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When should you add yourself to the payroll system?

As a business owner, you have a few options when it comes to paying yourself. One of these includes adding yourself as an employee to the payroll system. But you need to always balance your own pay with the financial needs of your business. So what’s the best way to do that? Think about your pay If you’re a business owner thinking about your remuneration, ask yourself these questions: How do you pay yourself? The options are salary through payroll, dividends, loans and taking money out as needed. How much should you take? Enough to get by? Enough to be comfortable? More than the highest paid employees? When should you take money out of the business? Is it ever okay not to pay yourself? In this guide we’ll help you answer these questions, so you’ll know how and when you should pay yourself. Businesses must be built Before looking at paying yourself, you need to think about the flow of money into your business. Businesses need investment to grow. In fact they often need it just to keep pace with developments in their market. Some investment comes in the shape of employee skills, which is why it’s important to hire the right employees. But some investment needs to be in the form of cash, which might come from: Financial investment. This may come from you, fellow owners or directors, or anyone else. Investors need to be paid back under agreed terms. These usually include providing a return on the original sum. Grants. These tend to be for specific uses so are only worth applying for if you need what they... read more

GST on Imported Digital Products and Services Will Apply In Australia From 1st July 2017

  New Australian law applying GST to imported digital products and services Australia has introduced a new law applying the Australian Goods and Services Tax (GST) to international sales of digital products and services provided to Australian consumers. Under the new law, overseas businesses will be required to pay GST on these sales from 1 July 2017. What services and digital products are covered by the measure? Examples of digital products include downloaded movies, games and electronic books. Examples of services include architectural, legal or educational services. The new law applies very broadly to sales of anything except non-digital goods or real property. If you sell through an electronic distribution platform, for example an app store, the platform operator is responsible for registering, reporting and paying the GST. Do I need to register for the Australian GST? If you sell digital products or services to Australian consumers and you meet the registration turnover threshold, you need to register for GST with us. You will meet the registration turnover threshold if your sales to Australian consumers in a 12 month period are A$75,000 or more. Once registered, you need to report and pay GST to the ATO on sales made from 1 July 2017. How do I register? A simplified system will be available for you to electronically register, lodge and pay the GST. You can access this service on the ATO’s website from 1 April 2017. Under the simplified registration system, you: will register electronically with minimal proof of identity will lodge and pay GST quarterly do not need to provide a tax invoice or adjustment note to your... read more

Thinking of Outsourcing Your Bookkeeping?

  Are you a business owner or operator who is considering outsourcing your bookkeeping? Then you’re in the right place! Read on to discover the benefits of outsourcing your bookkeeping to a qualified professional. Find out what to look for in a bookkeeper, what skills they have, and how a bookkeeper can help you run a more successful, profitable business. 10 reasons to outsource your bookkeeping Leveraging time is the goal of most smart business operators. Leveraging your time in business means that you achieve many tasks with the least personal input, thus reserving your time for the most important parts of your business. Outsourcing is a powerful business tool for those committed to leveraging their time. Done well, it brings significant benefits to your business. Consider the following 10 reasons to outsource your business’s bookkeeping. Outsourcing will: free you and your key personnel up to focus on your core business. save you money. A contract bookkeeper is significantly more efficient at dealing with bookkeeping issues and accounting software. This efficiency means the cost of you performing your own bookkeeping is likely to be higher. The opportunity cost (due to your time being spent on bookkeeping) may be significant again. offer you the ability to tap into a knowledge base not available internally. give you peace of mind knowing that you have complied with your legislative obligations. enable efficient dealings with the Tax Office, including lodgements. improve your financial reporting abilities, thus improving your access to key information with which to run your business. allow you to leverage the bookkeeper’s software knowledge, ensuring that you’re using the best software... read more

Delivering Happiness To Clients

Never a favourite activity of business owners, collecting outstanding debts, increasingly, is a key factor in business survival. Getting paid on time is optimal, but far too many business owners allow themselves to be exposed to bad payers. But, as the saying goes ‘every cloud has a silver lining’ and the silver lining for accounting and bookkeeping professionals is to leverage their skills and solve this most pressing of problems. It’s an opportunity for the trusted adviser that they understand the business inflows and outflows accordingly and be in a position to offer solutions.   The opportunity Most SMBs simply do not have the internal processes or the applications to protect themselves from slow or bad payers and it is almost a given that the business owner has no time to put together a concerted effort to collect outstanding debts in an organised manner. The older a debt is the greater the chance that it will become a bad debt. Debts left ageing for more than 60 days, reduce the chances of it being paid. Although many bookkeepers would rather keep the heads down and not stand in the line of fire between recalcitrant debtors and agitated business owners, there are resources and services at hand that can assist the business owner in better managing their cash flow. Screen the new customer No business owner wants to say ‘no’ to a new client; but screening new clients using a credit reporting agency may save money in the long run. It’s one of several ‘tools’ that the bookkeeper can bring to the business owner. A credit report from an agency... read more

Top 10 Bookkeeping Mistakes Made by Small Businesses

From one-person entities to major corporations, bookkeeping is a significant part of any business endeavor. While it is typically not one of the more glamorous jobs, bookkeeping is at the heart of a company’s success, and errors can cost the company significantly. Below are 10 of the most common errors that you want to avoid. Not saving receipts of less than $75. While such receipts may not be required by the IRS, they provide backup documentation for the many deductions you may claim. It is very simple to have a folder for such receipts, which can prove valuable at tax time. Doing it yourself. No matter how much they hate it, many small business owners insist upon handling the books themselves. Having a competent bookkeeper coming in to handle the books can be extremely beneficial in that they have the skills to do the job quickly and efficiently and will provide a second pair of eyes to find errors and make suggestions. Forgetting to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then make the mistakes of failing to track these expenses. They then fail to submit the expenses to the company for reimbursement. Not properly classifying employees. The proliferation of independent contractors, consultants, and freelancers has made it difficult to determine who is on staff and who is not. This results in misfiling when it comes to filing taxes since there are different rules and regulations for employees and non-employees. Lack of communication. Having someone handling bookkeeping is only effective if they are filled in and... read more

The Seven Pitfalls of Business Failure and How to Avoid Them

When you’re starting a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you’ll be much less likely to fall victim to them yourself. Here are the top 7 reasons why businesses fail and tips for avoiding them. According to statistics published by the Small Business Administration (SBA), about half of all employer establishments survive at least five years and a third survive ten years or more. This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years. Better success rates notwithstanding, a significant percentage of new businesses do fail. Expert opinions abound about what a business owner should and shouldn’t do to keep a new business afloat in the perilous waters of the entrepreneurial sea. There are, however, key factors that — if not avoided — will be certain to weigh down a business and possibly sink it forevermore. You start your business for the wrong reasons. Would the sole reason you would be starting your own business be that you would want to make a lot of money? Do you think that if you had your own business that you’d have more time with your family? Or maybe that you wouldn’t have to answer to anyone else? If so, you’d better think again. On the other hand, if you start your business for these reasons, you’ll have a better chance at entrepreneurial success: You have a passion and love for what you’ll be doing, and strongly believe — based on educated... read more

How to manage your cash flow

Your cash flow is the driving force behind your business. Every business has peak times and quiet periods, so understanding your cash flow means you can plan to cover your costs, make money and support the growth of your business. Here are some tips to help you manage your cash flow and keep your business healthy.   Forecast how much cash your business needs day to day factor in seasonal impacts, so you can operate and pay your bills during less busy times know how much cash you have at all times. Study your cash flow forecast to find where the weaknesses and opportunities are in your incomings and outgoings to help bolster your cash flow. pay your invoices on time and make sure your loans suit your needs. If you’re having trouble making payments, get help straight away. Make the most of your cash build up enough funds to have an emergency fund. You might need to cover price increases from your suppliers, payment delays or other unexpected costs. make use of interest free days on your business credit cards or take out a  Business Overdraft if your business has enough cash to spare, consider opening a high interest savings account if you need equipment, find out if it’s more cost-effective to purchase using a loan. You can spread the business loan repayment costs out over the life span of the equipment and keep your cash for the day-to-day expenses.   Keep your cash coming in   make it easy for customers to pay you quickly – invoice them straight away, give them your account details or help... read more