One of Torquay’s best cabinetmakers is a guy called Robert. He is a bit of a legend down on the Surf Coast and like most businesses in the region his busiest time of the year is summer and around Christmas. Robert does put his family first though and loves to get away in January and take a well earned holiday. When he gets back to the tools at the start of February he usually has to outlay a fair bit of cash for new materials, as the investment is needed to kick start the business back into action.
What this means is that when it comes time to complete his BAS from December and pay the GST owing, his cashflow is at its lowest and his capital has taken a battering with the holiday and the new materials, while not doing much in actual sales. This is actually a pretty common problem for many business owners, especially tradies.
One solution for this is to go cap in hand to the bank and get an overdraft to smooth out the bumps in the business’s cashflow. Robert wasn’t keen on this so he asked us at Diligence Bookkeeping to find a better solution for him that would help his business and not leave him vulnerable to the banks.
We took a two-step approach to this problem.
Out first action was to move Robert’s books onto Xero accounting software. This meant creating a database to store all of the accounting information onto the cloud, which is safe, secure, fast and so easy to use.
Second step was to make a call to the ATO. Our registered BAS Agents can do this on behalf of our clients and save them all the time of being on hold and talking to the tax office. Under Robert’s direction we were able to negotiate a plan with the ATO, that allowed Robert to complete a payment plan that fitted his budget, ensured there was no penalty interest and got him back on track ready for the rest of the financial year.
This is a real win:win for Robert, as he can manage his cashflow, avoid bank or ATO interest and work to a plan that works for his business. Most businesses do not understand the inner workings of the ATO, so it is really important to engage someone who has the experience and can lead you towards these types of solutions.
Especially if you are a Torquay or Surf Coast business, and you have been affected by either the floods or recent fires, you may be able to negotiate some favourable outcomes with the ATO to help you through these tough times and Diligence Bookeeping are to help guide you through the process.