The Australian Business Number, also known as ABN is a unique 11-digit number that is used to identify your business by the government. It is mainly used for taxation and giving more information about your business to the public when they search it on the ABN lookup website. Getting an ABN is basically the first step when starting a business or doing trading. However, if you’re still new with this, it might be confusing which way to start first. Here’s a simple guide to help make things easier to grasp in a shorter period of time.
Do You Need an ABN?
Not everyone needs to have an ABN. However, if you’re planning to open a business or doing activities that are making a profit then you definitely need to apply for an ABN. It is needed to make your business legal and so that your business-related activities can be tracked.
The ABN is essential when dealing with other businesses such as ordering, invoicing, avoiding PAYG tax, claim GST credits, and to get an Australian domain name. If you’re still not sure whether you need an ABN or not you can consult your accountant or check the ABR website to learn more about the requirements.
How Much Do You Need for Registration?
One of the most common questions asked by people is how much it will cost if you apply for an ABN. First of all, there are two ways to apply for an ABN. You can let your company accountant do it for you or you can do it yourself if you already know the steps. Applying for an ABN is basically free of charge. However, if you consulted with an accountant, you may need to pay their service fee. You can definitely apply for an ABN for free if you do it by yourself. This is the same for an ABN reactivation as there’s still no fee.
When to Apply for an ABN?
One thing to remember when starting a business is to apply for an ABN on the first day of commencing your business. This could be when you start earning or even when you start spending to invest in your business. It could be building a website, buying equipment, opening your business, and other similar activities as long as there is cash flow in your business.
This is to be sure that you could track all your expenses and income from the beginning, making it easier to account the cash flow in your business. Before applying, be sure to identify your business first whether it is a company or sole trading since there are significant differences between those two.
How Long Does It Take to Get an ABN?
When you provide all the necessary information during the application, usually you can get the ABN right away after processing. However, if there are lacking information or if there are problems with your application, it could take about 28 days since your papers will be processed manually.
Knowing the basics about ABN makes everything easier even if it’s still your first time applying for one.