Many business owners do not have an accounting background and can struggle with the basic accounting concepts although their business is in good shape. If accounting is not your forte and your strengths are better focused elsewhere in your business, we suggest you hire a professional to look after the business finances and tax. This could be a reliable and experienced tax accountant. Keep in mind that their services are also tax deductible.
There are some tips to make sure you get your tax right in a year ahead:
- Ensure you have a handy accounting software with you, you might not pick up the expensive one but must select right one..
Ensure you keep good records as they
will need to be produced in case of being audited. Some examples are: sales and purchase invoices , bank account statements, deposit books and cheque books,credit card statements , financial reports ,stocktake records, debtor and creditor reports, BAS statement and employee
records, tax file declarations, timesheets, superannuation records and payslip
- Ensure your compliant accounting software is set up to account for GST accurately
- Ensure you keep personal and business transactions completely separate, especially for many small business owners, they use one credit card for everything.
- Ensure your filing systems are robust and easily accessible. You can also store records electronically. You must keep your records for five years from the last assessment you lodged.
- Ensure any entertainment purchases are declared appropriately and liable for Fringe Benefit Tax (FBT). e.g. motor vehicles.
- Ensure your income and expenses are all entered into the accounting software to support the GST paid on your purchases and collected on sales.
- Ensure your BAS is lodged and paid on time and the corresponding reports are kept on file i.e. GST detail report, balance sheet and profit and loss. The appropriate accounting program can produce these reports.
- Ensure the superannuation is lodged and paid on time and is recorded correctly
- Ensure backup your accounting data, even when you use cloud technology.
- Spend some time once a month/quarter with your accountant make sure your knowledge updated.