As a small business owner, managing your finances can be a daunting task. It’s not just about the day-to-day accounting of keeping track of your expenses and income but also ensuring you comply with the tax laws and regulations. This is why one of the most important aspects of managing your finances is always going to be your accounting and GST obligations.
In this article, we’ll be sharing what you need to know about accounting and GST as a small business owner and how the Agilis Chartered Accountants team can help simplify these important elements of effectively running and managing your business.
What is GST?
The Goods and Services Tax (GST) is a tax on the supply of goods and services in Australia. It applies to most businesses with an annual turnover of $75,000 or more. It’s important to register for GST if you meet the threshold as failing to do so can result in penalties and fines.
If you’re registered for GST, you’ll need to charge GST on your sales and remit the GST you collect to the Australian Taxation Office (ATO). You can also claim back GST on business expenses related to your sales, which can help reduce your tax liability.
Read More: 5 Tips for Tax Time 2023
GST Reporting Requirements
As a small business owner, you’ll need to report your GST to the ATO either monthly, quarterly, or annually. The frequency of reporting depends on your turnover and business structure. It’s important to ensure that you report and pay GST correctly, as failing to do so can result in penalties and fines.
To calculate the GST you owe, you’ll need to know how to determine the GST included in your sales and purchases. You’ll also need to keep accurate records of all your business transactions, including invoices, receipts, and bank statements.
Important Aspects of GST to Remember
No matter the size of your business, it’s essential to be aware of the important aspects of GST. Here are some key things you need to know:
- GST registration threshold – If your annual turnover is $75,000 or more, you’re required to register for GST. For non-profit organisations, the threshold is $150,000 or more. It’s important to register for GST within 21 days of meeting the threshold.
- GST on sales – If you’re registered for GST, you must charge GST on your sales. The current rate of GST is 10%. You’ll need to include GST in your sales price, issue a tax invoice to your customers, and remit the GST collected to the Australian Taxation Office (ATO).
- GST on purchases – You can claim back the GST you’ve paid on your business expenses, such as rent, supplies, and equipment. To claim back the GST, the expense must be related to your business, and you must have a tax invoice from the supplier.
- GST reporting requirements – You’re required to report and pay GST to the ATO either monthly, quarterly, or annually, depending on your turnover and business structure. You’ll need to keep accurate records of all your business transactions, including invoices, receipts, and bank statements.
- Penalties for non-compliance – Failing to register for GST, charging the wrong amount of GST, or failing to report and pay GST on time can result in penalties and fines. It’s important to ensure that you comply with all GST laws and regulations.
By understanding these important aspects of GST, you can ensure that you comply with the law and avoid costly mistakes. However, if you’re unsure about any aspect of GST, it’s always best to seek professional advice from an experienced business accountant like Agilis Chartered Accountants. We can help you manage your GST obligations and ensure that your business remains compliant.
Read More: Understanding The Basics of Business Taxes
Don’t Forget Your Everyday Accounting!
Maintaining accurate and up-to-date financial records is crucial for any small business, regardless of its size or industry. Accounting is an important part of this process, as it involves recording and managing your business’s financial transactions. Without proper accounting, it can be difficult to keep track of your expenses, revenues, and profits, which can lead to financial mismanagement and even failure.
There are two types of accounting methods – cash-basis and accrual accounting. Cash-basis accounting records transactions when cash is received or paid, while accrual accounting records transactions when they occur, regardless of when the cash is received or paid. Choosing the right accounting method for your business depends on factors such as your revenue, expenses, and business structure.
Accounting Tools Simplify and Ease the Workload
Setting up an accounting system for your small business involves selecting the right accounting software, determining the chart of accounts, and establishing good record-keeping practices. By having a good accounting system in place, you’ll be able to manage your finances effectively and make informed business decisions.
One of the primary benefits of having an effective accounting system is that it provides you with accurate and timely financial information. This information is critical when making important business decisions, such as whether to invest in new equipment, hire more employees, or expand your business. Without reliable financial information, you may be making decisions based on incomplete or inaccurate information, which can have serious consequences for your business.
Another benefit of accounting is that it helps you to track your expenses and revenues. This can help you to identify areas where you can cut costs or increase revenue, allowing you to run your business more efficiently and profitably. Accurate financial records can also help you to prepare tax returns and financial statements, which are required by law for many small businesses.
Why We Love Xero
At Agilis Chartered Accountants, we believe that choosing the right accounting software is crucial for any small business. That’s why we recommend Xero, a cloud-based accounting software that provides small business owners with the tools they need to manage their finances effectively.
Xero is a user-friendly accounting software that offers a wide range of features, including invoicing, payroll, inventory management, and bank reconciliation. With Xero, you can access your financial information from anywhere, at any time, as long as you have an internet connection. This means that you can manage your finances on the go, whether you’re in the office, at home, or on the road.
The best part? All of our accountants are completely Xero Certified, so you can be sure they can provide the best advice, and support, and troubleshoot any issues you may come across.
Let Us Simplify Your Accounting & GST Requirements
Navigating the complexities of accounting and GST can be overwhelming, especially for small business owners who have limited time and resources. That’s where the Agilis Chartered Accountants team comes in. With our expertise, we can help you manage your finances and ensure that you comply with all tax laws and regulations.
Working with an experienced business accountant like Agilis CA has many benefits. We can help you with tax planning, provide valuable insights into your business’s financial health, and offer guidance on growth strategies. We can also assist with the preparation and lodgement of your BAS and other tax forms, leaving you with more time to focus on growing your business.
Get in touch with us today to see how we can help you manage your finances and grow your business!