Talking Cents

A friendly reminder from your small business accountant

As your business accountant in Sydney we thought we would bring the following issue to your attention. During difficult financial times it is our experience as small business accountants that many small businesses delay the lodgement of Business Activity Statements and even Income tax returns in order to avoid alerting the ATO to their businesses obligations and the resultant debts. If you are a small business operator I strongly urge you to avoid falling into this mindset.

Delaying the lodgements and burying your head in the sand is fraught with danger from many viewpoints. You immediately leave your business exposed to the imposition of late lodgement penalties as well as general interest charges on the outstanding amount. The current rate of interest charged by the ATO is 11.62% p.a. Surely an overdraft or short term loan from your bank is going to be cheaper in the long run than using the ATO as a source of funds. By lodging your ATO requirements on time, it allows you to gain a better insight into the health (or otherwise) of your small business. You can then make decisions and take action based on the information at hand to fix a poorly performing small business. By having your accounts prepared quarterly, and on time, it also allows you to discuss your business with your accountant before it's too late.