Table of Contents
Setting Up Your Business
Owning your own franchise means that franchise partners are responsible for their own finances, bookkeeping and accounting. A2Z Services recommends that franchise partners consult an accountant or small business adviser to set up their business structure and register for all the various taxes.
NOTE: It is the responsibility of the franchise partner to stay up to date with changes made to tax rules and regulations.
For more information, please refer to https://business.gov.au/guide/starting
Registration For Taxes
Ensuring you are registered for the correct taxes is an essential step to opening a business.
The taxes you must register for depend on the type of business you’re starting. Some tax registrations apply to all businesses and others may be compulsory depending on your business’ size and type. Some registrations are entirely optional but can make life easier if you have them. Follow the guide below to find out which tax registrations you need
All blue highlighted text is hyperlinked to more info
Tax File Number (TFN) (Required)
You must have a TFN regardless of the type of business you’re starting. If you plan on running your business as a sole trader, you can keep your individual TFN. If you’re operating as a partnership, company or trust, you’ll need to register a separate TFN for the business.
Australian Business Number (ABN) (Required)
Franchise partners are required to have an ABN. Getting an ABN is free and can make running your business easier in the future, particularly if you have to register for other taxes. For example, if you need to register for Goods and Services Tax (GST) now or in the future, you’ll need an ABN first. Without an ABN, other businesses must withhold 49% from payments they make to you for tax purposes.
Australian Company Number (ACN) (Required for companies)
If you register your business as a company, you’ll be given an ACN by the Australian Securities and Investments Commission (ASIC). You’ll need to apply for your ACN before getting an ABN.
Goods and Services Tax (GST) (Required for most businesses)
GST is compulsory if your business has a GST turnover of $75,000 or more. Once you’re registered for GST, any invoices you send to clients will need to include a GST component.
Pay as you go (PAYG) withholding (Required)
You must register for PAYG withholding if you need to withhold an amount from a payment for tax purposes. Withholding an amount from a payment is required if you make payments to employees, directors or businesses that don’t quote their ABN to you. In each case, you must register for PAYG before you can withhold that amount.
Payroll Tax (Required in certain circumstances)
Payroll Tax is collected by each state and territory government on the wages paid by employers each month. You must register for Payroll Tax in each state or territory that your staff are located in if your monthly Australia-wide wage bill is above the thresholds set by that state or territory government.
For details of the tax thresholds in each state https://www.payrolltax.gov.au/harmonisation/payroll-tax-rates-and-thresholds.
If your total Australian wage bill is under the maximum threshold for your state or territory, you’re not liable to pay.
Fringe Benefits Tax (FBT) (Required in certain circumstances)
Providing perks, or fringe benefits, to your employees can attract FBT. This might include providing, A company car, discount or free car parking, low interest loans, payment of private expenses as part of a salary package. You should register for FBT as soon as you decide to start providing fringe benefits to your employees.
Deductible Expenses
Maintaining an accurate record of all possible business-related deductible expenses is an important function that all new business owners must learn to perform. Accurate record- keeping can substantially lessen the tax burden at year’s end.
Accuracy can only be assured by utilising proper documentation procedures relating to expenditures such as cash receipts, cancelled cheques, daily mileage records, petty cash vouchers, etc. Properly completed expense documentation must be retained and must match bookkeeping expense entries.
Some deductions which may be claimed by the franchise partner include:
- most insurance premiums
- duplication of keys
- uniforms
- advertising
- office supplies
- printing
- interest expenses on any business loans `
- repair costs
- superannuation contributions
- rent expenses
- fees to A2Z Services
- salaries and wages to employees, etc.
Accounting Procedures
A2Z Services require franchise partners to use Xero as their accounting software. All accounts must be kept up to date and any cash payment received must be issued with a A2Z Services receipt.
Please note Work Buddy and Xero are linked so activity data is shared between the two software platforms.
Payment Methods.
A2Z Services accept payment via the following methods from its clients:
- Electronic funds transfer (‘EFT‘) into our nominated bank account
- Credit Card Payment (‘Credit Card‘) – via Work Buddy and or Square
Payment Terms
Payment terms are recommended as 14-30 days after date of invoice.
Debtor Management
Good Debtor Management
Getting debtor management right is imperative for the sustained financial health of any business. If poorly managed, the consequences for cash flow and growth can put a business at greater risk of insolvency. A2Z Services debt management processes are as follows.
- Check Xero every Friday for outstanding accounts
- Set up Xero to send automated reminder invoices at:
- 1 day past due date
- 7 days past due date
- 14 days past due date
- If payment has not been received by the 14 day due past – cease all future works until account has been bought up to date.
For more information on this please see OM00052 – Payment Collection Policy
Forms and Registers
| Document Number | Document Name |
Amendment Record
Issue#: 1 Issue Date: 13/7/2022
| Rev# | Date | Section# | Para.# | Description of Change | Prepared By | Approved By |
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Disclaimer: This documentcontains material to assist in meeting environmental management, Work Health and Safety and Quality obligations under the International Standard ISO AS/NZS ISO 9001:2016,14001:2016 and other legislative bodies. This document contains material sourced from Safe Work Australia. Any such material remains subject to copyright © Commonwealth of Australia. https://www.safeworkaustralia.gov.au/copyright. Although every effort has been made to ensure the accuracy of this information at the time of publication, it is provided as guidance only and does not provide legal advice on meeting your obligations. This document and its contents are © A2Z services 2018 and or the originating source authors and no permission is given for its duplication or copying, in part or in its entirety, for use outside its original purposes as stated within the company.