Future-Proof Your Business with Solid Accounting Foundations
Whether you’re starting a brand-new business or running an established one, strong accounting foundations are essential for long-term success. Good financial management isn’t just about compliance, it’s about clarity, confidence, and creating a structure that supports your goals.
At Proactive Accounting, we’ve helped hundreds of businesses grow from startup to success story. And one thing we know for certain: no matter how experienced you are, it pays to revisit your foundations regularly.
Here’s how to make sure your business is set up for sustainable growth, from day one and beyond with solid accounting foundations.
1. Begin With the End in Mind: Your Exit Strategy
It might sound strange to start by talking about the end, but understanding your exit strategy shapes every major decision you’ll make. Good accounting foundations starts with the end in mind. Whether your goal is to sell, merge, list publicly, or pass your business on, having a plan helps maximise your return and reduce risks down the track.
Common exit strategies include:
- Selling the business outright for a clean break and capital gain
- Merging or being acquired by another business (this process can take years)
- Listing publicly (IPO) to attract investors
- Passing it on as a family legacy
- Closing gracefully when it’s time to move on
Knowing your end game helps you build with purpose and helps you to understand what structure is best for you. Enter Step 2…
2. Choose the Right Business Structure
Your business structure affects everything including how you’re taxed, the licences you’re going to need, how much personal liability and control you have in the business.
The main structures to consider include:
- Sole Trader – simplest setup, but full personal liability
- Partnership – shared control and responsibility
- Company – separate legal entity with limited liability
- Trust – holds assets on behalf of beneficiaries
Choosing the right structure now can save major headaches later. If you’re unsure, speak to a professional accountant who can tailor advice to your goals. But never fear, it is possible to change down the line if a different structure becomes more suited to your business as it evolves.
3. Know Your Compliance Dates
We know – there are already so many dates to remember. Birthdays, anniversaries, events, functions, appointments, your annual health checkup. But like your mum’s birthday, there are some important dates your business won’t want to miss. Missing BAS, GST or tax deadlines can result in penalties (with 11% interest!) and unnecessary stress. The ATO’s compliance calendar should be your new best friend. We can’t stress this enough, paying your tax bills on time is accounting foundations 101.
Depending on your turnover, you’ll report monthly, quarterly, or annually. For most small businesses, quarterly BAS statements are due on:
- 28 October with payment required in November
- 28 February with payment required in March
- 28 April with payment required in May
- 28 July with payment required in August
Set reminders, use cloud accounting tools, or work with a proactive accountant to keep your reporting on track.
4. Get Cashflow Right From the Start
Strong cashflow management is one of the biggest indicators of a business’ success. It’s also a vital component of your exit strategy (remember Step 1 of our accounting foundations!) One method we recommend businesses follow is Profit First — a simple yet powerful system that ensures profit is built into your operations from day one. Go read Profit First by Mike Michalowicz and get started on this one ASAP!
Another strategy we love to employ is the 1% principle, which encourages business owners to improve their operations with small changes. By aiming to improve things by just 1%, you’re putting in minimal effort and achieving maximum returns. For ten easy habits you can employ for massive outcomes, check out our article about the 1% principle.
5. Understand GST and How It Affects You
If your annual turnover is $75,000 or more, you must register for GST (Goods and Services Tax). Even if you’re below that threshold, registering early can simplify things as your business grows.
You’ll charge 10% GST on your products or services, claim back GST on business purchases, and report everything through your Business Activity Statement (BAS).
Simple? Mostly. But GST compliance can get complex, so having an accountant ensure you’re claiming correctly and lodging on time can save you big in the long run.
The main thing to remember here is that as a business you are required to take and hold tax on behalf of the Government. GST is not your money, you’re just the middleman here so don’t account for it as profit because it isn’t. Put it aside and don’t touch it.
6. Know How Fringe Benefits Tax Works
If you think fun is free, we’re sorry to tell you that, when it comes to business, unfortunately, it’s not. Planning staff perks, team events, or bonuses? Be aware that Fringe Benefits Tax (FBT) applies to many employee benefits valued over $300.
FBT rules can be tricky, but getting advice early prevents expensive surprises. An accountant can help you understand which benefits qualify and how to structure them tax-effectively.
Read our handy guide to navigate Fringe Benefit Tax.
7. Stay on Top of Superannuation Obligations
If you’re a sole trader, contributing to super is one of the smartest investments you can make in your future. It builds wealth, compounds over time, and can even reduce your taxable income (winning!).
If you employ staff, you must pay superannuation (which is currently 12% of their ordinary earnings), to a compliant fund by the due dates each quarter. If you’re operating as a company, you are liable to pay yourself super. Failing to pay superannuation will mean penalties and charges from the ATO. Penalties that, unlike super for a sole trader, are not tax deductible.
8. Maximise Your Tax Deductions
Every dollar counts in business so don’t leave money on the table. Many everyday expenses are tax-deductible, including:
- Work vehicles and fuel
- Office rent and supplies
- Staff salaries and equipment
- Marketing and professional fees
- Washing of uniforms and more
Keep organised records, save receipts, and work with your accountant to identify all eligible deductions, there’s more than you realise!
There are even some instant tax write-offs for small businesses, so be sure to familiarise yourself with all the things you can claim and prevent paying more tax than you need to.
9. Plan the Timing of Your Expenses
Strategic timing can make a big difference at tax time, so get ahead of this as soon as possible. For example, prepaying expenses before the end of the financial year may boost your deductions and improve your cash position.
Small adjustments like this, when made consistently can help create lasting financial stability.
10. Be Aware of Division 7A Loan Rules
If you operate through a company, it’s tempting to borrow funds for personal use but beware of Division 7A rules. If you do take out money from the company, the ATO considers this a loan and unless it’s formally documented and repaid within seven years (with 8.77% interest), it can be taxed as income. In other words, you’ll be paying a premium to use your own money. Div 7A loans also often have the habit of spiralling out of control, so being aware of all of the pitfalls will go a long way.
Understanding how Division 7A works protects both you and your business. Read more about Division 7A Loans.
The Bottom Line (pun intended)
Strong accounting foundations don’t just keep your business compliant they help you grow with confidence. Whether you’re starting fresh or scaling up, revisiting these principles ensures your business is set up for the success you deserve.
At Proactive Accounting, we specialise in helping business owners at every stage of their journey — from setup and structure to cashflow, compliance, and succession.
Ready to build your business on solid ground?
📞 Get in touch with Proactive Accounting today to ensure your foundations are as strong as your vision.
