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A business structure dictates the legal structure of a given organisation as recognised by the jurisdiction. Examples of such structures include partnerships, corporations, sole proprietorships, and limited liability companies. However, these structures are not a set-and-forget type of activity. Businesses evolve, and so will their structure—meaning that the business structure you started with a few years ago may no longer be applicable to what you do today!
If you are reading this article, then it is safe to bet that you are wondering if your business structure is still the right structure for your needs. You are not alone in wondering this; many other companies also constantly wonder if they are using the right structure or whether they should switch to one more suited to their pace.
Here are some examples where a business should have switched structure to help you understand if your business needs a change:
A business starts as a sole trader and starts growing rapidly in the next three years. Unfortunately, the accountant did not consider all the changes the business experienced, and as such, did not review or change the business structure! This led to a substantial amount of income tax cost that resulted in additional liability for PAYG (pay as you go) instalments.
Although unsure about what is going on, the business owner believed that the tax cost was just too high. While consulting with the current accountant did not lead to any solution, a second opinion was wanted, and so the owner set out to reach out to another accountant for a second opinion.
Does this sound like you? If so, your business is highly likely to need a structural change. The above example is something many businesses actually experience in the real world. In many cases, you will need to re-establish your sole trader business as a company, paying a measly fee compared to the income tax saved from the change.
A business initially failed in its early endeavours, thus forcing its owner to set up a brand-new company and purchase the investment property from the previous endeavour. The owner believed that they could start this new business, losing money in the first year to avoid paying tax on rent from the investment property. Meanwhile, their focus was to improve cash flow to grow the business and later start making money.
Unfortunately, they lost the eligibility to discounts on the capital gain, which would have allowed them to ignore half the capital gain on investment properties. This results in hundreds of thousands of taxes needed to be paid during disposal.
If this relates to you, then fear not. All you need to do here is to go back to your old business and use a trust to purchase your investment. This will allow you to still use general discounts on capital gains, allowing you to save a lot on tax costs.
What is the general tip here? It is simple, really. All you need to do is get good advice! Good advice is one that you can easily understand and see how it can apply to your business. It is one that allows you to understand exactly what you can expect from it, helping you form an image in your mind of where you can see your company in a few years. Get good advice from professional and reliable accountants, and they will help you figure out if you need to change your business structure!
New Wave Accounting is your group of local small business accountants in the Gold Coast offering end-to-end accounting and bookkeeping services to help businesses in the area grow. Work with us today and receive the help you need to steer your business to success! Get in touch with us today!
As a small business owner, you need to understand how challenging it is to separate your personal taxes from business taxes. However, this is a must so you can closely monitor how your business is doing and formulate an effective solution in case there is an issue. Handling finances will be a lot easier if everything is organised and things are simplified.
Auditing will be easier and more seamless when your business tax is organised separately from your personal money at the end of the financial year. When they are combined, it may result in confusing financial records and may even require you to spend more time fixing them. To solve such accounting issues, you may hire several accountants or pay for tools to organise taxes, personal expenses and other financial matters.
Auditing will be easier and more seamless when your business tax is organised separately from your personal money at the end of the financial year. When they are combined, it may result in confusing financial records and may even require you to spend more time fixing them. To solve such accounting issues, you may hire several accountants or pay for tools to organise taxes, personal expenses and other financial matters.
It would be difficult to manage your overall finances when purchases for office supplies and groceries are recorded under one bank statement. That is why using a separate account for personal expenses and business operations are highly advisable.
Another benefit of having an account for your business that is separate from your personal account is that you can avoid possible financial troubles due to unorganised record entries.
Here are some of the tips to keep your business tax separate from your personal finances:
Make sure to open a bank account for your business finances and another one for your personal money. With that, you can have peace of mind that every transaction will be properly accounted for. No more worries about messing up your expenses and income since there are separate records to where you can refer to.
You can be more organised if you will manage two distinct bank accounts and avoid unexpected tax problems when it’s time for tax payments. This will also ensure that you will set aside some money to be allocated to your GST liabilities and income tax.
In some cases, small business owners borrow money from their personal account to aid business operations during a tough time. Although it is inevitable in some circumstances, these instances can be avoided. Make sure to set a clear budget for your business based on your current income and business status. It will prevent you from borrowing money from other accounts too often. You may also implement some precautions and measures to keep your business operations stable even when facing difficult times.
There should also be separate storage boxes for your receipts, especially if you’re making cash payments for both business and personal expenses.
When you work with an accounting services firm, you will be advised to prioritise your business receipts. This is because most tax auditors are highly concerned with the status of your business expenses. You should keep all the receipts and organise them properly to make it easier for you when tax season comes.
For some business owners, hiring an accountant may sound unnecessary. However, this is merely a myth. A good bookkeeping service will be a big help in organising your income, expenses and other business processes. An accountant or finance professional will help you become more organised and systematic with your financial records. They can do the tedious tasks for you and the whole business.
Every business organisation must recognise the advantages of having a separate record of your personal and business tax. This will not only avoid confusion, but it will also become beneficial in making every process of running a business more efficient.
Are you looking for a tax accountant on the Gold Coast? Make sure to get in touch with our professionals at New Wave Accounting. We are always dedicated to providing accounting and bookkeeping services to small business owners in different industries.
Keeping your Business Activity Statement (BAS) active and up-to-date every month or quarter is essential. Your BAS is related to your PAYG, GST and other taxes. So, knowing what’s going on in your BAS every month and keeping it accurate only makes sense. Here’s why:
Tax offsets are only granted to those who truly need them. They are based on the amount on your taxable income and your tax payable. Non-refundable tax offsets like these can lower your tax payable to zero if used, but this will not be granted if not filed for.
As for other deductions on your income, offsets also can’t reduce your Medicare levy and Medicare Levy Surcharge, if you have any. In addition to the tax paid on your taxable income is 2 per cent of the Medicare levy.
When you don’t meet the deadline for your BAS on time, you are subjected to pay fines. The fines will depend on the size of your business. Even if you think you only run a small business, you will still be charged. In fact, there’s a range of penalty fees for different business sizes:
With those hefty fees, you surely don’t want to miss anything when it comes to your BAS; therefore, pay and submit it on time to avoid any significant losses.
When submitting a BAS, your company will either owe money or be owed money. However, if you have a tax debt or fail to fill out all necessary information, you will withhold the refund.
This is inconvenient and something that you don’t want to get through. That’s why you need to submit all necessary information and make sure it’s updated so you don’t need to go through withheld tax credits.
A mistake on your BAS means you need to lodge a new revised BAS. With that, you’re going to need to take some time out of your busy schedule to do this. Plus, you’re going to have to deal with the wasted resources. When you have an up-to-date BAS, you prevent costly mistakes.
Doing BAS translates to excellent record-keeping. It involves logging fees, sales, expenses, wages and costs. When you keep up-to-date and provide accurate reporting, you will have access to the overall state of your business. In turn, you can use the information to set budgets and make accurate predictions based on how you did your previous BAS.
In your BAS, you need to declare all PAYG withheld amounts. Then, you need to pay the withheld tax to the ATO. When you have an accurate BAS, you will find it easiest to create a PAYG withholding annual report.
That’s why you need to aim to lodge the report after you give employees their payment summaries. The faster you submit it, the quicker they can file out their tax return.
Accurate BAS is crucial to your company and employees. Therefore, you need to ensure it is up-to-date. That way, you can prevent any significant losses and inconvenience along the way that could adversely impact your business. All these accounting-related concerns shouldn’t rest on your shoulder alone. Work with an accountant you can trust to ensure the accuracy of your BAS.
Let a reliable accountant in the Gold Coast help you out. Here at New Wave Accounting, we offer end-to-end accounting and bookkeeping services that can scale and grow businesses. Contact us today!
Australia’s tax laws have been striving to make payments fair for every individual. There is a percentage of people who live very comfortably, and many Australian citizens are barely making rent. To help those in a financial predicament, the government has implemented tax offsets to benefit low and middle-income earners.
Tax offsets let low-income earners pay less tax on their taxable income outside their deductions. They can reduce your tax payable to zero, but any unused offset cannot be refunded.
Tax offsets are only granted to those who truly need them. They are based on the amount on your taxable income and your tax payable. Non-refundable tax offsets like these can lower your tax payable to zero if used, but this will not be granted if not filed for.
As for other deductions on your income, offsets also can’t reduce your Medicare levy and Medicare Levy Surcharge, if you have any. In addition to the tax paid on your taxable income is 2 per cent of the Medicare levy.
You don’t need to apply for anything to get the low and low to middle tax offsets. If the Australian Taxation Office (ATO) finds that you are eligible for it, they apply as long as you submit your tax returns on time.
You can view it on your notice of assessment in the non-refundable tax offsets section to find out how much you were entitled to. If you completed things online, your notice of assessment will be sent to your myGov Inbox as soon as your return is finalised.
Any tax refund will be restored to your bank account. If you have any debt to the Australian government, the ATO will take some of it out of your refund.
Later last year, in October, the government announced they would start implementing stage two of the Personal Income Tax Plan. This stage increases income tax offsets and states that low and middle-income tax offsets will still be available for the 2020–2021 income year.
If your taxable income is between $37,001 and $126,000, you can qualify for some or all low and middle-income tax offsets. The offset amount is relative to factors, such as your taxable income and how much tax you have paid.
Tax offsets can be beneficial to many low and middle-income earners struggling to make ends meet. As everyone lives on different income levels, it wouldn’t be fair for everyone to pay the same as the people on the top. Being aware of the policies and qualifications can help you save on expenses and allow you to live more comfortably, so it is always a great reminder to tell every working adult to file their taxes.
If you’re having a hard time dealing with these numbers on your own, you need an accountant along the Gold Coast to assist you in the process. New Wave Accounting is an end-to-end accounting and bookkeeping service that helps businesses in several industries scale and grow through our innovative methods. Book a free strategy session today!
The Goods and Services Tax (GST) is a value-added tax paid for goods or services sold for domestic consumption. It’s paid by the consumers when buying products or getting some services and remitted by the businesses specifically to the Australian Tax Office (ATO). But did you know that you can claim a credit for any GST included for purchased products or hired services?
In this article, we will share more about what GST credit is and when you can claim it.
GST credit is a credit for the tax included in the price of your business inputs. Also called an input tax credit, this allows you to recoup funds from the ATO or offset this credit against the GST amount you’re liable to remit. If such credit is higher than your tax liability, you’ll be able to get a refund from the ATO. To claim a credit, you must:
Keep in mind that there are certain instances when you’re entitled to claim a GST credit, such as the following conditions:
All it takes is to report the GST you pay and the GST credits you’re entitled to obtain on a monthly, quarterly, or annual basis. Likewise, remember that a four-year time limit applies for claiming GST credits.
There are a few things you need to know when looking to claim GST credits. Take note of the details below:
When you want to claim a GST credit for a purchase that’s A$82.50 (including GST), you will need a tax invoice. Take note of these circumstances:
Aside from the tax invoice, you may need these details for purchases less than A$82.50:
On the other hand, if you don’t have those documents, you must keep a purchase record with these pieces of information:
At this point, you now know what GST credit is and when to claim it. When you ensure that all your records are accurate, you can rest assured that you will have a smooth period with the ATO. As such, be sure to consider all the valuable information discussed above, and we hope this article has shed some light on what you need to know about GST credit!
We’re an accounting firm on the Gold Coast that helps clients and businesses manage their finances by increasing profits and reducing taxes. If you’re looking for professional business accountants to help you deal with your GST credit, get in touch with us today to see how we can help!
Most small business owners are hesitant to hire a bookkeeper because they think it’s still too early for their business to do so. However, bookkeepers are crucial to your business, regardless of its size, because they can help sort out your finances. Finances are often the first thing that goes down the drain in small companies, often due to poor management.
As a business owner, you already have a lot on your plate and sitting down to work on your business finances isn’t really the best way to stay productive and find opportunities to grow your brand. Here are some of the things a bookkeeper can do for you:
Your bookkeeper will make sure to stay on top of your business’ accounts daily for all types of transactions. By doing so, it’ll be easier to keep an eye on your cash flow and it will save a lot of data entry time.
With a bookkeeper, you can be assured that all your business records are up-to-date. Moreover, your bookkeeper will be the one responsible for flagging up any inconsistencies between your books and business accounts to ensure all problems will be resolved quickly.
Tax is a sensitive part of your business, and this is where bookkeepers can help you a lot. Your bookkeeper will ensure your business is aligned with the relevant laws.
Can you imagine doing your taxes all by yourself along with a business to run? That will be nerve-wracking! With a bookkeeper, you can leave the books to him to ensure that tax deadlines are met, and all necessary documents are ready.
Bank fees that link software with your business bank accounts will let you see each transaction in real-time, which is a convenient way to keep track of your finances. A bookkeeper can manage this to ensure maximum transparency.
Bookkeepers are usually the ones who make payments on behalf of your business, from supplier payment to petty cash and expenses.
A huge responsibility of bookkeepers is to prepare invoices and send them to clients to ensure that you receive payment on time. Additionally, a bookkeeper may also manage accounts receivable ledger and chase late payments to ensure your records remain accurate.
Your bookkeeper will also be responsible for preparing important financial statements for your business, such as profit and loss statements, balance sheets and cash flow statements.
Some bookkeepers can help fulfil payroll and other HR functions. Usually, this involves assisting businesses with the processing of paychecks and tax payments to employees.
One of the most important tasks of a bookkeeper, especially for small businesses, is to ensure that the business doesn’t run out of money daily. Your bookkeeper will be responsible for tracking the balance of revenues to expenses; he may also provide you with advice if your company needs more available cash to run.
Having a bookkeeper for your small business will also make you have a business partner who can help you make sensible business decisions. Regardless of the size of your business, having a bookkeeper will go a long way.
Get reliable bookkeeping in Gold Coast, QLD at New Wave Accounting. We provide end-to-end accounting and bookkeeping services to scale and grow businesses. Contact us today to learn more about what we can do for your business.
While everything about a business, from its brand to its product, is vital to its success, one factor that can severely affect a company is industry compliance. It is surprising, then, to know that many business owners do not know what compliance is, let alone how it can affect their company.
Simply put, compliance is the act of following the rules and regulations set by the industry. It applies to essentially every aspect of the company—how the business is run, how the customers are treated, and so on. The reason compliance exists is to protect the company from all sorts of trouble, whether it be fraud or legal problems.
With that being said, if you want to fully understand what compliance is and why it is so important, you are in the right place. In this article, we will share precisely why compliance is so essential for your company.
Companies are all about making a profit. Knowing that being compliant helps boost bottom lines, it is only logical to be compliant! That said, being compliant helps a business make more money because it means it will not have to waste time addressing non-compliance problems. It will end up with more time to focus on other efforts to increase its competitive advantage. In other words, being compliant leads to more profits and fewer penalties.
Lawsuits are commonplace in the business world. This is because of injuries and other issues due to non-compliance to safety laws and regulations. By being compliant, a company can maintain a safe and productive working environment. This leads to reducing the risks of potential issues, which can help a company avoid expensive lawsuits that waste a lot of time and money.
Every business knows that it is only as good as the people that run it. This means that a company that fails to be compliant and mistreats its staff, such as by giving them unfair wages or holding back their benefits, will ultimately run into problems. When a business is compliant, employees tend to be much happier and more satisfied with their work, which can translate to better productivity.
A reputation takes years to build and only mere seconds to destroy. The last thing any company wants to deal with is someone or something that hurts its reputation, leading to negative exposure in the offline and online world. Unfortunately, non-compliance can cause this problem. It can lead to negative exposure that can cost a company customers and opportunities. Being compliant helps maintain a good reputation, which is vital in building trust between businesses and customers.
Being compliant means setting yourself up for success. When your business follows your industry’s rules and regulations, you can maintain a positive business image. Your business will also provide a productive and safe work environment and become more attractive to customers to grow your business.
That said, being compliant in specific areas, such as accounting, can be extremely challenging. As such, it pays to work with professional services to address compliance needs to ensure you minimize costs and maximize profits!
New Wave Accounting offers end-to-end accounting and bookkeeping services in Australia to help small businesses scale and grow quickly and efficiently. If you are looking for small business accountants to help you stay compliant in your finances, work with us today!
All organizations – no matter the size or industry – stay alive based on two financial flows: the revenue and the expenses. You need to spend the right investments to earn money, but understanding how it comes in and goes out is crucial for the stability of your business.
That’s why creating a dedicated accounts payable department is paramount, especially if you want to stay on top of the company’s financial status. It also revolves around the expenses left unpaid by the enterprise, which means it tracks the date and ensures the money is cashed in a timely fashion.
The goal is to lower the accounts payable days, but there can be complications in the process that can lead to costly consequences. If you find any marginal errors in the accounting records, this can result in your accounts payable becoming understated.
Any record-keeping mistakes can have serious repercussions on your financial handling, such as make your accounts appear like you have enough resources to pay creditors even if you don’t. This can lead to grave losses, so it helps to understand the common causes behind this flaw in your records:
Inventory purchases typically create an accounts payable balance, which should pen down the cost of goods. Any incorrect data in the record can lead to inventory variances, which results in an understatement of your accounts payable.
All data entries on your accounts payable invoice must be logged with their corresponding transaction date. After all, recording the time, day, and month of every transaction ensures your business knows all outstanding accounts payable.
Tracking the money prevents you from being cash-strapped in the long run, so any errors with the transaction dates can lead to an accounts payable understatement for the month.
When the balance you put on journal entries are incorrect, which can result in a discrepancy in the record. Cross-checking accounts and balances – either manually or using accounting software – can do wonders for spotting these errors and avoiding an understatement in your accounts payable.
Logging in the wrong amount when starting a balance for a new accounts payable account can immediately result in an understatement, which happens often when you fail to enter a beginning balance for a starting vendor.
Understanding the culprit behind your accounts payable understatements is critical since it can reveal errors in your records. It’s also the stage that’s the most vulnerable to fraud, which is why hiring a seasoned and dedicated bookkeeper is key to ensure your accounts payable remain accurate to the letter.
If you’re looking for reliable accounting and bookkeeping services in Mermaid Beach to manage your tax returns and apply money-saving tactics, we’re the best accounting firm to call! Contact us at (07) 55041999 and see how we can help you!
When running a startup, founders often have to be many things to many people; apart from facing clients, they have to oversee operations and marketing, keep track of the company’s finances, and set the budget for various projects. This may be manageable for very small companies; as a firm, grows, however, it needs people working in more specialised roles.
Bookkeeping, for example, is something that grows in complexity as the business scales up. This must be assigned to another employee, or outsourced to a small business accountant; otherwise, founders run the risk of being burnt out from all the extra work. If you’re starting to question why you went into building a business from scratch, it might be time to delegate some functions. Here are the benefits you will get if you hire a freelance accountant today.
Understanding your business’ numbers is an important part of keeping it running. Though you’re looking to offload the bookkeeping to another person, you should still be aware of how money flows in and out of your company. You don’t have to do the work of aligning the balance statements and preparing audits, but you should know how to explain your own data.
When you hire a bookkeeper, they can help you build and maintain systems for tracking your company’s income and expenses. To help them do a good job at that, though, you need input. Knowing your numbers will help your outsourced expert come up quickly with a system.
Hard copies of documents are a waste of resources. They take much more time to fill out and are expensive to maintain. If you still use paper in your office, especially for things like annual reports and budget proposals, it’s time you looked into getting rid of these. Going paperless will keep human error to a minimum and it lets your outsourced personnel work remotely.
Consider only keeping hard copies of important documents, like government permits, certifications, and long-term contracts. Your chartered accountant can help you set up an invoicing and payment system that does not need physical receipts or job order forms.
This is one area which you should leave entirely to your specialists. Your bookkeeper will be far more knowledgable than you about how to pay for your taxes. They can help you systematise your information and take care of intermediate documents like quarterly BAS or Business Activity Statements. Bookkeepers that are registered BAS Agents are authorised by the Australian Taxation Office and licenced by the Tax Practitioners Board.
They can help you regarding GSTs or goods and services taxes and matters arising from these. They can also help you allocate your claims properly; business owners might miss out on claiming GST credits if they try to do their taxes themselves. Your accountant helps you find every advantage you can get for your SME and for improving its cash flow.
SMEs will save a lot of time, money, and effort when they use online SaaS and cloud-based solutions for accounting. The right technology solutions will help your accountant meet payroll obligations, track payments and deliverables, and follow up on clients’ invoices. There are so many applications available today that can help a business become more efficient, and outsourced accountants can help you adopt these in your workplace.
The financial management of your business is something you can easily delegate to a skilled freelancer. Outsourced accountants can help you make your processes quicker while keeping costs low for your company.
For business accountants in the Gold Coast, get in touch with New Wave Accountants & Business Advisors today. We have helped over 600 businesses minimise tax and maximise profits with our outside the box accounting services. Get in touch with us to learn more!
Running a business involves plenty of financial and tax obligations, including complying with Australia’s Goods and Services Tax (GST) requirements for online and offline entrepreneurs.
By definition, GST is a value-added tax of 10 percent that is often levied on most goods and services sales. Businesses often register for GST to lower the cost of administration, individual income tax rates and boost investments or savings for your bottom line.
GST can provide a wealth of benefits for small businesses and even establish a presence. However, it can be tricky since it requires small businesses to complete a Business Activity Statement (BAS) every quarter of the year.
Failing to comply with the BAS requirements on time can result in problems with the ATO, which can be a significant bottleneck for your operations.
With the current rate of GST, you can expect all your goods and services to have a 10 percent addition, which should go directly to the ATO. If you’re selling $100 worth of goods, for instance, the GST will add 10 percent, which means the total cost will bump up to $110.
You will always be charged with 10 percent in GST when buying supplies and other forms of equipment for your business, but the advantage is that you can claim it back as a credit. By the quarter of the year, you need to compute the total GST you gathered from your sales and subtract the amount to the credits on your purchases.
The result will be the amount payable, which you can determine by paying the net GST to the ATO.
The GST tax system can put an unimaginable strain on Australian businesses as companies need to ensure they stay compliant and meet lodgement deadlines to the dot.
With that in mind, hiring professional accounting and bookkeeping services can ease your workload as they can provide GST consulting and tax-effective advice to ensure your business stays compliant.
If you’re looking for quality accountants that provide accounting and bookkeeping services for your entrepreneurial ventures in Mermaid Beach, we’re your best option! We can help your business register for Goods and Services Tax (GST) in no time, so contact us at (07) 55041999 and see how we can help you!
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