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Four Top Business Tips for Early Stage Startups

Author: Harry Hoang CPA | Tailored Accounts CEO

I started my business in 2008 with little to no capital, and have since gone through a number of roller coaster rides along my entrepreneurial journey. Ten years may not be a substantial amount of time for start-up veterans, but it is enough to understand the nature of entrepreneurship. There have been a fair share of lows and highs in my entrepreneurial pursuit, so I can thoroughly understand some of the challenges that start-ups in Canberra face. As an entrepreneur who is trained in accounting, I would like to take this opportunity to share my golden rules of financial management for start-ups.

These are some common mistakes start-ups often encounter:

  • Failure to realise the importance of financial management - Start-ups with poor financial management tend to suffer from poor cash flow and profit margins, ineffective debtor control, and an inability to meet their business’ commitments;
  • Lack of information about alternative support solutions such as recruitment - If crunching the numbers is not your strength, either hire or outsource to an accountant or bookkeeper who will deliver regular and reliable information and advice that you can use to manage your financial position;
  • Reliance on manual data try - Stacks of receipts, manual ledger books, overly simplified data sheets, unorganised financial transactions and reports, and overdue BAS and tax returns are common amongst start-ups with poor internal management skills;
  • Lack of financial management skills - Start-ups tend to focus on their products, ideas, and clients, often neglecting the fundamentals of their business. I have never seen a successful business that does not have strong financial management.

Over years of working with start-ups and other small businesses, I have accumulated a wealth of experience designing a sustainable and affordable accounting solution. Here are some tips to avoid making those mistakes above:

  • A good accounting system is a good return on investment. If you invest $50/month to use online accounting software such as Xero or QuickBooks, it will save you at least $50/month in bookkeeping costs as well as your time. These savings will be crucial for further growth of your business;
  • Do not only start raising funds or getting loans when your business is running out of cash. Plan ahead and have good financial controls in place;
  • Technology is the key driver of a good financial system. If your accountant suggests that you record everything in an Excel spreadsheet, this is no longer sufficient for doing business in the 21st century. The more automation you adopt for your accounting system, the more savings and accuracy you gain;
  • Start-ups need to start working on the business, not in the business. If you aren't able to afford to have a giant financial management system with a qualified in-house CFO, then outsourcing would be the best option.

A good financial care and responsibility is likely to lead your start-up to success  – so make sure you cultivate these good financial habits from the beginning and implement them in the way you do things. 


Part 7 Penalty: Directors Are Personally Liable When Facing Super Guarantee Stuff-Ups (Part 2)

Due to Covid-19, there was an amnesty period for businesses to comply and voluntarily disclose their unpaid super via SGC (Super Guarantee Charge) without incurring the administrative penalty or administration component, and to claim a tax deduction for the Superannuation Guarantee Charge (SGC) amounts paid. The Superannuation Guarantee (SG) Amnesty closed on Monday 7 September 2020. Business owners should have received letters from ATO if they were having unpaid super without lodging SGC by that time. Business owners, directors and volunteer directors of NFPs should pay attention to the key dates below:

Understandably, your business might have a cash flow issue during Covid-19, so if you have missed the first payment deadline, please do not miss the SGC deadline, which is exactly 1 month after the first payment deadline. If you are uncertain of how to fill an SGC form, please seek advice from your accountants or bookkeepers.

Please be aware that once you submit your SGC form, ATO will send you a statement that outlines the super owing amounts. It means that ATO has distributed super payments to your staff super funds. You will be required to clear your SGC debts with the ATO. Referring back to Part 1 in which I explained the consequences of having missed $10,000 for 2 quarterly super payments would turn into a $33,850 liability.

Don't forget the severity of the Part 7 penalty alone can drive businesses to insolvency, and directors’ personal liability is a further risk, especially when you don’t have a good financial system or governance!

My tips to stay in compliance:

  • Consider super obligations as important as staff salary payments;
  • Include SGC as a part of your compliance process, saving the key dates;
  • Make an informed decision between a business loan cost vs. the heavy penalty of unpaid super;

There are special circumstances that ATO may consider to reduce the penalty rate from 200%. These circumstances could be: 

  • Health & mental incapable (death or serious illness); 
  • Unprecedented situation (can’t access financial records due to bushfire); Loss of files due to cyber-attack; 
  • Having a good compliance history. 

If you would like further information or to discuss your circumstances, please contact Tailored Accounts. We will assist with providing advice on your circumstances and any potential liability; representing your business with the ATO to make a voluntary disclosure.



Family Business Australia: An Introductory Guide to Family Business Succession Planning

Source: Family Business Australia

Many family business owners hope to pass on their business to the next generation. Family business succession maintains the strong connection between the two most important things in a family business owner’s life; their business and their family. Succession can also be the perfect way to cap off the business owner’s personal business journey.

Together with the Australian Small Business and Family Enterprise Ombudsman’s office, Family Business Australia created An Introductory Guide to Family Business Succession Planning that provides a step-by-step guide to passing the family business on to the next generation.

This introductory guide draws on our experiences to help you understand the process of family business succession and what you need to consider to maximise your chance of success. There will be challenges along the way. But with the right approach, supported by quality information and advice, you can succeed and achieve rewarding outcomes for everyone involved.

Download An introductory guide to family business succession planning


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