We are Chartered Accountants and advisors who offer forward thinking, practical advice and strategies for business.
There is an increasing number of complex compliance issues with a greater potential for risk and significant penalties for failing to deliver.
Did you know that a mistake in a superannuation fund or its investments can compromise its status as a concessionally taxed structure, resulting in a tax bill amounting to nearly half the assets of the fund?
Many businesses are unable to dedicate the in-house resources necessary to undertake compliance reporting. For these businesses, dealing with the array of complex compliance issues can involve a significant drain on time and resources – resources that rightfully should be focused on the businesses primary purpose. As a result, the business can be exposed to a higher degree of tax risk.
Fulfilling your business compliance needs is something you have to do and have to do correctly. And, you have to do it every year.
Managing your tax and accounting needs is not just about form filling for the Government. It’s about understanding how you operate, how you need to be operating, and the most efficient and practical way of fulfilling your obligations.
At Ashmans, our primary role as your business partner is to minimize your business and personal tax exposures through legitimate planning and being entirely across changing taxation requirements. We develop ideas and creative solutions that are capable of being implemented into your business structure. We will ensure you have access to timely information, creative ideas and innovative solutions that will protect and safeguard you against the complex and constantly changing tax legislation that governs the Australian market.
Our experienced team know where problems can occur and where possible, identify those problem areas for you and help you with the solutions.
There are numerous compliance reporting requirements that businesses and individuals are obligated to meet depending on their circumstances. When we prepare financial statements for you, our philosophy is to get the basics right first, then most importantly, look beyond the numbers to see where we can improve your tax and internal efficiencies.
Business & Investment Structure
The choice of an appropriate business or investment structure is very important in order to maximise your returns and at the same time minimise the legal and economic risks as the owner.
Did you know that changing structures has serious tax and legal implications, so it’s important to make the right decision at the onset to avoid the need to change the structure at a later stage.
Choosing the most appropriate legal structure for your business or investments is essential to protect and grow your assets. The most commonly used structures are companies, sole traders, unit trusts, discretionary trusts, self-managed superannuation funds and partnerships. Each has its own advantages and disadvantages. Important factors to consider in choosing a structure include asset protection, tax efficiency, estate planning, financing and suitability for external investors – selecting a suitable structure requires careful consideration of all these factors.
It is very important to receive professional advice in order to choose an appropriate structure prior to commencing business or acquiring an investment. There are often substantial capital gains tax, stamp duty, and advisory costs in restructuring to a more appropriate or necessary structure.
Although tax should not be the single most important factor in deciding on the most appropriate structure, different structures do have different tax implications.
The following outlines just some of the tax and non-tax related factors that may be relevant when deciding on your business or investment structure:
Non-Tax Related Considerations:
Tax Related Considerations:
The importance of the various considerations differs depending on your circumstances.
As such, there is no such thing as a universal structure – only one that is tailored specifically to suit your individual circumstances. Selecting a suitable structure requires careful consideration of all these factors.
Ashmans regularly assist clients in choosing and establishing a structure appropriate to their needs, or in transitioning to a more effective structure
Starting a Business
Having a great business idea is just the beginning to financial success. Careful planning, research and execution are just some of the basics you need to get right before you start.
Did you know having the right business structure could save you thousands in tax concessions?
Starting a new business can be daunting, but with the right advice, it can also be significantly rewarding, both personally and financially.
A few simple steps for you to consider when embarking on your new business venture:
The first, and often the toughest part of starting a new business venture is having a clear, concise strategic and operational business plan. This forms the road map for your business.
Your business plan should answer the following questions:
Have you done your research?
Regardless of the product or service your business will be offering, you first need to make sure there is a viable market for it, and that you can reach the target audience in that market.
Make sure you clearly know the market you are getting yourself into.
New Business Set Up
Selecting the right legal business structure for you is one of the most crucial building blocks to starting a successful business. The incorrect structure could mean increased unnecessary costs or even lost opportunities.
Ashmans can help you select and implement the right legal structure for your business for tax, asset protection and growth, and help you understand your rights, obligations and duties.
Regulatory requirements for starting a new business:
Location, location, location
A common mistake for many businesses is having the wrong location, despite an outstanding product or service. Having the wrong location could mean your business venture fails to attract customers. Your business fittings and fixtures, whether it’s office equipment and furniture or store fit-out are key factors to consider as it represents the tangible aspects of your brand.
Source of business funding
So you’ve got a great business idea which your sure is going make you money….but how much money will it really make you? Forecasting your profit potential is not only exciting, but it’s also an important part of getting your business off to a solid start. For the best chance of obtaining financial funding for your business, you will need to prepare a budget and cash flow analysis and forecast for at least 12 months. You should also include a profit and loss projection for at least the next 3 years. Ashmans can help you prepare these as well as help you review any loan contracts.
Protecting your business
Insuring your business is often overlooked, but is one of the most important parts of setting up a business…after all your business will become your livelihood.
Marketing your business
‘If you build it, they will come’ is a quote you’ll likely be familiar with, but in today’s competitive environment, doesn’t always ring true.
If you ‘build it’ and your customers don’t know about ‘it’, how will they come to you? Marketing is the process of either screaming to the world, or selectively whispering to an exclusive group your product or service.
Understanding your financial position will help you allocate the appropriate resources within your business to make sure you don’t miss out on any opportunities.
Is your business going to be a family business, or do you need to hire more experienced staff? The hours you operate will also impact on your overtime costs and penalty rates. What industry award rates govern your industry sector? What taxes and employment duties and obligations are you responsible for?
Ashmans are small business specialists. We live and breathe small businesses and understand the challenges and opportunities you face. We can help guide you and build a solid foundation for your business to ensure its maximum short, medium and long term success.
Buying a Business
Buying an existing business (or franchise) can be easier and less costly then setting up a new business from scratch, but the process can be daunting, especially if you have never been in business before.
Did you know that one of the main reasons people buy an established business rather then set up a new business is for the established infrastructure and ongoing cash flow…meaning you can hopefully hit the ground running.
Thousands of businesses are bought and sold every year in Australia. As with any entrepreneurial endeavour, buying a business can come with many of its own risks, however, when done correctly, it can be an excellent way to become a business owner without any of the initial startup headaches.
Once you have a specific industry and business in mind, you’ll need to verify the state of the business through due diligence, preferably prior to making an offer on that business. Due diligence will minimise risk and ensures that the sale transaction proceeds smoothly. This can include ensuring that sales are as good as the owner says they are, that employees will be happy with a new owner, and that customers will remain loyal once you take over.
You need to ensure that you investigate all aspects of the business as thoroughly as possible. Are the business systems sound and well documented? Is the cash flow sustainable? A business owner will want to sell their business for as much money as possible and as the buyer, you’ll want to pay as little as possible. Your aim is to ensure the seller sells the business to you for a fair and reasonable price.
When conducting your due diligence on the business, ask yourself ‘If the business is as wonderful as they make it out to be, why are they selling?’ Sellers will often gloss over the weaker areas of the business and create short-term gains to give a favourable impression of the business. For example, lower stock levels to artificially inflate profit (before stock needs to be re-ordered again) can make a business seem more profitable on face value.
Some areas to keep in mind during your due diligence:
One good tip, is to try and get access to the business as much as possible, visiting the business at different times, both announced and unannounced. Due diligence should give you a good, detailed picture of the business. It will provide you with an assessment of the business’s strengths, opportunities, potential weaknesses, and areas for improvement.
Before you make an initial offer, ensure you have consulted with Ashmans to get a clear, crystalised value position of the business, especially any tax implications. Together we can forecast the sales and profit projections as well as set up the best ownership structure for you.
The Australian tax system is one of the most complex in the world. Generally you only get one chance to make it right!
The goal of tax planning is to arrange your financial affairs so as to minimise your tax obligation. There are three very basic ways you can reduce your taxes: Reduce your income, increase your deductions and take advantage of tax credits.
Tax is like any other cost in your business. It should be managed effectively to ensure you don’t pay any more than you absolutely have to.
At Ashmans we zone in on your business specifics, the way it operates, the current position of your business and your businesses likely needs in the future to develop innovative solutions to achieve the most effective tax outcome for you.
When businesses anticipate and manage their tax liabilities, their cash flow improves, their risk of ATO audits reduces, and their profits ultimately go up. A stronger business means a lower risk profile, greater valuation, lower interest rates and a myriad of other benefits.
Business profits are directly affected by tax laws, and indirectly by other Government policies that rely on existing tax laws for their operations.
Ashmans will help you to build a more profitable, sustainable and stronger business by managing your total tax risk and exposure. We will help you to understand your tax risks and liabilities across your entire business, and we will show you how sound and careful planning can help you to reduce your liabilities and manage your corporate tax governance.