Understand Finance Acronyms: A Guide for Business Owners

Have you ever spoken to a finance professional and thought with all the finance acronyms, the chat sounded a bit like this:

Every industry has its own language but not understanding finance abbreviations can be risky, because it might mean non compliance which can go hand in hand with penalties. That’s definitely the beauty of working with a finance professional like a bookkeeper or an accountant who can each help you with different areas of compliance and business finances.

Here’s a guide to some of the most common bookkeeping and finance acronyms you might come across in Australia.

1. ATO –  Australian Taxation Office

Who is the ATO? They are the main organisation in Australia that collects taxes for the government. 

Their job manage the tax and superannuation systems that support Australinas and fund the services they use.

This includes:

  • Collecting taxes
  • Managing the goods and services tax (GST) for all Australian states and territories
  • Overseeing various programs that deliver financial assistance and benefits to the public
  • Managing key parts of Australia’s retirement savings system
  • Acting as the keeper of the Australian Business Register

2. BAS – Business Activity Statement

Hands up who has heard of business owners who have woes with their BAS? We’re not going to sugar coat it – BAS can be a huge source of stress, especially when a business owner has to look through multiple sources to get transaction or business data and, if they get an unexpected bill. A BAS agent who can take care of this for you is a worthwhile investment.

BAS is a form submitted to the ATO by businesses to report their taxation obligations, including GST, PAYG withholdings, and other taxes. Your lodgement will either be monthly, quarterly or annually depending on your business. Find out more here: 


3. GST – Goods and Services Tax

A 10% tax on most goods, services, and other items sold or consumed in Australia, crucial for pricing, invoicing, and tax.

4. PAYG – Pay As You Go

A withholding tax system where businesses withhold amounts from payments for employees and other businesses, then pay that amount to the ATO.

5. ABN – Australian Business Number 

A unique 11-digit number that identifies your business to the government and community, necessary for trading and invoicing.

6. TFN – Tax File Number

A unique identifier for individuals and organisations for tax and superannuation purposes, issued by the ATO.

7. ASIC – Australian Securities and Investments Commission 

The independent Australian government body that acts as the national regulator for corporate, markets, financial services, and consumer credit.

8. FBT – Fringe Benefits Tax 

A tax paid on certain benefits employers provide to their employees or their employees’ associates.

9. CGT  – Capital Gains Tax 

The ATO defines this as: 

Capital gains tax (CGT) is the tax you pay on profits from disposing of assets including investments, such as property, shares and crypto assets. Although it is referred to as ‘capital gains tax’, it’s part of your income tax. It’s not a separate tax.

10. P&L – Profit and Loss Statement

A financial statement summarising the revenues, costs, and expenses incurred during a specific period. Essential for understanding business performance.

11. EOFY – End Of Financial Year 

While Christmas is crazy for the general population, EOFY is crazy time for Australia’s financial professionals and business owners alike. In Australia, the financial year starts on July 1 and ends on June 30 of the following year.

12. TPAR – Taxable Payments Annual Report 

The Taxable Payments Annual Report (TPAR) is a report that businesses in certain industries in Australia need to submit to the Australian Taxation Office (ATO). This report has the details of payments made to contractors for their services during the financial year. The purpose of TPAR is to help the ATO identify contractors who have not met their tax obligations, e.g. not declaring their income or under-reporting their earnings.

13. Return on Investment – ROI

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

14. General Ledger – GL

The primary accounting record of a company that uses double-entry bookkeeping. It contains all the accounts for recording transactions relating to a company’s assets, liabilities, equity, revenue, and expenses.

15. Cost of Goods Sold – COGS

The direct costs attributable to the production of the goods sold by a company. This includes the cost of the materials and labour directly used to create the product.

16. Fringe Benefits Tax -FBT

A tax applied by the Australian Tax Office to most, though not all, fringe benefits, which are non-cash benefits provided to employees or their associates (like family).

17. Accounts Receivable – AR

The balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.

18. Accounts Payable- AP

The amount of money a company owes creditors (suppliers, etc.) in return for goods and services they have delivered.

19. Balance Sheet – BS

A financial statement that reports a company’s assets, liabilities, and shareholders’ equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

20. Net Income- NI

The total earnings of a company, calculated as the revenue minus expenses, taxes, and costs.

That’s a wrap

Understanding financial acronyms and abbreviations can be overwhelming for Australian business owners. Tackling financial management alone is not only challenging but time-consuming. This is where a professional bookkeeper becomes a valuable asset. They bring expertise in financial records, ensuring compliance and peace of mind. By working with a bookkeeper, you save time, reduce the risk of costly errors, and get expert guidance for your business’s financial decisions.

It’s a wise investment, allowing you to focus on growing your business while a bookkeeper handles the complex financial details. If you want to see whether one of our bookkeepers/BAS Agents can help you and your business, let’s have a conversation.

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Ready to take your books and business to smooth operator level? Smart choice!

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Ready to take your books and business to smooth operator level? Smart choice!