Let’s talk about Sally. Sally is a therapist with 10 years of experience helping patients. She’s decided to open her own practice. While Sally is quite comfortable handling the “therapy” side of her practice, she’s a little concerned about the paperwork. More specifically, Sally has no accounting experience, and she wants to make sure her business is successful. So far, she has an office assistant, but she feels like she needs to understand accounting concepts so she can be a proper business owner. If you’re thinking, “What should I know about accounting?,” here are a few of Sally’s most important questions.
1. Do I need a separate bank account for my business?
When it comes to banking, you have options. First, you can separate your business transactions from your personal transactions by setting up two separate bank accounts. This is probably the easiest option. It makes managing cash flow, organizing your taxes, and loan applications much easier.
However, you can choose to keep your finances in one bank account. If you go this route, you may want to use software to tag and organize your transactions by category so they’re easy to find later. You will also need to stay on top of your personal and business budget so you know where your money is going.
Keeping finances intermingled is a little risky because you may accidentally spend all of your business capital on personal expenses (or vice versa). Most business owners keep separate accounts for this reason, among the others we’ve already mentioned.
2. Should I pay myself when I’m just starting up, or should I wait for better cash flow?
In the very early days of business, cash is often scarce. If you have the personal resources to forgo a paycheck for a while, you may choose to keep all your cash in your business.
If you can’t afford to live without a paycheck, though, it’s probably better to create a routine payment now. It’s much easier to keep track of all your expenses if you create these habits on Day One.
If you decide to defer your payments until later, remember to pay special attention to taxes. Depending on your business structure, you may owe additional taxes, and it’s best to plan ahead so you don’t fall short.
3. How can I make my business compliant?
Business compliance is a complicated topic that requires a lengthy overview of your business structure and operations. At a minimum, each business must file a Business Activity Statement (BAS) with the Australian Taxation Office (ATO). And you might need to register for GST if your business earns over $75,000 per year. As an NDIS service provider, you may also need a strong understanding of privacy laws and other matters. Corporations often have more stringent compliance requirements than other business entities.
4. Can I hire someone to answer all my complex questions?
Most small businesses owners hire a professional to assist with more complex tax and accounting questions. These may include issues regarding capital gains, stock options, choosing a business structure, and other concerns that aren’t general business knowledge.
5. Can someone help me create a business plan?
Yes, of course. Not every business owner is also a business expert. Sometimes you’re just really good at what you do but you need a little help with the details. There’s no shame in asking for help when you need it. In fact, that’s exactly what we’re here for.
nexZen is happy to guide our clients through every aspect of business set up and day-to-day operations. Here’s a short list of our services:
New Business Set Up
Setting up a new business is tricky, but nexZen knows how to help. We walk with you through the process, taking your brilliant business idea and turning it into a successful practice. We help with everything from choosing a business structure to creating a business plan.
You can’t run a successful business without compliance, and proactive compliance is much better than the alternative (getting in trouble and trying to deal with the consequences). We teach you what you need to remain compliant and how to organize your business to achieve your compliance standards.
Day-to-Day Accounting and Payroll
Two things never stop when you’re running a business: accounting and payroll. These tasks can easily take up your entire day if you don’t get ahead of things. We help you reconcile your accounts, organize your records (both paper and electronic), manage A/R (get paid!), pay your employees, and pay your suppliers.
Business Queries and Support
Have other questions? We can help with those, too. We answer any questions relating to bookkeeping, payroll, taxation, accounting systems, or small business in general.
Consider us your business advisors. We don’t give basic answers. We create customised solutions for each and every query. That helps you make the best decision — every time.
Business Value Creation
Your business needs value to stay competitive. We will work with you to make sure your business has a clear vision, compelling values, and direction. This helps you stay sustainable and profitable in any economy.
Why should you work with nexZen?
nexZen is much more than a consultant or accounting firm. We are dedicated to growing your business and creating more happiness and freedom in your life. It’s a win-win that takes little more than a phone call or email to get started. Connect now to learn how we can help.