Month: January 2021

 

The most cost effective and straightforward business structure you could set up in Australia is a sole proprietorship or sole trader. It’s a business type that doesn’t have any legal distinction between the business entity and the owner. 

A sole trader business structure is popular among consultants and individual contractors. Most operate under their personal names because you’re not required to have a separate trade or business name. Just as it’s easy to set up, a sole trader business is also relatively easy to dissolve.

Are you thinking of registering as a sole trader? Here are some tips to help you get started. 

Sole Trader Vs. a Company and a Partnership 

The main advantage of registering as a sole trader is that you don’t have to pay workers’ compensation, PAYG tax withholding and payroll tax (if you do not employ staff), as you’re not considered an employee of your business. Additionally, you are able to offset any losses in your business against other income-generating assets, such as your personally held investments provided certain criteria are met. A Sole Trader structure may suit best for individuals operating as consultants or individual contractors due to Personal Services Income issues, however this will depend on your particular situation.

A Sole Trader structure offers complete control over your business compared to a partnership or company structure where you may have other partners.

Another factor to consider is that this type of structure does not offer the income tax minimisation opportunities that a company structure could potentially offer.

Unlike a company structure, you have full liability for debts of your business as there is no legal distinction between private and business assets. This liability could place your personal assets at risk. Because you and your business aren’t two separate entities, your business’s debt could be considered your personal debt, too. However, note that even under a company structure, the director can be personally liable for debts such as unpaid employee entitlements.

With a partnership, each partner is jointly and severally liable for the partnership’s debts – that is, each partner is liable for their share of the partnership debts as well as being liable for all the debts.

Things You Need to Register as a Sole Trader 

If you would be using your name, you won’t have to register a business name to set up a sole trader business.

You will first need to apply for an Australian Business Number (ABN).

If your annual business turnover is or likely to be more than $75,000/annum, you are required to register your business for goods and services tax (GST).

Finally, don’t forget to include your business income and losses as part of your income tax return.

 Not sure if a sole trader is the right business structure for you? Call us at 03 9885 9793 or fill out our contact form to determine how we can help you get your business off the ground.       

It’s 2021, and if your business still relies heavily on spreadsheets for your business operations and record keeping purposes it may be time to consider a more efficient option.

A 2018 study by Deloitte Access Economics and Research Now showed that approximately 31 per cent of businesses in Australia use cloud services for invoicing. Furthermore, about 26 per cent of companies use cloud services to manage their financial operations. In the recent past, the take up of cloud based accounting software has further increased for a variety of reasons.

Why do these companies use cloud services? One of the most popular reasons many make the switch is cost savings. You’re able to scale up or down your resources quickly based on your needs. Cloud based software offers efficiency and gives you an opportunity to provide better customer service. Imagine what you could do for your business if you could free up your time by automating or increasing the speed of processes like quoting, invoicing, payroll, sending follow-up emails, managing debtors & creditors and consolidating data.

Is cloud based accounting software for you? Here are some reasons why you should consider this option.

Understanding Cloud Based Accounting Software

In its basic form, cloud based accounting software allows your business’s financial data to be available online. This means you can access your books anytime, anywhere, and on any device. You are also most importantly able to provide access to your bookkeeper and accountant.

Today’s cloud based accounting software offer many features that make it easier to manage your finances and track your business cash flow. Additionally, these platforms come with multiple security layers to protect your data, so you manage your books with confidence and peace of mind that your data is secure.

Benefits of Cloud Based Accounting Software

It is suitable for all types of businesses. Whether you’re a small business owner, a sole trader, or a CEO of a fast-growing corporation, you would be surprised how cloud based accounting software fits in your business.

Here are some of its benefits.

1. Time- and cost-efficiency — A desktop-based accounting system requires regular upgrades. Additionally, you’ll also have to think about hardware management. This means that apart from spending on the hardware and software, you may need to spend on higher IT services. Cloud based software would increase the speed of your business operations and scaling up your operations would be easier to achieve.
2. Sustainability — With cloud based accounting software, it will be relatively easy to go paperless and do your part in protecting the environment.
3. Collaboration — Cloud based accounting software allows you to give access to team members, your bookkeeper and accountant who need to access your books. No more sending emails back and forth to share information. You could access the same data instantly.
4. Security — With cloud accounting, you won’t have to worry about losing important data. Your books are backed up on a real time basis, and your work is automatically saved.

Cloud based accounting software is easy to integrate into your business processes, and we are here to help you make the most of it. Get in touch with us to learn more about cloud based accounting software and how it can support your business growth.

 

For many entrepreneurs and business leaders, managing a business is similar to going on a mission with people who share your vision. However, at some point, your task would reach its end, and it’s time to find someone else to take your place.

How do you ensure your business will continue to thrive even after you’ve stepped down? That’s what a succession plan is for.

Here are some tips to get started with a succession plan for your business.

Do I need a succession plan for my business?

Many small business owners often ask if they too need a succession plan for their business. The answer is yes. It doesn’t matter how big your business is. A succession plan would help you make sure your business transitions smoothly to new leadership.

Creating a Succession Plan

1. Build a Succession Planning Team

It’s best to have a team with people who are process-oriented and know your business inside out before starting with your plan. Additionally, it would help choose people from different areas of your organisation to keep this team balanced.

Your succession planning team should also understand competency development to tap talent in your business with great potential.

2. Take Stock of Your Business Assets

The next step is to take stock of your assets — including your staff. What are your assets, and how would these assets be affected by a change in leadership?

Part of succession planning is thinking about the future leadership of your business. Are there individuals within the workforce who can be the next leader of your organisation?

3. Define Essential Roles and Responsibilities

One way to find top talent in your staff who may have what it takes to lead your business is to define essential roles and responsibilities and evaluate which of your team could take on these tasks.

4. Revisit Your Strategic Plan for Your Business

Your strategic plan informs your employees and clients of what they can expect from your business in the years to come. Because of this, your succession plan must be in line with your strategic plan. Otherwise, your succession plan could fail.

You shouldn’t rush the creation of a succession plan. And it doesn’t hurt to start creating one as early as possible. This way, it’ll be easier to begin the process of transitioning the business to new leadership as you already have a plan prepared.

Need help with succession planning? Contact our team. We could help you create a succession plan together with the legal paperwork (in collaboration with our legal network) that meets your goals. Send an email to enquiries@glanceconsultants.com.au or call 03 98859793.

 

Is your organisation ready for the holidays? Before heading off to merry land, there is one more thing you have to do, and it is not a Christmas shopping list but your end-of-year bookkeeping.

Have a good start to your New Year by not worrying about your books from the previous year. Closing your books does not have to be complicated. And we are here to help you get started.

Make sure all transactions are recorded.

One of the reasons many businesses struggle with end-of-year bookkeeping is that they don’t have accurate records of their transactions. This does include not only sales but also your expenses, other miscellaneous costs, asset & liability balances.

Be sure to double-check invoices and accounts receivable.

Make sure all invoices are created and sent out. If there are any unpaid invoices, consider sending out email reminders so your clients could settle them as soon as possible. On the same note, check if you have any outstanding invoices from your suppliers and resolve them.

Don’t forget your tax responsibilities.

Are you thinking of giving out holiday bonuses to your employees? Check to see whether or not you need to withhold a certain amount for PAYG Tax Withholding.

Assess your inventory.

The end-of-year is an excellent time to check your inventory for errors and areas of improvements in your stock management process. Be sure to correct any discrepancies between the numbers in your books and your actual list.

Revisit your financial statements.

After you’ve completed all necessary adjustments in your books, it’s time to review your financial statements for significant movements from the previous year’s numbers. Doing so gives you a good idea of how your business has performed for the year.

Create your balance sheet report and profit and loss report.

It would help to create financial reports for the year, especially if you have partners in the organisation that would want to stay up-to-date with your business’s performance. With these reports, you could get started creating your business plan and strategy for the next year, giving you a confident start for 2021.

Are you having a hard time with end-of-year bookkeeping? Count on Glance Consultants to help you close your books. We could help you with a bank account and credit card reconciliations, accounts payable and receivable, payroll processing, PAYG summaries and more.

Call us at 03 9885 9793 or fill out our contact form to learn more about our bookkeeping services.

 

A partnership is a business model where two or more individuals agree to work together to form a business. These individuals share ownership of the business as well as the responsibilities that come with managing one.

Are you planning to form a partnership? Here are some things you need to know.

Types of Partnership

There are three types of partnerships. Depending on your needs and agreement with your partners, your options are the following:

• Incorporated Limited Partnership (ILP) — In an ILP, partners can have limited liability. However, there should be at least one partner with unlimited liability.
• Limited Partnership (LP) — In an LP, general partners have liability but only to the amount that they contributed to the business.
• General Partnership (GP) — In a GP, all partners have unlimited liability and share all responsibilities regarding the company equally.

Pros

One of the reasons many entrepreneurs choose to create a partnership, is that it’s relatively easy to set up. Financially, you won’t take on the burden of starting up the business yourself as you can pool resources with your partners.

Building a partnership has reduced requirements compared most other business structures, and the partnership does not have its own income tax obligations. However, each partner would have to pay income tax on their share of the net partnership income.

Cons

One of the biggest challenges of having a partnership is that differences in opinion could pose a threat to the business and its operations. Because all partners play a role in the business, making decisions could take time, especially if you and your partners find it difficult to come up with a consensus.

Another disadvantage is the way profits are divided among partners. Any miscalculation on how income should be shared could result in disagreements and issues.

It would help to keep in mind that in a partnership, partners both have an individual and joint liability. Therefore, all partners could also be liable for the actions of the other partners.

The key to a successful partnership model is making sure you choose partners that you can depend on. Choose those who understand and share your vision for the business. Additionally, it’s essential to select the right type of partnership for your business.

Not sure about which type of partnership is best for your business? Our team at Glance Consultants can help. Our professionals provide tailored advice to help you make an informed decision. Call us at 03 9885 9793 or send an email to enquiries@glanceconsultants.com.au for more information on our services.