Feeling uneasy about where your business is at financially as the New Year approaches? It’s that time of year again: the last 12 months of dodgy financial decisions come to a head as the Christmas bills start to roll in and the January expenses make their mark on the horizon.
Most business owners have a strong resolve to do better at this time of year, but no idea where to start. Luckily, one of Australia’s leading Chartered Accountancy firms, Nexia Court & Co, has a list of 20 Financial New Years Resolutions to make life easier in 2011.
1. Meet your superannuation obligations on time.
In order to get a tax deduction for your superannuation it must be paid on time. This means the withdrawal must clear your bank account ON OR BEFORE the 28th day of the month following the end of a quarter. Failure to pay on time, means not only do you not get a tax deduction for that expense, you are also required to lodge a superannuation guarantee form with the ATO and pay a penalty based on the number of employees affected and how late the payment was. This can be a time consuming and expensive process and is so easily avoided.
2. Invest in Praemium.
Praemium links your stockbroker with your accountant. Online access will help keep a track of your investments, and help your accountant to help you to plan for tax liabilities arising from capital gains generated. It will also reduce your accounting fees by making your capital gains tax calculations simpler as your investment history is easily accessible and all in one location.
3. Send your accountant the purchase details of any investments sold.
Capital Gains (your profits), such as those derived from the sale of shares and property are subject to Capital Gains Tax. The taxable value of your capital gain is calculated as the difference between the sale proceeds and the purchase cost. If you can’t prove the purchase cost then you could be liable to pay tax on the whole value of the proceeds generated by the sale of your investment.
4. Make sure your stocktake is done before the end of the year.
If your business requires you to maintain stock then you need to undertake a stocktake each tax year to calculate the profit made through your business activities.
5. Seek advice from your accountant before you act.
Ask for tax advice before undertaking any significant changes to your business or investment structure. Mistakes can be costly.
6. Let your accountant know if you can’t meet your tax obligations on time.
It may be easier to get an extension to lodge and/or pay than it is to get a remission of interest or fines.
7. Talk to your accountant about your bookkeeper.
Discuss the quality of your bookkeeper’s work. You may be paying for unnecessary costs.
8. Do an MYOB course.
MYOB and Quickbooks and similar programs contain many traps for inexperienced and unwary users. A course can help you to understand how to use the product more effectively and also more efficiently which will save you time and result in better records.
9. Ditch the shoebox.
Talk to your accountant about an appropriate record keeping system.
10. Process your transactions regularly.
Don’t leave it until the end of the year when you have forgotten what the transactions are for.