Over 50% of new businesses fail within their first three years of trading, and one of the reasons for this is because the person running the company is not ready for the daily responsibility of keeping the business booming. You have just started up a small business of your own, but you are trying to do everything yourself, so you don't have to pay professional fees for accounting or legal services. This cost-saving attitude is one reason why your business may not survive. Accounting services can help you have healthier business finances in the following ways.
Cash flow management
Do you know already how much to put away each quarter to pay for staff superannuation and pay-as-you-go taxes? An accountant does. Small business owners who do not make allowances for these payments from the first day of operation will find themselves in trouble with the Australian Taxation Office quickly. For example, non-payment of PAYG tax on time attracts a general interest charge from the ATO. The interest is calculated daily and applied to the outstanding balance.
You can avoid this problem by having an accountant help you manage your cash flow. It may be that the best way to ensure these taxes get paid is to have a separate business bank account to transfer this money into. It is easier for a skilled professional to help you determine the amounts to be transferred rather than a novice business owner to figure it out on their own.
Another area where new business owners often fall short is setting up and sticking to a budget for their finances. It is easy to get carried away when you first start a business because you are passionate and full of ideas. Unfortunately, spending more money than you should is difficult to bounce back from. Get an accountant to help you organise a budget, so you still have money in the bank at the end of month one. A great budget is not just about how much money you and can't spend; it also covers realistic goals to strive for. Having a budget helps foresee potential trouble before you find it.
Finally, if you choose to track your business finances using software, an accountant can help you decide which one suits your industry best. Once the software system, budget and cash flow management are in place, your accountant takes a back seat as an advisor while you march ahead toward healthy profit.
Hello. When you are at school, maths can seem so complicated at first. But then you learn about numbers and all of sudden everything seems as easy as 2 + 2 = 4. I used to be pretty good at maths so when I started my own business, I didn't think I needed to hire an accountant. After all, why should I pay someone else to do something that I could do myself? However, I very quickly learnt two important lessons. Lesson one was that accounting and doing the books will take a lot longer than you might think and, secondly, it is actually pretty complex stuff. In the end, I decided to hire a professional accountant. He is great and he has taught me a lot of cool stuff.