Master checklist for new business owners

What’s your long-term plan? If you’re planning to stay small, it could be a good move to class yourself as a sole trader. However, there are real benefits to incorporating your business as a company if you have growth on the horizon.​

If you’re not sure yet, you can get a better idea of the ideal choice for you with our article – Choosing Sole Trader vs Company.​

And if you’ve already decided to register as a company, here’s where to do it and here’s where to grab a business IRD number (it’s necessary by law). We can also handle the whole process for you – just get in touch.​

Here’s how to figure out whether or not you should register your business for GST.​

Are you (or your business) earning (or expecting to earn) over $60,000 per annum?​

Then you’re legally required to register for GST.​

You’ll need a GST number – just use your personal IRD number if you’ve elected to be a sole trader, and if you’re going to trade as a company, you can register for a company IRD number here.​

Are you earning under $60,000 per annum?​

Then it’s your call if you’d like to register for GST. It could be helpful if​

The key to understanding GST is recognising what you can and can’t claim. Learn all about that in our dedicated article here.​

As our client, we’ll offer you a full GST service if you’re using Xero. We make sure you’re claiming all your permitted expenses.​

You can’t trust a spreadsheet.*​

Of all our recommendations, the strongest is that you use some form of accounting software. You can learn all about the benefits with this article of ours. ​

We’re big advocates for our partner, Xero. They’re the best accounting software on the market in NZ, but there are other providers like MYOB, CashManager, FreshBooks, and Reckon.​

If you’re yet to choose a system, it may help your future-proofing to know we’re a Platinum Champion Partner of Xero’s and a certified Xero advisor.​

Have a chat with our support team if you’d like to learn anything Xero (including integrations with your current systems). You can also do a 30-day free trial over on Xero’s website.​

* The problem with relying on a spreadsheet is that a single mistake in your formulas at any point can cause catastrophic problems in future.​

It’s best to have two bank accounts. One handles normal trading transactions, while the other takes care of your tax savings.​

Despite interest rates being at an all-time low, we still suggest transferring 30% of your sales into a separate bank account. This ensures you have adequate funds at hand when tax time rolls around!​

The ideal combination of insurances for you will depend on your business and personal situations.​

Here are some questions to consider:​

Discussing your needs and risks with an insurance broker is a great idea.​

It’s also worth knowing that some insurances can be GST-deducted for business purposes, while others are only applicable for personal tax returns.​

Protecting your data is critical for you and your customers. You may need​

Also have a think about​

Unless you already have a company constitution, it’s a good move to formalise agreements between shareholders or partners. Your agreements don’t need to be complex and can be written without legal support.​

An agreement should detail:​

Simmons Steward is a New Zealand legal firm offering templates free of charge. In addition, we recommend asking your lawyer to take a look at anything you’re about to sign.​

If you’d like an in-depth intro to everything you need to know about income tax, go straight to our article, here.​

You can do your future self a major favour by keeping your bookkeeping and accounting systems up to date. It equips your accountant to see how you’re tracking and let you know how much tax you should be putting aside.​

To ensure you pay your annual tax bill without worry, we always recommend putting aside 30% of your sales in a separate bank account on an ongoing basis.​

Before employing staff, it’s important to understand that you have responsibilities as an employer.​

We have a more detailed information here, which gives you an idea of the ongoing requirements of being an employer.​

If it’s only you working in the business, it’s a good move to keep yourself off the payroll for the first year. You’ll still pay tax, but later, and the amount will depend on your profit levels. We explain further here.​

Having an accountant by your side allows you to focus on growing your business, while they handle the numbers.​

It’s difficult to figure this out. Here’s why:​

You can claim any expense directly linked to the production of your business income.​

Distinguishing what’s directly linked is hard. Doctor’s bills aren’t linked – even though your work depends on you being healthy. Neither are your boat costs – even when you’ve taken clients out on it.​

We have an in-depth article on figuring out which expenses you can claim, here. But keep in mind that as a Beany client, we’ll make sure you claim all of your legitimate expenses.​

It wouldn’t be silly to make a calendar notification for three months from now to check this list again. Are you slipping into any of these habits?​

You might also want to check the income tax section one more time ????​

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world. ​​

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.​