Financial Services Archives

When it comes to preparing your business to hit the ground running in the new year, the best thing you can do is speak to your accountant. They know the ins and outs of how to properly prepare your business for the new year, whether you close for the holiday period, or if this is your busiest time of the year. However, there are a few things you can do to get ahead of the curve for 2022, including reviewing business processes, technology, spending habits and trends.

Review your business processes and tech

The new year is often regarded as the time to reflect and make new resolutions. As a business owner, one of your top priorities should be to take a close, honest look at the way you operate your business, where the bulk of your income comes from, where it goes, and how you can implement better spending habits and bolster income streams.

The technology you use is another factor to consider. Consider your payroll, bookkeeping, superannuation, record keeping, etc. The software available for keeping track of these aspects of business have evolved exponentially over the years, helping you to save time, money and even the environment through the use of digital and cloud-based platforms.

Assess your income and spending

Reviewing your current income streams and business expenses is key to identifying areas that need to be better managed and improved. Gathering and assessing this data can also allow you to identify both positive and negative trends, and develop ways to enhance what is working, whilst reducing unproductive spending.

Looking back often allows us to make predictions for the future, and enables businesses to make educated decisions when it comes to planning for the year ahead.

Update your business plan

A business plan should never be set in stone and the new year is a good time to review what did and did not work for your business, what other businesses are doing well, and how you can promote growth and prosperity. By keeping your business plan flexible enough to make changes as the business environment shifts, you are much better placed to weather most issues with relative ease.

Collaborate with your business accountant to make the most of their expertise when it comes to financial data analysis, predictions and planning. By employing the knowledge of a financial advisor, you become free to focus on the operations of the business plan. You can also rest easy knowing that your business is being guided by an industry professional with the experience and skills necessary to help your business thrive.

You don’t need to reinvent the wheel to get your business heading in the right direction in the new year. Follow these simple steps and you will find yourself well equipped to take on what 2022 has in store, or get in touch with the friendly team at QCA for the best, tailored advice to really kick start your new year!

If you are an employer, your superannuation is a huge part of the payroll process. Superannuation payments are often overlooked when cash flow gets tight or when internal processes aren’t in place to handle it. Super needs to be paid on time, every month. If not paid on time, you run the risk of encountering any or all of the four major consequences outlined below.

1. You will not receive income tax deductions

Superannuation is one of the easiest ways to save on tax. If superannuation is only one day overdue, it can no longer be claimed as a tax deduction. This means you’re paying more tax if it’s not paid on time.

If you don’t meet your legal obligation of paying superannuation on time then there could be tax implications which means you could end up paying up to 25% more. This can add up and become a potentially catastrophic burden on your business.

Income tax deductions often translate into tens of thousands of dollars for medium sized businesses, either spent or saved depending on whether or not you pay on time.

2. You are obligated to notify the ATO

In the event that your superannuation payments are late, you are responsible for filing a Superannuation Guarantee Charge Form (SGC) within 1 month of the payment due date.

The SGC is designed to give the ATO a detailed account of late payments, including relevant information such as the financial quarter, due date, due payment, employee, etc. This form can also include details of the payment if it is made between the due date and the date the form is submitted.

3. Extra Fees

When lodging an SGC form, it is your obligation as an employer to provide compensation for late payments. This process provides disincentives for late payments, as well as compensating employees for time their superannuation was not being invested.

Generally, the interest rate paid on late super payments is 10%, as well as a $20 fee per employee paid to the ATO per quarter of late payments. These fees and interest payments can quickly add up and failure to comply can result in personal liability and serious repercussions.

4. Personal liability

Failure to comply with the legal obligations you have as an employer when it comes to superannuation is a serious infraction in the eyes of the ATO, putting you in a bad position if your business practices are not up to scratch.

Director penalty notices are a legally binding responsibility, naming company directors and trustees personally liable for the superannuation owed to employees if payments are late or SGC forms are not lodged in time.

If your business is at the stage of receiving director penalty notices from the ATO, there are some very serious issues that need to be addressed. These notices are a major sign of malcompliance, and failure to acknowledge and respond appropriately to these notices is an invitation for the ATO to come down on your business with force.

Conclusion

When it comes to superannuation, it pays to have good business practices in place, and a thorough understanding of your obligations as an employer. Knowing what happens if you don’t pay super to your employees on time is a good place to start.

Inability to keep up with your superannuation obligations is a slippery path that can quickly lead your business into unfavourable territory. If you’re having trouble keeping up with superannuation payments, now is the time to have a look at your business practices. The team at QC Accountants are superannuation experts who are here to help your business thrive. Get in touch for help and advice towards getting your superannuation payments on track.

The Australian Government has been helpful in the Covid19 crises, and so far announced multiple packages on how to help SME businesses.

One of them is an instant $150k Asset Write Off which came into effect in March and has been extended until 31st December 2020.

What is an instant asset write off?

According to the ATO, an instant asset write off is an immediate write off of each asset that costs less than the threshold. Businesses can now claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.

How does it work?

If your business’ annual turnover is less than $500 million, you are eligible to claim immediate deductions up to an amount of $150,000 for any new or second-hand plant and equipment assets purchases. That means you can purchase any equipment, any vehicle or material for your company that will help you to recover from the current situation or improve your business in the future. Don’t forget if you wish to claim an immediate portion from your purchased asset this is only allowed in the year the asset is first used or installed ready for use.

A humble note, is that if you are planning on purchasing a motor vehicle, the depreciation limit is $59,136, cars over this value are deemed by the ATO to be a luxury vehicle.

Is my business eligible?

Before you make any new purchases, we would suggest checking out assets that are excluded from the government lists such as horticultural plants or simply contact us and we can assist you.

Remember we don’t charge for quick 5 minute phone calls and we encourage all of our clients to take advantage of this.

It’s important to always align your strategy with your established business plan.

How do I apply for the instant asset write-off?

Here at QC Accountants, we are ready to help you with additional details and also help you to claim the business portion of the asset’s use in your tax return for the particular financial year.

If you have any questions at all, do not hesitate to contact our team of professionals on 07 5593 6060 as we are here to help you.

The start of the financial year is a great time to review and understand the requirements of record-keeping for business. If you can stay on top of your record-keeping throughout the year, you’ll have less of a headache come tax time next year. Not only that, but sound record-keeping in your business will enable better cash flow management.

Let’s take a look at best practices of record-keeping for business, and how you can stay on track throughout the year.

Which Records do I Need to Keep?

Records are required wherever there’s activity relating to:

Starting your business
Running your business
Changing your business
Selling/ Closing a business

Records that relate to both business and personal use need to show which portion is relevant to the business.

Keep records that relate to your business income and expenses. You should also keep records of estimates/ methods/ calculations of your business’ tax and super affairs.

Make record-keeping a part of your daily business operations to stay organised and within legal requirements.

How to Keep Records

As a general rule, you need to keep records for 5 years from when you prepared/ obtained the record, or completed the transactions/ actions related to the record – whichever is later. There are some exceptions to this rule in individual circumstances.

It is acceptable to store records digitally, provided they are held within an encryption system, password-protected and indexed or labelled in an easily accessible way. They must be in English or easily converted to English. The ATO recommends keeping records digitally.

Bear in mind that the ATO may need to access your records, so it’s important to file and manage them in a way that the information can be easily extracted and reviewed.

How QC Accountants can Help

As a business, you can keep your records, but working with a registered tax or BAS agent may be a viable option for you, in terms of collecting, filing, and managing your records.

QC Accountants can help by collecting and managing your records. If we also conduct your tax return it can be beneficial and time-saving if we’ve been managing your records. In any case, you should regularly verify that you’re meeting your record-keeping obligations.

The ATO has a handy record-keeping evaluation tool online for businesses.

If you’d like to discuss our capabilities for managing your records, please get in touch. We’d love to hear from you.

The Annual Reporting requirement is part of the new reporting requirements that the QBCC introduced in the 1 April 2019 legalisation changes.

The Annual Report

The Annual Report asks each licensee to provide the QBCC with Financial Information (essential profit & loss and balance sheet information) from the most recent financial year – for most licensees this will be the prior 30 June.

The amount of information that you need to provide will depend on which type of license you hold:

Self-disclosing category 1 – turnover up to $200,000
Self-disclosing category 2 – turnover up to $870,000
Category 1 – turnover up to $3,000,000
Category 2 – turnover up to $12,000,000
Category 3 – turnover up to $30,000,000

How to lodge

Self-disclosing categories 1 & 2

We have spoken with the QBCC, they have confirmed that the Financials can be directly from your accounting software. We encourage you to be cautious as they must still meet the minimum financial requirements under your license.

Categories 1,2 & 3

If your license is under these categories, it is likely that you will require our assistance to prepare the Financial Information as you must lodge A Statement of Cash Flow & Statement of Equity which are generally unavailable directly from your Accounting software.

Annual Reporting versus Minimum Financial Requirements

At a basic level the Annual Reporting will provide the QBCC with access to your revenue, expenses, assets and liabilities which will allow the QBCC to determine if you hold more enough Net Tangible Assets at the end of the financial year.

This will also allow the QBCC to focus on licensees who do not hold enough to match their turnover, providing them with a grace period of up to 31 December 2020 to strengthen up their asset position.

We will send more information about this in the next few months.

How we can help

We recommend that you allow us to assist with lodging your Annual Report, this is easily done by adding your Accountant as a nominated representative under myQBCC:

Add a nominated representative:

Select “My Licences” at the top of account login page
Click “Action” tab to the left of the licence you are granting access to
Select “Add a new representative”
Enter the representative details:

Chris Henman – 0404 935 495
Dean Coram – 0421 866 831

chris@qcaccountants.com.au dean@qcaccountants.com.au

Click submit to access the Manage Permissions page
Locate the newly added representative and click ‘enable’ to grant permission to access myQBCC

Or by calling QBCC directly on 139 333.

We are always here to help if you have any more questions on your QBCC reporting requirements, please feel free to call your Accounting team on 07 5593 6060.