How much does it cost to hire an accountant for a small business?

Even in your average small business (1-3 employees, less than $500k turnover) there will be a broad range of options for accounting and finance including getting specialise setup, tax structuring advice, finance systems and processes together with the everyday bookkeeping and accounting functions.

Is an accountant needed for a small business?

An accountant can offer comprehensive startup and ongoing small business advice, while making sure tax compliance is prepared and filed with the relevant authorities on time.

What is the role of an accountant in a small business?

Being a business owner can be a tough job, and it’s good to have a trusted advisor to lean on in times of complexity or uncertainty. An accountant will be able to help you navigate your business through these times, and help keep compliant with relevant tax authorities.

Xero is an integrated accounting platform that can complete all small business invoicing, receipts, bank transactions and reporting for the IRD. Being cloud based means your advisers can have access to your information in real time.

Is Xero Accounting any good?

Xero is a great tool for small businesses as it gives you real time access to the financial data of your business - information we couldn’t imagine being in business without.

Why the %#@! are Tax Payments for Terminal Tax and Provisional Tax so Close Together?

Sometimes business owners can feel like they’re constantly playing catch-up with paying taxes. While focusing on your craft is essential, neglecting your financial obligations can lead to a nasty surprise come tax time. This is especially true when Terminal Tax and Provisional Tax payments land close together, like they do every year in April and May.

Understanding the Tax Lingo:

Terminal Tax: This is the final tax payment for the income you earned in the previous financial year (ending March 31st). The due date is typically April 7th.
Provisional Tax: These are estimated tax payments based on your expected income for the current financial year. Payment #3 usually falls on May 7th.

The Challenge of Close Payment Dates

For many small business owners, the close proximity of these two payments can be challenging, especially if their income has increased significantly in the previous tax year. This situation can lead to two large tax bills, with payments falling within a month of each other.

Tips for Smoother Sailing:

Make Tax part of the Routine: Know your figures as you go. This will not only make tax preparation easier but also give you valuable insights into your business's financial health.
Ask Away: Lean on your Advisors to strengthen your financial knowledge. They’ll be able to tell you what percentage of income you should be putting to things like Income Tax and GST (tip: it’s usually 25% and 10%)
Estimate Wisely: When making Provisional Tax payments, don't underestimate your income. While overpaying may result in a later refund, underpaying can lead to penalties and interest charges. Consulting with a qualified accountant can help you make informed estimates.
Save for Tax Season: Setting aside a portion of your income specifically for tax payments can ease the financial burden come April and May.
Register and File for AIM: We’ve written about the Accounting Income Method of filing and paying provisional tax before. Filing and paying provisional tax based off actual information that aligns with your GST filing makes everything a lot simpler for provisional tax, and reduces any bad surprises at this time of year.

Here at Accountech, we understand the unique challenges faced by small businesses. That's why we're here to shed some light on why these tax payments seem to sneak up on you, and what you can do to avoid a financial headache.

Disclaimer: This blog post is for informational purposes only and should not be construed as professional advice. It is recommended to seek the advice of a qualified accountant or tax professional regarding your specific circumstances.