News Archive

Record Keeping

Record keeping is one of the most overlooked, yet vital, business management activities. It is also frequently one of the biggest challenges for a small business.

Taking time to organise a good system can be tedious and time consuming, but it only takes one visit by a tax auditor or a refusal for a loan by a bank, to convince any business owner that an organised system would be useful.

Why are record keeping systems so important?

It is a legal requirement for all trading businesses to keep financial records.

There are penalties for not maintaining the required records, and for not keeping them for five years.

Your financial records also provide the basis for all the reports required for the ATO, government agencies, banks and potential funders, plus they provide you with an overall picture of how your business is travelling.

But probably the most important reason for keeping financial records is to enable you to monitor business performance. Financial statements allow you to track progress towards your goals and provide you with the information required to make informed decisions along the way.

Your record keeping system should be easy to use, understandable, reliable, accurate and timely.

Why should I keep good records?

Accurate and well kept records will help you in so many ways:

Monitor the health of your business and assist you to make sound business decisions;
Prepare financial statements;
Manage your cashflow;
Make it easier to complete Activity Statements and prepare annual income tax returns;
Substantiate items reported on your tax return;
Demonstrate your financial position to banks and other lenders or to prospective buyers of your business;
Keep accounting fees down, or allow us to provide you more important value-added services;
Peace of mind.

Our qualified accountants and bookkeepers have many years experience in developing and maintaining good accounting records and systems. If you need help to understand your obligations or to set up a good record keeping system, please contact our office.

National Workplace Relations

You may be aware that from 1 January 2010, ALL businesses are now covered by the National Workplace Relations System. This means the wages and conditions you provide to employees must, at a minimum, comply with:

The National Employment Standards and
The minimum wage in a modern award.

Under the National Employment Standards (NES) the 10 minimum entitlements relevant to fulltime and part time employees are:

Standard 38 hour week – a maximum standard working week of 38 hours for full time employees, plus “reasonable” additional hours.
Flexible working arrangements – a right to request flexible working arrangements to care for a child under school age, or a child (under 18) with a disability.
Unpaid parental leave – unpaid parental or adoption leave of 12 months, with a right to request an additional 12 months.
4 weeks annual leave – 4 weeks paid leave each year.
10 days paid personal or carer’s leave – plus 2 days paid compassionate leave for each permissible occasion and 2 days unpaid carer’s leave for each permissible occasion.
Community service leave – for jury service or activities dealing with certain emergencies or natural disasters (this leave is unpaid, except for jury service).
Paid public holidays – entitlement of paid ordinary hours on those days.
Long service leave.
Notice of termination and redundancy.
The right for new employees to receive the Fair Work Information Statement.

One of the key changes to occur under the new system is the modernisation of awards. The Australian Industrial Relations Commission (AIRC) is currently consolidating all existing awards into industry or occupation-based categories.

From 1 January 2010, most industries are subject to “modern awards”. Modern awards apply to all employees covered by the National Workplace Relations System, with only certain entitlements applying to casual employees. If you are an employer currently operating under an existing award, there is a good chance you are now covered by a “modern award”.

You will now need to determine whether your employees are covered by a modern award and when it takes effect. You will also need to check whether any terms and conditions of their employment have changed.

The AIRC has allowed for transitional arrangements over a five year period, to assist employers and employees with the move to the modern award system. Increases/decreases in wages, loadings and penalty rates will be phased in from 1 July 2010. These include:

Minimum wages.
Casual and part time loadings.
Saturday, Sunday and public holiday penalty rates.
Evening and other penalty rates.
Shift allowances.

The period provides time for those affected by a modern award to make the required changes. During the period between 1 January 2010 and 1 July 2010, the pre-modern award pay-related entitlements remain in effect.

From 1 July 2010, if a modern award results in an increase or decrease in wages or penalty rates, some modern awards will allow for the incremental phasing-in of these changes over a five year period. However all entitlements under a modern award will apply from 1 January 2010.

Employers should consult their relevant “modern award” for specific transitional arrangements.

The introduction of the new workplace relations system means changes to the way you operate your business. Our qualified advisers are available to help you understand your obligations. If you have any queries regarding the new National Workplace Relations System or any other accounting or taxation matters, please do not hesitate to contact our office.

Reportable Employer Super Contributions

For the 2009/2010 financial year and all future years, if you make super contributions under a salary sacrifice arrangement or extra super contributions to a super fund for an employee, you may need to report those contributions on your employee’s payment summary. This includes working owners of a business who pay themselves a salary.

These are called Reportable Employer Super Contributions and are those contributions you make for an employee where:

Your employee has influenced the rate or amount of super you contribute for them.
Or the contributions are additional to the compulsory contributions you must make.

Even though Reportable Employer Super Contributions are not included in your employee’s assessable income, you must report them to the ATO as part of your payment summary reporting and keep enough records to prove whether or not your employee influenced the super contributions you made on their behalf.

These records include:

Information on how you calculated Reportable Employer Super Contributions.
Information on how you calculated the employee-influenced portion of the total employer contribution.
Information on how you calculated your employee’s salary or OTE.
Copies of relevant salary sacrifice agreements.
Copies of relevant industrial agreements.

Records should be detailed enough to report each employee’s Reportable Employer Super Contributions in your payroll and record keeping systems and also provide accurate information to your employees, if they were to ask about their Reportable Employer Super Contributions.

The introduction of the Australian Government’s Reportable Employer Super Contribution scheme means change for you and the way you run your business. Our team of qualified accountants and experienced bookkeepers are available to help you understand your new obligations and changes to payment summaries and payroll systems. If you have any queries regarding Reportable Employer Super Contributions or any other accounting and taxation matters, please do not hesitate to contact our office.

Profit Improvement Strategies

Welcome to the start of a new decade and best wishes from all at Austax for a happy and successful 2010.

A new year is always a good time to reflect on how your business is performing, and to look at new ideas and strategies you can implement to improve operations, revenue and profitability.

This is also a good time to plan for what you hope to accomplish in your business. That is your short, medium and long term goals. Every business should have a forward plan (both strategic and financial). But the reality is that very few businesses do.

In our personal lives, we all have goals. Examples include putting your children through university, upgrading to a nicer home, taking that overseas holiday, or improving your golf handicap. And we plan and work towards achieving these goals.

In business, it is no different. If you haven’t set goals, how can you hope to achieve a certain level of sales or profitability? And if you would like your business to achieve better results, how can you expect this to happen, unless you are proactive and take action to bring about improvements?

This is where we can help. We can work with you to develop budgets and targets for your financial performance. And then, we analyse your actual performance against the budgets, and work with you to bring about the desired improvements.

You know the operational side of your business and by working with Austax to improve your financial and business skills we can make real improvements to your business and therefore its profitability and value.

We are firm believers that better systems drive greater efficiencies, which in turn delivers increased profits. Higher profits and better systems will ultimately increase the value of your business when the time comes to sell and retire.

To find out more, please phone our office for a free, no obligation discussion about how we can help you and your business. [January 2010]

Bookkeeping

Austax Townsville has recently introduced some fantastic new services for our business clients. We provide accounting and compliance services to over 200 local small businesses. Our team of friendly qualified accountants are committed to helping local business owners to manage and grow their businesses successfully, and we believe our new services will add real value.

Austax Townsville is proud to offer a new bookkeeping service that we are confident will be a cost effective way to help you efficiently manage your business’ finances.

Our experienced Bookkeepers are supported by a team of qualified Accountants who are on hand for any technical assistance that may be required.

So, if you find you’re struggling with all the paperwork, give us a call and we’ll help you out – which means you’ll have more time to concentrate on running your business!

Also, watch out for a series of useful MYOB training seminars in 2010, designed specifically to assist local, small businesses. [January 2010]