As seen in Woopi News February 2022
I’ve seen an increase in people leaving jobs and becoming self-employed, whether it be due to COVID-19, looking for more flexibility, or starting a small business in a completely new field.
Before you apply for an Australian Business Number (ABN) consider which structure you will operate your business under. You don’t need to register for GST when you apply for an ABN. GST becomes mandatory once your financial year-to-date turnover (sales) exceed $75,000. However, some choose to register early depending on start-up costs and the industry they are in. When you are self-employed you need to put money aside for income tax. Discuss this with your accountant if you are unsure how much to put aside. After your first tax return containing business profits is lodged the ATO may request that you pay tax throughout the year, to avoid another tax bill the following year.
Keeping business and personal transactions separate will save you and your bookkeeper/accountant time. Open a new business account, deposit enough money to cover your start-up costs and monthly overheads for a few months. Only use this account for business income and expenses.
Consider how your new business will be keeping track of its income and expenses. If you don’t intend to employ staff and you think it will be a slow start-up, perhaps a spreadsheet will be sufficient at the beginning. Ask your accountant which program they recommend. If you pick something that is efficient for both of you, you will save time and money in the long run.
At StayShap Accounting we offer a FREE, no obligation, 30-minute appointment if you are starting up or purchasing a small business, as well as business owners looking to change accountants. We also offer bookkeeping software setup, training and support.