As a trade business owner, managing your finances can be an overwhelming task, especially when it comes to dealing with your GST and tax. All business owners know they should be putting money aside for their GST and tax but when it comes time to most businesses fail to do so.

That's where the Profit First system comes in, providing a simplified and accessible way to manage your business finances and ensuring you are never behind in your GST and tax again.

When we set up the Profit First system for business owners two of the bank accounts that are required are the GST and tax account. I recommend you have an account for each of these to make it easier to know how much you have aside for each purpose.

For most of my clients they do an allocation every week, that is they look at how much income has come into their income account in the past week and then do their allocations to each of the various Profit First bank accounts with the 10% going to the GST bank account first. Yes 10% will be more than enough (as long as you don’t touch this account before you pay your GST bill) but for those getting started 10% is an easy round number to work with. Remember we want to ensure Profit FIrst is set up in a simple and efficient way for you.

I work with so many clients who have been surprised by a tax bill, many after years of having carried over losses, their business begins to make money but they haven’t been putting money aside for tax and then when the tax accountant does their end of financial year tax they congratulate them on finally making a profit, on for the the business owner to also realise they now have a tax bill they don’t have the money to pay off in full. Cue sleepless nights and a whole heap of stress for the business owner on top of the usual stress of running a business.

Putting money into your tax account every week will certainly help when tax time roles around and in fact I recommend to all my clients that they have a tax planning meeting with their tax accountant every May to get an understanding of what their tax situation looks like for the current year and gives them time to assess what they have saved for their tax bill and if there will be a gap.

Using Profit First in your business means we are looking forward and being proactive rather than being reactive which is never great for the business owner. If you have a ATO payment plan or worse aren’t sure what you owe the ATO now is the time to reach out and book a call to discuss how Profit First will help you reduce the looming stress of your next tax bill.