Technical Data

Business structuring

Business structuring is the most important aspect of running a business. We look at the following aspects:

Cost of administration of the structure
The legal liability and business risks associated with running a business
Tax optimisation.

Tax is often top of mind with arranging a structure but in fact the reverse is true. The old adage ‘to be penny wise, pound foolish’ applies here.

You do not want a structure that costs more than it is worth, nor one that puts you at risk of loosing everything to save some tax.
Broadview Accounting can help you design a structure to meet your individual needs.

Typical structures may be a mix of the following:

Sole Trader
Partnership
Company
Family or discretionary trust
Unit or fixed trusts
Hybrid trust
Superannuation fund.

Generally we do not recommend operating a business that has any risks, as a sole trader or partnership. The chance of loosing your family home and all your assets are too great.

Download our free e-book from this site to understand how the tax system works and how tax incentives can be used to maximise your after tax income.

Business Tax Return Checklist

Be tax savvy. Tax can be your biggest expense. For individuals tax is up to 48% and for companies 30%.
Talk to us about tax planning strategies that will help your business save money now, as well as in long term.
Here is a list of items you'll need to give us to prepare your business tax return:

INCOME

Trading income
Other income (royalties, rent, interest)
Stock on hand including any obsolete stock
Subsidies if applicable (e.g. primary producer, small business)
Capital gains from assets sold
Dividends

DEDUCTIONS

Losses
Repairs and maintenance
Salaries (include FBT)
FBT paid
Rates, land tax and insurance premiums paid
Advertising expenses
Interest on borrowed monies
Retirement payments
Bad debt written off in the year
Charitable contributions and donations (over $2)
Commissions
Legal expenses
Lease expenses (motor vehicles, premises, equipments)
Losses from previous years
Superannuation contributions
Subscriptions
Car expenses
Accounting fees, tax agent fees
Travel expenses
R&D expenditure by registered R&D company
Bank fees
Borrowing costs

LIABILITIES

New loans
Existing loan closing and opening statements for the financial year
Provisions for long service and annual leave
Creditors on hand
Accrued expenses
Fully reconciled mortgage or loan facilities
Fully reconciled GST accounts

ASSETS

Depreciable assets acquired or disposed (type, date, consideration)
Capital Gains Tax assets acquired
Lease commitments
Debtors
Fully reconciled bank accounts

Year-end tax tips

Tax planning should be an all year exercise. It is part of the cost of doing business and can in many cases can be your biggest burden. You need to focus on ways to ensure you are paying the minimum tax that is within the law. As a Business Owner you also need to ensure that you take advantage of all the tax incentives and other options that are available to help you maximize the after tax profits of the business.

These are our top 5 five suggestions:

Defer income
Unless you think that next year you will move into a higher personal income tax bracket you may want to defer income until after June 30. Interest, dividends, royalties, insurance proceeds or rent all count so until the money is physically received (paid/credited) it can be deferred.
Accelerate Deductions
So that you can get deductions and claim them in the current financial year: write off bad debts; scrap stock and plant equipment of nil value, ensure home office costs, superannuation payments and others are paid by year end.

Pre-paid expenses are also deductible in the year in which they are paid. This includes things like subscriptions, business travel, business related seminars or other expenses like educational courses that relate to your business or work.
Gifts
If you have extra cash, donate money to an ATO approved charity on or before 30 June. Save the receipts and use the charitable donations as deductions on your tax return.
Sale of investments
You can delay capital gains tax by delaying the sale of investments such as shares until after 30 June. Of course if you have a loss you may want to sell these before 30 June, to bring to account that loss to offset any capital gains.
Tax Rebates
It pays to know what you are entitled to. What you can claim will depend on your family circumstances and income but some of the most common things to think about are childcare expenses, private health insurance, medical expenses, dependent spouse rebate, low-income rebate, tax offsets for senior Australians and entrepreneur tax rebates.

How to save on accounting and bookkeeping costs

Having a good accountant or bookkeeper is key to helping you and your business function more efficiently and cost effectively. Costs for bookkeeping and accounting services will depend largely on the types of service you require.

There are a couple of basic rules that will help you keep accounting and bookkeeping costs to a minimum and help us to service you better:

Keep clean, clear, accurate records
Accountants and bookkeepers generally charge by the hour. The easier it is for the accountant or bookkeeper to read and understand the information you bring in, the quicker the service will be performed. Find out what you can do in advance to make the work easier. We have checklists, check-sheets and are more than willing to help you in this regard.
Use an automated system for record keeping
The goal is to make your or your company's information as accessible as possible. Computerised systems allow you to pass information back and forth quickly and easily.
Keep us informed of business and personal financial decisions
Think of your accountant as a trusted business advisor. Talk with us about your plans for the year ahead. We can help you develop financial and tax saving strategies that will make sure that you set up the best business and financial scenario for your particular situation. Never be afraid to talk to us. We can say from experience that talking to us about your plans and ambitions very often leads to incredible new insights and how to do things better. We are your business mentors.
Be prepared
In advance of your scheduled meetings with us or your bookkeeper, write down as many of your questions that you can think of. You will want the meeting to be organised and flow smoothly and take notes so that you will remember details.
Billing
Our billing is either time based or product based. If you need a detailed breakdown or explanation, do not hesitate to ask. We aim to always exceed our client’s expectations. If your expectations are not being met talk to us.

Frequently Asked Questions

What do accountants do?
What is a tax agent and how does the tax office monitor the above?
What is accounting?
What is the difference between an accountant a CA or CPA?
What should I take to my accountant to do my tax return?
Why is having an accountant important?

Choosing an Accountant

Whether you are an individual wanting financial planning advice or a start-up wanting business and tax planning advice, selecting the right accountant and accountancy firm for you or your business is an important decision.

Your accountant will have access to your private records or your business data so you will want to choose someone who you trust. It is important to take your time in the selection process the first go-around.

Here are the key steps to finding the best accountant for you and your business:

Step 1 - Think about your needs and preferences.
Before you start speaking with accountants, determine the scope of work that you want an accountant to provide you or your business. Do you want them to only help you prepare your income tax return or do you want a more holistic financial management plan? Do you need monthly bookkeeping services or are you looking for someone to do an annual audit and periodic advice? Having a good understanding of your needs first will save you time and importantly, money - accountants charge by the hour!

Here are some of the things to consider:

Business Experience
Does your accountant have experience in running a business? If they are to advise you, then you want to know they have knowledge preferably first hand and are not just running an accounting business but running a small business.
Size
Do you want a one-on-one engagement with a small firm or do you want a larger established practice? Your choice may depend on the types of services you are after.
Specialisation
Is it important the accountant has other clients in your field/industry or similar size to yours? Do they have experience in helping businesses in your particular circumstances? This can be important in tax planning and investment and to ensure that you receive the right advice and support.
Communication Skills
Your accountant will need to give you complicated advice. They need to be able to communicate this to you in a way that you can understand it. You also need to build respect for their opinion and accept their advice. You must also feel comfortable with them having access to all of your personal information.

Qualifications
Look for Chartered or Certified Practising Accountants. Accountants who have a CA and CPA designation have undergone specialist training and adhere to certain accounting standards and ethics.
Technology
Make sure your accountant is using the latest computer software to deliver services more efficiently. You pay for their time and they should be as productive as possible. Also the Australian Taxation Office and Australian Securities and Investment Commission have web based interfaces that make an accountant’s job easier. Your accountant should be using these. If you are a small business, an accountant must be able to advise you on the right accountancy software to choose to do your in-house bookkeeping and check what support they provide.

For a complete outline on how to choose an accountant download our free e-book.

This will help you decide what to look for and what type of accountant you should engage that is aligned to your business needs. At Broadview Accounting we pride ourselves on service. But you be the judge.

Why Policy Statements are vital

Firstly policy statements help you set guidelines on what is important to you both in your life and in business. If your aim is to achieve a goal, policy statements are part of keeping you on that path. If you don’t have a goal then you have no direction and certainly will fail.

There is an old religious saying “what matters if a man conquers the world if he looses his soul?” This is true in life and business. There is no point being a successful entrepreneur if you are miserable and unhappy in life.

At Broadview Accounting we work with business owners firstly to set some goals. Generally we find that when your business is aligned to your life goals, you have a better chance of success.

No business can succeed if the business owner is not passionate about what they do. With this passion success follows, without it failure or mediocrity are assured. If you hate your job or what you do, our advice is to get out of it. You must find your passion. We have processes to help with this and also hold seminars that can be life changing.

If your decision in business is to achieve a certain level of profit, freedom or retire at a certain age, you need to document the policies that will keep you aligned to that goal.

Writing policy statements in business is a continually evolving process. When something happens that is not aligned, write a policy statement to keep you aligned. These may range from how your staff members treat customers, to setting strategic plans for your business. They are all part of keeping you aligned to your goal and keeping your business aligned to its goal.

At Broadview Accounting we have continued to write policy statements on all aspects of our business. They free us up, so that every decision is made once. The entire team within Broadview Accounting knows how every aspect of the business is to be run. These policy statements are a set of parameters that the key members have agreed upon of how the business will operate. They are also a method for the owners to keep the business moving the way they intend.

Do you know where your business is heading? Is this your goal or the goal of others?