Starting a new business is a major milestone. It comes with excitement, growth and plenty of responsibilities – one of the most important being tax and account management. While sales, marketing, and staffing may seem more urgent, ignoring your financial obligations can lead to penalties, cash flow issues and long-term business challenges.
Getting your tax and accounting practices right from day one is essential to building a stable and successful enterprise. Here are practical tips to help you establish strong financial foundations from the start.
1. Choose the Right Business Structure
Your legal structure – whether a sole trader, partnership, company, or trust – has significant implications for tax obligations, personal liability and financial reporting. The right structure depends on your goals, risk appetite and industry. Engaging a tax professional early can help you choose the best structure for long-term success.
2. Register for the Relevant Taxes
Ensure your business is registered for all applicable taxes. These may include:
- Australian Business Number (ABN)
- Goods and Services Tax (GST) if your turnover exceeds $75,000
- Pay As You Go (PAYG) withholding for employee wages
- Fringe Benefits Tax (FBT) for any applicable employee benefits
Missing tax registrations can lead to fines or missed opportunities to claim deductions.
3. Separate Personal and Business Finances
Open a dedicated business bank account to avoid mixing personal and business expenses. This makes tracking income and spending more straightforward and helps maintain clean records, which are crucial for accurate tax reporting and easier audits.
4. Set Up an Accounting System Early
Using software like Xero, MYOB, or QuickBooks can streamline your bookkeeping, invoicing, payroll, and financial reporting. Cloud-based platforms reduce manual work and make it easier to stay organised from the outset.
5. Understand Tax Deductions
Knowing what you can legitimately claim as a tax deduction can make a significant difference in your bottom line. Common deductible expenses include:
- Office supplies and equipment
- Travel for business purposes
- Marketing and advertising
- Employee wages and superannuation
- Training and development costs
Always keep accurate records and receipts to support your claims.
6. Monitor Your Cash Flow
Effective tax and account management requires keeping a close eye on your cash flow. Review financial statements regularly to understand when money is coming in and going out. This ensures you can meet tax obligations, pay suppliers on time, and avoid unexpected shortfalls.
7. Stay Ahead of Tax Deadlines
Missing Business Activity Statement (BAS), GST, or income tax deadlines can result in fines and interest charges. Mark due dates on your calendar and set up reminders to keep your submissions timely and accurate.
8. Consider Hiring a Bookkeeper or Accountant
While managing your books in the early stages is possible, seeking professional help as your business grows can save you time, money and stress. An accountant or bookkeeper ensures compliance, identifies cost-saving opportunities, and helps with strategic planning.
9. Plan for Superannuation Obligations
If you employ staff, you must pay their super contributions on time. Failing to do so can lead to penalties and loss of tax deductions. Plan regular super payments and incorporate them into your financial processes.
10. Seek Help with Tax Debt Early
If you’re experiencing tax debt issues, don’t ignore them. Addressing tax debt early is crucial to avoiding escalation. Tax Negotiators can work with you to assess your situation, explore your options, and negotiate directly with the ATO to find a practical solution.
The Role of Tax Negotiators
At Tax Negotiators, we understand the pressure new business owners face. From managing cash flow to staying compliant with ATO requirements, our team helps you establish sound tax and accounting practices while offering support if challenges arise.
Whether you’re seeking guidance on tax obligations or help navigating debt, our experienced professionals are here to support your business from day one.Contact Tax Negotiators today to lay the financial foundation your new business deserves.
