Category: Xero Training Courses

EzyLearn’s Xero Training Courses are the most updated courses available. The Xero software is changing regularly and we keep our training materials up-to-date every quarter.

The bookkeeping and accounting industry changes and these blog articles our commitment to the best quality standards in online bookkeeping courses, including integrations that add features and functionality to the major accounting software (including MYOB & QuickBooks Online).

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Recording BAS Refunds is a Cinch in Xero

Understanding BAS refunds

accounting for BAS refunds with Xero_comp
No need to be puzzled: Our online Xero courses can walk you through how to account for a business loss or BAS refund from the ATO.

IF YOUR BUSINESS RECORDS a loss for a quarter, you may be entitled to a BAS refund from the ATO. In a new workbook in our Xero training courses, we look at what happens when a business changes strategy and when this change results in a loss. 

Businesses that record a loss sometimes receive a BAS refund from the ATO. You may have the full amount returned to you, or part of the amount.

Are you receiving a full BAS refund?

When you lodge your BAS paperwork, you either owe money (a tax debt) or the ATO owes you money (a refund). Sometimes you mightn’t receive a refund or the refund may be less than you thought.

This could happen if the refund is offset against a tax debt you already owe, or perhaps the refund is being retained by the ATO until you provide further information — which could be as simple as providing the correct bank account details. The ATO provides information about both of these scenarios on their website. Regardless of whether the whole amount, or part of the amount is returned, you’ll need to account for this in Xero.

Create a ‘receive money transaction’

If you do receive a BAS refund, you’ll need to record this money (that isn’t due to a sale) by creating a ‘receive money transaction’ in Xero. Our Xero training courses show you how to do this.

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Our online Xero training courses show you how changing your business strategy could result in your business making a loss — and how you can account for this. Our Xero courses also walk you through how to lodge and record BAS refunds. For more information, visit our website or go direct to the courses.

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Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses.

 

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Self Managing Your Superannuation in Excel

Skipping super can be a thing of the past

super payments xero online training learning course videos
We feel your pain! Often businesses lack the cash flow to make super payments, but you always have to pay them in the end…

WHEN YOU’RE SELF EMPLOYED you are responsible for managing your taxes and your superannuation — the latter of which many business owners let go by the wayside. It’s almost always because they don’t have the cash reserves to contribute to their super fund regularly enough.

Just as you would create a budget to make a business investment or asset purchase, you can use Xero and Excel to determine how much super you should contribute on your behalf, and then make the payments.

Run a cashflow report

You’ll learn how to run a cashflow report in our Xero training courses. This report will show you the periods when cashflow is liquid and when it isn’t. Run a cashflow report for a couple of different periods, and export them into Excel. This will give you a better idea of trends and cycles in your business.

You can also use a cashflow report to determine your income before taxes, expenses, and so forth. Superannuation is determined based on gross earnings — or revenue — so you should use this figure to work out your super contributions. This is especially important before end of financial year!

Determine super contributions

At time of writing, the superannuation guarantee is 9.5 percent of your gross revenue, before taxes, expenses, etc. If you set your prices correctly, you should have already factored this 9.5 percent into your prices or hourly rate. If you haven’t, you ought to consider revising what you charge customers and clients.

If you were an employee of a business, your employer would be required to make super contributions on your behalf, at least each quarter. Because you’re self-employed and self-managing your super contributions, you can make them as frequently or infrequently as you like, so long as you’re contributing the correct amounts. (Speak to your accountant or financial advisor, however, if you’re salary sacrificing above the minimum amount — this may affect your tax.)

Make super contributions

Once you’ve determined how much you should contribute to your super fund each quarter, refer back to your cashflow report and to the periods where your cashflow is especially liquid. Are you able to make your contributions each quarter easily, and without compromising your business’s liquidity? Would it be easier to make smaller, more regular contributions?

The decision is yours.

Use Xero to make your super contributions. Xero is connected to a superannuation clearing house, and if you’ve been using to Xero to pay yourself a wage, it’s the easiest way to do so. If you’re not using your accounting software to pay yourself a wage, you can make the payment directly out of your bank account, however, you’ll need to track this in Xero for taxation purposes.

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Our Xero training courses will show you how run cashflow reports and make wage and super payments, while our Excel training courses will also teach you how to create business budgets and forecasts. Visit our website for more information.

learn xero myob excel cheap online training courses videos

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). 

 

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Marketing for When Your Business Strategy Changes

Where lead generation services are useful

lead generation services
Using a dedicated lead generation service can be more useful than advertising but the quality of the leads may be questionable.

CHANGING YOUR BUSINESS STRATEGY to include additional services will require an additional investment in marketing if you are to make this successful. In terms of simply paying money to advertise your additional services, as you’re probably already aware, advertising doesn’t always yield immediate results. Therefore you might consider spending money on a lead generation service.

We cover how to account for marketing and lead generation costs in our Xero training courses, which includes a new workbook that looks at what to do when your business strategy changes. Continue reading Marketing for When Your Business Strategy Changes

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When Your Business Strategy Changes

There are websites that make it easy to change your business name

changes in business strategy xero cheap online learning course
Having a plan rather than changing your business strategy in an ad hoc fashion, ensures greater success of your business going forward.

PLENTY OF BUSINESS OWNERS change their business strategy, but what makes this successful? We say, above all, planning and a willingness to change the ordinary operations of your business. In a new workbook contained in our Xero training courses, we take you through the steps you would take in Xero to affect a change in business strategy.

In this blog post, we’re going to look more generally at some of the things you might need to do if you were making a change to your business strategy — even before you would start making these changes in your accounting software.

Business name change

A change of business strategy and direction may warrant a business name change. As a basic example, a builder who begins offering plumbing, electrical, and handyman services should change their business name from John’s Building Services, for example, to John’s Building and Home Maintenance Services.

If considering a business name change, visit the ASIC website. There you’ll be able to register a new business name and make sure one you’re thinking of doesn’t already exist. ASIC doesn’t allow you to update or change your business name, but provided you’re operating your business under the same structure — i.e., sole trader — there’s no limit to the number of business names you can register and assign to your ABN.

In April this year, the business.gov website launched a new Business Registration Service, which although still in Beta, allows you to easily and quickly apply for a business name, ABN, company, and tax registrations for free. At the moment it’s only available for new businesses — whether they’re sole traders, partnerships, companies or joint ventures — but it’ll soon be rolled out to existing businesses, trusts, and superannuation funds.

Registering for GST

Many contractors don’t register for GST because they do a combination of contract work on their ABN and TFN. Provided their business doesn’t generate $75,000 per year or more, they won’t have to register for GST, even if they do earn more than that by also working as a contractor on their TFN.

If the change in business strategy means your business is going to generate substantially more than $75,000 per year, or even if your suspect it may get close to it, you should register your business for GST.

You can register for GST via the ATO’s Business Portal. Registering for GST does mean your business will need to lodge regular business activity statements. This is additional compliance that can yield fines for late or inaccurate lodgements.

If you’d like to try and defer registering for GST for as long as possible, run a profit and loss statement in Xero and compare your current revenue with the estimated additional revenue your new business strategy will generate.

If there’s good, safe margin between your projected income and the $75,000 GST threshold, you can hold off.

You can learn what you need to implement the financial side of your changed business strategy, plus how to run profit and loss statements, complete and lodge business activity statements and much more in our Xero training courses. For more information, visit our website.

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At EzyLearn you can choose from a range of XERO online courses, depending on your skill level — or you can access ALL courses for ONE LOW PRICE. All our courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 

 

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How to Create a Cash Flow Forecast in Xero (and Excel)

Why cash flow is a better indicator than profit

cashflow and profit reports in xero and excel
Don’t overestimate how much money you’ll have to spend on a new business venture; better to forecast using cash flow as an indicator.

WE RECENTLY PROVIDED DETAILS of a case study highlighting the experiences of a business owner named Jerry. Jerry decides to start a real estate business on the side, after operating a business already that has synergies, for instance, in terms of clientele. 

We mentioned that Jerry should use his accounting software to determine whether his he’ll have the start-up capital required to fund his new venture for the next 12 months. The best way to do this is to create a cash flow forecast, and we’re going to show you how.

Cash flow is a better indicator of available funds

If you’re wondering why you wouldn’t create a profit forecast, it’s pretty simple. Cash flow represents money in the bank, after you’ve paid all your suppliers and staff and loan repayments and so forth, while profit just shows how much the business earned but doesn’t take into account any cash outlays. 

Profit just shows how much the business earned but doesn’t take into account any cash outlays.

It’s important to understand that it’s not uncommon for businesses to be profitable; however due to cash outlays, these same businesses may not actually have enough money in the bank to fund investment, or in this case, a new venture.

Generating a cash flow report in Xero

Follow these steps in Xero to generate a cash flow report for your business:

  1. Go to Reports, then click All Reports.
  2. Under Financial, select Cash Summary.
  3. Enter the following report settings:
    • Date — The latest finalised month
    • Period — 1 month
    • Compare With —  Previous 11 Periods
    • Select the Include GST and Show YTD filters
  4. Click Update to generate the report in Xero
  5. At the bottom of the report, click Export and select Excel to download the report in Microsoft Excel format.

The messy startup needs Xero Cashflow Training

Xero Advanced Certificate Training Course cashflow-forecast-charts-reporting-budgets

There is a great business case study with lots of practical exercises in the Xero Cashflow Training Course. You’ll learn how to code and manage lots of different types of transactions and reconcile 2 quarters worth of transactions and end up producing cash flow reports to make financial sense of it all.

You’ll even be able to highlight alternative ways of financing some of those transactions. 

Set up formulas to forecast 12 months ahead

In Excel, you’ll need to create formulas that will show you the average cashflow of your business across the previous 12 month period, so you can then forecast ahead for the next 12 months.

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Creating and working with formulas is something we teach you in our Microsoft Excel training courses. We also feature a suite of highly popular Xero online training courses, or if you want more information on creating profit and loss statements in Xero, read here.

If you don’t use Xero and you’re using MYOB or QuickBooks, our MYOB and QuickBooks training courses will also show you how to run cashflow reports, among many others.

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.

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Thinking of Starting a Second Business? Introducing Jerry

Case Study: Costs for starting up a second, related business

microsoft excel starting a second business
Contemplating starting a second business, related in some way to your first? Excel can help you forecast start up costs.

A LOT OF BUSINESS OWNERS branch out into related fields when their flagship business becomes successful enough (just look at Jim’s Mowing). However, this can be a bit dicey if the business owner doesn’t properly forecast all the start up costs. Not doing so can not only have an adverse impact on the new venture, but also on the existing business.

In this case study, we’re going to look at the start up costs associated with starting a real estate sales business. With real estate licencing laws changing and digital marketing available to everyone the ability to start your own business and work at home is now very realistic. Continue reading Thinking of Starting a Second Business? Introducing Jerry

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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.

 

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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

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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 pointsEzyLearn 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.

 

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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 payrollAt 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.

 

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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?

bookkeeping procedures manualA 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

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.

 

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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 expensesMagazine 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. 

 

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EOFY: Organise Your Reports and Records

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

profit and loss statements P&Ls
Now’s time to take stock of the reports that need to be generated to keep you GST and tax compliant.

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

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). 

 

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EOFY: Get Your Business Expenses In Order

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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

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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:

  1. Selling air conditioning units
  2. 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. 

 

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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?

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 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

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.

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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.