When Your Business Strategy Changes

There are websites that make it easy to change your business name

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Having a plan rather than changing your business strategy in an ad hoc fashion, ensures greater success of your business going forward.

PLENTY OF BUSINESS OWNERS change their business strategy, but what makes this successful? We say, above all, planning and a willingness to change the ordinary operations of your business. In a new workbook contained in our Xero training courses, we take you through the steps you would take in Xero to affect a change in business strategy.

In this blog post, we’re going to look more generally at some of the things you might need to do if you were making a change to your business strategy — even before you would start making these changes in your accounting software.

Business name change

A change of business strategy and direction may warrant a business name change. As a basic example, a builder who begins offering plumbing, electrical, and handyman services should change their business name from John’s Building Services, for example, to John’s Building and Home Maintenance Services.

If considering a business name change, visit the ASIC website. There you’ll be able to register a new business name and make sure one you’re thinking of doesn’t already exist. ASIC doesn’t allow you to update or change your business name, but provided you’re operating your business under the same structure — i.e., sole trader — there’s no limit to the number of business names you can register and assign to your ABN.

In April this year, the business.gov website launched a new Business Registration Service, which although still in Beta, allows you to easily and quickly apply for a business name, ABN, company, and tax registrations for free. At the moment it’s only available for new businesses — whether they’re sole traders, partnerships, companies or joint ventures — but it’ll soon be rolled out to existing businesses, trusts, and superannuation funds.

Registering for GST

Many contractors don’t register for GST because they do a combination of contract work on their ABN and TFN. Provided their business doesn’t generate $75,000 per year or more, they won’t have to register for GST, even if they do earn more than that by also working as a contractor on their TFN.

If the change in business strategy means your business is going to generate substantially more than $75,000 per year, or even if your suspect it may get close to it, you should register your business for GST.

You can register for GST via the ATO’s Business Portal. Registering for GST does mean your business will need to lodge regular business activity statements. This is additional compliance that can yield fines for late or inaccurate lodgements.

If you’d like to try and defer registering for GST for as long as possible, run a profit and loss statement in Xero and compare your current revenue with the estimated additional revenue your new business strategy will generate.

If there’s good, safe margin between your projected income and the $75,000 GST threshold, you can hold off.

You can learn what you need to implement the financial side of your changed business strategy, plus how to run profit and loss statements, complete and lodge business activity statements and much more in our Xero training courses. For more information, visit our website.


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At EzyLearn you can choose from a range of XERO online courses, depending on your skill level — or you can access ALL courses for ONE LOW PRICE. All our courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 


 

Should Your Final Price Include GST?

The price you charge for goods or services should always include GST.
The price you charge for goods or services should always include GST.

We are constantly refreshing the content of our MYOB training course so that you can benefit from all the new information that is always coming in about being a bookkeeper, running your own bookkeeping business or doing the books for someone else’s business.

Pricing Your Services for GST

For bookkeepers and tax agents, GST is often one of the more confusing aspects of Australia tax. We cover GST reporting in our MYOB training course, but long before you come to doing financial reports, you need to ensure your clients are accurately collecting GST in the first place — something many new business owners have trouble with, and often do so incorrectly.

We were recently speaking about how business owners should price their services in relation to GST with Julie Guest, an accountant, auditor and the secretary of YNH Services, a neighbourhood house in the community of Yarrawonga, regional Victoria. YNH Services is a registered training organisation, providing learning and development opportunities to the local community through training courses, seminars and community events, and it’s where Julie regularly teaches a business course for small business and soon-to-be business owners.

When discussion turns to setting prices, invoicing and collecting GST, Julie has one golden rule: “The price is the price,” by which, she means that business owners, if they’re registered for GST, need to set their prices to automatically include the GST component.

Automatically Include the GST!

Julie says that the reason prices should always be inclusive of GST is because it is already implied. “People assume the final price on a tax invoice contains GST,” so business owners need to ensure that any prices they quote or advertise does, in fact, include GST.

But this is where a problem arises; when business owners who are registered for GST advertise their products or services as being exclusive of GST. “It seems people are using it as a marketing ploy to advertise something at $100 plus GST because it sounds cheaper than $110, even though that actually is the price,” Julie says. This can be confusing to the consumer when today it is really standard practice to purchase something, at the supermarket, for example, where GST is included in the price.

It’s for this reason that Julie goes back to her golden rule: the price is the price. If you’re registered for GST, you need to supply your clients and customers with a tax invoice — not an invoice which is what business that aren’t registered for GST would use — that shows the final price, including GST. If you choose to break down or itemise the GST on your invoice, that is your prerogative, though you don’t really have to. If you’re not registered for GST, issue your clients and customers with an invoice — notice the absence of the word “tax” since you’re not collecting any tax. It is also handy to include a note that says that you haven’t charged any GST, though, agin you don’t really have to do that either.

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For more information on our GST reporting click here, or for more information on the YNH neighbourhood house, visit their website here.