Tax deduction secrets that women need to know

by Bianca Hartge-Hazelman

Tax isn’t sexy, but talk shopping and tax deductions, and then you’ve got something most women want.

Handbags, gloves, makeup, clothes, sunglasses, sunscreen and hats may all be tax deductible but the success really depends on meeting the ATO’s three golden rules:

  • You must’ve spent the money yourself

  • The expense must be related to your work and;

  • You need to have a record to prove it.

Assistant Commissioner at the Australian Tax Office Graham Whyte told Financy the purchase of handbags used to carry work items, such as papers and electronic devices, could be tax deductible. This is despite earlier reports which suggested that this couldn’t be done.

But he added that a wallet, purse, and business suits are unlikely to be successfully claimed.

A wallet or business suit will usually be considered private, even though in many professional circumstances it may be an expected component of work,” said Mr Whyte.

Whitehead Dingley & Betar partner and chartered accountant Kate Hills says the most common items that women claim tax deductions for are sunglasses, driving gloves, sunscreen and bags.

Flight attendants 

Clothing is not usually tax deductible because it’s a private expense in that we all need clothes. However there have been successful claims made for extraordinary items.

The courts have consistently looked for ‘additional features’ which would take these purchases out of the category of private expenditure,” said Ms Hills.

For example, in the Mansfield Case, the taxpayer, who was a flight attendant, purchased conventional shoes for work.

These shoes needed to be a half-size too big for ordinary use due to the cabin pressure of the aircraft.

They were also subject to regular scuffing while working on the aircraft.

The courts allowed a tax deduction due to ‘additional features’ which took the purchase out of the category of private expenditure.”

Sales reps, construction work and couriers

Protective clothing can also be tax deductible but only if the items protect you from the risk of ‘illness or injury’ while at work.

For example, a woman working as a courier or in a sales role, who spends most of her time in the car visiting clients, could claim the purchase of driving gloves, sunglasses and sunscreen to protect her from the sun whilst in the car,” said Ms Hills. 

This could also apply to a women who works for a construction company as a project manager and spends are large portion of her time exposed to the sun whilst visiting construction sites.

In addition to the above purchases, she may also have expenditure on a sun hat.”

Make up and the arts

Makeup is much easier for performing artist to claim, such as actors, musicians or presenters on stage, film and television. But for everyone else, it’s a lot tougher.

This is because makeup and other grooming items are private everyday expenses, and not necessarily needed at work.

The courts have been known to even deny the claims of flight attendants, despite the need to look presentable, and hairdressers, where claims for personal hair expenses have been made.

How to Run Your Business with Apps

   Apps That Count

Did you know that the majority of Australian small business owners are lagging well behind their Asia-Pacific competitors when it comes to innovation and automation, according to research recently published by CPA Australia?

Strangely though, Australia is also renowned for being at the forefront and one of the most advanced countries in online accounting technology which clearly highlights that small business owners are not taking advantage or sourcing the right talent pool.

Are you one of those businesses who would like to explore the world of online applications, also known as apps?  Would you like to know what some of the benefits are by introducing online apps that could potentially increase your productivity?

One of Australia’s leading small business online accounting specialists and Intuit ProAdvisor, All That Counts, believes that Australian business owners are just unaware and not informed of the tools that are available to them to help build, grow and automate their business. Many business owners still believe that growth equals increased headcount, and are reluctant to grow.

All That Counts uses its expertise to clearly identify the pain points that small business owners experience and go about to address those pain points by matching the right applications (apps) that will improve their client’s business operations. It’s not just about the numbers and the accounting system. People drive the numbers and people require the right tools to keep the heart and soul of a business pumping.

All That Counts Director, Lielette Calleja, stated, “I understand that online technology is an opportunity for SMB’s to embrace, and an opportunity for bookkeepers and accountants to take the client relationship to the next level. It’s about providing value and not just have them look at us as the person that tells them how much BAS or Tax they need to pay. We want them to look at us as a trusted source who understands the big picture of their business and that we are in a position to influence, guide and educate them on the world of apps that will improve their business operations – automation must become the rule rather than the exception”

Online technology may replace data entry and some compliance related activities, but it’s no replacement for the relationship a client builds with a trusted business advisor.

Let’s say a business is experiencing difficulty in their collections process, an automated collections app like AR Collect, Debtor Daddy or IODM would be ideal to address their cash flow problem. In the old world you would need to hire a collections person to email statements, copy invoices and make phone calls.  In the new world with apps you can set your statements to be automatically emailed, reminder letter, legal action and SMS reminders – some of the systems can be customised to suit your needs.

Now, what if you had a business that billed out time and required staff to submit timesheets? Hello TSheets!! This is an app that allows staff and contractors to submit timesheets via their smartphone which automatically populates the payroll hours in QuickBooks Online as well as creating an unbilled activity for sales.  This app works great for professional services who bill by time.

Let’s look at some real time case studies that All That Counts have undergone with their clients using QuickBooks Online:

Case Study 1

We work with a number of Printing Franchisees doing their bookkeeping using traditional desktop accounting applications.  As part of our roll out to move their accounting to QuickBooks Online we saw an opportunity to automate the data entry for the high volume of supplier invoices. We implemented Receipt Bank which is an app that extracts the key information from their bills and receipts, removing the need for manual data entry. Receipt Bank then publishes the data to QuickBooks Online. Receipt Bank has saved us approx. 8 hours per month for these particular franchisees. The added benefit is when the invoice is published from Receipt Bank to QuickBooks Online it attaches the invoice to the transaction.  Accountants don’t have to ask us for copies of invoices as they can access them directly from the accounting file.

Case Study 2

A few months ago we were approached by the owner of a 30 Childcare Centre location. They were frustrated with how long it took them to do rostering and payroll for their 200 employees.  They had spoken to many other consultants who provided them with industry solutions but none of the systems actually linked to their accounting system.  After conducting our own due diligence on the systems they were trailing we were confident in recommending KeyPays Soft Clock app.  We worked closely with the team from KeyPay as we transferred all 200 employees into the new payroll system that also came with an inbuilt award interpreter for the Childcare Industry.

Within 3 months we had all 30 sites up and running and trained with the Soft Clock app.  Our client has managed to save 2 days per week with the implementation of this app.  This equates to an annual saving of $50K.  We have now been asked to roll it out for any other new centres moving forward.  An app like this means that a business can grow rapidly without having to resource it within. The integration with QuickBooks Online also enables the client to report profit & loss statements by locations for each centre with very little effort.

Case Study 3

This case study is more about our approach and validates when we say the people drive the numbers and what a true trusted advisor is.

We were recently contacted by an Engineering company who was in desperate need for a bookkeeper 2 days per week.  Part of the scope was to move them away from Desktop to QuickBooks Online.  They had approx. 13 accounting data files which were all saved in different locations and different versions.  It was an absolute nightmare!

The client had recently put together a new bonus scheme for his team and we soon realised that there was no way he could honor those bonuses as he didn’t have the reporting tools in place to measure their performance.

Upon further review we found out that they were also using an outdated desktop project management system.  They had no way of identifying if they were making or losing money on jobs and what resources were being utilized.

We quickly put the brakes on the accounting system and suggested we get the operations in order first.  The company is expecting major growth and we believed the priority was to do our research and source a new online workflow management app that would integrate with QuickBooks Online.

Needless to say client was thrilled with our approach.  The bookkeeper role is now 1 day per week and we have since placed an experienced systems accountant to re-engineer the processes around the new technology. This will also eliminate the data entry a typical bookkeeper would do in the old world.

Switching to QuickBooks Online and Apps Is Seriously Easy

If you would like to explore the wonderful world of apps why not take advantage of our free online offer by calling us on 1300 884 722 so we can arrange a free download for you.

Debtors – Let Us Collect Your Money

When should you engage a professional or your bookkeeper to collect your debtors?

If the debt is not recovered after friendly reminders, informal negotiations and a letter of demand, it might be time to decide to engage a debt collection service or a bookkeeping company that specialises in this. Using a debt collection service goes one step further than sending a letter of demand because it signals to the client that you have decided to hand the matter over to professionals. This could further strain your business relationship with the client, however sometimes it may be more important to get the money you are owed.

What methods do we use?

Initially we will send a ‘letter of demand’ to the debtor demanding that the debt is paid by a particular date or legal action may be taken. If necessary, we will issue a second, ‘final’ letter of demand or follow up with a ‘phone demand’. We can also refer legal action on your behalf.

Our collection systems are automated and we can integrate our debtor collection apps onto your accounting system be it MYOB, Xero or QuickBooks Online.

Case Study: What it means to engage us on an annual basis

John is a small business who provides computer services to other small businesses. After losing $11,000 in one year from several unpaid bills from customers, he decided to engage us on an ongoing basis. He paid an annual fee of $3,000 for this service. On all his contracts, quotations and invoices, John now includes terms and conditions of payment provided by us. They state that any costs associated with recovering the debt will be charged to the client.

In some cases, if a bill is not paid on time, John asks us to chase the payment. We do this until the debt is paid. John doesn’t use us for all his unpaid bills because sometimes he wants to maintain the business relationship so he can get more work from the client in the future.

John sees the annual fee as a form of insurance and a way to reduce worry and stress about money.

This is why we love collecting money … it takes away one of the added pressure of running your own business.

Let us help you today.  Call us on 1300 884 722 or info@allthatcounts.com.au

 

5 Top Tips for Saving Your First Home Deposit

Our top tips for saving your first home deposit was featured in Which Investment Property

Perhaps you are thinking: how can I afford the deposit? How can I service the loan and how long will it take me to save for the deposit?

It’s one of the biggest financial decisions you will make in your life.

The term household budget might even be a foreign concept to you. Most people know they need a budget, but when it comes time to creating one – and then sticking to it – it can be tough.

If you run a business, you probably understand the importance of good bookkeeping and budget management. And I always tell my business clients, why not apply the same good book-keeping practices towards your personal life and saving for that first home deposit.

Here are our five tips on how you do this and achieve your dream of owning your first home.

5 top tips – Featured in Which Investment Property

HERE’S a sure fire way to save money and improve productivity and efficiency

cloud imageAs a small business owner, chances are you are hearing a lot about small businesses moving to “cloud accounting” and if you haven’t yet jumped on board, you’re also probably hearing that there’s so much you’re possibly missing out on.

Perhaps you want to jump in with both feet and give it a go but you’re just not sure how and it never seems to be the right time or perhaps you’ve been avoiding it altogether.

After all it’s a big move and what if it doesn’t work out? What if it does? What if moving your accounts and other business processes to the cloud was the best move for you and your business.

What if I told you that small businesses that have made the move to the cloud doubled their profits and achieved 25% additional revenue growth compared to their cloudless counterparts.

So let’s explore what cloud software really is and what it means to you and your business….

…..put simply the cloud enables you to transform your business processes and no matter which industry you are in there is an innovative product that will allow you to accelerate your service offerings.

In fact, a recent global survey highlighted the top 5 reasons why small business chose to implement cloud software:

  1. Security
  2. Lower IT costs
  3. Low maintenance requirements/no systems
  4. Easy mobile access
  5. More productivity/efficiency for end-users

I was surprised security was number 1 as most small businesses have adopted the belief the cloud equals high risk, where in fact it’s the opposite. The survey continued to list the additional benefits small businesses experienced when moving to the cloud

  1. Easy to use
  2. It’s easier to find information
  3. Easier to share information
  4. Increased productivity
  5. Easier to add/remove users

Let’s break that down to what that really means to you.

  1. EASY to use and grasp, but, it doesn’t mean you can do it all yourself. Don’t be afraid to call in the experts to support you and provide the right training.
  2. NO more lost data – how many times have you lost CD’s to restore backups
  3. NO more hard disk drive crashes and data file errors
  4. NO more upgrades to install – the latest software is at your fingertips
  5. REAL time insights – information available to you anytime and anywhere
  6. HELP to make some of the standard small business processes more efficient
  7. FREES up time for your staff to be more productive to take on more work

Ultimately this means you get to enjoy more money and more freedom with peace of mind.

Want to know more how you can step into the cloud world easily and effortlessly? Our team are experts in deploying cloud accounting solutions as well as some of the great add-ons that help enhance your business processes.

[button link=”tel:1300 884 722″ type=”big” color=”green”] Call us today for an obligation free discussion on 1300 884 722[/button]

 

 

 

Guide to Cloud Accounting

Whether you’re a startup, sole operator or an established company, cloud accounting has the potential to transform your business life.

Intuit QuickBooks Online have done a wonderful job in preparing this guide.  We encourage all business owners to click on the link below and read this guide.

[button link=”http://www.intuit.com.au/showroom_cms/image/content/dam/intuit/quickbooks/i18n/en/Australia/pdf/Intuit_Guide_to_Cloud_Accounting.pdf” type=”big” newwindow=”yes”] Read Intuit’s Guide to Cloud Accounting [/button]

Maybe you already use the cloud but haven’t been given all the right tools and necessary training to get the most out of your system.  Our team can help you take your accounting software to the next level so you can be confident that your data is 100% correct.

Time Tracking Software That Counts

Time-372x372

Time Tracking Software That Counts

Time tracking is the essential evil to time billing, if it’s not done properly your profits could be dwindling away… Missing hours equals less profit.

A few months ago we made the decision to move our accounts over to QuickBooks Online (QBO). We knew we had a great cloud accounting package but found ourselves still using timesheets in excel. It went against the grain of having all our systems in the cloud. It was a weekly ritual nightmare for me to chase up timesheets. I was desperate to get the timesheets in so I could invoice out, but when I did get them in I was left to decipher customer billing rates and having to go back to previous raised invoices to confirm rates, review the actual hours worked compared to budgeted hours and more importantly has everyone accounted for all their hours. The whole process was counter-productive.

The other problem I faced was not having any real-time knowledge on the hours being worked each day. I had access to our workflow system so I knew where they were and what they were working on but I didn’t have visibility to my work in progress in $$$. It was essential for me to know each day how many billable hours the business was doing equated to $$$.

I guess we are no different to a company that sells product. They would want a sales order report to know what sales were in the pipeline. When you sell time as a service it’s imperative you know the value of that time spent. I knew one thing for certain, I needed quick and easy access to that information, that could be used anywhere, anytime and on any device. I call them my triple A’s.

I was very clear in my mind what my ideal solution would look like for me as a business owner and my team, who would ultimately be the driving force behind the product. We tested a few time sheeting systems and hands down TSheets was our pick!

Tsheets

There were many features that ticked our boxes with TSheets but what appealed to us the most were these:

  • Default client charge out rates
  • This alleviated my problem with having to decipher charge out rates
  • Default classes for job costing
  • This allows me to run a profit & loss report on each client
  • Available on all devices
  • No excuse to never clock your hours as all our team have smart phones with the app loaded
  • Weekly overview snapshot
  • This gives me my work in progress for the week

When I decided to implement TSheets I rolled it out to one key experienced staff member. It’s easier to manage and iron out any teething problems on a small scale than a company wide scale. Once we were both confident that the system was configured correctly and the integration with TSheets and QBO was working we did a demo/training session with the rest of the team. The team were on board as it was also being endorsed by their co-worker.

Moving to TSheets has provided us with many benefits including:

  • Identifying training issues. Previously if someone spent 10 hours on a task that should have only taken 5 hours I would have to rely on my memory bank and look back at previous invoices to determine if those hours were reasonable. TSheets enables us to set alerts so if this does happen we can pro-actively review our processes to ensure the staff member is completing their tasks within the required time frame
  • Knowing that every hour incurred by a team member is being captured for Payroll and Invoicing
  • Some of our work is value billed (fixed rate) TSheets allows us to log all hours worked so employee gets paid but the client is not billed. Having this information allows us to review our pricing structure on some of our fixed contracts
  • Having real-time visibility on who is working and I can clearly see in my QBO file the Unbilled Activity

Our work has now become Seriously Easier!

 

Seven Practices of Successful Teams In Sport and Business

basketball-on-court 750xx2122-1194-0-110

Sports teams play hard to win, and so does YOUR business. The desire to take a victory lap, however, isn’t the only similarity. Business owners and sports teams watch rivals closely, strategise at every turn and work together to reach the final goal, whether it’s the trophy, a customer win or the successful deployment of a long-running project. In business, we often look at our competitors to better understand what we’re doing right and wrong. I believe there’s similar value in looking outside the business world for examples. In basketball we often look at teams and how they succeed or fail. Not surprisingly, the best teams engage in certain practices that make them winners. Apply these practices to your business and you can come out on top, too.

Practice Point No. 1: REMEMBER THE NAME OF THE GAME

Basketball players who strive for home runs or touchdowns don’t get far. Their goal is to land the ball in the basket at either side of the court. Knowing what game you’re playing is the obvious first step to scoring more points than the other team and eventually winning the game.

Business Application: A surprising number of employees have no idea what game they’re playing and only a foggy notion of what it means to win. As they aim for home runs on the hardwood, their performance will be unsatisfactory, and their chance of success will be nil. As the coach of your business, discuss with every player/employee the game you’re in and define what success is. The big picture might be obvious to you, but it’s not necessarily clear to them.

Practice Point No. 2: UNDERSTAND YOUR POSITION

A power forward knows he’s in the game to catch rebounds. A point guard knows he’s the team’s best handler and passer. A shooting guard knows his job is to get the ball in the hoop. Every basketball player knows his position and his role in both achieving success and preventing the opposing team from scoring.

Business Application: Make sure your employees understand their position and how they’re expected to contribute to the team’s overall success. Too often, employees are distracted by conflicting demands and confused by responsibilities that they don’t understand. In other words, they’re either not sure how their job fits into the big picture or what they’re supposed to be doing in the first place. As a business owner, you need to make their roles clear. Just like a sports coach, come up with a game plan. Then discuss with each employee how their responsibilities fit into the ultimate performance and success of the business.

Practice Point No. 3: UNDERSTAND THE RULES OF THE GAME

The rules of basketball are known to all the players on the court and on the bench. They not only know how to play offense and defense but also the penalties for infractions. If a player violates a rule, the other team gets free throws. If there’s a serious violation, players may be expelled from the game or fined by the league. The rules are not a secret, and they’re applied across the board by impartial referees.

Business Application: Don’t keep your players in the dark. Establish and communicate ground rules for their jobs and your business. Employees shouldn’t be left to guess about what’s allowed and not allowed once they’re in the office. And don’t forget to lay out the consequences of not following the rules. Make sure your employee manual specifies the consequences of breaking certain rules, especially those that can trigger termination. Finally, be a fair referee. Apply the rules and the penalties fairly to all employees.

Practice Point No. 4: KEEP SCORE

At any given moment of the game, players know the score. The scoreboard updates with every basket, and the clock ticks toward the end of the game. There’s no need to wait until the end of the game or the end of the season to figure out how the team is performing.

Business Application: Don’t keep your team guessing about whether their performance is sufficient. Update them frequently and regularly on the status of the business. Your communications should cheer not only progress but victory itself. Too often, business owners use management superiority and commercial sensitivity as excuses for not communicating with employees. Get over it. Just imagine a basketball team where players had no idea whether their team is winning or losing.

Practice Point No. 5: REAL-TIME EVALUATION

Everyone on the basketball court and sitting on the bench knows his status. Coaches (not to mention fans) provide feedback after every play. The flow of actionable advice is constant during the game. Even more feedback is given after each game and at the end of every season, regardless of the outcome. Everyone has an opportunity to learn, shift gears and improve performance before it is too late. Nothing is held back.

Business Application: Too often, employees get no feedback until there’s a problem. Don’t hold back and make sure your managers do the same. For the group, post department and team results so that everyone can see their progress. Build training and coaching that connects to desired performance and outcomes. On an individual level, you and your managers must meet regularly and frequently with every employee to discuss performance. Make sure the bulk of the feedback is in writing – just as a basketball player’s performance lands in the sport section of a newspaper.

Practice Point No. 6: FOCUS ON TEAMWORK

A single player does not make a basketball team. Players can only win if they work together as a team. As a group, they have a shared goal. They have positions that interact and enable individuals and the team to achieve success. Finally, every player understands his role among the larger group. They know when to dribble the ball down the court or pass it to another player who can take the shot.

Business Application: For your business to be successful, employees must work as a team. All departments and employees must know how they are supposed to interact with each other to achieve common goals and overall success. As the business owner and head coach, you have to map out the interactions between departments and between employees. Hold meetings that involve multiple departments, focusing on cross-functional processes. Share results good and bad with everyone. And don’t forget to host social events that mix employees and departments from across your organization.

Practice Point No. 7: REWARDS

After a game, there’s a party in every winning team’s locker room. After the championship, the winning team gets a trophy and a ring. Individual performance isn’t left out: The most valuable player also gets special recognition.

Business Application: Too often, victories are greeted with silence in business. This is a recipe for ensuring bad performance and poor employee morale. A focus on individual achievement often results in a team of mavericks who are looking out only for themselves. At the same time, if you reward only the team, individuals who were key to the victory may feel under appreciated. The solution here is to make sure your rewards cover all the bases. First, set measurable goals for teams and individuals. Second, make noise when those goals are met or exceeded. Third, analyze the impact of rewards programs and whether a re-balancing is necessary to prevent individual goals from being negatively affecting the team effort.

DOES THIS REALLY MATTER?

Analogies between sport and business are often used to motivate managers and employees, but that’s usually where they stop. The words are not put into action, and nothing changes. Helpful lessons, whether from sports analogies, consultant reports or something else, are not absorbed and performance continues to decline. In the end, the business muddles along until it’s bankrupt and disappears.

The seven practices discussed in this article are critical to the success of any team, whether on the court, in the field or at the office. To show why these matter, let’s take the practices and pull them from the game. You can do this with any sport and get the same results.

Imagine what would happen if your son takes the field of his Little League game, but nobody knows the rules of play, how to win or even the name of game to be played. We also won’t let them know who’s winning, assuming they figure out how to play. And once it’s over, we’ll hop in the car and drive home without a word about what just happened.

You would expect puzzled players and disastrous results, right? Well, that’s exactly what’s happening at many businesses that don’t follow these practices. People are working without a clear picture of the end game. Some don’t understand their role, the rules or expectations. And, at the end of the day, they have no indication as to whether they’ve succeeded or failed.

Granted, it’s a stretch to think all seven of these practices are missing from any given workplace. But the end results are just as disastrous even if one or two are ignored. Imagine a company where employees are told exactly what their position is, how to succeed and whether they are performing. But managers at this company don’t acknowledge success or show workers how to do the job better. In this company, employees are likely to have low morale and start looking elsewhere for another team to join.

To return to the sports analogy, you can’t cut costs by firing the coaching staff and expect good results even though the other practices are still used. And yet many businesses see some of these practices as optional extras that can be ignored when convenient or cut when the budget is tight.

None of these practices is optional, ever. Take a close look at your business for any missing practices. If any are absent, think about how that would translate into disaster in sport. From there, it won’t be difficult to see the damage that’s being caused to your business. The good news is it’s not too late to implement any of these seven practices. Before you know it, your teams will be accepting the trophy and celebrating success.

 

Written by Leslie Allan – Managing Director of Business Performance Pty Ltd

 

Keeping Goods Records

Bookkeeping is the glue that keeps your business together

Many business owners don’t keep good records. Some don’t understand bookkeeping; others understand it but maybe afraid of what the numbers might tell them. If your reocords aren’t in good shape, the business could fall apart. A healthy business is monitored through its records on a regular basis so you can find problems and correct them before it’s too late.

1. Keep an audit trail
An audit trail is nothing more than a record of all your invoices and checks in numeric order. The thing to remember is never skip numbers. Record voided cheques and invoice numbers in numeric order with all other cheques and invoices. Only denote each one that is “voided.” This assures there will be no gaps in your numerical sequence and leaves a proper audit trail.

2. Due Date Reminders
It’s a good idea to follow a computerised diary for each due date reminder. Due dates should be recorded for all tax, superannuation, insurance obligations and any other statutory requirements.

3. Be Consistent
Consistency is essential to successful business bookkeeping. If you use a paper bookkeeping system, always be sure to head your columns the same way each month throughout the year. This small matter of consistency will save you and your accountant time and aggravation.

4. Deposit Books
How do you handle your bank deposits? One easy way is to record your daily deposit in a deposit book. Generally, these books come with a white (original) copy and yellow (duplicate) copy in books of 50. For a small business, an order of 200 duplicate deposit could last 2 years unless you make deposits everyday. As you write each deposit, it is a good idea to remove the white copy to give to the bank and leave the duplicate (yellow) in the book. That way nothing gets lost.

5. Bank Account Statements
When opening a business cheque account, you should request a statement with a month-end cut-off date. This will save you time when reconciling your records with the bank statement every month. The closer the cut-off date to the month end, the fewer cheques you will need to record as outstanding. And don’t toss those bank statements into a filing cabinet without reviewing them. Resist the urge to do this! As soon as your statement arrives, review it before anyone else sees it, including your bookkeeper or employees.

6. Petty Cash Tin
Almost all small businesses make small cash purchases. You may want to set up a Petty Cash tin to keep control of those purchases. Get yourself a metal cash box and put in currency and coin that totals $100.00, for example. . This will be your starting point. The value of this tin should remain at $100.00 at all times. Perhaps you or your employee purchases a notebook at the local office supply store for $5.00, using money from the Petty Cash tin. When you get back to the office you will put your receipt in the box. Now you should have $95.00 in currency and one receipt for $5.00. The value of your box is still $100.00. You can continue using the Petty Cash Box until you run out of cash. Then replenish the box by writing a cheque for “Cash”, expensing all the receipts, and cashing the cheque at the bank. After you cash the cheque, the new currency and coin go into the Petty Cash tin, so you’ll be starting again with $100 in the tin.

7. Storage Boxes for Each New Year
Keep all your records for one year in one box. If you need more than one box make sure you label each box the same year, contents on the outside of the box and note that it is box 1 of 2 etc…You can put a copy of your tax return, bank account statements, BAS, Super, Payroll records, paid creditors etc . Store it somewhere accessible.

8. Filing Paid Invoices
Start new lever arch file folders at the beginning of each financial year for all your paid paid creditors. It’s not necessary to start a folder for each supplier unless you do a large volume of business with that supplier. You could get by with a folder for all suppliers from A-K, L–Z.

9. Printing Invoices
Ensure all your customer invoices have a Remittance section on the bottom of the page which clearly states invoice number, amount and customer name. This will make it quicker to allocate the payment on your accounting system.

10. From Paper System to Computer Program
When going from a paper bookkeeping system to a computer system you will want to run dual systems for a few months. You want to be sure both systems come up with the same totals before dropping the paper system.

11. Deposit That Cash Right Away
Get into the habit of depositing all cash immediately at the bank once it is received. This ensures that all income will be properly recorded.

12. Choose the Right Accounting Method. Cash or Accrual?
Many small businesses opt for the cash system because it is much simpler. In fact, the ATO requires that you use the accrual method only if you have $1 million in sale. It is best to consult with your Accountant which method is best for your business.

13. You Are Taxed On Net Profits
Many business owners think they are taxed on all the money they take out of their business. In fact, if you are a sole trader (rather than a corporation) you are taxed on the profits of the business-not the turnover. Your estimated income tax payments should be based on the net profits of the business.

14. Computer Software
The biggest mistake people make is not taking the time to set up their accounting software correctly when they install it on their computers. The old saying “Garbage in – garbage out” applies here. If you want a financial report you can trust, you will need to be sure it is set up correctly from the start.

15. Start at the end
When starting a new business; determine what expense categories to track by taking a look at the tax return you or your accountant will need to file. Write down all the categories that apply to your business. Then include those categories when you set up your bookkeeping system.

16. Don’t over-categorise
Most of us tend to make things harder than they need to be. For instance, when categorizing office supply expenses, we don’t need separate categories for fax paper, letterhead and printer cartridges, etc. All these items can simply be listed under Office Supplies.

17. Personal Credit Cards
Save time by using a private credit card. Do not mix your business credit card with your private expenses. This creates unwanted bookkeeping expense.

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