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  • #988141
    M_SER
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    Hi guys,

    Me and my wife have plans to start our own bookkeeping business in the near future and I am after some ideas and advice from you all. First of all I’d give you some background info.

    We are both degree holders and have completed bachelor of degrees in Accounting and Finance. We have nearly 500hrs of experience working in Accounting and have processed payroll, account receivables/payables, BAS, bank reconciliation’s,etc.

    I have done my research online and have also been in touch with Australian Bookkeepers Network(ABN). Based on what I have gathered so far, we both don’t require any other qualifications to start the business as we both already have degrees in the relevant field. However, I am also aware that I’d only be able to do BAS work with the guidance of ABN as I don’t have the required work experience of 1400hrs (only 1000hrs when registered with ABN). Therefore, I’ll definitely be getting the membership as not being able to do BAS work would severely limit my ability to cater a wide range of clients.

    The questions that I have for you guys are,

    1. With my qualifications, am I legally allowed to do tax returns for my clients? Or do I need a special tax qualifications and register as a Tax Agent?

    I have already rung E-Tax and they have told me that their fee is 50% of the earnings. My main concern with E-Tax is that I wouldn’t be able to let the clients know how much they are getting back until E-Tax have processed all the data.

    2. How much does PI insurance normally cost per annum?

    3. I have also considered becoming a MYOB partner. Any pros/cons please advice.

    Other than above, I know that I’d have to get an ABN and register as a business and would also have to do advertising,etc.

    Is there anything that I have missed above? If yes, please comment and advice me on what I should do.

    Thanks in advance for all your help.

    Regards,
    Nathan.

    #1165797
    Anonymous
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    Hi Nathan

    There is quite a lot in your post so let me address as much as I can for you.

    1. To do tax returns you need to be a registered tax agent.
    2. My PI insurance is usually around $850pa for coverage of $250k and Public Liability
    3. I cannot comment on whether you should or should not become a MYOB partner. These days most small business are happy to sign onto a cloud based accounting package which would enable you to have access as well. I think you need to determine if you have a need to become a partner or not once you have your business up and running.
    4.You are correct you need to get an ABN. Anyone carrying on a business in Australia needs to do this. You also need to determine your trading structure, if you need to register for GST (earnings $75k & over) and if you need to register for PAYG for employment withholding taxes.

    Good luck with your business.

    Regards

    Kerry
    http://www.hallashconsulting.com.au

    #1165798
    Collins Insurance
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    Hi Nathan,

    I am just reply on the Insurance cost part.

    The Professional Indemnity premium is very much depending on the volume of business, your scope of services and the insurance companies’ claim experience in your field. For new biz, its possibly below $1k and goes up as your biz grows.

    Typical accountant and bookkeeping biz would need at least $1m nowadays and that’s commonly the lowest amount most insurance companies are providing.

    Some insurers include a public liability cover section making the policy premium slightly higher. That is good if you need public liability cover.

    Suggest you get an insurance broker to source for an experienced and suitable insurer for you.

    Good luck.

    #1165799
    alliedib
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    M_SER, post: 192017 wrote:
    2. How much does PI insurance normally cost per annum?

    Hi Nathan,

    As has been mentioned, your PI insurance is determined by a number of factors. Just be aware that the Tax Practitioners Board has determined minimum levels of cover that are required to be held by Tax and/or BAS Agents. More details can be found at http://www.tpb.gov.au/TPB/Obligations/Professional_indemnity_insurance/TPB/Subsidiary_content/0024_Professional_indemnity_insurance.aspx

    When this legislation first came out, there were companies throwing themselves into this space with cheap premiums (I seem to remember $250 floating around) to try to gain market share. This was a few years ago so a lot of that has settled down… in saying that, however, even now Bookkeepers/BAS Agents with turnover of, let’s say, $200,000 can obtain cover for $500,000 (the TPB requirement) for less than $1,000. You need to be careful of the exclusions / excesses / conditions of each policy but there are certainly plenty of market players out there. Some Associations also have schemes in place but just be careful as these are sometimes constructed as ‘one size fits all’ and there could be exposures if you undertake activities which they do not consider under their scheme.

    You should then consider adding other types of covers to complete your insurance program:
    – Public Liability
    – Office Equipment
    – Portable Electronic Equipment
    – Workers Compensation / Income Protection
    to name a few.

    Happy to help if you have any more questions or you would like me to look at your specific circumstances.

    Regards,

    Mark

    #1165800
    Luth6322
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    Hi Nathan

    If I was to offer a bookkeeping service, then I would look to join as many of the software partnerships as possible. Particularly MYOB, Reckon, Saasu and Xero the main providers of finance software for small to medium sized business.

    In most cases you have free access to software and knowledge basis which means your going to have all the support and information you need to properly service those clients already set up using these systems. If it costs money to sign up (I’ve been out of the loop regarding these for while) then it might be something you could do progressively.

    The only things that you haven’t mentioned that you might need to consider is registering your business name. This is all done with ASIC now.

    http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Registering%20a%20business%20name

    And don’t forget to set up your own accounting software :)

    Cheers

    Carrie

    #1165801
    LindaS
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    • Total posts: 11
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    Hi Nathan

    You mention you don’t have the hours for BAS agent registration while on your own ABN but have you and your wife worked in the bookkeeping / accounts field previously? If so, you should be able to include this work experience in BAS registration.

    You are unable to charge for processing tax returns unless you are a registered tax agent. e-tax have just changed their memberships however, with your experience and qualifications you should be able to do their second level of membership which is more than 50% of the earnings. You would gather all information on their system and then your work is checked by an additional accountant before submission to the ATO – you will be able to give the client an approximated return at that time. The fee structure has just changed – used to be a set 75% but is now dependent on how much work you do so could be more.

    ABN are great for lodging BAS until you have your BAS registration. They also have a company they recommend for PI – they do have a very reasonable rate (I think mine was about $650 or something around that) so worth looking into.

    BAS and Tax registration is both through the Tax Practitioners Registration Board – you may find you are closer to registration than you think. Would pay to give someone there a call.

    Linda

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