If you’ve made the exciting decision to go out on your own and take on the business world then congratulations. We’re thrilled for you but before you mentally launch yourself into the glam world of Corporate Jets and luscious business lunches take a few moments to cram in our five accounting tips for getting your business off to a terrific start:
(1) Start your business as a company, sole trader or partnership:
- First-up, when starting a business you need to decide if you’re going to do business in your own name (as a sole-trader) or as a company. Having a company gives you the flashy title of Director and it should also give you a little more legal protection if the worst happens and things go belly-up but having a company generally costs a bit more to setup, run and shutdown.
(2) How much money will you need to start your business:
- Next, find out how much money you’ll need. In the business world this is called a Cashflow Forecast and it’s really just a budget, on turbo charge, showing how much money you expect to earn and what your bills will be. This’ll help answer those murky questions about how much you can spend on the fun things like your business car, coffee machine or an uber cool office. Just remember to factor in the things you’d rather not think about like Insurance, Income Tax and Goods and Services Tax (GST).
(3) Going into business and registering for Goods & Services Tax:
- Thankfully, you don’t actually have to register for GST unless you think you’ll charge more than $60,000 in the next twelve months. However, registering for GST and getting a refund, of the GST on your business expenses, may boost your bank balance and make you seem that bit more ‘businessy’. Doing the paperwork and preparing GST returns can be a real drag though unless you invest in super easy accounting software.
(4) Open a business with the right accounting software:
- Luckily accounting software’s a bit cool right now so you’ve timed getting into business perfectly and if you’re an iPhone fan then chances are you’ll love online accounting software like Xero. Accounting software may seem a bit pricey but cutting corners now and running your accounting on spreadsheets will generally cost you far more when your accountant tries to get their head around your dinky little system
(5) Starting up in business with a New Zealand Chartered Accountant on your side:
- And finally, it’s essential you find a Chartered Accountant that speaks your language, who’s up to it technology wise and who’ll provide the care and support you need for a price you can afford. Most accounting firms charge an hourly rate but some of the newer firms offer fixed fees so you don’t have to worry about humongous accounting bills and can get on with making your business rock.
Once you’ve got this lot sorted you’ll seriously need to think about getting your prices right and understanding your business model which we’ll take you through over the next few weeks. In the meantime have a quick read of our Idiots Guide to Getting an Audit so you don’t make your new business a throbbing target for the IRD.
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