G'day All,
I'm starting out on my own as a contractor / small business this year and was hoping to seek some thoughts from the community regarding a couple of matters.
Prior to this year, I was working a PAYG job and also had a side hustle (through a sole trader ABN) and an investment property. I diligently recorded all income in YNAB, budgeted every dollar, etc. etc.
This year I've established a PTY LTD company (of which I am the sole employee) and due to the more rigorous reporting requirements and the desire to get my shit together a little more, had intended on using some sort of accounting software (it's looking like Quickbooks at this stage - cheaper than Xero and seems to provide the same functionality for my purposes).
My rough plan at this stage is as follows:
1) ABC PTY LTD (ABN Holder)
- Establish Business Bank Account & Business Credit Card (to only be used for work related expenses - transport, office supplies, education, etc.)
- Send Invoices Out, Receive Monies (hopefully)
- Establish budget for - Company Tax , GST, Wages, Super, General Expenses (further categories in here - software subscriptions, etc.). Set money aside from these for each invoice as required.
- I was also going to establish a little "annual leave" budget category to set money in to so that if I do choose to take some time off, I will still be able to pay my monthly salary. I realise this isn't necessary but I figure will help keep things clearer in my head as to what each dollar's "job" is in my Business Account.
- Pay myself a salary which will be calculated to minimise my individual income tax liabilities while still covering all relevant expenses.
2) Me Myself & I (TFN holder)
- Continue as normal, really. I budget the salary I receive from ABC PTY LTD + rental incomes, carry on as per normal.
Is this how other people do it? Could you give any recommended improvements or changes?
At this stage I am going to attempt to do all my own bookkeeping and potentially BAS reporting as well to try and keep costs down and because of the nature of the business, I don't expect there to be a great deal of accounting to do.
Also, if anyone knows of any good websites or other resources for advice for small business owners, e.g. a blog like MMM, that'd be greatly appreciated!