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  • #1000313
    dealsmate8
    Member
    • Total posts: 6

    Hello All,

    I know this is a very generic question and the actual answer will depend on the work accountant will perform for a business.

    Just for a brief, until last financial year, I was working as a sole trader without registered for GST ( legally for the allowed turn over of less than 75K a fiscal year). This fiscal year I was bound to register for GST due to increase in sales which is good :), so I engaged a professional accountant and he helped me to register for GST and to build a discretionary trust to save the personal assets in case something goes wrong and also take advantage of the tax-saving by distributing the earnings among the beneficiaries. So far so good since I chose to go this path.

    Now, have never been traversed this path I am not sure about the ASIC compliances, payroll, accounting, Xero accounting software set up, filing tax returns, bookkeeping services using Xero, etc, and hence I chose to discuss this with my accountant. The accountant sent me the quotation which turned out to be about $350 dollars one-off Xero set up and $600 dollars per month contract for 12 months and he will take care of all that I mentioned above. So the question is to this business community, is it the best way to engage the accountant or are there more cost-effective ways? It will be really nice to hear some personal experiences.

    Thanks
    Amit

    #1223845
    Webslice
    Member
    • Total posts: 30

    That’s $7200 per year and that’s insane for under $100k in turnover. ASIC company fee is just $254 and you want to pay that yourself because your screwed if your accountant forgets to pay it and you get de-registered (everything the company owns becomes owned by the Commonwealth Govt)

    Are you sure it’s not $600 per quarter ($2400/yr)?

    This is going back pre-COVID but my annual accounting fees for a trust tax return and financial statements were about $1200 (trust with a corporate trustee). I did my own BAS, bookkeeping etc (I’d recommend outsourcing this so you can focus on your business and regularly review business performance with your accountant or mentor).

    Even with Xero and everything my accountant still asked for csv files of the bank account and credit cards at the end of the year.

    You can get a bookkeeper to help set up Xero, do your accounts, BAS, payroll, etc for less than $300 per month for 1 bank account and credit card where there’s less than 200-300 transactions – bookkeeper can show you how to save cost by prefilling details into xero etc. Payroll for employees would be a bit more but once setup you can do a lot of this in Xero too. Maybe you just need some training on xero.

    Being that you just broke $75k why are you looking at moving to a trust? Do you expect a huge uplift this financial year? I don’t think trust is worthwhile until your making at least a $130k profit. You can use the small business exceptions to transfer to a different business structure (conditions apply) without copping capital gains tax.

    I don’t think the extra cost is worth moving to a trust unless you’re in a high-risk industry, have assets to protect (e.g can’t put the family home in spouses name) etc.

    Get a second opinion.

    Just my 2 cents.

    #1223846
    dealsmate8
    Member
    • Total posts: 6
    Webslice, post: 270550, member: 59380 wrote:
    That’s $7200 per year and that’s insane for under $100k in turnover. ASIC company fee is just $254 and you want to pay that yourself because your screwed if your accountant forgets to pay it and you get de-registered (everything the company owns becomes owned by the Commonwealth Govt)

    Are you sure it’s not $600 per quarter ($2400/yr)?

    This is going back pre-COVID but my annual accounting fees for a trust tax return and financial statements were about $1200 (trust with a corporate trustee). I did my own BAS, bookkeeping etc (I’d recommend outsourcing this so you can focus on your business and regularly review business performance with your accountant or mentor).

    Even with Xero and everything my accountant still asked for csv files of the bank account and credit cards at the end of the year.

    You can get a bookkeeper to help set up Xero, do your accounts, BAS, payroll, etc for less than $300 per month for 1 bank account and credit card where there’s less than 200-300 transactions – bookkeeper can show you how to save cost by prefilling details into xero etc. Payroll for employees would be a bit more but once setup you can do a lot of this in Xero too. Maybe you just need some training on xero.

    Being that you just broke $75k why are you looking at moving to a trust? Do you expect a huge uplift this financial year? I don’t think trust is worthwhile until your making at least a $130k profit. You can use the small business exceptions to transfer to a different business structure (conditions apply) without copping capital gains tax.

    I don’t think the extra cost is worth moving to a trust unless you’re in a high-risk industry, have assets to protect (e.g can’t put the family home in spouses name) etc.

    Get a second opinion.

    Just my 2 cents.

    Thank you so much for giving clarity and sharing experience. I just talked to my accountant on the basis of your comment and the price dropped to half if we could do bookkeeping ourselves which he thinks that he will not add much value in that anyway.

    #1223847
    Webslice
    Member
    • Total posts: 30
    dealsmate8, post: 270555, member: 117787 wrote:
    Thank you so much for giving clarity and sharing experience. I just talked to my accountant on the basis of your comment and the price dropped to half if we could do bookkeeping ourselves which he thinks that he will not add much value in that anyway.
    I still think that is a little high but I don’t understand the full picture but it sounds like you know what your doing so go for it if your happy. For all I know that might include after hours consults in which case that might be more reasonable.

    Please make sure you don’t have an agreement where they’ll refund you for any unused hours. Because they won’t :)

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