Answers to your queries about small business tax season
You might be wondering what will happen to your small business in the coming months as we enter a new fiscal year. In fact, you'll probably be thinking about your current situation and future plans often. Who would be the greatest to guide you through everything? your bookkeeper or accountant.
How frequently should I visit my tax advisor?
You must regularly communicate with your advisor, not only around tax season, if you want to understand how your business is doing. We advise speaking with an accountant or bookkeeper at least four times a year at the very least (or every quarter of the financial year). It's unlikely that you're getting the most out of the connection if you only see them sometimes. Decide on a strategy for FY23 and establish a regular cadence to help you carry it out instead of simply checking the tax and compliance boxes in June and July.
Do I need a bookkeeper or an accountant, or do I only need one of the two?
Regardless of how small your business is, hiring an accountant is a prudent and worthwhile investment. Why? Due to the complexity of running a business, you risk getting into trouble if you don't have the advice of a knowledgeable professional on issues like tax, payroll, and compliance. Here, a bookkeeper is crucial since they give you current, precise financial data about your company. They'll provide a thorough analysis of your figures, working with your accountant, to inform budgeting, cash flow forecasts, and any outliers that could be obstacles to your goals.
However, some solitary entrepreneurs (such freelancers, for example) feel competent enough to handle their own bookkeeping depending on the size and complexity of a business. While some people can manage this, as a business expands, it frequently gets more difficult to manage. Therefore, it's always important to consider whether hiring a bookkeeper would eventually save you time (and, ultimately, money and sanity).
How will I know if I'll get a tax refund or a tax bill?
It's a good idea to start tax planning with your advisor before the conclusion of the fiscal year. This is the easiest approach to determine if the ATO will issue you a refund or a bill, and what choices you have for minimizing or fronting the tax you must pay.
What distinguishes a financial planner from an accountant?
Many people believe that accountants and financial advisers perform the same duties. In reality, they play quite distinct roles. You can get assistance from a financial planner with retirement planning, investment management, risk management, and general financial guidance. An accountant, on the other hand, is often more knowledgeable about business finances, including tax obligations, reporting, budgeting, and general business advice.
What value can an advisor bring to my company outside of tax season?
A good query. An advisor can significantly increase the value of your business by assisting you in developing and implementing a game plan for the next year and beyond, from forecasting to defining financial goals. This goes beyond tax preparation and closing out the current financial year (and everything in between).
Beyond the numbers, many consultants provide broader services including assistance with digitalization and plans for attracting and retaining people. To make the most of your time together, be sure to inquire about their wider options when you two next meet.