Brisbane Bookkeepers & Taxation Blog

Everything Bookkeeping & Taxation in Brisbane!

One Task That Most Small Business Owners Dread

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As a small business owner, you need to fulfill your responsibility in ensuring that your business is in tip-top shape. You need to hire the right employees, keep your business finances in order and create a website that potential and existing customers can turn to if they need to buy your product or engage your service. Without a doubt, you are ready to roll.

Unfortunately, there is still one essential element in managing your business that should never ever take a backseat regardless of priorities. While bookkeeping can take so much of your precious time especially if you don’t have any extensive experience dealing with quickbooks and other bookkeeping related tools, every task that involves bookkeeping seems complex.

Although bookkeeping can be everyone's least favorite task, this can play an important role in running your business. Bookkeeping is unappealing to small business owners because of the basic practices that can still be foreign to someone who does not have an accounting degree. You will need to learn the ropes before you can breathe a sigh of relief when deadline for submitting financial reports approaches. If you are new at bookkeeping, it can also be time-consuming and making mistakes can't be undone by simply changing figures. The painful part is that it can be costly.

How to make bookkeeping easy for business owners?

You don’t have to love math to master your business’ bookkeeping side. You just have to employ some simple techniques: 

• Take a short course on bookkeeping basics

Bookkeeping can be overwhelming when you don’t know anything about it especially if you hate numbers. However, a small business owner should make the effort to know what bookkeeping is all about so you know where your business finances are going. A short day course can give you long term benefits.

• Use bookkeeping software

When it comes to balancing the bank statements, you can't do all the work because it will sure be a tiring job. Instead of doing the job by hand, try using reliable bookkeeping software that allows you to enter the financial statements in a jiffy. It is best to use software that allows you to link your bank transactions automatically for real-time monitoring.

• Keep records organized

Keeping accurate financial records is a sign of good bookkeeping. It starts with developing good work habits and ensuring that you keep your company workflow in check. Keep receipts in one folder and be sure to label it to avoid confusion. File them on a monthly basis and store them in one place.

• Get a reliable bookkeeper

Even if you are running a small business, hiring a bookkeeper should not be set aside. A bookkeeper will be responsible for setting a workable system that your company can follow. All you need is a basic understanding of the system so you know how the process works. 

You can’t promote business growth if you don’t pay attention to small but essential details of your business. This is why giving importance to bookkeeping is a must. A lot of businesses have failed because of not paying attention to the business’ financial activities.

Reasons Small Business Struggles With Bookkeeping

entrepreneur 696976 1280It is easy to pay little attention to bookkeeping when your business is going well. Why would you still go into the smallest details of your business when you can focus on more important things? Any business owner can hover on the brink of disaster with this mindset. Your business’ bookkeeping task does not end where your success begins.

In fact, you can’t take shortcuts on other tasks such as selling without prioritizing bookkeeping. You can overlook financial activities but once these errors take their toll on your business, it is already too late for you to realize that you have already made a costly mistake. If bookkeeping stays in background, you won’t be able to determine the factors that have driven the success in your small business.

Avoid These Bookkeeping Mistakes:

Failure To Maintain Records

A small business can swim in its pool of success and just watch the bookkeeping task take a nosedive. As the temporary allure of your business starts to fade, bookkeeping starts to resurface, but this time, there are numerous questions that quickbooks can’t provide any answers to. Record-keeping is important in every business. Even if you have already tasted the sweet success of your business, this does not take the glamour out of bookkeeping. Make sure you keep all receipts in a safe place as you will need them in the future.

Unaware Of The Amount You Spend For Your Business

It is perilous to every business to assume that there is still enough cash without budgeting your spending. Keep in mind that you are spending money to run your business on a daily basis. If you are complacent that you have sufficient money at your disposal, unable to keep your financial activities in check can make you spend more than you know. When budgeting the money for your business, make sure you separate them into 4 categories: 1. Fixed expenses; 2. Prospective income; 3. Paycheque-allowance; 4. Variable expenses. You should give priorities to needs more than wants.

Spending Rather Investing

There’s a difference between spending and investing. When you spend, your business does not obtain any benefits from it as you just let your money go out the window. On the other hand, investing your hard-earned money can help you reap long-term success. While it can be inevitable to spend, make sure that the benefits still outweigh the cost. Although the balancing act can be challenging, making a sound judgment usually does the trick. If you need to buy office supplies, think first if these are necessary to improve your business’ quality of work.

Not separating your business bank accounts

You can easily lose track of your cash reserves when you don’t separate your business and personal bank accounts. If you continue to follow this practice, you may end up using all the money for your business and you have nothing left to pay for your living expenses. You can avoid confusing your personal bank account for your business bank account if you pay your business expenses from a business credit card. There should be a credit limit so you can control your cash flow. It will also give you the ability to be more flexible.

Why Good Cash Flow Management Is Essential

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Managing your cash flow wisely is not just a business practice but a household practice as well.  There are plenty of reasons you should keep your cash flow in check especially if you are running a business. Most bankruptcy in businesses is due to poor financial management. Even if your products and services are making it big in the business industry, you still have to find a leverage that will ensure sustainability in your business. If your financial activity is in chaos, you may want to look at the benefits that a good cash flow management provides.

The major benefits of managing cash flow

In running a business, you don’t just maintain a cash flow, but a healthy cash flow. However, it takes good management skills for you to pull off a balancing act ensuring the money that comes in and goes out are proportion. When money is not coming in, you won’t be able to pay your employees or purchase essential supplies. You will also see loans and debts piling up because your business appears to be breaking the bank. A good cash flow management helps you fulfill your tax office obligations such as superannuation, GST and PAYG. 

Cash Flow vs. Profit

You might confuse cash flow for profit, but these two are never one and the same. They serve a different purpose and are not created equal. A business can be considered profitable, but may not be in a position that brings in money. The real income of your business will be determined once the Profit and Loss report has been turned in. If you have not really paid off your debts and loans yet, a steady cash flow is not yet in the picture.

Cash Flow Budget Preparation

Anticipating receipts, expenses and other income should be kept in mind as it is part of preparing a cash flow budget. You don’t just provide budget without preparing a cash flow projection. You can turn to bookkeeping software packages with features that allow you to produce graphs and reports easily. 

Note that a cash flow projection does not deliver 100% accuracy. This is just a prediction of your financial activity, but it allows you to track your cash efficiently.

How to improve cash flow

There are various ways you can improve cash flow such as cutting down on your expenses or reducing the number of contractors or employees you have. If you have items that are slow-moving, you can also avoid overstocking them. You can prevent falling behind payment schedule if you only take out a short-term loan. It helps you pay your debts and other obligations in a timely fashion. If you can’t pay your debts all at once, you can also stagger payments where possible.
As a business owner, you should be keen on checking your financial activity and cash flow is going to be an essential part of it. If you fail to keep track of your expenses and other financial activities, you might be surprised to discover in the end that more money is going out instead of coming in. Check financial reports regularly so you know where your business’ financial status is at.

Are You Stuck In A Routine Or A Deadly Sin?

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Whether you have a busy day or you just want to get things done more quickly, multitasking is usually the route you are more likely to take. You believe that doing several tasks at once can save time, but what about the quality of your work? If there's one aspect that multitaskers often compromise, it is the quality of their work. Sure you save time doing things at the same time, but since each task only gets 50% of your attention, you give little time to ensuring that you deliver high quality results. Imagine working at the computer and talking on the phone at the same time. These tasks are both demanding and distracting.  You lose your focus even if you are a seasoned multitasker. 

What makes multitasking less efficient?

The chaos that a divided attention brings can be compared to money: it is quantifiable. If your attention is shifted to another task, you are only giving less than 100% of your attention to the first task. Even if you make an effort to finish earlier than usual, there is still one important aspect of the task that you might miss out. While you try your best to make the task error-free, the attention you give to the task will not give you any assurance. 

Even if you only perform one activity and thinking about another, it can also be considered multitasking. Note that your attention is still divided even when you are just thinking of another task. If you always find yourself doing two tasks at once, you need to consider introducing mindfulness into your life. Mindfulness is the opposite of multitasking. 

Unlike multitasking, mindfulness lets you pay full attention to what you are doing at the moment. For instance, if the phone rings and you are working at the computer, you leave your current task and answer the phone. If it is an important call, you are a hundred percent sure that you are getting the message right as you are not distracted. Once the call is over, you resume working and quality is not compromised. 

A complete attention to the task at hand ensures that errors are corrected and your job is kept to a satisfactory level. Mindfulness hit two birds with one stone: your work life and your personal life. More likely than not, multitaskers find it easier to be lost in thought or become absent-minded as there are so many things running in their head. Even at home, they still can't give their full attention to their family and quality time is already out of the picture.  

Mindfulness breaks the spell that binds multitaskers into the same routine. It puts things in proper perspective so it will be easy to carry out various tasks without the need to multitask. Not only do you promote efficiency but you also ensure that the job you accomplished is consistently satisfactory. 

When you integrate mindfulness into your daily routine, you will begin to notice a transformation in how you accomplish your tasks. You genuinely focus on the quality and take your work to a higher and more consistent level.  

 

Tax Systems And Other Impediments To Business Growth

Business expansion is a big decision and it can create a rippling effect on other factors of your business. It is not just a decision that you make on the spur of the moment. You need to consider several factors before you can decide which direction you are going to take. However, there are several factors that can stop a small business from growing. These factors are part and parcel of having a small business. They only become deterrents when entrepreneurs decide on taking their small business to a higher level. You may need to take a look at these several factors first, before you can decide whether or not you are going to broaden your busines horizons.

Tax systems and other barriers to business growth:

Limited access to the privileges you get from having a small business. 

When you are running a small business, you are also entitled to gain complete access to various small business concessions, which are related to GST, income tax, CGT and many others. Once you decide to expand your business, all of these will be no longer be accessible for you. When taking the road to business expansion, you need to ask yourself if you are willing to gamble or if you are ready to lose access to these concessions. 

Business restructures. 

If you want significant change to happen to your business, you need to welcome restructures. Although it is not going to be an easy decision, being familiar with the effects that restructures make can help you stay on the right track. If you are going to switch to a more effective business structure, you also have to be prepared for the challenges ahead of you. One of the challenges that you are going to face is the CGT liability. 

Payroll Tax  

One of the essentials of putting up a business is making sure that you pay the right tax including payroll taxes. The government is very particular with tax payments and they are keeping their eye on small businesses as well. This is why you need to take it seriously if you really want to run your business smoothly. You subject yourself to a series of problems if you fail to pay on time. You can also get stuck in debt which can take a serious toll on your business. Make sure you keep your payroll taxes in check and avoid falling behind your payment schedule because debts can pile up faster than you know. 

For business owners who decide for an expansion, it is necesary to step out of the business' comfort zone. There are some challenges along the way but once you are familiar with how your business works, everything will fall into place. It does take time before you can reap positive results but it will be all worth your efforts. 

There are other barriers to fulfilling your dreams of expanding your business. Regardless of the obstacles that you will face, you need to keep in mind that you can obtain remarkable results if you are going to consider the risk factors and the steps to take to reduce the possibilities of failing. 

How To Classify Your Allowances Correctly?

For employers, getting bookkeepers to ensure that financial activities including handling allowances are kept in check is a difficult responsibility to fulfill. In fact, it is one of the most complex areas that both employers and bookkeepers are trying to decipher. When you misclassify an amount, the impact on your business and your employees are going to be serious. There will be some corrections that need to be done so you can put your finances the way they should be. Why are there misclassifications on allowances and how can they be avoided? Misclassifications take place when the amount that employees expended are not identified correctly.

When are allowances given to employees?

Allowances are separately identified payments and they are given to employees for:

• Expenses that are work related such as traveling between work sites.
• Working conditions
• Expenses that are not considered as an employee’s tax deduction.
• Special duties or qualifications.

Allowances should not be mistaken or confused for reimbursements. Allowances are intended for covering anticipated costs and these are given whether or not the employee incurs these expenses. These are also considered an assessable income and they are already included in the employee’s tax return. The employee has the right to claim a deduction for the expense.


On the other hand, reimbursements are given to employees for the expenses they have already incurred. The employer may also shoulder the fringe benefits tax (FBT). The reimbursement is not considered an assessable income if it is covered by FBT. The employee cannot claim a deduction for this type of expenses.

Super obligations for paying allowances:

• Reimbursements and expense allowances are not considered wages or salary. They are not ordinary time earnings as well but can be included in ordinary time earnings.
• Employees will only be granted expense allowances if they have fully expended the money on items that are tax deductible.
• When employees are required to work during non-working hours, they will be excluded from ordinary time earnings.

Travel Allowance

• The expenses incurred when employees travel in the course of their duties.
• The expenses for food, drink accommodation and incidental while employees travel.

Reasonable rates for travel allowance

The travel allowances given to employees must also be compliant to the reasonable travel allowance rate for the following expenses:

• Meals
• Deductible expenses which are related to travel
• Accommodation

For domestic travel, the rates only apply in commercial establishments such as serviced apartments, motels and hotels. If another type of accommodation is used other than these commercial establishments, the rates will not apply.

In the event the allowance has not been fully expended, the amount must be recorded on the employee’s summary report and this should be part of the gross earnings. The employee must also show the allowance received as assessable income in their tax return. The claim will only be the amount of the deductible expense that the employee incurred. Tax Office tables can also be used for ensuring that the summary reporting for payment is error-free. Gaining a deeper understanding of how allowances should be handled can save you from committing some errors. You just need to be keen on details and be able to tell the difference between reimbursements and allowances.

5 Signs Of Fraudulent Payroll Activity

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When it comes to your business’s financial activity, accuracy is important because it is not just a simple number crunching. However, your keen eyes may not always take notice of payroll irregularities and because you’ve put so much trust in the people in charge, you become oblivious to the fact that something is not right. Payroll fraud is very common these days. The execution may be different but it all boils down to the same intention. Being complacent is not an option especially if you run a business with hundreds of employees. You just cannot afford to ignore erroneous entries on payroll reports especially if this has taken place numerous times. When payroll fraud takes place, undoing things can be such a painful and costly process.

5 signs you need to put a stop to fraudulent payroll activity:

1. Sharing logins with other employees.

The information in your payroll system should be treated with confidentiality. This is the reason logins are created. However, if your employees are sharing logins or using obsolete logins, this activity is already questionable. Make sure you have the payroll staff delete your old login to ensure that no one will use it. If you suspect that someone is trying to access your account, request a password reset. 

2. A drastic change in regular masterfile.

It is also a cause for alarm if you see the masterfile changing information at a rapid rate. This should be investigated especially if the essential information such as bank details is not what you hoped for. If changes need to be made, they have to be subject for the manager’s approval.

3. Access to payroll system outside business hours.

When payroll cut-off is getting near, you feel as though there is so little time but so much work to do. If someone in the payroll department attempts out of hours access without your permission, this activity may already be in question. If your payroll staff needs to access the payroll system outside business hours, it needs to be audited.

4. Increasing numbers of casual employees.

There are companies that may often have more casual employees than regular ones and even though this is not a tell-tale sign of fraudulent activity, casual workforce is often used to execute payroll fraud. It is important that you pay more attention to your business if the percentage of casual employees is much higher than your regular employees.

5. Inconsistent payroll reports.

You should also be suspicious if there are some obvious discrepancies in the payroll reports. These reports often undergo extensive scrutiny before they are finalized and if this process is by passed, then you know that something is just not right. It is best to outsource someone that can check the reports on a monthly or quarterly basis. More serious problems such as payroll fraud can be effectively avoided this way.

Payroll fraud needs to be taken seriously as it creates a serious impact on your business. If you suspect an employee engaging in fraudulent activity, do not hesitate to conduct further investigation. Payroll fraud prevention lies in your hands. While you cannot immediately put a lid on the problem, you can prevent more serious issues from happening when you monitor payroll activities closely.

The Future Of Bookkeepers: Are They Becoming Obsolete?

 

grid 725269 1280With the bookkeeping software stealing the limelight, is this already the end of bookkeepers’ career? For sure, every business owner relies heavily on the modern advancements of technology to accomplish daily tasks quickly and easily. However, bookkeeping software is not the be-all and end-all of every business transaction. No matter how advanced the software in carrying out bookkeeping tasks, they still have glitches that can take a large chunk of your time if you choose to fix these errors. These days, people rely on real-time information and this is one of the benefits that cloud software provides. The information you need is available right off the bat and the process isn’t time-consuming. 

The allure of accessibility, convenience and speed often make bookkeeping software more attractive to business owners. Gone are the days when you have to check a pile of receipts and enter them into the database manually. Everything is replaced by a microchip that does all the bookkeeping jobs instantaneously. However, the success of a company does not just depend on bookkeeping software and with that being said, a reliable bookkeeper will still play an important role to the company. In fact, software and bookkeepers make a great tandem. You just have to know how to play your cards right.

How to utilize bookkeepers in a world of modern technology?

Just because entrepreneurs are relying heavily on bookkeeping software does not necessarily mean that businesses are formally saying goodbye to bookkeepers. In fact, a bookkeeper can still continue to stay in the game so long as the skills required are present.

• Create a solid understanding of bookkeeping fundamentals.

If you only have basic knowledge on bookkeeping, there is only a slim chance that you will emerge victorious in a stiff competition. Attempting to step out of your comfort zone and do more than just gaining knowledge on QuickBooks can help you acquire an edge. Take it a step further by obtaining useful information on debits and credits. This is going to give you a great advantage especially when you need to fix data that have been incorrectly imported.

• Find your niche and develop it.

Instead of trying your luck on mastering various products, focus on a single product so you will only deal with a single standardized process. This way, you can work on a specific niche and ensure remarkable results.

• Participate in the community of bookkeeping technology.

If you are looking for a valuable resource that can help improve your skills and have an edge in spite of the proliferation of bookkeeping software, get involved in a community where views on bookkeeping technology are shared. When you are in the loop, you will remain updated of the principles of bookkeeping that you need to stick to.

• Explore cloud bookkeeping tools.

Searching for bookkeeping tools that might be helpful to your clients and developing a system where you can minimize errors or glitches on these tools are a must. You can also ask feedback from your colleagues so you will have an idea on the tools’ area for improvement.
You don’t need to be left behind even when bookkeeping technology continues to soar high. Regardless of the competition, being keen on seeing the loopholes and acquiring the ability to foresee future problems can still make you relevant to the world of bookkeeping technology.

Reasons Oral Advice Must Be Documented

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When oral advice is given based on professional standards, documenting it may be considered unnecessary. However, clients who fail to document oral advice may suffer its deleterious effect in the event of liability claim. Without the documentation, the defense will find it difficult to support any claims. Clients rely heavily on expert advice, but if this is not documented, it is as if the conversation had not really transpired. It will be impossible for the client to mitigate disputes especially when it comes to liability claim. When both sides don’t depend on oral advice, the discussions will be kept in place. 

Essential elements of documenting oral advice:

When clients have some important questions lingering in their mind, advisors will provide information for the enlightenment of the client. This is where written correspondence comes into play. While general questions only require basic notes, some information must be present to ensure that the discussion really took place.

When documenting oral advice, make sure it includes the date that the discussion took place and the names of the persons involved in the discussion. The specific advice that the solicitor provided must also be included in the documentation. The additional items that must be present in the documentation are the appropriate disclaimers, recommendations, tax and accounting considerations and the details of client follow-up. 

Essential things that must be taken into consideration

More likely than not, the client will receive unsolicited advice which is generally work-related. This may be about the work flow enhancements or improvements on record-keeping. The advice is very general and firm working papers are enough to support such an advice.

There are also instances when the client receives more specific advice which can affect business operations. In this case, the client needs to be detail-oriented. If there were allegations that the advisor or accountant failed to provide the right advice to the clients, the documentation will serve as a strong defense.

There are also some special considerations for consulting engagements that must be put to mind. Some examples of consulting engagements include discussions between the solicitor, client and sometimes, third parties. It is definitely the client that can benefit from these engagements as they are the ones that will be held responsible for making the final decision and executing plans.

As much as possible, the consultant should only provide the recommendations or conclusions to the client alone. This way, a third party will be deterred from relying on the information that was provided for their personal interest. For consulting engagement working papers, the date, parties involved and the things discussed by all parties must be included. If specific oral advice was given, it should be confirmed in a written report. There is a huge difference when these are included in the documentation. Any discrepancies will be prevented and disputes will be corrected before worsening the problem. 

For tax advice which revolves around providing information on filing obligations, penalties, interest charges and deadlines, everything must be documented. It should show the advice provided to the client and the negative impact in case no actions are taken.

Five Bookkeeping Tips Every Business Owner Must Keep In Mind

Keeping financial activities in check should be the best practice every business owner should follow. You just can’t run your business without following a system. Otherwise, it will be in complete chaos. Imagine running a business without any specific system in mind. You’ll increase the risk of losing important financial details and get into a serious trouble with the Australian Taxation Office (ATO), which is something any business owner wouldn’t want to happen.

Your business should have a long term goal and simply keeping it running and wait for things to happen at the end of the day is not the way it should work.

How do you maintain a steady cash flow and help your business stay on track?

1. Keep a record of deposits.

The benefits: It helps you prevent paying your taxes using money that is not obtained from your business income.

The steps: The first thing you need to do when recording your deposits is to choose a system that will straighten out your financial activities. It can either be bookkeeping software or a ledger. Regardless of the methods you use, it should provide you detailed information of your financial standing including the deposits you made all through the year.

2. Make a list of your expenses.

The benefits: You are more likely to prevent missing some tax write-offs and pay your taxes on time.

The steps: Auditing your expenses is a good habit that you should develop because it puts your business in proper perspectives. When going out on a business trip, see to it that you keep a notebook to record your business expenses on. With this simple habit, you can be sure that you remain in the loop with your business’ financial activities.

3. Plan major expenses carefully.

The benefits: You are well-prepared for bigger business opportunities that come your way even if it means spending vast amounts of money.

The steps: Make it a habit to plan in advance so you will know how much you should spend for some business improvements that you want to consider. You should also keep in mind that every business will experience peak and off-peak season. However, if you have planned ahead of time, major expenses will not worry you.

4. Store receipts and invoices.

The benefits: Cash flow will remain intact and you will reduce the risk of falling behind your bill payment schedule. 

The steps: Assign a person in your organization that will be responsible for tracking your billing. Make sure you keep track of your invoices and make a phone call to ensure that your payments have been settled in a timely manner. Invoices should not be confused for payment. Just because you have sent out an invoice does not necessarily mean you will not incur penalties or charges for late payment. 

5. Prepare money for paying your taxes.

The benefits: The ATO will not impose interest if you pay your taxes on time.

The steps: Set aside a portion of your business income for paying taxes. Don’t just make a mental note of tax deadlines as you might run the risk of forgetting them. Keep a note where you can easily retrieve it and make payments on or before the due date. Never underestimate the consequences of late payments because it can take its toll on your business sooner than you know.

Five Tips for Choosing Bookkeeping Software for Your Business

man 475557 1280It is a dream-come-true for every business to keep transactions smooth, hassle-free and fast. This is where bookkeeping software comes into play. You can be sure that your tasks are kept in order because one of the primary benefits of the software is to reduce redundancy especially when it comes to data entry. For small businesses, the process of encoding the customer’s information can be time-consuming if they heavily rely on employees. If one employee is assisting a handful of customers, the level of efficiency is more likely to suffer.

How to spot the right software for your bookkeeping needs?

1. Choose the software that is specially designed for your business’ niche because it can save you from choosing unnecessary features.

2. It is important that you determine your budget so you will know how much you are willing to spend for the software. While your budget can be your primary concern, do not put too much focus on it because you should also take quality into consideration. 

3. It is worth investing in the software that can help your business grow. One of the challenges of most small businesses is keeping up with the well-established businesses but with the help of efficient software, this goal will be achievable. 

4. Make use of a trial version for you to find out if you have picked the right software. 

5. Ask your bookkeeper for some recommendations in case you don’t know which option to choose. Read reviews from reliable sources to get an idea about your prospective software’s features and benefits. 

The Software Small Businesses Can Rely On:

• MYOB

This bookkeeping software allows you to get an accurate view of your cash flow. You will be spared from getting stuck in endless computations for your financial report. All you have to do is to link your bank account and the software will enter the necessary data for you. If you need to obtain real-time information of invoices and tax liabilities, MYOB will provide you a clear picture so you will know the status of your company’s finances. 

While accounting tasks can be a tiring and daunting, the software will make the process a whole lot easier. You can fulfill your tax obligations in a timely fashion because your supplier invoices and bills are stored securely. The best thing about MYOB is that you can collaborate with your bookkeeper without being physically present. You can keep up with the changes and updates with this feature.

The time you spend for payroll preparation will also be reduced by up to 40% because there are only three easy steps you need to follow. You can also send invoices with the use of your mobile device. Once you download free MYOB OnTheGo app, you will have the ability to use EFTPOS and credit card. 

• Xero

Xero is the noteworthy software that small businesses can put their trust in. This is not just the usual online bookkeeping software because it provides you up-to-date financial reports so you can keep track of your financial activities accurately. Its dashboard gives you quick and clear view of your bank balances, bills, invoices and other transactions.

Sales and purchases are also tracked easily so your employees will no longer spend too much time on this task. It also has the ability to categorise or import your bank transactions. As opposed to waiting at the end of the month to generate budgets and reports, Xero gives you the ability to obtain reports in real-time. 

When it comes to paying super contributions, the process will be fast and easy as the usual long process is by-passed. With this software, you can simply pay your employees’ contribution in a snap. The software can be downloaded so you can gain access to it anywhere you go. 

• Reckon

The software is such a time-saver because of its ability to generate over 200 reports. It also features unlimited payroll and massive lists of inventories. You can also make use of its job tracking tools so you will remain in control of your business no matter how busy you are. It also integrates BAS and payment summary so you can save time sorting them. 

For bank transactions, all you need to do is to link your bank account for real-time bank transaction monitoring. The invoices are also customizable and this is going to be advantageous because the feature lets you create your own logo and payment terms.

When it comes to choosing your bookkeeping software, it really pays to start with a free trial so you can gauge the software’s ability to deliver efficient and effective service. You should also keep in mind that the software has its own glitches and this is why it is imperative that you opt for the software that offers 24/7 technical support.

Record Keeping in a Shoebox - You need Help!

Is your mind as cluttered up as the pile of receipts in your table? Do you find it hard to keep a record of your financial transactions due to juggling multiple tasks at the same time? For any business, a bookkeeper is essential because they help you keep things organized especially if it has something to do with dealing with numbers. You might be spending too much time trying to remember the transactions you made on a single day, but due to the tasks at hand, getting everything organized may be such a hard thing to do. If you have a fledgling business, you may consider keeping receipts very trivial. However, you will come to appreciate its importance in the long run. This is because the receipts serve as a way to track the progress of your business. It gives you a clue for tracking your progress. Without receipts, how would you go about preparing your financial statements?accounting 57284 640 

The role that a bookkeeper plays cannot be underestimated. If you used to set aside the importance of a bookkeeper in your business, these situations may just change your mind: 

• You need to look for receipts for a specific transaction.

For minor or major transactions, receipts serve as proof that the transactions have really been made. These receipts are kept for good reasons. In the future, you will need to prepare financial report which includes all of the financial endeavors you have pursued. Without the receipts, there is no proof that the transactions have taken place. However, if you have a bookkeeper, the receipts and other important files you will need for preparing a financial statement are intact. 

• You need to prepare your tax returns.

Preparing all the necessary documents for filing your tax returns is often easier said than done. It cannot be carried out by an extremely busy person with limited time at his disposal. It is either you miss out on completing the essential documents or you are going around in circles as you have a lot of things in mind. When you have a bookkeeper to do the job, everything you need for the process to be smooth sailing is going to be achievable. 

• You want a complete report of your deductible expenses.

It is easy to make a mental note of your expenses, provided you do not have any important matters to attend to. Unfortunately, a business owner has a lot of things to do aside from preparing financial statements. A bookkeeper will help ease your worries by ensuring that you back up your deductible expenses.

The time you spend for all of your back-end activities will be significantly reduced if you use a bookkeeper’s service. You can also save money without necessarily cutting corners and as a result, your purpose of keeping track of every cent is not defeated. Any technicalities involved in bookkeeping will be properly addressed. At the end of the day, your business goals are achieved and the quality of work is not compromised. Your business can also go the extra mile as you have already set your bookkeeping worries aside.

Get Ready For Superstream

In a nutshell, Superstream is an advanced package dedicated to improving everyday superannuation transactions. The process of submitting payments and essential data will be made much easier with the use of this system. Employers with more than 20 employees will have until June 30, 2015 to complete the requirements. However if a company has less than 20 employees, employers need to comply with the requirements until June 30, 2016. To ensure that employers are ready for these changes, it is important that they also prepare contribution data following the electronic format. The employers will adopt the new standard by June 30 2017. All employers that are making super contributions are mandated to use SuperStream.

Reasons for introducing SuperStream:calculator 695084 1280

It is every employer’s obligation to ensure that employee contributions are paid in a consistent and timely manner. With this new system, discrepancies will be prevented because transactions are done electronically.

Before employers can use SuperStream, changes have to be made with their existing system. Otherwise, there will be some issues with adopting SuperStream. The software that employers need to use should be compatible with SuperStream. Employers can either upgrade their payroll software or a third party service provider. For employers with less than 20 employees, another option to consider is using a commercial clearing house. This is also referred to as free Small Business Superannuation. Since this is a completely different approach, employers will also be required to collect additional information for the electronic processing to take place. The essential information includes electronic service address, bank account details, ABN and unique superannuation identifier.

The Significant Benefits of Superstream to Employers and Employees:

Employers

• Employers will only spend less amount of time dealing with fund queries and data issues.
• Employers save on the cost of processing payment and contributions.
• Since SuperStream only uses a single channel, employers can focus on a systematic process for handling employee contribution.
• Superannuation obligations become less stressful because there is a steady flow of information and cash.

Employees

• Employees will have greater peace of mind as payment processing will be less prone to errors.
• Payments and contributions are processed faster than using the old approach.
• Employees will have better retirement savings as the new system is more efficient.
• Employees will be notified once their contributions have been received.

How does SuperStream work?

SuperStream has four elements, which are essential for each transaction being made:

• Payment methods which have been set using standard electronic format.
• Standard message structure designed for sending and receiving notifications or messages when funds have been received.
• Data format so employees receive reports of their contributions.
• Business terms and definitions used for describing employees’ contributions.

While these are considered technical details of SuperStream, employers should not worry about it so long as compliance with the requirements is observed. In the event SuperStream is prevented from sending notifications of contributions due to internet outages or technical issues, the alternative channels will be used such as paper and electronic options. Employers must also include the reasons for using these options. These contributions cannot be rejected if these reasons are indicated.

For employers to get a better grasp of this new system, support tools will also be provided and these include support mailbox, seminars, self-help materials, which can be accessed online and links to the system’s framework.

Essential Qualities of a Bookkeeper Every Business Should Not Overlook

Bookkeeper2A bookkeeper plays a vital role in your business. It is mandatory for bookkeepers to know the ins and outs of your business because they will be held responsible for managing its financial aspect. Majority of businesses is more likely to fail due to poor financial management. This is why every business owner must be keen on selecting a bookkeeper that does more than just number crunching. Without setting some criteria, the hiring process can be daunting especially if you have a plethora of options. How then can you narrow down your selection when there are too many prospects to choose from?

Experienced

There may be hundreds of bookkeepers you will come across on the Internet but not all of them will make the cut. Checking your prospects’ qualifications is a must because it helps you identify who will really pass themselves off as your closest ally in running your business. Aside from certifications and training, an experienced bookkeeper is also necessary.

Good Communicator

While an impressive qualification often wins the nod of business owners, a positive attitude must not also be overlooked. Choose a bookkeeper that has the ability to communicate errors and questions before more serious issues occur. Even when they are dealing with numbers most of the time, there is still no substitute for proper communication when it comes to resolving issues.

Versatile

A top-notch bookkeeper must have the ability to offer a wide range of services. It is not enough that they are knowledgeable about basic bookkeeping because if your business is fast-paced and serving multiple clients, bookkeepers must have the ability to juggle various jobs such as accounts management, filing tax returns and even business advice.

Available

Timely submission of financial reports is a must. If there is an open line of communication, any bookkeeping task will be carried out. This is why a bookkeeper that has the ability to provide a direct line so business owners can make a connection whenever their services are required will definitely have an edge over the ones who always appear to be unavailable. Availability also ensures that deadlines are met and delays are prevented.

Technically Adept

There are changes that may take place in your business such as using tools that make the entire bookkeeping process much easier than before. The bookkeeper that you decide to hire must be able to adapt to these changes and use modern bookkeeping tools with ease.

Detail-Oriented

Bookkeeping is deemed crucial in all types of business. Miscalculations, delayed financial reports and erroneous information can create a rippling effect on your business. If your bookkeeper does not have an attention to detail, minor errors may wreak havoc on your business. Due to the fact that bookkeepers are mostly involved in numbers, they should also have keen eyes for correcting errors as business owners do not have the luxury of time to do that.

Trustworthy

A business owner will disclose confidential financial information to the bookkeeper and someone who can be trusted when it comes to treating the information with confidentiality should be considered for the job. In fact, among the list of selection criteria, integrity and trust must be the number deciding factor when hiring a bookkeeper.

Clear Costs

Before you hire a bookkeeper, you must be in agreement with the charges for the services. A contract stating the payment for the services and other basic rules of engagement must be specified. Everything must be clear to both the business owner and the bookkeeper. Focus on the value of the service instead of the cost. Searching for a bookkeeper can be a challenging task but with these criteria, you will be able to choose an efficient and effective bookkeeper that will contribute to the success of your business.

Happy Easter Everybody!

Here’s hoping you had a joyous time.

In my last BLOG I touched on the importance of engaging a qualified and experienced bookkeeper. I am not exaggerating in any way by saying that since I established Brisbane Bookkeepers, 80% of new clients that have engaged me to manage their bookkeeping had previously used a bookkeeper who were clearly not qualified to do so. This is potentially an extremely costly situation for many reasons such as the following:

  1. Your BAS Agent or Tax Agent will have to spend a lot more time correcting your bookkeeping which of course can become very costly.
  2. Your accounts are a picture of your current financial position at any given time. If the bookkeeping is incorrect then the financials may be misleading which could lead to very costly business strategy and decision making. We don’t manage our bookkeeping solely for the tax man!
  3. Lodging incorrect BAS’s may lead to penalties and interest.
  4. If expenses are incorrectly categorised this could result in unclaimed Input Tax Credits which is money straight out of your pocket. I have revised many BAS’s for clients which has resulted in refunds for amounts up to $50K. That’s incredible. It happens.
  5. I have seen bogus bills that have been paid. Bills entered more than once and subsequently paid. Payments to suppliers incorrectly allocated.
  6. Clients incorrectly invoiced. Payments from clients incorrectly allocated.
  7. Interest on loans not claimed.
  8. Capital improvements recorded incorrectly. Repairs & Maintenance treated incorrectly.

This is just a few examples. There are so many ways your bookkeeper could cost you a lot of money. Any amount is inexcusable. This is your money!

The most important message is that Bookkeeping is Accounting which requires an expert with years of training and experience. Until 2000 when GST was introduced most businesses used their qualified Accountant/Tax Agent exclusively which was a reasonable guarantee that your business reporting would be accurate. The introduction of GST and the requirement to report monthly or quarterly placed further burden on business which induced business to find a cheaper alternative to the rates charged by your Accountant/Tax Agent. This opened up a can of worms as demand for bookkeepers sky rocketed. A qualified, experienced bookkeeper should cost you $60 - $90 dollars per hour and more which is still significantly less than rates charged by an Accountant/Tax Agent. Engaging a bookkeeper for much less is potentially a false economy* as apart from the potential costs as described above, I have found that a lot of business have had their bookkeeper in the office for 2 -3 days per week where on most occasions I have found that they only required a bookkeeper who knows what they’re doing for half a day! There are many reasons for this which I’ll cover in my next BLOG.

Andrew Donnelly

* ‘A false economy is an action that saves money at the beginning but which, over a longer period of time, results in more money being spent or wasted than being saved’. - Wikipedia

Welcome to my first BLOG ever!

A bit about myself

In 1992 I jetted off from Brisbane into the great unknown, being Darwin, to undertake further education in my chosen field of Accounting. I know, who would aspire to be an Accountant right! In hindsight, apart from gaining a solid grounding in this field, it was of great benefit to get out of my comfort zone and focus on my future. I will be forever grateful that I took this path. Darwin is a great spot with a lot of wonderful people. It had an indelible effect on the person I am today.

After graduating I got a start with Horwath NT, a second tier firm, in Alice Springs. This was an invaluable introduction to public Accounting as I was thrown straight into the deep end. By the time I moved back to the great South East Queensland I had a lot of experience with a variety of entities of all different sizes, including very large Primary Producers.

Over the ensuing years I worked for several firms on the Gold Coast and in Brisbane reaching managerial status and a position as branch manager for a mid-sized firm. This is a brief history of my experience leading up to my decision to enter the ‘Bookkeeping Services’ sector.

I still clearly remember in the early 2000’s thinking to myself that there must be a market out there for Bookkeepers ‘who know what they’re doing’! The standard of the bookkeeping I saw coming across my desk on a daily basis was atrocious. Well, after embarking on a couple of business ventures over a period of about four years the GFC hit so, by default, I went back to what I know best, Accounting, or in this case, Bookkeeping. Therefore, Brisbane Bookkeepers was conceived.

I found that nothing had changed. The majority of clients I have helped since have had bookkeepers working for them who clearly had no idea about Bookkeeping at all. And were getting paid very well for it. It’s one thing to learn how to use a software program but that isn't much use if you have no idea about the fundamentals of Bookkeeping such as what the difference between a debit and a credit is and the relevance they have to Bookkeeping. Further, it is absolutely essential that a bookkeeper must understand the structure of bookkeeping, a Balance Sheet in particular, and what goes where and why. Bookkeeping is essentially Accounting and when I was young everybody, well not everybody, wanted their children to become Doctors, Lawyers or Accountants. Ring a bell? One reason for this, I believe, is that Accounting requires knowledge, a head for numbers and years of experience and mentorship. Make no mistake, this is still the case. Accounting or Double Entry Bookkeeping hasn’t changed at all since the 1400’s when it was invented. Leonardo da Vinci played a small part in this! Interesting huh? Read into that how you like…Furthermore, the software manufacturers have a lot to answer for by claiming that ‘Anybody can do it’. That is one of the most outrageous claims I have ever heard in my life.

It is my mission to help shed light on the fundamental and absolutely essential importance of engaging a bookkeeper who knows what they’re doing and how costly it is to not do so for so many reasons. Comments and enquiries are encouraged and would be most appreciated.

Next week, I resume my quest to help businesses, and aspiring bookkeepers, appreciate the importance of engaging a qualified, experienced bookkeeper!

Andrew Donnelly



­ Questions? Give Andrew a call 0450 605 592

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