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Cashflow Tips – Managing the Money in Your Business – Resources

Cashflow Tips – Managing the Money in Your Business - Resources

Cashflow Tips – Managing the Money in Your Business – Resources

A great resource for managing the money in your business, is the Queensland Govt site at: and under the Running a Business then Making and Managing Money –

Managing CashflowYour cash flow is the money you have coming in from revenue and going out for expenses. Good cash flow management will ensure you always have money available for paying your expenses when they are due.

Even profitable businesses can fail if cash flow is not managed properly. If you don’t have enough money available to pay your lenders or suppliers, banks may foreclose and suppliers could cut supplies.

There are many areas in your business that can impact on your cash flow. It is important to understand how customer payment terms, supplier payment terms, loan payments, future spending decisions and other items can affect your cash flow.

This guide will help you to manage your cash flow and understand how to use cash flow analysis to inform business decisions.

Plan and Monitor Cashflow

Planning and monitoring your cash flow is one of the most important things you can do when running your business. This should also include how you will address cash shortfalls or surpluses if they occur.

Forecast cash inflows against cash outflows

A cash flow statement will help you forecast your money coming in and going out. Forecasting your cash flow is usually done annually and broken down into monthly amounts. Always record the amount in the month it is expected to be spent or received. For example, electricity is usually paid quarterly so should be recorded in the month it is due.

You can use a cash flow template to forecast your annual cash flow. You will need to estimate and record the following amounts for each month:

  • Total monthly cash inflow – includes sales, sales of assets, capital injections from borrowings or owners funds, interest revenue and any other sources
  • Total monthly cash outflow – includes items such as purchases, loan payments, supplies, telephone, electricity, wages and any other bills
  • Net cash flow – take the total outflows from the total inflows to see if there is more money in or out
  • Opening balance – record your cash available at the beginning of the month
  • Closing balance – calculate your funds available at the end of the month by adding the net cash flow to the opening balance. This will become your opening balance for the next month. Note: If your net cash flow is negative, this amount will be reduced.

Include GST when inserting amounts for some cash inflows (particularly sales) and many cash outflows (particularly purchases). Calculate the difference between total GST inflows and total GST outflows and insert this as GST payments.

Different businesses are subject to differing GST requirements, so you should seek specific advice from your tax adviser. Learn more about working with business advisers.

Monitor actual inflows against outflows

As each month passes it is important to record your actual cash flow. This can be compared against your forecast to see if you are tracking as planned. You may find you need to review and adjust your forecast as amounts change over the year.

Always make sure your payments received match invoices issued, and receipts and payments match.

Invest surplus cash or arrange loans

If you forecast excess cash for some months, it can be worth putting it in short-term investments to maximise your income. If you anticipate any shortfalls in cash, you may want to plan for an appropriate loan to temporarily cover your costs. Don’t forget to include these extra payments or receipts in your cash flow forecast.

Related links

Watch recorded webinars to learn about financial management: back to basics and financial management: the how to.

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Business Tax Tips – Preparing your Bookkeeping for Year End 30 June 2014

Business Tax Tips – Preparing your bookkeeping for Year End 30 June 2014

Business Tax Tips – Preparing your bookkeeping for Year End 30 June 2014

It is only weeks away and there are tasks you need to be preparing your bookkeeping for the Year End 2014.

ATO focus areas in 2014

The ATO have advised that they will be focussing on a number of areas in its 2014 compliance program, including:

1. Benchmarking small businesses;

2. Reporting of payments to contractors in the building industry;

3. Eligibility to access Capital Gains Tax (CGT) small business concessions on sale of assets used in business (discussed further below);

4. Goods and Services Tax (GST) on property sales; and

5. Cross border business transactions.

Maximising allowable deductions

Expenses that are incurred before year end can reduce taxable income. Consider upcoming liabilities and the value in incurring them before year end. Allowable deductions may include:

● Paying directors’ fees and bonuses;

● Minor repairs on property and machinery;

● Pooling depreciating assets; and

● Scrapping of depreciating assets.

Some Key Bookkeeping & Tax Areas to look at –

Bad debts

If you have any bad debts, ensure you write them off prior to 30 June and prepare minutes approving the write-off. This will also enable an adjustment for any GST charged on the original invoice.  Ask us how 0407 361 596.

Depreciating assets and motor vehicle purchases

The concessional depreciation rules that are applicable for the 2014 income year for small business entities, are broadly summarised as follows:  (although the final Federal consent has not been given to reductions)

1. An immediate write off of depreciating assets costing less than $6,500 first used or installed ready for use by the 31 December 2013. For depreciating assets acquired from 1 January 2014, the immediate write-off threshold has been reduced to $1,000;

2. An immediate write off of the first $5,000 cost of any motor vehicle (with a total purchase cost of at least $6,500) first used or installed ready for use by 31 December 2013, with the balance of purchase price being allocated to a depreciation pool. For motor vehicles acquired from 1 January 2014, the immediate write off threshold has been reduced to $1,000; and

3. Non-motor vehicle depreciating assets costing more than $6,500 first used or installed ready for use prior to 31 December 2013 are written off in a depreciation pool at the rate of 15% in  the first year and 30% in later years. From the 1 January 2014, depreciating assets costing more than $1,000 are written off in a depreciation pool at the rate of 15% in the first year and 30% in later years.

Non-commercial losses

Non-commercial loss provisions restrict the ability of an individual who carried on the ‘non-commercial’ business activity to offset that loss against other income earned in that income year. These provisions will not apply if certain tests are satisfied. There are also special exceptions for primary producers and artists. Note – Individuals with an adjusted taxable income of $250,000 or more will generally not be eligible to offset losses from non-commercial activities against other income. However, there may be an opportunity to request the Commissioner’s discretion to allow you to claim your losses.

PAYG payment summaries

PAYG payment summaries must be provided to employees by 14 July 2014 and the Payment Summary Statement lodged with the ATO Office by 14 August 2014, unless the ATO have granted your business an extension of time.

Personal services income

Be aware there are special rules about the tax treatment of Personal Services Income (PSI). The rules can apply to individuals, contractors and contracting entities by:

● Limiting the deductions available; and/or

● Attributing personal service income derived by an entity to the individual

An individual or entity is subject to the PSI rules, unless it can show that the “results test” is satisfied; or it does not derive 80% or more of its income from one client and passes one of three additional testsSee ATO site

Personal use assets

Where assets owned by a company are used outside of a business by a shareholder or “associate” – this may result in a breach of Division 7A. This can give rise to an unfranked dividend to you for tax purposes. If your company owns any assets that are available to be used for non-business purposes, please contact your tax advisor to discuss this issue.


Only certain prepayments required to be made by law (eg. worker’s compensation insurance) and amounts of less than $1,000 are deductible as incurred.

Shareholder loans

If you or your “associates” borrowed money, received a benefit, or had a debt forgiven from a private company during the year, the Division 7A rules may apply.

Small business entities

In general terms, you are classed as a Small Business Entity (SBE) if you carry on business and your aggregated turnover is less than $2 million or is likely to be less than $2 million as at the commencement of the financial year. SBE’s can choose to access certain concessions including:

● CGT concessions;

● Immediate deductions for certain prepaid expenditure; and

● Simplified depreciation and trading stock rules.

If you are transitioning beyond being able to be considered a SBE based on your turnover, it is important to consider the implications in this transition and consider whether there are any opportunities to minimise this impact on you and your associated entities.

Small business Capital Gains Tax (CGT) concessions

There are 4 specific small business concessions may apply to reduce capital gains as a result of the sale of your business (or active business assets). These are:

● A 15 year exemption;

● A 50% reduction for active assets;

● $500,000 retirement concession; and

● Replacement asset roll-over relief

If the 15 year exemption does not apply, you may apply one, two or all three of the remaining concessions.

If you sell your business or the entity that carries on the business, or are considering selling your business in the future, please talk to your tax advisor BEFORE entering into any agreement to discuss eligibility and planning to access these concessions.


Contributions in respect of the quarter ending 30 June 2014 must be made before 30 June for a deduction to be available in the 2014 year. For family businesses, consider maximising concessional contributions for key individuals.  Concessional contributions (include SG and salary sacrifice) are limited to $25,000 pa. for all individuals, unless you are 59 years of age on the 30 June 2013, your concessional contribution limit is increased to $35,000 p.a. Consider whether you are eligible to make an additional $10,000 concessional superannuation contribution prior to 30 June 2014. But be careful – contributions above these caps are generally subject to tax at the top marginal tax rate.

Timing of income

Consider issues associated with the timing of income close to 30 June, such as:

● The time of billing work in progress;

● Timing of sales income; and

● The date of entering into a contract for the sale of CGT assets.

Trading stock

Stock can be valued under different methods for each item of stock.

● Cost;

● Sales value; and

● Lower of market value or replacement cost.

Remember to conduct a stocktake before year end and also identify damaged lost or obsolete items.

Trust distributions

If your entity structure is a trust, then it is crucial that your trustee resolution to appoint or distribute income to beneficiaries is effective as at 30 June 2014. This means tax planning for trusts should be done as soon as possible to ensure the resolution can be made with tax effective considerations in mind and also finalised/documented prior to 30 June.

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!

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MYOB – Customer paid me twice – How do I fix in my bookkeeping as I have confused myself?


MYOB – Customer paid me twice – How do I fix in my bookkeeping as I have confused myself?

MYOB – Customer paid me twice – How do I fix in my bookkeeping as I have confused myself?

ClientI have a client who paid me twice ($80.03 twice, total $160.06 arrived in my account) and I know in the bookkeeping I needed to create another invoice to take up the extra in the bank, and then a credit for the client. I have already refunded the money to them. I started entering transactions, but now I am trying to sort out what I have entered and got confused. Can you help?

AnswerGet the full picture to start – that is all transactions that have been raised –

Ctrl+Y and search Card for transactions and we get –

MYOB sort refund

So in MYOB now, there is (as above) –

  • 3058 Inv 28/4 – Original Inv
  • 3062 Inv 5/5 – Credit /Reversal
  • SJ …044 6/5 = which is applying the credit

And nothing to pick up the $160.06 on the bank!!!

What we need is to enter in the order the events occur

3058 Inv 28/4 – Original Inv                          $80.03

Xxxx Inv 5/5 – to pick up EXTRA paid          $80.03                  

NB – easiest to start a new Inv

(Total Received, as on Bank                         $160.06 for the 2 Inv above)

Then –

Receive Payment                                          $160.06 which will apply to 3058 and xxxx – and it will match the bank deposit

Next create a CREDIT for the Overpayment

Xxxx Inv 5/5 – Credit Reversal                    -$80.03

Then –

Enter Refund – click Register icon at bottom of Invoice window (Sales Register) > Returns and Credits (tab) > highlight correct credit you want > at lower LHS click ”Pay Refund> update Cheque No. to W (withdrawal), Date and Bank account at top > Record.

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

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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!

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Reckon/Quickbooks Online – Is GST being added twice?

A client had a customer that emailed asking if GST had been added twice in the Reckon Online during the bookkeeping. She wrote – “Can you check the adding up, it seems to be charging me GST twice – the $252.20 included $25.22 GST and then $5.22 plus $14.00 = $271.42 but the account has added $27.14 again. Think I owe you $271.42 not $298.56”

Upon investigation, just looking at the Invoice in the software confirmed that there was confusion as she allowed GST  for the $252.20 but not for the $5.22 and $14.00 in her total! And the total is not correct either –

The total of 252.20 + 25.22 + 5.22 + 14.00 = $296.64 !!!!

The Reckon Online invoice showed –

Reckon/Quickbooks Online – Is GST being added twice?

Reckon/Quickbooks Online – Is GST being added twice?

Yes it is confusing that the $298.56 is incorrectly next to “Tax” under the “Total Tax” to add to the issuer’s confusion, and really should say “Total Due”, in the above shot.

The correct addition is – 252.20 + 5.22 + 14.00 (all ex GST) = $271.42  THEN ADD 1/10th of that is $27.14 – so $271.14 + $27.14 = $298.56

Does the printed invoice show different?

I asked the customer to forward her email so I could check the printed invoice to see if it matched the screen allocation.

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!

Email or call 0407 361 596 Australia