Accountant for Starting a Business in Ramat Gan

Why is Accounting Guidance Important When Starting a Business?

When deciding to open a new business, many owners focus on business aspects — logistics, marketing, products — and forget that the world of taxes and accounting is just as important. In the first months, a wrong decision regarding the type of reporting, VAT registration, or reporting to National Insurance can lead to high costs later on.

As accountants who guide self-employed professionals and business owners in diverse fields, we repeatedly see freelancers who start alone and realize within the first months that they need help. If you start with proper planning from day one — reporting becomes easier, taxes are lower in some cases, and the manager can focus on the business.

We assist self-employed professionals and business owners in Ramat Gan throughout the entire process: from choosing the type of reporting (exempt business or licensed business), through ongoing bookkeeping, to reporting with the Tax Authority and National Insurance.

What Exactly Do You Need to Do When Starting a New Business?

The process typically looks like this:

1. Choosing the Type of Reporting: First, you need to decide whether you are an exempt business (income up to a certain amount) or a licensed business (including VAT reporting). This depends on expected income, whether you work with businesses or consumers, and the various tax benefits each type offers.
2. Registration with Tax Office: After choosing the type, you need to register with the Tax Authority's tax office. This usually takes a few weeks.
3. Ongoing Bookkeeping: From the day you open the business, all income, expenses, and invoices must be recorded. This is not just a legal requirement — it's also the basis for smart business decisions.
4. Reporting to National Insurance: A self-employed person must register with National Insurance and pay monthly insurance premiums. This is mandatory and incorrect reporting can affect pension rights.
5. Annual Report: At the end of the year, you must submit an annual report to the Tax Authority with all documented income and expenses.

One point that is not always clear: many people think they can start with a simple Excel spreadsheet and move forward. It works for two or three months, but when the end of the first year arrives, reporting becomes a problem. We prefer to start right from the beginning — it saves time and headaches.

Exempt Business Owner or Licensed Business Owner? How Do You Choose?

This is a question that comes up frequently from new self-employed professionals. The answer depends on several factors:

Exempt Business Owner — This applies to those whose annual income is expected to be below a certain threshold. As an exempt business owner, you do not report VAT, which is significantly simpler. However, there is a disadvantage: if you work with other businesses that purchase from you, they cannot reclaim their VAT — this could make you less attractive as a supplier.

Licensed Business Owner — This applies to those with higher income or those working primarily with businesses. As a licensed business owner, you report VAT every two months (or quarterly, depending on your volume). This involves more reporting work, but there is an advantage: you can reclaim VAT on your expenses, which sometimes results in a refund from the tax authority.

In short: if you operate in a field that works mainly with consumers (for example, freelance graphic design, repair services), exempt business owner status is generally simpler. If you are a supplier to businesses or in a field with significant expenses, licensed business owner status may be more profitable. We examine both scenarios during an initial consultation meeting and help you decide based on your situation.

What is the cost of guidance for a new business owner?

This is a natural question, and the answer is: it depends on the scope of your business activity. For an exempt business owner with simple bookkeeping, the cost is usually lower than for an authorized business owner who reports VAT every two months. We build pricing proposals according to the scope of work — how many invoices per month, how many expenses, whether you have employees, and so on.

What is important to remember: investing in proper accounting guidance at the beginning usually saves money in the long run. We see self-employed individuals who try to do everything themselves, make mistakes in reporting, and then need to correct them — and that costs more. It's worth starting right.

In the first consultation meeting, which is free of charge, we listen to the details of your business and provide an initial estimate of the cost and scope.

Common mistakes we see new self-employed individuals make

• Non-reporting or partial reporting of income: Some think that if they work under the table or don't report all income, it won't be detected. This is almost always reflected in the bank account, and the tax authority is strict about this. It's best to be straightforward from the beginning.
• Keeping receipts disorganized: Some keep receipts in a bag or folder scattered around. When the report filing comes, they can't find anything. We prefer digital organization from day one.
• Failure to pay National Insurance contributions on time: Self-employed individuals who don't pay on time receive fines and interest. It's important to set a reminder and pay on time.
• Mixing personal and business funds: When using a personal account for business, it's very difficult to separate later. We recommend opening a separate business bank account.
• Failure to deposit VAT on time: Authorized business owners who don't deposit VAT on time face high penalties. It's never worth the risk.

Our Work Process with New Entrepreneurs

When you come to us initially, here's how it looks:

First Stage — The Meeting: We learn about your business: what you do, who your clients are, what your expected income is. This helps us understand your situation and propose the best solution.

Second Stage — Choosing a Structure: Based on the information we received, we advise you whether an exempt business or a licensed business is better for you. We also explain the implications of each choice.

Third Stage — Registration and Establishment: We handle all technical matters — tax office registration, registration for National Insurance, and accounting system setup.

Fourth Stage — Ongoing Support: Each month you send us invoices and expenses, we update the accounts, and we're available for questions. At year's end, we prepare your annual report.

This entire process is transparent — you can view all data anytime through our software, and we're always available by phone or email.