We know you have hundreds of thoughts and ideas when setting up your business and you’re bound to overlook some aspects or haven’t considered certain areas. This is absolutely normal, and when you realise this, get in touch with a suitable advisor.
We can’t give you a list of everything to consider, but we’ve covered some topics here that you may need to address.
There are numerous types of insurance you can purchase to protect yourself and your business. They include Business Asset Insurance, Public Liability, Employers Liability, Professional Indemnity and Income Protection.
We suggest you contact insurance providers for quotes. Remember, at the end of the day, it is up to you what sort of insurance you buy. Don’t be pressured into purchasing every insurance policy under the sun, but security definitely comes first.
If you have employees, you are required to hold workers compensation insurance.
Workers compensation insurance provides protection for an employer in the event that one of their employees suffer a work related injury or illness.
All employers that pay more than $7,500 in annual wages are required to have workers compensation insurance.
If you have a study and training loan and are no longer receiving any PAYG-paid wages or salaries, the ATO will calculate your loan repayment when you lodge your individual tax return at the end of the financial year. The student loan threshold changes regularly, but is generally around $47,000. As your income increases, your repayment rate increases up to a maximum of 10% of your repayment income.
Your student loan payment is due on the same dates as your income tax, however you can contact the Australian Taxation Office if you wish to make voluntary payments throughout the year.
Superannuation is money that is set aside for the retirement of an individual. Employers are required to make “super guarantee” payments to an employee’s superannuation fund, when the employee earns more than $450.00 per month. The super guarantee amount is currently 10% of gross wages.
If you have become a sole trader, personal superannuation contributions are not compulsory. However, superannuation payments made may be deductible.
If you are setting up a company, you will need to open a business bank account under your business name. You will need to provide a copy of your company constitution and certificate of registration to your bank manager when doing so.
We suggest opening a normal debit account and also a Tax/GST savings account. This way you can allocate 20-30%% of your earnings into you tax savings account and won’t be caught out when it’s tax time!
Separate business credit cards can also be setup – please discuss with your bank manager for your best options and be sure to ask about fees!
If you are operating as a sole trader, we’d also suggest setting up a separate bank account for business purposes. Keeping business and personal expenses separate makes it so much easier when preparing financial statements.
Remember to put ALL business expenses through your business account so they can easily be recorded and not forgotten! And if, on the odd occasion, you pay business expenses personally, we need to include these in your financial statements.
We can set you up with a Xero accounting subscription. This will be linked directly to your bank account and records all income and expenses going through your bank.
You are not required to use Xero and there are many other options out there. However, we find Xero the most efficient accounting package available, plus we can access it (if you provide authorisation) and advise you on your progress at any stage.
You will still be required to keep all invoices/receipts for up to 5 years and could be requested to provide copies to the Australian Taxation Office at any time. So, keeping these in some sort of order is definitely advisable. We love it when clients attach invoices to Xero transactions!
As your accountant, we may request copies of invoices for assets, insurance or legal costs, etc at year end only. These can be uploaded to your Beany account at any stage for safe keeping. Even better – attach them to the relevant Xero transaction and they’ll always be there – even if you stop your subscription.
Remember, we are here to help you! If you would like to discuss any of the above information, please get in touch.