Discover what an accountant can do for you!

Most business owners don’t really enjoy bookkeeping or accounting. They end up doing it late at night or on weekends, when they’d rather be spending time with family and friends. Yet they carry on because they have a do-it-yourself (DIY) attitude and they think hiring an accountant is a luxury. After all, why not work a little later and do the books yourself?

That attitude needs to change. Engaging an accountant or bookkeeper is not a lifestyle decision, it’s a business decision. Investing in professionals – or changing the way you use them – can bring considerable returns.

They’ll keep control of your tax obligations, identify savings, and help you grow your business.  And yes, as a bonus, they’ll give you back your weekends. You just need to use them in the right way to make sure your money is well spent.

Here’s what you’re missing

As a small business owner, you have to do a lot yourself. There simply isn’t the money to outsource much. In deciding whether or not to get outside help on something, you have to ask if doing it yourself creates extra risks or costs.

Here are the potential downsides of DIY bookkeeping and accounting:

• You miss out on tax deductions by failing to claim valid expenses.
• You fall behind with invoicing (and with chasing unpaid accounts).
• You underestimate your tax liability and find you are unable to pay.
• Tax returns and other compliance paperwork are lodged late, resulting in fines.
• Your bookkeeping ends up with mistakes that takes hours to fix.
• You don’t have reliable information to help you make business decisions.

Why you need an accountant or bookkeeper

We specialise in helping small businesses and we have clients who started off doing their own bookkeeping then came to us when the job became too big or when they started making costly errors.

There are many things an accountant or bookkeeper can do for your business but here are some key areas where they’ll help your business immediately.

Clean up your books once and for all

When business owners do their own bookkeeping, it often only happens when they can find the time. That’s not really giving your financials the attention they deserve and results in:

• data entry errors
• lost documentation (such as proof of purchase for expenses)
• missed tax deductions
• books that are out of date

If you engage an accountant or bookkeeper, they’ll clean everything up so you have accurate records backed up by supporting documentation.

Prepare tax returns thoroughly and lodge on time

Late lodgement of tax returns and/or payment of tax liabilities can result in penalties and interest charges. We’ve taken on clients in the past who’ve previously lost thousands of dollars this way. When you engage an accountant, you won’t miss any more deadlines. The good ones will work well in advance so that lodgements are smooth and stress-free. You’ll forget what it was like to dread tax time!

Improve your invoicing and cash flow

Your invoicing system is central to the health of your business. If you don’t bill efficiently, you won’t get paid quickly and that will leave you short of money.  It sounds basic, but this factor alone undermines a lot of business success.

As an example, think of the plumbing business that services your building. About two weeks after they’ve been, they send an invoice, which gives you 30 days to pay. If you pay on time, their business is waiting more than six weeks for the cash, even though the employees who did the work were paid the week the job was done.

Get an accountant or bookkeeper to set up an automated invoicing system and you’ll be able to:

• send invoices quickly
• check at any time to see which ones have been paid and which haven’t
• give customers a choice of multiple payment methods

Get the power to make better decisions

When you have to do the books yourself, you often don’t get onto it straight away – other things come up that delay progress plus, the longer you leave it, the higher the chance of rushing and making mistakes. This means you don’t always have reliable, up-to-date information about your business.

When you fall behind, it limits your ability to manage well. You don’t know how profitable you are or how much cash you can afford to spend on improving the business.

Accountants and bookkeepers can also give you good advice on invoice payment terms, to help reduce the time you spend waiting on money to come in.

Boost your profitability

Accountants can help you unlock growth in your business. They’ll start by removing unnecessary costs and smoothing out your cash flow, but there’s even more they can do. They’ll figure out what drives revenue and profit in your business and help you improve both.

Engaging an accountant or bookkeeper is a business decision

Don’t let bookkeeping distract you from your core work. It’s not where you’ll add value to your business.  A professional, on the other hand, has the expertise to:

• lower your tax burden
• avoid fines, interest and audits
• identify and eliminate unnecessary costs from your business
• help you measure and improve business performance

This will  free you up to work on the business, which is where you’ll be able to make the biggest difference, plus you’ll be able to spend more time with family and friends, which is a really great perk of making a good business decision!

Other related blogs:

How to apply for an ABN

Monthly checklist for your small business

Tips for managing debtors when you’re self-employed

Get a better tax refund

Understanding your GST requirements

Many business owners are often confused about their GST reporting obligations and whether or not they need to register.  If this applies to you, keep reading to discover everything you need to know.

What is GST?

It is a tax on goods and services.

What do you need to know?

Some of the more important things to know are:

• it is levied at a rate of 10%;
• it is ultimately paid by consumers who are the end users of goods and services;
• it is levied on most goods, services and other items sold or consumed in Australia;
• certain types of supplies are GST free.  Examples include certain fresh foods, exports and medical supplies, but most are subject to GST;
• certain real estate sales are subject to GST (e.g. sales of commercial property), while others are not (e.g. resale of residential property, business premises sold as part of an ongoing business and most working farms);
• businesses that purchase goods or services to use as part of the product or service that they supply to consumers may receive a refund of the GST they pay;
• only certain businesses are required to register for GST, which is currently those with a GST turnover (i.e. revenue) of greater than $75,000 per annum;
• if you are registered for GST, you must complete a regular Business Activity Statement (BAS), lodge it with the ATO and remit your GST collections to the ATO.

How does GST work?

It is charged at a rate of 10%, which means that you simply add 10% to the price you charge customers for goods or services you supply to them.

When you purchase goods and services most will include GST.  Once you are registered for GST, you can claim this back when you complete and lodge your BAS.

Do you need to register?

You must register if:

• your business has a gross income of $75,000 per year or more
• your non-profit organisation has a turnover of $150,000 per year or more
• you provide taxi or limousine travel for passengers in exchange for a fare as part of your business, regardless of your turnover – this applies to both owner drivers and if you lease or rent a taxi
• you want to claim fuel tax credits for your 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, you must register within 21 days of reaching it.

If you don’t register for GST and are required to do so, you may have to pay GST on the sales you have made since the date you became required to register.  This could happen even if you did not include GST in the price of those sales.  You may also have to pay penalties and interest.

Paying GST and your cash flow

As a GST registered business, you charge and collect GST.  If the amount you collect is more than the amount you are claiming, you pay the difference to the ATO when you lodge your BAS.

Most businesses do this either monthly or quarterly, so it’s important to put aside funds to cover these payments.  Also, there are two ways of working out the GST payable which we can assist with.

As accountants who specialise in helping small businesses, contractors, the self-employed and tradies, we can help you with not only the registration process but also your reporting obligations.  We make this process simple and stress free, ensuring you never miss an important lodgement date.  We provide a fixed price service and will send reminders to you, so you can get on with running your business.

Other related blogs:

How to apply for an ABN

Monthly checklist for your small business

Tips for managing debtors when you’re self-employed

Get a better tax refund

As small business accounting specialists, we have noticed that successful small businesses have certain things in common.  So if you want to ensure your business is a success, here are eight characteristics that can assist you.

1.    Owners leading by example

The owner or manager leads by example.  He or she is usually the first to arrive and the last to leave.  They know everyone by name and their presence is obvious.  They show a strong commitment, setting the standard in their work.  This commitment should be easy to understand; after all, if they don’t work hard in their own company, how can they expect any one else to take their business seriously?

2.   Simple business structure

They operate a simple and open business structure, facilitating easy communication between them and their employees.  They value the contribution of each employee, many of whom are given the opportunity to influence aspects of the business that would ordinarily be denied them in a large hierarchical company.

3.   Information sharing with employees

Information sharing, common goals, problems and concerns are discussed openly with staff.  Feedback is encouraged and staff are asked to contribute their own ideas for making improvements and overcoming difficulties.  It is often this aspect of open communication that staff appreciate the most; after all, they have a vested interest in the business.

4.   Staff are carefully chosen

Staff are recruited very carefully, because the owner(s) recognise they are the lifeblood of any small business. Staff are hired on the basis that their knowledge, skills and abilities will be beneficial to the business rather than because of friendships or family relationships.  Staff are not only carefully chosen but are nurtured and trained so that both they and the business get the maximum benefit possible from the relationship.

5.   Staff commitment and loyalty

When staff commitment and loyalty shows in their performance, they should be rewarded with praise, extra responsibility and money — poor performance is not.  Consistently poor workers should be removed as they upset the balance of things.  Businesses whose staff show optimum commitment and loyalty have a source of competitive advantage that is hard to copy or to beat.

6.   Unique products or services

Most successful businesses have unique products or services, such as their own designs, products, systems or some other aspect which sets them apart. This uniqueness is an important source of competitive advantage and one which many companies work hard to sustain, adapting and innovating their products or services as their competition catches up with them.

7.   Specific customer focus

Successful small businesses have a specific focus on supplying their customers with exactly what they want. This focus means adopting a market led approach, with the owners and their managers consistently looking for ways to solve their customers’ problems and improve their products to match requirements.

8.   Prompt follow up

On occasions when an enquiry or complaint is received, successful small businesses actively follow up and solve them as quickly as possible. The results are promptly reported back to the customer and, in the case of complaints, measures put in place to reduce the likelihood of similar issues reoccurring. Successful small businesses view complaints and problems as opportunities for growth and improvement.

Speak to us today to get help on managing all your accounting needs, leaving you free to focus on running your business!

Other related blogs:

How to apply for an ABN

Monthly checklist for your small business

Tips for Managing Debtors When You’re Self-Employed

Get a better tax refund

Every year hundreds of people in Perth give up the security of a regular salary to start their own business.  This can provide you with a better income, more flexibility and the chance to be your own boss.  However, it’s not necessarily an easy option.  As small business accountants, we share with you our 6 steps to starting your own business to maximise your chances of success.

1. Ask yourself “Why?”

Why do you want to start a business?  You might think that’s a simple question, but the answer will have a big impact on your chances of success.  Think carefully about the question and discover what you really want from your business:

• Do you want to make a difference in the world?
• Do you want to make life easier for people?
• Do you want to think differently and challenge the status quo – like Apple does?
• Do you want to challenge yourself?
• Do you want to gain financial independence?

Understanding your motivations will help you gain clarity and it will give you the confidence to build your business successfully.

2. The right time is now

There’s rarely a perfect time to start a new business, but that doesn’t matter because you don’t need to wait for the perfect moment to quit your day job or have a million dollars in the bank.  Also, you don’t need to know everything about running a business, but it would certainly help if you had a business plan.  You may also need some financial backing to tide you over until your new business makes a profit.

Don’t let minor details put you off.  Once you know how to make a start, there should be little to hold you back and things will fall into place over time.

3. Write it down

In today’s technologically demanding world, it can be hard to think clearly at times so go offline and take some time out.  Grab a piece of paper and a pen, go to a café and start brainstorming some ideas for your business plan.  Some of the best plans ever created started life on scraps of paper scribbled in cafés, so you’ll be in good company.

Don’t worry too much about structure, just think about your business and let your imagination run wild.  You can always refine your thoughts later.  If you get stuck, it might help you to think about some of these questions:

1. What purpose will my business fulfill?
2. Who will my customers be?
3. Why would customers come to me instead of my competitors?
4. Who are my competitors?
5. What products or services will I offer?
6. How will I decide what to charge?
7. How will my customers feel when doing business with me?
8. How will I decide who to hire?
9. What will my business be like – what type of culture will it have?
10. Where will my business be three years from now?

When your thoughts are out of your head and down on paper you will be surprised how much detail there is.  Don’t be afraid to think big and write down your dreams of success.  Even the largest businesses started out small.

4. Meet your heroes

Success leaves clues, and there are probably people you admire who have succeeded in business.  You may not know them personally, but don’t let that prevent you from stepping outside your comfort zone.

Think about successful business owners in your area and then ask them to catch up for a coffee.  It might sound daunting, but what’s the worst that can happen?  They might ignore you or decline your invitation.  But if they accept, you’ll be able to get a glimpse of the business world from their perspective. Just make sure you do this groundwork before you meet them:

1. Be prepared
   Decide what specific topic you want to talk about and do your research before you meet.
2. Figure out what you need from the meeting
   Focus on the area of their experience that might be useful to you.  That way, you’ll get the most out of the meeting and you won’t waste their time.
3. Be considerate
   Meet when and where they want to meet – and always pay for the coffee.  It’s the least you can do and what you’ll receive in return should be worth a whole lot more than the price of a cappuccino.

5. Work on the numbers

Accounting might not be your strong point, but no business can succeed without a good grasp of the financials.  The numbers don’t lie and are vital if you want to find out the true health of your business.  So think about how you’ll approach this.

• Hire an accountant or bookkeeper to handle the figures for you.  They can help you better understand your numbers and how to use them to boost your business performance.
• Talk to business advisors or entities such as the Chamber of Commerce who can provide guidance.
• Dive into your accounts and get familiar with the numbers.

6. Five ways to get started

At this point you’ll have done your research and should be ready for the finer details such as legal form-filling and applications, so free yourself up to get the ball rolling.  If you’re not sure where to start we can point you in the right direction or can do it all for you so you can focus on your new venture.  Below are some key areas you may need to consider:

1. Register your business name
   Do this through ASIC.
2. Set up payroll
   You will need to do this if you’re employing people – and perhaps even if you aren’t.
3. Develop your brand and logo
   There are plenty of online resources for this, many of which are inexpensive such as Fiverr or 99designs.  Or you could hire a design agency or graphic designer to develop your brand and what you’re trying to achieve.
4. Build your website
   This isn’t something you have to do yourself – in fact if you’ve never done it before you probably shouldn’t do it yourself.  There are plenty of online resources to help you build great websites, such as Squarespace, WordPress and Shopify.  Or you could hire a web development agency to build a site that suits you perfectly.
5. Market your services or products
   Think how you’re going to tell people about your business – marketing, PR, word-of-mouth.  You may want to hire someone to help you with this.

Launch – and then keep learning

Once you’ve gone through these steps, you’ll be ready to launch your business.  You might not feel ready, but that’s only natural.  While there will always be something else to do, or more preparations to make, don’t let this delay you.

Once you’re up and running, keep learning and developing skills in any way that you can – e.g attend seminars and conferences, listen to podcasts, read industry magazines and books.

Starting a business is just the first step on a long journey as a business owner.  There are many more steps to take if your goal is to build a successful business.  If you never stop learning, you’ll stand a good chance of reaching that goal.

Other related blogs:

How to apply for an ABN

Monthly checklist for your small business

Tips for Managing Debtors When You’re Self-Employed

Get a better tax refund