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  • What is inflation and how does it affect my savings?

    You can’t get through the news these days without hearing about inflation and how rapidly it’s increasing. Rates were generally low for quite some time and we all got used to it. Suddenly, however, everyone is getting squeezed by inflationary pressure.

    But what exactly is inflation, and how does it affect the money you have in the bank? Read on to learn more about what it is and what it means for your savings.

    What is inflation?

    Inflation is an increase in prices. Everything from a can of soup to a home costs more to buy. Of course, not all goods get more expensive at the same rate, and there are many reasons why prices go up.

    Year after year, things are more expensive than they were before. You’ll see this in action if you look at an old advertisement from 100 years ago. Things that used to cost a bit of change now cost much more.

    This is purposeful to some degree. Economists generally agree that a target rate of 2% annually is desirable to keep balance in the economy and promote growth. This rate allows central banks to lower interest rates to stimulate the economy if necessary without putting too much of a burden on the consumer.

    What causes inflation?

    The factors that cause inflation are varied and somewhat complex. There are a few different types of inflation as well. Supply and demand, production costs, worker shortages, printing money, and rising wages – all of these factors and more contribute to inflation.

    When the entire picture is considered, you can see why understanding any given inflation situation becomes a matter of healthy debate. While it’s clear that we as individuals have little control over inflation, we all want to know what it means for our bank accounts.

    Buying Power

    Any time your savings grow slower than the inflation rate, you will effectively lose money. Put simply, the money in your savings account must earn a higher interest rate than the inflation rate to continue to hold the same value.

    Currently, the global inflation rate is a few percentage points higher than the average savings account pays in interest. So while you have the same dollar amount in your account, that money now buys less than it could when prices were lower.

    The “Rule of 72”

    One interesting way of estimating how the inflation rate will affect your money is known as the Rule of 72. While it’s only to be used as a general estimate, it can help you imagine what will happen to your money if rates continue at their current level.

    To determine how long your savings will take to double, take 72 and divide it by your annual interest rate. For example, if you hold $100 in a savings account with a 2.5% interest rate, it would take 28.8 years for that account to reach a balance of $200.

    You can also use the rule to calculate how quickly these new higher prices would halve the value of your savings. Take 72 and divide it by the annual rate of inflation. If it’s currently 6.5%, for example, it would take just over 11 years for your $100 to be worth $50.

    You can see why an inflation rate higher than the interest you’re earning is problematic. While your actual dollar amount will continue to rise, inflation will undercut those earnings by making each dollar worth less.

    Remember that this is only a general estimation and doesn’t consider many factors. For example, it’s unlikely that the inflation rate would remain the same for 11 years or anywhere close to that. The Rule of 72 is only meant to illustrate the pace at which your money changes – to help understand the gap between the two rates.

    Final thoughts

    It’s easy to get caught up in the talk about inflation and how it devalues your money, but try to remain calm. Remember that while prices may never go down to what they once were, periods of high inflation have happened before, and they will happen again. However, they don’t last forever, and by continuing to make educated choices about where to invest your money, you will successfully weather the storm.[gravity form id=”3″ title=”true” description=”false”]

    If you have concerns about the rising inflation and how this would effect you, you can always talk to an accountant at S & H Tax Accountants, we have experienced and friendly staff who would love to help you. Book an appointment today at S & H Tax Accountants, email us on info@sahtax.com.au or call us on 03 8759 5532

  • Employee vs contractor – what you need to know

    Employee vs contractor – what you need to know

    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 obligations.

    When you have an employee, you must withhold income tax as well as report on additional benefits. Contractors generally look after their own tax obligations.

    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, especially with remote work blurring the lines between employees and contractors?

    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, say a prolonged illness, and someone else does it, this is substitution. Your business would then pay the other person to carry out those activities.

    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 arrange 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. A 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 assumes 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, unless otherwise specified in the contract.

    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 the employer. The employee then completes the work as required.

    Contractors are not subject to the same rules. They decide when and how the work is done, so long as it meets the obligations laid out in the contract. For example, a contractor could choose to work three 10-hour days to complete a job, rather than working four 8-hour days.

    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. Contact us to learn more about your tax obligations for employees and contractors. If you have any questions then feel free to call S & H Tax Accountants Cranbourne. S & H tax Accountants offer services to small business as an accountants. We are experienced advisors in Cranbourne and Accountants in Malvern East area. Book an appointment with S & H Accountants today! Call us on 03 8759 5532 or you can email us on info@sahtax.com.au

  • 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.

  • 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.

  • Differences Between an Accountant and a Financial Planner

    Differences Between an Accountant and a Financial Planner

    When it comes to managing your finances, there are two professions that can help you understand your numbers, and ensure you have a plan to get to where you want to be. Accountants and financial planners can both play an important role in your financial success, but there are some important differences between the two.

    2021 12 Advisor 2

    For any successful business, it’s advisable to have both an accountant and a financial planner because their skills are so complementary and they can work together to help you better meet your financial goals.

    There are areas where they are similar, of course. Both can help determine if your financial plans are feasible and can provide you with important strategies for managing your money. And while they can both advise you, neither can make decisions for you.

    Here are the main differences between accountants and financial planners.

    Accountants

    Your accountant is responsible for keeping accurate financial records, making summaries, and undertaking analyses of your financial transactions. Depending on their role or specialty, they may also undertake auditing, inventory accounting, and financial forecasting.

    They’ll also help ensure your business is compliant with tax regulations and may advise you on important financial issues related to your business, such as decreasing costs, setting prices or wages, managing expenses, and budgeting. Additionally, they can help you determine the best way to set up your business, how to increase your returns after-tax, and how to grow your business.

    Further areas accountants can help you include

    • Payroll
    • Lowering your tax burden
    • Preparing business plans
    • Forensic accounting
    • Selling, buying, or merging a business.

    Financial planners

    Financial planners advise you on your wealth management. Typically, they are specialists in areas such as tax planning, managing your portfolio, or retirement planning. They may also advise you on solving your debt or building your long-term wealth.

    People who have specific financial goals in mind can turn to a financial planner to develop the best path forward to achieve those goals and improve their financial wellbeing.

    Specifically, financial planners can help you with

    • Philanthropic strategies
    • Retirement planning
    • Investing
    • Estate planning
    • Budgeting
    • Inheritance tax planning
    • Cash flow modeling
    • Portfolio construction.

    Who to hire and when

    If you run a business, it’s a good idea to have both an accountant and a financial planner on your team. Both will help set you up for success, lessen your risks and develop strategies to enable you to thrive financially. Often, accountants will know of good financial planners to bring onto your team, and vice versa.

    If you feel you can only hire one, that one will be based on your specific needs. If you’re working towards long-term wealth or other financial goals, considering investing, or concerned about setting up your estate, talk to a financial planner. If your needs have more to do with running a business, daily transactional financial activities, or dealing with your taxes, an accountant will help you.

    Develop relationships with both

    In an ideal situation, you’d have both an accountant and a financial planner on your team. Keep in mind that for them to help you to their best abilities, they need to get to know you, your plans, and your challenges. By developing a solid relationship with both and being open and transparent about your financial situation and any issues you face you can better enable both to help guide you toward success.

    Final thoughts

    Whether you’re planning for your business or for your personal finances, it’s a good idea to have someone around who can give you expert advice and advise you on the best financial path forward.

     

    Need an Accountant, S & H Accountants are the one for you. We are one of the best accounting firms in Cranbourne. We offer all types of tax services not only for individuals but also for companies, trusts and  businesses. Our team consists of well-qualified, vastly experienced as well as extremely professional individuals. We also do offer bookkeeping services, which will manage your transactions for you! S & H Tax Accountants aim to provide the best level of service to our clients. Book an appointment today, call us on 03 8759 5532 or email us on info@sahtax.com.au

  • Pay as you go (PAYG) instalments – What is PAYGI?

    Pay as you go (PAYG) instalments – What is PAYGI?

    Pay as you go (PAYG) instalments applies to small business or investment income of any entity – Sole Trader, Company, SMSF etc. Pay as you go (PAYG) instalments are regular payments made throughout the year to avoid payment of large tax bill when tax return is lodged at the end of the year. The instalments made are based on business and/or investment income. The payments made during the year will be offset against the tax owed, if any, for the year.

    ATO estimate the tax payable in a year by taking the business and/or investment income reported in the most recently lodged tax return. Instalments amounts are calculated based on this income, current income tax rates and likely changes in the economy. The instalment amounts can be changed by the taxpayer if they expect a different income than previous years but will be penalized if the payment falls short.

    PAYG Instalments are reported and paid through activity statements or Instalment notice. They should be lodged before the tax returns are prepared. Once lodged, it will create a debit entry (debt) in the Activity Statements with the ATO. If the return is not filed on time, ATO might accept the instalment amount on their own in certain situations. Taxpayers must pay attention to the communications received from ATO regarding this.

    What happens when PAYG Instalments are paid?

    When a payment is made, it shows as a credit entry in the Activity Statement report offsetting the debit entry created while lodging the return. The balance will be zero. When the tax return is prepared, the tax payable on taxable income will be reduced by the amount of PAYG Instalments reported during the financial year. If the tax owed to ATO is less than the Instalment amount, the balance will be refunded.

    Example: –

    Total PAYG Instalments of John for the year – $10,000

    Tax on taxable income – $10,500

    Since John has lodged the PAYGI return and paid the same, he will be liable to pay only the balance $500 at the end of the year.

    If his tax on taxable income was, say, $9,500, he will receive a refund of $500.

    What happens when PAYG Instalments are not paid?

    If the PAYG Instalments are not paid, it will continue as a debt in the Activity Statement report of ATO. However, the tax return will still be prefilled with the actual lodged instalment amounts and this amount will be deducted from the tax payable for the year. Taxpayers should be very careful in this situation. The tax payable will be understated or refund receivable will be overstated here. If tax is payable (even after reducing the PAYGI amount, which was not paid), the payable amount will be shown as debt in ‘Income Tax Statement’ of ATO and the PAYGI amount will be shown as debt in ‘Activity Statement’ report of ATO. If the result is a refund (after reducing the PAYGI amount, which was not paid), it will be used by ATO to setoff the PAYGI debt and taxpayer will only receive the rest of the refundable amount, if any. If the refund is not enough to setoff the PAYGI debt completely, the balance will show in the Activity Statement report.

    Example: –

    Total PAYG Instalments of John for the year – $10,000. He lodged the returns, but never made payments.

    Tax on taxable income – $10,500

    Since John has lodged the PAYGI return, he will be liable to pay only the balance $500 as income tax at the end of the year. However, he will be liable to pay the PAYGI of $10,000 and will be shown as a debt with ATO in Activity Statement Reports.

    If his tax on taxable income was, say, $9,500, his tax return will show a refund of $500. However, he will be liable to pay PAYGI $10,000 and will be shown as a debt with ATO in Activity Statement Reports. ATO will setoff the refundable $500 with this debt and John will be liable to pay the rest $9,500.

    The scenario is similar for other entities like Sole trader, Company, SMSF etc. For more information refer ATO website.

    Looking for an accountant, S & H Tax Accountants can help. S & H Tax Accountants offer all taxation services whether it be for individuals, companies or even trusts. However we also offer business services, such as registrations or Business Activity Statement (BAS)  and even PAYG Installments. We understand that for businesses, these can tasks can be very daunting, that is why we offer the best level of services possible to all of our clients. Our team consists of well-qualified, vastly experienced and extremely professional individuals. Book an appointment today, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • How Accounting Software Can Increase Profits

    How Accounting Software Can Increase Profits

    Most small business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses, and view real-time financial reports to manage cash flow and make better business decisions.

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    But what many business owners don’t take advantage of are key insights that can improve customer care and increase sales. Here are some smart ways you can use your accounting software to help boost your bottom line.

    Gain insights that increase sales

    If you’re not tapping into your accounting software analytics to better understand your customers, you’re missing a major opportunity to close more sales.

    Most accounting software can highlight your biggest spenders and buying trends. How would knowing who your best customers are, your biggest selling products, and how much each customer spends impact your marketing decisions – not to mention help you fine-tune your sales strategies?

    By the same token, when you know which products and services aren’t selling, you’ll be able to make more profitable purchasing decisions. Most accounting software offers inventory tracking to help you decide what to keep on the shelves, which products to sell off at a discount, and which items to phase out altogether.

    Improve customer care and boost profits

    Accounting software can offer peace of mind when you know your financials are accurate and up to date. But another major advantage of an online accounting solution is how much time you’ll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects.

    We all know how important the personal touch is when it comes to sales. So why not use your accounting software customer data to help remember your customers’ birthdays or thank them when they’ve hit a milestone – spending more than $5,000 on your products, for example?

    With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You’ll be able to respond quickly when a customer calls with a question about a product or an order. And you’ll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap.

    How will you use accounting software to grow your small business?

    Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as simply a financial management solution and start thinking of it as a comprehensive tool for business growth.

    You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.

    Now that you have a handful of ideas for making better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your business?

    If you need assistance with managing your accounts, such as recording your information in an accounting software, please feel free to contact S & H Tax Accountants. We have wonderful staff members who are qualified and always ready to help. Book an appointment today at S & H Tax Accountants, call us at 03 87590 5532 or email us at info@sahtax.com.au

  • 4 Benefits to Hiring a Bookkeeper for Your Business

    Bookkeepers can be highly beneficial for businesses of any size. They offer expertise and insight into areas that you may not have experience in. They can also take some tasks off your to-do list, freeing up your time and energy to focus on other matters.

    Here are 4 benefits to hiring bookkeepers to help you manage your business.

    Expertise

    A bookkeeper is an expert at managing, sorting and recording your business’s financial transactions. They’ve spent time developing their skills and experience. During that time, they’ve also seen and resolved bookkeeping-related issues that you may come up against. Their expertise makes them more efficient at managing those issues.

    Beyond that, they understand business trends and challenges others in your industry face, and can help you move through those as well. They also know what questions to ask to help you make important decisions and can share best practices with you.

    Guidance

    Your bookkeeper not only helps you maintain accurate records, they understand your financial circumstances. They help you assess how to make important business decisions, such as whether now is a good time to grow or when you should hold back. They can also identify trends in your industry and help you take advantage of those opportunities.

    Finally, they can assist you with budgeting, and sticking to your budget. They’ll help you come up with a realistic financial plan that enables your business to grow while achieving short- and long-term goals.

    Time savings

    As a business owner, you likely have many activities to focus on. In bookkeeping alone there are numerous tasks to be responsible for, such as:

    • Collecting and recording transaction data
    • Sorting receipts
    • Classifying expenses
    • Invoicing customers
    • Paying vendors
    • Managing payroll.

    Bookkeepers take on those tasks so you don’t have to. It’s not just about the energy you put into them, it’s about the fact that unless you’re an expert at bookkeeping, it’ll likely take you longer to complete these activities than it would take a bookkeeper.

    Think of the time you spend during an average week managing your books, then think of the time you spend during a high-pressure week, such as during tax season. That can add up to a lot of extra hours.

    By hiring a bookkeeper, you save yourself that valuable time for other activities such as marketing, perfecting your products or even spending time with family.

    Money savings

    There’s a time cost to doing your own books, but there’s also a potential money cost in the form of missed opportunities. The time you spend doing your own books is time you could potentially be out creating or taking advantage of new opportunities for your business. Your bookkeeper frees you up so you have the time and energy to identify potential opportunities. They can also advise you on whether you’re in a fiscal position to jump on those possibilities.

    Additionally, the expertise bookkeepers bring to their activities means they’re likely to save you from costly mistakes that could affect your finances.

    Final Thoughts

    Hiring a bookkeeper is a sound business decision as it gives you access to expertise and guidance you might not otherwise have, and it frees up your time and money to take advantage of other business opportunities. Talk to S & H Bookkeepers for you business bookkeeping needs. S & H Tax Accountants offer servicess in Cranbourne and surrounding suburbs.

  • 4 Things to Consider Before Expanding Your Service Offerings

    If you’re looking to grow your business, you might consider expanding your service offerings. Adding additional services is a good way to increase your profitability, diversify your income and expand your market. But there are important things to consider before adding to your income streams.

    Here are 4 important things to keep in mind when you consider adding to your services.

    1. Does the expansion complement your business?

    The best way to expand your service offerings is to add value that complements the work you’re already doing and is attractive to your current client base. While it takes more effort to bring new customers in, adding something that your current clients need and that you already have the capacity for is an efficient way to increase your profits.

    If you already offer lawn maintenance, find out what other yard work your clients need done, for example. It might be fairly simple for you to offer those services to your clients, and they’d probably be happy for you to do it rather than hiring someone new.

    2. Is your profitability consistently high?

    Spending money to hire new people and buy more equipment if your business isn’t consistently profitable is risky. It might be tempting if you make a lot of money in one year to jump into offering a new service, but hold back until you’ve got a couple years of high profits behind you. That allows you to save money to cover the increased expenses and ensure that the one year wasn’t an anomaly.

    Invest in your business, but expand your services when your profits are consistently up, not when you’ve had one really good period.

    3. Is there a potential partnership or merger that makes sense?

    There are times when forming a partnership or otherwise merging businesses makes sense. Is there someone out there who works in a similar capacity that you could work well with? Maybe they are great in their field but need help running a business. Explore a partnership or a buy-out.

    For example, if you offer immigration consulting and you know someone who offers relocation services, you might form a partnership so the new company can offer both immigration help and relocation services. That can lead to new clients for both you and your new partner.

    4. Are you doing it for the right reasons?

    There are many good reasons to add new services, but there are also reasons that can increase your risks. Competition, for example. While competition can drive innovation, it’s not the only reason to add a new service—and doing so just to beat your competitors can lead to mistakes being made and money being lost. Rushing to expand is when companies find themselves in trouble for adding services there’s no market for or without a fully-formed plan.

    Final thoughts

    Expanding your business is exciting, but it’s important to consider some issues before you commit your time, energy and financial resources. If you’re adding new services, do so because it makes sense, you’re in a financial position to do so, your clients want it and you have the capacity for it.

  • Business Update – 9 September 2021

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

    We’re thinking of everyone affected by lockdowns around the country and encourage you to reach out if you have any questions about your business during this time. Read on for assistance that may be available to you.

    COVID-19 Government Support By State and Industry

    Small businesses that are currently suffering from lockdowns can get financial assistance to help them get through the pandemic. You can find the latest government support schemes for each state or territory here.

    The impacts of the COVID-19 restrictions vary from one industry to another. Here you’ll find the latest government financial assistance available for particular industries.

    Regional Victoria Leaves Lockdown

    Victorian Premier Daniel Andrews has announced restrictions will ease across regional Victoria, except for Greater Shepparton, from 11:59pm Thursday night.

    This means travel will be allowed around Victoria with no distance limit, but movement between Melbourne and the regions is restricted. A maximum of 10 people will be allowed for public outdoor gatherings, and outdoor tours will be capped at 20 people.

    Religious gatherings and ceremonies will be capped at 20 people and weddings will be limited to no more than 10 people. In-home visits are still not allowed in regional Victoria, and masks must still be worn indoors and outdoors.

    You can find a comprehensive list of the new rules here.

    Parts of NSW to Come Out of Lockdown

    The Mid and North Coast of NSW, as well as areas across the Riverina, and the Murrumbidgee regions, will all be free from lockdown restrictions on Friday at midnight. Regional travel is set to resume when 70% of the state’s adult population has been fully vaccinated.

    All Australian hotspots: COVID-19 Disaster Payment for recognised lockdowns

    This Federal Government support is lump sum payment for workers who cannot earn income because of a state public health order. You can check your eligibility here.

    NSW Grants

    The NSW Government will be offering financial support to businesses or not-for-profit organisations impacted by the recent COVID-19 restrictions and stay-at-home orders.

    NSW: Micro-business grant

    The micro-business grant is a $1500 fortnightly payment for businesses with a turnover between $30,000 and $75,000.

    To check your eligibility and apply, visit the Service NSW website.

    COVID-19 Business Grant

    A one-off payment to help businesses, sole traders or not-for-profit organisations impacted by the current Greater Sydney COVID-19 restrictions.

    Grants between $7,500 and $15,000 are available to eligible businesses depending on the decline in turnover experienced during the restrictions. For eligibility criteria and to apply, visit the Service NSW website.

    ATO support for those affected by COVID-19 restrictions or disasters

    The ATO has a range of support options to help those affected by disasters or those experiencing challenges due to continuing COVID-19 restrictions.

    The ATO may be able to:

    • prioritise any refunds owed to you
    • set up a payment plan tailored to your individual situation
    • remit penalties or interest charged during the time you have been affected.

    If you need help to manage your tax or superannuation obligations, please get in touch with us.

    JobMaker Hiring Credit

    Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021. You may be able to claim the following payments:

    • up to $10,400 over a year for each additional eligible employee aged 16 to 29 years
    • up to $5,200 over a year for each additional eligible employee aged 30 to 35 years

    Register before the due date of the first JobMaker period you’re claiming for.

    Wage Subsidy Scheme for Apprentices and Trainees

    The government is continuing the wage subsidy scheme for apprentices and trainees. Under the scheme, the government will pay half the wages of apprentices up to a maximum of $7,000 each quarter for 12 months.

    4 Easy Ways to Provide More Value for Your Customers

    Customers choose you over your competitors because you provide the most value. As competitors find ways to make their offerings more appealing than yours, you should also implement some strategies to provide even greater value than you already do and retain customers. This Forbes article shares some tips on how you can achieve this.

    • Become a niche authority. Establish yourself as an authority in your niche and provide solutions or insights to their pain points through blogs and social media posts.
    • Ask customers for feedback. Obtain honest feedback from customers to discover how you can add even greater value and improve customer experience.
    • Proactively customise your offerings. A one-size-fits-all approach doesn’t always work. Understand what each client needs and tailor your services accordingly.
    • Reward loyalty. If you want to gain repeat customers, find ways to reward their loyalty. Provide incentives and devise a rewards system.

    As you try to make your customers happier, your business becomes more memorable and valuable for them. Therefore, it’s a win-win situation!

    Need more focused business advice? Get in touch with us today and we can talk about your situation.

    Get in touch

    Contact us if you have any questions or want to discuss the next steps for your business. We at S & H Tax Acountants help Small business in Accounting, Tax and Bookkeeping. we are Accountants located in southeast of Melbourne. We offer Tax agent services in Cranbourne, Clyde and surrounding areas.

  • Business Update – 18 August 2021

    Business Update – 18 August 2021

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

    We’re thinking of everyone affected by lockdowns around the country and encourage you to reach out if you have any questions about your business during this time. Read on for assistance that may be available to you.

    Tougher COVID-19 Restrictions in Melbourne

    New stricter COVID-19 restrictions came into effect in Melbourne at 11:59pm on Monday and will be in place until 2 September.

    As part of the new restrictions, playgrounds, basketball courts, skate parks and outdoor exercise equipment will be closed and people will no longer be allowed to remove their masks to consume alcohol outdoors. Meanwhile, large construction projects will be restricted to 25%.

    Curfew will also be in force from 9:00 p.m. to 5:00 a.m. each day.

    Sydney Lockdown Fines Increased to $5,000

    State police will fine people up to $5,000 if they are found breaching stay-at-home orders or lying to contract-tracing officials. It is also looks increasingly unlikely that Sydney will end its nine-week lockdown on 28 August as planned.

    SA Blocks Travellers From Parts of NT, Greater Darwin Enters Snap 3-day Lockdown

    South Australia closed its border to travellers from several local government areas north of the Central Desert and Barkly LGAs — excluding the East Arnhem LGA — in the Northern Territory as of 6:00 p.m. Monday night.

    Only returning South Australian residents, essential travellers, those who are relocating, and people escaping domestic violence will be allowed to enter SA from the affected LGAs. Meanwhile, Greater Darwin and Katherine entered a three-day lockdown at noon on Monday after one positive case of COVID-19 was recorded.

    Victorian Business Costs Assistance Program Round 2 July Extension

    The Victorian Government’s Business Costs Assistance Program Round Two July Extension (BCAP2e) gives eligible businesses that had not previously applied for the Program in June, or have since become eligible, with the opportunity to apply for the equivalent of the July Top-Up Payments.

    The program offers grants of $4800 to eligible businesses, including employing and non-employing businesses, depending on their industry sector.

    Read the eligibility criteria here.

    All hotspots: COVID-19 Disaster Payment for recognised lockdowns

    This Federal Government support is lump sum payment for workers who cannot earn income because of a state public health order. You can check your eligibility here.

    NSW Grants

    The NSW Government will be offering financial support to businesses or not-for-profit organisations impacted by the recent COVID-19 restrictions and stay-at-home orders.

    NSW: Micro-business grant

    The micro-business grant is a $1500 fortnightly payment for businesses with a turnover between $30,000 and $75,000.

    To check your eligibility and apply, visit the Service NSW website.

    COVID-19 Business Grant

    A one-off payment to help businesses, sole traders or not-for-profit organisations impacted by the current Greater Sydney COVID-19 restrictions.

    Grants between $7,500 and $15,000 are available to eligible businesses depending on the decline in turnover experienced during the restrictions. For eligibility criteria and to apply, visit the Service NSW website.

    JobSaver payment

    JobSaver is a fortnightly payment to help maintain employee headcount (as at 13 July) and provide cashflow support to businesses. To check your eligibility and apply, visit the Service NSW website.

    Small business fees and charges rebate

    If you are a sole trader, the owner of a small business or a not-for-profit organisation in NSW, you may be eligible for a small business fees and charges rebate of $1500 aimed at helping businesses recover from the impacts of COVID-19. Applications are open and you can check your eligibility here.

    You can view more NSW Government COVID-19 Support Packages here, including Jobs Plus, Sydney CBD Friday vouchers, Payroll tax support and support for the tourism industry. Get in touch with us if you have any questions.

    QLD COVID-19 Business Support Grant

    Your business may be eligible for financial support through the 2021 COVID-19 Business Support Grants. $5,000 grants will be made available to small and medium businesses across Queensland affected by COVID-19 lockdowns and lockdowns in other states. You must have experienced a 30% reduction in turnover as a result of the lockdown.

    Applications will open in mid-August so we will keep you updated.

    The Business Queensland website has an overview of the range of assistance available.

    Fuel Tax Credit Rate Hike

    Fuel tax credit rates increased on 2 August 2021 in line with fuel excise indexation. If you claim less than $10,000 in fuel tax credits per year, you can use simplified methods including:

    • the rate that applies at the end of your BAS period
    • the Basic method for heavy vehicles to calculate your claims if you use a heavy vehicle.

    You can find the updated rates here and use this fuel tax credit calculator to work out your claims. If you need more help with your tax, contact our tax agents today!

    Government Support for Best Emerging Innovators in Western Australia

    A total of 21 start-ups and SMEs have been awarded up to $20,000 each by the Government of Western Australia. A total of $385,000 has been given through the Innovation Vouchers Program, which aims to assist Western Australian innovators in commercialising their ideas and creating new jobs.

    Since its launch in 2011, the Innovation Vouchers Program has awarded 199 vouchers worth approximately $3.7 million.

    Downsizer Contribution Into Superannuation

    If you’re at least 65 years old and you meet the eligibility requirements, you may be able to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

    Your downsizer contribution will not affect your total superannuation balance until your total super balance is re-calculated to include all your contributions, including your downsizer contributions at the end of the financial year.

    It will count towards your transfer balance cap which applies when you move your super savings into the retirement phase. You can also access the downsizer scheme only once, and if you sell your home and choose to make a downsizer contribution, you will not be required to purchase another home.

    Get in touch with us to check your eligibility and if you have any questions.

    ATO support for those affected by COVID-19 restrictions or disasters

    The ATO has a range of support options to help those affected by disasters or those experiencing challenges due to continuing COVID-19 restrictions.

    The ATO may be able to:

    • prioritise any refunds owed to you
    • set up a payment plan tailored to your individual situation
    • remit penalties or interest charged during the time you have been affected.

    If you need help to manage your tax or superannuation obligations, please get in touch with us.

    JobMaker Hiring Credit’s Second Claim Period

    The second claim period of the JobMaker Hiring Credit is now open. So if you’ve taken on additional young employees between 7 January and 6 April 2021, you may claim the following payments:

    • up to $10,400 over a year for each additional eligible employee aged 16 to 29 years
    • up to $5,200 over a year for each additional eligible employee aged 30 to 35 years

    Register any time until the scheme ends.

    Wage Subsidy Scheme for Apprentices and Trainees

    The government has announced the expansion of the wage subsidy scheme for apprentices and trainees. Under the scheme, the government will pay half the wages of apprentices up to a maximum of $7,000 each quarter for 12 months. Ask us if you have any questions.

    4 Ways Your Business Can Increase Its ROI in 2022

    Finding ways to boost your business’ profit margins can be challenging, especially if you’ve already tried many of the traditional ways of improving the stability of your cash flow during the pandemic. This Forbes article shared some unusual methods to grow your ROI.

    1. Invest in high-performing marketing platforms. Look into platforms that are not as saturated as Facebook, including Youtube and Instagram. You could also switch gears by starting a company podcast.
    2. Automate more tasks. Automate more tasks with the assistance of AI-driven tech and integrations to free up your team’s time and allow them to focus on getting higher level work done.
    3. Unclog your sales pipeline. Sit down with your sales team and outline your customer journeys. Remove stumbling blocks and friction points to improve your sales pipeline and speed up your sales cycle.
    4. Reorganise your team. Switching responsibilities between team members could improve your efficiency and may allow you to keep the same amount of core staff while scaling your business.

    Do you need expert advice on your specific situation? Get in touch with us today and let’s work out a plan!

    Get in touch

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

  • Tax Implications of Cryptocurrency (AU)

    Tax Implications of Cryptocurrency (AU)

    With cryptocurrencies gaining notoriety, many people are unclear on how or when they can be taxed. Despite widespread belief to the contrary, you can be taxed on gains made as a result of obtaining or using cryptocurrency. If you’ve made a profit from trading cryptocurrency, for example, you need to declare it at tax time.

    Here is some important information on cryptocurrencies and their implications for your taxes.

    How cryptocurrency is defined

    For tax purposes, the Australian Tax Office (ATO) defines cryptocurrency as “a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain.” This includes Bitcoin, or other digital currencies with characteristics that are similar to Bitcoin.

    The ATO says cryptocurrency—including Bitcoin—is not Australian currency and is not foreign currency.

    How cryptocurrency is taxed

    You can be taxed on your profits when you exchange cryptocurrency for another currency, other cryptocurrencies, or to purchase goods or services. If they are used in business or professional activities, they may be taxed as income. For example, professional cryptocurrency trading or mining, operating cryptocurrency-related businesses, or operating a business using cryptocurrency transactions all count as income.

    If the cryptocurrency is used in other ways—such as casually or as a hobby—it may be taxed as an investment and subject to capital gains taxes.

    You are not subject to capital gains until you exchange or otherwise dispose of your cryptocurrency holdings. Typical transactions include:

    • Selling cryptocurrency
    • Gifting cryptocurrency
    • Trading or exchanging cryptocurrency for another cryptocurrency or fiat currency
    • Converting cryptocurrency to fiat currency
    • Exchanging cryptocurrency to purchase goods or services

    A capital gain on any of the above transactions, will result in being taxed on part or all of the gain. If you hold the cryptocurrency for more than a year before exchanging, selling or trading it, you may receive a 50% capital gains tax discount. If you have losses on the cryptocurrency exchange, you can use those to reduce capital gains in that year or future years.

    Cryptocurrency obtained or held as an investment may be subject to capital gains taxes. Your reason for purchasing or keeping the cryptocurrency is as important as the reason for exchanging it. Even if you use it for a personal purchase, if you acquired it as an investment you must report it and it may be taxed as a capital gain.

    Keeping proper records

    No matter your reasons for purchasing, holding or using cryptocurrency, it’s important that you keep proper, detailed records of all cryptocurrency transactions. This means keeping a record of the date of each transaction, the value of the cryptocurrency in Australian dollars at the time of the transaction, the purpose of the transaction, and the other party’s details.

    Keep all receipts of any transaction including cryptocurrency and records of all costs associated with the transaction.

    Final Thoughts

    If you’ve been involved in any cryptocurrency transaction in the past year, it’s important that you keep proper records and report the transaction to ATO. Although many people think they do not have to pay taxes on cryptocurrencies such as Bitcoin, ATO views them as income or investments and they can affect your taxes. We at S & H Tax Accountants can help to lodge a tax return with Crypto trading, our accountants are highly experienced and well qualified. Book an appointment today with S & H Tax Accounting, call us at 03 8759 5532 or email us at info@sahtax.com.au

  • Why Bookkeeping is Crucial to Your Success

    Why Bookkeeping is Crucial to Your Success

    Keeping track of sales, earnings, expenses, and purchases is fundamental to the overall health and sustainability of your business. Effective bookkeeping produces the data you need to evaluate your current practices, anticipate challenges, and set attainable future goals.

    But despite their proven importance, many business owners dread and avoid accounting tasks. In fact, 40% of surveyed entrepreneurs claim that bookkeeping is one the worst parts of running a business!

    Wondering if it’s really worth the aggravation?

    Here are four reminders of how effective bookkeeping is the cornerstone of small business success.

    Keeping track of reimbursable expenses

    A reliable system for tracking reimbursable expenses ensures you reap all the benefits you’re entitled to when filing your taxes. Expenditures sorted into categories, such as “food”, “travel”, and “office supplies,” can be catalogued quite simply with online bookkeeping software.

    Using a dedicated credit card for business expenses, and updating your records on a monthly basis, will put money back in your pocket come tax time.

    Measuring profitability and planning for the future

    In order to grow your business, you must be able to track and compare its finances from one year to the next.

    In addition to reconciling the books and bank statements every month, effective bookkeeping generates records you can use to gain a comprehensive overview of your business. This data can help you:

    • measure year over year profits;
    • identify opportunities to cut costs;
    • plan for major expenses (such as new office space, equipment, or staff); and
    • develop data-based strategies for expansion.

    Preparing for tax season

    Few things are more stressful for business owners than scrambling to get poorly maintained financial records ready for tax season. In addition to the panic of last-minute filing, inaccurate or incomplete documentation can lead to serious penalties, fines, and even an audit.

    In the United States alone, 40% of small businesses pay an average penalty of $845 per year for late or incorrect filings!

    Save money and get peace of mind with sound bookkeeping. You’ll be assured of compliance with regulations, and will receive a reliable estimate of amounts owing long before your tax bill is due.

    Final tip: ask for help

    Most entrepreneurs are passionate about developing new business ideas – not crunching numbers. Employing a professional bookkeeper, even on a part-time or as-needed basis, can help optimize your accounting and increase overall profitability.

    There’s a good reason 71% of small businesses outsource at least one accounting function to help manage tasks like payroll, closing the books each month, and managing accounts receivable.

    It’s well worth it. Invest in effective bookkeeping and you’ll build a solid foundation for a resilient, forward-moving small business.

    Need assistance with bookkeeping, S & H Accounting can assist you as we also offer bookkeeping services. As mentioned above that bookkeeping services are essential for not just businesses but also for individuals. Our team also consists well-qualified, vastly experienced and extremely professional. We aim to provide our clients with the best level of service possible, as we prioritise our clients growth. Book an appointment today with S & H Accountants, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Paying down debt

    Paying down debt

    Debt can be a crippling problem for small businesses wanting to grow or just break even during difficult times. By reducing debt you’ll improve the value of your business, its financial situation, and its ability to continue operating into the future.

    Assess your debt situation

    Take a detailed look at all of your debts – both current and long-term. Evaluate which ones are more urgent and which can be parked until some progress is made.

    The key determining factor should be the interest you’re paying on your debts. For example, those with the highest levels of interest should be paid first.

    Also, list your debts from smallest to largest. Maybe some of those smaller debts can be paid off quickly without much hassle to enable you to focus on the larger ones. Consider consolidating all your loans into one payment if possible.

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    Cut costs and free up cash

    Try to cut any unnecessary costs and free up some cash in the process. Think about how much you spend on each of your daily expenses – is there room to cut some of those costs?

    For example, a building firm may shout takeaway coffees for its workers a few times a week. Maybe a cheaper way can be found to continue providing coffee, such as instant coffee on-site with hot water from a thermos, rather than expensive takeaways.

    Have a look at how long it’s taking your debtors to pay you. If your customers aren’t paying on time, come up with some solutions for encouraging them to pay quicker.

    Early payment discounts could work well but make it clear on each customer’s invoice. Alternatively, tighten up invoice periods so there are fewer days for your debtors to pay before penalties. Make sure you let them know about any changes and the reasons for those changes.

    Reassess funding

    Have a look at how you’re using funds to pay off your business’s debt. Do you have funds available that could be better used to reduce debt further? Perhaps you have money in a current account that isn’t being used optimally – lowering debt and hence future payable interest could be a wiser choice.

    Examine your cash cycle, when payments come in and when they go out to pay your creditors. Where does the incoming cash go before it gets allocated? Is there any you can reassign to debt payments?

    Close Up Home Sale Icon With Key Stacked Coins Calculator Math Blocks

    Sell your assets

    Another option for freeing up funds to reduce your business’s debt might be to sell some assets. What do you have money tied up in, but don’t use often enough to justify?

    Any equipment that’s not being used could be sold off. One example could be a builder who has an oversupply of power tools – making a detailed list of all their tools and how frequently they’re used might reveal some surplus assets.

    Make sure you’ve calculated depreciation correctly

    Have you depreciated all the assets in your business that need to be depreciated? It’s important to get these figures correct including the ratio of personal to business use if you use an asset for both.

    For example, a company vehicle will need to be accurately depreciated in relation to its usage over time. We can help you calculate depreciation correctly and also check whether you’re entitled to any tax rebates.

    If you need assistance with paying off your debt, please feel free to contact S & H Tax Accountants. Our Accountants are able to guide you through your debt and advise which strategy would be suitable for you, whether it would be cutting costs or calculating your depreciation. Book a consultation today, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • How to Avoid Costly Inventory Problems

    How to Avoid Costly Inventory Problems

    Inventory is the lifeblood of your business. It is the largest asset on your balance sheet and your company’s biggest revenue-generator.

    It goes without saying that poorly managed inventory can do serious damage to your bottom line. Businesses without clear strategies for streamlining the in and out flow of goods will have trouble meeting their customer’s demands and will see mismanaged stock corrode their profits.

    Follow these tips to ensure your business doesn’t fall prey to common – and costly – inventory problems.

    Implement a system for accurate stock tracking

    Whether you have a modest stockroom or a large warehouse, it’s important to know precisely when products are coming in or shipping out, so you’re able to re-stock efficiently.

    • Factor in lead time when calculating your basic stock, so you don’t run out of a product before new supplies can be delivered – disappointing your customers and missing out on revenue opportunities.
    • Implement an automated inventory management system to track fill rate and inventory returns for all products, and get a better handle on exactly how much stock you have at any given time.

    Avoid excess inventory

    Excess inventory is a financial drain on your business in more ways than one. It costs money in extra overhead, increases insurance costs, and reduces your liquidity – not to mention the space taken up by extra merchandise could be better allocated to more profitable products.

    Here are a few ways efficient inventory management can help avoid the problem of dead stock:

    • Don’t purchase large orders of stock simply because they’re being offered at a discount. It might take much longer than anticipated to sell the products and turn a profit – in the meantime, your order gathers dust in your storage room.
    • Calculate and stick to a realistic safety margin so you only buy what you are reasonably sure you can sell. A good system for tracking sales and profits – and checking it often – is essential to making better buying decisions.
    • Liquidate your overstock by selling products at discounted prices. You also might consider returning excess inventory to your vendor (it may be worth it even if you have to pay a re-stocking fee).

    Prioritize your inventory needs

    You can avoid inventory mismanagement by putting better systems in place to prioritize your inventory needs. You should always know which products have the highest turnover ratios and ensure those items are always on hand.

    One approach is to divide your inventory into three groups (A,B, and C) based on their dollar impact on your business . You’ll get a clear sense of which items to purchase more of and avoid needlessly tying up cash stocking up on the non-essentials.

    Final tips for better inventory control

    If you’re looking into switching to or upgrading your accounting software, look into a solution that includes inventory pricing and availability features. And be sure to invest in training to ensure your staff knows how to use inventory tools – and has a firm handle on overall inventory management practices.

    With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You’ll be able to respond quickly when a customer calls with a question about a product or an order. And you’ll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap.

    How will you use accounting software to grow your small business?

    Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as simply a financial management solution and start thinking of it as a comprehensive tool for business growth.

    You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.

    Now that you have a handful of ideas for making better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your business?

    Inventory needs and stock tracking are key elements of a business, however in order to maintain these elements, having a good accountant is a must. S & H Tax Accountants is a small firm that prides it self on the service that we provide, as we aim to offer the highest possible level of service to our clients. Our accountants are well-qualified, vastly-experienced and extremely professional. Book an appointment today with S & H Tax Accountant, contact us info@sahtax.com.au or call us at 03 8759 5532.

  • Strengthening your balance sheet

    Strengthening your balance sheet

    Your balance sheet (now more correctly called a Statement of Financial Position) reveals a great deal about your business, including the total value of your assets – the things you own; how much you owe to others – your liabilities; and the level of your solvency.

    These three aspects will be studied carefully by lenders and investors − and by buyers if you intend to sell your business. But they should also be important to you, because it’s important to be solvent at all times. In other words, you need to have more assets than liabilities available to pay your debts.

    If you can’t pay bills when they fall due, your business may be technically insolvent. Fortunately two simple tests can quickly reveal your solvency.

    1. The Current Ratio test

    This test simply involves dividing your assets by your liabilities (you should find both figures on the balance sheet). For example, if a business has assets of $435,000 and liabilities of $180,000, the current ratio is 435,000 divided by 180,000 = 2.42.

    In other words, the business has $2.42 in assets for every $1 of debt. On the face of it, the business is solvent, as the minimum ratio most banks would regard as acceptable is $2 for every $1 of debt.

    But wait a minute. Your assets include stock (your inventory). What’s your stock really worth? If you had to sell it all tomorrow to pay off your debts, could you really get out the full amount shown on the balance sheet?

    1. The Quick Ratio test

    Let’s try a tougher test – this time leaving out your stock. The aim here is to find out if your business has enough quick money (ready cash) to pay your bills if your creditors demanded repayment tomorrow. Let’s say the business has $325,000 in stock. Subtract this from the assets figure of $435,000 and the assets reduce to $110,000.

    Now for the Quick Ratio: $110,000 divided by $180,000 = 0.61.

    Hmm − the picture is no longer so rosy. The business has only 61 cents in ready cash for every dollar of debt, meaning it could not immediately pay its debts.

    Your aim should be to have at least $1 in assets available in quick cash for every $1 of debt, a ratio of 1:1. You’ll sleep better, and so will your bank manager.

    Strengthening your balance sheet

    A positive step to strengthen your balance sheet is to take a closer look at the quality of your inventory. If you had to sell all your stock in the next week or month to pay your debts, would you get the full amount shown on the balance sheet? In many businesses, the answer would be no.

    If you know you have obsolete or slow-moving inventory sitting on your shelves, talk to us about ways to get rid of it. We can discuss ways to reduce or get rid of obsolete stock, such as:

    • Holding a sale.
    • Bundling unwanted stock with more popular items as a ‘special offer’.
    • Choosing the most advantageous time of year to write it off if necessary.

    We can also show you how to measure the stock turn rate in your business to improve stock management and profitability. In broad terms, the faster you turn over your stock, the more efficient your business. A fast turnover rate can also reflect more efficient inventory management.

    Closing tips

    1. Many business people find a balance sheet more difficult to read than a profit and loss account. If this applies to you, we can help you understand it better so you can gain more from the figures.
    2. Getting a balance sheet just once a year is certainly not enough! A balance sheet offers important insights into your business. With the right accounting software you can generate a balance sheet whenever you need one

     

    A Balance Sheet can be an essential financial document, as it entails the financial position of the business. S & H Accountants offer services to businesses, where we assist with their financial documents. S & H Accountants have a great team, as it consists of well-qualified, vastly experienced and extremely punctual. We always aim to provide our clients with the best level of service possible. Book an appointment today with S & H Accountants, you can contact us on 03 8759 5532 or you can email us on info@sahtax.com.au