Often when you start a business you take advice from friends and family about how to go about getting set up. We frequently find people come to us either not knowing where to go, or they have gone to the wrong people about the wrong things. It’s a minefield and can be overwhelming for many people getting started.
Who do you need to see? Why? What? When?
The best place to start is with an Accountant. We have a previous blog that was a follow on from a Kochie’s Business Builders blog about what you should look for in an Accountant.
If you are buying a business an Accountant can carry out a Due Diligence on the business to ensure there are no ‘hidden’ surprises within the figures or the business overall. We highly recommend if you are purchasing an existing business you spend the money on this process. It may seem expensive but better to find the issues before then after when it could cost you easily 10-100 times the cost of the Due Diligence.
WHAT ELSE WILL YOUR ACCOUNTANT ASSIST WITH?
- Consider the best structure for you to purchase the business in (we will have a follow up blog on this also outlining the most common structures and why they are used). This is a very personal piece of advice and depends on your individual circumstances and the type of business you are entering. Always ensure you get this independent advice, the cost to restructure could be far more.
- Set up the chosen structure including most of the legal documents
- Setting up all your registrations with the ATO eg. ABN and Tax File Number, GST, PAYG WH, FBT etc
- Advice on which of these registrations you need to be aware of and how to administer
- Guidance with regards to workcover, QBCC (or relevant state authority), other licences you may need – note Accountants are not experts in this field but are usually aware of what you may need to obtain due to the nature of their work. You are responsible for doing your own research in this area.
- Advice on the best accounting system to useand any ‘add ons’ that may be suitable. There is a plethora of add ons and systems you can use in your business and it is overwhelming even for those in the industry. Finding ones that work best with your business and way of working is integral to your business’ success.
- Business Plan – if you need a business plan to present to a bank for finance your Accountant can assist with this too. Please be aware that unless you want to pay a decent chunk of money you will need to do a lot of the ground work on this yourself but an Accountant can certainly guide you.
- Refer you to a quality bookkeeper who can assist in training on your chosen software and if necessary carry out your book work and regular reconciliations.
- Referrals to trusted Solicitors, Insurance brokers and Financial Planners
If there is anything that an Accountant cannot cover legally they will refer you to a Solicitor. This would usually be for items such as
- Shareholder or Partnership Agreements (when entering business with unrelated parties)
- Writing of Terms and Conditions
- Writing of Contracts for clients
- Reviewing Contracts with large suppliers
- Reviewing a business purchase contract
- When you need to provide a Deed of Covenant for assets for QBCC Licences (or other state licences)
- Any other legal documents
It’s important when looking at Insurance that you seek out brokers who are specialists in their area of insurance being that General insurance (public liability, products liability, contents/building insurance etc) or Risk Insurance (life, trauma, income protection, key person etc).
Even under General Insurance if you are in a specialised area of business eg. Agriculture, manufacturing, exporting etc it’s probably an idea to seek out someone who is a specialist in that area. They will know the policies and your needs well and ensure you are adequately covered.
This may or may not be something you need at this point. But with the changes in the laws, unless licenced as a Financial Planner an Accountant is unfortunately limited on what advice they can give you. In general, the Accountant can answer ‘Can I?’ questions but not ‘Should I?’ questions regarding where or how you should invest your funds. (e.g. can my trust invest in shares?)
Bookkeepers are a vital part of any business and relationship with the Accountant. A good bookkeeper will assist on keeping your Accounting fees for compliance work (tax returns, BAS etc) at a reasonable level and enable your Accountant to be able to spend more time with you on ‘value add’ tasks that help you streamline and grow your business. They are also a great option for training business owners on how to use their software as their hourly cost is significantly less than an Accountants.
Our aim in this blog was to guide you in where you should start when you are looking to start a business. While advice from ‘the lady at the coffee shop’ is great we often find, this sends clients off on a path that wasn’t right for them and ends up costing them money in the long run. Start with an Accountant (or a good bookkeeper who sends you to a good Accountant) and you should be on the right path. And as always, good advice does cost some money but it will almost always save you money and stress in the long term.
This is general advice only we advise you always seek independent advice on your personal situation.