Tradies in Australia

We are looking forward to sharing with you articles that we think will help you grow your business

Monday, September 9, 2019

Single Touch Payroll

Single Touch Payroll (STP) - What is it and how does it work?

Unless you've been living under a rock, by now you should have heard about STP, and that it requires something of you. So what is it and how does it work? 

STP is an ATO initiative to establish real time digital salary reporting for employees. This means that as an employer, you'll now be required to report salaries and wages, PAYG withholding, and superannuation information every time you pay your employees, using a very specific format. If you haven't already, download the ATO's 'Get ready checklist'.

For employees, they can track their earnings through a myGov account.

Reporting

Micro employers (1 - 4 employees)

If you don't currently use payroll software, the are a number of no-cost and low-cost software solutions. (Details of those can be found here). Or, your registered tax or BAS agent can report your STP information quarterly, rather than each time you run payroll.

Small business employers (5 - 19 employees)

Those businesses with 5 - 19 employees have the option to have already begun reporting, do so any time before 30 September 2019, or apply for more time to get ready.

Large business employers (20 or more employees)

STP commenced on 1 July 2018. The ATO has allowed a 12 month transition period to start reporting by 30 June 2019.

Closely held payees

A closely held payee means the payee is directly related to the entity from which they receive payments, such as family members of a family-owned business; directors or shareholders of a company, and trustees or beneficiaries of a trust. If you report quarterly, you will need to send your STP report once per quarter at the same time you lodge your activity statement. Again, this is done using STP enabled software, or your tax or BAS agent.


How does it all work?

Once you've connected you payroll software to the ATO, keep processing your payroll as normal. After you process a pay, you'll now have to send the payroll information to the ATO. To do this your software can connect directly to the ATO using an AUSkey (more commonly for larger businesses), or your software may connect to the ATO using a software service ID (SSID). You can check the ATO Business Portals for prior lodgments.

When it comes to the end of the financial year, you no longer need to prepare Payment Summaries for the employees, or the summary for the ATO. These are all accessed digitally - for the employee it is through their myGov account. You'll need to finalise your employees' information by 14 July each year. The sooner you finalise, the sooner the employee can lodge their tax return.


What happens if I make a mistake?

Don't fret!!! You can submit an update event in your STP-enabled solution.

During the first year, the ATO has said they will not pursue penalties when businesses are making the effort to do their best to comply with the law. As John Shepherd, the ATO's Assistant Commissioner for the Singe Touch Payroll Program explains, 'We don't want to apply any penalties in the first year, so what we need is for people to actively engage, including if they feel they will need more time.' And if you need help - either with reporting or paying, it's better if you're proactive about it. The sooner you talk to someone about it, the sooner it can be fixed.

If in doubt, ask a question. It's easier (and better) to get things right the first time than having to fix it up later.

Kirsty Fox is the Principal of Spitfire Accounting Solutions, which runs the Tradies Accounting Toolshed. Should you have any queries, please do not hesitate to contact her here.


Monday, August 12, 2019

This is posted courtesy of Amanda Gascoigne of The Balanced Firm

Is $5K reasonable to pay an accountant annually?

This was a question posted recently on Facebook and I felt an urge to respond.
You see I’ve read similar questions before and have bit my tongue, but the frequency of these questions are getting more regular and the comments they are attracting are increasing.
Could it be that it’s tax time?
Or could it be that there truly is confusion in the market place due to so much misinformation, disparity and variation?
Here’s my response and a few extra musings for good measure. Enjoy and feel free to share.
Firstly, I believe $5,000 is reasonable for annual compliance work if a business is a small to medium sized business, good quality advice and support is provided throughout the year and the accountant and their firm are proactive which may include a tax planning review. There are of course many other factors affecting price including location, frequency of meetings, use of software , quality of information provided and qualifications and experience of the advisor.
There would be many small to medium sized businesses paying in excess of $5,000 and in the majority of those cases, their accountants are providing good value for the work they are doing and they have also been successful in articulating that value. Where there seem to be an element of confusion, disconnect and potential resentment from small business owners is in the range of $1,000 to $5,000.
Secondly, I’d like to give an insight into the value of a good accountant as I know many accountants won’t go into this themselves with their clients.
As a disclaimer, I’m a chartered accountant (was recently made a Fellow) and had my own practice for 18 years and when I went into accounting, it was a very well regarded and valued profession and it still is in many circles. I no longer have a practice and this month I’m celebrating my 20th year in business. When in practice, I prided myself that I gave quality advice, charged appropriately for it and had a very successful and profitable practice – my clients appreciated the work I did, respected what I charged (mid range) and were inspired by my success and what I was doing outside my practice.
Degree qualified accountants have studied full-time for at least 3 years, part-time for at least 6 years and many a combination.
Chartered Accountants (CA’s) study for a further 18 months and are only eligible to commence the program after a certain amount of practical experience in a firm.
Chartered Accountants are then required to undertake 120 professional development hours across every 3 years and many do more than that if they have other designations.
And if your accountant is a CPA or IPA, they too have similar requirements which you can read about on their respective websites which I have provided a link to. An area of concern that has been in the media in the last week and a possible reason for the widespread variation of pricing for accounting, tax and BAS services are the number of people offering these services that are not registered agents and could be lodging via their clients myGov account or online business portal. You can find out if your agent is registered here.
So let’s look at what I believe is the number one factor that is making accounting look easy and DIY’able, is downplaying the important role of an accountant and in turn is putting even more price pressure on what has always been a bit of a “grudge” spend by business owners – accounting programs.
I absolutely love programs like MYOB, Xero and QBO and would recommend to any business that they embrace cloud accounting software as a non-negotiable when they start a business. But for some reason, so many think that  these programs replace their accountant and all the work they used to do. As such, the value of a well trained and highly qualified accountant has diminished in the eyes of businessowners.
Software summarises income and expenses and categories it which merely replaces manual cashbooks, excel spreadsheets, folders/ziplock bags/shoeboxes and biscuit tins of yesteryear. Some also have payroll functionality and single Touch Payroll functionality.
Software does not interpret tax law.
Software does not interpret and advise of Fair Work obligations.
Software does not provide asset protection or tax minimising advice.
Software does not organise payment arrangements.
Software does not liaise with the ATO or other government departments such as ASIC on your behalf. 
Software is not a trusted advisor.
Software does not provide that listening ear, put things into perspective, help  you navigate challenging times, help you establish solid foundations in your business, help you grow your business and help you exit your business when the time comes.
Accountants do not merely just jump into your software, press a button and produce your BAS’s, financial statements and tax returns. Extensive checks and balances are performed, reconciliations attended to, adjustments, reallocations and additional entries not to mention consideration and implementation of tax minimisation strategies and whole raft of other compliance tasks and formulation of business improvement and growth advice coming from those figures.
Accountants take on a high level of risk in the work they do every day to ensure their clients comply with the law. They can get sued, lose their registrations, their reputations and their  livelihood if they do not detect errors, omissions, false statements and do not take reasonable care in ascertaining a client’s state of affairs and to ensure taxation laws are applied correctly.
Accountants will also connect you to other trusted advisors in the event that you need them eg a good bookkeeper/HR advisor/lawyer/financial planner etc.
And the list goes on.
A good accountant does all of this.
Business owners don’t see this and accountants probably don’t go into all of this with their clients. But then, do you go into the nitty gritty of what you do and the risk you take when delivering a good or service to you client or do you quote a price that is sufficient to cover your costs, overheads and provide you with sufficient profits to make a good living and then wait for your client to say yes or no?
I now work with accountants helping them to understand their value, to help them understand their worth and to help them price their services appropriately to ensure they are getting a return for all of their years of study, the risks they take interpreting and applying tax law each and every day and to cover the costs of running their business which are ever increasing just like everyone else’s.
So for anyone questioning what they are paying their accountant here are a few questions to ask yourself?
Are you getting great advice and support from your accountant right now?
If the answer is NO, it doesn’t matter how little or how much you are paying that accountant, go searching for one that will and there are plenty out there that will offer that level of service at all different price points, but please don’t shop on price alone. Think about what happen’s in your own industry and the horror stories you have heard – accounting is no different! 
If this answer is YES, but you are still curious as to whether you are getting good value for that service, ask yourself these questions.
How does the money you pay for your accountant compare to other professionals you pay in your business?
How does the money you pay your accountant compare to what you charge for your services?
Why not have a frank conversation with your accountant where you articulate what you are after, what your concerns are and reset the relationship and the fees and engagement going forward.
At the end of the day, I tell accountants there are more than enough clients for everyone and vice versa for business owners.
The secret is finding a match that will result in a mutually beneficial, respectful and long-standing relationship.

Sunday, January 20, 2019

Do What You Know - Not What You Don't

Do what you know - not what you don't!



I am an accountant, and run an accounting practice.  My strengths are looking at the figures, advising on what they mean, and what the client needs to know/do to get to where they want to go.  I am not a sales and marketing person, nor am I a technology expert.  So I do what (I hope) most people do - hire an expert for those areas.

Too often I see people (and clients) who think they know the ins and outs of everything - my personal favorite is when a client tells me the tax law, based on something they heard from someone else. I am a registered tax agent and I deal with tax law daily, so I do know how the system works.  More often than not, the client only has a snapshot of the topic they are talking about, not the complete picture - or the consequences if they are wrong.
But beyond that, if I do what I know, and hire people/outsource the stuff I don't know, then I have that time back - and isn't time money?? My hubby is an electrician, and he's good at wire jerking. He's been working with a mate (who's good at laundries, cooling, etc), and said mate didn't want to wait a day til hubby could get there. He tried running the cables and cable trays, took 3 hours, and did it wrong. Hubby tore it done and re-did it in about 30 minutes. He did what he was good at.

The other thing is that there's nothing worse than pretending you know something, giving the wrong information or doing it wrong, and having to fix it later. (Particularly book-keeping - please get that done right, it really can be a nightmare to fix!). I talk to marketing people about marketing, and IT people about my technology concerns.  I am part of a network that gives me access to lawyers, insurance people, mortgage brokers, coaches, etc as required. I'd rather admit I don't know something, and get someone else to either help me or do it for me..

I guess the point I'm trying to make is do what you know, and leave the other stuff to the professionals. It will save you time, stress and, ultimately, money. Because that time spent wasted on what you doing what you don't know. is time that could be spent working on new projects, being with the family, going to the beach or even a holiday.


If you have any questions, please get in touch with Kirsty:

http://spitfiresolutions.net.au/contact

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Tradies Accounting Toolshed   ~   Tradies Tax Terminator
 

Monday, October 22, 2018

Tradies in Australia

We are looking forward to sharing with you articles that we think will help you grow your business


SAS - MUST HAVE APPS FOR TRADIES


TRADIFY

The complete job management solution for tradies and contractors. Easy to learn and simple to use.
Handles invoicing, quotations, job scheduling, tracking, timesheets and more.

Pricing starts from $20 per month



Receipt Bank

Say goodbye to chasing and data entry! Spend more time growing your business with accurate and efficient data extraction from receipts and invoices straight into Xero.

Pricing starts from $33 per month.

Paypal

Pair the PayPal Here card reader with your mobile to take payments wherever your
business takes you. Accept MasterCard, Visa or American Express payments for the same rate,
with no monthly fees or lock-in contracts.

ServiceM8

Manages your client’s first call through to job completion, invoicing and payment. Enables trades
to provide great customer experiences, increase  productivity and win more business.

Pricing starts from $0.35 per job

Xero

Explore features like invoicing, payroll, reporting and more. Xero software has all you need to manage your numbers effortlessly. Pricing starts from $25 per month

Referron


Referron is a free mobile app where you can send your virtual credit card, and sned and receive referrals with 3 taps of the phone. THe app will be able to track your contacts and your referrals made and received. 

                                   
brought to you by Kirsty Fox of Spitfire Accounting Solutions - The Tradies Accountant . 

"You worry about your work,  I'll worry about everything else" 

www.spitfiresolutions.net.au