Top Tax-Saving Tips for Australians: Maximising Returns and Minimising Liabilities

1. Use the “Multiple Bank Accounts” We recommend using three main bank accounts for your business: Main Operating Account – for day-to-day expenses and receiving income GST Tax Account – strictly for GST and BAS lodgement obligations Wages & Super Account – for payroll, PAYG, and super contributions 2. Set Aside GST From Every Sale 1. If you’re registered for GST or have payroll obligations, it's important to set aside a portion of every sale to cover these liabilities. 2. Transfer a suitable percentage of each sale into your tax-related accounts. The percentage may vary based on your specific business needs and structure, but creating a buffer helps ensure you’re prepared for quarterly lodgements, unexpected tax liabilities, and timing issues. 3. Open separate tax accounts with your bank to prevent accidental spending of tax funds. 3. Plan for Wages, super and PAYG Withholding Even if you’re a sole trader or a small team, it’s critical to allocate a portion of each sale towards employee wages and entitlements. This should cover: · Salaries and wages · PAYG withholding · Superannuation · Workcover obligations 4. Track Your Expenses Weekly Use accounting software like Xero, or MYOB to: · Reconcile bank transactions as you go to avoid wrong accounted transactions · Track income and expenses in real time · Match payroll and GST accounts regularly Tip: Set weekly reminders to transfer GST and wages portions, don’t wait until end of quarter. 5. Stay BAS and Tax Ready Every quarter, you’ll need to lodge a Business Activity Statement (BAS). It includes: · GST collected · PAYG withholding · Any PAYG instalments due Having your tax and wage accounts pre-funded makes BAS lodgement smooth and stress-free, by having the money already sitting in your tax accounts, it becomes much easier to make arrangements for BAS payments without cash flow pressure. Conclusion Success isn’t just about increasing sales; it’s also about managing those sales with discipline. By setting aside appropriate amounts regularly into dedicated accounts, you'll foster a habit of tax preparedness and business stability. This allows you to focus on growth without the stress of last-minute tax shortfalls.  If you're unsure how much to set aside, or how your GST and PAYG are calculated, get in touch with our accounting team and we can tailor a plan based on your business cash flow and help automate your processes.

What are capital works? Capital works refer to substantial improvements, renovations, or construction that increase a property’s value or extended its life. Examples include: - Building extensions - Upgrading plumbing - Replacing roofs - Restumping of the house - Replacing the lawn - Replacing retaining walls These are long-term improvements, not regular repairs or maintenance. Unlike routine maintenance, which can be deducted in the year you spend the money, capital works deductions are spread out over 25 to 40 years. How do these deductions work? You can claim a percentage of the cost of capital works each year. Generally, residential properties built after 16 September 1987 can claim 2.5% per year up to 40 years.  Who can claim? Anyone who owns a property with significant improvements can claim this deduction, including property investors, business owners, and landlords. However, principle place of residence that are not rented out are not eligible for capital works deductions. Capital works deductions can be claimed as a deduction against the rental income that has been made for the year if you have made substantial improvements to you property.

Running a small or medium-sized business is challenging. Investing in hiring, marketing and raising prices may drive growth… but also impact the bottom line. Making prudent investments while managing cash is extremely important. Here are some practical strategies to help leaders achieve long-term profit growth, without putting the business at risk . 1. Stay Informed: Monitor Key Metrics Keep an eye on gross margin, net profit margin, and other key metrics which make sense in your business. For example, a financial services firm implemented a real-time dashboard to monitor key performance indicators (KPIs), and this analysis helped make informed decisions about their pricing and cost-control strategies. 2. Price Right: Regularly Review Your Pricing Strategy Research the market to ensure prices are competitive. Your pricing should capture the true worth of products or services in the minds of your customers. For example, a theater owner learned to modify ticket prices based on customer demand, resulting in increased revenue per performance even in slow periods. 3. Bundle Up: Offer Product Bundles Create bundles of products or services to encourage customers to buy more. This can increase the business’s average sale value and boost profits. For example, an e-commerce platform introduced personalised product bundles based on customer purchase history, leading to a significant increase in average order value. 4. Discount with Purpose: Offer Strategic Discounts Use discounts strategically to move slow-moving inventory or to attract new customers. For example, a seller of furniture offered targeted discounts for high-end products during off-peak seasons, which had a long-term positive impact on the bottom line. 5. Start Smart: Streamline Your Operations Review processes and identify inefficiencies. Find ways to automate or simplify them. This reduces costs AND frees up time for the team to focus on what matters. For example, a manufacturing business implemented an automated inventory system, saving 100 man-hours per month. In addition to reducing costs, the time saved was partly allocated to innovation, with good results. 6. Stay Sharp: Negotiate with Suppliers Regularly review supplier contracts and don't be afraid to negotiate better terms. Consider forming partnerships or buying in bulk to get discounts that boost the bottom line. A retail chain which renegotiated supplier contracts, achieved a 15% cost reduction, which directly increased profit margins. 7. Be Agile: Implement Just-in-Time Inventory Keeping a lean inventory helps reduce storage costs and avoids tying up cash in excess stock. For example, a food distributor uses sales forecasts to order inventory only when needed. This has reduced warehouse costs and food waste, leading to higher profitability. 8. Work Wisely: Outsource Non-Core Activities Consider outsourcing tasks like Accounting or IT support to specialised firms. This lowers overhead costs and gives access to expertise to help the business grow. For example, a software developer outsources some projects to an offshore team, which accelerates time-to-market and improves customer satisfaction. Each business is different but consider these practical strategies to improve your business's profitability and set the stage for long-term success.

Effective bookkeeping is vital for the success of any business. By understanding and implementing various methods, leveraging the right software, avoiding common mistakes, and following practical tips, you can maintain accurate financial records and make informed business decisions. Common Mistakes Below are some pitfalls to watch out for: By being aware of these common mistakes [...] Read More The post Bookkeeping Tips appeared first on Green Taylor Partners.