Starting your own business is often a scary and intimidating process and requires a number of decisions to be made prior to starting. One of the most important things is to establish the structure you are going to trade under. Typical structures are the sole proprietor, partnership, company or trust. A combination of company and trust is also often used.
It is also essential to implement a good accounting system both to comply with legislation and also so you can measure your progress and ensure that you are on track with your plans for the business. Accounting will help provide entrepreneurs with a clear picture of their business’s success. Many small businesses start as a hobby or side business using cash basis accounting. This method of accounting records and recognizes transactions when cash changes hands. It provides a simple method for maintaining accounting information however this can very often be a very tedious job. Having the correct accounting software in place from the start will allow for easily capturing the relevant information and of course as a company grows and expends, this correct software will change to suit the business’s needs. At Proactive Accounting and Financial Services we recommend Xero, a Cloud based program which relies on data feeds from your bank.
Another essential thing to prepare for your business is a comprehensive budget. Budgets outline the various expenditure needs of a business. Entrepreneurs may budget for capital outflows, like vehicles and equipment, as well as working capital for hiring employees, advertising strategies, inventory purchases and other types of business expenditure. Sticking to a budget helps avoid wasting money on non-essential business items. Knowing how to setup a budget and reading the reports is crucial to any business. Proactive Accounting and Financial Services are ready to assist you create a budget and understanding the historical records.
Profitability is always the overall focus for any small business. Although a small business may be able to generate high amounts of sales revenue, failing to generate enough profits may doom it to failure. Entrepreneurs need to understand how well they are using assets to generate revenues and managing expenses to ensure the company’s profit margin. Banks, lenders or investors may also require the small business to release financial information before lending to them to ensure that these loans can be serviced and repaid in a timely manner.
Small businesses should always seek the advice from an accountant. Proactive Accounting and Financial Services will provide education, experience and expertise when helping the small business in setting up the correct and ideal accounting operations for their business.
Proactive Accounting and Financial Services are ready to advise on the type of entity to form, to guide the financial section of your business plan, identify problem areas and help maximize profit for any business.
Hiring the right accountant could be the best decision your small business ever makes!
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Phone: 07 5539 4143
Fax: 07 5677 0614