FAQs
Clear and straightforward responses to your specific requirements and problems.
Frequently Asked Questions
We address common questions about our accounting and financial services, tax compliance, and business advisory solutions on our comprehensive FAQ page.
Find detailed information to help you understand how Solve Accounting can support your business with management accounting, tax reporting, and SMSF administration.
Learn about our expertise in working with franchisees, NDIS providers, and high-net-worth individuals.
Management Accounting Services
Management accounting involves analysing financial data to help businesses make strategic decisions. It includes budgeting, forecasting, and performance evaluation to improve financial efficiency.
Management accounting systems are tools that collect, process, and analyse financial data to support business decision-making. These systems include budgeting software, financial reporting tools, and cost management applications.
Accounts payable refers to the money a business owes to suppliers for goods or services received but not yet paid for. It is recorded as a liability on the balance sheet.
A provision in accounting is an amount set aside to cover future liabilities or expenses, such as tax obligations or bad debts.
Accrual accounting records income and expenses when they are earned or incurred, rather than when cash is received or paid. This method provides a more accurate picture of a business’s financial health. Accrual accounting is often adopted as businesses grow beyond the $1m turnover range, but it depends on the circumstances and whether the business wants to adopt this method. Before this point, most small businesses with turnover less than $1m use cash accounting, as it’s generally simpler to maintain.
Equity represents the owner’s interest in a business, calculated as total assets minus total liabilities. It includes retained earnings and capital contributions, also known as “share capital” for a company. Managing the equity in your company as a business owner is essential.
Net sales are a company’s total revenue from goods or services sold, minus returns, allowances, and discounts.
Double-entry accounting is a system where every financial transaction is recorded in two accounts—debits and credits—ensuring that the books remain balanced.
Goodwill is calculated as the purchase price of a business minus the fair market value of its net assets (assets minus liabilities). From an Australian tax perspective, goodwill is considered a capital gains tax (CGT) asset and will likely give rise to CGT when it’s sold. The small business CGT concessions can apply to reduce CGT on sales of goodwill.
Capital accounting tracks a company’s long-term assets, such as buildings and equipment, as well as investments made by owners and shareholders.
A statement in accounting refers to financial documents such as the income statement, balance sheet, and cash flow statement, which provide insights into a company’s financial position.
Cloud accounting refers to using online accounting software that allows businesses to manage financial records in real-time from any device with internet access.
The Accounting Rate of Return (ARR) is calculated as:
ARR = (Average Annual Accounting Profit / Initial Investment) × 100
Accounting and finance are related but distinct fields. Accounting focuses on recording financial transactions and preparing reports, while finance involves managing money, investments, and financial planning.
Reconciliation in accounting is the process of matching financial records, such as bank statements and invoices, to ensure accuracy and detect discrepancies.
Yes, accounting fees related to business operations are generally tax deductible in Australia.
Bookkeeping is the process of recording financial transactions, including sales, purchases, payments, and receipts, to maintain accurate business records.
A bookkeeper manages day-to-day financial transactions, including invoicing, payroll, reconciliations, and financial reporting.
Double-entry bookkeeping records each transaction in two accounts—debits and credits—to maintain financial accuracy.
Yes, AI-powered software can automate bookkeeping tasks such as data entry, transaction categorisation, and report generation, but human oversight is still essential.
Yes, bookkeeping fees related to running a business are tax deductible.
Yes, but professional bookkeeping services can help ensure accuracy and compliance, saving time and reducing errors.
Yes, Excel can be used for basic bookkeeping, but cloud accounting software provides better automation, reporting, and compliance features.
Some accountants provide bookkeeping services, but many businesses use dedicated bookkeepers for daily financial record-keeping.
It depends on the bookkeeping provider. Some bookkeepers offer payroll services, including wage calculations, tax withholdings, and superannuation contributions, while others may focus solely on financial record-keeping. View our bookkeeping services and reach out to our team for a tailored quote.
The cost of bookkeeping services depends on factors such as business size, complexity, and required services.
Bookkeeping
BAS Services
You can lodge your Business Activity Statement (BAS) online through the ATO’s Business Portal, via a registered BAS agent, or using accounting software integrated with ATO online services (e.g. Xero)
A BAS calculator helps businesses estimate their Goods and Services Tax (GST), PAYG withholding, and other tax obligations before submitting a BAS report.
BAS reliefs refer to government concessions or payment deferrals available to businesses during financial hardship, such as those provided during economic downturns or emergencies.
BAS bookkeeping involves tracking GST, PAYG withholding, and other tax liabilities to ensure accurate and timely BAS lodgements. Many businesses use BAS accountants for compliance.
BAS accountants prepare and review BAS reports, ensuring businesses meet their tax obligations while maximsing available deductions and credits.
BAS agent online services allow registered agents to lodge BAS, submit reports, and manage client tax obligations through the ATO’s online portal. View our BAS services for more information.
BAS reports summarise a business’s GST, PAYG withholding, and other tax liabilities for a specific reporting period. These reports must be lodged with the ATO by the due date.
BAS (Business Activity Statement) is a tax reporting requirement for Australian businesses registered for GST. It includes GST payments, PAYG withholding, and other tax obligations.
You can submit BAS through the ATO Business Portal, via a registered BAS agent, or by using compliant accounting software.
BAS payments are made to the ATO based on the net GST collected, PAYG withholding, and other tax liabilities reported in the BAS.
BAS reporting involves tracking and reporting GST, PAYG withholding, and other tax obligations each quarter (or monthly) to ensure compliance with ATO requirements.
GST BAS refers to the Goods and Services Tax (GST) section of the Business Activity Statement, where businesses report collected and paid GST.
Yes, sole traders registered for GST must lodge a BAS to report their GST obligations, PAYG withholding, and any other relevant tax liabilities. You are generally required to register for GST once your annual turnover is more than $75,000.
Yes, consulting fees incurred for managing your tax affairs are typically tax deductible.
Tax consultant fees vary based on expertise, services provided, risk, and business complexity.
Tax consultants provide advice on tax planning, structuring of your business entities, compliance, and deductions to help businesses minimise liabilities.
Yes, consulting services are subject to GST in Australia.
Look for qualifications, experience, and industry expertise. Referrals and online reviews can also help find a reliable consultant. Working with a trusted professional ensures you receive expert guidance on tax compliance and planning. Learn more about our tax consulting services and how we can assist you.
Yes, hiring a consultant for managing your tax affairs is generally tax deductible.
Tax Consulting
Virtual CFO
Virtual CFO costs vary based on services required, company size, and engagement level.
Virtual CFO services include financial strategy, cash flow management, forecasting, and reporting. A virtual CFO provides expert financial insights without the cost of a full-time CFO, helping businesses improve decision-making and financial performance. Learn more about our Virtual CFO services and how we can support your business growth.
A virtual CFO provides strategic financial guidance remotely, helping businesses optimise financial performance.
Look for industry experience, strategic insight, and a proven track record in financial management.
A virtual CFO offers expert financial management without the cost of a full-time CFO, helping businesses grow efficiently.
Yes, but only if the payment is at an arm’s length market rate and for legitimate services permitted by SMSF regulations.
Yes, an accountant can assist with SMSF setup and compliance but cannot provide financial advice. The services that accountants can (and can’t) provide in relation to SMSF are outlined in ASIC Information Sheet 216. Need Assistance? View our SMSF services and book a call with our team today.
Yes, if the SMSF is registered for GST and the fees relate to taxable activities. We typically assist our SMSF clients with submitting an annual GST return to claim back GST credits on expenses.
To set up an SMSF, you need to establish a trust deed, register the fund with the ATO, open a dedicated bank account, and develop an investment strategy that complies with superannuation laws. Managing compliance, audits, and reporting is crucial for maintaining your fund’s status. For a step-by-step guide, download our Free SMSF Setup Guide.
An SMSF accountant assists with compliance, tax returns, financial statements, and regulatory reporting.
Yes, an SMSF can have multiple bank accounts for different purposes, such as cash management and investment transactions.
SMSF accounting costs vary based on compliance requirements and fund complexity. If you need guidance on costings then contact our SMSF accountants for a personalised quote.
Self-Managed Super Funds (SMSF)
Crypto Tax Accounting
Yes, an accountant can assist with crypto tax reporting, capital gains calculations, and compliance with ATO regulations. Given the complexity of cryptocurrency taxation, professional guidance ensures you correctly report transactions, claim deductions, and minimise tax liabilities. Learn more about our cryptocurrency tax services and see how we can help.
Yes, in Australia, cryptocurrency transactions are subject to tax. The ATO treats crypto as an asset, meaning capital gains tax (CGT) applies when you sell, trade, or dispose of it.
Crypto is taxed as either capital gains or income, depending on how it is used. If you trade or sell crypto for a profit, you may need to pay CGT. If crypto is earned through staking, mining, or as payment for services, it is taxed as income. If you are carrying on a business of crypto trading, different tax treatments will apply.
The tax rate depends on whether your crypto is classified under capital gains tax (CGT) or income tax, and whether it is held by you, your company or your trust. CGT is based on your marginal tax rate, with a 50% discount available if the asset is held for more than 12 months.
Crypto losses can be offset against capital gains to reduce your tax liability. If you have no capital gains in the same financial year, losses can be carried forward to future years indefinitely.
To calculate your crypto tax:
- Determine whether the transaction is subject to CGT or income tax.
- Subtract the cost base (purchase price + transaction fees) from the sale price.
- Apply CGT rates or income tax rates based on your total taxable income.
Yes, crypto trading fees are considered part of the cost base and can be deducted from capital gains. However, fees related to personal use crypto are not deductible.
Yes, CGT applies when you sell, trade, swap, or dispose of cryptocurrency as an investor. There are some circumstances where you may be carrying on a business in relation to your crypto, in which case the general income tax rules will apply. If CGT rules apply and you hold crypto for more than 12 months, you may qualify for the 50% CGT discount.
Yes, the ATO requires taxpayers to declare all crypto transactions, including sales, trades, and earnings from staking or mining. Failing to report crypto-related income could result in penalties. The ATO has a data-matching program with most Australian crypto exchanges.
No, holding cryptocurrency without selling, trading, or converting it does not trigger a tax event. However, staking rewards and airdrops may be considered taxable income.
Yes, crypto tax obligations arise at the time of sale, trade, or disposal. CGT can arise even if you do not withdraw your crypto and exchange it for fiat currency.
Yes, earnings from staking, mining, or receiving crypto as payment for services are considered taxable income and must be declared on your tax return.
Crypto losses can be used to offset capital gains, reducing overall taxable income. However, they cannot be used to reduce other types of income, such as salary.
Yes, exchanging one cryptocurrency for another is considered a taxable event under the ATO’s CGT rules, even if no fiat currency is involved.
Transferring crypto between your own wallets or exchanges does not trigger a tax event in most cases. You should be aware of the custody arrangements of your crypto exchange by reading the terms of service.
Franchise accounting involves managing the financial operations of a franchisor or franchisee, ensuring compliance with tax obligations, financial reporting, and royalty payments. It includes cash flow management, financial forecasting, and tax planning tailored to franchise businesses.
At Solve Accounting, our Franchise Accounting and Tax Services are designed to meet the unique needs of franchise owners.
Franchises have unique financial structures, including royalty fees, franchise fees, advertising contributions, and financial reporting obligations. A franchise accountant helps manage these complexities while ensuring compliance with Australian tax laws and franchise agreements. An accountant specialising in franchise accounting has in-depth knowledge of how a particular franchise operates, making them invaluable to franchisees. Their experience across multiple franchisees allows them to benchmark financial performance, identify common challenges, and provide proactive advice tailored to that specific franchise system.
Additionally, their established relationships with the franchise manager or franchisor enable them to stay updated on compliance requirements, operational expectations, and financial best practices. This insider knowledge helps franchisees navigate financial obligations, optimise cash flow, and ensure they meet the franchisor’s standards, ultimately improving their chances of long-term success. View our Franchise accounting services for more information.
Franchise royalties and fees should be tracked using accounting software that records periodic payments, deducts marketing contributions, and ensures accurate financial reporting for both franchisees and franchisors.
In Australia, initial franchise fees are considered a capital expense and are not deductible upfront. However, ongoing franchise royalties and marketing fees are usually tax deductible as business expenses.
A franchise financial report typically includes:
- Revenue and royalty payments
- Operating expenses
- Profit and loss statements
- Balance sheets
- Franchise marketing fund contributions
- Benchmark reporting against other franchisees
Franchisees can improve cash flow by:
- Automating invoicing and payment tracking
- Monitoring expenses and reducing unnecessary costs
- Setting up financial forecasting and budgeting
- Using cloud accounting software for real-time reporting
Popular accounting software for franchises includes Xero, QuickBooks, and MYOB, which offer multi-location financial tracking, royalty calculations, and compliance reporting.
Yes, franchise owners should have a dedicated business bank account to keep finances separate from personal transactions and ensure clear financial reporting.
Franchise businesses must comply with GST, PAYG withholding, BAS lodgements, and corporate tax regulations. A franchise tax accountant can help structure your business to minimise tax liabilities and ensure compliance.
You can work with specialised franchise accountants who understand the financial complexities of the franchise industry in Australia. Look for firms experienced in tax compliance, financial reporting, and royalty accounting for franchises.
Franchise Accounting FAQs