Financial management is the most critical issue when running a business. It determines if your business succeeds or not. As an entrepreneur, it might not be easy to understand financial dynamics of your business well. For that reason, it is advisable to hire a qualified accountant to handle your books of accounts. Some frequently asked accounting questions from many entrepreneurs include the following.
1. Should You Open a Separate Bank Account as a Sole Trader?
Yes. It is vital to create a boundary between your personal finances and those of your business. Doing this gives you and your accountant an easier time when bookkeeping and filing returns. However, it is not a legal requirement for a sole proprietor to open a separate business account. If you plan to use one account for your personal as well as business finances, then note down all the personal expenses and payments in your cashbook.
On the other hand, trusts, partnerships, and companies need a different business account for better accountability and tax calculations.
2. Should You Hire an Accountant or a Lawyer?
Both experts are essential. Though small business owners can choose to handle their tax returns without an accountant, they mostly end up making mistakes. It's best to hire a trained accountant to manage your company's finances and taxes. Hiring them saves you many stresses that come with bookkeeping.
Similarly, it is vital to work with a business lawyer. A competent lawyer guides you in making critical business decisions, like signing legal documents or forming partnerships. With their expert advice, you'll avoid making legal mistakes. Furthermore, a proficient business lawyer will recommend the type of business protection and insurance you should take to cover your business.
3. Which Record-Keeping Strategy Should You Use?
Electronic bookkeeping is the most ideal for businesses, whether big or small. In today's world, most things have moved online, and you should follow suit to stay ahead of the competition. That means computerizing and automating your record-keeping systems. There are various online accounting packages available today. However, it's not easy to choose the right one for your enterprise. For the correct purchases, seek the professional assistance of an experienced accountant.
4. Should You Approach the Australian Tax Office?
The ATO's responsibility is to provide information and laws that businesses should know. The ATO's website offers basic information about establishing a new business. However, you need a qualified accountant to help you identify aspects that apply to your business.
These are some of the common questions many people ask when establishing small businesses. However, it is vital to work with a licensed and experienced accountant to help you navigate a new business's financial and legal processes.Share