Tips For Avoiding ABN Cancellation

If you are operating a small business, one of your responsibilities as a business owner is to make sure that it generates profit. Once ATO deems your business to be more of a hobby than an enterprise, ABN or Australia Business Number will be cancelled. If your business has also violated the terms and conditions of setting up a business and you are no longer operating your business you are most likely to have your ABN cancelled as well.

There are ways to avoid ABN cancellation and as a business owner, you need to make sure that you have a viable plan and effective business management. Even if you are running a small business, you can still make sure that it is going to be in good hands if you consider hiring a bookkeeper.

A bookkeeper prepares the financial statement and report so business owners will have an idea where their business is going. A bookkeeper also gives business owners peace of mind knowing that their business has enough to survive. Although having enough is not a proof that your business is going to be profitable, you will have an idea of the aspects that you still need to improve.

A bookkeeper prevents ABN cancellation by ensuring that you have a steady cash flow. While watching over your cash flow is not deemed be-all-and-end-all of running a business, ensuring that your cash flow is not in danger can help you maintain its stability. With the help of your bookkeeper, your assets and actual liability are going to be separated so you will know the sum of money that goes to your business savings account. It is also easy to determine whether or not you are making a profit or a loss once your financial statements and reports are organized.

You may also have to take various financial factors into consideration

• Reconnect With Your Associates
When it comes to networking with people, you need to make sure that you have a continuous or ongoing process. Consider reconnecting with your business associates as you can get advice from them especially when it comes to creating viable action plan.

• Build New Connections
Aside from reconnection with your associates, you should not also forget to build new connections. Make sure you have two or three acquaintances that you can build a good working relationship with. You should give importance to community as it can serve as your strong system of support especially for tough times.

• Assess Your Goals
If it has been a year since you opened a small business, make some assessment if you have achieved all of the goals you set. If there are goals which you have not accomplished, determine the factors that deterred you from accomplishing those goals.

• Re-Evaluate Your Spending Habits
Unnecessary purchases can also affect your business. Assess your spending habits and if you find out that you made purchases on impulse, try implementing new measures so you can prevent unnecessary spending. You may also speak to your bookkeeper for recommendations. With these simple changes, your business can make a difference.

Why Poor Bookkeeping Can Wreak Havoc On Your Business

When it comes to business management, your business’ financial aspect requires attention and while bookkeeping and accounting fees are quite high these days, ensuring quality is going to be the best practice to follow to avoid experiencing poor bookkeeping. Just imagine operating your business without paying attention to your financial activities. You had high hopes that your cashflow is still intact but when you received a letter from the ATO reminding you of your delayed or non-payment of GST and PAYG, everything will surely sink in that you need to recheck your bookkeeping task.

You worst fear has finally come true as the ATO forwarded the letter to your bank informing them of your non-payment. It was too much to take and you are well-aware of what is going to happen next. You panic at the thought of your bank receiving the letter from the ATO. You are restlessly waiting for the bank manager to call and demand of a good explanation for your non-payment.

Being in the business requires you to keep watch of your cashflow from a bird’s eye view. For the most part, business owners rely on bookkeepers when it comes to ensuring that their financial activity is kept in check. However, your business is doomed to fail if you do not take an active participation in the process of checking your financial statement. As a result of non-payment of GST and PAYG obligations, the ATO is left with no choice but to garnish the company’s bank account.

The sad truth about mismanaging a business is the failure to pay attention to their operating expenses and wages bill. It seems too easy to request the ATO to defer payments, but if this already becomes a habit, it is definitely difficult to catch up. Once a business is in financial distress, making a payment of debts is a challenge. If paying debts is not definite, insolvency is not far from happening and bankruptcy is inevitable.

Even the hardest working people are not immune to financial stress and there are things beyond a business owner’s control. If you have a business partner and he is not doing his part in managing the business, it can also take its toll on your business.

This scenario can still be avoided so long as essential questions are truthfully answered:

• Can you still meet the contractor’s bill and payroll?

• Are you making timely GST and superannuation payments?

Timely management reports should be prepared by your bookkeeper so you will be able to keep watch of your business. Bookkeepers should meet the following obligations for a cost effective way of handling your business:

• Create a system so invoices go out promptly and reminder notices are sent effectively to avoid falling behind payment schedule.

• Prepare a system that has the ability to highlight late payers once due dates are triggered.

• Terms on invoice should also be set up so it will be easy for you to find out about your collection costs.

As a business owner, it is also your responsibility to call the bank manager before he calls you, give the ATO a call, arrange payment plan that you can follow, prepare budget and reduce head-count if it is considered necessary.