Small Business Bookkeeping Explained – Part 4
Welcome to the fourth and final part of our small business bookkeeping explained blog series. These posts are aimed at explaining, in plain English, the most important aspects of small business bookkeeping.
We’d love to help you with any of these areas and we can work with you on an hourly, temporary or permanent basis, just give us a call or email us here.
If you’re just not ready to hand it all over yet, we totally get it and you can simply read on for some helpful hints.
WHAT IS GST?
GST, or Goods and Services Tax, is a tax on the items you buy or sell in the course of running your business. There are some GST-free sales and purchases, such as anything you buy or sell overseas, but generally speaking, GST is 10% of most of your business transactions.
If your business earns gross sales of $75,000 or more in a financial year you will need to register your business for GST.
You can voluntarily register your business for GST if you earn less than $75,000 but you will first need an Australian Business Number (ABN).
You may want to register if you have a lot of expenses such as when you are in startup mode. You will then get back dollar for dollar the GST you are paying for your business purchases. This can help with the cash flow of your business.
Every invoice you send to your customers will need to charge 10% GST and your invoices need to look a certain way to comply with the tax rules.
BENEFITS OF REGISTERING FOR GST
If registering for GST is compulsory for your business then the most obvious benefit is you will meet your legal obligations and avoid any penalties. But there are also some good reasons to register, even if you don’t have to:
DISADVANTAGES OF REGISTERING FOR GST
If you have the choice, it may not be beneficial to register in some situations.
If you’re still having trouble working it all out and need some friendly advice you can call or email us today for a free bookkeeping analysis, we’re here to help.
If you enjoyed this blog series or if you have more questions please leave us a comment below, we would love to hear from you.