Talking Cents

Small business accountant in Melbourne: four useful tips to improve money management for small businesses

Small businesses are not like large multinational corporates that have tons of money and that makes management of money especially important.

Here are four tips are small business owners to perform effective money management:

1. What is your business structure?

You might begin your business as a sole proprietor but it does not mean it have to be the same structure. As your business grows, you might consider changing your structure to a partnership or limited liability company (LLC). Why should turn your business into its own legal entity? Because it is able to protect you from other financial risk and it is easier to open a business savings account to help you save on taxes as well. So, the first step is to consider what is your business structure. The best person who can give you advices is a certified public accountant (CPA).

2. Business is business, personal is personal

If your business is LLC, it is compulsory to keep personal expenses from business finances. In fact, it is always good to do so for any type of business structure. Why should you do that? The answer is so that you can manage taxes easier, stay organised as well as can track and record your financial records accurately. Other than that, it will be not too complicated when you decide to sell your business. To separate your funds, have a credit card and savings account solely for business expenses. Apply for an Employer Identification Number (EIN) and use it when you open your business savings account. It is a tax number for your business and act as a protection against identify theft. Best part? It is free on IRS website!

3. Talk to a tax advisor

Taxes are really tricky is it? Talk to a CPA and get him or her to help you. One should be able to help you avoid overpaying and focus on long-term tax payment plan. They should assess historical tax situations and forecast next year’s payment for you so that you don’t underpay.

4. Invest in an accounting software

One of the nicest things technology did for small business owners is the development of accounting software. Invest in one that is able to cover your accounting needs, it will save you time and increase efficiency in tracking important information. If you are always on your phone, get an accounting app!

Money management is crucial for any businesses as it helps you to stay future-oriented, efficient and open more opportunity doors for investments. 

For more useful tips and advice on how to grow your small business, contact us here at mas accountants, the original accountants for small business, servicing Sydney and Melbourne for over fifty years.