Australia’s tax season is only a few months away and as a small business owner, it is probably not a time to be very excited about. At best it can feel like a hassle and at worst it can be a major source of stress and confusion.
Tax Season doesn’t have to be painful if approached with the right knowledge and sometimes the right tip can even see businesses reduce the amount that is due.
Get an Accountant
The first crucial step in surviving tax season is enlisting the help of a knowledgeable accountant. Do not just select the first one you find, it is important you hire one who understands the different issues of your industry. This is one area that labour hire companies excel in supporting small businesses. Many small businesses do not need access to a professional accountant throughout the entire year, so using labour hire, Melbourne businesses can simply hire one during tax season or for the quarterly reviews, ultimately saving them money.
Keep business and personal separate
Do not hire your accountant to treat both your personal and your business’ tax at the same time. While as a small business owner the line between private and business can be blurred it can lead to some of the most common mistakes. When the expenses are intertwined, owners forget to claim certain things and it can make tracking the BAS challenging for your financial officer. The easiest way to keep them separate particularly as a sole trader is to maintain a completely separate business credit card or account. This then also makes it easier to transfer over to the records to whoever you hire for the tax season.
This is one area that many small business owners find it easy to slack on. Updating records can be a tiresome process however ultimately it will save you the last minute rush when the records are needed. Updating them all at the last minute will also increase the risk of forgetting information, leaving certain expenses out or even losing the receipts for items and ultimately costing the business more money. If you do a little bit every day not only will you keep on top of the paperwork, it will also give you a better picture of your business’ overall financial health.
Use Accounting software
Using accounting software throughout the year and keeping up to date will make tax season much simpler. By taking a photo of any receipts and attaching them to the right expense, it will reduce the stress of keeping track of the paperwork. Research carefully all the different types, with the huge range available, there will be a version that is ideal for all your business’ needs.
Do not wait for the tax season to be already upon you before you start any financial prep. Not only is it a complicated process that requires some time to get right, if you wait too long the best accountants will all be booked up and an inexperienced accountant can end up costing you more than a simple tax return.