For a small business to thrive, it must curate a long-term financial strategy that starts at the foundation of every business’ outgoings–tax!

Overlooking tax deadlines or reserving insufficient funds could inflict penalties with interest charges, damaging the business’ financial health and impacting growth areas, such as recruitment or procurement. 

While some businesses handle this in-house, others connect with chartered accountants to develop strategies that yield the following benefits: 

  1. Minimised Tax Bills

Allowing sufficient time before ATO deadlines enables you to identify eligible deductions, credits, and concessions. Accounting for these deductions ensures you retain the correct documentation, such as receipts and log books for travel receipts, operational expenses, and vehicle costs.

A similar approach ensures you’re updated on current incentives, rate changes, and offsets applicable for a fixed period. For instance, in July 2023, superannuation rates increased from 10.5% to 11%.

  1. Long-Term Financial Stability

A linear view of your business’s financial situation provides better visibility of the funds you have to make productive investments and execute growth strategies. For instance, knowing which funds go to the Australian Taxation Office on particular dates allows you to plan purchases accordingly, reducing risk of overspending. 

  1. Ongoing Superannuation Compliance

Super guarantee deadlines arrive on the 28th of each quarter. Overlooking this date, even accidentally, could leave your small business liable for hefty superannuation guarantee charges (SGC). Tax planning ensures your business is well-prepared for these outgoings on time, every time. 

  1. Optimised Cash Flow

Tax planning gives people greater autonomy over their cash flow, making it easier to track customer invoices and plan outgoings. Reconciling your accounts payable and receivable as often as possible improves the accuracy of your financial data, allowing you to make informed business decisions. 

  1. Improved Understanding of Obligations

While planning covers fundamental taxes, like income, PAYE, and goods and services tax (GST), it also prepares you for other commitments, such as fringe benefits tax (FBT), capital gains tax (CGT), and payroll tax

Not only are you more likely to hit the deadline, but you’d reserve and lodge the correct amount. This can help you plan incentives that benefit your team and company, such as staff events or the sale of unused assets. 

  1. Efficient GST Savings

Accounting for GST in the long term ensures you price goods and services with the right tax attached to the price. This organisation prevents you from having a lump sum payment making up for unaccounted GST. A long-term understanding of GST can also streamline pricing elements when launching new concepts. 

  1. Refined Use of Resources

Tax planning allocates time to updating business activity statements, reconciling bank accounts, and updating internal records. Maintaining your books in real-time effectively streamlines audits and data uploads, mitigating the need to rifle through various transactions and payment data. 

Outsourcing tax management tasks to specialists effectively saves valuable time that’s better spent focusing on other developmental areas.

Are you Ready to Reap Tax Planning Benefits? 

Contact Advisory One to connect with chartered accountants and certified bookkeepers with extensive advisory experience. Our tailored approach ensures your financial objectives are carefully considered, enabling us to provide ample support.