let us help you set up your business to maximise


Other related blogs:

Monthly checklist for your small business

Tips for Managing Debtors When You’re Self-Employed

 The ins and outs of being a contractor

Get a better tax refund

Monthly checklist for your small business

Time flies when you’re running your own business.  Days can quickly turn into weeks as you focus on the day-to-day work and sometimes you can work so hard it’s easy to lose sight of the big picture.  Our monthly checklist will ensure you keep your business on track.

10 tasks to keep your business in good health

This monthly checklist will help you assess the health of your business and stay in control.

1. Step back and do a financial overview

Your business won’t survive unless you have a tight grip on your finances.  Make sure you carefully manage:

• expenses and bills – pay quickly to ensure goodwill
• invoices – chase all late payers
• payroll – ensure all staff records are up to date
• taxes – lodge your returns and pay on time, every time.

2. Review account statements from suppliers

Are your suppliers charging a price that’s fair?  Are you still getting good value for money?  If not, it might be time to look for new suppliers.

3. Review annual sales

Look at your year-on-year sales.  Are you doing better than the same time last year?  Are costs and profit levels where they should be?  Refer to your business plan and make changes if necessary.

4. Keep a close eye on stock

If you’re running a retail or manufacturing business then stock is your lifeblood.  You should:

• carefully match stock levels to sales forecasts
• make special provision for perishable goods
• ensure storage is safe and secure
• work with your accountant or bookkeeper to find the optimum stock levels.

5. Make sure your customers remember you

In a crowded marketplace, customers are likely to forget your service or product, so help them remember:

• Use a CRM (Customer Relationship Management) or MAS (Marketing Automation System) tool.  This will help keep your customers and partners up to date with news about your business.
• Use all available communication methods.  For example, email newsletters are a highly effective way of keeping in touch with customers – as long as they’re well written.

6. Spread the word about your business on social media

Social media can be a very effective marketing channel if you use it regularly.  Make sure your blogs always have fresh content, send new tweets and post on Facebook and LinkedIn.

7. Review your website traffic

Google Analytics is a tool that makes it easier to understand your website traffic.  It will identify pages that are performing poorly and pages that are doing well.  Ask a web developer to help you if necessary.

8. Keep on top of industry news

Set aside two hours a month to review industry news.  Sign up for Google Alerts and set an alert so that the news comes to your inbox.  If you are a consultant in the medical industry, you could set one up for ‘medical trends’ or ‘new technologies in medicine’.

9. Keep your data safe

Use cloud-based applications to store data and ensure your information is always available and automatically backed up.  Relying on your hard drive leaves you vulnerable in the face of burglary, fire or natural disasters.  If you use your hard drive to store data, make sure you do at least one monthly backup online or to an external device.

10. Talk to your advisors

Arrange meetings with your accountant or bookkeeper, board of directors and investors.  Meet them at the office or a cafe for a half hour chat over coffee. Review business performance for the last 30 days and last quarter to check you’re on track.

Successful business owners have great habits

Set yourself up for success and get into the habit of setting aside time for monthly tasks.  Business can move at a rapid pace, especially in the first year, so make this checklist a priority to ensure your business is going in the right direction.  This will keep things on track and under control – which can make all the difference.


Small Business Accountant and Tax Specialist


Other related blogs:

Tips for Managing Debtors When You’re Self-Employed

 The ins and outs of being a contractor

Get a better tax refund

Tips for Managing Debtors When You’re Self-Employed

Tips for Managing Debtors When You’re Self-Employed

You’ve poured passion, time and money into fulfilling a contract, have agreed on payment terms and invoiced your customer — and then nothing.  Days turn into weeks, and you still haven’t received payment.

For single proprietorships and small start-up businesses, uncollected invoices can sink your business.  Suddenly, you’re cash flow negative.  Income you needed to cover expenses and pay vendors dries up.  Without the safety nets larger companies enjoy, small businesses often face bankruptcy when a large client refuses to pay.

Wondering how to tip the balance of power in your favour?  Try these strategies to get paid quickly and avoid non-payment.

Send a collection request right away

It is absolutely crucial for business owners to follow up on unpaid invoices quickly, just a few days after the payment date is missed.

Contact the debtor by phone to confirm they received your invoice and remind them that it’s past due.  In many cases, your client has simply neglected to review their accounts payable and is behind with their bookkeeping.   Agree on a new payment date and follow up again if it is missed.

It is also possible that your customer is struggling with financial difficulties.  If so, be reasonable and suggest a payment plan.  It is better to collect instalments than to receive no payment at all.

Be persistent and firm, but always polite.  Harassment and escalating threats will often get you nowhere with no payment from the debtor.

Remind your debtor that late payments come with a cost

In many countries, late payments often accrue penalties that add to the debt the longer it remains unpaid.

In the UK, for example, businesses can claim interest and debt recovery costs if a client is late with payment.  The Late Payment of Commercial Debts Act considers a payment late 30 days after the delivery of goods or services.  After that point, interest is set at the Bank of England’s base rate, plus 8%.

Consider including a late payment charge in your terms and if your debtor won’t respond to your reminders, send them a “statement of account” that includes:

  • the date of the unpaid invoice
  • a description of goods or services provided for which you are awaiting payment
  • the total amount due, including applicable late payment charges

Proceed with legal action

Have 30 days passed and you’re still getting nowhere with your unpaid invoice?  Sometimes, all it takes to motivate a reluctant debtor is an official letter from a lawyer or debt collection service.

It’s important to note that in some cases (for example, the debtor has declared bankruptcy), it makes more sense to write off unpaid invoices as “bad debts” and absorb the loss.

When it comes to dealing with debtors, the key is to respond quickly to non-payment and follow up consistently until you’re paid.  It’s also wise to consult your accountant or a trusted business advisor to tailor your strategy to protect your business.


Other related blogs:

Tips for Managing Debtors When You’re Self-Employed

 The ins and outs of being a contractor

Get a better tax refund