Starting a small business is a challenging time. Time itself is the one thing you simply never have enough of. When you are short on it, the first thing that is often overlooked is your business finances and making the most of the tax deductions you may be entitled to.
There are many obvious tax deductions that small businesses simply miss through a lack of capturing the data on them. With cashflow a critical challenge for many small businesses, it’s really important you stay on top of all the opportunities to bring cash back into your business.
In the blur of getting their business started, many businesses simply forget to accurately track all expenses incurred before they begin receiving revenue.
Don’t overlook these start-up expenses. As deductions as they add up quickly and every little bit helps. The most important thing is to maintain accurate and detailed records and receipts from the moment you start.
Treat your business like a business and set-up a bank account and good software when you register your business name.
Work-related car expenses
Small-business owners who use their personal car for work-related reasons (apart from driving to and from where you work) can generally claim the running costs as a tax deduction.
For example: driving between the office and a client or moving from one job site to another.
To be eligible, you must be the owner of the car and your travel must be part of your working day. It’s usually as easy as tracking your kilometres travelled.
QuickBooks Online Self Employed even has a kilometre tracker built into the software. Easy!
Staff are expensive, but businesses can deduct staff wages, salaries and superannuation paid before the end of each financial year.
Superannuation payments, in particular, can really add up as deductions. Just remember that if you want to claim a tax deduction for super payments made to employees, the super has to be paid before June 30.
Using an automated superannuation solution inside your software makes this process, quick, easy and most importantly tax-deductible.
Keeping track is key
Good recordkeeping is absolutely key to ensuring managing your tax affairs simply and ensuring your business benefits from all the tax deductions you are entitled to. The right software, such as QuickBooks Online, as well as regular communications with your bookkeeper or accountant can make that record-keeping far easier.
By staying on top of your business finances generally, as well as your tax obligations and entitlements, you’ll ultimately run a better, more efficient, business. Some things are worth making time for.
Kane Munro, Director, Accountancy Online