3 Things Your Accountant Needs To Set Up To Future Proof Your Business
February 8, 2021
Starting and running your own business can be really exciting.
But it can also be quite stressful.
One of its stressful sides is the accounting part.
Accounting may not be fun for you, but it’s an extremely important aspect in your business.
Businesses need comprehensive accounting now more than ever, as those days of hiring accountants for payroll and tax purposes are long gone.
If you want your business to keep running, then you definitely need the services of a business accountant.
Accountants are needed for financial statements and tax returns. However, these two only tell the story of what your business was – NOT where it could be heading.
Obviously, we can’t see what the future holds. And unless you have a crystal ball, we can’t really say what our business would look like 5, 10 or 15 years from now.
This uncertainty can jeopardize the chances of growth.
We can however, take drastic measures to future-proof our business, and the only way to do that is to start thinking differently about different risks.
And this is where a good business accountant comes into the picture.
Here are 3 things a business accountant can setup to help future proof your business.
Get Tech Savvy
The world is getting high-tech.
If you want your company to keep up and survive, then you should embrace technology.
In the case of business, cloud computing is the future.
Moving your business data to cloud computing saves you from PC storage and on-site servers, allowing data to be accessed anywhere, anytime.
Obviously, cloud computing has its pros and cons.
The obvious cons are the safety and security.
And with that, it’s important you seek the most reputable global cloud provider that fits your needs.
This is to ensure the safety of your information and easy and convenient disaster recovery process.
Also, the whole world is heading into app-based society, which depends heavily on various social media platforms.
Thus, you can invest on designing apps for your business, update social media profiles, and make sure your customers have an easier time finding and doing business with you online.
Setup A Customer-Driven Marketing Force
Traditional forms of advertising will become less and less important in the future.
Thus, spending money to place your business on ad magazines once a month, or making a radio ad probably won’t give you the same results as they did 10 or 15 years ago.
What’s the best option?
Well, you and your accountant can actually devise a way to empower your consumers and customers to become advocates of your brand.
How?
Again, we can go back to being tech savvy – through online digital strategy and carefully considered social media campaigns.
Just like positive word-of-mouth can catapult a brick-and-mortar business, social media campaigns that injects high level of “talk-ability” among consumers is the key to grow your business fast.
Also, make sure your use social media to share valuable information to your consumers.
Industry information, expert tips, guides, shortcuts, interesting news, testimonials, etc., will help you position yourself as an authority in your industry.
Thus, make sure you setup and invest in a good social media campaign.
Free Up Your Cash Flow
When running a business, no matter how much cash you have, you will never have enough.
There will always be external circumstances that are beyond your control, such as natural disasters, new consumer trends, changes in the economy, etc.
Thus, make sure you and your accountant setup cash flow strategies that will protect your business for the years to come.
Ask your accountant how to manage your cash flow better.
Also, it’s crucial that you keep your business and personal expenses separate.
This is to avoid problems in your cash flow.
Reconcile your bank and credit statements regularly, and keep original receipts.
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For many Australians, a holiday home does double duty. It’s a place to escape with family and friends, and during the rest of the year it’s listed on Airbnb or Stayz to help cover the costs. Until recently, many owners assumed they could claim most of the usual deductions for the property without much trouble, as long as appropriate apportionments were made. However, that position is now under more scrutiny than ever following the release of some new draft guidance documents by the Australian Taxation Office (ATO) - TR 2025/D1, PCG 2025/D6 and PCG 2025/D7. The ATO is looking to significantly tighten the rules around holiday homes that are used to derive some rental income. While the documents are still in draft form, they clearly signal the ATO’s compliance focus going forward. What is the ATO Concerned About? In simple terms, the ATO wants to distinguish between properties that are genuinely held to maximise rental income and those that are primarily lifestyle assets with some incidental rental use. The ATO confirms that all rental income must be declared, even if it is occasional or earned through informal arrangements. However, if the property is really a holiday home and isn’t used mainly to produce rental income during the year then the owner can’t claim any deductions for expenses such as interest, rates, land tax, repairs and maintenance. That is, the ATO might not allow any of these expenses to be claimed as a deduction, even if the property is used to generate taxable rental income for some of the year at market rates. If the property is classified as a holiday home by the ATO then owners can only claim deductions for limited direct expenses such as cleaning or advertising. The ATO is particularly focused on properties that: · Are blocked out for private use during peak periods (for example, school holidays or ski season), · Are advertised inconsistently or at above-market rates, · Generate ongoing tax losses year after year. How Expenses Must be Claimed Even if the property isn’t classified as a holiday home, it will often still be necessary to apportion expenses if the property is only used partly for income producing purposes. PCG 2025/D6 outlines how expenses should be apportioned. The key principle is that claims must be “fair and reasonable”. Common methods include: · Time-based apportionment (for example, based on days rented or genuinely available for rent), and · Area-based apportionment (where only part of a property is rented). Getting this wrong, or failing to keep evidence, increases audit risk. The ATO has access to booking platform data and can easily compare listings, calendars and reported income. The Financial Impact can be Significant Consider a holiday unit that earns $30,000 a year in off-peak rent but is kept for private use during peak holiday periods. Under the new approach, the ATO may conclude the property is really a holiday home and could reduce deductible expenses from tens of thousands of dollars to only a small fraction, resulting in a materially higher tax bill. Co-ownership also needs care. Income and deductions are generally split according to ownership interests, regardless of who uses the property more. Renting to relatives at discounted rates can further limit deductions. Practical Steps you Should Take Now Although the guidance is proposed to apply from 1 July 2026 (with transitional relief for arrangements in place before 12 November 2025), now is the time to review your position: · Are you holding and using the property to genuinely maximise rental income? Is the property advertised broadly and consistently, including during peak periods? · Use market pricing: Set rent in line with comparable properties in the same area. · Keep strong records: Retain booking calendars, advertisements, enquiries, and a diary showing private versus rental use. · Review ownership and strategy: In some cases, changing how a property is operated can improve its commercial profile and tax outcome, but beware of CGT liabilities, duty and legal fees. · Document existing arrangements: If you may qualify for transitional relief, evidence is critical. The Bottom Line The ATO is not banning deductions for holiday homes, but it is drawing a firmer line between genuine investment properties and lifestyle assets. With the right structure, pricing and record-keeping, many owners can still claim appropriate deductions and improve cash flow. If you own a holiday property, a proactive review could save you from an unpleasant surprise later. Please contact us if you would like us to assess your current arrangements and help you plan ahead.
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