TRACK EVERY EXPENSE
Keep receipts for everything. You will need these at tax time. Doesn’t matter if it’s an item, service or anything that cost you money, you need it on your tax system.
Web based systems can help here. There are web and cloud systems that keep an inventory of what you buy, and can often integrate this with payroll and other expense information. It’s very convenient to hand this to an accountant and have all the information in one place.
SUPPLIERS
Whoever you are you will probably need basic materials of some kind, even if it’s only office paper. If your needs are very modest you can buy this yourself, but having a dedicated supplier for all your needs you may find you’re better off. Electronic companies do well to have wholesale parts delivered and even basic offices need printer supplies and water on a regular basis. If you use one or two suppliers for all you need you will probably save in delivery costs, and a considerable amount of time too.
The only real disadvantage of using one supplier occurs if the supplier goes broke – you may be stuck until you find a replacement. This is rare, and rarer still if they are a large and established company.
LOOK AT RETURN ON ADVERTISING
You are probably using several methods to promote yourself; find methods that work and cut the other out for the time being. Keeping at least some form of website is about the only mandatory requirement these days. If you’re a very small business a simple site that explains your services and give a contact number may suffice. A larger business may want to look at interactive sites. Find what works, and look at what your competition has had success with. Concentrate on your target audience and don’t waste effort in other areas.
TEMP OR CONTRACTOR WORKERS
You won’t need a full-time accountant unless you company is already quite large, the same goes for a few specialty positions. Yet you will need these services if you are to make the most of your tax situation, or if you need some expert advice for a particular business area. Hiring an accountant once a year for tax time is the absolute minimum. But this is wasted if you haven’t been planning your business operation in accord with what the tax system allows. Having somebody work once a week to show you the best plan for deductions and expenses can be beneficial. Failing that, get advice each time a BAS statement is due, every 3 months. Use tax and accounting advice to help plan your expenses and operation.
Keeping the same accountant long term can help, as the individual in question is familiar with how you run your company and finances. Remember, tax rules change every year. It helps to have somebody keeping track of everything and letting you know what the best options well in advance of tax time.
DEDUCTIONS
The deduction system in Australia has been temporarily modified, allowing small businesses (under $2 million) to deduct most expenses or items under $20 000.oo in a single year. Previously this limit was $1000.oo, with greater amounts being deducted over several years as the item’s value decreased. Given this situation it might be a good opportunity to gain some assets. This tax regulation is only meant to operate until the end of June 2017.