Training you – Solving Problems – Or We do your books for you! For Business owners and fellow bookkeepers!

Bookkeeping – Train Troubleshoot or we do it for you! MYOB Reckon Xero


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Business Finance 101 – How does the Cashflow Statement Work – Overview for Business Owners

Business Finance 101 – How does the Cashflow Statement Work - Overview for Business Owners

How does the Cashflow Statement Work – Overview for Business Owners

There are 2 popular financial statements that are commonly given for a business – a profit & loss or income statement, a balance sheet or statement of position, but rarely used is the cashflow statement (or statement of cash flows). The purpose of the cashflow statement is to highlight the major activities that directly and indirectly impact cash flows and hence affect the overall cash for the business.

Business owners usually know by “feel” what their cash flow is like, and they should monitor cash for a very good reason – without a sufficient cash balance at the right time, a company can miss golden opportunities or may even fall into bankruptcy. 

The cash flow statement answers questions that cannot be answered by the income statement and a balance sheet. For example a statement of cash flows can be used to answer questions like where did the company get the cash to pay dividend of nearly $14,000 in a year in which, according to profit & loss / income statement, it lost more than $10,000?

The cashflow statement is a valuable analytical tool for business managers as well as for investors and creditors, although managers tend to be more concerned with forecasted statements of cash flows that are prepared as a part of the budgeting process. The statement of cash flows can be used to answer crucial questions such as the following:

  1. Is the company generating sufficient positive cash flows from its ongoing operations to remain viable?
  2. Will the company be able to repay its debts?
  3. Will the company be able to pay its usual dividends?
  4. Why is there a difference between net profit/income and net cash flow for the year?
  5. To what extent will the company have to borrow money in order to make needed investments?

For the statement of cash flows to be useful, it is important to use a common definition of cash. It is also important that a statement be constructed using consistent guidelines for identifying activities that are sources of cash and uses of cash. The proper definition of cash is broadly defined to include both cash and cash equivalents.

Cash equivalents (applicable more for large companies) include short term, highly liquid investments such as treasury bills, commercial paper and money market funds that are made solely for the purpose of generating a return on temporary idle funds. Instead of simply holding cash, most large companies invest their excess cash reserves in these types of interest bearing assets that can be easily converted into cash. These short term liquid investments are usually included in marketable securities on the balance sheet. Since such assets are equivalent to cash, they are included with cash in preparing a statement of cash flows

The 3 sections of cash flow statement (each has an inflow and outflow section):

Business Finance 101 – How does the Cashflow Statement Work – Overview for Business Owners

How does the Cashflow Statement Work – Overview for Business Owners

Operating Activities: (mostly income statement / profit & loss)

Operating activities shows the cash effects of transactions such as –

  • cash receipts from sales of goods and services and
  • cash payments to suppliers and employees for acquisition of inventory, taxes, interest on loans

Investing Activities: (mostly long term assets)

Investing activities generally show long term assets (and sometimes debt/equity securities) which include –

  • sale/disposing of plant, equipment
  • sale of debt or equity securities
  • acquiring plant and equipment
  • acquiring debt or equity securities

Financing Activities: (mostly long term liabilities and equity)

Financing activities involve liability and stock holder’s equity items and include obtaining cash from creditors and repaying the amounts borrowed and obtaining capital from owners and providing them with a return on, and a return of, their investment.

  • Increase in debt / loans taken on
  • Payment/redemption of debt facilities / loans
  • Dividends paid

Next month we will work through an example

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MYOB – Taxable Payments – When is it due and how to set up and report Taxable Payments Annual Report (TPAR)

MYOB – Taxable Payments – When is it due and how to set up and report Taxable Payments Annual Report (TPAR)

MYOB – Taxable Payments – When is it due and how to set up and report Taxable Payments Annual Report (TPAR)

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 2 Steps to set up and generate a Taxable Payments Annual Report from MYOB software.

1   ATO Requirements

The ATO website tells us – (From Here)

You may need to lodge a Taxable Payments Annual Report by 28 August each year if you are a:

The Taxable Payments Annual Report tells us about payments you have made to contractors for providing services. Some government entities also need to report the grants they have paid and payments they make to certain other entities.

Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.

The details you need to report about each contractor are generally found on the invoice you should have received from them. This includes:

  • Their Australian Business Number (ABN), where known;
  • Their name and address;
  • Gross amount you paid to them for the financial year (including any GST).

We use this information to identify contractors who haven’t met their tax obligations.

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

How to track reportable payments in AccountRight

Once you set up MYOB, you can start marking transactions as reportable including:

  • 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 so you’ll be able 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.
When 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

1. Go to the Card File command centre and click Cards List. The Cards List window appears.

2. Click the Supplier tab.

3. Click the zoom arrow of the card you want to set up. The Card Information window appears.

4. Click the Buying Details tab.

5. 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.

6. 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 create the taxable payments report

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:

i.    Review all transactions marked as reportable;

ii.    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:

i.    Click Create Taxable Payments File. The Save As window appears;

ii.    Select the location to store the file and click Save.

8. Click Finish to close the assistant.

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much!

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

Or ask a question – Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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MYOB Quickbooks – Tax Tables for 2018-2019 – Which versions MYOB – Update

MYOB Quickbooks – Tax Tables for 2018-2019

MYOB Quickbooks – Tax Tables for 2018-2019

Update on versions the tax tables are compatible with – updated tax tables for 2018/19 are now ready – in that we advised that tax tables were available for all MYOB® versions up to v19.14. It may be concluded that those with versions such as v19.5 or v19.7 were no longer provided tax tables for those versions, after all 19.5 is higher than 19.14 – right? Just to clarify – tax tables are available for all v19 versions, including:

v19.0, 19.5, 19.6, 19.7, 19.8, 19.9, 19.10, 19.11, 19.12 and 19.13 – these are available HERE.

And for versions v19.14, and AR2014-2018, go find the special pages under “Products” in the top menu –  GO HERE.

FGHT MYOB v19.4 and 2014-2018

 

 

 

Parliament agreed to the Budget tax cuts last week, meaning new tax rates will apply from 1 July 2018 and will now affect most employees – not just those with student loans as previously expected. As a result, HELP/SSL/TSL and SFSS rates and thresholds has caused every tax table to change – see the ATO website for more details.
Does your MYOB/Quickbooks software have out of date tax tables, or you know you need them from experience every year?

(To find what you have, in MYOB, click Set Up then General Payroll Information. In about the middle is the table date at the start of that tax year it applies to.

To find the tables in Quickbooks (AUST version), open your company file. On the menu bar choose Employees, then Tax Table Information. The next screen will have an entry showing “Calculations are updated for:“. For the 2012-13 financial year, the date needs to be 1/7/2012.).

Tax tables become out of date nearly each year if tax rates and/or Medicare and HECS thresholds are changed by the Tax Office (ATO). MYOB & Quickbooks/Reckon only supply new tax tables via full software annual subscription. You can no-longer buy the  latest tax tables separately as many years ago. Users must upgrade to a new version or take out Cover under their support program to receive the latest tables or ‘pay2myob.bin’ file for earlier versions (MYOB), or in QuickBooks, a file called taxtbl.oz  to keep payroll compliant. (If you want assistance to upgrade to the latest MYOB call Paul – 0407 361 596 or email us – info@accountkeepingplus.com.au).

The special tax file (eg ‘pay2myob.bin’) has been specially formatted so that it disallows any manual edit. Additionally, each version is formatted specially, so you can’t use a tax file formatted for MYOB Version 19 with say Version 16. For the Mac version (AccountEdge®) the tax table file is called “MYOB Tax Tables” or in v9 to v9.6 has a “.tax” extension. Everything else though is the same and all the comments here apply equally to the Mac version, and Quickbooks.

Note third-party tax tables cannot be used in MYOB 2011 onwards – you MUST have subscription or upgrade. Contact the software supplier.

If you have older desktop versions, there is a Solution up to MYOB v19.13 and Account Edge 15.5 Third party updated tax tables available for $82 provide a substitute, have been tested by ourselves and work with many prior versions. They are for those who want to continue to use their current versions of MYOB® without the need to upgrade. Note that there is nothing in your license agreement that prevents you using 3rd party tax tables.

Installation is simple. The tables are supplied with easy to follow video and instructions and instantly downloaded after secure credit card  payment in most instances, or will be emailed to you. You also receive a PDF copy of the applicable Aust Tax Office Weekly Tax Table for you to check the accuracy of the calculations. After-sales email support is available for any installation or setup issues you may encounter. If you would like Account Keeping Plus to install for you, we can do so by remote desktop – Teamviewer (free software) – or $50+GST. Call or email for instructions.

Note NO changes are made to the software. The only changes made are to the tax rates in your company data file that the software calls upon to calculate PAYG Withholding in a pay, when processing payroll. The changes made are not permanent and can be reversed by reloading the tax tables from your current tax table file – simply moving a file in the software folder

These third-party tables are available, which Account Keeping Plus have tested in the software and tested against the ATO tables and work perfectly for us and our clients. To get more details and purchase for your MYOB – click the grey box to the right – “Tax Tables” or CLICK HERE

For the latest tax tables, to download the PDF and keep a copy, or use the Tax Withheld Calculator online all from here ATO Tax Tables – PDF’s

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

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

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


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Business Tax Tips – Taxable Payments Annual Report – Building Industry (and others to be added?)

Business Tax Tips – Taxable Payments Annual Report – Building Industry and others to be added

Taxable Payments Annual Report – Building Industry and others to be added

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

The ATO website tells us – (From Here)

You may need to lodge a Taxable payments annual report by 28 August each year if you are a:

  • Business in the building and construction industry
  • Government entity
  • May extend to Couriers and Cleaners

The Taxable payments annual report tells us about payments you have made to contractors for providing services. Some government entities also need to report the grants they have paid and payments they make to certain other entities.

Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.

The details you need to report about each contractor are generally found on the invoice you should have received from them. This includes:

  • Their Australian business number (ABN), where known
  • Their name and address
  • Gross amount you paid to them for the financial year (including any GST)

We use this information to identify contractors who haven’t met their tax obligations.

Find out about:

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

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


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MYOB Quickbooks – Tax Tables for 2018-2019

MYOB Quickbooks – Tax Tables for 2018-2019

MYOB Quickbooks – Tax Tables for 2018-2019

For an update on this post, see THIS POST

Parliament agreed to the Budget tax cuts last week, meaning new tax rates will apply from 1 July 2018 and will now affect most employees – not just those with student loans as previously expected. As a result, HELP/SSL/TSL and SFSS rates and thresholds  cause every tax table has changed – see the ATO website for more details. 

Tax Rate Table 2018-2019

Does your MYOB/Quickbooks software have out of date tax tables, or you know you need them by experience every year. (To find what you have, click Set Up then General Payroll Information. In about the middle is the table date at the start of that tax year it applies to).

Tax tables become out of date nearly each year as tax rates and/or Medicare and HECS thresholds can be changed by the Tax Office (ATO). MYOB only supply new tax tables via full software annual subscription. You can no-longer buy the  latest tax tables separately as many years ago. Users must upgrade to a new version or take out Cover under their support program to receive the latest tables or ‘pay2myob.bin’ file for earlier versions (MYOB) to keep payroll compliant. (If you want assistance to upgrade to the latest MYOB call Paul 0407 361 596 or email us – info@accountkeepingplus.com.au).

The special MYOB tax file (eg ‘pay2myob.bin’) has been specially formatted so that it disallows any manual edit. Additionally, each version is formatted specially, so you can’t use a tax file formatted for MYOB Version 19 with say Version 16. For the Mac version (AccountEdge®) the tax table file is called “MYOB Tax Tables” or in v9 to 9.6 has a “.tax” extension. Everything else though is the same and all the comments here apply equally to the Mac version.

Note: Third-party tax tables cannot be used in MYOB 2011 onwards – you MUST have subscription or upgrade. Contact the software supplier.

If you have older desktop versions, there is a Solution up to MYOB v19.13 and Account Edge 15.5 Third party updated tax tables available for $82 provide a substitute, have been tested by ourselves and work with many prior versions. They are for those who want to continue to use their current versions of MYOB® without the need to upgrade. Note that there is nothing in your license agreement that prevents you using 3rd party tax tables.

Installation is simple. The tables are supplied with easy to follow video and instructions and instantly downloaded after secure credit card  payment in most instances, or will be emailed to you. You also receive a PDF copy of the applicable Aust Tax Office Weekly Tax Table for you to check the accuracy of the calculations. After-sales email support is available for any installation or setup issues you may encounter. If you would like Account Keeping Plus to install for you, we can do by remote desktop – Teamviewer (free software). For $50+GST. Call or email for instructions.

Note: NO changes are made to the software. The only changes made are to the tax rates in your company data file that the software calls upon to calculate PAYG Withholding in a pay, when processing payroll. The changes made are not permanent and can be reversed by reloading the tax tables from your current tax table file, simply moving a file in the software folder

These third-party tables are available, which Account Keeping Plus have tested in the software and tested against the ATO tables and work perfectly for us and our clients. To get more details and purchase for your MYOB – click the grey box to the right – “Tax Tables” or CLICK HERE.

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

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

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

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


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Reckon – Single Touch Payroll – STP – reporting in Reckon One – Accounts Hosted – Accounts 2018

Reckon - Single Touch Payroll – STP - reporting in Reckon One – Accounts Hosted – Accounts 2018

Single Touch Payroll – STP – reporting in Reckon One – Accounts Hosted – Accounts 2018

We wrote the other week all about what Single Touch Payroll (STP) Reporting is about, and what the ATO tells us.

Reckon, an Australian company, is a popular accounting software for many small & medium businesses.

Here is how they are preparing for STP, from the Reckon and STP single touch payroll page

We’re supporting STP across our online and desktop range. The following products will be ATO compliant by 1 July 2018*:

  • Reckon One;
  • Accounts Hosted;
  • Reckon Accounts 2018 version onwards;
  • Payroll Premier 2018/19 version onwards.

We’ve developed a new application called GovConnect STP that will make meeting your STP requirements quick and easy. GovConnect STP acts a gateway to the ATO enabling you to view and lodge your STP reporting no matter what Reckon product you use.

✓ Lodge directly to the ATO
✓ Review before you submit
✓ No extra cost

✓ ATO status messages
✓ Review past submissions
✓ MFA secure

Single Touch Payroll Checklist

Reckon also have a created a checklist with some important questions to consider to help you get prepared for STP. Sign up to download.

And from the Reckon Community, Rav the Community Manager, explains further detail

  1. You won’t need to do anything other than upgrade to the latest version of Reckon Accounts Hosted which will be released in June.
  2. No, we are not using an intermediary to lodge.
  3. There is no additional cost to lodge using SBR through Reckon Accounts Hosted.
  4. Users cannot do testing. All data transmitted through the service will be seen as live data as the ATO does not have a mechanism to set a lodgement as test data (aside from their test service which is for development use only and uses specific data).

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much!

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

Or ask a question – Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Business Finance 101 – 6 MORE tips! Plus 4 individual tax tips – End of Financial Year tax tips 2018

Business Finance 101 – 6 MORE! Plus 4 individual tax tips - End of Financial Year tax tips 2018

6 MORE! Plus 4 individual tax tips – End of Financial Year tax tips 2018

BUSINESS

1. Get more from your director’s bonus

If you are expecting a pre-30 June bonus, you may be able to sacrifice your pre-tax salary or bonus into super rather than receive it as cash. As with the deductible contributions, this could reduce tax on your salary or bonus by up to 34%, and will allow you to take advantage of the contribution caps that apply in this financial year. Once your money is invested in super, the tax going in is only 15% and also, tax on earnings is capped at 15%, which may compare favourably to investments held in your own name.

2. Pay quarterly/monthly super

Super Guarantee contributions must be paid before 30 June to qualify for a tax deduction in the 2017/18 financial year. You might consider bringing forward the June quarter contribution payments. We recommend allowing plenty of time for it to reach the super funds (5-14 days some funds require).

3. Bad debt review

Review all your bad debtors. Write-off all those you think are unlikely to pay to enable a tax deduction this year. We recommend recording this in the minutes of the business after ensuring that all reasonable steps have been taken to recover the debt.

4. Prepay expenses

Prepaying certain expenses such as rent, repairs and office supplies before year end can reduce your current year tax liability. If payments are due early next financial year, a pre-payment may entitle you to the tax benefit much earlier.  The rules differ depending on the type of entity so please call your tax agent, if you would like more clarification.

5. Stocktake

Trading stock should be reviewed before 30 June, either by a physical count or from a perpetual stock record system. Small Business Entities can be exempt from conducting a yearly stock take if the value of stock has moved by less than $5,000 during the year. Tax is paid on the value of stock at the end of the financial year so consider selling or disposing of slow moving stock so that it is not included in the count.

6. Franking credits

If you are planning on paying dividends out to shareholders before the end of the year, it is worth reviewing the company’s franking account to ensure that the company has paid sufficient tax to enable the dividends to be fully franked. This may mean paying ahead of scheduled payments in an arrangement with the ATO. For assistance with calculating your franking account balance, please talk to your tax agent.

INDIVIDUALS

A. Get a super top up from the Government

If you earn $35,454 – $51,021 pa, of which at least 10% is from employment or a business, and make a personal after-tax super contribution, you could qualify for a Government co-contribution of up to $500. 

B. Boost your partner’s super and reduce your tax

If you have a spouse who earns less than $10,800 pa, consider making an after-tax super contribution on their behalf, and you could receive a tax offset of up to $540.

C. Use super to manage Capital Gains Tax

If you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income from eligible employment, you may be able to claim a tax deduction for a contribution to superannuation, which could reduce or offset your capital gain. You will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement).

D. Make tax deductible super contributions

If you earn less than 10% of your income from eligible employment (eg you are self-employed or not employed), you are generally able to claim a tax deduction for personal contributions to superannuation. As with super, you will need to be eligible to contribute to superannuation (which means you are under the age of 65, or under 75 and meeting the work test), and be comfortable having your contribution preserved in super until you meet a condition of release (eg retirement). If you claim a deduction for it, the contribution you make will be taxed at 15% in your super fund, so your tax saving will be the difference between your marginal rate and 15% – which could be up to 34%.

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much!

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

Or ask a question – Email info@accountkeepingplus.com.au or call 0407 361 596 Australia