Get started with Business Lighthouse and Chambers & Partners

Business Lighthouse provides innovative solutions, with a client-centred approach, to help build local businesses into a force for social good. Yes there is a lot in that sentence. We understand that compliance is necessary however it is only one part of what we do to support businesses. We understand the importance of solid processes and systems to strengthen operations as well as the need to support your business strategy through comprehensive financial forecasting.

Tax (Income Tax), planning is the process of 1. Firstly estimating the likely income and expenses and thus net taxable profit for the selected period (such as financial year-end), and the resultant tax liability of your business or organization. 2. Secondly providing some options or action points to complete before the end of the period to help minimize your tax burden and/ or just as importantly to give clarity around the likely size and timing of the payment of the tax liability. This information most critically gives you the business owner good visibility over the timing of cash outflows from your business/organsiation providing additional rigor in your financial management process.. Tax planning can also include planning around other key liabilities such as GST and Payroll obligations as these can often be larger than income tax liabilities.

Organisations that carry inventory have more complex accounting requirements and need robust systems that account for stock on hand, stock in transit, prepaid stock, cost of goods sold, customer prepayments to name a few. They also need operational information such as production or procurement planning and warehouse solutions, And this is just for B2C (Business to Customer) business models. If you add Business to Business ie Wholesale- it can become even more complex). There are great systems that are available to small - medium sized businesses to handle the accounting and the processes. Learning to use them effectively and therefore access the right information is the key.

Passionate business owners often carry a wealth of knowledge in their minds, meaning their business success depends on their heavy involvement. When it comes time for growth, increased freedom from the daily activities, or even a complete exit, the business needs proper processes and systems. Effectively Identifying, sourcing the right software solutions and setting up the processes is a medium to long term project that requires expertise, foresight and planning and is easy to delay until it's too late. However, if this work is done effectively, it adds enormous value to the businesses sale value.

Corporate governance is the system by which organizations are directed and controlled. It is a system that is removed (or at least should be!), from the ‘nuts and bolts’ of running an organization or business. This is the role of management. The business environment is increasingly complicated with increasing regulatory and compliance obligations on business owners and Directors. Directors are increasingly responsible for an organization's activities that must operate within society’s framework and meet the expectations and ethical standards of that society. As well as their compliance responsibilities, Directors are responsible for the organization’s business performance and impact across wider stakeholders. Proper governance provides valuable and essential high-level oversight and guidance on an organization's operations, strategy, risk management, and culture. It is governance that helps ensure organizational success, adding value to all stakeholders and not just shareholders. It is about the long term, not just 'short-termism'! There is no question that proper governance contributes to better organizations and businesses and thus a better society.

DGR means an entity is able to provide receipts for donors’ tax deductibility which is often critical to successful fundraising efforts. Applications for DGR status are made to, and approval is granted by, the ATO. However, the application process is complicated by other regulatory bodies such as ASIC, Consumer Affairs or (other Australian state compliance bodies) and ACNC (Australian Charity and Not-for-profit commission). In order to satisfy the ATO, the criteria for all relevant bodies need to be satisfied and the organisation needs to be compliant across all regulatory bodies individually. In addition, there needs to be alignment and consistent information provided registrations of all bodies relevant to the organisation. Matters that need to be highly considered include: members, the constitution, organisations purpose and main activities amongst other complex issues such as correspondence with ATO regarding the application.

The infrastructure of the Australian community such as health, education and public transport, etc are largely funded through various local, state, and federal government revenue-raising activities as part of a broad taxation system. Central to our taxation system are a raft of compliance requirements which help ensure the correct amounts of revenue are collected from taxpayers. Compliance requirements in this area include GST (BAS lodgements), PAYGWH (tax withholding on employee wages, various payroll reporting), and Income Tax return lodgements (income tax liability). The Australian taxation system provided nearly $600b of revenue in 2020/21, nearly 30% of GDP! Additionally, our business and organizational activities are regulated to provide various protections to customers, employees and other stakeholders. Compliance activities in this area are extensive and include those related to workover, fairwork, ASIC, SRO and the ACCC.

We recommend and mainly work with Xero software. Whilst there are many solutions out there that provide a similar service, we find that Xero is the most seamless, flexible, and intuitive. The add-on software integrations provided with Xero provide a wide scope for added automations across other business needs for e-commerce, inventory management, payroll management and reporting and data analysis functions.

Your business entity's or individual income tax liability is based on a taxable income calculation with lodgement of the Income Tax Return which is lodged annually to the ATO. The tax liability that arises is paid in 2 forms. Firstly, solely as a lump sum as part of the tax return lodgement. Either payable after lodgement once a Notice of Assessment is received (for individual taxpayers), or payable with lodgment of the tax return (a company). Secondly through a combination of a lump sum on tax return lodgement together with quarterly installment payments (IAS). This occurs following a tax return being lodged with a tax liability arising from mainly business and investment income which results in the taxpayer paying 'income in advance' on a quarterly basis with lodgement of an IAS (Instalment Activity Statement). These income in advance installments are a credit to the tax payment amount when the tax return is lodged. Sometimes these IAS payments can actually result in a refund because the in advance (estimated) payments are greater than the actual liability for the year. Most Trusts do not pay income tax because all profits are distributed or passed through to other individuals or entities and the income tax is paid by them. Partnerships never pay income tax because their profits are distributed to the partners (which can be individuals or other entities) and the tax is also paid by them.

Increasingly the Australian tax and accounting system is becoming increasingly complicated and non-compliance creates the risk of penalties. To ensure your exposure to risk in these areas is minimized, a qualified accountant or bookkeeper is in the best position to help and guide you. Trying to do it yourself will inevitably cost you more money in the long run. Do not make that mistake. You are good at what you do. Let a committed skilled accountant 'partner' remove the burden and risks of this area of the business from you allowing you to concentrate on growing your business.