Business Advice Your Business Activity Statement
Are you lodging BAS returns on time? Most businesses need to lodge their business activity statement, (BAS) each quarter (i.e. 1st July to 30th September). Your BAS returns due date depends on whether or not you do it yourself or use a tax agent. However we find that completing the BAS shortly after the quarter has ended makes it easier to complete whilst details are still fresh in your mind.
We feel it must be mentioned that should you fail to submit your BAS return on time the Australian Taxation Office will impose late lodgement fees up to $900 over and above what you may already owe, therefore it pays to lodge on time. It should also be noted that tax agents are often able to get a further extension of time if required and can negotiate on your behalf if necessary.
Do you require varying any PAYG instalments?
PAYG is calculated on your business and/or investments income tax based on the last year’s tax return. Should there be significant changes to your income or tax situation that would see you paying much more or less than anticipated, then you may need to submit a variation.
Some examples of why this would be necessary are if you have bought or sold an investment property, received more or less rent from an investment property, stopped receiving an income from business activities or reduced or expanded the business share portfolio.
We provide business advice and guide businesses through all manner of tax decisions.
Have you done a strategic plan of the business?
As any successful business owner will tell you, not only should you be up to date with BAS and PAYG but businesses need to have plans for what they want and the direction they are going to take to get it. A strategic plan provides you with a clear indication of where your money is best spent and the items best spent money on. It allows staff to know which direction they are taking and the role necessary to facilitate this.
If your business has a target to reach and aims for it, your earning capacity, on average, is three times greater than those who don’t have a plan.
Include such things as values, vision, long and short term goals, main areas of focus for the year ahead and an annual theme.
Small to Medium Business and Board Meetings
Another means to keep track of progress in your business is through keeping minutes of board meetings. The board meeting minutes are an important form of record keeping for any organisation, providing key information such as board actions on selected goals, elections of officers and directors and certain reports from committees and staff.
Additionally, meetings can be of major significance to verifying actions and positions should there be a court hearing. There should be enough information within the minutes if they are to be used as a reference or offered as evidence, although every detail of statements said in a meeting are not necessary to be recorded.
It should however include date and time of meeting, notification that it is a special or regular meeting, name of directors in or not in attendance, guests who are in attendance, including title or associations, whether a quorum was established, departure or re-entries of attendees and any board actions taken.
Lastly, minutes should be kept indefinitely as they present a full history of the organisation, including historical decisions.
Have you considered preparing a yearly forecast?
Yearly forecasting allows you to calculate what your business is going to spend next year and what it will bring in financially? Do you know how your sales are going to ebb and flow?
Plan for the worst case scenario and project for the best, have a plan that caters separately for both so you’re never caught short. Sometimes your yearly forecast go’s stale, consider pushing it back a few months or changing to monthly until you regain confidence within your business to move back to annual forecasting. Keep a strict eye on customer terms throughout the year and plan discounts or sales ahead of time.
The yearly forecast should be formed along-side your strategic plan as well as a risk review of your business.
The role of the risk review is to develop realistic and cost effective strategies. Assess your business taking into consideration critical business activities, key services, staff and things that could affect them. This allows you to prioritise and work out which aspects you could not afford to operate without.
Consider when, where and why the risks would likely happen. Are they internal or external and who might be involved if an accident were to happen? Analyse previous events and their effect on your business, what was the outcome? How likely is it to happen again and how would it impact the day to day running? Assess your processes to minimise risk and always consider the worst case scenario. Once you’ve analysed and identified the risks to your business, brainstorm to find tools and options for managing them.
Lastly, does your business have a shareholder’s agreement in place?
A shareholder’s agreement ideally should be in place when the company is first formed and the first shares have been issued, ensuring a common understanding between shareholders of the expectations of the business. The purpose of this is to protect the shareholders’ investment in the company, establish fair shareholder’s relationships and govern the running of the company.
The agreement should include shareholder’s rights and obligations, regulation of the sale of shares, a description of how the company will run, provide some form of protection for minority shareholders and the company whilst also defining how important decisions within the company will be made containing specific and practical rules pertaining to the relationship between the shareholders and the company.
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