FAQ’s

What Do I Need to Do to Start a Business?

There are many. Firstly, we strongly advise you contact us and make an appointment before you do anything including what business you like to start or purchase. If you look under checklists we have created a checklist of items you will need to consider.

Do I have to register for GST?

If you expect your turnover to be over $75,000 a year you will need to register for GST. If you are not sure you can wait a quarter or two to see if you will achieve $75,000+ in sales and then register for GST at the start of a quarter. A quarter starts on the 1st July, 1st October, 1st January and the 1st March.

Once you register for GST you are required to add 10% GST to your invoices to your customers. In other words you start to collect GST from your customers (called GST collected). However, you can claim back GST paid on business expenses. Normally, your GST collected will be greater than your GST paid which means you will have a GST liability to pay each quarter.

What tax records do I need to keep for my business?

We recommend some form of bookkeeping system. If you are a small one man operator then excel spreadsheets are fine.

Otherwise we highly recommend Xero which starts at around $50 per month for the software. Xero obtains bank feeds from you bank so you do not need to enter each transaction individually rather allocate each transaction to an expense item or revenue item for example. We can do your Xero bookkeeping for you starting at $100 per month and increasing depending on your turnover, payroll & number of staff. In other words Xero can grow with your business.

If you would like to use MYOB or QuickBooks Reckon that is fine. We work with any software. However, our recommended bookkeeping software is Xero.

You will also need to keep all tax invoices on all your purchases for 4 years. We recommend obtaining a folder and place all your purchase tax invoices in date order for easy reference.

What is the Purpose of a Business Activity Statement (BAS)?

The purpose of a BAS is for you to pay your;

  • GST
  • PAYG withholding from your employee’s wages and
  • Your PAYG Instalments on your business profit
When Do You Lodge a BAS?

You are required to lodge and pay BAS for the following quarters;

Jul-Sept – Due 28th October
Oct-Dec – Due 28th February
Jan-Mar – Due 28th April
Apr-June – Due 28th July

GST Payable

Once you register for GST you are required to add 10% GST to your invoices to your customers. In other words you start to collect GST from your customers (called GST collected). However, you can claim back GST paid on business expenses. Normally, your GST collected will be greater than your GST paid which means you will have a GST liability to pay each quarter.

So let’s say for example to for the quarter July-Sep you invoiced to customers $20,000 plus GST and paid $7,000 in expenses then your GST payable for the quarter is;

$2,000 minus $700 = $1,300

PAYG Withholding Payable

Also in the BAS you need to pay your PAYG withholding for your employees. So for example you had once staff member and his wages were $1,153 gross per week then the tax per week would be around $229. This means you pay him $924 per week after tax. However, in a quarter if you paid him 13 times (or 13 weeks) then the PAYG withholding will be $229 x 13 weeks = $2,977.

PAYG instalments Payable

Also on your BAS you will need to pay a PAYG instalment on the profit of your business. For example let’s say you are a sole proprietor and last year you made a profit (income less expenses) of $50,000 then your annual tax liability on this income is $8,547. So if we divide into four quarters that is $2,136 per quarter.

If you make these installments on your BAS each quarter and your profit for the current year is the same then you won’t owe any tax at the end of the year.

If your profit is more you will need to pay the difference.

If your profit is less you will end up with a tax refund.

What is an ABN, ACN & TFN?

An ACN is an Australian Company Number. This number is for ASIC the Australian Securities & Investment Commission. They are a government institution that maintains a public database of companies with details of company directors, shareholders and operating addresses.

An ABN is an Australian Business Number with the Taxation Office. Every business in Australia needs to have one to legally operate (with few exceptions). You quote your ABN on invoices to customers and your suppliers will have their ABN when they invoice you. The ABN is to ensure that all GST credits claimed are not false.

A TFN is a tax file number. Every entity must have one which includes an individual, company, trust, self-managed superannuation fund and a partnership. Any entity with a registered TFN will need to lodge a tax return with the Taxation Office.

What is the Best Software Package for Bookkeeping for My Business?

The main bookkeeping software’s are Xero, Quickbooks and MYOB.

We prefer Xero because it is more user friendly, cloud based and reliable. However, we support all our clients who use MYOB or Quickbooks.

In addition there are many software packages that enhance invoicing for particular industries. A lot of these integrate with Xero.

How Much Tax Do I Pay?

Most likely too much. We suggest you book a free consultation with us so we can advise you of your future tax strategies.

The Taxation Office have many business and investor tax breaks that you are most likely missing out on.

Can I claim Motor Vehicle Expenses?

As an employee you can claim car expenses if you use your car for work.

This does not include travelling to and from work.

For example, a sales representative travelling to visit clients can claim most of his / her motor vehicle expenses based on a work / private use %. You will need to keep a log book for 3 months every 4 years.

Look at our checklists for our motor vehicle checklist.

Can You Provide Me Business Advice?

Definitely. We have assisted 1,000’s of small to medium sized business owners ranging from a turnover of $10,000 to over $5,000,000. We are truly experts in this field.

We can assist on all aspects of business issue such as budgeting, marketing, business ideas, marketing ideas, hiring staff, signing a lease, finance issues, funding issues, legal issues, business growth, expanding overseas, tax structures and many more.

What Do You Charge?

At our free consultation we provide you a breakdown of our fees based on the services you require or requested. These remain stable throughout the years unless you require more services.

If you require additional services or a situation arises where we feel you are missing out on opportunities then we will stipulate what these additional services will be and the fees associated with them (upfront) so there are no surprises.

We rarely have any disputes over fees because the monetary value from the advice we provide is many times over the fees we charge. In any case they are very competitive and reasonable.

Is it Easy to Change Accountants?

Yes. We simply write the letter to your former accountant and let them know you are switching your services to us.
We usually request;

  • A full copy including depreciation schedules of your last individual tax return
  • For a trust, company, partnership or superannuation fund we request a copy of the last tax return and financials
  • For a company your company register
  • For trust and superannuation funds copies of the trust deeds
  • We add you and all your associated entities to our tax portal
  • We add all your companies to our ASIC agent database

In short we do everything for you. You don’t need to do anything other than thank your former accountant if you wish to do so.