Business owners: You want answers – I want the truth

Business owners can’t handle the truth.

Or can you?

Sometimes running a business can be like dodging landmines.  You go forth and try and grow and build your brand and tribe….but you are not sure which direction you really need to take.  You know there are hazards out there….but instead of getting help along the way you want to try your luck.

So you tiptoe forward, sometimes backwards or sideways trying to avoid the hidden hazards that you know exist somewhere but not you are not sure exactly where they are.

You think you have made it safely out the other side and BAM – a hazard hits you in the face quicker than lightening.  Wouldn’t it have been much nicer to find out what the hazards are, how to avoid them and what systems to put into place to avoid them in the future?  Wouldn’t you much rather know the truth to begin with?

What are these hazards that I see business owners and entrepreneurs face that could have been totally avoidable….here is my current list.

  1. Payroll should not be done manually.  There are tax rates to be considered, superannuation to be calculated and payment summaries to be issued at the end of the financial year.  Do yourself a favour and use a program to help streamline this function.  You won’t regret it.
  2. Payroll should not be deleted (yes this is a real life example).  You need to issue payslips and payment summaries – so deleting anything in your accounting system should be done with extreme caution.  The money you spend to get payroll queries sorted at the time of the “hazard” will prevent someone having to re-key 12 months of data at the end of the financial year.
  3. GST – are you registered for GST?  I am not asking if you think you are registered I want to know if you really are registered.  If you trusted a BAS Agent or Tax Agent to do this registration for you – do yourself a favour and get a copy of the ATO notification saying you are registered.  Finding out 12 months later they didn’t submit the GST registration could cause you unnecessary stress and heartache.  Do you really want to be refunding people the GST you have incorrectly overcharged them?
  4. Invoices – the tax office has requirements.  They are not my rules – they are rules to ensure every business is “doing the right thing” in a consistent manner.  Ensure your invoices comply and while you are at it, maybe check your invoices have your bank details on them.  If you want to get paid, I find this quite essential (and yes, I see at least one invoice a month that has no payment details on it, the wrong details, no ABN, no business name – or all of the above).
  5. BAS reporting.  I am all for business owners preparing and lodging their own BAS….if they know what they are doing.  Whilst accounting systems spit out a BAS report, you still need to check, reconcile and verify the numbers are accurate, plus have your supporting documents in case of an audit.  If you are not doing this, then you could get a nasty surprise.  Invest time and money in getting the true help you need, so you don’t spend time and money correcting mistakes you have made.
  6. PAYG Withholding.  As soon as you hire an employee, you MUST register for PAYG withholding with the tax office.  This is so you can pay any tax withheld to the ATO on behalf of your newly beloved employees.  Regardless of their wage, you must register.
  7. Get a schedule or a timeline so you know when things are due to be paid.  The old saying of “Cash is King” is so true.  And getting a nasty surprise about a tax instalment, superannuation debt or BAS liability can be crippling if you were not aware it was coming.

Sometimes the truth hurts.  Sometimes facing the truth is hard.  But I would much rather know the truth and how to implement processes and procedures to go forth and conquer, than to continue to dodge landmines.

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