Starting a new business is an exciting chapter in any person's life. In the 2020 financial year, 344,472 new businesses opened in the Australian market. The opportunity to work for oneself and decide one's working destiny are the main reasons for new small business commencement. However, without solid professional support, many new businesses fail. Business accountants are critical to the success of all operations, and here are four things they want you to know as you embark on this new journey.
Keep All Receipts
Receipts are a vital part of every business operation, no matter their size. The Australian Taxation Office (ATO) requires you to produce receipts when requested to prove what you have spent as part of your business operations. Instead of analysing what receipts matter, keep everything and let your business account distinguish which ones are claimable as part of your company's operating expenses. You could lose valuable deductions by throwing away viable receipts.
Be Truthful
Hiding cash income or other vital pieces of information from an accountant is only hurting yourself in the long term. If the ATO ever audits you and finds you did not declare all necessary cash flow, then you face a fine. Your accountant is only as good as the information you provide them, so start on the right foot by giving them all information they need to know.
Do Not Listen To Neighbourly Advice
When a person starts a new business, they often receive multiple advice offers from non-qualified friends and neighbours. While these intentions are good, they are often misinformed and incorrect. Your business accountant knows the current tax and business operation laws, so it is best to heed their advice over that of a well-meaning friend.
Never Co-Mingle
It is critical your personal and business finances are kept separate. There may be times when you are short of funds to pay a private bill, but taking business funds creates complications. For example, personal accounts are legally not included in the company expense report, so your accountant now needs to carefully check all expenses in your system to remove anything that is not a business cost. This examination creates a higher accountant cost. Keep your life simple by keeping these two parts of your life separated.
Finally, if you ever have questions about the financial side of running your business, make an appointment to discuss these with your accountant. It is better to get advice throughout the financial year than to find that you have been doing things wrong at the end of the year. Your accountant wants your business to succeed, so take advantage of the advice they bring to the table. Contact a local business accountant to learn more.
Share27 January 2022
Hello! My name is Hannah and this is my money blog. I decided to start writing about this topic after my recent visits to see a financial advisor. The advisor was able to give me lots of fantastic advice about how I could improve the state of my finances. I had been spending too much money and not saving enough and it was really starting to stress me out. Thankfully, by following the advice given to me by my advisor, I have now started to take control of my money. I hope you enjoy reading this blog. Thanks for stopping by!