Accounting
Business accounting is a critical aspect of running a successful business. Learn the basics of accounting and when you should seek professional expertise.
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A government incentive to support business investment for 15 months.
A cash boost of up to $100k for eligible SMEs and non-profit organisations.
Fortnightly payments of up to $1,500 for 6 months for every eligible employee.
Prepare and submit your tax returns and meet tax obligations including payroll, GST, FBT, etc.
Get expert advice on annual or periodic budgeting and forecasting for your business.
Maintain your business's financial health with accounting services
Find and apply for the right government grant for any type of business.
Effectively manage and mitigate risk with financial and due diligence assessments
Keep your books organised and updated in accordance with Australian standards.
Get advice on tax implications when buying or selling assets such as capital gains tax (CGT).
The instant-asset write-off threshold is $30,000 to $50,000 for businesses with a turnover of less than $500 million.
Get expert financial and accounting advice to grow or transform your business.
Prepare and lodge your BAS returns and fulfil all of your GST obligations.
Review financial statements of a business you want to buy to determine their value and negotiate a price.
Set off on the right foot by incorporating your company in line with regulations and smart business strategies.
Wind down your business in accordance with regulations and finalise your accounts correctly.
Ensure you are meeting corporate secretarial standards including ASIC requirements.
Review your financial affairs and assess associated business risks to stay ahead of the game.
Manage your payroll accounting including payroll, payroll, taxes, employee benefits and compensation.
Get your finances in the best possible shape and develop accounting strategies to push your business forwards.
Hatty Bell, Community Manager at SavvySME
Would be great to get your thoughts on this too @Lisa Ormenyessy @Richard Forrest @Hitesh Mohanlal @Brad Lyons
Phil Khor, Founder at SavvySME
As Kirsty said, the easiest accounting software package for small businesses boils down to personal preference and what you are using it for. Xero, QuickBooks, Reckon, Sassu (and many other accounting software programs) are designed with small business owners in mind and have excellent resources to equip you with what you need to use the various tools and functions. While there is no one-size-fits-all approach, Xero is arguably one of the easiest accounting programs for small business owners.
Some of the features that make Xero such a user-friendly accounting package include:
It’s cloud-based - meaning you can access it from any computer or mobile device with an internet connection
There are 500+ tools available to tailor the program to your business’s requirements
It’s very easy to collaborate with your bookkeeper or accountant
Automatic currency conversion
Automated bank statement feeds
User experience is on point - Xero has one of the prettiest user interfaces which makes accounting far less daunting
It has an award-winning 24/7 email support team
The key is to read comparison guides and user reviews to help you decide on the right package. I would also second taking advantage of free trials to get a feel for different programs and how they work for you. Hope this helps.
Bruce Patten, Director at Pattens Group Pty Ltd
Every business is different so there is no best software accounting package. MYOB, Xero, WAVE, Quickbooks etc all have different functionailty. Does the business need a POS interface? Does it require stock records? Do you need time keeping, traceability, barcode reading, multiple currencies conversion and reporting? Record keeping and reporting is critical for all businesses, but so are budgets and planning. Around 80% of start-ups fail in the first 5 years. so is the software decision a high prority? My suggestion:
1. Define a business plan with milestones and dates.
Most businesses aim at nothing and hit it with incredible accuracy.
2. Find a good bookkeeper or accountant
You will be busy running the business.
Get a professional to do the accounting and provide financial advice, lodge BAS, tax etc.
3. Get an Executive Support Team (people that will give you straight and honest feedback).
Don't do it on your own - you are too close to see the reality.
Ego's, emotions, passion can get in the way of objectivity and success/failure.
4. Set a budget for at least 12 months by month.
What is the breakeven point? How much money do you need to succeed?
5. Manage the business against the budget.
You can only manage what you measure. Know when to reassess priorities or stop.
Failure is a great teacher than can lead to success. But it can't do it on its own.
And the original best accounting software decision.. we covered that in point 2
As a side you should explore any grants available to support your business.
What are the main factors in selecting the best accounting firm for your small business?
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Hatty Bell, Community Manager at SavvySME
It would be great to get your thoughts on this @Stuart Reynolds @Leigh Cummings @Mark Chapman
Hatty Bell, Community Manager at SavvySME
Would love to get your opinion on this @Amanda Hoffmann - Certified Bookkeeper, BAS Agent
Can someone please explain the differences between BAS and PAYG and how they work?
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Amanda Hoffmann - Certified Bookkeeper, BAS Agent, Owner / Manager ★ Certified Bookkeeper ★ BAS Agent at My Office Books - Virtual Bookkeeper & BAS Agent
BAS
If you are a business registered for GST you will be required to lodge a Business Activity Statement. This statement will include PAYG for staff and PAYG instalments along with other taxes like Fringe Benefits Tax, Fuel Credits or Wine equalization Tax.
See https://www.ato.gov.au/business/business-activity-statements-(bas)/ for more details.
PAYG
Pay as you go relates to :
Employee wages
PAYG Instalments
PAYG
You do not have to be registered for GST but employee staff.
As such, a Business Activity Statement will not be applicable. You will need to still declare and submit Single Touch Payroll (STP) for your employees.
Link on the ATO for more details https://www.ato.gov.au/Business/PAYG-withholding/
PAYG INSTALMENTS
If your company/business made a profit in any financial year, the Australian Taxation Office will require you the following year's tax liability in advance.
Link on the ATO for more details https://www.ato.gov.au/General/PAYG-instalments/
Hatty Bell , Community Manager at SavvySME
Thanks so much for this @Amanda Hoffmann - Certified Bookkeeper, BAS Agent . Really useful information there!
Amanda Hoffmann - Certified Bookkeeper, BAS Agent, Owner / Manager ★ Certified Bookkeeper ★ BAS Agent at My Office Books - Virtual Bookkeeper & BAS Agent
The price will vary depending on the experience/qualification of the BAS Agent and what services are included.
Hatty Bell , Community Manager at SavvySME
So helpful. Thanks @Amanda Hoffmann - Certified Bookkeeper, BAS Agent !
How much does the ATO charge as a penalty fee if your BAS lodgement is late? Is there any way of appealing the penalty fee?
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Amanda Hoffmann - Certified Bookkeeper, BAS Agent, Owner / Manager ★ Certified Bookkeeper ★ BAS Agent at My Office Books - Virtual Bookkeeper & BAS Agent
When you fail to pay your BAS on time, the Australian Taxation Office may impose a late lodgement penalty fee.
One penalty unit will be applied for each 28 days that you are late which equals $222
See https://www.ato.gov.au/general/interest-and-penalties/penalties/
If you know you will be late lodging or payment your BAS the best option is simply to pick up the phone and let the Australian Taxation Office know in advance. Most times they are understanding of your circumstances and will not impose you with a penalty fee.
The WORST THING YOU CAN DO is not contact the Australian Taxation Office.
Failure to do so will only attract more fees and interest.
Principal at Spitfire Accounting Solutions
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Business accounting covers the financial management of a business. It involves recording, analysing, interpreting and presenting financial information in a way which allows business owners to make better decisions.
Accounting allows businesses to keep track of cash flow and ensures businesses meet compliance obligations for tax purposes.
The topic of accounting is often quite complex, but for small businesses, it’s helpful to simplify the process into three key areas:
Bookkeeping is essentially a form of record-keeping and is extremely useful for business owners when it comes to budgeting. When running a business, you’ll need to record all of your income and expenses. This can involve tracking invoice payments and business purchases, as well as keeping a record of all your receipts.
This is different to accounting, which is the process of collecting, interpreting and analysing this financial information and presenting it in a way which allows you to easily see the financial situation of your business.
Although bookkeeping can be done manually by writing down all transactions, there are easier ways to go about it with accounting software. Read about the different types of accounting software.
Accrual accounting is more commonly used than the cash method as accruals give businesses a more realistic idea of the income and expenses during a given time period. Accruals paint a more accurate picture of long-term business.
After you have a bookkeeping system set up, the next step in the accounting process is to determine the state of your business finances. As a business owner, you will want to know whether you are spending or earning more or less than you think, and how much money your business is owed or is owing.
This is where accounting reports come in. Accounting reports are statements that clearly show the financial status of a business over a specific time period, detailing all financial transactions and operations. Hiring an accountant to assist you along the way with accounting reports will ensure that all of your accounting records are correct.
There are various types of accounting reports, such as:
The business activity statement (BAS) is a legal document required by the Australian Taxation Office (ATO) for registered businesses. The purpose of BAS is to report on BAS tax obligations including Goods and Services Tax (GST), pay as you go withholding (PAYGW), pay as you go instalments (PAYGI), wine equalisation tax, Fringe Benefits Tax and Luxury Car Tax.
After you’ve considered the various accounting reports, don’t forget to consider the taxes that your business will need to pay.
Another important step of the accounting process is meeting your compliance obligations and filing the appropriate tax returns to the Australian Taxation Office (ATO). Some of the most common types of tax for businesses are:
If all of this is sounding complicated, you’re not alone. This is why many businesses consider engaging an accountant.
Accountants are an asset for small businesses because they help start, turn around and grow a business financially while keeping businesses on the right side of the law. They do the fundamental jobs of balancing your accounts, tax returns, financial statements, funding, loans and payroll.
However, beyond that, an accountant can also help steer your business in the right direction by showing you which numbers really matter.
Find out more about account services talk to accounting experts here.
Single touch payroll is a way of reporting tax and superannuation information to the ATO. The software allows you to automatically send the relevant reporting on salaries and wages, PAYG withholding and super as you are running your payroll.
A sole trader business structure is taxed as part of your personal income, e.g. if your personal income is taxed at 23% so will your sole trader tax. The full tax rate for a company business structure is 30% and there is no tax threshold. Different tax rates apply to base rate companies.
You can register for GST either by phone, online or through your registered BAS agent or accountant.
Petty cash is a small sum of discretionary cash used for ad hoc expenditures that are too small to merit writing a cheque. Examples of petty cash purchases include office supplies, flowers, petrol, cards. etc.
Financial accounting is a specialised area of accounting which involves a process of recording, analysing and reporting on a business’s financial transitions over a period of time. The purpose of financial accounting is to accurately prepare financial statements including income statements, cash flow statements and balance sheets.
Accounts payable are monetary amounts due to suppliers and vendors for goods and services that have not yet been paid for. The total sum of outstanding accounts payable is stated on a business's balance sheet.
Accounts receivable is the balance of money due to a business for goods and services delivered but not yet paid for by customers. Accounts receivable are generally in the form of an invoice or shown on a balance sheet.
A profit and loss (P&L) statement is a financial statement that provides a summary of all income, expenses, costs and revenue over a specific period, usually a quarter or whole financial year. Profit and loss statements are used to determine a business’s capability of generating profit and minimising expenses.
A cash flow forecast is the process of estimating or forecasting a business’s cash flow and projected income and expenses over the next financial year, although it can also cover a shorter period. Cash flow forecasts are a core part of financial planning and business decision making.
Accounting is the systematic process of recording, analysing, interpreting and presenting financial data and insights in a way that allows businesses to monitor and improve their financial health and meet compliance and regulatory requirements.
In accounting terms, fixed costs refer to costs that remain the same regardless of product output, e.g. premises rental payments, insurance payments and fixed loan interest rates. On the other hand, variable costs differ depending on the output amount, e.g. business supplies and materials, labour costs and energy bills.