Tax Accounting Tips Every Small Business Should Know

September 17, 2021    Accountant Perthwa

Don’t you think a new business start-up is an amazing and intimidating task at the same time? If you are ready for your small business inception, don’t let that put you off! So, it could never be the worst time for accounting. 

So, during this start-up, it’s inevitable to keep in mind how mindfully you are going to do proper money management. Small businesses could live or perish on their accounting. If you have launched the most captivating product but can’t manage your dollars appropriately, you could jeopardise your business, falling into the pitfalls. 

Your small business could be messier and might not have dedicated employees to handle tax filing like big enterprises. So, given below are the top 7 tax accounting tips, which will be valuable for small businesses and help you get back on track. 

1. Set up your small business accounts 

Have you already registered your business with the local authoritative bodies? It’s high time for setting up business accounts, according to the small business accountants Perth. It lets you differentiate your personal accounts and expenditures from business accounts. Are you a sole trader? While legitimately, you don’t require an isolated account, still, it will help make your life a lot easier with a simple setup. 

It would be best to start by looking around at diverse banks, their fees structures, and other amenities for opening a business account throughout numerous banks. While rummaging for this, you may come across some banks with comparatively high costs but offer lucrative benefits, which could be more advantageous for your small business. 

After setting up your main account, open a business savings account too. This will allow you to manage taxes, bills and sometimes help in accumulating money for future investments. In case you are from ups and downs industry concerning work, it could be convenient to have a savings account.

Therefore, before you are ready to take a plunge in setting up a business account, please make sure you have completed all the mandated paperwork. ABN is required in that case to complete the process before applying. 

2. Be well-informed about Capital Gain Tax or CGT changes

If a small business sells its active capital assets, including trade or a business building, the Australian government charges 50% tax deductions. Although in order to be entitled to such deductions, a small business must pass its $6 million total asset examination. 

Such an exemption is delayed if a replacement asset is bought within 2 years of trading the CGT asset. Therefore, this gain is put off until the replacement asset is predisposed. Moreover, the tax deduction rate differs according to innumerable criteria enacted by the higher authorities. However, required changes must be properly researched and applied. 

3. Search for a top-notch bookkeeping system

Bookkeeping is indispensable for watching over your daily expenses and revenue. It includes:

  • Keeping track of receipts
  • Recording transactions
  • Reconciling bank statements 
  • Classifying transactions 

In order to avail the maximum benefit of accounting, it’s crucial to understand what’s happening with your daily finance. The tax accountant Perth knows a plethora of practical reasons to start bookkeeping after you have begun your small business. 

Bookkeeping for your small business is a fun and the most necessary process. You have to track your business expenses daily and revenue via your opted bookkeeping method. You might start bookkeeping to check daily expenses, more precisely, where your money flows in and out, allowing you to fine-tune your business operation and improve profitability. 

The primary objective of these tax accounting tips is to motivate you to keep a close eye on your bookkeeping. Therefore, it would be the best way to get immensely benefitted from the invested time. 

4. Upgrade your marketing and business plans

It’s necessary to look over your business and marketing plans so that the required changes for business improvements can’t be slipped through the cracks. Precisely analyse your previous year plans, check if you achieve your targets, and establish new ones for the following year. 

It is undoubtedly a best-in-class tip that some businesses overlook. Always remember that future planning is the key to success and shouldn’t be taken lightly. 

5. Identify your tax obligations

This is where an expert accountant seems convenient! They help you fathom all your significant tax obligations. Professional tax accountants can answer these questions:

  • Mainly, what amount you will be going to get back in tax returns?
  • When do you need to start incorporating GST into your products?

You must not know these answers, but an expert has! Therefore, by hiring a tax accountant, you can help enhances your return and evade pricey pitfalls.  

6. Crosscheck the overseas taxes

Have you started to propagate into overseas markets? If yes, you should start looking at mandatory import taxes and any other major requirements for a seamless business within that country. 

Therefore, you can begin the process while having fruitful communication with a tax accountant. They are your best companions and help you know all the taxation needs and carefully prepare your business financial plan for overseas propagation. 

7. Get professional tax accounting advice

This can’t be trivialised, but you must have your tax sorted as a small business. With various tax claims and deductions to be made, you must want your business paperwork in professional hands only. So, the expert tax accountants diligently help you navigate through the tax season and add tax depreciation in your case. In brief, the last-minute tax preparation technique from veteran tax accountants help you streamline your accounts. 

Concluding words

In a nutshell, any small business can ace in tax accounting by keeping in mind all the aforementioned tax accounting tips. Accounting is a highly crucial criterion for taking your business to the summit of success. 

It will provide you with a profound notion of what’s really going on in your small business periphery. This is how you can better plan for your future. Are you not sure about what precisely a tax accountant can do for your small business? Contact Tax Accountant Perth WA straight away!

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