Preparing your Australian start-up for fast growth

For established businesses in the Asia-Pacific, Australia can be a great market to enter due to its ease of market entry and Australian consumers’ appetite for new products.

A great business concept is essential for any business starting up in Australia, but businesses also need the ability to quickly scale their original idea into a business model that delivers profits back to their investors. How can effective finance systems help an overseas start-up achieve this?

Accru Felsers has helped a number of overseas start-ups in Australia grow into businesses with a large number of employees, sometimes in less than 12 months. In our experience, those who manage fast growth best (and most profitably) implement strong management systems from the start.

Focusing on these three areas initially can help a start-up new to Australia achieve this.

1. Scalable financial systems, customised to specific reporting needs

Choosing an accounting system that can grow with your business is particularly important for those businesses that hold stock. What system will allow the business to grow and how can it be set up from the beginning to allow for adequate tracking of financial performance in the future? Systems such as XERO, Quickbooks, NetSuite or SAP can be tailored to achieve these outcomes. It is also important that the company tailors their accounting systems to meet Australian reporting requirements as well as those of the overseas parent company.

Similarly, payroll systems should be easy to manage in the face of rapidly increasing staff numbers in the initial growth phase.

2. Effective local and global tax compliance

Overseas companies also need to understand the Australian Taxation Office’s (ATO) monthly and quarterly deadlines and thresholds for reporting and payment of taxes. Having an Australian tax agent to assist with these lodgements generally provides an automatic one month extension for payments which will minimise the cash flow impact of these payments.

An up-to-date transfer pricing manual has become essential for foreign owned businesses since Australia introduced multinational anti-tax avoidance measures. There are substantial tax penalties for getting this wrong, so it is important to consider transfer pricing arrangements from start-up in case of an ATO review. A Transfer Pricing Manual should provide a rationale for why a particular transfer pricing method has been used and establish that the company’s pricing meets the arm’s length requirement.

3. Adequate capital funding and form

Start-ups need to ensure that their initial investors have adequate capital to invest into the start-up for the funding required. It is important to choose the most suitable type of funding in the form of debt or equity due to the underlying tax consequences. Should the Australian entity receive loans, the resulting interest charged needs to be commercial so as not to jeopardise the tax deductibility. In addition, any equity needs to be correctly reported in the local Australian accounts and match the treatment by the parent company.

With these things in place from the start, fast growth start-ups are well-positioned to maximise their profitability and returns to investors.

Accru also offers a range of services to help more established Asia-Pacific businesses to improve their financial performance. As part of our growth services, we use business intelligence software which is ideally suited to multi-national operations because it enables:

  • Accurate integration data reported by different locations, systems, applications and in different currencies.
  • Easy analysis of transactions between subsidiaries and departments to identify areas of overlap and where inventory or costs can be cut.
  • Tracking of various metrics to diagnose problems before they evolve into bigger issues, e.g. to adjust pricing or cut costs early to avoid making a loss.
  • Utilising industry benchmarks and demographics to help with competitor comparison and trend identification.

See more about our Business Boost+ service and our case study on how it helped a start-up with business performance. If you would like to know more, please contact the author Rebecca Beitzel,

By Rebecca Beitzel, Accru Felsers Chartered Accountants