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End of Financial Year Preparation: Magical touch on your books!

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With end of financial year (EOFY) fast approaching, the Tailored Accounts team is counting down to the last day of the financial year! Offices of accountants and bookkeepers will be filled with the hustle and bustle of time-critical challenges. You may wonder why EOFY often becomes such a hectic time for us. I hope this article can shed light on the inner processes of EOFY preparation.

Having worked in the accounting industry for more than a decade, I consider EOFY preparation as a chance to place extra effort to ensure accurate, up-to-date numbers as well as presentable reporting. These outputs are the results of, what I call, a magical touch on your books.

The following list articulates the main examples of magical touches that we exert to ensure your books are in the best order:

1.      The year-end payroll

During the financial year, we process 12 – 52 payrolls for our clients subject to their pay cycles. At the end of each month or quarter, our team reported the payroll information to Australian Taxation Office (ATO), including Gross Wage and Tax details. In addition to the accurate reports regularly lodged to the ATO, payroll reconciliations at year-end takes care and attention to ensure all requirements are met. Here are the core tasks that our team has been undertaking in the process of EOFY preparation:

  • Final super payment runs must be done before 25th June each year to ensure the last super payment is eligible for a tax deduction in the current financial year. Final salary sacrifice payment runs must happen on or before the same date to ensure all salary sacrifice arrangements are captured in the current year’s payment summary for employees. These particular tasks will require a few extra hours of work during the EOFY period.
  • Payment summaries are to be communicated to employees via email/post before 14th July. We ought to undertake a full year payroll reconciliation to ensure the accuracy of the information in payslips, Business Activity Statements (BAS), and payment summaries. This significant task requires half a day at a minimum, depending on the number of employees and complexity of the payroll structure.
  • Payment summary reports must be submitted to the ATO before 14th August in the following year. The task usually takes an hour to complete. To illustrate, 300 clients at Tailored Accounts are interpreted into a budget of minimum 300 hours for all payment summaries with no mistakes allowed.

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Time for change: Accounts Health Check Tools for Not-For-Profit organisations

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By Teddy Nam

The Not for Profits (NFP) sector in Australia is considered diverse and large (approximately 600,000 NFPs in 2010 per the Productivity Commission report), contributing toannual revenue over $100 Billion and representing 8% of the Australia’s workforce (ABS, 2016). With the chief goal of achieving missions beneficial to the public, NFPs are expected to meeta higher standard of public expectations; balancing this withseeking and managing funding has been identified as the greatest problem.

Following the Government policy changes regarding grants in the NFP sector, organisations started to experiencethe impact of increased competition – diminishing funding and enhanced accountability requirements. Specifically, NFPs are expected to convince funds providers of the value of their mission while ensuring efficiency and stewardship of the organisation. This situation creates opportunities for NFPs to manage financials more strategically by reassessing the efficiency of core operations against their budget and demonstrating measurable effectiveness.

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3 useful tips for shop owners to mitigate risk of sales fraud

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20% of our clients are in the retail & food industry or in a business using a Point of Sales (POS) system. Their daily transactions are composed of 20-30% cash and 70-80% Electronic Funds Transfer at Point of Sales (EFTPOS). Though the level of cash transactions may be seen as low, substantial fraud can often take place in cash transactions. According to the research undertaken by Inside Retail Australia, cash fraud penalties for some retail owners exceeded one million dollars.

If shop owners do not have an appropriate procedure for daily reconciliation,it is extremely troublesome to identify irregularities after a few weeks.Thinking of my first casual job as a student at a restaurant, I was responsible for reconciliation between a cash register and a POS system. This sometimes took up to 3 hours per day, but had been proven to be a worthwhile practice,for the restaurant as a small business. As EFTPOS became more popular, shop owners started to pay less attention to their cash revenue, which accelerated risk of fraud. Since owners largely rely on an auto-settlement system provided by EFTPOS providers,fraud in cash transactions have been much overlooked.Furthermore, shop owners may not have thought about potential fraud from EFTPOS transactions.

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The important role of CFOs in Not-For-Profit Associations

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Recent changes in government policy have resulted in substantial impacts on the Not-For-Profit (NFP) association sector. Government grants to NFP associations are expected to decline, contributing to the resourcing pressures for many NFP associations in Australia. Financial resources from memberships, donations, and government grants were core funds used to sustain NFP associations for many years. However, the concern in the sector now would be their survival under the increasing budget constraints. 

The recent changes in the National Disability Insurance Scheme (NDIS) removed many existing grants paid directly to the NFP association sector. According to market research conducted by BDO in 2016, most associations were not ready for the changes in the new scheme even after the NDIS was rolled out. The complexity of the changes required more effective change management. Typical associations in the healthcare and community well-being industry needed significant training and transitional support. 

A significant strategy for NFP associations to effectively adapt to change is the development of new leadership. It should begin with Board reforms to create an “A-team”, who is willing to  lead the association through changes. In order to achieve this changing leadership need, the role of Chief Financial Officer (CFO) is crucial. CFOs can assist their CEOs and Board members with strategic decisions on budget, financial health analysis and estimation. 

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Tomorrow’s CFOs –Transformational Leadership in the C-Suite

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Chien Dang

The growing importance of Chief Financial Officer (CFO) roles due to globalisation and business complexity has led to the need of increased expectation for CFOs to become business strategists. Equipped by technology advancement, the role of a CFO is now transforming.  

Conventionally, CFOs are required to direct the company accounting, ensure the financial information accuracy, and monitor the financial health of the company. However, the future candidates for CFO positions might experience a change in their conventional roles. Future CFOs will be expected to not only good at interpreting the numbers but also developing and supporting their companies’ business strategies. The CFO will become more progressive to act as the CEO’s right hand man, especially when it comes to strategic decision making. 

The change in CFO role could not happen without the impact of technology. Innovative technology are disrupting and challenging the conventional definition of being a CFO. Technology is indeed the significant factor that is transforming the role of the CFOs.

Image result for big data

Innovative technology enables cloud accounting to flourish. Systems like XERO provide CFOs access to real time data and insights of their companies’ performances. With advanced machine learning, XERO could learn to complete multiple manual tasks which are currently performed by human. The automation feature of XERO allows CFOs to have more time and resource for strategy analysis, thus results in a better decision making. 

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MOULA offer from Tailored Accounts

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Tailored Accounts is pleased to announce our partnership with Moula - the trusted Australian business loan provider. There are three key reasons why your business may need external finance.

  1. Are you expanding your business in 2017? Expansion involves cost such as renovations, rent, new staff payrolls, and marketing. An extra financial resource could be very helpful to cover your expenses and accommodate the growth of your business.
  2. Are you looking to buy new machines and equipment? Computers, kitchen supplies, machinery are critical resource to run the business, but their costs might not be affordable for your budget. A loan for these purchases should be considered. 
  3. Are you planning on increase your inventory? If you are a retailer and you want to stock more inventory for new year sales, then you might be interested in getting an additional source of finance to acquire more inventory. 

 

Moula offers unsecured loans across Australia, up to $250,000 for periods of 6 – 12 months with a simple interest rate starting at 0.75%* applied against your outstanding balance. It takes just 10 minutes to apply for a loan, and you will get an answer from Moula within 24 hours and, once approved, the funds will be in your account by the next morning. Click here to apply and learn more about Moula products today. 

 

 

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Single Touch Payroll & four things that business owners should know

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Harry Hoang

Single Touch Payroll (STP) is now becoming compulsory for businesses, which have minimum 20 employees. You will be required to report on the new system from 1st July 2018. What needs to be prepared to get ready for the new system? Would there be any impact on your business transaction or cash flow?

Here are few check points to ensure that you are ready for STP:

1.      Your STP readiness: If you have 20 or more employees on 1st April in a later year, you will commence reporting under STP from the next 1st July. It means you will have a minimum of 3 months to organise your systems & procedures to meet requirement of STP.

3-month period is not sufficient to prepare thoroughly for the change if your accounting system has not been ready for STP. You should check with your software provider NOW to ensure they are STP if you plan to have 20 employees in the next 6-12 months. As a XERO Gold partner, we can confirm that XERO will be compliant with STP.

                                                                                           

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#AccountantChange - What might the future of accounting and business?

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Have you ever wondered how you we would operate our businesses in the future? How could we make an impact to change? How accounting practice could be improved in the future? Watch our #AccountantChange videos and find out the answers! 

In October 2016, Harry initiated #AccountantChange project. He asked experts, entrepreneurs, and students about their thoughts on future of accounting and business. The answers were amazing. Please subscribe to our channel for more interesting discussions daily. If you wish to share your thought with us, feel free to This email address is being protected from spambots. You need JavaScript enabled to view it. usLet's us together envision a future of our business world. Watch the full playlist here

 

Media

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What can XERO tell us about leadership (Part 2)

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Fuzuki Nishimura

XERO entered Australian accounting software market seven years ago. They used to be a boutique-sized business; however, they brought a disruptive innovation that has changed the landscape of accounting industry. Software used to be installed in our computers; and accounting data were handled mostly offline from our desktops. When XERO came out, we just loved it. It allows us to access data from multiple devices. Our clients could now enjoy seeing financial reports from their mobile devices.

                                                                         

Many of our clients love XERO because it is highly customised to their business needs. A grocery owner, who has been our client for more than four years, shared with me that XERO was the best software to handle hundreds of transactions and still able to generate real-time report. That is the reason clients choose to subscribe and stay using XERO for long term.

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Financials & Accounting Workshop for IACT 2016 participants

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Tailored Accounts was pleased to conduct the Financials & Accounting workshops for more than 30 participants from the IACT 2016 competition teams. This is an important training for all teams before the idea pitching date. Accounting knowledge is the key to convince the judge on the credibility of your ideas!


The teams were interact with workshop instructor, raising interesting questions, and sharing their experience in dealing with financial issues in start-up projects. Cashflow, budgeting, and financial forecast were our hot topics. Great discussion among the teams!

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