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Business Accounting - The Fundamentals

Updated: Apr 11, 2023

Kevin Cotter has worn many uniforms in his career.

From patrolling some of Sydney's most challenging streets as a member of NSW Police, to time spent in the Royal Australian Navy, as well as the Army Reserves, Kevin has an affinity for both the Veteran and First Responder communities.

It's in his role as a Certified Practicing Accountant, and owner of Van Cotter Partners however, where Kevin now supports individuals and businesses.

Kevin recently hosted one of InnoClub's online workshops, Business Accounting 101, and provided some invaluable advice to a broad range of participants.

For those who couldn't attend this workshop, the following summary outlines some of Kevin's key accounting considerations.

1. The importance of the right business structure:

There are many different ways that people can structure their business, and not getting this critical first step right can have significant impact.

Kevin shared some of the most common reasons why start ups get this wrong:

  • lack of knowledge, or reliance on "Dr Google"

  • incorrect advice

  • the way it's always been done, and even ...

  • "that's what my brother in law told me"

In identifying how best to structure a business, some of the key considerations include:

  • asset protection

  • costs and savings

  • taxation benefits

  • future plans and goals

  • insurance

  • size and complexity of the business

Getting it wrong can have significant impact; from missing significant opportunities and advantages, to incurring avoidable tax assessments and breaching legal obligations.

2. Accounting Systems:

Having good systems can make meeting your business's legal and regulatory requirements much easier.

Kevin outlined some of the more common resources available, from off-the-shelf packages to the humble Excel spreadsheet. Main systems reviewed included:

  • Xero

  • Quickbooks, and

  • MYOB

Of course, selecting the right system should be done in consultation with your accountant.

3. Tax Considerations & Common Mistakes:

The workshop was rounded out by Kevin sharing some of the most common areas where businesses get into trouble through incorrect accounting procedures.

Some of the regular "traps" include not properly accounting for the following:

  • Depreciation

  • Entertainment

  • Superannuation

  • Director Money and Loans

  • Fringe Benefits

  • Motor Vehicles

  • Personal Services Income versus Personal Services Business

  • Stock

Seperatley, Kevin highlighted other taxation-specific areas as being potential problems, such as GST, Capital Gains Tax, and Income Tax / Pay As You Go Withholding / Pay As You Go Instalments.

InnoClub Business Essential online workshops are ideal ways for business owners and budding entrepreneurs to quickly learn the fundamentals to start, run and grow their business.

If you have specific accounting needs or questions, please feel free to reach out to us and we'll connect you to Kevin and his team.

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