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End of Financial Year Tax Tips For Individuals 2019-2020

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The following tax planning measures should be considered in respect to your own individual circumstances. For specific guidance please refer to the ATO website or consult your Tailored Accounts accountants.

End-Of-Financial-Year Tax preparation often seems a bit daunting for many people. The COVID-19 outbreak this year has generated a range of impacts on the community and individual well-being. Tailored Accounts will help you overcome the burden of individual tax return complexities. The following tips provide a comprehensive list of important items for your coming tax return.

  • Salary Sacrifice Arrangements

If employed, you may wish to review your remuneration arrangements with your employer and forego future gross salary in return for receiving exempt or concessionally taxed fringe benefits and/or making additional superannuation contributions under a valid salary sacrifice arrangement.

Please review your contributions including Superannuation Guarantee (SG) and Salary Sacrifice to assess whether you have over/under contributed. It is now a good time to adjust your contributions.

  • Additional Superannuation Contributions

Voluntary superannuation contributions would help grow your super balance quicker and reduce your personal tax liabilities.

  • Work-Related Deductions

For employees who are working from home during the period 1 March to 30 June 2020, the ATO is allowing a temporary simplified method of calculating deductions for additional running expenses. There are 3 alternatives including:

  1. 80 cents per hour for all additional running expenses incurred after 1 March 2020 until 30 June 2020; or
  2. 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus the work-related portion of phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device; or
  3. The actual work-related portion of all running expenses, which will need to be calculated on a reasonable basis.
  • First Home Super Saver (FHSS) Scheme

The FHSS scheme essentially allows an individual to make additional voluntary salary sacrificed superannuation contributions or after-tax contributions to a complying superannuation fund from 1 July 2017 up to a maximum amount of up to $15,000 per year (and $30,000 in total) which can be withdrawn to help finance a first home deposit from 1 July 2018. In addition, where the buyer’s partner also has never owned real property, the couple can effectively withdraw an amount of up to $60,000 to jointly fund a home deposit.

  • Early Access To Your Superannuation

You may be able to withdraw up to $10,000 from your superannuation balance in Financial Year 2019/20 and a further $10,000 in 2020/21. You do not need to declare those amounts in your tax return, in other words, they are tax-free. In order to be eligible, you must pass one of the following tests:

  1. You are unemployed; or
  2. You are eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  3. On or after 1 January 2020:
  • You were made redundant; or
  • Your working hours were reduced by 20 per cent or more; or
  • If you are a sole trader and your business you suspended or there was a reduction in your turnover of 20 per cent or more. 

If you are unsure of your current tax status or need assistance and advice for your EOFY preparation, please contact Tailored Accounts for a 20-minute of free consultation. Alternatively, you can access the Tailored Accounts - Sharing Is Caring Page for a free download of an individual cashflow assessment plan. 

Tailored Accounts - Sharing Is Caring Page

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End of Financial Year Tax Tips For Business Owners 2019-2020

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This information is intended as general guidance only.  For specific guidance please refer to the ATO website or consult your Tailored Accounts accountants.

Uncertainty about the continuing spread of the noble coronavirus makes people fear for their health and their lives. If you are doing business in one of the industries, which are most susceptible to health and economic problems, such as tourism, food services, retail, or healthcare, the pandemic has struck your disproportionately hard. Under high uncertainty, funding and immediate government grants have been made available for eligible businesses to navigate the road to recovery. This End-Of-Financial Year Tax Tips will help you reach out and effectively leverage a range of existing support measures for business survival and growth.

Covid-19 Stimulus Measures

The government released a number of economic measures in response to COVID-19. Some of them may impact your FY 2020 tax return. 

  • Enhancing the instant asset write-off

The cost threshold for which entities can access an immediate deduction for depreciating assets and certain related expenditure has been increased from $30,000 to $150,000 for the period 12 March 2020 to 31 December 2020. The turnover threshold of businesses eligible for the instant asset write-off during this period has also been increased to include businesses with an annual turnover of less than $500 million (up from the existing cap of $50 million).

  • Backing business investment

Entities with an aggregated turnover of less than $500 million in an income year who do not use the simplified depreciation rules for small business may be eligible for accelerated depreciation if the entity starts to hold the asset and the asset was first used or installed ready for use for taxable purposes between 12 March 2020 and 30 June 2021.

The tax implication on received stimulus payments:

  • The Cashflow boost you have received will be treated as non-assessable, non-exempt income and is therefore not taxable to the entity. However, JobKeeper payments received are assessable income of the entity. Deductions for payments to employees are available provided the general requirements for deductibility are satisfied.

Other tax-saving tips

  • Super Contribution

All contributions which are required to be received by the superfunds by 30 June 2020 need to be scheduled for payment within ClickSuper by 4 PM AEST on Monday, 24 June 2020.  Superannuation contributions paid after this date may or may not be received by the superannuation fund by 30 June 2020. 

  • Review your Debtors

Review your aged receivables and write off any recoverable debts before 30 June 2020. The bad debt written off can be claimed as a tax deduction for the 2020 financial year. 

  • Pre-pay your expenses

Small business entities may be able to prepay expenses and claim an immediate deduction in the financial year in which they are paid. 

  • Trust resolution

Document and sign the trust distribution resolutions before 30 June 2020.

JobKeeper tips

If your business was not eligible for the JobKeeper grant during the March-May period, it is recommended to re-assess your JobKeeper eligibility for the period of June-August. 

Tailored Accounts is committed to supporting businesses during this critical time. Please contact us for JobKeeper, EOFY, Tax and Advice supports. Our expertise and experience will put your business in the best possible position for sustainable success. 

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End of Financial Year Note

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Most business owners do not know that the SME sector in Australia has wasted millions of dollars due to inefficient cost, most of which can be attributed to the complex bookkeeping process. As the financial year is coming to an end, here is a guide to help business owners save the unnecessary cost and improve the company performance in a period when financial management is very much needed.

To improve the existing financial management process, you will first have to evaluate the system. Take a minute and think about how you control your financial process right now. Most SMEs have the same mistakes listed below:

  • They fail to realise how important financial management is. Businesses with poor financial management tend to suffer from poor cash flow and profit margins, ineffective debtor control, and an inability to meet their business’ commitments;

  • They are unaware of alternative solutions such as hiring an accountant or implementing an accounting system. If crunching the numbers is not your strength, either hire or outsource to an accountant or bookkeeper who will deliver regular and reliable information and advice that you can use to manage your financial position;

  • While many businesses are in the field of IT, it is surprising how backward their accounting systems are. Stacks of receipts, manual ledger books, simple Excel sheets, messy financial transactions and reports, and overdue BAS and tax returns are common among start-ups with bad financial management;

  • Businesses owners tend to focus on their products, ideas, and clients, often neglecting the fundamentals of their business. I have never seen a successful business that does not have strong financial management.


As a matter of fact, most people fails to realize their mistakes until it’s too late. If you are a small business, it is highly likely that you need to do everything to manage your business, from administration, marketing to bookkeeping. It is seemingly running well and you believe you are able to manage it until the end of financial year approaches. One client shared with us that EOFY used to be her nightmare and she was always lost with massive paperwork. Only until the end of financial year does your disorganized bookkeeping system come back to bite you. To avoid this scenario, though, here is the EOFY to-do list from our executive director.

 

 1. Undertake analysis

To see if you will achieve your budget in the last quarter. If you haven’t made budget, consider what you can do? Cut costs? Improve sales? Or lower your expectations?

 2. Review your financial performance from July to end of financial year

The best report in any accounting software is multiple period profit and loss. This report compares monthly performance so you can see which month is the best and which one is the worst. It also helps you to monitor recurring costs and highlights if costs have spiralled in any particular month.

 3. Cash is king!

Review your cash flow to include big ticket items so you don’t get any surprises towards the end of the financial year. Make sure your cash flow includes last quarterly BAS; last quarterly super; FBT; company tax return; personal tax return; accounting and/or auditing costs.

 4. Business plan

Review or prepare your business plan for the next year and 5 years and ask yourself following questions.

Review your budget and cash flow for next year and 5 years. Assess your goals. What do you want to achieve in the next five year?

Assess your goals. What do you want to achieve in the next five years? Retire? Achieve $1M turnover or just slow down?

How much do you want in your super fund when you retire? Make sure you include your family or partner in the plan.

5. Cloud solutions

Local business owners can customise cloud solutions to meet their business needs and environment―for example, Vend has become a popular Point of Sale choice among local retail businesses because the software is straight-forward and very easy to learn. First-time users are able to get oriented to the system within a day! Additionally, with functions such as product register, stock management and sales recording integrated into the “Vend HQ” interface, business owners can manage sales centrally. The owner of one of my favourite gift shops shared with me how Vend saves her an hour each day by populating payment receipts and e-mailing them to customers automatically.

Receipt Bank is another app that many business owners love. Collecting and sorting receipts can be a nightmare during tax time. Receipt Bank is so popular because it saves hundreds of hours by eliminating the hassle of digging out receipts and invoices left carelessly in car trunks or shoe boxes. Simply upload photos of receipts or invoices using your mobile phone, and Receipt Bank will extract and process the key information (e.g., invoice number, date, GST, etc.). The information is subsequently published to your cloud accounting package (e.g., Xero or Intuit QuickBooks), which saves time and money all thanks to automation.

While cloud technology offers significant benefits to small business owners, it is crucial to consider the following factors as not all cloud services are suitable for your business needs and environment: What are your business categories? Where is your major revenue coming from (online/walk-in)? Which business activity do you spend the most time on (and is it extremely important or extremely time-consuming)? Keep in mind that when choosing a specific cloud product or service, you need to consider the eco-system that it operates in as well. Just like preparing dinner for an important guest, your decision to cook a beef steak as the main dish will significantly influence your choice of wine. Hence, before cooking, it is better to find out if your guest prefers beef to other meat choices.


In Tailored Accounts, we offers a professional service that checks all boxes above. As our employees is dedicated and tech-savvy, we offer the latest technology in the accounting industry with the lowest overall cost. Should you be interested to outsource your accounting and financial system, give us a call at (02) 6169 5196. Tailored Accounts is the accounting department of Canberra and the preferred choice among small businesses.

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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.

2.      The last GST & BAS of the financial year

As you may be aware, April-June BAS is not due until 28th July in the next year. Regardless of the due date of BAS, our team finalises the last quarterly BAS before 14th July to reconcile balances between payslips and BAS. To prepare the end of the year BAS, the assignments below must be carefully completed:

  • Our team undertakes all reconciliation processes for the last quarter BAS as usual, requiring half a day.
  • We review all quarterly sets of BAS submitted during the financial year to reassure the integrity of your financial data since all adjustments need to be made in the final BAS. This task usually takes half a day.

3.      The final review of all other accounts

After the big year-end reconciliation processes of Payroll and BAS, our team also reviews every single account in your Trial Balance prior to closing your books. If your business has 50 accounts codes, for instance, we will need to thoroughly go through all 50 of the accounts. To deal with the sheer volume, the Tailored Accounts team implemented the effective way to review the accounts as follows:

  • We reconcile final bank account, credit card, petty cash & term deposit first. These reconciliations are usually completed by 30th June; however, a good summary of the whole year bank reconciliation will be prepared separately to support your tax agent in finalising their files. This task takes up to two hours.
  • We undertake stock-taking and complete the asset register. If on-site, physical stock-taking is required, it will take from three hours to a day for completion. Based on the volume of stocks and assets, our team may require another half a day for their reconciliation and adjustment.
  • We reconcile debtors’ information, normally taking half a day. This task includes a follow-up with debtors to identify doubtful debts and subsequent end of year adjustments.
  • Our team reconciles creditors’ information, which usually takes less time since most businesses pay their creditors regularly.
  • We reconcile loan accounts where businesses have internal loan transactions with directors. Preparing interest schedules and calculating a final balance should be completed before 30th June, which will then be rigorously reviewed for another two hours.
  • Our team prepares consolidation of all accounts after the reconciliation of Payroll and BAS, taking an hour to methodically consolidate them. The items include Salary & Wages, PAYG withholding, Super payable, Super expenses, Leave entitlement, GST, Sales, Capital purchases, Non-capital purchases, and PAYG tax installments.
  • We finally analyse other accounts from the Statement of Profit and Loss, including a Budget versus Actual comparison and discrepancy identification. This task will require up to four hours as Tailored Accounts places its accuracy as a top priority.

Total hours of required effort tend to rely on a number of factors, such as the size of your books, your accounting software, and the maintenance status of your accounts.

For instance, a small business, with up to five employees and having less than $500,000turnover,would need three hours for the year-end payroll processes, three hours of finalising all sets of BAS, and another six hours for other EOFY tasks. An additional provision of three hours is required for assisting your tax agent or auditor.

Accordingly, one-hundred small business clients can be translated into a budget for 1,500 hours (equivalent to 6.5 full-time staff) at a minimum for six weeks prior to EOFY. This response, hence, addresses the original question, "Why are accountants and bookkeepers busy during the EOFY period?"

At Tailored Accounts, we adopt the latest technology to minimise manual reconciliations. The purpose of implementing the most recent systems and processes is to save time and cost during EOFY period, consequently providing you with optimal savings. With strong attention to details, the Tailored Accounts team and I have always delivered neat, error-free and presentable reports to more than five-hundred clients since 2008. As the EOFY period is now approaching, this is an opportunity to set your financial reporting right by contacting Tailored Accounts today!

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Can your software replace the role of a financial analyst totally? Think again!

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Whether you're a start-up or experienced business person, you have your call to decide which one is better for your business: a finance staff or an artificial intelligence system.

As we all know, data is everything today. It is why big institutions are paying big amount of investment to collect data in all sorts and forms. For example, Big Data is now the topic going right from local start-ups to multinational corporations.

Being an CFO, who had over 12 years of experience working in financial and accounting industry, I think we are lucky enough to witness the shift from data collection to data analysis.

While many firms out there are still focusing on compliance, I am already gearing my staff toward the future of Big Data.

The future is here!

It is hard to believe that I will not have to conduct bank reconciliation, data verification by checking receipts or even filing a simple Business Activity. I could realise that future is here already! 

Financial and business software are transforming toward digital data analysis. The software functions could communicate to the tax office and banks. There is no extra need for manual data checking and reconciliation to get your data in the right format.

So what finance majored students are going to do after their graduation and years of professional development? It is scary to think about the young generation of finance people who are still being trained about the skills that were already replaced by innovative business software.

Would accounting jobs be no longer relevant? The answer is No! Finance jobs can still survive. Business clients want services that no software could possibly offer.  

Here is a good example, your sales team is about to seal a new contract that requires extra resources. The team requests you to provide extra resources and a quick update on the financial viability of the new job. You can straightaway contact your analyst and request a quick insight on how much the company could earn and spend to make a certain profit. With the information, your sales team and you can go on to tender with a peace of mind!

There is another good example of using Big Data in finance & accounting. One of our clients is doing software development. They are in the process of preparing for the launch of a brand new product to the market. They come back to us and request a set of sales data in the past 5 years to show them sales activities could answer the following queries:

  • What is the new recurring sale per month?
  • What is the churn rate?
  • What is the cost of acquiring new sales? 

I can provide you the answers to within 45 minutes with suggestions to benefits your product launch.

In both of the examples here, we can see the finance role has changed yet it still stays relevant to a client’s need. The only that changed is the role have to move from a data collection into data analysis to produce business intelligence and help clients making important business decision instantly!

We think the future of data mining, business intelligence and business solution will give accountants a future career, growing side by side with technology. At Tailored Accounts, we don’t know the future, we create them!

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Tailored Accounts PowerHour: JobKeeper, Stimulus Package, and Your Business

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The Federal Government and ACT Government have been rolling out extensive economic stimulus and support measures for business in response to the economic disruption caused by the COVID-19 pandemic.

Harry Hoang from Tailored Accounts will provide everything you need to know about the Government support initiatives and how to access them.

45-Min Discussion Agenda

  • JobKeeper Eligibility
  • COVID-19 Stimulus Packages
  • How to support your staff?
  • Essential business checklist
  • Q&A With Harry

Speaker profile:

Harry Hoang is an accomplished accountant and business owner based in Canberra. After completing his studies in Accounting and Economics at the ANU, he founded Tailored Accounts in 2008 and found significant success. To date, Tailored Accounts has grown to represent over 500 clients with no signs of slowing down, and is continually striving to remain at the forefront of the industry to bring the best financial expertise to businesses Australia-wide.

Harry’s work focuses on working with corporate and not-for-profit clients to meet their financial goals, using strategic analysis and cutting-edge technology. Especially, his work ethics and achievements in the industry have been recognised with many recent accolades, such as the 2019 ACT Training Award Finalist For Medium Employer Of The Year, 2018 Australian Accounting Awards Winner in the CEO of The Year Category, 2017 Institute of Public Accountants ACT Member of the Year, and the 2016 Telstra Business Awards ACT Finalist.

Not limited to mere business success, Harry has focused on giving back to the community through mentorship and training programs for university students and start-up community. His experience includes mentoring at The Mill House Social Enterprise Accelerator, Innovation ACT, and the Griffin Accelerator Program since 2015. He is also the organiser of AccountantChange – a training seminar for local and international students to discover the latest trends in the financial industry.

Harry holds a Master of Accounting degree from the Australian National University. He is currently a member of the IPA, CPA, and Australian Institute of Company Directors. Connect with Harry on LinkedIn

Who should attend?

  • This session is dedicated for entrepreneurs, business owners, and sole traders.
  • Please be informed that this training will be delivered online via Zoom.

EventBrite Link For Registration Is Here   

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Tailored Accounts Sharing Is Caring

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Tailored Accounts Sharing Is Caring

To all Tailored Accounts Customers & Friends,

The current pandemic of Coronavirus crisis is once in a hundred years, so it isn't surprising that people and businesses are panicking! None of us including our parents got this experience in their lifetime!

Tailored Accounts was incorporated in 2008, right in the middle of the global financial crisis. However, we believe that the economic crisis back then didn't really hit Australia hard, this time it will! We strongly believe that working together is the only way to survive. Back in 2008, we were involved in many small local businesses get-together events to brainstorm about our difficulties and share how could we overcome the challenges. For example, there were local restaurants & retailers that were suffering so we encouraged each other to SHOP LOCAL ONLY to help them out!

Tailored Accounts team members are eager to help in any way that we can. Being an accountant, we are born to be well-prepared as we practice with checklists every day to ensure that we don't make mistakes at an important step such as your payday or lodging a compliance report to the Government. Our team members have been working together in the past few days to develop two great products that we would like to share with the public:

  1. Tailored Accounts COVID-19 Action Plan for individuals so they can get their acts together quickly when needed. This is like a bushfire emergency plan. When any of your plans need to be activated, you just need to go to your checklist and see if you have got everything ready. Please note that this document is a template that allows you to customise the plan and action the way you want.
  2. Tailored Accounts financial budgeting & future cashflow is dedicated to individuals so they can review the current & future impacts of this crisis to their own financials. Inevitably, thousands of jobs will be lost in Australia in the next 6 months. If any of our staff members or their family lost their source of income, this small tool would be handy for them, not just predicting their future but also helping them to adjust their current expenditures or investments to be able to survive! Please be informed that this isn't a financial advisory tool, this is a template that you are to be fully responsible for utilising and maintaining it. 

Please register via the form below and these 2 templates will be sent to your email. 

If you have any questions, please reach out to us via our contact details below:

P: 02 6169 5196

E: This email address is being protected from spambots. You need JavaScript enabled to view it.

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Simpler BAS and implications on businesses

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Business Activity Statements (BAS) reporting has often been a time consuming and complex process for many small and medium enterprises (SMEs) since goods and service tax (GST) was introduced in 2010. The Australian Taxation Office (ATO) is introducing Simpler BAS for SMEs to reduce the reporting burden. If your annual turnover is less than $10 million, you will report GST on Simpler BAS (unless you report GST by installment).

SMEs who use Simpler BAS will be required to report for the following fields only;

  1. G1 Total sales
  2. 1A GST on sales
  3. 1B GST on purchases

In other words, SMEs are no longer required to report the following fields;

  1. G2 Export sales
  2. G3 GST free sales
  3. G10 Capital purchases
  4. G11 Non-capital purchases

This means that businesses will need only three GST codes instead of seven when reporting BAS. This will not only save time for business owner, accountant & bookkeeper but also reduce room for error….less is more!

However, please be aware that Simpler BAS only affects the GST field, that is, other BAS fields such as PAYG instalment, PAYG withholding and luxury car tax remain unchanged.  Also this does not change the frequency of BAS submissions.

Although this change will reduce the time to complete the BAS and simplifies recording GST information, the change will not significantly change the amount of work performed to get all GST number right! Please do not sacrifice the time that you spend on GST reconciliations as it mean creating more room for mistake. GST still has to be recorded in the correct manner as the underlying GST law has not changed, at Tailored Accounts, we are actually spending the time saving on report to build more layer of GST reconciliation to ensure that our quality assurance is maintained.

While the change is likely to only provide a small reduction in the reporting burden, this certainly has some effects on the setup & function of your accounting department. Not all the accounting software fully supports this change or will require some adjustments or variations. If you need any support in regards to Simpler BAS, please contact Tailored Accounts.

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Tailored Accounts Pro Bono Service Announcement

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The start to our summer has been filled with news of the severe damages caused by drought and bushfires. Fires have ravaged more than 10 million hectares, taking lives, destroying homes and impacting wildlife - leaving behind devastated families, communities and landscapes. At Tailored Accounts, we have made a number of collections at the end of 2019 and, thanks to the generosity and kindness of our staff and friends, have been able to donate to our brave firies. 

In the aftermath of this unprecedented bushfire crisis, Tailored Accounts believed that we could contribute more to our communities. We are delighted to announce our 12-month pro bono service, which is equivalent to $113,000, to the Team Rubicon Australia, an organisation dedicated to emergency responding and natural disaster relief in our country's time of need.

While the devastation in Australia has been unthinkable, there has been incredible support from the Team Rubicon Australia personnel for the affected communities and surrounds. Organisations like the Team Rubicon Australia that provide essential benefits to Australians should not be forced to incur absurdly high operational costs, or see their organisations suffer because of financial vulnerability. 

Tailored Accounts is committed to offering the Team Rubicon Australia the chance to reduce the expenditure of their accounting service, so that the organisation’s budget can be spent on other areas. The consistency of our management accounting will place Team Rubicon Australia in the best position for sustainable success. 

We believe that this in-kind support will promote community inclusion, providing resources, and strengthening our relations between not-for-profit and corporate sectors. We are proud that this project would allow Tailored Accounts staff to add more experience to their careers while creating a good social impact.

Tailored Accounts has a long history with volunteer service. We have focused on giving back to the community through mentorship and training programs for university students and start-ups since 2013. There is no exception this time. On the engagement with the Team Rubicon Australia, we are beyond excited that we get to honour our social responsibility commitment in the collaboration with the country's most visionary military veterans, as we evolve Tailored Accounts into a hub of positive impact and community transformation.

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Simpler BAS and implications on businesses

  • Read: 168 times

Business Activity Statements (BAS) reporting has often been a time consuming and complex process for many small and medium enterprises (SMEs) since goods and service tax (GST) was introduced in 2010. The Australian Taxation Office (ATO) is introducing Simpler BAS for SMEs to reduce the reporting burden. If your annual turnover is less than $10 million, you will report GST on Simpler BAS (unless you report GST by installment).

SMEs who use Simpler BAS will be required to report for the following fields only;

  1. G1 Total sales
  2. 1A GST on sales
  3. 1B GST on purchases

In other words, SMEs are no longer required to report the following fields;

  1. G2 Export sales
  2. G3 GST free sales
  3. G10 Capital purchases
  4. G11 Non-capital purchases

This means that businesses will need only three GST codes instead of seven when reporting BAS. This will not only save time for business owner, accountant & bookkeeper but also reduce room for error….less is more!

However, please be aware that Simpler BAS only affects the GST field, that is, other BAS fields such as PAYG instalment, PAYG withholding and luxury car tax remain unchanged.  Also this does not change the frequency of BAS submissions.

Although this change will reduce the time to complete the BAS and simplifies recording GST information, the change will not significantly change the amount of work performed to get all GST number right! Please do not sacrifice the time that you spend on GST reconciliations as it mean creating more room for mistake. GST still has to be recorded in the correct manner as the underlying GST law has not changed, at Tailored Accounts, we are actually spending the time saving on report to build more layer of GST reconciliation to ensure that our quality assurance is maintained.

While the change is likely to only provide a small reduction in the reporting burden, this certainly has some effects on the setup & function of your accounting department. Not all the accounting software fully supports this change or will require some adjustments or variations. If you need any support in regards to Simpler BAS, please contact Tailored Accounts.

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