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Online business accounting questions from a newbie

Discussion in 'Accounting, Tax & Legal' started by hotchilli, 17th Oct, 2008.

  1. hotchilli

    hotchilli New Member

    16th Oct, 2008

    I run few online business and invest in some. For last few years my company didn't make any profit and now we are seeing some boost. I'm based in Melbourne and trying to find an accountant and until i do, i've few questions that you may be able to help with

    1. Is it better to get an accountant in the same city as you. The reason I ask is i've heard a lot of Nick from this forum but we are in different states

    2. In my online business i get most of the payments via paypal as income in US dollars. Now, in my accounting system should i use the rate to convert on the day i got the payment or when i withdraw? Only problem is that i only withdraw after i pay 80% of my expenses through paypal and currency rate may differ. So there is a lot of confusion regarding this

    3. I buy ads on 100 of small sites through forums. None of those forum member send the invoice. They just give there email address on chat and amount to deposit on paypal. Now i've formed relationship with 100 of them and each month through paypal mass pay send payments to them. Now, this is my expense without invoice as in online this is how it works for me.

    4. I've a team of 6 people in India. My family wants to send some money to me in Australia as a gift but instead i just tell them to pay the team there and it would be a loan from me to the company as there is no tax on gift. Though i've done this only few times but i am not happy with the arrangement coz tax office can simply think i can put whatever payment as expense as nothing is stopping us to create a company in India. Though i'm on a honest path of declaring everything, i still have to think in advance

    5. Through paypal account, i get 99% business payment and 1% personal payment from relative. How to prove that 1% is from relative. India runs on a cash economy. My brother pays someone family in India in local currency and there son transfer some money to invest in the business from USA

    I know that is is very unorganized and within one year i want to get rid of all this but how do i arrange all that in the most legal way.
  2. MattR

    MattR Well-Known Member

    23rd May, 2007
    Hi chilli

    1.Its nice to have a face to face, but not vital. Pretty much all work is done via phone and email once a relationship is established. However if you have really intricate affairs then I advise same city unless you need a specialist.

    2. Pass

    3. Is there a query?

    4. Ditto?

    5. Pass

    Looking at your questions, I'd advise you to see an accountant. Perhaps one with experience with GST on imports and exports - this can get a bit tricky once the internet is involved.