Top Accounting Tips to Grow your Franchise Business in Australia

According to top NRA executives, Australian franchises have shown a consistent 80% success rate over the past few years.

With 80,000 franchises operating in Australia at the beginning of 2020, the estimated number of franchise units for this year stands at 90,500. Thanks to FCA's prolific efforts, the Australian franchise landscape is now worth over $180,000 billion.

If you wish to own a successful franchise business in Oz, it is best to consult specialists in tax accounting franchise in Australia. From BAS, bookkeeping to filing tax returns, these experts will help you at every stage, ensuring your balance sheet is free from discrepancies and protects you from financial debts. Here are some expert-advocated accounting tips for growing your franchise business in Oz.

Stick to Your Pre-defined Budget

While the average franchise cost for retail starts at a staggering $287,000, the Federal Government's 2020 Budget offers $26.7 billion in instant asset write-off for businesses.

As a franchise owner, plan your capital, considering ongoing expenses like franchise fees, employee salaries, advertising fees, and utilities.

The initial fee you pay to your franchisor is an integral part of your budget, which you should include as an intangible asset on your balance sheet. An experienced consultant will help you with the amortisation of this initial fee while deducting it from your tax returns.

Monitor Your Cash Flow

As per this year's budget, some of the franchising sector's key measures include $552.9 million in efforts to support regional Australia. It also allots $850 million on JobMaker hiring credit payable up to 12 months to you if you employ young people between 16 to 35 years.

With the government offering encouraging tax provisions, having a tax accountant ensures that all your transactions and cash flow are accurately recorded. You can then claim eligible tax deductions for all your yearly expenses.

File Your Tax Returns Correctly

If you own a franchise business in Australia, you will have to pay a corporate tax of 30% and a GST of 10% while trading goods and services. And then there is the Capital Gains Tax, which applies when you plan to terminate the franchise.

An experienced professional in a tax accounting franchise in Australia will help you claim tax deductions for various expenses, thus saving money and time.

Ensure Proper Tax Planning and Structuring

In Australia, there are different tax treatments for franchise-specific payments as compared to small businesses. The aspects to consider are franchise fees, royalties, training fees, GST, and franchise termination.

An adept accounting professional can help you plan, structure your taxes, and offer monthly tax management services, allowing you to better focus on your franchise.

Adhere to ATO Requirements

The ATO manages the Australian revenue systems, ensuring that franchisors comply with relevant tax, superannuation, and excise legislation. You will have to maintain seven years' financial records, which may be subject to an ATO audit.

When you engage a franchise accounting service agency, they regularly coordinate with the ATO, ensuring your franchise adheres to the applicable regulations.

If your franchise's corporate tax entities have an aggregate turnover of less than $5 billion, you are eligible to carry-back tax losses from the previous three income years. But to fully utilise the government's provisions for your franchise operations, consult an experienced agency of tax accounting franchise Australia to take care of your taxes, giving you ample time to run a successful brand.

Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice