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Bookkeeping – Employee Entitlements – Staff Entitlement balance on old staff

BookkeepBookkeeping – Employee Entitlements – Staff Entitlement balance on old staffing – New Year Resolution – Organising bookkeeping tips for small business – Part 2

Bookkeeping – Employee Entitlements – Staff Entitlement balance on old staff

With a new client the last couple of months, we do an overall review, then as time permits, review the settings and details further, such as staff entitlement balances in the system, and send over a report to review. The client emailed:

“Clearly our staff records are WELL out of date as most of these people are no longer with us, and been paid out their leave on termination.

I will edit this document and highlight whom has left –

Can you also please ensure that the leave is correctly accrued based on their base wage “ordinary pay” and not over that please, as per fair work guidelines.

I also need you to check DS, as he resigned as was paid out, and then re-commenced employment with us.

DS left at the end of February, and then recommenced on the 13th August.

Therefore his employment is broken, therefore can you please check this figure.

I would suggest the one I have highlighted was the one he was paid out on resignation.

I would also suggest that Director’s leave details are incorrect considering X should be from 1987, and mine 1992.”

Answers –

Staff no-longer with usNOTE in MYOB, the report will include inactive staff – and most of these are also part of what needs tidying up for STP – Single Touch Payroll (many also have incomplete addresses and info that causes an STP error, as Hari and I found in Oct 2018).

Many DO NOT have TERMINATION dates – that is why they still have balances – another part of the STP tidy-up required (termination dates, which also eliminates requiring the address detail).

Leave Balances left – it still may be correct and paid out, as you said they had been paid – eg when they were paid leave, if another payroll category is used – as MYOB recommends, called “Unused Holiday Leave”, then the balances of accrued leave will not be reduced to zero – depends how the previous bookkeepers did it.

Termination datesfrom Hari and my investigation weeks ago, it looks like many of the old staff are missing TERMINATION dates – this automatically wipes off the leave balances.

I believe that may be the case with all the old staff you highlighted.

Often termination is not manually entered on staff file – so if they left in past years, not easy to find the dates – we may need to enter 30/6/17, last tax year for saving time – TBA.

Hari and I started that back in Oct for half an hour, but there were over 65 errors/issues including termination dates that needed attention, so we had to leave it as daily work and wages was the priority, as reported to you, we need to come back to STP.

Leave Accrued Calculation MYOB – Hari and I reviewed the calculations in MYOB already – back in Oct  – they are set correctly (%) and to be in proportion to work.

The problem is they cannot be given a max –

Holiday Leave accrual

It is difficult –

If certain staff consistently work OVER 38 hrs, we could set a fixed rate per week at 38 hrs.

But – if we use “Equals” for a fixed number of hours a week – they can still accrue too much if they work UNDER 38 hrs.

And if they SOMETIMES work LESS than 38 hrs – they will accumulate TOO much.

Not sure why MYOB has not allowed a max to be set – but it must not be requested enough, above the many other updates they get requests for each week and have to prioritise which are urgent.

For staff & directors/owners, we can us the Fair Work calculator to check the correct leave – however, have past year’s leave for you and T been recorded – manually and in MYOB correctly?

If so great, if you are sure and can show how the amount was derived – we can update both your records with those amounts.

For all staff – since MYOB rolls the payroll over each year – past years cannot be accessed to see what was recorded,

EACH year needs to be restored and opened!

It is a bit of a job to restore back-ups of each MYOB payroll year back up after payment summaries are completed.

And from asking T in OCT and our search of the system, there is no central storage of all the year-end back-ups of all past years of the MYOB file – unless you know/have?

(This is common in many businesses – the back-up is not kept or not labelled well, and are very rarely needed again – but are part of the record-keeping obligation annually!)

It may require estimates for current staff leave – eg Ann leave is not the same each year at Christmas it seems, depending on the work load in Dec/Jan?

We can start a Calendar to record shut downs over Dec/Jan form now on, so we know the current staff annual leave.

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Cashflow Tips – Ways to raise cash for business – Some business cashflow tips

Cashflow Tips - Ways to raise cash for business – Some business cashflow tips

Cashflow Tips – Ways to raise cash for business – Some business cashflow tips

Handy ways to raise cash for business – some cashflow tips from an Australian Entrepreneur, Brad Sugars

1.  Know your expenses when discounting
Although discounting — through coupon sites like Groupon and BuyWithMe or even on your own — can help you attract new customers, selling anything at a loss won’t help you generate a positive cash flow.
My view? Never discount. But if you do, know the costs and impact of what you’re offering and be prepared for the fallout. Among other things, you’ll need to know your overall cost basis — that is, what you paid for something. You should also know your how much you should ideally charge, the cost of your offer and the profit margins on your product or service. How else will you know if your discount has you breaking even or operating at a loss?

2.  Bundle products and services
Even though discounting isn’t always recommended, adding value is. By creating bundles of products or services, for instance, businesses can inject tremendous amounts of perceived — and tangible — value into their offerings for very little cost.
A good example is the maintenance agreements some car manufacturers are now providing with the purchase of a new car. Not only does that type of offer help allay a major concern or frustration customers have – paying for a breakdown or time lost at the dealership – it also offers real value in terms of limiting out-of-pocket maintenance costs.
Put more simply, you can increase your price point initially since you’ve helped lower a perceived risk by offering something as basic as a guarantee.

3.  Create a back-end product or service
If you know your initial offer to reel in new customers won’t be profitable (loss leader), find ways to create higher price points on back-end products or services. Perhaps the first hour of catering is free, but subsequent hours shoot up in price. Or maybe an attorney will agree to draft your will for less if she thinks you’re a likely candidate for estate-planning consultations in the future.

4.  Encourage repeat business
If you’re in a volume-driven business like retail, landing repeat shoppers is your holy grail for cash flow, profit and growth. In most cases, you won’t start to profit on a customer until the third, fourth or even fifth transaction. For this reason, you need to devote your efforts toward getting customers coming back — and more often.
Consider loyalty programs, VIP offers and other frequent-shopper programs, which can be ideal vehicles for systematizing repeat business. Also keep in mind that the word “free” is a popular incentive among shoppers, and the costs of funding a freebie may easily be covered as long as you’re dealing with excess inventory or low-cost, but valuable add-ons.

5.  Pre-sell products or services
For owners who want to encourage sales sooner, pre-sell your products or services. You might couch the pre-sale as a way for consumers to plan for their future or get a jump on shopping. You can also offer to take old, out-dated products back at a pre-arranged price.

Taken from Entrepreneur article HERE

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Business Tips – Ideas to grow business sales

Business Tips – Ideas to grow business sales

Ideas to grow business sales

Here are a couple of ways your business can grow with some work and persistence!

Idea 1 – Add Complementary Products and Services
One way to increase sales and bring new customers to your sales base is adding new complementary products and services. But how do you decide what to add without turning your business into a third-rate department store?

Start by reviewing the definition of your business. For example, if you sell house siding, ask yourself, are you in the siding business or the exterior building materials business? The result may be that you redefine and expand your business to add gutters and downspouts, roofing and other coverings to your product line!
Another surprisingly simple way to build a list of new products or services is to ask your customers what else they might buy from you if your business sold it. A few friendly conversations with customers and staff will likely get you more information than thousands of dollars spent on professional customer surveys. Be sure to ask how much they would want to buy and how often to get a sense of whether the demand would be great enough to warrant the additional costs of building up this area of your business. (To learn how to build your network, read Small Business: It’s All About Relationships.)

Idea 2 – Look for New Market Niches
One way to find a new market niche is to seek alternative applications for your existing products and services, and we have a Cheez-y example of how this works. Kraft started out with a spreadable cheese product in a jar that could be spread on crackers for snacks – it was called Cheez Whiz. This was fine, but selling a cracker topping will only take you so far in this world. That’s why Kraft expanded the scope of Cheez Whiz and started promoting it as a base for a variety of dips and food toppings. Soon Cheez Whiz was an ingredient in all sorts of recipes. Kraft wasn’t satisfied with only human consumption though. One of the latest unique uses of Cheez Whiz comes from a California fishing lure and bait company that sells Cheez Whiz in a pre-packaged bait application, and it buys Cheez Whiz in 55 gallon drums!

If Kraft had stuck with the spreadable-cheese concept, sure, it would have covered a lot of crackers. But by thinking outside of its original intent, Kraft expanded the market and attracted customers it never would have targeted initially.

(Source and more Ideas Investopedia)

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Business Tax Tips – Starting a business – The tax and super responsibilities

Business Tax Tips – Starting a business – The tax and super responsibilities

Starting a business – The tax and super responsibilities

Starting a business? Do you know your tax and super responsibilities? The ATO (Australian Tax Office) have many things to support you with the running (and start-up) of your business.

Here is what is available with some explanation –

From ATO site

When you start a business, there are tax and super responsibilities you need to be aware of, including:

  • the tax implications of your business structure
  • whether you’re entitled to an ABN
  • registering your business
  • records you need to keep
  • deductions you can claim.

We provide information about the key things you need to know and do when starting your own business.

Find out about:

For your tax and super basics, this video is a good starting point:

AKP link 22-11-18

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Cashflow Tips – 5 ways to improve cashflow business success

Cashflow Tips - 5 ways to improve cashflow business success

Cashflow Tips – 5 ways to improve cashflow business success

Here are 5 ways to help improve cashflow business for success and get it under control – remember it is an on-going monitoring that keeps you on top – measure and tweak, measure and tweak…!

One of the things many business find a burden is that cashflow can easily get out of hand and several studies suggest that financial miss-management is one major contributor to business failure.

Take action on these –

1.       Look at who owes you – WEEKLY.

Check your debtors/accounts receivable report every week – get onto those tardy payers – send Statements a minimum every Fortnight! A month is too big a gap and easy to slip the mind…

2.       Plan for highs and lows.
Be aware of possible lean cashflow patches coming up and plan for them!. Avoid major purchases from your business’ working capital unless you are sure you have cash to cover it. A cashflow budget will help you see this – eg when revenue is down on forecast you expected (eg the average monthly required, or based on same time last year, or certain % growth if that is the current trend).

3.     Have finance products working to your benefit.
Overdrafts, premium funding, lease facilities and cashflow funding products can all be excellent tools to help boost a business’ cash. Even the business credit card can be a good way to ease the squeeze as long as you are sure the debt can be paid before interest kicks in, which is the best way to handle credit cards!

4.     Avoid penalties.
Keep on top of credit cards, taxes and compliance to save the cost of fines… and the stress!

5.     Keep your hands out of the till.
Make cash drawings for personal purposes as minimal and follow conservative cashflow forecasts. Take a weekly wage for yourself so it’s easier for the bookkeeper/accountant, and gives stability to regular expenses and drawings so you can PLAN better!

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Bookkeeping –Top 7 ways to organise your accounting

Bookkeeping –Top 7 ways to organise your accounting

Bookkeeping –Top 7 ways to organise your accounting

When it comes to running your own business, keeping your accounting in-order must be an achievable goal. That said, there are times where a little lack of discipline can cause some headaches down the track.  Rather than getting yourself in a bind later, let’s have a look at some simple steps you can take to help keep your accounting organised.

1. Bank Accounts – Separate and Secure

Mixing up business and private transactions in your bank accounts is a recipe for disaster. Always use separate business bank accounts for your business transactions; your private bank accounts should be kept wholly for private transactions. The cost of business bank accounts these days is very low, and there is no excuse for not having a business bank account or accounts. Get in the habit of making regular transfers of drawings from your business to your private bank account.

2. Cash payments – Avoid cash, where possible

It’s best not to use cash for your business transactions, as losing the receipts is common (and extra work) but if you use it in an emergency, then reimburse yourself using a suitable expense claim (to document the transaction, which analyses the expenses between expense categories) so that again, all business transactions are recorded and the GST is safely captured.

3. Credit Card accounts – Stay on top monthly

If you use a credit card for your business that is absolutely fine, but you should always pay your business credit card bills from your business bank account — that way no business transactions are omitted and all GST is captured. Similarly, if you use the wrong Eftpos card by mistake (such as the one for your private bank account) reimburse yourself documenting using a suitable expense claim document or simply transferring the correct amount to your personal bank. Then there is a clear record in your accounts.

4. Bartercard – Managing transactions

If you must use Bartercard, then it’s so much easier if you use live bank feeds to record all the transactions on the Bartercard statements because there are a lot of them (especially the fees and charges). Otherwise, it’s a total pain from the bookkeeping point of view. (Where not available with your software version, here is how to enter the transactions).

5. Accounts Receivable – Implement process to report and remind methodically

Always ensure you have a system for recording (good accounting software) whether your customers, clients or patients have paid your accounts receivable. Of equal importance, it’s important to track how old the debts are if unpaid so you can chase them up promptly. Your system should also record any special arrangements to pay over time or the excuses given for non-payment. It doesn’t have to be sophisticated, and if you are not using your accounting software to issue invoices, just write on the face of the invoice whether or not they have been paid, filing separately those paid from those awaiting payment. It’s surprising how many business people do not know who owes them money, which is just plain crazy considering how hard it is to earn the money in the first place!

6. Accounts Payable – Don’t forget about!

Similarly, always have a system for your accounts payable. I’ve had two clients pay me twice this month for the same invoices, which is not only a hassle for me because I have to repay the money, but it is risky for them as not all suppliers are as honest as I am! It’s best to be totally organised with your accounts payable and pay them on the 20th of the month so that your suppliers know when they’re going to be paid and you know when you’re going to pay them. Research shows that the most successful businesses pay their bills on time!

7. Paperwork – Organise and digitise where possible

Keep all your business paperwork in an orderly fashion. Nowadays you can scan on the paperwork and keep this electronically, either on your accounting software or in a simple electronic filing system using the US date system (eg 2 May 2018 written as 180502) so that everything is filed in chronological order. Keep a separate e-folder for each month and year. If you’re old-fashioned you can keep the paperwork in physical form, but now so much arrives electronically it’s pretty daft printing it out and wasting all that ink and paper!


Keeping your accounting organised will save you time and money, and also help you make your business more successful. Perhaps even more important, it should result in a whole lot less stress!

Based on the MYOB software blog at

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Business Tax Tips – GST on Hire Purchase – How it works and how GST applies

Business Tax Tips – GST on Hire Purchase – How it works and how GST applies

GST on Hire Purchase – How it works and how GST applies

Instead of paying the full price upfront for a high purchase asset such as equipment or vehicle, a business can acquire assets by entering into hire purchase to pay for and use goods over a period of time – then they need to account correctly for the GST on hire purchase. Next they need to know how GST applies. Here is some information from the ATO website to assist, including links for further information –

From the ATO website at this current date

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.

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 can generally claim a GST credit.

You treat a hire purchase agreement as a stand-alone sale or purchase in a tax period – that is, the same rules apply as they would for any sale and purchase of goods under an ordinary sale agreement. A hire purchase agreement is not treated as a sale or purchase made on a progressive or periodic basis.

Paying GST on hire purchases

If you enter into a hire purchase agreement on or after 1 July 2012, all components of the supply made under the agreement are taxable, whether or not 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, are also subject to GST.

If you enter a hire purchase agreement before 1 July 2012, and the supplier:

  • separately identifies and discloses the interest charge to you, you don’t have to pay GST on the interest as it is a financial supply;
  • doesn’t 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 sufficient to work out the credit charge amount.

A hire purchase agreement entered into before 1 July 2012 continues to be treated in this way even if there’s a subsequent change to the agreement, provided the change doesn’t result in a new agreement. That is, the supply of a separately disclosed credit component will continue to be an input taxed financial supply.

Claiming GST credits on hire purchases

If you account for GST on a cash basis.

As all components of a hire purchase agreement entered into on or after 1 July 2012 are subject to GST, you can claim one-eleventh of all components, including the credit component and any associated fees and charges that have been subject to GST under the agreement.

For hire purchase agreements entered into on or after 1 July 2012, you can claim input tax credits up front 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.

For hire purchase agreements entered into before 1 July 2012 you can 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 don’t know the principal component for each instalment, you need to take reasonable steps to find out from the supplier.

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 period when either:

  • you make your first payment;
  • a tax invoice is issued to you, provided you haven’t already made your first payment.

For agreements entered into before 1 July 2012, you claim a GST credit only for the principal component of the agreement, not the credit component. 

Example: Hire purchase agreement entered into on or after 1 July 2012

Albert’s Abattoir (Albert) is registered for GST and reports GST quarterly.

Continuing the example above, Albert decides to buy a second freezer on hire purchase from Friendly, …on 20 July 2012.

Albert buys a freezer from the Friendly Freezer Store (Friendly) for $33,000 through a hire purchase agreement. Under the terms of the agreement, which separately discloses the interest charge, Albert will repay $670 per month for five years. The total payment will be $40,200 ($33,000 plus $7,200 interest).

Because the agreement is entered into after 1 July 2012, both the principal and interest component of the supply are subject to GST.

The freezer is delivered on 7 August 2012 and Friendly notifies Albert that the principal component of the first instalment is $550. This means the credit component of the first instalment is $120 (670-550).

Albert can claim a GST credit for the GST included in both the price of the freezer and the interest charged. As the agreement was after 1 July 2012, the interest is not a financial supply (even though it is separately disclosed).

Whether Albert accounts for GST on a cash or non-cash basis, he can claim a GST credit of $3,654.54 (one-eleventh of $40,200) for the tax period ending 30 September 2012, as this is the period in which he pays the first instalment.

(To see a pre-1 July 2012 Example: hire purchase agreement entered into before 1 July 2012, see the webpage)

See also:

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