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Staying on top of finances for a small business

There is a lot to keep track of when running a small business, including your finances. They can make or break your business, so here are some pointers to help you keep them in check.

Don’t lose out

Ensure you are taking advantage of recent tax and regulatory changes. Businesses with turnover of less than $25 million are eligible for the lower 27.5 per cent company tax rate from the 2017–18 financial year.

In addition, if your turnover is less than $10 million, you are eligible for the $20,000 instant asset write-off threshold. The government extended the deadline for eligible businesses to 30 June 2018. This means that if you buy an asset for less than $20,000, you can claim an immediate deduction of the portion of the asset you use for business purposes in your tax return. But you must use the asset, or install it ready for use, in the financial year in which you are claiming it.

If you are seeking to raise equity, you could benefit from a new crowd-sourced equity funding regime that reduces the costs and regulatory requirements for public fundraising.

Brush up on the basics

Sound budgeting is important to ensure your business stays on track. Have a clear understanding of your income streams and expenses – and keep a close eye on your cash flow. It doesn’t hurt to overestimate expenses, and it is wise to have an emergency fund in case something goes wrong.

Regularly review your budget as your business and the market evolve.

Remember that cash flow is the fuel that keeps a business running smoothly, and you need to keep a constant watch. If you have surplus funds, explore options to make them work for you.

Get help with bookkeeping

You might save money by doing your own bookkeeping, but if you aren’t good at it or you put it off because you are too busy, it can hurt your business. If you can afford it, hire a bookkeeper or accountant to dissect your numbers, pay your bills, help you calculate your deductions, organise your cash flow and, of course, ensure your records are in order.

Also, consider how new technologies and apps could help. For instance, cloud accounting solutions could provide real-time insights into your finances while also saving you time.

Be proactive

Whether you need goods or services for your business, don’t be afraid to try to negotiate better terms with your suppliers. If you are unhappy, shop around.

Also, encourage your clients to pay as quickly as possible. Send your invoices via email, which is instant, and set clear payment terms.

Most importantly, take time off to work on your business, rather than just working in it.

Read more

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Reducing-the-corporate-tax-rate/

https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/$20,000-instant-asset-write-off/

http://asic.gov.au/regulatory-resources/financial-services/crowd-sourced-funding/

 

 

 

 

 

 

 

The information provided in this document, including any tax information, is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. Millennium 3 Financial Services Pty Ltd ABN 61 094 529 987, AFSL 244252.