Cash or Accrual
What will be most suitable reporting obligations for you Business (Cash or Accrual)?
- Cashed Based Reporting: You pay your GST on your Sales and claim your GST Credits on Purchases in the period that you receive or pay the money.
- Accrual Reporting: You pay your GST and claim your GST credits in the period that you make the Sale or the Purchase.
Large Business’s will be required to report on an Accrual Basis, while Small Business, those with a turnover of less than $10 million can choose to report on a Cash Basis.
Many Small Business will report on a Cash Basis as this method better aligns with their cashflow.
BAS Liability
How do you intend to meet your BAS obligations at the end of the quarter? For example, if you are starting a Restaurant or Takeaway business you might want to consider that most stock purchases will be GST free while most sales will include GST, therefore your BAS obligation maybe higher in percentage than some other industries.
PAYG & Superannuation
If you intend to employ staff, don’t forget that you need to withhold the appropriate amounts of tax from their pay which will be included with your BAS to be paid to the ATO. You will also be required to meet your relevant industries Superannuation Guarantee obligations and keep in mind the pending Payday Super Changes.
Insurance for the Business Owner
It should also be noted that the Business Owner, or Director are not covered by WorkCover. Thus, depending upon your personal circumstances you might like to consider a policy that covers yourself.
Structure
Your Accountant can advise you which structure is most suited to your financial position. Ie. Sole Trader/Partnership/Company or Trust.
WorkCover
You will also need to ensure you have the appropriate amount of WorkCover (Insurance).
Insurance
Have you considered if you require Public Liability Insurance or even Professional Indemnity Insurance.
The Queensland Government have some great information on Starting a Business, some sites of interest might be: