Family day care educators must have an accountant. There are certain jobs that call for expertise. Just as you would run a family day care business successfully only if you have expertise in the niche, you would need a family day care accountant to ensure that your finances are in order.
It is common for small to midsize business owners and startup entrepreneurs to think that not hiring an accountant would save some money and that anyone can attend to the math necessary to maintain the financial records of the enterprise. That is a wrong approach. First, you don’t have to spend a fortune to hire a family day care accountant. Second, the job a professional would do is seldom replicable by someone who is not a professional or trained accountant.
Let us check out a few pragmatic reasons why you need a family day care accountant:
- The first reason is it makes good business sense to have an assessment of your family day care business structure and income and expenses to optimise your financial, cash flow and retirement positions. Accountants can manage your invoicing, receipts and debt collections and provide real-time control and monitoring to ensure that you have money available to pay your suppliers and employees when needed. They can also help you forecast your cash flows to ensure that money is readily available for day-to-day living, retirement or future investment and provide real-time reports to track your progress.
- Accountants will have the know-how to guide you in making more strategic business decisions by forecasting your cash flows and other financial results and helping you understand what drives income and cost in your business and how this could be better managed. They can also assist in quantifying the benefits of different options you wish to take in your business and guide you in setting priorities e.g. changes in fee structure, pricing, incorporating before and after school care or overnight care, buying an investment property or a car.
- Family day care taxes are more specialised than other small business taxes and if you don’t have a financial background you could miss out on areas which could save you time and money.
- It’s not sufficient to keep your income and expenses up to date on an annual basis as it’s inevitably too late to take action once a tax year has already passed. How else can you make informed business decisions, determine whether you have overrun on your budget or run a business that can sustain you into your retirement years? Whether you use some software or do it manually, whether you use balance sheets or a chart of accounts or a simple excel layout, you need to know what your family day care business bottom-line and cash flow position is in order to make more informed business decisions and this information needs to be readily available.
- You might want to sell your business or buy a house or car and will need financial records to support your finance application. Generally a 2-year history including copies of your lodged tax returns will be required. In addition, the ATO requires records of income and expenses to support amounts on your family day care tax return.
- Accountants can also assist you in setting up payroll, PAYG and superannuation payments for relief care or assistant educators in order to meet employer obligations under Fair Work Australia.
It sounds pretty simple and could be if it was just a bit of data entry at the end of every day however when you run your own business there are several demands that need to be met simultaneously and it becomes difficult to give every aspect of your business the due attention it needs. Inevitably the little bit of data entry at the end of each day gets put aside and before you realise it – it becomes a mountain that is just too hard to face!
The bottom-line is you can’t run a succesful business when your accounting records are maintained in a shoebox. You need to know how to save money on taxes, how you can defer taxes, how you should manage the finances with the kind of investments and expenses to pay less taxes or how you can come up with a tax profile that will enhance your chances of getting a loan in the near or distant future. All such issues are relevant when you file your family day care tax return. You need the help of a family day care accountant.
With a family day care accountant, you can have some spare time, you can focus on the core issues of the business, you can have some fun because personal life is just as important.