Proactive accounting firms have offered Tax Planning as a service offering for decades, however the purpose and the importance of tax planning is now even more important than ever.
In 2024, the key advantages of tax planning would include:
THE NUMBERS
- Minimising tax liabilities
- Optimising financial resources
- Maximising tax credits and deductions
- Managing cash flow
FOCUS, PERSPECTIVE & STRATEGY
- A focussed and deliberate deep dive in to the business operations
- A 3rd party point of view on the business operations
- Monitoring long-term financial goals
- A review of the business structure for optimal effectiveness
AVOIDING CRIMINAL PENALTIES
- Legal compliance with trust distribution minutes rules
- Avoiding penalties and interest
- Ongoing compliance with legislative changes
When you consider these advantages, it becomes clear that the process that accountants refer to as Tax Planning is probably misnamed and would likely be more appropriately simply BUSINESS PLANNING.
Gone are the days where it might be acceptable for businesses to operate without periodically and deliberately reviewing their numbers, structures, strategies, strengths, weaknesses and governance. Also gone are the days where it was acceptable to have these reviews after the fact (sometimes 6-12 months after year end) when we sit down with the accountant to review last year’s figures.
Some businesses will review these issues weekly, monthly, quarterly, etc however many of us are simply too busy in the day to day to allocate time to these obviously vital functions. It isn’t hard to see the detrimental effect of this potential neglect.
Put simply, the biggest advantages of this Business Planning would be:
- To have a deliberate deep dive in to your business and see what’s happening under the hood in real time so that you know what is happening and what is to come
- To ensure that we have the opportunity to action anything that needs to be actioned prior to year end to improve your current situation
- To keep you out of the grasp of the ATO and other regulatory bodies with respect to compliance (if you operate a Family (Discretionary) Trust, you are legally required to nominate how profit is going to be distributed prior to the end of the financial year. Without guessing, this CANNOT be done without Business Planning!)
By now I’m sure it’s clear why Business Planning is essential for every business but wait, there’s more!
As accountants, we see part of our role as ensuring that everything is planned and that there are no surprises. As such, we will actually lose sleep if we have to deliver you year-end results that will shock you. So for our sanity, we urge you to reach out to us if we are not already preparing Tax/Business Planning for you OR at very least, please keep this correspondence on file in case we do have to deliver any shock news to you at year end if we have not been preparing tax/business planning.