S & H Tax Accountants

Tag: Accountant Clyde North

  • Avoid These 5 Costly Accounting Mistakes

    Avoid These 5 Costly Accounting Mistakes

    A Canadian bank recently surveyed over 500 small business owners about what they love and hate most about owning their own business.

    Unsurprisingly, flexibility and feeling in control ranked first in the “love” category. Meanwhile, almost 60% said bookkeeping was hands-down their most hated task.

    Most business owners understand that effective financial management is key to their success. But lack of knowledge, frustration, and even avoidance can add up to accounting mistakes that derail future growth.

    Protect your business and reduce your stress by avoiding these five costly accounting errors.

    Mixing personal and professional finances

    From day one, business owners should have a separate bank account in which to deposit their income and pay their business expenses.

    It’s also crucial to designate a business-only credit card. Come tax time, separate statements will make submitting claimable expenses quick and easy, while reducing the risk of a painful audit.

    Letting accounts receivable slide

    It’s frightening easy to lose track of which customers have paid you and which clients are late. Implement a strict policy and schedule for tracking accounts receivable and pursuing unpaid invoices.

    • ask customers to pay at the point of purchase or no more than 30 days later;
    • contact clients to confirm they have received your invoice and to agree on a payment date;
    • follow up immediately when payment dates are missed; and
    • keep accurate, up-to-date records of each client’s payment history.

    Investing in a cloud-based accounting solution can make AR a breeze by automating your monthly invoicing – and contacting late payers with a reminder email.

    Not using tech to track your expenses

    Tired of chasing down missing receipts and struggling to justify claims come tax time? There’s an app for that! Choose from numerous options, such as Receipt Bank, Shoeboxed or Expensify.

    Many of these apps generate expense reports that are easy to share, or sync automatically with accounting software.
    Neglecting to strategize for long-term growth

    Effective accounting means managing day-to-day finances while making provisions for future growth. Software and cloud-based solutions offer easy ways to track your financials, but they also generate reports and provide analytic tools SMB owners can use for future forecasting.

    Familiarize yourself with the reports your software can generate to track long-term trends, identify and mitigate risk, and discover new ways to increase profitability. Talk to your accountant about which reports and metrics are most important for your particular business and how to utilize them.

    Final tip: Don’t go it alone

    Small business owners are rarely trained accountants. Don’t try to manage your company’s finances all by yourself.

    Collaborate with a trusted professional, invest in quality IT solutions, and spend some time familiarizing yourself with relevant tools and trends.

    You’ll feel empowered, which is step one to forging a more love-filled relationship with small business accounting!

     

    Handling a business can be difficult, as there so many aspects to it. It is clear that many businesses generally do not enjoy the task of bookkeeping, as it can be tedious at times. S & H Tax Accountants are here to help, our team is well-qualified and rather experienced. We aim to provide our clients with the best level of service possible, as we offer bookkeeping services and all other tax services as well. To book an appointment now, you can call us at 03 8759 5532 or email us at info@sahtax.com.au

  • 6 Essential Accounting Terms for Small Businesses

    6 Essential Accounting Terms for Small Businesses

    Hiring an accountant is widely considered best practice for small business owners.  But delegating financial analysis and reporting doesn’t mean completely checking out of the process each month or quarter. On the contrary, it’s recommended that business owners work closely with their accountants throughout the year to better understand their financial position, and make smart plans for future growth.

    Want to increase your accounting knowledge so you can have more informed, insightful discussions with your account this quarter?

    Start right now, with this list of 6 essential accounting terms for small business owners.

    1. Cash Flow

    Do you have more cash flowing into your business each month than you pay out to cover costs and expenses? If so, your accountant will conclude that you’re “cash flow positive.” If the opposite is true, your cash flow statement will reveal that you’re “cash flow negative.”

    Having excess cash on hand means you’re better equipped to keep up with debt, cover unforeseen expenses, and invest in growth opportunities. Your accountant will generate a cash flow statement each quarter to keep tabs on this key performance indicator.

    1. Profit and Loss Statement

    The profit and loss statement (also known as the income statement) is one of the most important documents used by accountants to determine the profitability of your business.

    The P&L statement lists revenues and gains as well as expenses and losses over a specific period of time (typically every three months for small businesses). It calculates your all important “bottom line” so you know if you’re operating at a loss or turning a profit.

    1. Gross vs Net Profit

    Gross profit is what remains when you subtract the cost of goods sold (COGS) from your total revenue. Net profit, on the other hand, drills deeper. It reveals your exact dollar per profit of sales after subtracting all operating expenses, including COGS, taxes, interest paid on debt, etc.

    Gross and net profit are both profitability ratios. They are key for measuring business performance against an industry benchmark and your competitors.

    1. Balance Sheet

    The balance sheet offers a snapshot of your overall financial position at a particular moment in time. It lists the assets (such as cash, inventory, accounts receivable, and equipment); liabilities (like accounts payable, income tax, and employee salaries); and shareholder capital.  In a nutshell, the balance sheet shows what you own, as well as what you owe.

    1. Accounts Receivable & Accounts Payable

    Simply put, accounts receivable is money your business is owed by customers for goods or services sold. It is considered an asset on your balance sheet. Conversely, accounts payable is money you owe suppliers and any bills you have yet to pay, so it’s listed as a liability on your balance sheet.

    1. Bad Debt Expenses

    Bad debt happens when you can’t collect payment from your customers. Long term outstanding accounts receivable could be listed on your balance sheet as “bad debts”, and if they’re never collected, may have to be written off as a loss.

    And there you have it – six key terms to help you build your accounting vocabulary, join the conversation, and empower smarter decision-making.

     

    With the help of these 6 terms, a small business is able to identify their financial position. In order to help small businesses, S & H Tax Accounting are always ready. Our team of Accountants are one the most well-qualified and experienced accountants that you will ever meet. We aim to provide our clients with the best level of service possible, as we believe that your growth is our priority. To make a booking now contact us on info@sahtax.com.au or you can call us at 03 8759 5532.

  • Your End of Financial Year Checklist

    Your End of Financial Year Checklist

    The end of the tax year is right around the corner and though you may be dreading 30 June, there are things you can do to feel better prepared and make the most of your tax deductions. Because this year has been different for many people in terms of their employment situation, there are changes to tax reporting that may affect you.

    Here are some things to know about your income, deductions and home office expenses.

    1. Your income

    Generally speaking, your income is money you earn from your employer in salary or wages, or the income you earn as a self-employed person from your business. However, there are other items included in income that people often forget. When you file your taxes, be sure your reported income includes:

    • Employment income
    • Personal services income
    • Crowdfunding income
    • Sharing economy and tax income
    • Investment income
    • Government payments
    • Termination payments
    • Bank interest
    • Prizes and awards
    • Dividends
    • Income from rental property
    • Foreign income
    • Capital gains
    • Managed funds income
    • Discounted shares under employee share schemes

    2. Your deductions

    Deductions are typically the least understood area of taxes. People often get confused about what they can and cannot deduct, which can result in missing out on important tax breaks.

    To qualify as a deduction the expense must be directly related to earning your income; you must be able to prove the expense occurred, for example, with a receipt; and you cannot have been reimbursed by your employer for the expense. In the case of an expense that is both work and private, you can only claim a deduction for the portion that is related to work.

    Items that may count as deductions:

    • Vehicle expenses
    • Travel expenses
    • Clothing, laundry and dry-cleaning expenses
    • Self-education expenses
    • Home office expenses
    • Tools and equipment expenses
    • Overtime meals
    • Union fees
    • Client bad debts
    • Protective items, equipment and products
    • Income protection
    • Personal super contributions
    • Gifts and donations

    There are more items here that you may be able to claim as a deduction.

    3. Your home office expenses

    Even if you are an employee, if you work from home you may be able to claim deductions related to the cost of working from your home. These include items such as additional electrical, phone, and internet expenses.

    Among the things you can’t claim as deductions:

    • Anything your employer pays for or reimburses you for;
    • Any decline in value of items your employer provided;
    • General household items your employer provides at work (such as snacks);
    • Items related to your children and their education; and
    • Occupancy expenses such as rent and mortgage (employees typically can’t claim these).

     

    The Working from home expenses  can be claimed if you are working from home to fulfil your employment duties, if you also incur additional running expenses due to the fact that you work from home. In order to claim these expenses, it is essential to have records that show that these expenses incurred.

    The Car Expenses , in order to claim the deductions of your vehicle that you own or lease, you will need to calculate the expense, you can do so through the two methods; cents per kilometers or you can use the logbook method. For the logbook method, if you have been using the same logbook for the past 5 years, then you will need to add a line in the logbook, which will consist your odometer reading as at 30/06/2023. You will then need to complete the first page of the logbook that shows the start and the end of the period odometer reading.

    If you are working from home as an employee, you can use one of three methods for calculating your expenses.

    The Fixed Rate Method allows you to claim a deduction for additional running expenses for working from home. In this case, you can claim 67 cents for each hour you worked from home, but you must have a dedicated work area and keep records of time worked, either throughout the year or over a representative four-week period. The fixed rate method for calculating your deduction for working from home expenses has been revised. This revised method is available from 1 July 2022.

    The Actual cost method allows you to work out the deduction based on the actual costs incurred working from home. This includes electricity and gas, phone and internet, cleaning and consumables. The exact expenses you can deduct varies, depending on whether you have a dedicated work area.

    Final thoughts

    The end of financial year can feel overwhelming. However, with some information and organisation, it can be a lot less daunting. If you miss out on some deductions this year, make a note of them and keep track of them for next year. Consider speaking with an accountant so you can plan ahead and make the most of your deductions next year. We at S & H tax accountants can help to prepare and lodge tax returns.

  • Why good financial advice is a great investment for your retirement

    Why good financial advice is a great investment for your retirement

    Retirement is a significant milestone that brings with it the need for careful planning and financial security. A well-planned retirement ensures that you can maintain your desired lifestyle without worrying about running out of money. One of the key components of successful retirement planning is seeking good financial advice. Obtaining professional financial guidance can contribute to a secure and comfortable retirement.

    The Benefits of Good Financial Advice

    Tailored Retirement Planning

    Every individual has unique needs and goals when it comes to retirement. A financial advisor can assess your financial situation, understand your objectives, and design a plan specifically to meet your requirements to ensure that your retirement strategy is both effective and achievable.

    Streamlining Savings and Investments

    A financial advisor can help you diversify your investment portfolio and allocate assets strategically to balance risk and reward. By doing so, they can improve the growth of your savings and investments while reducing potential losses to a minimum, setting you up for a more financially secure retirement.

    Tax-efficient Strategies

    Understanding the tax implications of various investment options can be complex. A financial advisor can guide you through the process and help you structure your investments in a tax-efficient manner. This not only improves your returns but also reduces your tax burden during retirement.

    Managing Inflation and Market Volatility

    Inflation and market volatility can have a significant impact on the value of your retirement savings. A financial advisor can help you navigate these challenges by protecting your investments and adapting to changing market conditions, ensuring that your retirement funds remain secure and continue to grow.

    Estate Planning and Wealth Transfer

    Good financial advice extends beyond retirement planning to include estate planning and wealth transfer strategies. It’s important to seek advice to ensure the financial security of your loved ones.

    When selecting a financial advisor, consider their professional qualifications, as well as their track record of success in retirement planning. This will help you gauge their expertise and ensure that they are well-equipped to address your specific needs.

    Understanding how advisors are compensated is crucial when comparing different providers. Make sure you are aware of their fee structure and any potential conflicts of interest. Transparency is key to building a trusting relationship with your financial advisor.

    A good financial advisor should provide regular updates on your portfolio performance and be available for consultations and meetings when needed. Effective communication ensures that you remain informed about your investments and can make well-informed decisions.

    When to Seek Financial Advice

    While it’s never too early or too late to seek financial advice, certain life events and milestones may prompt you to consult a professional. These include major changes in your financial circumstances, such as receiving an inheritance, experiencing a job loss, or approaching retirement age. Periodic financial check-ups can also help ensure that your retirement plan remains on track and adapts to any changes in your life.

    Investing in good financial advice can have long-term benefits for your retirement planning. With the right financial advisor by your side, you can look forward to a comfortable and fulfilling retirement.

     

    At S & H Tax Accountants, we understand that every individual has different goals and outcome that would like to achieve. That is why our team is so passionate about being able to guide our clients to reach their goals. S & H Tax Accountants provide financial advise to all of our clients, as our staff members are well-qualified and experiences. We make it a point to provide you with the most highest level of service possible. To make an appointment today at S & H Tax Accountants contact us on info@sahtax.com.au or call us on 03 8759 5532.

     

  • Mastering the basics: A guide to accounting principles for small business owners

    Mastering the basics: A guide to accounting principles for small business owners

    As a small business owner, you know that managing your finances is crucial to the success of your business. But with so many accounting principles and practices out there, it can be challenging to know where to start. That’s where we come in! In this guide, we’ll break down the essential accounting principles that every small business owner should know. We’ll discuss how these principles can help you keep track of financial transactions, create accurate financial statements, and make informed decisions for your business. So, let’s dive in, shall we?

    Why Are Accounting Principles Important for Small Businesses?

    Accounting principles are the foundation for any successful business. They provide a uniform framework for recording and reporting financial transactions, ensuring consistency and accuracy in your financial records. By adhering to these principles, you’ll be able to:

    • Make better financial decisions based on accurate and reliable data
    • Monitor your business’s performance and identify areas for improvement
    • Meet legal and regulatory requirements for financial reporting
    • Build trust with investors, lenders, and other stakeholders

    Let’s explore some of the key concepts you need to know.

    IFRS: International Financial Reporting Standards

    International Financial Reporting Standards (IRFS) – as the name implies – is an international standard developed by the International Accounting Standards Board (IASB).

     

    IFRS is used in more than 110 countries around the world and is a set of principles that help companies around the world show their financial information in a clear and consistent way. Think of it like a common language for money matters, so everyone can understand and compare how businesses are doing financially, no matter which country they’re from.

    Accrual Accounting vs. Cash Basis Accounting

    When it comes to accounting methods, there are two main options: accrual accounting and cash basis accounting.

    Accrual Accounting is the more widely accepted method, where you record transactions when they are earned or incurred, regardless of when cash changes hands. For example, if you invoice a client for services provided in December but don’t receive payment until January, you would record the revenue in December under accrual accounting.

    Cash Basis Accounting, on the other hand, records transactions when cash is received or paid. In the example above, you would record the revenue in January when the payment is received.

    Double-Entry Accounting: The Backbone of Financial Record-Keeping

    Double-entry accounting is a fundamental accounting principle that requires every transaction to be recorded in at least two accounts: one as a debit and one as a credit. This system ensures that your books are always balanced and makes it easier to detect errors or discrepancies in your financial records.

    Here’s a simple example: When you purchase inventory for your business, you would record the transaction as a debit to your inventory account and a credit to your cash account.

    By using double-entry accounting, you’ll have a clear and accurate picture of your business’s financial position, allowing you to make better financial decisions.

    Practical Examples and Case Studies

    To illustrate how these accounting principles can be applied in practice, let’s look at a few real-life examples:

    • Example 1: A local coffee shop owner uses accrual accounting to record sales and expenses. They track their daily sales and expenses, recording them as they are earned or incurred, rather than waiting for cash to change hands. This allows them to monitor their cash flow and make informed decisions about purchasing inventory, hiring staff, and investing in new equipment.
    • Example 2: A freelance graphic designer uses cash basis accounting for their business. They record income when they receive payments from clients and expenses when they pay for software, supplies, or other business costs. This simple approach helps them stay on top of their cash flow and ensures they have enough money to cover their expenses.

    Becoming knowledgeable in accounting principles has the power to transform the way you run your small business. A strong grasp on your financials enables you to make informed decisions and accelerate revenue growth.

    If you need assistance, we’re here to help.

    When choosing accounting methods, it is essential to choose the one that suits your business. As for small businesses, the cash-basis accounting method can be quite effective, however large businesses tend to use the accrual accounting method to manage their transactions. If your business needs assistance in deciding which accounting method would be more appropriate for them , please contact S & H Tax Accounting. Our team of accountants are well-qualified and rather experienced, we aim to provide the best service to our customers. Please book an appointment today, call us at 03 8759 5532 or you can email us at info@sahtax.com.au

  • What is a balance sheet and how does it help me manage my finances?

    What is a balance sheet and how does it help me manage my finances?

    You’ve likely heard the phrase “in the black.” Your balance sheet is the tool that shows you whether your business is indeed “in the black.”

    Your balance sheet includes a section for your assets (things you own or will receive that have value), your liabilities (what you owe to others) and equity (retained earnings and funds from investors) at a specific time. The relationship between these three sections shows how financially healthy your company is. If your assets outweigh your liabilities, you’re in the black. However, if you have more liabilities than assets, you’re in the red – which is undesirable.

    But how does a balance sheet help you to manage your finances? Read on to find out.

    Track your assets and liabilities over time

    Most companies prepare a balance sheet quarterly, but you can certainly complete yours more or less frequently than that. The key is to prepare one regularly to understand how you perform over time.

    When you have a set of successive balance sheets, you can clearly see how your assets and liabilities measure up on average. For example, you may have had a costly period with critical equipment requiring replacement or repair. That balance sheet might not look so good if that’s the only one you have to interpret.

    But when measured against other balance sheets, you may see that it was just an anomaly from which you have handily recovered. Perhaps the improvements even helped you to earn more money once they were complete. There’s no way to know unless you use several balance sheets together.

    Measure risk

    Your assets act as security for your business because if you found yourself in a situation where you had to, you could sell them to cover your debts. This is how you determine how liquid your business is. Your balance sheet easily identifies how much you own and how much you owe, so you have an easy way of assessing your liquidity.

    This also enables you to determine how much risk your business faces. If you find you couldn’t readily pay what you owe by liquidating your assets, it would be clear that you couldn’t currently take on any more risk by borrowing money or buying something new.

    Calculate decisions

    Similarly, your balance sheet will help you see if now is a good time to spend your money or if you should hold off. For example, if your business is healthy, with plenty more assets than liabilities and easily able to pay shareholders, that would indicate a good time to make some capital improvements.

    If you find things more precarious, your balance sheet will guide you to hold off on making any major purchasing decisions until you’re in better shape. It may even indicate you need to find a way to offload some debt to get back on track.

    Use with other financial statements

    Your balance sheet helps you see your assets and liabilities clearly. It becomes even more useful when used with the other two main financial statements: income statements and cash flow statements.

    An income statement (which may also be called a profit and loss statement or an earnings statement) shows your revenues, expenses, and profitability. It tells you what you earn and the costs you incur to make that revenue.

    Your cash flow statement will show what money came in and went out of your business during a specified period. Its primary purpose is to highlight your ability to operate based on how money moves through your business.

    Together, these three financial statements give you a clear picture of how your company operates and how financially healthy it is.

    Final thoughts

    If you’re unfamiliar with financial statements, a balance sheet can initially seem intimidating – especially if it shows that you’re in the red. However, once you prepare one for your business, you will find it invaluable to help you see where you stand and what you can do about it.

    Get in touch to have your balance sheet questions answered and learn more about how we can help you prepare this critical financial statement.

     

    Recording your financial information is a useful way of identifying your financial position. S & H Tax Accountants are able to assist you with recording your financial information accurately as well as being able to guide and assist you to reach your financial goals. Whether it be a balance sheet or income statement, our accountants can do it all. Book an appointment today at S & H Tax Accountants, call us at 03 8759 5532.

  • Financially Savvy Women: 5 Strategies to Improve Your Financial Literacy

    Financially Savvy Women: 5 Strategies to Improve Your Financial Literacy

    It is well established that financial literacy is a key component of financial independence. The more you know and understand about finance, the better equipped you are to make important decisions. Historically, women have had lower financial literacy scores than men for many reasons, including social norms, a lack of access to resources, and needing to focus on other issues.

    That said, women are living longer than men and studies suggest they face systemic barriers that make it difficult for them to achieve the same level of economic security and financial literacy that men can obtain. This, in turn, makes it increasingly difficult to accumulate wealth, plan for retirement, and invest money, despite women’s increased involvement in higher education and in the workforce.

    In recognition of International Women’s Day, here are some steps women can take to increase their financial literacy so they can make informed financial decisions.

    What is financial literacy?

    Financial literacy is an understanding of the value of money, how money works, and how to make money work for you.

    Seek out information

    Unfortunately, due to a lack of access to educational resources, a lack of financial resources and ongoing stereotypes about women’s ability to manage finances, women have often been shut out of financial conversations.

    A great step in building your financial literacy is to start pursuing information and knowledge. There are many resources available online, including introductory personal finance courses, newsletters, podcasts, and websites that explain key concepts. Many of them are written for a general audience, so they’re designed for beginners to understand.

    Find them, subscribe to them, and learn from them. Ask us for specific recommendations for your situation.

    Find an advisor you trust

    Women tend to view financial risks and investments differently than men do, and they tend to feel less confident in financial conversations. Find an advisor who respects you and your goals, and understands your unique financial needs. Make sure it’s someone you feel comfortable talking with and asking questions of. Ask them to explain everything to you, so you understand all the important terms, phrases, and strategies.

    Don’t be tempted to think you’ll never understand finance. You can, and you will. You just need someone to explain it to you in a way that is meaningful to you. And you need someone who builds a strategy based on your financial responsibilities and pressures.

    Build an emergency fund

    Build an emergency fund of your own. Having an emergency savings account gives you some financial independence, in case of a crisis. Find a way to save up three to six months of expenses, so that if you lose your income or financial resources, you have some breathing space. The work you put into saving that money and managing the savings account will teach you about how money works.

    Check your credit score

    If you have any credit in your name, you have a credit score. Knowing it and understanding the role it plays in your finances is a massive step towards financial literacy. Your credit score affects your eligibility for loans, leases, credit cards, and mortgages. Utility companies might check your credit score when you open an account, and rental agencies take it into account when renting to you.

    If your credit score is low, look into ways to build it up. There are many resources available to teach you about improving your credit score.

    Continue educating yourself

    You don’t have to become an expert in finance to be financially literate, but having a basic understanding will help you make better financial decisions, and it will help you get on the path to financial independence.

    Commit yourself to continually learning about finances, or at least to always being involved in your financial decisions, so you have control over your future.

    Final thoughts

    Financial independence involves you having the money you need to live the lifestyle you want, but it also means being confident in making your own financial decisions. Financial literacy can give you some of the confidence you need to make important decisions.

    If you need assistance understanding your finances, making sure that your information is correct or even building an emergency fund, S & H Tax Accountants can always help. We have friendly and experienced staff who are always willing to help and guide you to have the ability to be financially independent. Book in today at S & H Tax Accountants, call us at on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Business Update – 8 March 2023

    Business Update – 8 March 2023

    Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

    Inflation is still a concern as the economy slowly recovers

    Australia’s economy has recovered better than most from the COVID pandemic and is now 7% larger than before. But experts say that ongoing inflation is a continuing concern for everyday affordability.

    Mental health is a major concern as the cost of living remains high

    New quarterly figures from Suicide Prevention Australia show that 46% of Australians have reported an elevated distress level from cost of living pressures – a 5% rise on the December quarter.

    Centrelink payments set to rise to help with the cost of living crisis

    Beginning March 20, more than 4.7 million Australians will receive a cash boost to their social security payments to help them cope with the soaring cost of living.

    Demand for EVs is stronger than ever

    New data from FCAI shows that Australian EV demand soared in February 2023 as fully battery electric vehicles made up 6.8% of the overall new car market. The total number of EVs on Australian roads is approaching 80,000 and climbing higher.

    Australian companies still shedding jobs as recession looms

    Two Australian companies have laid off hundreds of staff members due to tough market conditions. Healius, a healthcare company, has cut 500 full-time roles since the Covid-19 pandemic began, and Thoughtworks, a software firm, has laid off 100 employees.

    Queensland is considering legislation to keep solar panels out of landfills

    Queensland is the biggest contributor of solar waste, and the potential products set to end up in the landfill is enormous – but the opportunity for recycling or repairing those panels is also massive. New legislation is hoping to prevent those panels from going to waste.

    Affordable rent is becoming rarer and rarer

    The number of properties listed for rent for less than $400 per week has almost halved over the last year, with Hobart and Darwin the exceptions.

    New super tax rules only affect the wealthiest Australians

    National Party leader David Littleproud says that raising the tax rate on superannuation balances above $3 million will affect “many mum and dad businesses, ” hoping to sell up for retirement. However, Federal Treasurer Jim Chalmers reiterated, “99.5% of Australians with super accounts will continue to receive the same rate.”

    Toblerone is no longer Swiss enough to have the Matterhorn on its packaging

    Mondelez, the US parent company of Toblerone, is moving some of its production to Slovakia. Because Switzerland has laws regulating the use of national symbols, the change could see the Matterhorn disappear from the packaging because it will no longer meet the country’s standard of ‘Swissness.’

    Get in touch

    Contact us if you have any questions or want to discuss the next steps for your business.

    If you are concerned regarding your financial position due the various elements such as the rise of inflation or your rent is increasing day by day, please feel free to contact S & H Tax Accountants. We are a Local Accounting Service in Cranbourne, that have experienced and friendly staff  who will always help you in the best possible manner. So please book an appointment at S & H Tax Accountants today, call at 03 8759 5532 or email us at info@sahtax.com.au.

     

     

  • Return on investment vs cost: how to weigh them when making business purchases

    Return on investment vs cost: how to weigh them when making business purchases

    Deciding to purchase something to help your business is a big decision. It can be difficult to part with hard-earned money, especially in the early days. To understand the right time to invest by purchasing something for your business, you must calculate whether the Return on Investment (ROI) would be profitable.

    The cost is the amount of money you spend making the purchase, plus any indirect costs (such as training costs) related to the purchase. The ROI is calculation of financial gains or benefits that you obtain as a result of that cost.

    To determine ROI profitability, there is a simple formula you can use. If the purchase yields a positive return, it can be considered profitable.

    However, if the purchase does not earn back the amount of money it costs, it would be considered a negative return on investment. Read on to learn more about how to weigh a potential return on your investment versus the cost.

    Return on Investment Formula

    Using a formula to calculate the ROI only offers a rough initial estimate. Other factors might come into play, such as future work you will get because of the new asset or unforeseen expenses. The formula to determine ROI is:

    ROI = (Net Profit / Cost of Investment) x 100

    Let’s see an example

    Suppose you run an environmental surveying company. You have three employees who spend their time in the field gathering data and taking stock of how a proposed development project would affect the landscape. Vegetation, waterways, animals – everything is taken into consideration.

    You have one client who would like you to perform a survey of very rugged terrain. They would pay $2500 if you could complete this work, but covering the landscape would be difficult and take time.

    The only way to do it effectively would be to purchase a drone for $1000. The new equipment would make taking on this work possible and save many hours spent physically in the field. It would cost $200 to train each employee how to use the drone.

    Additionally, having a drone would mean you could offer your new aerial surveying services to other clients who are undertaking more large-scale or complex projects.

    Calculating the ROI of obtaining new equipment for this project

    You would first tally your total expenses and expected revenue to decide whether this purchase would be profitable.

    Expected Revenue = $2500

    Total Expenses = $1000 + ($200 x 3) = $1600

    You would then subtract the expenses from your expected revenue to determine the net profit.

    Net Profit = $2500 – $1600 = $900

    To calculate the expected return on investment, you would divide the net profit by the cost of the investment and multiply that number by 100.

    ROI = ($900 / $1600) x 100 = 56.25%

    Your return on investment would be 56.25%, which is a positive return. Not only that, but your new equipment may allow you to gain more work in the future, making your ROI even better.

    What happens when you don’t put your investment to work

    What if you purchase the drone but find the learning curve overwhelming, and it winds up collecting dust in a corner?

    In this case, your client may not hire you, or the hours required to do the work on foot may make taking on the project cost prohibitive. This would result in a negative return on investment, especially if you have already performed the employee training. Your ROI would be zero, plus you would be down $1600 from the initial expense and training.

    Final thoughts

    While the idea of making a large purchase to benefit your business can be daunting, there are often significant rewards that come with taking the plunge. Do your research, calculate if the investment is worth it, and then move ahead confidently. If you calculate correctly, you will find that your purchase takes your business to new heights.

    If you need any assistance calculating the return on your investment, you can always contact S & H Tax Accountants. We have experienced staff, who can help direct your business in the right direction. Book an appointment today at S & H Tax Accountants, you can call us on 03 8759 5532 or email us on info@sahtax.com.au

  • 6 tips to paying down your personal debt in 2023

    6 tips to paying down your personal debt in 2023

    2023 is expensive. The cost of living is higher than ever, interest rates keep rising, and it keeps getting harder to stay afloat, let alone get ahead. As a result, carrying debt has become commonplace. But, with the challenges of the past few years, many of us have more debt than we’re comfortable with.

    How do you get ahead while you’re still trying to catch up?

    Here are some tips on how to pay down your personal debt this year.

    1. Take stock of your debt

    There’s no way to fully understand your situation if you don’t take the time to identify everything you owe. Because looking at your monetary situation can be stressful, many people choose to ignore their financial statements and just keep a rough estimate of how much they think they owe.

    This is a mistake. Turning a blind eye to the numbers won’t change them, and neglecting to look at your debts regularly will make it easier to continue spending.

    2. Identify which debt is costing you the most

    Between a mortgage, outstanding loans, credit card debt, car payments, lines of credit, and many more forms of debt, some will cost you more than others to maintain. Once you have a clear picture of everything you owe, determine the interest rate on each debt.

    This way, you can plan to pay down the most expensive debt you have first. Doing so will save you as much interest as possible, meaning that you can pay down your debt faster as time goes on. So make your money work as hard as it can by paying down that higher interest debt.

    3. Consider consolidating your debt

    While working with a debt consolidator can temporarily hurt your credit score, it might be worth it in the long run. It can be extremely stressful to look at multiple sources of debt, and it’s easy to be overwhelmed by it all. This often leads to missed payments, which also hurts your credit score.

    By consolidating your debt, you end up with one regular payment, which is much easier to manage. The temporary credit score hit can be well worth it if you have a complex debt situation or simply feel overwhelmed.

    4. Set a budget and save

    Once you have figured out your repayment strategy, make a plan so you’re not working against yourself. Look at the actual cash you bring each month and allocate those funds. Set aside money for living expenses, entertainment, and your existing debt payments.

    If you have any leftover money, start putting that in a savings account. You should work towards setting aside 3-6 months of living expenses so that if something unexpected happens, you have the money to deal with it and don’t have to rely on credit to help yourself.

    5. Adjust your credit card habits

    Credit cards come with many perks, but they’re only worthwhile if you can pay the amount you’re spending on them. Doing so responsibly builds your credit score and allows you to take advantage of the benefits of being a cardholder.

    If you don’t have the actual money to pay your credit card off each month, tuck it away somewhere so you’re not tempted to use it. It’s
    easier than ever to tap your card, but without the funds to back it up, you’ll find yourself back in debt before you know it.

    6. Increase your income

    Nobody wants to hear that they have to work more, but if after looking at your financial situation, you find that there simply isn’t enough money coming in to pay for what you’ve already spent, you will likely need to find a side hustle. The only other option is to decrease your living expenses, which is tough to do in 2023.

    Final thoughts

    Paying down your personal debt isn’t anyone’s idea of a good time, but it’s essential. The debt isn’t going to go away on its own. Once you start seeing improvements, you will feel encouraged to continue until it’s eliminated. Call your personal accountant to devise a strategy to pay down your debt this year.

     

    If you need assistance managing your accounts or need to formulate a strategy to minimise your debt, please contact S&H  Tax Accountants. We are a local Accounting Service that provide all tax services as well as bookkeeping. We have experienced and friendly tax agents that will do their best to provide you with the best outcome. Book an appointment today at S & H Tax Accountants, you can call us on 03 8759 5532 or email us at info@sahtax.com.au

  • Business Update – 22 February 2023

    Business Update – 22 February 2023

    Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

    What to do if you can no longer afford your mortgage

    As rates continue to rise, many Australians find themselves unable to make payments on their home. Learn what to do if your mortgage payment obligations are becoming impossible to meet.

    Woolworths expands controversial surveillance tool

    Woolworths is expanding the rollout of a controversial AI technology that helps reduce misscans at self-serve checkouts at more stores in NSW, Victoria and Queensland.

    Changes coming to superannuation rules

    Treasurer Jim Chalmers is proposing an “end to the super wars” with a new law that would see an end to early access to funds.

    Chinese airlines flying through Russia have an unfair advantage

    Since the Russian invasion of Ukraine nearly a year ago, European, Canadian, and U.S. airlines have avoided Russian airspace, making long-haul routes take longer and cost more. As China reopens and flies directly through Russia, other international airlines say they have a leg up.

    No more SMS two-factor authentication on Twitter unless you pay

    Twitter warned non-Twitter Blue users using SMS 2FA authentication that they have 30 days to switch to another 2FA method. Find out how to keep your account secure here.

    Everyone’s scrambling to get on board with AI

    With the release of ChatGPT in November, it seems that everyone’s talking about the potential of AI. Everyone from students to CEOs is trying to keep up as we figure out how this new technology fits into our lives.

    Meta follows in the footsteps of Twitter

    Mark Zuckerburg announced that Meta is launching a pay-for-verification subscription service called Meta Verified for Facebook and Instagram, much like Twitter Blue. The launch begins in Australia and New Zealand this week, with more countries to follow.

    Bitcoin is booming, but why?

    Everyone’s watching as Bitcoin continues to make steady gains in 2023. But will it climb back to $20K? Forbes has some ideas about why the price of crypto is suddenly climbing again.

    Get in touch

    Contact us if you have any questions or want to discuss the next steps for your business.

    If you need any assistance, managing your business’s accounts, please contact S & H Accountants. We are a local Accounting Service, that specializes in Bookkeeping and all Tax services. We have experienced and friendly staff, that will provide you with the best service possible.

  • Business Update – 15 February 2023

    Business Update – 15 February 2023

    Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

    RBA governor’s statement met with confusion

    Philip Lowe will appear before the senate this week to answer for the RBA’s rate hike strategy. Last week, he said that further interest rate hikes would be necessary to tame inflation, leaving observers confused as it seems to have already peaked.

    Faster internet is on the way

    Millions of Australians will benefit from the government’s $2.4 billion funding boost to the NBN.

    ATO seeks to boost the use of eInvoicing

    eInvoicing is a digital system that allows businesses to send and receive invoices through their accounting software, eliminating the need for physical documents, scanned papers, or PDFs. However, less than 1% of businesses have adopted it.

    Households spending power decreased due to inflation

    Middle-income households are major drivers of the nation’s economy, spending over $1 trillion annually. However, the cost of living has increased significantly, increasing spending on necessities by 23 percent. That means less money to spend on anything else.

    Homeownership becomes less likely the younger you are

    Most Australians spend much of their working lives pursuing home ownership. Yet, many millennials still pay sky-high rent for small rooms. Owning anything has become further out of reach for each generation.

    Real estate auctions pick up again

    After a severe lull following the pandemic, auction volumes are gaining steam once more. The increase is attributed to the end of a holiday lull and stabilising real estate prices.

    Money laundering is alive and well in Australia

    Due to a lack of scrutiny and regulation in some professions, Australia is a facilitator for money laundering. Real estate is a popular vehicle for the shadowy practice, with few government regulations in place to prevent it.

    The government seeks SME thoughts on payment times

    Small Business Minister Julie Collins is urging small and medium businesses to share their thoughts for a government review regarding accelerating payment times between major companies and their suppliers.

    Disney cutting 7000 jobs

    Reinstalled Chief Executive Bob Iger is seeking to cut $5.5 billion USD from its annual costs to drive profits. He is also under pressure to make Disney+ profitable and find new ways to monetise the Disney catalogue.

    UNSW psychiatry professor seeks to redefine burnout

    Gordon Parker, the founder of the Black Dog Institute, argues that burnout is not just a syndrome resulting from chronic workplace stress that has not been successfully managed. Instead, it’s a more wide-ranging condition that must be redefined to learn how to prevent it.

    Get in touch

    Contact us if you have any questions or want to discuss the next steps for your business.

  • Employee vs contractor – what you need to know in AU

    Employee vs contractor – what you need to know in AU

    Depending on the nature of your business, you may have workers who are employees or contractors, or you may have both. Each has their merits, but it’s important to review which are which in order to meet your tax and super obligations.

    When you have an employee, you must withhold PAYG tax, pay super, and report and pay fringe benefits. Contractors generally look after their own tax obligations. However, you may still have to pay super depending on the nature of their work.

    It’s against the law to treat an employee as a contractor. Significant penalties apply if you do, so it’s important to get it right.

    The simplest way to remember is:

    An employee works in your business and is part of your business.
    A contractor is running their own business.

    But how can you be sure that you’ve got an employee or a contractor on your hands?

    Does there come a point that you should actually be hiring a worker as an employee, when you thought they were a contractor?

    There are six factors to consider:

    1. Ability to subcontract or delegate

    An employee is not able to subcontract or delegate the work. They must perform the outlined tasks themselves. If they can’t do the work themselves for any reason, and someone else does it, this is substitution. Your business would then pay the other person.

    A contractor can delegate the work as long as they’re not obligated to do it themselves as per the contract. If your contractor can’t work, they would organise for another qualified person to do it. You would pay your contractor as usual, who would then pay their subcontractor.

    2. Basis of payment

    An employee is paid a set amount per period of time. The most obvious example would be an annual salary or hourly wage.

    Some employees are paid piece-work rates. They receive an amount per successful sale, or per the number of pieces produced. Commission basis would be a price per item structure.

    A contractor, however, is paid an agreed-upon price in exchange for a predetermined result. Some contracts may specify the amount to be paid in increments as stages of the project are completed. But the key takeaway is that a contractor is paid when the agreed-upon result is achieved.

    3. Equipment, tools, and other assets

    If your business is responsible for providing the equipment, tools, and other assets required to perform the job, that’s characteristic of an employee.

    If the worker is providing these items, they are likely a contractor.

    4. Commercial risks

    Employees do not bear commercial risk and they are not liable for correcting any defects in the work at their own expense. Instead, your business takes this responsibility. The worker will be paid for the time required to perform the task to completion.

    A contractor does assume the commercial risk. They are responsible for fixing any mistakes on their own time. This extra work would fall under the umbrella of the terms set at the beginning of the project. Your business does not have to pay for any extra time taken or materials used. You only pay once the work is completed.

    5. Control over the work

    Employees have to complete the work the way the employer specifies. What work is done, where it’s done, how it’s done, and when it’s done are all up to you. The employee then completes the work as required.

    Contractors are not subject to the same rules. They decide the way the work is done, so long as it meets the obligations laid out in the contract.

    6. Independence

    An employee works within a business. They complete tasks as required until they leave the job.

    A contractor operates independently and may have any other number of contracts on the go with other companies. They can freely accept and refuse other work. Their obligation is complete when they deliver the specified outcome.

    Final thoughts

    It can be confusing to make the determination between an employee and contractor, but it’s important that you do so in order to meet your tax obligations and play by the rules. The ATO has a great tool to help you determine the status of your workers. If you are also in need of understanding your tax obligations please contact S & H Tax Accountants, our team of accountants are well-qualified, vastly experienced and extremely professional. Book an appointment today with S & H Tax Accountants, call us on 03 8759 5532 or you can email us on info@sahtax.com.au

  • Important Things to Know about an Estate Plan

    Important Things to Know about an Estate Plan

    If putting together your estate plan isn’t at the top of your priority list, you’re not alone. It’s something that people typically don’t want to do–for a variety of reasons. It’s not fun to think about what happens after we’re gone, and we often believe we have a lot of time to get our affairs in order.

    No matter how large or small your estate is, you need a plan to ensure your wishes are carried out and your loved ones are taken care of in the way you see fit. A will is an important part of your estate plan, but your estate plan is bigger than your will.

    Here’s what you need to know about having an estate plan.

    It’s for everyone

    The term “estate plan” may make people think that it’s only for the incredibly wealthy, but an estate plan is for anyone who wants to ensure their assets–whatever those maybe–are available and accessible to their beneficiaries. Assets include bank accounts, investments, properties, vehicles, household furnishings, and anything else that you own or are owed.

    Beyond that, an estate plan lays out where your money should go, who should be in charge of your estate, and who will take guardianship of your minor children.

    Business Man Show Money Bank Note Make Financial Plan Invite People Sell Buy House Car Monetary Properties Loan Credit Insurance Concept

    Your priorities might change

    Review your estate plan regularly, especially if you have a major shift in your circumstances. The will you wrote when you were 30 and newly married may no longer reflect your wishes now that you’re 55, and on your second marriage with three children, 2 step-children, and a grandchild.

    Perhaps you’ve purchased a second property, now have a retirement plan, or have collected valuable artworks. These are all items that can change how your estate is divided. Any change in your circumstances should trigger a review of your estate plan.

    This estate plan review should include who your beneficiaries are and if they’ve changed recently, how you want them to receive your assets, who you trust to make important medical or financial decisions if you become unable to, and how your bank and investment accounts are managed.

    It’s not just for after your life

    We associate estate planning with death, but it’s just as much about planning for disability or incapacitation. Your estate sets out who can access your money to ensure your medical needs are taken care of–and who will make important decisions on your behalf. Without an estate plan, someone in your family may have to petition the court to be allowed to make decisions for you, and you run the risk that the person granted that ability is someone you don’t trust.

    Hands Agent Client Shaking Hands After Signed Contract Buy New Apartment 1150 14836 (1)

    If you don’t have a plan, decisions will be made for you

    With an estate plan, you dictate how your assets are distributed. Without a plan, your assets are distributed according to the law where you live. Simply living with your significant other might not be enough to ensure they receive your estate in regions that don’t validate common-law marriages. In those areas, your estate goes to your biological family, not your unmarried partner, unless you have a will.

    If you have a blended family, you may want your biological children to receive all of your estates or you may want it split with your current spouse and their children from a previous marriage. Without an estate plan, those wishes may not be carried out.

    Final thoughts

    An estate plan is a vital part of your financial planning. It sets out how you want your estate distributed, who you want to be in charge of, and who can make decisions for you if you’re not able to. If you’ve been putting off your estate planning, now is a great time to get started. Estate planning is important for you and your next generation. S & H Tax accountants cranbourne can help you in estate planning.

  • Business Update – 13 September 2022

    Business Update – 13 September 2022

    Sah 3

     

    Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

    All big four banks now aligned with Reserve Bank’s rate rise

    After last week’s decision by the Reserve Bank to raise the official cash rate to 2.35 per cent, Westpac is the last of the big four banks to raise its interest rate to align.

    Public holiday may hurt small businesses, critics say

    Government announced that Australia will observe a public holiday on September 22 to mourn and honour Queen Elizabeth II. However, not everyone is enthused – critics say that a forced closure will be hard on already-suffering businesses.

    Summit makes it clear that we need more women in the workforce

    The Jobs and Skills Summit was held earlier this month, and was meant to address unemployment and labour shortage concerns. Some say it’s a start, but to see real improvement, we need more women in the workforce immediately.

    Government seeks to ease housing crisis with new law

    Labor is expected to introduce a new law this week that would seek to encourage pensioners to downsize, freeing up their large homes for younger families.

    Aussies struggling with rental housing hikes

    Renters in most areas are faced with an impossible situation. With the price of everything going up, landlords are telling renters to either pay more or get out once their leases are up. Some are reporting increases of hundreds of dollars per week.

    Calls to extend fuel excise cut go unanswered

    The fuel excise cut is set to expire on September 29, and the government has made it clear that it won’t be extended. Many are concerned about an economic ripple effect – people may stop spending in retail in restaurants if they can’t afford to drive anywhere.

    How the government could help small businesses as inflation rates rise

    Inflation is painful for small businesses, but there are ways to ease the sting. SmartCompany has rounded up three ways the government could help protect Australian businesses from inflation.

    Construction growth falls in June quarter

    While the Australian economy grew overall last quarter, the construction industry took a bit of a hit. Skills shortages, supply chain disruptions, and inflation-affected material costs combined to deliver the blow.

    How China’s economy affects Australia

    China’s economy has been under close watch as it adapts to evolving Covid-19 restrictions, property market fluctuations, and population changes. Find out why all this matters to Australia here.

    Money will change eventually, but not anytime soon

    With the death of Queen Elizabeth II on September 8, Commonwealth nations around the world began to wonder what will happen to the existing coins that bear the queen’s likeness.

    Get in touch

    Contact us if you have any questions or want to discuss the next steps for your business.

  • When to raise your prices

    When to raise your prices

    It’s an inevitability in every business – you have to raise your prices to continue making a profit. There are many factors that go into deciding how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).

    While it may seem like you just set your prices or recently adjusted them, this is a task that should be done once a year at minimum – preferably more. Read on for some signs your business is ready to charge more.

    1. You have a loyal customer base

    Once you’ve been in business for a while, it’s likely that you’ve built up a loyal base. People will return to you when they know they will get a quality product. They’re also more likely to return when they get to know you personally.

    If your business has a lot of customers who bargain shop because you offer rock-bottom prices, choosing to raise your rates likely won’t go well. Wait until you’ve established a base of loyal customers who will be happily willing to pay more knowing they’ll get fantastic, personal service from you.

    People buy from those they know, like, and trust, so once they get to know, like, and trust you, they’re likely to keep coming back. Build relationships to foster that customer base.

    2. It’s been a while since you raised your rates

    The rate of inflation is reason enough to raise your prices, otherwise you’re operating at a loss. Keep track of the rate of inflation each year and adjust accordingly. People generally understand raising prices in times of high inflation–even if they don’t like it–since every business on earth must either keep up, or accept the loss to their bottom line. It’s just good business sense.

    For decades, the average rate of inflation has hovered somewhere around the 3% mark, with some years worse than others. If you’ve paid attention to the news lately, you’ll know that things are a little different in 2022. Take into account what’s going on in the bigger picture, and then adjust your rates accordingly to avoid absorbing the hit.

    3. You’ve added value

    This doesn’t necessarily mean that you’re offering more literal services for the same price. Value can also come in the form of increased experience or new skills. When you and your staff have added value to what they’re able to offer, that can and should be passed along to your customer base. People are almost always willing to pay more for a superior product or service.

    4. Your competitors are charging more than you

    Be sure to take a look around to see what your direct competitors are charging. As your business evolves and becomes better with time, check to make sure that you’re comparing yourself against other businesses of the same class.

    If you don’t keep up with regular rate increases, you may be surprised to find that competitors you initially considered to be equal to you have raised their rates significantly. You will then find yourself in a position where you have to raise your rates significantly in one go just to keep up. Keep on track by regularly checking what they’re doing.

    5. Your close rate is over 80%

    Some people like hard and fast numbers, so this is a good rule of thumb. You want to aim for your close rate to be between 75-80%. If it’s lower than that, you likely have an issue with perceived value. If it’s higher than that, you’re probably overworked and also attracting mostly bargain hunters – not a true loyal customer base.

    If everyone is saying yes to your prices, you probably aren’t charging enough.

    Final Thoughts

    There is a lot to consider when raising your rates, and you don’t want to do too much too fast. Make a point to reevaluate your rates every six months, and you’ll find that you can keep your customer base while also keeping up with the increased cost of doing business.

    If you need advice, on how setting new prices may effect your accounts and how this would then effect your costs, please contact S & H Tax Accountants. We have qualified staff that can help you in the best possible way. Book a consultation with one of our accountants today, call us at 03 8759 5532 or emails us at info@sahtax.com.au.

  • 5 ways outsourcing payroll can help you

    When you start a business, you’re typically your only employee and payroll is about as simple as it gets. But as you grow, you hopefully find yourself in the position of needing to take on more employees. Before you know it, what was once a very straightforward task becomes a giant undertaking that’s sucking up most of your time.

    This is when it makes sense to outsource your payroll. While this is yet another cost to consider, it’s actually a great idea that easily pays for itself. Here are the ways outsourcing your payroll can help you:

    1. Free up your time

    In any small business, there is a lot of legwork that comes with running payroll. The percentage of time spent on it is quite large compared to the other aspects of your business. This is because it’s a complex task that needs to be done every single week – forever. You may feel that payroll is never done and that’s because it truly never is.

    Outsourcing your payroll is one of the easiest ways to free up more of your time, which can then be put into other tasks that actually help your business thrive. Once you reclaim this huge chunk of time, you’ll wish you made the switch sooner.

    2. Reduce errors

    Yes, there are the actual hours worked that you need to account for. That’s complicated enough. But add in sick days, holiday pay, other types of leave, employees leaving early or arriving late, and other complications, and suddenly your payroll has become a daunting task that you would probably rather just ignore.

    This is where the beauty of outsourced payroll comes in. Because you are paying a professional to worry about all of these little things, you no longer have to worry about all of the potential areas where you could make a mistake.

    And the thing about a payroll mistake is that it typically takes even more time and energy to fix. Not to mention, you likely now have to assuage a disgruntled employee.

    With outsourced payroll, this mammoth task is simply done for you, and done correctly. Every single time. And that’s good for you and good for your employees.

    3. Reduce costs

    While you may initially balk at the cost of outsourcing your payroll, it’s actually a money-saver. When you put a dollar amount on all of the time you spend struggling through, this is often enough in itself to pay for a pro to take it off your hands.

    Not to mention, the cost of fines and penalties that can arise from mistakes. If you find yourself having to cough up money in these circumstances, you’ll wish you outsourced your payroll sooner.

    4. Maintain compliance

    We can’t all be tax or finance professionals. Chances are, if you’re running a business, you have an entirely different industry on your mind most of the time. So, it makes sense to hire someone who’s in the business of payroll to look after this for you.

    Maintaining compliance with your region’s tax authorities is a challenge that has to be met every year. And tax laws and codes are always changing. The average person can’t be expected to stay on top of all of this information, so why not get someone who knows the ropes to take care of it for you? It could save you a lot of money come tax time.

    5. Eliminate headaches

    There is nothing more valuable than the feeling of being stress-free. When you hire a payroll professional, you can relax knowing that your business is in good hands, that your employees are getting paid correctly and on time, and that you’re doing everything right.

    Final Thoughts

    There are a lot of reasons why outsourcing your payroll to S & H Tax Accountants Cranbourne and S & H Tax Accountants Malvern East just makes it easy for you.. By letting go of this time-consuming, finicky task, you will likely find that you’re enjoying your business more. Not only that, but you’ll be able to put your energies into other things, meaning your business is likely to grow.

    S & H Accountants have the experience and resources to manage large payroll services. If you have any questions contac us on 0387595532.

  • 4 Reasons to Switch to Cloud-based Accounting

    4 Reasons to Switch to Cloud-based Accounting

    If you’ve been considering making the move to a cloud-based accounting system, you’re not alone. Cloud technology has impacted many business functions, including making managing financial aspects of your business easier and more efficient.

    Cloud-based accounting moves your accounting from being hosted on your computer’s hard drive to an online platform. Cloud-based platforms like QuickBooks and Xero offer important features that save you time and money, freeing you up to focus on other important business activities.

    Here are 4 reasons to switch to a cloud-based accounting system.

    1. Efficient invoicing

    If your business relies heavily on invoicing, an online accounting system like QuickBooks or Xero makes invoicing incredibly efficient. You can email invoices to clients directly through your software and track how long it’s been since the invoice went out.

    Clients pay you through a link attached to the invoice, making the payment process easier for them, which increases the likelihood they’ll pay you sooner. If they pay through the system, your platform will mark the invoice as paid automatically. If their payment is late, the system alerts you.

    Further, you can set up your software to send automatic reminders about late payments. Taxes are automatically calculated for you and you can set up recurring invoices and retainers to further automate your invoicing.

    Hand Holding Cloud System With Data Protection 53876 124620

    2. Paperless accounting

    Managing your accounting through a cloud-based system enables you to move away from paper accounting. You don’t have to worry about where or how to store years of paperwork and files because everything is securely stored in the cloud. Likewise, you don’t have to go through boxes of files to find a receipt from two years ago, you can simply access the information through your computer.

    It’s easy for you to share your records with your accountant, bookkeeper or anyone else who may need to collaborate on your finances. You don’t have to mail them physical copies of your financial transactions and statements, you can email them the information or give them access to your software.

    3. Accessibility

    With a cloud-based accounting system like QuickBooks or Xero, you don’t have to be in the office in front of your computer to access your financial information. You can see your ledgers and reports from anywhere, on any device. If you want to work from home one day, you can log in to your software from your smartphone if you want, to send invoices, check your reports, or manage expenses.

    4. Accurate reporting

    An important component of running your own business is reporting. Accurate reporting enables you to better manage your finances and understand your profitability. It’s vital for making informed decisions about your business.

    Cloud accounting provides you with accurate reporting at the click of a button. Using systems like QuickBooks or Xero you can easily access profitability reports, income and expense reports and year-end reports.

    The information is available to you automatically–you don’t have to spend hours in front of a calculator going through every invoice to see your numbers. Simply by keeping your records in a cloud-based system, you can easily generate accurate reports.

    Final thoughts

    If you’re hosting your accounting information on your computer hard drive, it’s worth looking into cloud-based accounting to see if you can benefit from the switch. Given the ease of invoicing and accurate record keeping, combined with the accessibility of a paperless system, you may find cloud-based accounting software is the right system for you.

     

    S & H Tax Accountants pride themselves in being efficient when it comes to our administrative skills or our accounting skills. However, we understand that not everyone is able to use these types of software, therefore S & H Tax Accountants are here to assist you. As well as all taxation services, we also provide bookkeeping services. Book in a consultation today with one of our accountants, email us at info@sahtax.com.au or you can call us at 03 8759 5532.

  • Efficient business systems really pay off

    Efficient business systems really pay off

    Too many businesses fall over because the owner has not established efficient business systems. This typically happens because the business owner is so caught up in the day-to day running of the business that the fundamentals of good business management get forgotten. Often too it must be said that the owner simply doesn’t like bookkeeping or other administrative tasks, so these get put on the back burner.

    The symptoms are familiar, and their results disastrous:

    • Poor or non-existent record-keeping.
    • Tax obligations are not met.
    • Invoices go out late and debts remain uncollected.
    • There is one cashflow crisis after another.
    • Goods and services are incorrectly costed and priced.

    Any of these factors can lead the business down the slippery path to failure, but all are avoidable. The whole point about putting in good systems is that they free you to spend more time working ON your business, not in it. Here are some tips on good business housekeeping.

    Man

    Be business-like

    To be in business and to remain in business, become a business person! In order to run a business, you must be business-like. It’s not sufficient just to be very good at what you do. Lots of people who are ‘very good at what they do’ have failed. The common cry: “I’m far too busy for that” is also no excuse. Are you ‘too busy’ to be a competent businessperson? If so, your business won’t last long. You must continue to develop your business skills.

    To be a businessperson you have to make the effort to become something of an ‘all rounder’, not just a specialist player. You can offer outstanding goods or services, but if you don’t develop good business systems then you are not a fully rounded businessperson and your business will be in danger of failing.

    Remember that other stakeholders in your business, such as the building material suppliers who give you credit and the bankers who extend loans and financing terms, are always assessing your business skills. If you consistently pay people late or can’t meet the terms of your debt agreements they will draw the obvious conclusions about your business skills.

    How good business systems will help you

    Good business systems will make your business stronger, more efficient and easier to run. They will also make your business far more attractive to future buyers because if you have developed clear operating and procedures manuals the business will be seen as an independently viable unit and less dependent on you.

    Think for instance of what makes franchises so successful: it’s because they are designed so that people can buy a proven system and operate it after minimal training. They can do this because the business procedures are captured in simple, clear operating manuals.

    Here are five steps to a better business:

    1. Good record-keeping and bookkeeping will help you keep on-side with the Inland Revenue Department. If you’re able to meet your tax obligations through sensible planning you’ll sleep better at night. You won’t fear a tax audit and you’ll know how your business is doing. You won’t be caught by a ‘sudden tax demand out of the blue’ because no such thing exists for a well-run business. You should always know which taxes are due, and when. You’ll suffer less stress.
    1. Good business planning will help you set goals for your business, with specific steps on how to achieve these goals. Without goals, where do you think you’re going? Running a business without goals is like turning up at an airport and saying, “I’d really like to go somewhere.” The person at the ticket desk would think you’re clueless, to say the least!
    1. Good cashflow forecasting will enable you to anticipate a possible cashflow problem (something all growing businesses experience from time to time) and take steps before the problem becomes a crisis. Banks will respect you if you anticipate problems and make plans in advance. Banks will not respect you—and will indeed categorise you as incompetent—if you tell them you’ve been ‘caught out’ by a crisis. Banks don’t like crises. They like you to go to them well in advance of any possible crisis with a plan in hand. This shows them you’re in charge of your business.
    1. Good creditor and debtor control will improve your cash flow. Invoicing promptly and collecting debts on time gives you the cash to pay suppliers on time and get more favourable credit terms from them. It is a virtuous circle. Sloppiness in this department is one of the most common (and unnecessary) causes of business owners experiencing stress and anxiety. So pay your creditors on time and don’t let your debtors use you as a free banking service.
    1. Realistic pricing and costing will ensure that you run your business in a competitive but profitable way. Poor skills in this regard could mean that you’re operating at unrealistic levels—even at a loss. For example, if you let costs get out of hand (such as overhead costs) your profits will erode. There is no point in increasing sales if you’re not increasing your profits.

    Aerial View Of A Business Team

    In business you don’t have to be an expert at everything. For example, you might hate bookkeeping. Fine—but do get someone else to do it for you, don’t rely on a shoebox for your accounts! And you should at least understand the processes and the overall accounting picture even if you don’t want to do the ‘drudge work’ yourself.

    Having poor systems is the road to stress and burnout. On the other hand good business systems will enable you to work smarter, not harder. They free you to work on your business rather than in it. That way, you’re more likely to avoid burnout and you’ll be able to take time off work because you can train others to follow your clearly documented systems and procedures. Systems are the way to build a better business and liberate yourself from it.

    To help you with this, Our small firm S & H Accounting offers business services as well. We offer from starting up businesses, to bookkeeping, to all tax services related to business, etc. Our accountants are very well-qualified, vastly experienced and extremely professional. We aim to always meet all of our customers need, as we aim to provide the highest level of service possible, as we always satisfy the needs of our client, so that they reach the desired outcome. Book an appointment today, call us at 03 8759 5532 or you can email us at info@sahtax.com.au

     

  • Federal Budget 2022: What it means for you

    Treasurer Josh Frydenberg has released the 2022 Federal Budget ahead of a Federal election in a few months. This article has a summary of the “Winners and Losers” of the Budget and we’ve compiled a recap of the key points below. Get in touch with us if you have any questions.

    A Quick Overview

    • Due to soaring fuel prices, the fuel excise tax will be cut in half, saving motorists 22 cents per litre.
    • Low-and middle-income earners will receive an extra $420 back on their tax returns to help with the increased cost of living.
    • The low and middle tax offset means qualifying individuals may get up to $1500 back at tax time. This is “temporary and targeted” assistance for certain individuals.
    • Pensioners, carers, veterans, job seekers and other concession card holders will receive a one-off payment of $250.
    • Wages are not forecast to grow until later this year due to higher-than-expected inflation which will continue to put pressure on the cost of living.
    • Big changes to the government’s Paid Parental Leave program including “Dad and Partner Pay” now combined with “Parental Leave Pay”, extended to 20 weeks and able to be shared between partners.
    • Regional Australia will benefit from investments in infrastructure projects including port and road upgrades, dams and logistics hubs and the “Regional Accelerator Program” to improve supply chains.
    • The first home buyers scheme expands so people only need to have a 5% deposit to buy a house with no lenders mortgage insurance (LMI).
    • 50% reduction to minimum drawdown rate for pension accounts extended to 30 June 2023.
    • Half a billion dollars allocated for the National Mental Health and Suicide Prevention Plan.
    • New apprentice incentive scheme to replace the one ending 30 June.
    • Tax break for farmers who make money by selling carbon credits.
    • $1 billion for the Great Barrier Reef, $53 million for koala conservation as well as funding for National Parks and planting trees for the Queen’s platinum jubilee.
    • Subsidies for vocational education and training places for aged care workers.
    • Funding to boost Australia’s cybersecurity and intelligence capabilities.
    • Funding for Indigenous Rangers including encouraging women to begin work as rangers.
    • Extra places for Afghan nationals and temporary humanitarian visas for up to 3 years for Ukrainian refugees.
    • Expanded task force to target tax avoidance by multinationals, large public and trust groups and wealthy individuals.

    Fuel Tax Cuts

    In a bid to bring down the soaring price of petrol, the government is cutting the tax levied on fuel in half. The war in Ukraine has caused an increase in oil prices and with some stations charging more than $2.20 a litre for petrol. The cut will last 6 months and will save motorists 22c per litre. The ACCC will keep an eye on fuel prices to make sure this is passed on.

    Tax Offsets

    Pensioners, carers, veterans, job seekers and other eligible concession cardholders will receive a one-off payment of $250 to help with the cost of living. This is estimated to go to 6 million people.

    Low-and middle-income earners will receive $420 back on their tax returns to help with the cost of living. Plus the temporary low and middle tax offset will mean $1500 back at tax time for qualifying individuals.

    Wages

    Wages are not forecast to grow until later this year due to inflation. This means cost of living pressures will continue for the meantime.

    Paid Parental Leave

    The Paid Parental Leave (PPL) scheme will have some changes. Instead of offering two separate payments — two weeks of “Dad and Partner Pay” and 18 weeks of “Parental Leave Pay” — these will now be combined, meaning parents can choose to split the leave between them however they’d like.

    Single parents will also be able to access the full 20 weeks of leave.

    The income test will be adjusted to include a household income threshold of $350,000 a year.

    Regional Australia

    Billions have been set aside to help Regional Australia with “nation-building infrastructure projects”. The funding may go towards everything from upgrading ports and roads to building dams and logistics hubs and certain regions.

    A “Regional Accelerator Program” will bring together schemes designed to improve skills, education and supply chains in Regional Australia.

    First home buyers

    The first home buyers scheme expands so people only need to have a 5% deposit to buy a house with no lenders mortgage insurance (LMI). The number of places will increase to 35,000 but there are rules on eligibility.

    Mental Health

    Half a billion dollars has been allocated for the National Mentional Health and Suicide Prevention Plan. Those on a mental health plan will again receive an additional 10 partially-Medicare subsidised visits to a psychologist, as was first announced during the pandemic.

    Apprentices

    A new incentive scheme will be created to encourage businesses to take on apprentices and hand new apprentices some cash.

    The Boosting Apprenticeship Commencement scheme will end on June 30. The Australian Apprenticeships Incentive Scheme will replace it but will offer lower wage subsidies and only for “priority” occupations. The priority list hasn’t been announced just yet.

    Farmers

    Farmers that make money by selling carbon credits will receive a tax break.

    The Environment

    The big spend here is $1 billion for the Great Barrier Reef, particularly water quality, reef management and research. There’s also $53 million for koala conservation as well as funding for National Parks and planting trees for the Queen’s platinum jubilee.

    $60 million has been added to the government’s recycling fund in order to find new and innovative ways to make recycling more efficient. The funding is to develop “advanced plastic recycling technology” which will better recycle soft plastics like chip packets. This will contribute to the government’s target to have 70% of plastic packaging recycled or composted by 2025.

    Aged Care

    Last year’s budget included $17.7 billion for aged care. This year includes subsidies for 15,000 vocational education and training places for the aged care workforce (both existing and new to the sector).

    Cyber

    A significant part of the budget has been allocated towards boosting Australia’s cybersecurity and intelligence through data analysts, computer programmers and software engineers.

    The government has warned about potential cyber attacks from China and Russia and has urged businesses to update their systems to defend against future attacks.

    Indigenous Rangers

    The government will spend more than $636 million to create around 2,000 more ranger jobs by 2028 in regional and remote parts of the country. The funding will also encourage more Indigenous women to begin working as rangers.

    Refugees

    Australia’s humanitarian program will have extra places for 16,500 Afghan nationals and temporary humanitarian visas for up to 3 years for Ukrainian refugees.

    Tax Avoiders

    There’s also funding for an expanded task force to target tax avoidance by multinationals, large public and trust groups and wealthy individuals.

    Get in touch

    Got a question about how this budget will affect you? Get in touch with us today. We’ll keep you updated as more information is released. S & H TAx Accountants Cranbourne are here for help.