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Business Tax Tips – Research shows how to increase revenue for small business especially start-ups

Business Tax Tips – Research shows how to increase revenue for small business especially start-ups

Research shows how to increase revenue for small business especially start-ups

If a 21% chance of increasing revenue / sales was possible by working with your accountant / advisor – would you do it?  Rose Powell reports on a survey in SMEs can make better use of their accountant to boost their bottom line“For the third of business owners who worked with an accountant as an advisor, one in five (21%) saw a rise in their revenue over the last year”.

Rose wrote – “Small business operators who used their accountant as a business advisor last year were 31% more likely to see an earning uplift, according to … research from the 2013 MYOB Business Monitor.

The vast majority of the 1005 business owners surveyed, 89% used an accountant last year.

Only 32% of owners reported having an advisory or consultative relationship with their accountant, compared with the 57% whose relationships were for compliance only, such as tax return completion or GST reporting.

Just 11% did not have an accountant.

For the third of business owners who worked with an accountant as an advisor, one in five (21%) saw a rise in their revenue over the last year.

Adam Ferguson, general manager of the accountants division at MYOB, told StartupSmart that using an accountant as an advisor was especially valuable for start-up companies.

‘The start-up phase of a business is very different to when it’s up and running. In that phase, your accountant can help with things like creating a business plan, applying for business loans, building out your business case,’ says Ferguson.

For start-ups who are already in operational phase, the increasing use of cloud accounting systems enables accountants to provide feedback and ask the right questions about compliance and cash flow.

Ferguson says cloud accounting means compliance is no longer a year-end process, and increasingly a monthly one. This makes them well placed to advise on cashflow questions.

‘An accountant can play a key role in helping a start-up, reporting on cash flow on a more regular basis, and understanding the dynamics that drive cashflow,’ says Ferguson.

The report found companies that worked with an accountant as an advisor were less concerned about attracting and retaining customers, and were more likely to increase their overall investment in their business strategies.

‘Once you’ve got your cash flow healthy, it becomes a question of how to use that and where to invest that to grow my business,’ says Ferguson.

Over half, 53%, said they found their accountant advisor provided useful advice on how best to manage the money that flows through their businesses.”

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!

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Business Tax Tips – Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

Business Tax Tips – Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

A client was reconciling the GST accounts: Collected & Paid amounts on the Balance Sheet and GST reports, and wanted to know –

  1. The end of year Balance Sheet shows a different amount to the GST Accrual (& Cash) reports.  Why?            
  2. They thought that the GST Liabilities section of the Balance Sheet gets automatically updated when you enter a Spend Money purchase or raise a Sales invoice.  Is this the case?
  3. Or do we have a classification issue in our MYOB account set ups that we need to fix?

The answer is – the amounts in the GST accounts should reflect the way the transactions are created, and depend on whether cash recording (cheques and deposits or cash receipt sales) or accrual recording is used (invoice sales and purchases or bills).

Cash transactions recognise revenue sales and expenses when actual CASH is received and paid, ie when paid. The GST accounts will have the exact GST amount for each transaction, as and when paid or received.

Accrual transactions recognise revenue sales and expenses when the TRANSACTION occurs, not when paid. The GST accounts will have the GST  from the invoice or purchase.

If you report tax amounts for a period, keep in mind the way transactions are entered, as the GST on sales and the GST on purchases will not be picked up if reporting on Cash basis, and are not paid in the time frame. If they were paid, they would appear in the report.

Always check on screen the GST detail reports to see what transactions are picked up for the period, and after checking, if ok, PRINT to keep a record, then print the GST/Tax summary report.

The balance of the tax accounts also changes, as we post the amount reported to the ATO to them, reducing/increasing the account to reflect what is reported and paid (or refunded). So a tax payment during the period reported also changes the Balance Sheet amount. Look through the detail of the transactions in the tax accounts, and see what has occurred.

See also Cash and Accrual – will there be Debtors (Accounts Receivable – AR) and Creditors (Accounts Payable – AP)?

And for a quick summary of the reports suggested to check and use to prepare a BAS, go to MYOB – Aust. BAS Checks Reports & Entries

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


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Business Tax Tips – Business Christmas party ideas – when things can go wrong

Business Tax Tips – Business Christmas party ideas - when things can go wrong

Business Tax Tips – Business Christmas party ideas – when things can go wrong

The festive season should be an enjoyable time of the year but are you aware of your obligation to provide a healthy and safe environment when planning business Christmas party/workplace functions? Don’t be complacent – prepare for when things go wrong…

If a function is organised, promoted and funded by the business, it is more than likely to be considered an extension of the workplace and therefore, your business should ensure it takes all reasonable steps to minimise any risk to the business.

When is the employer liable?

In most legal contexts, an employer function/staff party will be considered as part of the ‘workplace’ and having connection with the employment of employees. As such, all the duties and obligations of the employer that apply in the office, shopfront or yard will continue to apply for the duration of the function or party. In practical terms, this could mean the organisation (or even individual employees of the employer) could be held liable for occupational health and safety breaches for failing to provide a working environment that is safe and without risks to health.

Injuries or illnesses arising out of or in the course of the function may be compensable under statutory workers compensation schemes and inappropriate conduct or comments could lead to harassment or discrimination claims. Additionally, employees must also be aware that they may be disciplined for their actions at the party, as the terms and conditions of their contract and any applicable company policies apply for the duration of the function. The employer’s liability may be limited in some circumstances where the employee has engaged in serious misconduct or for instances that occur after the completion of the organised function. However, such exceptions are assessed on a case-by-case basis. In all circumstances it is clear the employer must be able to demonstrate all reasonable and proportionate steps were taken to educate staff on appropriate standards of behaviour, to provide a safe environment, and eliminate discrimination and sexual harassment.

Some tips to minimise your risk of things going wrong:

  • Plan your function – Select a venue wisely and provide all employees with the details of the function, including clearly communicating start and finish times;
  • Educate and set the rules – Ensure all employees are aware it is a work function and, as such, that the usual code of conduct and associated policies and standards of behaviour apply. Now is also a good time to review relevant policies and consider training employees in acceptable workplace behaviour. For example, Bullying and Discrimination awareness training for managers and employees;
  • Safety – Provide alternative transport options including designated drivers, Ubers and taxi vouchers.

Other Questions

Is the employer liable for the actions of employees at an ‘after party’ event?

Employers may be vicariously liable for the actions of their employees if such actions are in the ‘course of’ or within the ‘scope’ of employment. This will differ on a case by case basis, depending on the factual circumstances of each situation. As discussed above, advising staff of the clear finishing time of the organised function and avoiding sanctioning or funding any post-function activities will assist in reducing such liability.

Does the employer have to provide transport after the function?

Employers have a duty of care to provide a safe workplace environment to all employees. Legislation concerning liability for injuries sustained whilst travelling to or from the workplace (or a workplace function) differs from state to state, but the possibility of providing transport to employees after the event should be considered as part of the planning phase, but is not obligatory.

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!


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Business Tax Tips – Managing Small Business Taxes and Obligations

Business Tax Tips – Managing Small Business Taxes and Obligations

Managing Small Business Taxes and Obligations

Running a small business has many extra requirements – one of the most important is planning for reporting and managing small business taxes. Here are tips for the ATO – Australian Tax Office, to get you organised –

Reporting and paying tax

As soon as you start up your business, you need to plan for how you will pay the tax you will owe each year when you lodge your tax return.

Paying tax in your first year

In your first year of business, you can stay on top of your obligations by:

  • making tax pre-payments into your tax bill account;
  • putting money aside for your expected tax bill;
  • voluntarily entering into instalments.

See also:

Paying tax by instalments

Once you lodge your first income tax return and report a tax-payable amount above a certain threshold, you will automatically enter the pay-as-you-go (PAYG) instalment system.

If you voluntarily enter into instalments prior to lodgment of your first tax return, you will be able to make quarterly payments towards you tax bill.

See also:

Reporting

Once you’re up and running, you’ll need to report your business income and other tax information. The key reports you should be aware of are:

  • Business Activity Statement (BAS) –

    • the main taxes you will report on will be GST (if you’re registered for GST)
    • any tax you withhold from employees’ pay
    • instalments towards your own tax once you are in the pay as you go instalments system;
  • Income tax return  
    • to report your personal and business income and claim deductions.

Most of your business reporting can be done online.

Next steps:

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


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Business Tax Tips – Reducing Red tape in Australia

Business Tax Tips – Reducing Red Tape In Australia

Reducing Red Tape In Australia

Did you know there is a current 4 year plan where the ATO is working hard at reducing red tape in Australia for tax payers?

The ATO says at Reducing red tape Reforms to the Australian Taxation Office

In the 2015–16 Budget, the Government announced it will provide funding over four years to deliver an improved experience for clients in their dealings with the Australian Taxation Office (ATO).

Red tape will be reduced and future administrative savings delivered through investment in three foundational initiatives: a digital by default service for provision of information and making payments, improvements to data and analytics infrastructure and enhancing streamlined income tax returns through the my Tax system for taxpayers with more complex tax affairs.

The package of service improvements supports the Government’s commitment to reduce red tape and forms part of the Government’s digital transformation agenda.

This measure delivers on the Government’s election commitment.

Click for links with information on the legislation

A detailed website on tracking the initiative is https://www.cuttingredtape.gov.au/  – It says –

The Government has committed to reducing the cost of unnecessary or inefficient regulation imposed on individuals, business and community organisations by at least $1 billion a year. An important part of this commitment is the development of a Framework to review the performance of Commonwealth regulators.

This Framework isn’t just for regulators. It will benefit business and the community, including individuals. Find out more.

What are YOUR thoughts and experiences? Comment below! 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!


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Business Tax Tips – Taxable Payments Annual Report – Building Industry

Business Tax Tips – Taxable Payments Annual Report – Building Industry

Taxable Payments Annual Report – Building Industry

Are you a business in the building and construction industry? You will probably need to report the total payments you make to each contractor for building and construction services each year.

If you’re a business that is primarily in the building and construction industry, you need to report payments you make to contractors if both of the following apply:

  • you make payments to contractors for building and construction services
  • you have an Australian Business Number (ABN).

Contractors can be sole traders (individuals), companies, partnerships or trusts.

You need to report these payments to us on the Taxable Payments Annual Report by 28 August each year.

Activities and services that are considered to be building and construction are broad. Some examples include architectural work (including drafting and design), certification, decorating (including painting), engineering, landscaping and construction, project management and surveying.

Payments you need to report

Report only payments you make to contractors for building and constructions services.

Contractors can be sole traders (individuals), companies, partnerships or trusts.

If invoices you receive include both labour and materials, whether itemised or combined, you report the whole amount of the payment, unless the labour component is only incidental.

The definition of building and construction services is broad – it includes any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:

  • alteration
  • assembly
  • construction
  • demolition
  • design
  • destruction
  • dismantling
  • erection
  • excavation
  • finishing
  • improvement
  • installation
  • maintenance (excluding the maintenance, service or repairs of equipment and tools)
  • management of building and construction services
  • modification
  • organisation of building and construction services
  • removal
  • repair (excluding the service or repairs of equipment and tools)
  • site preparation.

Get more details from the ATO website HERE             

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!

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Business Tax Tips –GST Error Correction – How to put it right

Business Tax Tips –GST Error Correction – How to put it right

Business Tax Tips –GST Error Correction – How to put it right

On the Australian Tax Office (ATO) website has information on what to do when you find you have a GST error correction to make – and how to put it right in a way that is easier than revising a prior statement, as well as you can save penalties (see!… the ATO is really NOT your business enemy!)

Correcting GST Errors –

If you make a mistake (that fits the definition of a GST error) when reporting GST on an activity statement, you can correct that error on a later activity statement if you meet certain conditions.

The benefit of correcting a GST error on a later activity statement is that you will not be liable for any penalties or general interest charge (GIC) for that error.

Generally, it is easier to correct a GST error on a later activity statement than to revise an earlier activity statement. Revising an earlier activity statement that contains an error can incur penalties or GIC.

Here are a series of links about correcting GST errors –

o    options for correcting an error

o    definition of a GST error

o    types of GST errors

o    correcting credit errors

o    correcting debit errors

o    how to make corrections on a later activity statement

o    when a credit or debit error cannot be corrected on a later activity statement

o    what is not a GST error

o    example of correcting GST errors on a later activity statement

o    record keeping

o    more information.

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