As any small business owner knows, maintaining smooth cash flow requires juggling nearly every facet of a business, from staying on top of accounts receivable, to extending lines of credit, to managing inventory.
The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital that you need to support the given level of your business.
An increased, consistent cash flow also creates a predictable business pattern, making it easier to plan and budget for future growth. Here are 10 things you can do to increase your cash flow:
1. Organize your billing schedule. The faster your receivables turn over, the more capital you’ll be able to spend on growing your business. To help you bill early and often, put yourself on a billing schedule with an accounting software program as it allows you to act immediately on overdue accounts.
2. Review banking products. Using the right banking transaction products can have the money in your pocket sooner. Review loan interest rates, consider a mobile EFTPOS device or investigate services to take payments over the phone or online.
3. Take advantage of early payment incentives If your suppliers offer you a discount for paying early (usually within two weeks of receiving the bill), take them up on it. Think of it this way: a 2% on a 30-day invoice is equal to a 24% annual return if the money was invested. If your suppliers don’t offer this kind of incentive, ask for it; they may be willing to offer the discount in return for speeding up their receivables.
4. Balance your client base Many service and professional companies work with certain clients on a project-by-project basis. Look for ways to convert some of these clients to a retainer relationship, where they pay you a set amount of money per month for a certain number of services. You might want to offer them some kind of incentive — value-added services, a discount — to encourage them to shift to a retainer. This might reduce your profit margin, but it will help make your cash flow more predictable.
5. Check your pricing Have your prices kept pace with your rising costs? When was the last time you raised your prices? Many small businesses hesitate to increase their rates because they’re afraid they’ll lose customers. However, customers actually expect their suppliers to institute small, regular price hikes. Also, be sure to check out your competition on a consistent basis. If they’re charging higher prices, you should too.
6. Don’t buy all in one place You can save money by splitting your business between suppliers. Closely examine where you need to pay for added service, and where you can save money by paying commodity prices. For example, you might want to buy your computer hardware from a value-added reseller who can help you choose the right system to meet your business needs, while you can purchase other items — such as printer cartridges, cables, or off-the-shelf software — from a mail order catalogue or other price merchant.
7. Form a buying cooperative Save money on supplies by rounding up a few colleagues and buying supplies in bulk, then divvying them up amongst yourselves.
8. Renegotiate your insurance and supplier policies Are you getting the best possible deal on insurance, phone service, and other regular business expenses? Review each of your insurance policies annually and get three quotes for each to ensure you’re getting the most for your money. Keep a close eye on price sensitive services such as your long distance phone service or your Internet access service. Regularly examine these bills and call around to make sure you’re getting the lowest available rate.
9. Tighten your inventory Overstocking inventory can tie up significant amounts of cash. Regularly gauge your inventory turns to make sure they are within industry norms. Avoid buying more than you know you need when suppliers lure you with big discounts; this can tie up cash. Periodically check your inventory for old or outdated stock, and either defer upcoming orders to use that stock or sell it at cost to improve your liquidity.
10. Consider leasing instead of buying Leasing generally costs more than buying, but these costs often can be justified by the cash flow benefits. By leasing computer equipment, cars, or other tools you need to expand your business, you will avoid tying up cash or lines of credit that might better be used for running your business day-to-day. Lease payments are also considered a business expense, so the tax benefits are maintained even though the items are not purchased.
Though the end of the financial year is still a few months away, it’s best to start your financial and tax returns Broome planning ahead of time. This way, you can not only make most out of any tax benefits – but also minimise your tax liabilities for the current year.
To make your life easier and to make sure that you are on the right track in terms of your financial obligations – using the professional assistance of tax accountants in Broome like Melissa Simpson could be a wise decision.
Getting Started
Before you begin sorting out your tax returns, you need to make sure that your business and personal affairs are separated first. This involves separating your invoices and receipts – and ensuring that you have separate bank statements for your personal bank accounts and business bank account.
Income And Deductions
When you incur deductions this year and defer the derivation of income until next year – you can minimise your tax liability for the current financial year. You can have deductions incurred when you spend. You can do this by making a donation, or purchasing stationery items, or paying for maintenance.
If deferring the derivation of income is something new to you and is too complex for you to understand – you can always glean some insights from tax accountants in Broome. Contact Melissa Simpson, she can help you with your tax returns Broome.
Bad debts
When you hear ‘bad debt’ you automatically think of it as something negative. It’s because recovering from debt can be difficult and almost impossible. There’s a good news about bad debts, though – as they can be tax deductible.
This is the best time take a look at your trade debtors and identify which invoiced amounts have little or no likelihood of recovery. Once you get these prepared, you can bring them to account as bad debts when you lodge your tax returns Broome on or before this 30th June. From there, you can claim them as tax deductions for this financial year.
Depreciation expenses
Whether you hire tax accountants to prepare and lodge your tax returns, or you do it on your own – you should not forget to bring to account and claim your depreciation expenses. For certain assets that cost less than $1,000, you should also have an immediate write off readily available. You can pool together and treat other depreciating assets as a single asset for depreciation purposes.
When you make financial decisions, you should always remember that it’s not always about tax. Be sure to make the right decision not just for the sake of tax benefits. It’s best to seek the advice of a professional and experience tax accountant like Melissa Simpson to help you with your financial and tax planning.
The Australian Taxation Office assumes that you, as a taxpayer, will be honest in all your tax affairs. They also expect that when you submit your tax returns Australia at tax time, these will be complete and accurate. If there are evidence of recklessness, carelessness, or disregard of the law intentionally, the ATO will not tolerate that.
When it comes to preparing and lodging your tax returns Geraldton, mistakes should not happen. You don’t want to put yourself on ATO’s radar of people who might have not paid the correct tax amount, do you?
If ever you realise that the information you provided is not accurate, the next important thing to do is to act to correct it. However, it’s still best to avoid and eliminate as much as possible. This article should serve as your guide.
What are the common mistakes you need to avoid?
1. Incorrectly claiming expenses that you are not entitled to, and not having the right records to support these claims you have made.
2. Incorrect calculations of capital gain from a disposal of investment property or shares.
3. Not properly claiming concessions you are entitled to such as CGT discount or capital gains
What are the consequences you might have to face?
Once the ATO discovers that you made a mistake, you might be in trouble. Whether you forgot to declare some income in your tax returns Australia, or you have claimed a deduction you should not have – they most likely are going to penalise you.
However, if you voluntarily let the ATO know about your mistake the soonest time possible, it might help you alleviate penalties. But of course, you would have to pay the tax or interest you might be owing.
How do you fix tax returns mistakes?
As soon as you realise you’ve made a mistake in your current or previous tax returns Geraldton, you should:
1. Write the ATO directly and request an amendment of your tax returns (alongside your explanation for making the mistake, or why there should be changes made)
2. Call the ATO to discuss things, and then prepare the documents you need to send them.
3. Talk to a registered tax accountant for some valuable advice and assistance.
What do you do when you think the ATO made a mistake?
If the Australian Taxation Office alerted you of some mistake in your tax returns Australia, and you don’t agree about it – you can lodge an objection to it.
If you are not sure about things, it is always a good idea to seek advice from tax accountants. They can help you go about objecting to ATO’s decision regarding your tax returns Geraldton.
If you have a car and you use it for work – you would be pleased to know that you can claim the expenses (related to the business costs of using your car to do your work) as a tax deduction on your tax returns Kununurra. For you to be able to claim these car expenses on your tax returns Australia, you need to use any of the four methods below:
NOTE: Before you can claim under any of these methods, you must be the owner of the car. Also, you need to follow the record keeping requirements. If you are not too sure on how to go about things, it might be a good idea to consult with tax accountants, and make sure you’re on the right track.
Method 1: 12% Of Original Value
- 12% of the original value of your car will be the basis of what you can claim. The luxury car limits will apply here.
- During the income year, your car should have travelled more than 5,000 business kilometres.
Method 2: Cents Per Kilometre
- There’s a set rate for each business kilometre you travel – which will serve as the basis of what you can claim on your tax returns Kununurra. Under this method, you will be able to claim a maximum of 5,000 kilometres on your tax returns Australia. Your claim must only be limited to 5,000 even if you travel more than 5,000 kilometres. Alternatively, you can use another method of claim – or use the professional services of tax accountants to make your life easier.
- To make your claim, you don’t need written evidence. Diary records would be good enough to demonstrate that you have incurred the expenses.
Method 3: One-Third Of Actual Expenses
- One-third of your car’s expenses can be claimed as a tax deduction.
- During the income year, your car should have travelled more than 5,000 business kilometres.
- For all the other expenses for the car, you should have written evidence of oil and fuel costs.
Method 4: Logbook
- When you make a claim on your tax returns Kununurra for each car expense, it will be based on the business use percentage. For this, you need to keep a logbook for a minimum of 12 weeks. This must be updated every 5 years.
- Throughout the start and end period that you have owned or leased the car, you should have odometer readings.
- Also, for the logbook period – you need to keep details of all the kilometres you have travelled.
- All expenses related to the operation of the car can be claimed as tax deductions on your tax returns Australia. You, however, need to justify your claim by presenting receipts.
IMPORTANT NOTE: You cannot claim any of the car costs if your car is provided by your employer – or if it is part of your salary package. Get advice from tax accountants to figure out the best way you can claim your car costs this financial year.
If all or part of your employment activities are carried out from home – you would be pleased to know that a portion of the expenses of running your business from home are tax deductible on your tax returns South Hedland.
You ideally should set aside a room to serve as your home office, athough this is not a requirement. If you use a room shared with others (for example, a lounge room), or a room with a dual purpose (for example, a dining room) – you can still make home office claims when you lodge your tax return online or offline.
You can do this by claiming the expenses for the hours you spent exclusively using the area. It might be good to consult with tax accountants in your local area to find out more useful tips on how to sort things out.
Some of the expenses you can claim on your tax returns South Hedland include:
- Lighting, cooling, and heating
- Depreciation or decline in value of furniture and fittings in your home office
- Depreciation or decline in value of computer and office equipment
- Actual expense basis claiming of internet costs, telephone, stationery, and computer consumables
Methods Of Claiming Home Offices Expenses When Lodging Your Tax Return Online Or Offline
1. Actual running expenses / diary method
Keeping a diary is one way to calculate how much of your home office running expenses is related to work. You need to keep this diary as detailed as possible, especially when it comes to taking notes of the time you spend in the home office. Keep a four-week period diary record. You can ask help from tax accountants if you are not too sure on how to go about things.
2. Tax rate per hour
There’s a fixed rate of 34 cents per hour that you can use to calculate home office expenses for lighting, cooling, heating, and depreciation of office equipment. Instead of keeping details of actual costs, you can use this method when making claims on your tax returns South Hedland this tax year.
All you need to do is keep a record of the number of hours that you use your home office. When you preparing and lodging your tax return online or offline, simply multiply that number by 34 cents per hour. You should know, though, that you cannot claim decline in value of furniture when using this method.
Other home office expenses you can claim include:
- Depreciation of the home
- Rates and taxes
- Mortgage or interest costs
You can ask record cards from tax accountants to make your life easier, especially when keeping these important records.
The end of the 2014 financial year is just a few months away. Before you know it, it’s tax time again – the time to lodge that much dreaded tax returns Kalgoorlie.
When lodging your tax returns this tax year, you should know that the Australian tax-free threshold has been increased to $18,200. This means that if you haven’t filed your 2012-2013 taxes yet and you are planning to file it this 2013-2014 financial year – there’s probably a tax refund waiting for you. You need to be careful when it comes to filing and make sure that you do not to get in trouble with the ATO. This is where the professional services of tax accountants come in most handy.
The Tax-Free Threshold Changes
The tax-free threshold in 2011-2012 financial year was $6,000. But the threshold has been increased to $18,200 starting 2012-2013 tax years and onwards – thanks to the Clean Energy Future package.
So, if you are an Australian resident for tax purposes, you would be pleased to know that you would only be paying taxes for the taxable income exceeding $18,200. You will get a higher tax rate on your tax returns Kalgoorlie as your income goes higher.
In 2013, (according to a report from the Australian Taxation Office) taxpayers who used the $18,200 tax-free threshold for Pay-As-You-Go withholding purposes on their tax returns were able to save money equivalent to:
$350 = a week
$700 = a fortnight
$1,517 = a month
Claiming The Australian Tax-Free Threshold – What You Need To Do
When it comes to claiming this tax-free threshold, and make sure that you pay taxes only for the income you earned over $18,200 – it would be good to let tax accountants sort things for you. As an overview, here are some of the things you need to satisfy:
1. Be an Australian resident for tax purposes
You are considered an Australian resident for tax purposes if you live in Australia for a minimum of 6 months. This also means that you can claim the tax-free threshold on your tax returns Kalgoorlie. If you’d like to learn more whether or not you are considered as an Australian resident for tax purposes, you can visit the ATO website or discuss things with tax accountants in your local area.
2. On your tax file number declaration, mark ‘yes’ for claiming the tax-free threshold.
When your employer asks you to fill in a tax file number declaration, make sure to mark ‘yes’ to the tax-free threshold claim. If your employer doesn’t let you fill it in, ask them for it.
To make sure that you’re on the right track, and that you get a maximised tax refund and minimised tax bill – you might want to consider hiring a tax accountant to file your tax returns on your behalf.
Though the end of the financial year is still a few months away – it pays to put together a checklist of your end-of-year tax planning the earliest time possible. This way you can achieve the best outcome from your tax returns Broome.
Tax planning is a year-round event, and not a one-time project. Though it is inevitable to encounter some last-minute items in your tax returns preparation – at least they can be minimised.
To help you with your tax planning, here are some helpful tax returns Australia tips you can start thinking about:
1. Trading stock
If you have stocks that are old, damaged, or obsolete – then it’s time to get rid of them and include them in your tax returns Broome before 30th June. Such a written-off amount will immediately serve as a tax deduction. It would also be worthwhile to begin reviewing your stock in relation to the appropriate valuation method. Talk to your financial consultant or registered tax accountant about how you can go about this.
2. Bad debts
You will also get tax deductions when you write off your bad debts in your tax returns before 30th June. However, you need to make sure that these are written off in the ledger of the debtor. Also, ensure that the recovery action is ceased.
3. Asset register
When you write off any equipment or plant that has been scrapped in your asset register, you will receive the tax benefit within the current year. Your tax accountant can assist you with this.
4. Director’s fees and bonuses
Make sure to declare before 30th June any bonuses or director’s fees you are planning to pay. You don’t have to pay them before the said date before you can get the tax deduction. Also, the recipient do not have to declare this on their tax returns Broome until the time of actual receipt.
5. Expense prepayments
You can take advantage of the prepayment rules if you are a small business entity for tax purposes. You should be aware though that you will only qualify for the deduction in your tax returns Australia only if you make expense prepayments in June.
6. Superannuation
If you want to receive the deductions in your tax returns this year, you need to pay your superannuation before 30th June. Also, you need to make sure that the funds are receipted by the super fund.
7. Income trustee appointments
If your business operates through the trust structure, the appointment of income for beneficiaries must be determined before 30th June. Be careful when you sort these things as the Australian Tax Office is busy keeping an eye on this area at the moment. It would be best to consult with our financial advisor or tax accountant regarding your tax returns Australia.
Preparing and lodging your tax returns Geraldton can be done in many different ways. There are currently four ways to lodge your tax return online and offline with the Australian Taxation Office (ATO). When choosing the method, it all comes down to how simple or complex your tax affairs are. You can choose from the following:
1. E-Tax
If you have a simple tax affair, or you are a wage or salary earner who has relatively straightforward deduction, rebate claims, or expense – the ATO’s online e-tax facility could be a good option. Over 2 million individual taxpayers in Australia use this facility, and enjoys the advantage of receiving refunds within 14 days.
At first, things can be a bit confusing when you use this tax return online facility, especially if you are not an internet savvy. Perhaps the help of your family and friends could make your life easier. The professional service of tax accountants would also be a wise choice.
2. Tax Packs
If are a taxpayer with more complex tax affairs, and you are not expecting to receive any end-of-year tax refund – tax packs are a good option. Tax packs are printed version of tax returns Geraldton forms issued by the Australian Taxation Office.
A pack contains two types of tax return forms. You will use one to complete your tax return lodgement with the ATO, then you use the other for your own records.
A form is further divided into two parts. There’s a part for taxpayers with more complicated tax affairs, and another part for those with simpler returns.
3. Phone Lodgement
If you prefer to sort your tax return over the phone – you may also do so using ATO’s self-help phone number. This is a good option for those young people who have just entered the workforce; who have simple and short tax affairs; and for those who don’t or can’t access the tax return online facility.
By following the prompts, you can easily lodge your tax returns Geraldton in as fast as 12 minutes. This method is available 24 hours a day, 7 days a week. You can expect to receive your tax returns within 14 days upon lodgement. You should know that you must receive the short tax return first before you can qualify for this option.
4. Tax accountants
Last but not the least, you can use the professional service of a tax accountant to help prepare and lodge tax returns on your behalf. You need to make sure, though, that the tax accountant is registered with the Tax Practitioners Board (TPB). This way, you can have the peace of mind knowing that your tax returns are in good hands.
With a credible and reputable tax accountant by your side, you don’t need to spend your precious time going through your records and financial documents as you can leave everything to them. Also, you can be sure that your tax returns are completed correctly and on time.
There are important tax returns South Hedland key points to keep in mind so you can enjoy an easier life. It’s similar to preparing for a big exam, you get adequate sleep the night before – or when you spend a day at the beach, you put on sunscreen.
When you lodge your tax return online or offline, you should remember that having a lower taxable income means having a lower tax bill to pay. So, how do you lower your taxable income? One legitimate and effective way to do this is to claim tax deductions for certain expenses that are directly related to your work or your business.
Before you go ahead and start claiming tax deductions on your tax returns South Hedland this tax year, it would be good to equip yourself with the right knowledge. Alternatively, you can use the professional services of tax accountants in your local area to make sure you’re on the right track.
Australian Taxation Office’s Deduction Rules
When it comes to lodging tax return online or offline, the ATO has set rules which include:
1. You need to show written evidence of your claims.
2. You cannot claim expenses that you will be or have been reimbursed for.
3. You can claim expenses that have only been incurred within the same income year.
There are more specific rules you need to know, depending on the tax deductions you are claiming on your tax returns South Hedland. You should keep all the financial documents and receipts that serve as evidence when you lodge your tax return online or offline, regardless of the deductions you are claiming. If you are not too sure on how to go about things, it would be good to consult with tax accountants.
8 General Tax Deductions You Can Claim
To give you an overview as to what you can claim on your tax returns, here are 8 general expenses you need to know:
1. Gifts and donations
2. Clothing, laundry, and dry-cleaning costs
3. Travel and vehicle expenses
4. Self-education expenses
5. Dividend, interest, and other investment income deductions
6. Home office expenses
7. Tools, equipment and other assets
8. Other deductions
Each of these categories are broken down into further categories. To find out more about what you can and you cannot claim on your tax returns, discuss your tax affairs with tax accountants. When you have a tax accountant to sort things out on your behalf, you can have the peace of mind knowing that you get a maximised tax refund and minimised tax bill.
You lodge your tax returns Karratha each tax year to the Australian Taxation Office so they can work out how much tax you should pay. The tax returns Australia cover the financial year and it ends on 30th of June.
The ATO uses the information you provide when working out the amount of your tax debt or tax refund. The good news is that if ever you have paid too much tax, you can still get your money back through a tax refund. This is why lodging your tax returns is very important.
There are three ways you can lodge your tax return: using e-tax (online), by mailing a paper return, or by using the professional services of tax accountants.
Do I Need To Lodge A Tax Returns Karratha?
More often than not, people need to lodge a tax return every year – especially if you have had tax taken from any payment you received. If you don’t lodge your tax returns Australia when you are supposed to – you can get in trouble with the ATO and you may even have to pay a penalty. To avoid getting caught up in such situation, it would be good to consult your financial affairs with tax accountants in your local area.
Completing and sending the ATO a non-lodgment advice is all you need to do if you don’t need to lodge a tax return. Otherwise, the ATO might need to contact you.
How To Lodge Your Tax Returns
1. E-tax
If you want to prepare and lodge your individual tax returns Karratha online, you can use e-tax. It is ATO’s free, fast and secure service. The advantage about using the e-tax is that you can get your tax refunds issued within 12 business days. To get started with e-tax, you need to know the requirements first. You can either talk to someone from the ATO; get information from their website; or get advice from tax accountants in your local area.
2. Paper tax returns Australia
If you wish to lodge your tax returns by mail, you can use the paper tax return for individuals and follow the individual tax return instructions. You can expect to get your tax refunds issued within 50 business days upon lodgement.
3. Tax accountants
To make your life easier, you might want to consider hiring a tax accountant. This way, you can make sure that you not only have a maximised tax refund and minimise tax bill – but also have your tax return lodged accurately, completely, and on time.