Regular contact with an accountant is vital for business owners.
A recent survey carried out by Xero found that 56% of business owners were actively looking for a new adviser due to lack of contact or poor level of service from their current adviser or accountant.
Half of the 1,226 small business owners contacted, said that they were contacted less than twice a year by their accountant or bookkeepers and rarely, if ever, received any insights from their adviser.
Every business needs strong advisers to stay on track. Regular contact, incisive insights and ability to go beyond the numbers to the issues that matter most to owners is a key competency of PTS Advisory. Programs like Xero themselves have helped free up more time for accounting firms to focus on advisory and planning services. That is what a modern accountant should be providing their clients.
We can help you expand your business into new areas and markets. Our technology stack creates efficient processes to provide you with timely and accurate information to help you make informed decisions.
If you want more than just compliance from your accountant, contact us for a complimentary financial health assessment. We can make sure you are on track to business and financial success.
Single Touch Payroll – What if I have Outstanding Superannuation
With mandatory Single Touch Payroll (STP) reporting coming into effect from 1 July 2019, business owners should be aware that this will result in increased transparency and access to information for the Tax Office, and your employees.
From 1 July 2019, STP will require all
employers to report Gross Wages, PAYG and Superannuation Guarantee Charge to
the ATO each time they pay their employees via STP-enabled software.
Superannuation Funds will now be reporting to the ATO each time they receive superannuation contributions for them. The ATO has invested heavily in technology to cross-reference this information, and any anomalies between reporting and payment, will be quickly picked up by the ATO, with ‘please explain’ and reminder messages being sent automatically to employer inboxes and devices.
Employees will also have real-time visibility of all this information via their MyGov account, and shortfalls or non-payment of Superannuation could see them taking up issue of non-payment directly with their employers.
If you are currently behind in your Superannuation Guarantee obligations or struggle to keep up to date from time to time, cashflow management and business budgeting, forecasting and reporting are becoming increasingly important.
If you don’t have robust accounting systems to report issues in real-time, you could be getting yourself into a lot of trouble. Embrace cloud accounting and real-time reporting to help you understand and manage your business, and meet your reporting and payment obligations.
We can provide proactive business accounting advice for most sized businesses in Melbourne. Contact us if you would like to learn more about our services, including a shift to cloud-based accounting.
Changes to Instant Asset Write-Off
New laws have now
been passed to give effect to the federal budget announcement to
increase the instant asset write-off threshold to $30,000.
The amendments mean
there will be three tiers within the 2019 financial year for
businesses with turnover of less than $50 million –
for depreciable assets that are acquired before 29 January 2019
for assets first used or installed between 29 January 2019 and
2 April 2019
for assets first used and installed after 2 April 2019 and before 1
From 1 July 2020,
the threshold reverts to $1,000 for small business entities only,
with all other business and assets subject to the ordinary
depreciation provisions after 30 June 2020.
Businesses will need
to review their records carefully in order to determine which assets
are eligible for the instant asset write-off and which are not.
How to Avoid Fake Invoice Scams
According to ACCC’s Scamwatch, Australian businesses lost $2.8 million to fake invoices in 2017, and almost $5 million in 2018, showing this type of scam is on the rise.
A fake invoice works because it usually includes all the information a finance team would expect to see, including purchase order numbers, legitimate-looking line items, and reasonable amounts.
A business should consider automated accounts payable solutions such as Receipt Bank, and purchase orders and approval processes can be put in place to spot fake invoices. Other automated cross-checking systems can also be put in place where a high volume of supplier invoices is processed.
Another typical invoice scam and one which should raise particular red flags involves a change of bank details, either by way of letter, or change of bank details on an invoice. Scammers typically duplicate company documents and impersonate email addresses to add validity to the change of bank account details. A simple procedure to identify this type of scam is to require a phone call to suppliers confirming the bank account details have indeed changed.
Are You Getting Ready For Tax Time?
Getting ready for tax time can be daunting for any business, be it small or large. A little preparation before the end of the financial year can save time (and money) when it comes to preparing year-end accounts and tax returns.
Good record keeping can ensure a smooth tax time, and all taxpayers, whether they are a business or Individual taxpayer, are advised to make good record keeping a habit. By gathering, sorting and keeping good financial records, you will ease the tax lodgement process for yourself and your accountant/tax agent.
advised to keep an eye on the following :
- If your business carries stock, carry out a stocktake at the end of the financial year;
- Reconcile bank accounts, credit card accounts and petty cash;
- Compare Debtors and Creditors listings to amounts shown in the Balance Sheet to ensure they are reconciled i.e. there are no discrepancies;
- Reconcile GST and PAYG withholding accounts to the June quarter Business Activity Statement (BAS);
- Reconcile Wages and Superannuation per the Profit and Loss account to your PAYG Payment Summaries declared to the ATO;
- Make sure personal expenses have not been claimed as business expenses;
- Ensure that you have substantiation (i.e. copies of invoices/receipts) for all business expenses;
- Check that sales, particularly cash sale, have all been accounted for;
- Write-off bad debts prior to year end.
Make sure you have set up for Single Touch Payroll, which comes into effect from 1 July 2019, and is compulsory for all businesses, regardless of the size or number of employees.
Tax time does not
have to be difficult or stressful if you are organised. Affordable
cloud accounting packages provide a range of options to help keep you
organised and record tour financial transactions in the correct
And don’t forget to take advantage of the $30,000 instant asset
write-off to invest in assets to boost productivity and
profitability, and get an immediate tax saving at the same time.
ATO Raises Alarm on SMSF Property Investment Activity
by the Australian Securities and Investments Commission (ASIC) about
the why people chose to set up an SMSF, indicated that property
investment as the sole or predominant purposes continues to be an
ongoing issue for SMSF’s.
Many people chose to
set up an SMSF to invest in property. This is categorised by funds
that solely invest in property, have fairly low balances, borrow
money, and often bought of-the-plan property.
This rings a number
of alarm bells for the ATO and regulators because they think that
members of those funds will not be well placed to self-fund their
Some of the issues
relating to an SMSF’s investment strategy which has high borrowings
and predominant investment in property, relate to what happens when
the member retires – does the property need to be sold, can you
live off the rental yield, and what happens if prices drop?
People may not be
fully informed of all the issues before making their investment
decision, particularly where they are being advised by a
one-stop-shop, being organisations which set up an SMSF for you, find
you a property, work out your borrowing/finance arrangements and also
prepare you legal documents and advice as well.
The ATO are finding
many people that are not making a fully informed decision, and one
that does not consider the risk of illiquidity and falling property
There is an obligation on the trustee of an SMSF to consider the
appropriateness of an investment decision when setting up and
considering the investments of an SMSF.
The power of business insights
Most businesses don’t actually make the most use of their financial data because they simply don’t understand it. The numbers can tell a story if properly presented.
However, typical financial statements can only tell you a story about what happened in the past. The real power of financial information is in predicting what will happen in the future, then working out a plan of how to get there. Of course, monitoring if you are on the right path throughout your journey is a critical component of achieving success.
Our powerful tools can provide insights into your business, and help you create cashflow forecasts, along with associated profit and loss and balance sheet forecast to cover all bases of your business growth.
Our business financial health check can analyse the state of your businesses finances, and help set you on a path towards achieving your financial goals.
Tax Changes on the Horizon with returned Morrison Government
The return of the
Scott Morison led Liberal government signals a raft of new tax
changes on the horizon. Fortunately the majority will be for the
positive, as opposed to the Labour party alternative which would have
sent shockwaves through the Australian economy.
We can look forward to personal tax cuts, including changes to the tax thresholds and rates delivering tax savings, along with 83 tax and superannuation changes that were put on hold when the federal election was announced.
The most notable of these includes :
deductions for certain deductions denied where associated
withholding obligations have not been complied with. For example,
payments for salaries and wages are denied where PAYG withholding
obligations have not been withheld or no notification is made to the
commissioner. Should you find PAYG withholding obligations that
have not been met, we recommend making a voluntary disclosure to the
addition, contractor arrangements should be closely examined to
ensure correct classification. An employer will not only be at risk
for unpaid PAYG withholding and compulsory superannuation guarantee
payments, but will also be at risk of being denied a tax deduction
for such payments if the withholding obligations are not complied
asset write-off has been expanded to include a threshold increase to
$30,000, and to include medium-sized businesses with a turnover of
less than $50 million.
Self Managed Superannuation Fund (SMSF) Contraventions identified by the ATO
The ATO has advised that is has received a total of 16,909 regulatory contraventions in relation to 8,215 SMSF’s in the 2018 financial year.
The ATO has
identified the most common contraventions are :
related party assets; and
assets where members are not keeping their personal assets separate
from the SMSF assets.
categories listed by the ATO related to administrative errors, sole
purpose breaches, borrowings, operating standards and acquisition of
assets from related parties.
that can be taken by the ATO include a direction to rectify,
enforceable undertakings and notice of non-compliance, which resulted
in 275 trustees being disqualified to act as trustee, or a director
of a trustee company, or a superannuation fund.
The duties and
responsibilities of being trustee of a SMSF are not to be taken
lightly, and penalties can be severe for intentional misconduct.
ATO Audits and the Importance of Documentation
digitisation of data and hence increased sophistication and speed of
data matching, has allowed the ATO to have greater visibility of
taxpayer’s transaction history, opening up the risk of audits
should red flags pop up on your account.
The ATO is now proficient in linking interest and dividend income to provider databases (i.e. banks and share registries, and is increasingly linking in with state revenue departments and land titles offices to match property sales and high-value car purchases amongst a whole range of things.
You can be prepared for a potential ATO audit by ensuring that you have all the necessary documentation dating back a minimum of 5 years in place. A taxpayer subject to an ATO audit can have up to 28 days to gather the necessary documentation, and you can expect a high level of detailed inquiry regarding your transactions.
documentation in electronic form, i.e. PDF’s saved in electronic
filing systems, are sufficient subject to meeting the normal
obligations. Evidence from the supplier to substantiate a tax
deduction includes :
The name or
business name of the supplier;
Amount of the
expense and the currency in which it was incurred;
nature of the goods or services purchased (1);
The date the
expense was incurred (2); and
The date the
expense was paid
document the supplier gives you does not specify the nature of the
goods or services, you may write in the missing details yourself
before you lodge your income tax return for the relevant year.
document does not show the date the expense was incurred, you may
use a bank statement or other reasonable, independent evidence that
shows when it was paid.
Voluntary disclosure is the best step to take if an error has occurred and been discovered. Generally, ATO case managers appreciate when information is willingly disclosed.
If you would like to speak to an experienced business bookkeeper in Melbourne about maintaining your receipts and invoices efficiently, then contact us for an appointment to talk about the best solution for your business.