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A 10-Point EOFY Checklist to Raise with Your Trusted Advisor

Author: Tailored Accounts

Many of our clients don’t have an accounting background, so it can be difficult for them to check the work of their accountant or bookkeeper. Knowing that the certainty of work being done right can take a load off everyone's shoulders, here are 10 things to tick off with your trusted advisor.

1. STP Reconciliation: Confirm that your bookkeeper and/or accountant has conducted a reconciliation between total salary and PAYG withholding in the payment summary report sent to the ATO, totalling W1 and W2 reported on BASs during the financial year.

2. Business Activity Statement (BAS): Ask your bookkeeper to run an annual BAS report as of 30th June and compare it with your BASs lodged to the ATO. Any discrepancy will need an explanation.

3. Bank: Look at the bank reconciliation report as of 30th June. Compare that with your bank’s closing balance as of 30th June, even a $1 discrepancy deserves a further check.

4. Aged Receivable & Payable Report as of 30th June: Review this report to ensure that it makes sense to you. Is there a debtor that you’ve already paid that’s still showing up?

5. Asset & Equipment: Review asset and equipment movement in the Balance Sheet between this year and last year. Have you purchased any asset that has not been included in this year’s balance sheet? Should you use Instant Asset Write Off this year?

6. Balance on GST Payable Account: Does this account show the balance of your last BAS quarter? Is it indicating that you owe the Tax Office more than $100k? If you don’t have any cash-flow problems, what would be the cause of that?

7. Balance on super payable account: Is it showing the balance of your last quarter super only? Anything more would deserve a closer look.

8. Balance on Loan and Lease Account: Check your Loan and Lease statement as of 30th June to ensure that it is reconciled.

9. Leave Balance: Print out your payroll leave balance (in dollar value) and compare it to your leave provisional liability in the Balance Sheet. If an employee has a 2-month Long Service Leave (LSL) balance when your balance sheet is showing no provision for LSL, it’s time for you to ask questions.

10. Are any transactions being posted to your account? This could be general expenses, miscellaneous expenses, sundry expenses, unallocated expenses, drawings etc. This is a good indicator of lazy data entry.

Here at Tailored Accounts, we teach our clients to conduct a review of our work using these checkpoints. Your financial figures make more sense to you than to us. And on the off-chance that you pick up something that we won’t, we much rather be “accurate” than “right”. 

If you are interested in learning more about how to diagnose your books and accounts status, please don’t hesitate to contact us.

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EOFY 2022: A Final Checklist

Author: Tailored Accounts

With only one week to the end of the financial year, are you ready?

EOFY is always an exceptionally busy time for small business owners but it is also a very important period. Just completing necessary EOFY tasks is not enough. This is the time where businesses should start preparing and organising themselves, placing themselves in the best position for the year ahead.

Business.gov.au has shared an EOFY checklist to help businesses achieve this goal, a valuable resource that Tailored Accounts would like to share and expand on.

1. Record keeping and compliance

All businesses have a responsibility to complete certain tasks for EOFY. If you are unsure about your obligations, visit the Australian Tax Office (ATO) website or call the ATO on 13 28 66. The ATO has also shared their 4 priorities for tax time 2022, so make sure that you get these areas right! Additionally, here is a link to Tailored Accounts’ guide on EOFY preparation.

2. Know what tax deductions and concessions you can claim

You can claim deductions for most business expenses, as long as they directly relate to earning your income. Be sure to do your homework and know exactly what tax deductions you can claim to maximise your tax savings! 

Sole traders can use the ATO’s myDeductions tool to record business income and expenses throughout the year. Instructions on how to use these tools can be found here. More information on tax concessions is available here.

3. Use a registered tax agent 

Ensure your tax agent is registered with the Tax Practitioners Board (TPB). There's no protection for taxpayers who use unregistered tax or Business Activity Statement (BAS) agents.

4. Keep up to date with tax changes 

There may be tax changes each year that you need to be aware of. These might include changes in tax breaks and deductions for small businesses. You can stay up-to-date with any changes by subscribing to Tailored Accounts' weekly newsletter.

5. Review your finances

Spend some time reviewing your finances by yourself, or with your accountant or bookkeeper. Look at whether you met your targets and what you can do differently next financial year. Feel free to contact Tailored Accounts if you’d like our help with this process.

6. Be aware of common tax time scams

There are a number of scams that target small businesses around tax time. Common tax time scams include tax refund scams or tax owed scams. Recently, the ATO has posted warnings on GST fraud and fake websites that offer to obtain a TFN or ABN for a fee.

7. Review your business and marketing plans

Take time to set yourself up for the year ahead. Regularly reviewing and updating your plans will help:

  • Remind you of your goals
  • Assess if your strategies are working
  • Adapt to any changes in your environment
  • Make the best of the opportunities that come your way
  • Help you work smarter, not harder

Here are some business plan and marketing plan templates to get you started.

8. Review your business structure

As your business grows and expands, you may decide to change your business structure or restructure your business. The compliance and taxation regulations differ depending on your business structure. Feel free to contact Tailored Accounts if you have anything you’d like to clarify.

9. Check your insurance

If your circumstances change, you may need to update your level of cover. Read the product disclosure statements (PDS) for your insurance policies carefully. Don't assume you're covered. Learn how to make sure your business has the right insurance here.

Tailored Accounts is passionate about keeping our community informed and updated. Be sure to subscribe to our weekly newsletters to gain access to the latest policy updates, news, grants, opportunities, events, and more!


Changes To Super: Impact On You & Your Business

Author: Tailored Accounts

As some of you may be aware, the ATO has announced some changes to the eligibility criteria and rate for superannuation. Applicable on pay runs with a payment date of 1 July 2022 onwards, these changes include:

Changes To Super Guarantee Eligibility Threshold
The $450 monthly minimum income threshold for super contributions will be automatically removed, which means that employers will need to pay super for their employees regardless of how much they are paid.

Other eligibility requirements for super guarantee will not be impacted by this change. Workers under 18 will still need to work over 30 hours in a week to be eligible.

The Base Super Contribution Rate is Increasing 
On 1 July 2022, the super guarantee rate will increase from 10% to 10.5%. The Norfolk Island transitional SG rate will increase from 6% to 7%.

The SG rate is scheduled to progressively increase to 12% by July 2025. Please be aware that if you do not pay an employee’s minimum super guarantee amount on time and to the right fund, you will have to pay the super guarantee charge (SGC) and lodge an SGC statement to the ATO. 

If Tailored Accounts is currently handling your payroll, there is nothing for you to worry about as we’ll make the necessary arrangements to guide you through this process and ensure that these new changes are accounted for. 

Otherwise, here is some more information and resources on how to ensure that your business is complying with these changes:

1. Eligibility for SG is determined according to when an employee is paid, not when they earn the income. 
If an eligible employee is paid on or after 1 July 2022, these new rules will apply to the full amount, regardless of whether some or all of the pay period it relates to is before 1 July.  

If you are unsure if an employee is eligible for super, please have a look at this article provided by the ATO.

2. Check that your payroll and accounting systems are updated from 1 July to ensure that you are paying the right amount of super to all eligible employees. 
For businesses using Xero, the new rate will be automatically applied in pay runs with a payment date of 1 July 2022 onwards for all your employees with the Statutory Rate option selected. If your employee doesn’t have the Statutory Rate option selected, you can review this in their Pay Template and manually update the rate if needed.

More information on how to update super guarantee contributions on Xero is available here.

3. If these changes mean you'll be paying SG for an employee for the first time, you'll need to follow the choice of super fund rules. 
More information on these rules is available here.

If all the preparations for EOFY and the new financial year are starting to feel overwhelming, our CEO, Harry, is always happy to have a quick chat with you to discuss how Tailored Accounts can help!


Behind the Scenes Look at EOFY: A Magical Touch

Author: Harry Hoang | CEO of Tailored Accounts

With the End of Financial Year (EOFY) fast approaching, offices of accountants and bookkeepers are filled with the hustle and bustle of time-critical challenges. Some of you may wonder what makes EOFY an especially hectic time.  This article will give you a behind the scenes look at EOFY preparation.

Having worked in the accounting industry for more than a decade, I consider EOFY preparation as an opportunity to put in 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” 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 each of our clients. At the end of each month or quarter, our team reports this payroll information to the Australian Taxation Office (ATO). In addition to the accurate reports regularly lodged to the ATO, payroll reconciliations at year-end take extra 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. These particular tasks will require a few extra hours of work during the EOFY period.
  • Tailored Accounts will be preparing STP on behalf of our clients and submit them to the ATO. We will submit STP to the ATO by 14th August via STP enable software. Your payroll summary (used to be called payment summaries) will automatically show up in your MyGov ATO section.
  • If you are managing your own payroll, you will also need to have STP ready for employees by 14th July and the ATO by 14th August.

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 for the end of the year BAS, the assignments below must be carefully completed:

  • Completing all reconciliation processes for the last quarter BAS will require half a day.
  • 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 account 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 a streamlined process to review every account.

Ultimately, the 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 less than $500,000 turnover, would need three hours for the year-end payroll processes, three hours for 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. A hundred medium businesses would be an exponentially larger endeavour!

Now you know why accountants are always so busy at this time of the year.

Fortunately, at Tailored Accounts, we adopt the latest technology to minimise manual reconciliations. Thus, providing you with optimal savings in both time and cost during the EOFY period. With strong attention to detail, the Tailored Accounts team and I have always delivered neat, error-free and presentable reports to more than five-hundred clients since 2008. With EOFY approaching, this is an opportunity to set your financial reporting right by contacting Tailored Accounts today!


Struggling With Hiring A New Accountant? You're Not The Only One

Author: Tailored Accounts

Research from National Australia Bank (NAB) has found that 1 in 5 Aussies changed their jobs last year and 25% are currently considering leaving their workplace. Additionally, the 5% inflation rate is adding more stress to families, forcing staff to look for better paying jobs.

And, with the end of financial year approaching, it is likely that you are one of many businesses struggling to hire the right staff for your Accounting Team. This is the time of the year Government Departments start opening up job vacancies and similarly, many accounting practices will also be gathering their resources for EOFY. 

With pressure coming from all sides, this can be a big headache for SMEs and small not-for-profit organisations, not only will you be forced to find good-quality staff in such a competitive environment but also be forced to account for the associated business disruption and cost!

Businesses may be forced to make do with what they have and do the accounting themselves, leaving themselves vulnerable to at best, delegating long hours to an accounting task that trained accountants could easily complete in a much shorter period, or at worse, making costly mistakes.

As an alternative, businesses could try finding a new accountant through a recruitment agency. But, as a consequence, business owners or managers would be forced to go through the whole process, from selecting the candidate, interviewing, on-boarding, training, retaining, termination & handover. This traditional way of recruiting your Accounting Team seems to not only be time-consuming but extremely costly! Neither option is ideal. Fortunately, there is a much smarter, efficient, and cost-effective way to hire your Accountant.

Our solution: Tailored Accounts will be your fully functioned Account Department, providing you with full solutions ranging from: Data entries, bookkeeping, payroll, AR, AP, Reporting, and Reconciliation to CFO. The benefits of this innovative model are:

  • Continuity of services is our strength. As we have a big team to handle high numbers of jobs and commitments. Collaboration between different tiers of our services will give you a fully functional Account Department worthy of any large corporation at only a fraction of the cost!
  • 100% qualified accountants, we provide our staff with professional training programs on monthly basis to keep them updated with the latest policies, trends, and technology. 
  • The best Quality Management System, built in alignment with our procedures & processes to maintain the high integrity & reliability of our work. As we deal with high volume & value transactions on a daily basis, quality assurance is our top priority. Currently, we have over 500 business customers, processing over 1000 payrolls per week and transacting over $300 million per year on behalf of our clients.
  • As one of the first to adapt to cloud accounting in 2009, we know that cloud is now the past, and security is the future! Everything that we are doing here is about how to make your secured transactions even more secured!
  • A minimum of 30% cost reduction to your current recruitment model. A well-trained and experienced accountant will cost your business at least $90,000 per year plus superannuation, training, travel expense and other entitled benefits according to the latest labour market rate.

Here at Tailored Accounts, we offer you the chance to reduce your expenditure on accounting services so your budget can be spent on other key areas. Our service commensurately corresponds to your benefits, including:

  • At least 20% less spending on annual accounting costs;
  • Time ownership of a team of accountants and CFO with our flat fee for at least 20 hours per week;
  • Free of charge for End Of Financial Year work; including Payment Summaries, Tax return and audit preparation.


EOFY 2022: Important End Of Financial Year Dates

Author: Tailored Accounts

It's nearing the end of the financial year. And because EOFY is always a hectic time of the year, Tailored Accounts would like to save you some time by sharing some important dates to be aware of so you can get ahead of the game. 

Super Contributions

To be eligible for a tax deduction in the current Financial year, your final superannuation guarantee payment for EOFY should be made 7-10 days before 25th June (allow for delays) to ensure that super funds receive the contributions by 30th June.

Salary Sacrifice Super payment will happen on the same date to ensure that the salary sacrifice super contribution appears in this financial year’s payment summary.

If your Super is being managed by Tailored Accounts, all the deadlines will be met so there won’t be any hassle for you! Super reports and reminders will be sent out well in advance so that you will have sufficient time to review and make super payments before the deadline.

Make sure you are aware of the following rules:

  • The concessional contribution cap is $27,500 for all individuals regardless of age for this income year.
  • Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and employee personal contributions claimed as a tax deduction

Single Touch Payroll (STP) Submission & Reconciliation

If you are managing your own payroll, you will need to have STP ready for employees by 14th July and the ATO by 14th August.

Tailored Accounts will be preparing STP on behalf of our clients and submitting them to the ATO. We will submit STP to the ATO by 14th August via STP enable software. Your payroll summary (which used to be called payment summaries) will automatically show up in your MyGov's ATO section.

Final Business Activity Statements for this FY

April – June BAS is not due until 28th July or 25th August if you are using BAS/Tax Agent to lodge online. Tailored Accounts will be asking our clients to send us the quarterly paperwork a few days after 1st July. This will help us with End of Year reconciliation and ensure that your BASs are complete before the due date.

Thank you for entrusting Tailored Accounts with your EOFY services – We guarantee that 100% of your payment summaries are completed before the 14th July due date!


EOFY 2022: How Much A Move To Xero Will Save You

Author: Harry Hoang | CEO of Tailored Accounts

The end of financial year is approaching us rapidly. Here at Tailored Accounts, we are already planning our payment summaries for the end of year reconciliation! However, we know that April through to July is the period when we are flooded with enquiries concerning moves from an existing accounting system to a new system like Xero, so we are ready for this surge of interest too!

Transitioning into a different system can be a big endeavour but it is also important to keep the potential benefits in mind. One of the biggest questions our clients like to ask us is "How much will I save?". We'll be answering this question today with the case of one of our largest-staffed client company's transition to Xero, showing you how much you can save by moving from a large corporate accounting method to a more de-centralized system like Xero and its add-ons.

The client was previously using Attaché, for which they were paying around $40,000 per year plus around $5,000 extra for upgrades and general support. However, the highest costs were felt in the inefficiency of recording transactions using this clumsy software. Large investments of time from the payroll and accounting team meant serious losses to the company!

By moving this client to Xero, here are the straight savings in dollars that were collected:

  • Software subscription cost: From $40,000 down to $8,020 per year ($720 for Xero + $4,500 for Keypay + $1,800 for Receipt bank + $1,000 for Power BI). A straight saving of 80%;
  • Paperwork handling and warehouse storage (turning hard copies to soft copies) cost: From $9,600 per year down to $0 as XERO + Receipt Bank will enable clients to be 100% paperless. Savings of 100%;
  • Time-saving for payroll handling (staff) & processing (payroll team): Around 15 minutes per staff + 3 hours per payroll clerk per week. Annual savings of around 1,456 hours or $36,400;
  • Time savings for account payable handling (staff & manager) & processing (AP team): Around 30 minutes per staff & manager + 3 hours per AP clerk per week. Annual saving of around 208 hours or $6,240;
  • Time savings for senior accountant & CFO in producing reports: Around 2 hours per week per person. Annual savings of around 208 hours or $8,320;
  • Improvements in financial data that help Managers & the Board to make the right decision at the right time: Including identifying waste or overspending budget cost items (including salary); Pressuring sale team to meet KPI; Retaining recurring income and customers. The estimated annual saving will be a minimum of $100,000 per year for a business of this size.

Overall, that's a saving of almost $200,000 per year for a business turning over around $10 million. Our client will save over $2 million in just the next 10 years!

If you want us to review your system and produce a business plan to show you how much your business would save, we can get it done for NO upfront cost!

So what are you waiting for?