AccountKeepingPlus – Administration, Bookkeeping, Compliance News & Tips MYOB Reckon Quickbooks Training BAS Small Business

Making Business Books and Accounting Come Alive! MYOB Reckon Quickbooks Training BAS Small Business


Leave a comment

Cashflow Tips – Improving Cashflow – 5 things to attend to when cash is low

Cashflow Tips – The Importance and Productive Boost of Team-Building

Cashflow Tips – Improve Cashflow – Invoice Promptly!

There are many areas of your business can have an effect on how much cash is available. Here are 5 things to attend to when cash is low. Additionally, controlling your expenses and increasing your sales, you can improve your cash flow.

1. Review stock levels

Holding too much stock will tie up cash and increase storage and insurance costs. Practicing good stock control is to keep stock at efficient levels to service customers, but not sit for months waiting to sell.

2. Manage customer and supplier accounts

Follow up those overdue debtor accounts who owe you money. Managing debtors by having good credit policies and enforcing them, will keep your cash coming in.

You may also be able to negotiate longer payment terms with your creditors/suppliers. If you can get payment from your customers before you pay your suppliers, you will have zero out of pocket expense – easier said, but sometimes can happen.

3. Review banking products

Using the appropriate banking transaction products can have the money in your pocket sooner. Consider a mobile EFTPOS device, or investigate services to take payments over the phone or online.

4. Increase sales income

Review your pricing (time to increase?), use an new advertising campaign or improve your customer service and sell add-ons (would you like Fries with that?) to see if you can increase profits. You may also want to consider other ways to growing your business, such as complimentary products or services.

5. Reduce overheads

Think about reducing staff overtime hours and controlling overheads. Make your business more environmentally friendly may reduce costs such as power and water bills and minimise wastage. Remember to clearly communicate your policies on these items to your staff.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

                Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!


Leave a comment

MYOB Essentials – Why is tax calculating/appearing when only $300 earned by an employee for a week?

MYOB Essentials – Why is tax calculating/appearing when only $300 earned by an employee for a week?

MYOB Essentials – Why is tax calculating/appearing when only $300 earned by an employee for a week?

Client calledI thought with the tax-free threshold of $18,000 which is $346.15 week gross, has NO tax up to that amount? Is that correct? I can’t work out why tax is appearing when only $300 was earned by an employee for a week? I have ticked ‘Tax Free Threshold is being claimed” – but tax still calculates!

AnswerIt is easy to miss, but along with Q8 Tax Free Threshold is claimed, you also need to tick Q7 Australian Resident for Tax purposes – so in MOST cases – tick Q7 & Q8!

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

Business Tax Tips – Hire Purchase and how GST applies

Business Tax Tips – Hire Purchase and how GST applies

Hire Purchase and how GST applies

Businesses can acquire assets such as equipment by entering into hire purchase or leasing agreements to pay for and use goods over a period of time rather than paying the full cost up front. Then they need to know how GST applies. Here is some information from the ATO website to assist, including links for further information –

How does hire purchase work?

Under a hire purchase agreement, you:

  • Purchase goods through instalment payments
  • Use the goods while paying for them
  • Do not own the goods until you have paid the final instalment.

Do you pay GST on hire purchases?

For a hire purchase agreement entered into before 1 July 2012

Where the supply of goods to you under a hire purchase agreement is a taxable supply, the price you pay for the goods includes GST. If you use the goods in your business, you may be able to claim a GST credit for any GST included in the purchase price of the goods.

If the supplier:

  • Separately identifies and discloses the interest charge to you, you do not have to pay GST on the interest as it is for a financial supply
  • Does not separately identify and disclose the interest charge to you, you must pay GST on the total amount payable under the contract.

The interest charge is ‘disclosed’ to you if the supplier tells you any of the following in the hire purchase agreement:

  • The dollar amount of the credit charge
  • The interest rate
  • The formula or formulas used to work out the credit charge amount
  • Any other information enough to work out the credit charge amount.

For a hire purchase agreement entered into on or after 1 July 2012

All components of the supply made under a hire purchase agreement entered into on or after 1 July 2012 are taxable regardless of whether the credit component is separately disclosed. Any associated fees and charges, such as late payment fees incurred under the terms of the hire purchase arrangement, will also be subject to GST.

A change to an existing hire purchase agreement entered into before 1 July 2012 that does not result in a new agreement is not affected by the new rules. That is, the supply of a separately disclosed credit component will continue to be an input taxed financial supply.

Hire purchase agreement not treated as a progressive or periodic supply

Do not treat a hire purchase agreement as a sale or purchase you make on a progressive or periodic basis. Treat a hire purchase agreement as a stand-alone sale or purchase in a tax period – so, the same rules apply as they would for any sale and purchase of goods under an ordinary sale agreement.

How do you claim GST credits on hire purchases?

If you account for GST on a non-cash (accruals) basis

You can claim the full GST credit on your hire purchase agreement in the tax periods when either:

  • You make your first payment
  • If before making your first payment, a tax invoice is issued to you.

If you account for GST on a cash basis

For hire purchase agreements entered into before 1 July 2012 you may claim one-eleventh of the principal component of each instalment in the period you pay it. If the supplier provides regular accounts or statements that show the principal and interest components for each instalment, you must use that information to work out GST credits in the relevant tax period. If you do not know the principal component for each instalment, you need to take reasonable steps to find out from the supplier.

For hire purchase agreements entered into on or after 1 July 2012, you may claim input tax credits upfront instead of waiting until each instalment is paid, in the same way as you would if you accounted for GST on a non cash basis. As mentioned above, all components of the supply made under a hire purchase agreement entered into on or after 1 July 2012 will be subject to GST. You may claim one-eleventh of all components, including the credit component and any associated fees and charges which have been subject to GST under the agreement.

See some working examples further down the page at the ATO site HERE

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes”

There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

Cashflow Tips – Making a profit but have no cash – Why?

Cashflow Tips – Making a profit but have no cash – Why?

Cashflow Tips – Making a profit but have no cash – Why?

Do you find you are making a profit but have no cash and wonder why?

This may be because a company report can show they are making a profit but have no cash because profit is an accounting record using revenues and expenses, (accrual accounting) which are different from the company’s cash receipts and cash disbursements (cash accounting). In other words, there is a difference between revenues (invoiced sales) and receipts (actual cash receipt of payment of invoices (banked)). There is also a difference between expenses (purchase orders still to pay) and expenditures (actual payment of purchases, and overhead expenses).
Examples

As an example a new company that sells $10,000 to its clients in a month and the clients are given 30 days to pay. The company will have $10,000 of revenues in its first month, but the cash will not be received until the second month. If the company’s expenses are $7,000 in the first month, the company will report a profit of $3,000 but will not have received any cash from its clients. It may not have been paid, and it may not have paid it’s expenses either.
Another company might report a profit of $60,000 in its first year, but during its first year it uses $65,000 of cash to acquire equipment that will be put into service at the beginning of the second year. This company will have a profit, but will not have the cash.
Other times cash is paid out, but the profits are not reduced at the time of the payment, because they don’t pay for expenses but pay loans, payroll PAYG or super or for stock – they go to the Balance Sheet and include prepayments of insurance, payments to increase the inventory of merchandise on hand, and payments to reduce liabilities.

Keep in mind that Profit does not equal cash: it is as simple as that! Profit is the accounting record of what is left after you have made sales and raised all expenses. Of course, remember there is tax on the profit as well. The remaining amount is then reinvested back into the business or distributed the owners.

Cash is what the business needs to operate every day and can come from 5 different main sources — profit, selling assets, contributing your own personal funds, bank loans or new investor money.

Cash and Timing

The key to remember is that you don’t spend profit in our business — you spend cash, and it is all in the timing.

There are 2 timing situations to be aware of –

Firstly as the old saying goes, you have to spend money to make money. To make a profit, you first need to purchase goods or services to sell, so you will need cash before the sale is made. By selling your product or service at a higher price than what it cost, you make a profit.  The point is you need the cash before you get the profit, or get credit and pay the supplier later!

Secondly (that catches most businesses) is providing credit to customers. The longer the customer takes to pay, the longer you have to wait for the cash, and in the meantime you have wages, rent, stock and other expenses to pay. This is where the trouble begins and often ends.

Focus on what matters – Cashflow

You need to focus on not only profit but also what drives your cashflow. If you have regular loan repayments, rent and other expenses that have to be made on time, then you will need enough cash to cover these while you wait for your customers to pay. Keeping track of your accounts receivable and following up on late payments will definitely help your cashflow. The other thing to remember is if you can get credit from your suppliers, this may mean that you don’t have to pay for stock until you have sold it — again making a big difference to your cash flow.

The business needs to be profitable to stay in business. Be careful of sacrificing profits to generate cash. Offering discounts to pay early will definitely help your cash position but will reduce your profit.

The best management is to make sure you have enough cash buffer to cover ongoing expenses. Having a finance facility (overdraft, credit card) can help that will tide you over during a cash flow shortage, but this will cost in the form of fees and interest, which again, will reduce your profit.

Remember profit does not equal cash!

See more help at Cashflow Tips

“If we helped solve your problem, please consider posting a review or comment for us!”

Need help? Not sure? Call for FREE 30min Advice / Strategy session today!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

MYOB – How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

MYOB - How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

MYOB – How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

If you are a business in the building and construction industries, you may be wondering how to generate in MYOB a Taxable Payments Annual Report (TPAR) – and when is the due date?

Here we look at what the 1. Australian Tax Office (ATO) requires and how to 2. the steps to set up and generate a Taxable Payments Annual Report from Reckon/Quickbooks software.

1. ATO Requirements

From the ATO website latest page 19 June 2015 –

Taxable payments reporting – building and construction industry

Recent updates

In March 2015 we updated:

When to report The due date for lodging the Taxable payments annual report is by 28 August each year.

Overview

Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year.

You need to report these payments to us on the Taxable payments annual report.

To make it easier to complete the annual report, you may need to check the way you currently record your contractor payment information.

Background

Taxable payments reporting for businesses in the building and construction industry aims to improve compliance with tax obligations by those contractors who are currently not doing the right thing.

The information reported about payments made to contractors is used in our data matching program to detect contractors who have not:

·                     lodged tax returns, or

·                     included all their income on tax returns that have been lodged.

2. MYOB – The steps to set up and generate the report are –

How to track reportable payments in AccountRight

Once you select the contractor payments option in the Preferences window (Setup > Preferences > Reports & Forms tab), you can start marking transactions as reportable. You can mark:

  • Spend Money payments made to suppliers as reportable. You can also set up a supplier so that any payments for them are automatically included in reporting.
  • Bills and Orders recorded for suppliers. Payments received against these transactions will be included in the report.

You can then generate a report that will help you complete the ATO forms, or create a report file you can lodge electronically.

Lodging your report electronically

You can lodge your report electronically, using the ATO’s Business Portal. If you haven’t already set up access to the Business Portal, you should do this before the end of the financial year so you’ll be ready to lodge the report when it’s due. See the ATO website for more information.

Set the reporting preference

  1. Go to the Setup menu > Preferences. The Preferences window appears.
  2. Click the Reports & Forms tab and select the preference, I Report Taxable Payments Made to Contractors.
  3. Click OK.
    Whenever you record a Spend Money or purchase transaction, the Reportable Payment option will appear in the transaction window. Select this option to mark the transaction as being a reportable payment.
  4. Set up suppliers to report
  5. Go to the Card File command centre and click Cards List. The Cards List window appears.
  6. Click the Supplier tab.
  7. Click the zoom arrow of the card you want to set up. The Card Information window appears.
  8. Click the Buying Details tab.
  9. Select Report Taxable Payments. In the message that appears, choose whether to report any existing transactions for the supplier for the current financial year. Note that you can later remove payments from reporting.
  10. Click OK. The Cards List window reappears. Whenever the card is selected in a Spend Money or purchase transaction, the transaction is marked as reportable by default. 

To report taxable payments

  1. Go to the Purchases command centre and click Report Taxable Payments. The Taxable Payments Assistant opens.
  2. Click Next. The Company Information window appears.
  3. Enter any company information that doesn’t appear by default.
  4. Click Next. The Review window appears.
    In this window, you can click Review Your Transactions to:
    a.     Review all transactions marked as reportable.
    b.     Change the reporting status of transactions.
  5. Click Next. The Create window appears.
  6. Click View Taxable Payments Report. The Taxable Payments Annual Report (Detail) report appears. You can use the report to help you complete your ATO forms, or to keep for your records.
  7. If you’re lodging the Taxable Payments Annual Report file:
    a.  Click Create Taxable Payments File. The Save As window appears..
    b.  Select the location to store the file and click Save.
  8. Click Finish to close the assistant.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

                Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!


Leave a comment

Reckon/Quickbooks – How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

Reckon/Quickbooks – How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

Reckon/Quickbooks – How to set up and generate a Taxable Payments Annual Report (TPAR) – and when due?

If you are a business in the building and construction industries, you may be wondering how to generate a Taxable Payments Annual Report (TPAR) – and when is the due date?

Here we look at what the 1 Australian Tax Office (ATO) requires and how to 2 The steps to set up and generate a Taxable Payments Annual Report from Reckon/Quickbooks software.

1. ATO Requirements

From the ATO website latest page 19 June 2015 –

Taxable payments reporting – building and construction industry

Recent updates

In March 2015 we updated:

When to reportThe due date for lodging the Taxable payments annual report is by 28 August each year.

Overview

Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year.

You need to report these payments to us on the Taxable payments annual report.

To make it easier to complete the annual report, you may need to check the way you currently record your contractor payment information.

Background

Taxable payments reporting for businesses in the building and construction industry aims to improve compliance with tax obligations by those contractors who are currently not doing the right thing.

The information reported about payments made to contractors is used in our data matching program to detect contractors who have not:

  • Lodged tax returns, or
  • Included all their income on tax returns that have been lodged.

2. Reckon/Quickbooks – The steps to set up and generate the report are –

  1 Enable the Taxable Payment Reporting option in the preference to be able to open the report.

  1. Go to the Edit menu, choose Preferences.
  2. Choose the Tax item and go to the Company Preferences tab.
  3. In the Taxable Payment Report section, click to select the Enable the Taxable Payment Reporting option.
  4. Click OK.

  2 Enable a supplier (sub-contractor) to become reportable on the Taxable Payment report

  1. Go to the Suppliers menu and choose Supplier Centre.
  2. On the Suppliers tab, double click the supplier’s name to open the supplier’s profile.
  3. Click to select the “Include in Taxable Payments electronic report” option.
  4. Click OK.

  3. How do I create this report to have what I need to write on the ATO form?

  1. Go to the Suppliers menu, click Tax Activities, click Process Taxable Payments. The Process Taxable Payments annual report window opens.
  2. Click the Tax Year drop-down to select the tax year you are reporting on.
  3. If applicable, click the Withholding Liability Account drop-down to select the account you use to track withholding tax.
  4. Click the (tick) column to select the selected suppliers that you want to appear in the selected tax year’s report.
  5. Click the supplier to view the transactions for each supplier that are included in the report. The Supplier Taxable Payments Details – <supplier name> window opens.
  6. You can review each transaction and click to deselect if you don’t want it included.
  7. Click OK.
  8. Click Save to save the changes (if you have made them) in the Process Taxable Payments annual report window.
  9. Click Export to save the report to your disk. The Select Location for Tax Payment Report File window opens. Enter a file name for the report, we recommend using the date in the file name. The default location for the file is \\ProgramData\Intuit\ReckonAccounts 2013\<level> 2013\<Company Name>\Export Files\Tax Payment Reports. For Reckon Accounts Hosted users, the default location is “Q:\ “
  10. Click Save. You will receive a message that the file has been successfully written. If you have electronic key, you can upload the file to your ATO portal
  11. Note: If you make any changes to the data whilst the Taxable Payments Annual Report Window is open, the report needs to be closed and reopened for it to refresh.

4. How do you Amend the TPAR report if incorrect?

If you require to submit an amended report to the ATO, select the Generate Taxable Payments as ‘Amended’ option in the Process Taxable Payments annual report window.

Select the supplier that has been amended from the list and click Create Report.

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right! Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


Leave a comment

MYOB ESSENTIALS – Tips when setting up Employee – Why is there too much PAYG tax when claiming Tax Free Threshold?

If you are wondering why there is too much PAYG tax being raised when the employee is claiming Tax Free Threshold, eg tax is raised on $200 (and there should NOT be any) and there is an extra box to tick.

As you are setting up each employee, most will nominate, and you will tick “Tax Free Threshold claimed”.

What does Tax Free Threshold mean? The first $18,000 there is NO Tax on wages and salaries in Australia currently. But if an employee works at 2 jobs – they can only (should!!!) claim the tax free threshold at ONE employer – usually the one where the most time is worked.

In MYOB Essentials if the option 8 on the Tax Tab is ticked WITHOUT option 7, tax will start generating when it shouldn’t!

Here is how to set it up – tick 7 + 8 –

Essentials - Tax Set Up

Useful links – (from our Useful Business Links page above) –

ATO Tax Tables – PDF’s

For the latest tax tables to download the PDF and keep a copy, or use the Tax Withheld Calculator online, all from here.

Australian Payroll Tax and Super Calculator

See all you need in one table! – weekly, fortnightly, monthly – enter the Annual Gross wage/salary

(or take the weekly gross x 52 to get annual)

Need help? Not sure? Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

***BEFORE you BUY – Ask us for a competitive software price BELOW retail – No obligation!

You also get FREE 30 min to assist in setting up your company in the software, and FREE ongoing email or phone support – no-one offers as much!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia

Follow

Get every new post delivered to your Inbox.

Join 1,158 other followers