In this blog, Diligence Bookkeeping CEO Steve Miller reveals his business-profit blueprint that enables local business owners to make the most of their tax planning this financial year.
Recently it dawned on me that to really get the best tax outcome there are three different disciplines you need to master, a little bit like a triathlete.
As you know, a Triathlon consists of three key disciplines: Swimming, Cycling and Running. The key in a triathlon is not only to do only a single discipline well but to exceed in all disciplines in order to win the race.
Funnily enough, Business (in particular, taxation outcomes) is just like that.
So I’m calling The ultimate businessperson “The Financial Triathlete” because you need to be able to master the three key pillars: bookkeeping, accounting, and finance; to be able to get the most tax effective outcome for any financial year.
Bookkeeping: The Swim Leg – Where it All Begins!
Let’s start here. If you’re doing your books incorrectly, it’s all going to be a nightmare at the end of the day. As the old computer saying goes “Garbage In, Garbage Out” and it’s totally true for your Business’s financials too.
If you ensure that your bookkeeping is cost-effective, timely, and accurate, then it’s going to be a lot easier when it comes to predicting financial outcomes for your banker. With the right information, your banker can successfully determine how they can assist you in raising finance for tax-effective investments towards the end of the financial year. Now that – that’s smart!
But before I go any further, let me please reiterate the key point here.
The foundation of The financial triathletes is the bookkeeping.
Before we move onto the next discipline, let me ask you this: Are you operating your accounts in such a way that it makes it easy, and that reconciliation and tax affective investment is recognisable and deductible?
Accounting: The Cycle Leg – Build Upon A Great Swim!
The second layer is the accounting, because with affective accounting you can look forward into the new financial year and make investments That align with your business goals.
The accounting component needs to be balanced with the bookkeeping and finance. This is important because the treatment of your different expenses and investments needs to be in harmony with your ability to make those investments and project into reports for your banking.
Finance: The Run Leg – Finish Strong And Get Your Best Taxation Outcome!
The third discipline is finance. What we mean here is this:
With sound Bookkeeping and Accounting, you’re able to able to produce documents and reports that enable your banker or financier to be able to deliver you the capital you need for your investments on or before your end of financial year deadlines.
A great example of this is somebody who wanted to Reduce their total income after having a very successful first nine months of the financial year. There are a couple of ways they could achieve this, one would be to make investments back into their business, another way would be to prepay expenses for the following year. Neither of these possibilities is going to be able to be taken advantage of and if they don’t have either money in the bank or access the borrowed funds.
If you are not prepared or fit, you will miss this opportunity.
Would you like a little bit more information on how you can be more prepared And more tax affective? Contact Us Now and ask to speak to Steve on how you too can become a Financial Triathlete in your business today!