Posted on April 28, 2017April 26, 2017 by Steve Slisar

How Buying Business Premises Affects Your Tax

What to do about capital gains and losses

xero online training course capital gains capital losses — **Documenting and tracking your business premises’ expenses leads to accurate tax and activity statements.**

IF YOU DECIDE TO buy your business premises it will have an effect on your tax. Our Xero training courses will show you how to account for your business premises, but here is what you need to consider about your tax and GST obligations.

Capital gains tax (CGT)

If your business will be operated out of the premises you buy, it will be subject to CGT when, or if, it is later sold. As such, you need to keep records about when and for how much the property gained so you can work out the capital gains when you sell it.

Capital gains occurs when the amount the property is sold for is greater than what it originally cost to acquire it. If the property is sold for less than its original purchase price, this is known as a capital loss.

Capital losses

If you make a capital loss when you dispose of the premises, you can use that loss to reduce any other capital gain you might have also made in the same year — another property or shares in another business, say.

If you haven’t made a capital gain in the same year, you can use the capital loss to reduce a capital gain in a later year, but you cannot use a capital loss for any other income.

Income tax deductions

If the premises is used to run a business, or is available to rent for that purpose, you can claim tax deductions for expenses associated with owning it; such as interest on a loan to buy the property and maintenance expenses. Keep records of your expenses from the start, so you can claim everything you’re entitled to.

GST

If you buy commercial premises, you may be eligible to claim a credit for the GST included in the purchase price. Additionally, you may also be able to claim GST on other expenses that relate to buying the property — such as the GST included in solicitors’ fees and ongoing running expenses.

However, you can’t claim GST in the following instances:

The seller used the margin scheme to work out the GST included in the price
You purchase property from someone who is not registered or required to be registered for GST
You purchase the property as a GST-free supply
You’re not registered for GST.

Keeping track of the purchase and expenses related to your business premises properly in your accounting software is vital to the ongoing financial health of your business — and accurate tax and activity statements.

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Our Xero training courses will teach you how to run different financial reports. Visit our website for more information.

Online bookkeeping accounting training courses for CPD points

EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

Posted on April 26, 2017April 18, 2017 by Steve Slisar — 2 Comments

Xero’s Reports to Help Decide Whether to Buy or Rent

Xero’s reports can help you decide to buy or rent your business premises

learn xero online training course — **There are pros and cons to owning your business premises depending on your circumstances, but appreciation is a significant benefit.**

A BIG DECISION FOR A NUMBER of business owners is whether they should buy their own premises. And because there are upsides and downsides to both owning and renting your business’s premises, we’re going to look at some of the considerations you should take into account first.

Buying is an appreciating asset

The biggest advantage to buying is that it’s an asset that appreciates over time. As such, purchasing a property can provide your business with an additional source of income that, over time, will allow you to grow your business.

Buying also gives you access to equity that will allow you to use the property as a guarantee when you’re striking deals with potential suppliers and clients.

There are also tax advantages and deductions you wouldn’t ordinarily have by renting, something we discussed in a recent blog post about investing in a granny flat.

There are upfront costs to buying

That said, you shouldn’t overlook the upfront costs associated with buying. In particular, you’ll need to ensure you have the appropriate amount of capital available before you can buy.

There are certain reports you can run in your accounting software, which will provide you with a clear picture of your business’s financial health and help you determine whether buying is the best option for your business. We always suggest running regular reconciliation reports, even weekly, in say, Xero to help you know the true financial picture of your business.

Our online Xero training courses show you how to run reports that will help you make the vital business decisions; particularly relating to how a capital outlay like buying commercial premises would likely impact your cashflow.

Renting is flexible

If your business is relatively new or it’s generally difficult to predict your future growth over the next five to ten years, renting may be a more viable option. This allows your business to remain agile and offers flexibility that buying doesn’t.

Renting, for example, offers a better range of property types of locations that mightn’t be within your price range if you were to buy.

Furthermore, shared office spaces or co-working spaces are good options for businesses with a small, mostly virtual team, or startups looking for meet like minded individuals.

You miss out on equity gains when renting

The main downside to renting your business premises is that, over time, it is your landlord’s equity you are contributing to, rather than building your own asset.

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Using your accounting software to determine the financial health of your business will help you to make important business decisions. Our Xero training courses will teach you how to run different financial reports. Visit our website for more information.

online bookkeeping courses to earn cpd points EzyLearn Excel, MYOB and Xero online training courses count towards Continuing Professional Development (CPD) for bookkeepers and accountants. We’ve been an accredited training provider of the Institute of Certified Bookkeepers ever since the organisation started in Australia. Find out how CPD points can be of benefit to you.

Posted on April 24, 2017April 18, 2017 by Steve Slisar

Paying Several Employees With One Payroll Payment

MYOB and Xero now make payroll easier to manage

myob and xero online payroll management — **Struggling to manage your online payroll management? Our Xero and MYOB courses will help you get the most out of this software so you can manage payroll in house.**

MANY COMPANIES OUTSOURCE PAYROLL because it contains many moving parts. For instance, there’s the payment of wages each week or fortnight or month, sure. But there’s also superannuation contributions, PAYG obligations, annual and sick leave accrual.

Fortunately, most accounting apps like Xero and MYOB have made payroll easier to manage, particularly if you only have a handful of employees.

Superannuation clearing houses

Nearly every major cloud accounting package has a connected superannuation clearing house within its payroll package. Xero and MYOB are both SuperStream compliant, a government initiative to help business owners tell which accounting software apps will let them make electronic superannuation payments. And QuickBooks uses a partner payroll system which is also SuperStream compliant.

Batch wage payments

Electronic superannuation payments are one way that paying staff is made easier, but paying a dozen or so employees individually each week or fortnight can be tedious. Fortunately, both Xero and MYOB have a ‘pay run’ function that lets you make batch wage payments. This eliminates the tedium of paying employees individually, as well as the potential for error.

Accounting software calculates entitlements

MYOB, Xero and QuickBooks, if you’ve set up your employees correctly and have the appropriate payroll subscription, will also calculate your employees’ sick and annual leave entitlements, also reducing the time it takes to process payroll and the potential for error.

Our MYOB training courses and our Xero training courses both cover payroll, where you’ll learn how to set up employees correctly, process wage payments and more. Using a cloud accounting program for payroll, saves time and reduces errors. Visit our website for more information.

EzyLearn courses now include real life case studies

managing ad hoc payroll At EzyLearn we are constantly refreshing the content of our online training courses. Relevant to those of you doing Payroll, might be our Excel Ad Hoc Payroll case study which is part of our Intermediate Excel Online Training Courses. Where possible, we draw on real-life case studies as examples, to help you learn, and apply your skills, in a relevant way that makes sense. Visit our Micro Courses page to learn more.

Posted on April 19, 2017April 18, 2017 by Steve Slisar

Why Your Business Needs a Bookkeeping Procedures Manual

Documenting procedures helps keep your bookkeeping up to speed

bookkeeping procedures manual rescue bookkeeping work — **Rescue bookkeeping is not ideal – it’s often expensive and shows you’re not in control. A bookkeeping procedures manual will outline what bookkeeping needs to be done, when.**

IN A PREVIOUS POST we talked about how to tell when you need rescue bookkeeping, which is basically when a business is behind on its bookkeeping by three months or more and the deadline is looming to lodge their activity statements.

Rescue bookkeeping work costs more than having your bookkeeping taken care of regularly, because it’s often messy and there are no procedures in place to manage the bookkeeping efficiently.

What’s a bookkeeping procedures manual?

A bookkeeping procedures manual clearly identifies the regular tasks and activities your bookkeeper needs to take each week, fortnight, month or quarter to ensure your bookkeeping is kept up-to-date. This not only gives you the peace of mind that your bookkeeper is staying on top of your books, but it also helps you to understand what’s going on with your business.

If you require regular P&L statements or balance sheets, having a procedures manual to clearly outline how frequently they’ll be created helps you to stay on top of your business’ financials.

A typical procedures manual will include:

Simple steps that are easy-to-understand and succinct
Tasks are written up in a step-by-step style, so they can be followed logically
References, links or examples are included to help readers understand
Contain a number of formats — written steps, flow charts or checklists.

Rather than leaving your bookkeeping to the last minute, so you’re always operating your business in dark, organise to have bookkeeper create a procedures manual to regularly take care of your business’s bookkeeping.

We Can Help You Find a Good Local Bookkeeper

find a local bookkeeper

We have bookkeepers, BAS agents and accountants located across Australia, available to help businesses in need of rescue bookkeeping work. Visit our online bookkeeping directory, National Bookkeeping, to find a suitable and experienced person available to work in your area, or able to work anywhere in the cloud. Alternatively, if you are a bookkeeper looking to expand your client list or find contract work, you can register and become part of our network for free.

Go to National Bookkeeping for more information, to see our rates or to request a quote.

Online bookkeeping accounting training courses for CPD points

Posted on April 15, 2017April 12, 2017 by Steve Slisar

Should You Take Out a Loan to Avoid Delaying Payroll Payments?

Repayments on a business loan may be less than super and PAYG combined

Small business loan to finance PAYG and super — **It’s not uncommon for small businesses to take out a business loan to meet their super and PAYG obligations – but this should never be a knee-jerk reaction to lean times.**

IN A PREVIOUS POST we talked about taking out a business loan to cover payroll if you anticipate that you won’t have enough funds to do so otherwise.

Naturally, it’s always better to use your business’ own funds to meet your obligations, whether it’s paying staff or suppliers. This said, getting a business loan to cover payroll can be a good idea for small and growing businesses in certain circumstances. We look at these now.

Loan repayments are usually small

Depending on how many employees work for you, the repayments on a business loan are typically smaller than all of your payroll obligations — this includes superannuation and PAYG — combined. If you get a loan to fund 12 months of your business, payable over a 24 or 26 month period, the repayments will be far easier to manage each month.

Interest is usually a tax deduction

Businesses are able to claim the interest from any business loan as a tax deduction, so even if the annual percentage rate (APR) adds a few additional thousands of dollars to your capital amount over the period it takes to pay the loan back, the interest will still go towards reducing your taxable income.

This is a more favourable option to delaying payment to your employees (illegal) and delaying payment of PAYG and superannuation withholdings, which could incur a Failure To Lodge (FTL) penalty, plus a general interest charge (GIC). Note: Fines and penalties cannot be claimed as a tax deduction and are therefore dead money.

Do your sums first

taking out a small business loan Don’t forget that, while a business loan to cover payroll for 12 months will be easy to repay initially, your business’s profits will need to improve substantially over the next year so that you can continue to meet your loan repayments AND your payroll obligations for that year.

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You can easily work this out using Microsoft Excel. Our Intermediate Microsoft Excel training courses show you how to determine if you can afford to take out a mortgage, but because all of our fields remain “unlocked”, you can easily modify them to suit a business loan scenario. Visit our website for more information on all of our Excel training courses.

learn excel online training course — **Our online training courses feature real-life case studies to make our learning more relevant and true to life.**

Posted on April 13, 2017April 12, 2017 by Steve Slisar

EOFY: Remember to Deduct Your Prepaid Expenses

The Cut-Off for Claiming Deductions is Looming

reduce-your-taxable-income-with-expenses-Xero-and-MYOB — Dive deep into your claimable expenses and don’t forget all those smaller prepaid expenses like magazine subscriptions or domain name registrations – you can only claim all of these during the period in which they occurred.

WE’RE IN THE LAST QUARTER of the 2016/17 financial year, so now is the time to dive in deep and check you’ve included every single business expense — prepaid or otherwise — to ensure all your expenses are in order.

We’ve previously posted about writing off stock and inventory and the reports you’ll need to file your activity statements and tax returns: all of these you’ll learn how to run in our MYOB BAS Reporting and GST online training course or our Xero GST, Reporting and BAS training course.

Expenses reduce your taxable income

We all know this, but remember, they can only be claimed for the period in which they occurred. If you forget to claim a major business expense in the financial year that it occurred, you can’t make it up by claiming it the next year.

It’s really important you thoroughly check your credit cards and business accounts to make sure you’ve accounted for each expense. The final quarter of the financial year is also a good time to make any purchases for your business, because you can claim them straight away.

Prepaid expenses are often forgotten

what are some claimable expenses Magazine or journal subscriptions, domain name registrations, business name registrations, car registrations, website fees, insurances — collectively they add up, but they’re also the easiest to forget.

These deductions are often prepaid and may not come up on your radar and may certainly not show up on your final quarter bank statements.

Make a list and check it twice

Over the next month or so, make a list of all of your expenses as you think of them. This makes it easy to spot them when you’re going through your bank and credit card statements and checking them against the expenses in your accounting software.

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Learn how to run the reports you’ll need for EOFY with our MYOB BAS Reporting and GST online training course or our Xero GST, Reporting and BAS training course.

learn PowerPoint online training course

Want to make your business presentations and publications more eye catching?

Gone are the days of excruciatingly dull PowerPoint slide presentations. Nowadays PowerPoint is the hidden gem used to generate animations, videos, movies, advertising and graphics. It’s a great ally to the marketer or social media person in your organisation.

This creative program can also be used to conjure up the most beautiful and modern pictorial slides to enhance any presentation or induction. Find out more about our 2016 version PowerPoint courses.

Posted on April 10, 2017April 11, 2017 by Steve Slisar — 1 Comment

Turn Your Wage Payments into a Business Loan

Only Managing Payroll on an Ad Hoc Basis? We Show You How

managing ad hoc payroll — **If you know that you can’t quite make payroll, a short-term business loan may see you through and avoid penalties.**

WE’VE RECENTLY UPDATED THE course content in our Intermediate Microsoft Excel training courses to include a workbook and spreadsheet (that you can use in your own business) showing you how to manage ad hoc payroll using Microsoft Excel. This will enable you to calculate your PAYG and superannuation obligations in Excel.

Using Excel to work out your PAYG and super obligations is a great way for small businesses, with a small number of employees, to save money. It saves you having to purchase this extra module in MYOB or Xero, for instance, when you may rarely use it. Saving money for small business is crucial as often it’s these same small businesses that have trouble making payroll payments each week, fortnight or month — and then wind up incurring further fees from the ATO when they’re late with their reporting and payments. It’s a vicious cycle.

When you can’t make payroll

If you’re finding it a stretch to make payroll payments, don’t worry, you’re not alone. Lots of business owners have trouble making payroll. But there are things you can do about it. We find that it frequently comes down to poor credit management processes or perhaps a downward trend in a business’ cycle that’s been missed due to poor or inefficient accounting processes. All of these can be rectified.

If the reason your business can’t make payroll is due to one or more shortcomings in your business’ operations, remedy the problems now. Similarly, if credit management is the issue, and late-paying clients are partially to blame, then tighten up or implement a credit management process. If it’s the result of bookkeeping that’s not up-to-date, find a bookkeeper to manage this for you.

How you can make payroll when cash is tight

Get financing. There are lots of ways to do this, but a common method, particularly if you need access to funds quickly, is to get a short-term business loan. Many short-term business loans don’t require businesses to have a great credit score, and will offer funding of as little as $5,000 right up to $500,000.

You’d have between 3 and 36 months to pay back the loan, but you need to be aware — the annual percentage rates (APR) are usually high. Most lenders require the business to have been active for a minimum of 9 months, and have revenue of more than $75,000 per annum. However, if paid off quickly, these can be an alternative to incurring penalties — it will obviously depend on your business’ individual circumstances.

Keep on top of bookkeeping

If you stay on top of your bookkeeping, you’ll either reduce the likelihood that you won’t make payroll, or as a worst case scenario, be able to foresee the periods when you won’t be able to, and be able to arrange finance in time to cover it.

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Use the Ad Hoc Payroll Guide included in our Intermediate Microsoft Excel training courses to determine the rate of PAYG tax to withhold — and the required super contribution amounts in Excel. Visit our website for more information on our entire suite of Excel training courses.

Xero online training course

At EzyLearn we offer online training courses to help you up-skill and find employment. Choose from our range of cloud-based online accounting software courses, to business start up and management courses, to marketing and sales courses, or update and further your skills in a range of Microsoft Office programs (Excel, PowerPoint, Word) or social media and WordPress web design).

All of our online training courses can also be counted towards Continuing Professional Development points.

Posted on April 9, 2017April 8, 2017 by Steve Slisar

We Don’t Lock Our Microsoft Excel Course Content

You Can Use the Calculation Fields in our Excel Exercises as Often as You Like!

learn Excel online training course unlocked calculations and formulas — **We keep all the calculation fields in our Excel course exercises unlocked so you can play around with different figures of your own as often as you like.**

DESPITE THE POPULARITY OF cloud-based accounting software applications like Xero and MYOB, Excel still remains one of the most indispensable software programs for businesses and individuals alike. That is why we always make it a priority to constantly update our Microsoft Excel Training Course.

You can apply Excel to so much

Accounting software, even robust packages like MYOB, only allow you to perform a finite number of functions that relate to business accounting. However, Excel can be used for a multitude of different purposes — both business and personal, merely one of which is to develop a financial forecast for an investment.

EzyLearn courses provide real-life case studies

learn excel online training course

Our Intermediate Excel Training Course uses the construction of a granny flat for investment purposes as a case study example. We chose a granny flat for the case study because most people construct them as an investment, whether they’re in business or not, so it’s a good real-world example.

It also deals with depreciation, which you can claim in your tax, regardless of whether you’re in business or not.

Our calculation fields remain “unlocked”

But even though, with the current property booms in our major cities, granny flat construction has become more common, it is not so common that every person taking our Excel courses is planning to build a granny flat for their next investment. That’s why we decided not to lock our course content.

What does this mean? It means that all the calculation fields in the exercise files of our Excel training courses are unlocked, so that your education remains unlocked too. You’re free to play around and replicate them as you need, so you can get a proper handle of how to use Excel in business or for work.

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Visit our website for more information on our Microsoft Excel Training Course, with its new granny flats case study. We provide a range of online Excel training courses for beginners’, intermediate and advanced students.

Online bookkeeping accounting training courses for CPD points

Posted on April 7, 2017April 7, 2017 by Steve Slisar

EOFY: Organise Your Reports and Records

We Show You The Reports to Generate Now for End of June

THE LAST QUARTER OF the 2016/17 financial year is upon us, so now is the time to organise your reports and records; including Profit and Loss Statements, Accounts Receivable and Payable, PAYG and Super payments. We’ve previously written about writing off stock and inventory and getting your business expenses in order. In this post we’ll take a look at the reports and records you’ll need for EOFY, which you’ll learn how to produce in our MYOB BAS Reporting and GST or Xero GST, Reporting and BAS training courses.

Profit and loss statement

Depending on the structure of your business, you may be legally required to include a P&L statement with your tax return or activity statements. Your tax agent will be able to advise you if your business will be required to file a P&L, which requires all of your bookkeeping to be up-to-date before you can run it.

Even if you don’t have to file one with your activity statements or tax returns, it’s still a good idea to run a P&L for your own sake. A P&L statement identifies whether your business has made a profit or loss and which accounting period these occurred.

Accounts receivable, payable

Find out who owes money to your business and to whom your business owes money. This is obviously part of the credit management process, which any good business will have in place already, but it’s a good idea to keep a steady eye on what’s coming in and what’s going out as EOFY approaches.

PAYG, superannuation

The end of each quarter brings a lot of PAYG and superannuation reporting, but EOFY brings a double whammy of activity statements tax returns and PAYG and superannuation compliance. You’ll need to run these reports so your bookkeeper can complete the payroll component of your returns.

Inventory stocktake

If you sell goods, you’ll need to complete a stocktake of your business’s inventory so that any missing stock can be written off, and to ensure you’re starting a clean slate for the new financial year.

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Learn how to run the reports you’ll need for EOFY with our MYOB BAS Reporting and GST online training course or our Xero GST, Reporting and BAS training course.

Xero online training course

Posted on April 6, 2017November 14, 2018 by Steve Slisar — 2 Comments

EOFY: Get Your Business Expenses In Order

We Show You 2 Steps You Can Take — Right Away!

WE’VE ENTERED QUARTER 4 for the 2016/17 financial year, so we’ve been writing about the things your business should be doing this quarter in preparation for the end of the financial year. In our last post we wrote about writing off stock and inventory. Now we’re looking at business expenses.

Our MYOB BAS Reporting and GST online training course or our Xero GST, Reporting and BAS training course will show take you through the necessary steps in your accounting software.

Here’s what you can do now to make sure you’re prepared come tax time? Continue reading EOFY: Get Your Business Expenses In Order

Posted on April 4, 2017April 5, 2017 by Steve Slisar — 1 Comment

End of Financial Year: Writing Off Stock

We show you how to write off stock and inventory before the EOFY

how to write off stock before eofy in xero myob — **Do you know how to make inventory adjustments? Our Xero and MYOB BAS and GST Reporting courses can show you how.**

IT’S A GOOD TIME TO START looking at any slow-moving or obsolete stock that your business (or your client’s business) may be holding, as we’ve reached the end of Quarter 3 and have now started Quarter 4 for the 2016/17 financial year — which means the end of the financial year is fast approaching.

Writing off stock in MYOB or Xero is known as making an inventory adjustment, and our MYOB BAS Reporting and GST or Xero GST, Reporting and BAS training courses take you through the steps to do this. But first, you need to identify which items aren’t selling. We’ve created this case study to help you understand how.

Understanding your inventory’s performance

Every business needs to understand how their inventory is performing, and how it impacts their business. If the business owner is too busy to stay on top of this, then they should employ a bookkeeper to help.

A good example of why understanding inventory is important to a business is to look at an air conditioning company. This business makes money two ways:

Selling air conditioning units
Installing / maintaining air conditioning units

The margin on the sale of an air conditioning unit is not much, a few percent on top of the wholesale price. Where the business makes its money is in the installation or maintenance of the units it sells.

The business purchases three dozen units, of varying brands, models, price points, etcetera. It now needs to know which units are most popular with customers and why; which units aren’t popular with customers and why; whether it’s profitable for the business to continue to stock the unpopular units; or, conversely, whether it’s profitable for the business to continue stocking the popular units.

Inventory reporting

The business’s bookkeeper regularly runs a number of reports in their accounting software, including profit and loss reports and stock-on-hand reports. These reports are used to identify which units sell quickly, as well as the units that take longer to sell, and the profit margins on each.

The units that sell quickly don’t require a technician to install them. Although they’re responsible for the majority of sales, they don’t generate more revenue for the business. The units that sell slowly, do generate more revenue as they require installation and maintenance, however too many units were ordered and they’ve now been discontinued by the manufacturer. Some units have hardly sold, and, although not discontinued, have been superseded by newer models.

Stock write offs and future orders

Because the bookkeeper regularly runs these reports, s/he has been able to export them into Excel for further analysis. By the end of Q3, the bookkeeper can make suggestions to the business owner about the future of the business.

In particular, the bookkeeper suggests that the units that have been superseded are marked down to clear as much stock as possible, and cease any new orders. Likewise, the discontinued models will be marked down.

Orders for the units that replaced the discontinued models will halve the order volume. Likewise, order volumes for the top selling units will reduced. The profit margin on these units is very low and they result in no additional revenue from installation or maintenance. The profit that would be earned on the additional units is negligible, however by reducing the unit volumes, the business improves its cash flow.

Act NOW for EOFY

If your business sells stock or a combination of stock and services, like the air conditioning business does above, start looking at your inventory now. Markdown any slow-moving stock at the end of Q3, to give your business time to move the remainder of it. If it doesn’t sell, write it off at EOFY.

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Our MYOB and Xero training courses have recently been updated to include a workbook on how to write off inventory. Learn more about our MYOB BAS Reporting and GST or Xero GST, Reporting and BAS training courses at our website.

find a local bookkeeper

We feature our own online directory of local bookkeepers looking to add to their customers. Visit National Bookkeeping to find a suitable and experienced person available to work in your area, or able to work anywhere in the cloud. Alternatively, if you are a bookkeeper looking to expand your client list or find contract work, you can register and become part of our network for free.

Posted on March 31, 2017April 12, 2017 by Steve Slisar — 3 Comments

What Happens if You Have Backlog of PAYG and Super Payments?

Don’t get lumped with penalties when you don’t need to!

failure to lodge penalties how to manage payroll in Excel online training course — **It’s not only frustrating and disheartening, but a waste of business funds to be penalised for lodging your financials too late.**

A LOT OF SMALL BUSINESSES have trouble managing their payroll, especially when they only have a few employees and paying to access a payroll system in their accounting package is an unnecessary expense. You’ll learn how to use Excel to manage your PAYG and super contributions in our Intermediate Microsoft Excel Training Courses. However, sometimes you may have a backlog of PAYG and super payments. Let’s take a look at how to manage these.

Rescue bookkeeping

A backlog of PAYG and super payments that date back more than three months is known as rescue bookkeeping, although it can often include other bookkeeping issues, like bank accounts that don’t reconcile with statements.

PAYG payments

For businesses that only withhold up to $25,000 each year, you’re supposed to make PAYG payments and file a withholding report each quarter. You have 28 days from the end of the quarter to do so, after which time, you may incur a Failure To Lodge (FTL) penalty.

Superannuation payments

As with PAYG payments and reporting, you can also incur a FTL penalty for not lodging or paying your employees’ superannuation contributions in time. All businesses, regardless of size, have to make superannuation payments each quarter — the ATO sets out the due dates for each period on their website.

Lodging late PAYG and super payments

The ATO only applies penalties for failure to lodge reports or make payments for each period of 28 days (or part thereof) that a document or payment is overdue. Each period incurs one penalty unit for each document, up to a maximum of five penalty units.

From 2015 onwards, the value of a penalty unit is $180 (previously it was $170) for small businesses, which are defined as entities with an assessable income or GST turnover of no more than $1 million a year.

The maximum penalty a small business will pay is $900 for each document or payment that is overdue. Note too that FTL penalties will also incur a general interest charge (GIC), applied on top of the penalty.

Managing late PAYG and super payments

Use the Ad Hoc Payroll Guide, a new case study that is included in our Intermediate Microsoft Excel Training Courses to determine the rate of PAYG tax to withhold and the required super contribution amounts in Excel. Once you’ve worked out the required amounts (visit the ATO website for tax tables prior to 2017), lodge the necessary PAYG payments and reports to the ATO; pay super contributions using the SuperStream super clearing house.

The ATO will write to you if you are required to pay a penalty — sometimes they are waived for first-time offences, or if the amounts are small.

Our courses now include real-life case studies

learn excel online training course

Our Intermediate Microsoft Excel training courses will also teach you how to create a payroll spreadsheet from scratch to suit your own business, so you can easily work out your PAYG and super obligations. Visit our website for more information on all of our Excel training courses.

learn PowerPoint online training course

Create brilliant presentations and graphics for all kinds of business purposes.

Posted on March 29, 2017June 24, 2024 by Steve Slisar — 4 Comments

When Does Your Bookkeeping Need Rescue Work?

If you’re 3 months or more behind, call in help!

find rescue bookkeeper — ***Hmmm, so much to do, so little time…***

WHEN IT COMES TO YOUR BUSINESS ACCOUNT KEEPING, unless you’re a bookkeeper, bookkeeping is probably your least favourite thing. However, it’s also a fundamentally important part of running a business.

We provide business people with a number of courses in Xero accounting software and we know firsthand that, aside from the legal requirement to lodge regular activity statements, keeping your bookkeeping up-to-date also helps you run a more successful business. This is because it allows you to run regular balance sheets, profit and loss statements and many other financial reports that’ll give you a clear picture of how your business is performing.

However, not every business owner has the procedures in place to manage their bookkeeping regularly. It’s ok, it’s not your fault — you were meaning to, but you were busy running your business and time marched on. Now you have to lodge an activity statement, and you’ve just realised you haven’t done any bookkeeping for three months!

When you need rescue bookkeeping

If you have three months or more of bookkeeping to do before you can lodge an activity statement, then you’re in need of a bookkeeper who can perform rescue work. Some of the common bookkeeping problems rescue work covers includes:

Bank accounts or credit cards that don’t reconcile with statements
Old un-presented transactions in the bank account or credit card
Trade debtors and trade creditors don’t balance with the balance sheet
Dealing with outstanding invoices and bills that have already been paid, but still showing as outstanding
Incorrect previously lodged BAS
Incorrect information showing in payslips, tax tables, super guarantee contributions calculations, payment summaries, etc, due to payroll systems being set up incorrectly
Unreliable inventory figures.

Not all bookkeepers are able to take on rescue work, because it’s lumpy and it requires them to perform a lot of work in a short space of time, which can conflict with their other regular bookkeeping work.

Rescue bookkeeping is often more expensive

Because rescue bookkeeping requires a lot of manpower in a short period of time, it’s often a little more expensive than have your bookkeeping attended to on a regular basis. In most cases, you will be asked to prepay for a minimum of 10 hour’s work or however long it’s estimated it will take to get your bookkeeping up to speed.

Do you need help with rescue bookkeeping work?

We have bookkeepers, BAS agents and accountants located across Australia, available to help businesses in need of rescue bookkeeping work. Visit our online directory of local bookkeepers and bookkeepers who work ‘in the cloud’ at National Bookkeeping for more information. Here you will be able to see the different bookkeepers’ rates or request a quote.

Online bookkeeping accounting training courses for CPD points

Posted on March 28, 2017March 28, 2017 by Steve Slisar

How to Make a Capital Purchase That Won’t Affect Your Cash Flow

A Chattel Mortgage Can Help Keep Your Business Cashflow Under Control

chattel mortgage learn xero online training course — **A chattel mortgage can tide your business over without having to dip into savings.**

In our Xero Daily Reconciliations Course, you’ll learn how to set up a chart of accounts, among other things such as running balance sheets and Profit and Loss (P&L) statements. For the most part, daily transaction reconciliation is pretty straightforward, until you get to a capital purchase, which, if it’s over $20,000 or was purchased prior to May 2015, needs to be dealt with differently.

In most cases, when a business purchases major assets, such as a motor vehicles, it’s known as a capital purchase, which is made via a loan. There are two types of loans the business can take out: a hire purchase loan or a chattel mortgage.

Buying assets on hire purchase

This is an agreement between you and the lender to acquire a motor vehicle. During the hire period, the lender legally owns the car and you pay regular instalments to the finance company. For tax purposes you can claim depreciation, running costs and interest paid against your business income. When you pay off the loan in full, legal ownership is then transferred to you.

Buying assets on chattel mortgage

Chattel mortgage is essentially a mortgage over goods to be financed. Chattel mortgage is classed as a cash sale in that the goods automatically become your property on purchase and the finance company takes a mortgage over the chattels.

Just as a hire purchase you can claim depreciation, running costs and interest paid, against your business income. The chattel mortgage allows businesses to claim the full input tax credit from GST incurred expenses immediately (next BAS statement).

Chattel mortgages are more popular

Chattel mortgages became popular when BAS and GST was introduced, because businesses could claim the GST at the time of purchase, whether they ran a cash system or an accrual accounting system. Plus, under a chattel mortgage, the allowable depreciation and interest payment are also tax deductible.

How capital purchases affect cash flow

If a business doesn’t take out a loan to make a capital purchase, it will have to dip into its savings, which can adversely affect cash flow, especially on big ticket items. Taking out a chattel mortgage, however, helps to keep cash flow under control because the business can borrow the funds (and claim the interest back as a tax deduction) without any major impact on cash flow. You will also then be able to factor the repayments into your monthly forecast projection.

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You’ll learn how to record an capital purchase, whether it’s been bought on hire purchase or a chattel mortgage, in our Xero Daily Reconciliations Course. You can find out more or enrol today.

Xero online training course

At EzyLearn we offer many online training courses to help you up-skill and find employment.

Choose from our range of cloud-based online accounting software courses, to business start up and management courses, to marketing and sales courses, or update and further your skills in a range of Microsoft Office programs (Excel, PowerPoint, Word) or social media and WordPress web design.

Posted on March 23, 2017March 23, 2017 by Steve Slisar — 1 Comment

Linking a Financial Forecast with Xero and Excel

Excel Will Help You Work Out the HOW of Depreciation

learn excel online training course We recently updated our advanced Microsoft Excel Training Course content. It now contains a case study, by way of an extra exercise workbook, using a granny flat building project to create a financial forecast.

We chose a granny flat building project for our case study because it’s an investment decision quite a lot of people with or without a business have made. It’s also a capital asset that can be depreciated over time. Therefore it has the potential to affect your taxes in lots of different ways.

Our Excel Training Course, with its granny flat financial-forecast case study, will teach you how to use Excel to create a financial forecast, which you can then replicate for your own investment — whatever that may be.

Your bookkeeper uses Excel to calculate depreciation

When you build a new structure, such as a granny flat, which you intend to rent out or use for businesses purposes — i.e., it’s an investment and not for your own personal use — the building can be depreciated along with some of the fittings and finishes (floorings, curtains, paint, etc). That’s despite the value of the land upon which the granny flat is constructed increasing in value over time.

Once you’ve set up your financial forecasting file in Excel using the correct formulas that will update as the investment progresses, you’ll be able to track all of the future costs, income and depreciation in that spreadsheet.

Input depreciation into Xero

Excel will calculate the depreciation amounts for you, which you should then enter into Xero. We cover how to deal with depreciation in our Xero Bank Reconciliation Course, because lots of businesses own, or will own, a capital asset at some point.

However, this doesn’t tell you how to determine the depreciation amounts, which most business owners have to get their bookkeeper to work out for them. Most bookkeepers work this out in Excel based on the depreciation rates provided by the ATO. However, if you have already created a financial forecast in Excel, you won’t need to get your bookkeeper to do this for you.

Individuals can claim depreciation too

Even if you’re not a business owner, but you’ve still built a granny flat that you intend to rent out, you can claim depreciation in your tax returns. Instead of entering the depreciation into Xero, you’d include it on your annual tax return, so it’s really important that you work this out in Excel first and regularly update it.

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Once you know how to use Excel for financial forecasting, you can use the same formulas and modelling for any financial forecast — be it for a granny flat project, business investment, anything that requires you to make a financial decision. Visit our website for more information on our advanced Microsoft Excel Training Course, with its new granny flats case study.

Do you want to brush up your Xero skills? Or perhaps you use MYOB but want to get a handle on Xero? Check out our suite of Xero training courses — all available for one low price.

Online bookkeeping accounting training courses for CPD points

Posted on March 21, 2017March 17, 2017 by Steve Slisar — 2 Comments

Which Transactions Affect Balance Sheets?

Avoid Any Nasty Surprises: Balance Sheets Matter!

EzyLearn Xero Balance Sheet A business’s balance sheet is a snapshot of its financial position at a particular period of time, which is not to be confused with a profit and loss (P&L) statement. Unlike a P&L, which just shows whether the business is making a profit or loss during a given period, a balance sheet, will eventually, show nearly every activity that has occurred within a business.

However, there are some transactions that will show up immediately. You’ll learn how to run a balance sheet in our Xero Daily Reconciliations Training Course, but we wanted to show you the transactions to look out for and why.

profit and loss statement xero online training course — **A balance sheet reveals the nitty gritty of your business’ transactions.**

The purchase or sale of assets

When an asset, such as a car, is bought, it will reduce the cash account and increase the fixed-assets account. Both of these accounts are listed in the asset portion of the balance sheet, however, cash is part of the current assets section and fixed assets are part of the long-term assets section.

When an asset is sold, the way the cash is accounted for is a bit more difficult. Here, both the asset’s book value and any accumulated depreciation are removed from the books at the same time that the cash account is increased by the sales price. If the sales price does not equal the book value, the difference is accounted for as a gain or loss on the sale of equipment. This gain or loss is recorded on the P&L statement.

Purchases on credit

When a business purchases supplies or inventory on credit, the business will debit the asset account (supplies or inventory) and credit the accounts-payable account. Almost always, accounts payable are considered to be current liabilities and are shown at the top of the liabilities section of the balance sheet.

Debt and lease arrangements

When a business issues debt or enters into a leasing arrangement, a liability must be recorded in the long-term section of the company’s balance sheet. For example, if a company issues bonds for cash, the company would debit cash and credit bonds payable in the simplest bond-issuance scenarios.

Capital-lease transactions affect the balance sheet in a similar manner. When entering a capital-lease arrangement, the business will debit a fixed-asset account to show that the company has taken economic possession of the leased asset. At the same time, the business will credit a capital-lease obligation account to show the offsetting economic liability.

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For a balance sheet to be correct, you must code each transaction correctly in your accounting software. Our Xero Daily Reconciliations Training Course covers balance sheets, and much, much more. Why not enrol today?

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Online bookkeeping accounting training courses for CPD points