You're a One-Person Business. That Doesn't Mean You Should Run Your Accounting Alone.
Sole traders and very small businesses often assume outsourcing is for bigger companies. Yet the owner of a one-person business is usually the person with the least spare time, and the one who pays most for a mistake.
What Makes a Sole Trader's Finances Tricky
- Tax is paid on the whole profit at personal rates, so a good year can mean a much bigger bill than expected.
- PAYG instalments can apply once income reaches the ATO's threshold, so tax is paid during the year, not only at lodgment.
- GST registration is compulsory once turnover reaches the threshold, and the BAS that follows has its own deadlines.
- There is no employer paying super. Contributions for yourself are optional, but the deduction and timing rules matter.
- Deductions depend on records. A claim without a record behind it is at risk if reviewed.
- Business and personal money overlap, which makes records harder.
Signs It May Be Time to Outsource Something
- Admin is eating into billable or sales time
- You are close to the GST threshold, or have just crossed it
- You are about to employ someone
- Your tax bill keeps surprising you
- You are unsure whether you are claiming everything you should
- You are wondering whether a company would suit you better
What to Hand Over First
You do not need to outsource everything at once. A sensible order is:
- Tax returns and tax planning. Often the best value, because a good plan can change the outcome.
- BAS. Once registered for GST, accuracy and timing matter.
- Bookkeeping. When invoicing, receipts and reconciliations start to take too long.
- Payroll. When you hire your first employee.
- Advice. Pricing, cash flow and structure as the business grows.
Habits That Make Outsourcing Cheaper and Better
- Use a separate business bank account
- Capture receipts at the time of purchase
- Set aside a percentage of income for tax and GST as you are paid
- Send your accountant questions as they arise, not at year-end
The Structure Question
As profit grows, a company or trust may suit you better than a sole trader structure, but it brings extra costs and obligations. The decision depends on your profit, risk and plans, so it is worth asking for before your income changes, not after.
RBizz provides outsourced accounting, bookkeeping, BAS, payroll and advisory support for sole traders and small businesses. Book a free discovery call to find the first thing worth handing over.
