Archive for category: Tax

Running a small business can be overwhelming and time-consuming. With the help of an accounting firm, small business owners can simplify their finances and make sure that their company is running efficiently. Here are five reasons why small businesses need an accounting firm.

1. Access to Professional Financial Advice

As a small business owner, it’s important to have a good handle on your finances. An accounting firm can provide professional advice on tax planning, cash flow management, and budgeting. This can be extremely helpful in making sure your business is on the right track.

There are a few things to keep in mind when working with an accounting firm. First, be sure to ask plenty of questions. It’s important that you understand the advice they’re giving you, and how it will impact your business. Second, don’t be afraid to negotiate. Many firms are willing to work with you on pricing, so don’t be afraid to ask for a better deal. Finally, make sure you’re comfortable with the firm you choose. You’ll be working with them closely, so it’s important to make sure you’re compatible. If you’re looking for professional advice on how to run your small business, an accounting firm is a great resource.

2. Improved Cash Flow Management

Accounting firms can help small businesses manage their cash flow more effectively. They can provide advice on budgeting and cash flow forecasting, as well as help set up systems to make sure that payments are received on time.

3. Reduced Risk of Mistakes or Errors

When it comes to finances, there is no room for error. This is especially true for small businesses, who may not have the resources to weather a financial mistake. This is where an accounting firm can help.

An accounting firm can help minimize the risk of financial mistakes. They can help small businesses stay on top of their taxes, ensure accurate accounting records, and provide guidance to ensure that the business remains in compliance with applicable laws.

4. Increased Efficiency

An accounting firm can help small businesses streamline their processes. They can set up systems to automate certain financial tasks, such as billing, invoicing, and payroll. This can save small businesses both time and money.

5. Peace of Mind

As a small business owner, you have a lot on your plate. You’re responsible for keeping your business running smoothly, achieving your goals, and growing your business. This can be a lot to handle, and it’s easy to get overwhelmed.

One way to ease the burden and take some of the stress off of your shoulders is to work with an accounting firm. Having a team of professionals to handle your finances and keep your books in order can give you peace of mind and help you focus on what’s important.

Conclusion

Overall, an accounting firm can be a valuable asset to small businesses. They can provide professional advice and help streamline financial processes. This can save small businesses time and money, while also giving them peace of mind. Working with an accounting firm is an important step for any small business owner.

If you’re looking for a reliable tax consultant, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.

Tax season can be a stressful time for individuals and businesses alike. With the ever-changing tax laws, filing taxes can be a complicated and time-consuming process. That’s why it’s important to find a qualified tax accountant who can help navigate the complexities of the tax code. But, with so many options available, how do you know which tax accountant is the best for you? To make the decision easier, here are five important factors to consider when hiring a tax accountant. 

1. Credentials

The first and most important factor to consider when hiring a tax accountant is their credentials. Make sure the accountant you hire has the necessary qualifications and certifications. The most common qualifications include a Certified Public Accountant (CPA) or Enrolled Agent (EA). A CPA is a professional who has passed the CPA exam and is licensed to practice public accounting. An enrolled agent is a federally-authorized tax practitioner who has demonstrated expertise in tax law. 

2. Experience

When it comes to taxes, experience is everything. You want to make sure that the tax accountant you hire has the necessary experience to handle your unique tax situation.

Ask about their experience in filing taxes for individuals, businesses, or both. Additionally, ask about the types of tax situations they’ve handled in the past. This will give you a good idea of whether or not they’re up for the task.

It’s also important to choose a tax accountant who is familiar with the tax laws in your state. This will ensure that they can provide the best possible advice and service.

3. Reputation

Before hiring a tax accountant, it’s important to do your research and find out what others have to say about them. Check out online reviews and ask for references from past clients. This will give you a better idea of the quality of service the tax accountant provides.  You should also ask for referrals from friends or family. If someone you trust has had a good experience with a particular accountant, that’s a good sign.

4. Cost

Cost is another important factor to consider when hiring a tax accountant. Ask for a quote before hiring to make sure that their services fit within your budget. Also, make sure to inquire about their payment policies. You want to make sure that you understand the full cost of the services before signing any contracts. 

5. Communication

Finally, it’s important to ensure that the tax accountant you hire has good communication skills. After all, they will be responsible for helping you make important decisions regarding your taxes. Make sure that the accountant you hire is someone you feel comfortable discussing your financial situation with.

Conclusion

We hope this article helps you gain a better understanding of how to hire the right accountant. These are five important factors you should consider when hiring a tax accountant. It’s important to take your time and

If you’re looking for a tax consultant, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.

Financial audits can provide your business with a variety of benefits. Not only do they help to ensure that your financial records are accurate and up-to-date, but they also allow you to identify areas where you may be able to improve your processes and save money. Here are five reasons why your business needs a financial audit.

Compliance

As a business owner, it’s important to stay compliant with government regulations. One way to do this is to get a financial audit. This will help ensure that your financial records are accurate and up-to-date.

A financial audit can be conducted by an external auditor or by an internal auditor. Either way, the goal is to examine your financial records to see if they are accurate and in compliance with any applicable regulations.

The auditor will review your financial statements and supporting documentation. They will also test your internal controls to see if they are effective. After the audit is complete, you will receive a report that outlines any areas of concern.

Getting a financial audit is an important part of complying with government regulations. By having your financial records audited, you can ensure that you are in compliance with any regulations that apply to your business.

Fraud Detection

Audits can help to detect any fraudulent activity or discrepancies in your financial records. This is especially important for businesses that handle sensitive data or have a high level of financial transactions.

Tax Preparation

Audits can help to ensure that your business is in compliance with tax regulations and can help to ensure that you are taking advantage of any available tax deductions or credits. Overall, audits can be a valuable tool for businesses. They can help to ensure compliance with tax regulations and can uncover potential areas of improvement. If you’re facing an audit, stay calm and cooperate with the auditor. Be prepared to provide documentation and answer any questions that the auditor may have.

Efficiency

Audits can help to identify areas of inefficiency in your financial processes. This can help you to streamline your processes and save money over time. For example, if you are manually processing invoices, an audit can help you to identify ways to automate the process. This can save you time and money in the long run. Similarly, if you are using outdated software, an audit can help you to identify ways to update your system. This can also save you time and money in the long run.

Investor Confidence

Investors will often require a financial audit before investing in your business. Having an audit completed can help to instill confidence in potential investors and increase the likelihood of securing investment.

Conclusion

Overall, financial audits can provide a variety of benefits to your business. They can help to ensure compliance with government regulations, detect fraud, prepare for taxes, identify inefficiencies, and instill confidence in investors. If you have not had your financial records audited recently, now is the time to do so.

If you’re looking for help with the audit process, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.

Given that 84% of Australian taxpayers anticipate receiving a refund and the average size of returns exceeded $3,000 the previous year, it is in your best interest to double-check that your tax return is correct in every way.

Read on to discover more about tax returns and how to (finally) do it right this time around.

Assess Your Claim to What Is Legitimately Yours

Any expenditure that generates a profit can be deducted as a business expense. You should file a claim for any work-related expenses for which you have documentation. Most taxpayers are permitted to deduct expenses related to automobiles, travel expenses for work, and costs of equipment and work tools.

By speaking with an experienced tax accountant, you can lessen your chances of getting audited by learning which deductions are legal and which are not.

Skip the Dramatics, and Don’t Exaggerate

Only expenses are allowable deductions from taxable income. In order to earn a higher return, do not inflate your deductions; instead, ensure that any charges you claim can be proved by an invoice, a receipt, or a bank statement.

Self-declarants who use myTax are scrutinised by ATO computer systems to ensure they are not filing an excessive number of claims. If your deduction generates a warning, myTax will prompt you to reconsider accepting it. If you choose to disregard the notification, you risk being subjected to an audit.

If the deductions you claimed were incorrect, you must repay the tax as well as any relevant interest. The ATO calculates daily compounded interest at a rate equal to the 90-Day Bank Accepted Bill rate plus three percentage points. If the Australian Taxation Office (ATO) deems that your acts were negligent, it may levy a penalty ranging from 25% to 95% of the tax evaded.

Avoid Using ATO-Prefilled Data

At the moment, ATO’s computers can pre-populate a substantial amount of information regarding income. However, don’t assume that income data is correct or complete. Always rely on your own knowledge and firsthand information. Some people believe ATO data is reliable, but this is simply a dangerous assumption to make.

Even if you utilised pre-filled information on your tax return, you could face legal consequences if you disguised income and were later questioned about it by the ATO.

Focus On Everything, Especially the Essentials

The Internal Revenue Service can delay the processing of many tax returns due to trivial errors.

For example, if you’ve lately relocated or changed your legal name, make sure that before filing, you notify the Internal Revenue Service. If you use distinct information, the ATO will be unable to match your tax filing number.

Another example is if you have not provided bank account information. Because the ATO is unable to ship refund cheques at this time, make sure you give your bank account information. Otherwise, you don’t get the refund.

Furthermore, let’s talk about typos. If you add a letter to a required field, such as your name, the ATO will manually match your information. For example, if you add a letter to the “address” field, it will be automatically disregarded or ignored.

Do It Right with a Professional

Giving their information to a tax professional who will prepare their return in an accurate and comprehensive manner relieves the great majority of clients’ stress. When you hire a good agent, they should be able to identify hidden tax deductions that you were not aware of, resulting in the agent more than paying for themselves. Tax preparation fees are tax deductible!

Conclusion

It’s true that the Australian tax system is so convoluted that many people get confused. Thankfully, we can hire the services of a trusted professional tax agent. By learning with a professional, you can do your taxes right again and again!

Are you in need of a tax professional’s guidance? SMB Accounting is here to manage your finances, including your taxes. Work with us today!

The profit and loss statement (P&L) is a financial statement that shows your company’s income and expenses over a given period of time. It’s also known as the income statement or the income & expense report. The P&L compares how much money you brought in with how much money you spent during a specific period of time, usually one month or quarter.

Profit and Loss statement

A profit and loss statement, or P&L, is a financial statement that summarizes a company’s revenues, expenses and net income for a given period of time. It’s also called an income statement.

The P&L summary shows you how much money your business made or lost through sales revenue (revenue) minus expenses (costs). The bottom line is the net profit, which can be positive or negative depending on whether your total revenue outweighed your total costs.

Profit & Loss Statement Example:

Income

Income is the money that comes in to a business. Income can come from sales of products or services, and may include interest, dividends and other types of income.

It’s important for you to be able to identify where your income comes from so you can make sure you’re getting as much revenue as possible out of each sale. You can break down your income by category (for example: product A sold X units; product B sold Y units), by period (for example: Q1 versus Q2), or even by customer (for example: John Doe purchased X number of products).

Sales

Sales are the total amount of money your company brings in from customers. Sales are the result of your company’s marketing efforts, pricing strategy and product or service offerings.

Sales can be broken down into four main categories:

• Gross sales – The amount of money that comes in before any discounts have been applied to it. For example, if you sell something for $1,000 but give a 20% discount; gross sales would be $1,000 (not $800).
• Net sales – The amount of money that comes in after all discounts have been applied but before taxes have been paid. For example if you sell something for $1,000 which has a 20% discount; net sales would be $800 after tax (not $840).

Financing

Financing is the money you borrow to start or grow your business. Financing can be in the form of a loan or a line of credit.

Financing allows you to buy inventory and pay for other expenses. Financing is usually paid back over a period of time, though it may be paid back immediately if it’s an unsecured line of credit.

Other Income

Other Income is any income that is not part of the normal operations of your business. Examples of other income include interest earned from a savings account, rent received, or money you receive for selling an item on eBay.

To report other income on your P&L, you can use one of two options:

• The Accrual Method – This method records all revenues when they are earned and deducts expenses when they are paid (or accrued). You can learn more about the accrual method here.
• The Cash Method – This method records revenues when cash is received and deducts expenses as soon as they occur (when you pay them). You can learn more about the cash method here.

Expenses

An expense is a cost that is incurred in order to generate revenue. You can broadly categorize business expenses into two types: direct and indirect. Direct costs are those that can be specifically identified with a product or service, while indirect costs cannot be so easily attributed.

Direct expenses include things like the cost of raw materials used in the production process and salaries paid to employees who work directly on a project or product. On the other hand, indirect expenses are related to overhead costs such as rent, utilities and office supplies; they’re associated with operating your business but aren’t directly linked to any one specific product or project (e.g., if you have an administrative assistant who works on sales tasks as well as accounting work).

Fixed vs variable expenses

Fixed costs are those whose rates do not change over time—they remain at exactly the same amount every month regardless of your volume of activity during that period (e.g., rent). Variable costs fluctuate depending on how many units you sell each month—the more products sold per month means higher variable expenses (e.g., packaging materials for each unit).

COGS/Cost of Goods Sold/Inventory

COGS is the cost of goods sold, or the inventory on hand. It is also called Cost of Goods Sold and Inventory. When you buy raw materials, receive them in your warehouse, process them into finished products and sell those products to customers, this figure will be used to calculate your profitability (or lack thereof).

Marketing & Promotions

So, what does all that mean? Well, a Profit & Loss Statement is an overview of your company’s financial performance. It breaks down revenue and expenses so you can see how much money you’re making or losing. The first section of the statement is Marketing & Promotions.

Marketing is one of the key drivers of revenue in any business because it helps customers find you and buy your products or services. But marketing isn’t just advertising—it’s also customer relations and public relations (PR).

Marketing can be divided into three main categories: consumer-facing marketing; business-to-business (B2B) marketing; and branding through corporate social responsibility (CSR), sustainability initiatives, etc., which I refer to as integrated communications.

Salaries & Benefits (including Contractors)

Salaries & benefits are a cost of doing business. They include salaries, bonuses, 401k contributions and any other benefits you provide employees (such as health insurance).

Salary: This is the amount you pay your employees. If you have contractors or subcontractors who work with your company but don’t make up a significant part of your workforce, then they would be considered “contractors” here (more on that later).

Rent, Utilities, and Insurance

As a business owner, you’ll want to know what your rent, utilities, and insurance costs are. These three items make up a significant portion of your ongoing expenses as a small business owner. To calculate them:

• First add together all of the monthly payments that you make for these services. For example, if you pay $2,000 in rent each month and $200 in utilities each month, then your total monthly payments for these two things would be $2,200 ($1,400 + 600 = 2200).
• Next divide this number by 12 to get an average monthly cost per year (2200 / 12 = 175).
• Finally multiply this amount by 100% to arrive at a percentage of total expenses (175 * 100% = 175%).

Interest paid on debt or financing including any fees associated with the loan or line of credit.

The interest paid on debt or financing, including any fees associated with the loan or line of credit. This is a cost of doing business, and it will vary depending on the type of loan you take out.

A Profit & Loss Statement is a document that reports your company’s financial performance over a specified time period.

A Profit & Loss Statement is a document that reports your company’s financial performance over a specified time period.

You can use this statement to calculate how much money you made or lost during the given time period.

Conclusion

Profit and loss statements provide a snapshot of your business’s financial performance over a given time period. In addition to showing how much money you made or lost, they provide insight into your company’s expenses and income sources so that you can make informed decisions about future financing needs, inventory levels, pricing strategies and more.