Julie Dixon Accountant - Resources

On the Money - June 2021 Newsletter

Wed, 30 Jun 2021 07:41:04 GMT

This editions topics include:
• 2021/2022 Federal Budget Highlights
• Year End tax planning
• Superannuation and Tax planning
• 2021 Tax return – home expense claims
• New Director Identification Number

On the Money - March 2021 Newsletter

Thu, 18 Mar 2021 06:39:50 GMT

This quarters newsletter's topics include:
• Planning for a Pandemic
• Coronavirus Vaccine Rollout - What Business Owners Need to Know
• What Drives Your Business Growth and Profits?
• Ways to Grow Your Business - Your Ideal Type of Customer
• Circuit Breaker Action Business Support Package

On the Money - December 2020 Newsletter

Thu, 10 Dec 2020 06:38:11 GMT

This Quarters Newsletter includes the following topics:
• Is it the right time to start a Business?
• ATO Job Keeper Spam email – what to look out for.
• 2020/2021 Federal Budget summary
o Personal income tax
o Superannuation
o Business Taxation
o Job Hiring Credit scheme

Click on the link below to view the newsletter

July 2020 - JobKeeper Extension

Tue, 07 Jul 2020 07:36:20 GMT

On 21 July, the Government has announced it is extending the JobKeeper payment program to continue the temporary relief for businesses who continue to be affected by the economic impacts of Covid-19. The JobKeeper Payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period. The extension is until 28 March 2021.

Please read the attached newsletter for more details. The information contained is all that we know of at this time. More information will be released as we move closer to the end of the September quarter. We will keep you updated as we move forward.

2020 - Companies, Partnerships, Trust & Other Businesses

Wed, 24 Jun 2020 07:34:27 GMT

Download the PDF to find our 2020 Tax Return Client checklist for Companies, Partnerships, Trust & Other Buisnesses to assist you in the collation of your tax document prior to your appointment

2020 Tax Return - Individual Client Checklist

Wed, 24 Jun 2020 07:32:39 GMT

Download the PDF to find our 2020 Individual Tax Return Client checklist to assist you in the collation of your tax document prior to your appointment.

JobKeeper - Sole Trader/ Partnership/Trusts

Wed, 08 Apr 2020 07:30:47 GMT

Further information is now available for these entities

Details and links in the PDF

JobKeeper

Wed, 01 Apr 2020 06:28:54 GMT

For those of us that have registered with the ATO, you will have received notification of the update
available on their website; ato.gov.au/jobkeeper.

Details of what is required is in the PDF

Covid-19 update for Superannuation Funds

Sun, 15 Mar 2020 06:27:09 GMT

Please find latest updates for self managed superfunds.

Details in the PDF

Support packages

Sun, 08 Mar 2020 06:19:57 GMT

Yesterday, the Government released details of their third economic package entailing a $130 billion JobKeeper Payment.
The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus aimed at supporting employers to maintain their connection to their employees. The JobKeeper Payment will also be available to the self-employed. The Government will provide $1,500 per fortnight (before-tax) per employee for up to 6 months.

The JobKeeper Payment will provide vital support to small business owners, many of whom have SMSFs.

More details in the PDF

Covid-19 Government Assistance packages

Sun, 01 Mar 2020 06:18:34 GMT

Firstly, I encourage everyone to stay safe and implement the restrictions and lifestyle changes
necessary to assist in dealing with this health issue. Please give thought to those who are
still dealing with the Bushfires and others around you who are vulnerable. Asking RU OK
needs to be a constant in interaction with others daily. We all cope differently.

Parliament has been working very hard to assist us all in dealing with the impact of the measures they have had to
impose as they affect every household.
We have attached a number of Fact Sheets in relation to the assistance that is currently available to both small
businesses and individuals and will continue to assist by sending these out as we are aware of changes and new issues.

More details in the PDF

February 2020 - Lodgements & Director Penalty Notices

Sat, 01 Feb 2020 06:15:35 GMT

Parliament has just passed legislation to include GST in the Director Penalty Notice (‘DPN”) Regime, and it comes into effect on 1 April 2020.
A Director Penalty Notice is a Notice that the Australian Tax Office (“ATO“) can send to a director that can make that director personally liable for, currently, two types of tax debts of a company – Pay As You Go (“PAYG“) and Superannuation Guarantee Charge (“SGC“) liabilities. The addition of Goods and Services Tax (“GST”) to this list means the ATO will be able to pursue a company director personally
for the majority of a company’s tax debt.

Details in the PDF

January 2020 - Superannuation Contributions

Fri, 10 Jan 2020 06:12:24 GMT

We remind you that the last date for payment of superannuation contributions for the quarter ended 31 December 2019 is 28 January 2020. To ensure that employees’ funds receive and process superannuation contributions by this date, we recommend that these be paid by 24 January 2020.

More information in the pdf below

Audit Hit List

Tue, 20 Sep 2016 07:16:31 GMT

If you bought or sold an investment property in the past year, pocketed some of those resource stock profits or continued to make losses on your rental property then there is every chance you will receive a letter from the Australian Taxation Office. Between now and October the Tax Office will be writing to people it thinks might need ‘help’ complying with the law when preparing their tax returns.

Accountants expect the Tax Office checklist to again include unusually high work-related expenses, undeclared capital gains on investments such as property and shares, and burgeoning claims for rental property losses.

In addition, the Tax Office will focus on specific industry sectors and occupations including accountants, hospitality workers, factory hands, mechanics, IT professionals and miners. Industries to be scrutinised included fishing, used-car sales, restaurants, cafes, horse racing, hotels, building and construction.

Tax Office statistics show that clothing was the most common work-related expense but motor vehicle expenses were the most valuable totalling $4.7 billion, or an average of $2013. Overall, the average claim for work-related expenses was $1661.

The Tax Office says it looks out for deductions that seem high or excessive compared with your income and claims that are ‘outside the regular pattern’ for a particular job or industry. Work-related expenses must have a ‘direct connection’ to the income you earn and good record-keeping is important. You need to be able to produce a receipt if required, or a diary or logbook that substantiates your claim.

Boom times in property in past years and the bullish sharemarket mean the Tax Office will make sure capital gains are on the radar. Last year the Tax Office wrote to 23,000 people who made investments in property, shares and managed funds to generally alert them to their obligations when they sell.

The Tax Office will also be on the lookout for ‘unusual patterns of rental claims’, as landlords continue to report growing losses on their properties. They warn that a property must be genuinely available for rental to claim expenses.

Driving Your Tax Dollar Further ...

Tue, 20 Sep 2016 07:11:11 GMT

If you use your car for income producing purposes, you could be entitled to claim a tax deduction for motor vehicle expenses. Once you have established your entitlement to claim your motor vehicle expenses, you can then select one of four methods and apply the one that provides the highest possible tax deduction.

Examples of tax deductible motor vehicle usage include the following:

You use your vehicle to carry work tools or equipment that could not be left at work
Your home is your employment base and you then travel to a secondary workplace
You have various places of employment and you regularly work at more than one site each day before returning home
You use your car to travel directly between two separate places of employment, for example, when you have a second job
You travel from your normal workplace to an alternative workplace, such as a clients premises
You have travelled from your home to an alternative workplace, such as a clients premises

Once you have established your entitlement to claim your motor vehicle expenses, you can then select one of the four methods below and apply the one that provides the highest possible tax deduction.

Method 1 Cents Per Kilometre

Your claim is based on a set rate for each business kilometre depending on your vehicle’s engine capacity.
Based on a reasonable estimate of travel you can only claim a maximum of 5,000 business kilometres and you do not need any written evidence to substantiate your claim.

Method 2 12% Of Original Value

Your claim is calculated at 12% of the original value of your car (subject to luxury car price limits).
Your car must have travelled (or would have) travelled more than 5,000 business kilometres in the income year and you do not need any written evidence to substantiate your claim.

Method 3 One Third Of Actual Expenses

Your claim is based on one-third of your car’s actual expenses
Your car must have (or would have) travelled more than 5,000 business kilometres in the income year and you need written evidence or odometer readings for fuel and oil costs.
For all other car expenses you need written evidence.

Method 4 Logbook

Your claim is based on the actual business use of your motor vehicle.
You need to keep a vehicle logbook for 12 continuous weeks that documents your odometer readings for the start and end of each business trip.
You can claim fuel and oil costs based on odometer records but you will need written evidence for all other car expenses.

Please note that this information is provided only as a guide because there are a number of other issues to consider such as:

The guidelines do not apply to vehicles other than cars for example, utility trucks or panel vans with a carrying capacity of one tonne or more, vehicles with a carrying capacity of nine or more passengers or motorcycles.
If you operate your business through a Company or Trust structure you can claim all your motor vehicle costs but private usage may be subject to Fringe Benefits Tax (FBT).

Before finalising your claim for motor vehicle expenses we urge you to contact this office for professional advice tailored to your individual circumstances.

Activity Statement

Tue, 20 Sep 2016 07:08:51 GMT

Activity statements are used to make payments and report obligations under the tax system. The statement is used to report and pay your FBT Instalments, PAYG (instalments and withholding), GST and related tax obligations, and to pay deferred company and superannuation fund instalments.

The ATO website provides instructions on how to complete sections of the activity statement:

Activity Statement

Activity statements are used to make payments and report obligations under the tax system. The statement is used to report and pay your FBT Instalments, PAYG (instalments and withholding), GST and related tax obligations, and to pay deferred company and superannuation fund instalments. The ATO website provides instructions on how to complete sections of the activity statement:

If your annual turnover is less than $20 million, you can lodge your Business Activity Statement monthly or quarterly. However, if your annual turnover is $20 million or more, you must lodge your Business Activity Statement and make payments electronically every month.

FURTHER INFORMATION: The ATO website provides answers to some common questions about the Activity Statement.

Australian Business Number (ABN)

Tue, 20 Sep 2016 07:07:07 GMT

Australian Business Number (ABN)

The Australian Business Number (ABN) is a single identifier used for all dealings with the Taxation Office and other business entities and agencies.

Do I need an ABN?

Businesses need an ABN and GST registration to claim GST credits for any GST you have paid on goods/services you have used in your business. Where your business invoices for goods or services you will need to quote your ABN so that other businesses do not withhold tax at the highest marginal rate.

An ABN is necessary to interact with the ATO on GST , the Diesel and Alternative Fuels Grants Scheme, Luxury Car Tax and Wine Equalisation Tax. Also businesses that need to apply to the Tax Office for endorsement as gift deductible recipients or income tax exempt charities will need an ABN. You can also use an ABN to interact with the Australian Tax Office on the PAYG system and Fringe Benefits Tax .

To be entitled to an ABN, you must be:

A company registered under Corporations Law in Australia and business entities carrying on an enterprise in Australia.
A non-profit organisation with a turnover of $150,000+ (for GST purposes)
A superannuation fund

Certain entities (sole traders, companies, partnerships, trusts and superannuation funds) can apply for an ABN on line
FURTHER INFORMATION: Refer to the ATO website ABN Essentials

Capital Gains Tax (CGT)

Tue, 20 Sep 2016 07:06:03 GMT

Capital Gains Tax (CGT) is not really a separate tax but is what you need to include on your income tax return for any net capital gain incurred in a financial year for a Capital Gains Tax event which can include compulsory acquisitions, forfeited deposits, etc. Also you may have a Capital Gain from managed funds or other units where the Capital Gain is distributed to you. You are taxed on net capital gains at your marginal tax rate. The date of acquisition and disposal is the date the contract is signed and not when it is settled, so you may have a situation where it is signed pre 30th June and goes into the current tax return even when settlement is post 30th June.

CGT is the difference between the assets cost base (what you paid for it) and your capital proceeds (what you received for it). Costs that may be included are expenses for acquisition, holding and selling such as stamp duty on purchase, legal fees, advertising, interest on borrowed monies in some circumstances, etc.

CGT assets are normally things like:

Shares
Units in a trust
Collectables (eg. jewellery, stamps, coins, etc.)
Assets for personal use (eg. furniture or boats, etc.)
Real Estate (eg. land, investment and holiday properties, etc.)
Other assets (eg. forfeited rights, etc.)

The Capital Gain or Capital Loss worksheet helps you calculate a capital gain or loss for each CGT event.

Where a capital gain has been made, it can be calculated using one of these methods:

Indexation method for capital gains made on CGT assets acquired before 21 September 1999 and owned for at least 12 months
Discount method for assets owned for at least 12 months and for which you are not using the indexation method
'Other' method (if neither indexation method nor discount method applies)

These three methods of calculating a capital gain are explained in full detail in the Guide to Capital Gains Tax on the ATO website.

A capital gain is transferred to the CGT summary worksheet according to the method you used to calculate it and the type of asset that gave rise to it. This worksheet is used to calculate your entity's net capital gain or net capital loss for the income year. If the total capital gains or capital losses of your entity exceed $10,000 for the current year, a CGT schedule must be completed. The Guide to Capital Gains Tax explains how to complete the CGT schedule
There are four small business CGT concessions that may apply to asset sales. These exemptions are:

15 year rule (business has owned asset 15yrs or over and individual is 55+, retiring or incapacitated)
50% active asset reduction (capital gain can be reduced by 50% on business (active) assets)
Small business retirement exemption (capital gain exempt if individuals
Small business roll-over (generally, deferring gain from sale of a business asset).

These concessions are outlined in the ATO CGT concessions for small business-overview and further details are available in the ATO Guide to Capital Gains Tax Concessions for small business .
FURTHER INFORMATION: see the CGT section of the guide on the ATO website.

Fringe Benefits Tax

Tue, 20 Sep 2016 07:04:57 GMT

What is FBT?

Fringe Benefits Tax is generally the tax payable by an employer on a taxable benefit provided to an employee (or their associate usually family) and can relate to current, past or future employment. The benefit could be in place or in addition to salary or wages. The tax is separate to Income Tax and the FBT year runs from the 1st April to 31st March.

Do you provide benefits to employees (or their associates) such as:

Do your employees take cars home at night?
Can your employees use cars owned or leased by the business for private purposes?
Do you provide low interest loans to employees?
Have you waived a debt from an employee?
Have you paid or reimbursed a non-business expense for an employee?
Do you provide housing or accommodation of any sort to your employees? This can be any kind of housing from units, cabins, caravans, boats anything they live in
Do your employees receive a living away from home allowance?
Do you pay for food, drink or recreation for your employees or families?
Do you salary package for any of your employees (or yourself)?
Do your employees receive any kind of staff discount?

These are all examples of Fringe Benefits and the main categories are:

Cars (any company vehicle (less than 1 tonne) with private usage ie. Garaged at employee's home, even if it is not authorized)

Expense Payments (paying for or reimbursing an employee's expenses including things like health insurance, home telephone, school fees etc.sometimes the taxable value can be reduced for business usage)

Entertainment (provision of meal entertainment or recreation) see ATO

Loans (low interest loan provision doesn't apply if same conditions are available for regular customers)

Debt waiver (eg sell goods to employee then don't worry about repaymentexcept genuine bad debt)

Housing (employer provides accommodation where employee usually lives includes houses, units, caravans, guesthouses, bunkhouses, hotels or motels);

Board (where employer provides accommodation and at least 2 meals/day - eg remote construction site); Airline transport(free or discounted air travel on standby basis normally in travel industry)

Living-away-from-home-allowance (allowance paid to employees to compensate inconvenience and expenses of being away from home-additional expenses not normal tax deductible expenses)

Car parking (where a commercial car park is within 1km radius and charges an allday rate above the declared fee threshold normally announced by the ATO each April. The car parking benefit may be exempt if the employers total gross income was less than $10 million in the previous year and the parking is not provided in a commercial car park);

Property (providing employees with no cost or lowcost goods eg clothing, electrical equipment etc. or real property-land/buildings or shares);

Entertainment provided by a tax-exempt body; (food, drink or entertainment provided by or reimbursed by an employer who is exempt or partially exempt from income tax)

Residual benefits (where a benefit doesn't fall into the above categories it becomes a residual benefitfor example a group health insurance policy provides for employees would be a residual benefit)

What's NOT a fringe benefit?

Salaries and wage payments
Approved employee share acquisition schemes
Employer contributions to complying superannuation funds
Eligible termination payments (eg. Company car given or sold to employee on termination)
Laptop computers and mobile phones used primarily for work purposes.

You can reduce the amount of FBT you pay by:

Replacing fringe benefits with a cash salary
Providing benefits that your employees would be entitled to claim as an income tax deduction if they had paid for the benefits themselves
Providing benefits that are exempt from FBT
Using employee contributions

FURTHER INFORMATION: See the Fringe Benefits Tax Guide on the ATO website for more information.

Goods & Services Tax (GST)

Tue, 20 Sep 2016 07:03:44 GMT

Goods and Services Tax (GST) is a tax of 10% in Australia on most goods, services, and other consumables. If you are a registered business, you need to charge GST on most goods and services you sell or supply. You must be a registered if your business turnover exceeds $75,000 per annum or $150,000 for a notforprofit organization but you may elect for voluntary registration if you are below the threshold.

Likewise registered suppliers will include GST in the price of items you purchase from them for your business. You may be entitled to claim input tax credits from the ATO if you are registered for GST and the acquisitions are acquired for the purpose of carrying on your enterprise. Although the liability for paying GST rests with
GST-registered entities, the end consumer bears the economic cost.

Some supplies will be GST free such as medical and educational services but you are still entitled to claim input tax credits for GST included in any purchases you made if you are a registered entity. For an input tax sale, such as providing residential rental accommodation, you do not charge GST on the sale of the goods or services to your customers and cannot claim input tax credits for the GST portion of your business expenses relating to the items acquired to make the supply.

The reporting periods for GST are called tax periods and can be quarterly or monthly. Quarterly tax periods are three months long, ending 30 September, 31 December, 31 March, and 30 June. Monthly tax periods end on the last day of each calendar month. Entities with an annual turnover of less than $20 million generally have quarterly tax periods, but can choose to have monthly tax periods. Entities with an annual turnover greater than $20 million are required to have monthly tax periods.

The rules for attributing GST payable and input tax credits to tax periods differ according to whether GST is accounted for on a cash or accrual basis. You can account for GST on a cash basis if you meet one of these requirements:

Are a small business with an annual turnover of less than $2 million. This includes the turnover of your related entities.
Are not running a business, but are carrying on an enterprise with a GST turnover of $2 million or less.
Account for income tax on a cash basis.
Carry on an enterprise the commissioner has determined can account for GST on a cash basis regardless of your GST turnover
Are an endorsed charitable institution regardless of your GST turnover
Are a trustee of an endorsed charitable fund, giftdeductible entity, or government school, regardless of your GST turnover.

If you are not registered for GST, you cannot include GST on anything you sell or provide. You also cannot claim back any GST included in the price you pay for goods or services used in your business.

FURTHER INFORMATION: For more information, see the GST guide for small business

Imputation

Tue, 20 Sep 2016 07:02:19 GMT

The imputation system provides a way in which Australian corporate tax entities can pass on credit for income tax they have paid to their members. The system prevents income tax being levied twice once when the income is earned by the entity, and once upon distribution of the income to the members.

This imputation system works by franking a distribution. The franking account is a record of franking credits and franking debits that arise within an income year. All corporate tax entities are required to maintain a franking account. Typically a franking credit would arise in the franking account when the corporate tax entity pays its income tax or receives a franked dividend. A franking debit would arise when the corporate tax entity pays a franked dividend or receives a refund of income tax it has paid.

FURTHER INFORMATION: See the Imputation section of the ATO website.

Income Tax

Tue, 20 Sep 2016 07:00:17 GMT

Income tax is levied on taxable income. Taxable income is calculated as [assessable income] less [any allowable deductions]. Deductions include wages, cost of stock, rent, bad debts, and previous year losses.

Sole traders are not required to complete a separate return for their business. They use their personal income tax return to report their business income and deductions. Partnerships complete a partnership tax return to show the partnership's income and deductions and how the profit or loss was shared among partners. Companies complete a company tax return to calculate the income tax the company should pay. Income tax is calculated according to taxable income for sole traders.

Resident Tax Rates 2008-09

NOTE: Resident tax rates do not include the Medicare levy of 1.5%.
FURTHER INFORMATION: Refer to the Medicare levy section of the ATO website for more information .

Non-Resident Tax Rates 2008-09

NOTE: Nonresidents are not required to pay the Medicare levy.
MORE: For more information on sole trader income tax, refer to the TaxPack section of the ATO website.

Partnership
A partnership running a business must complete a partnership tax return to show all income earned and deductions claimed for expenses during the course of the business. Each partner pays tax on their share of the partnership's income. Consequently they must include their individual share of the net partnership profit or loss in their personal tax return. Partnership and trust 2008 tax returns instructions are available on the ATO website.

Company
A company is a distinct legal entity with its own income tax liability therefore a company tax return must be completed for each company. A company's income tax is calculated as a percentage of the taxable income the company earned during the financial year. The company tax rate is 30%.

FURTHER INFORMATION: Company 2008 tax return instructions are available on the ATO website

Negative Gearing & Property

Tue, 20 Sep 2016 06:59:08 GMT

The real benefits of negative gearing are only realized when you combine the correct tax and financial advice with a property in the right location funded by the most suitable loan product. You should always seek expert professional advice to make sure the purchase is within your budget and will provide long term taxation and financial benefits.

PAYG Instalments

Tue, 20 Sep 2016 06:57:44 GMT

Pay As You Go (PAYG) instalments is a system for paying instalments during the income year towards your expected tax liability on your business and investment income. Your actualtax liability is worked out at the end of the income year when your annual income tax return is assessed. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.

The Tax Office will write to companies required to pay PAYG instalments, notifying them of an instalment rate, which has been calculated based on information in the company's last assessed income tax return.

PAYG instalments are generally paid quarterly, however some taxpayers pay two instalments a year and some have an annual instalment option. The annual instalment is a single, lump sum payment of your PAYG liability for the year. For more information see the PAYG Annual Instalment Fact Sheet . If your company is not eligible to pay an annual instalment, it can pay PAYG instalments quarterly. Each quarter the Tax office will send you an activity statement. The due date for lodging the activity statement and paying any amounts due will be printed on your company's activity statement. This is also the case if you choose the twoinstalment option, however this only applies to some primary and special professionals (eg sports professionals and authors). For more information see PAYG Instalments Guide for Primary and Special Professionals on the ATO website.

PAYG Withholding

Tue, 20 Sep 2016 06:56:42 GMT

Employers are required to withhold amounts paid to employees and regularly send these payments to the Tax Office. This system is called PAYG Withholding.

Under PAYG withholding, businesses and other enterprises must deduct amounts from certain payments they make to others, including payments:

To employees, company directors, and office holders
Under labour hire arrangements
Under voluntary agreements
Made because a person is unable to work (eg due to sickness or accident)
Where an Australian Business Number (ABN) has not been quoted

FURTHER INFORMATION: See the PAYG Withholding section of the ATO website. For PAYG Withholding Rates refer to the ATO website.

Recession Proofing Your Business

Tue, 20 Sep 2016 06:55:48 GMT

Just as evolution in animals dictates that only the fittest survive, in a recession it is generally survival of the smartest.

In this country we seem to have a recession like economy happening every seven to nine years and almost 75,000 Australian businesses were wiped out in the last downturn. To survive business owners must find a way to plan their way past potential threats including higher interest rates and fuel prices plus declining consumer confidence.

Record Keeping & Retention

Tue, 20 Sep 2016 06:52:49 GMT

What records to keep and for how long?

As the burden of proof falls upon the taxpayer in event of any dispute it is imperative that adequate, well organized records are kept for the statutory periods as set out in the Income Tax Assessment Act.

Generally, this is for 5 years from the end of the relevant records. There are penalties for not keeping records and it will reduce the risk of tax audit and adjustments if the records are kept and maintained for the required statutory period.

Statutory requirements are contained in Section 262A of the Income Tax Assessment Act 1936 (ITAA 1936) and the requirements are that people (including companies) carrying on a business must keep adequate records that support and explain all transactions relevant to that Act.

In particular this would include:

All documents supporting amounts of income and expenditure
All documents showing any estimates, elections, calculations or determinations relevant to the Act and showing basis for and methods used to arrive at an estimate, determination or calculation.

All records must be in plain English (or convertible to English) and be easily accessible and should be kept for 5 years. This would include records that are kept in paper or electronic form.

Records for Capital Gains Tax

Similar to the Income Tax Section 262A, the section 12120 of the Income Tax Assessment Act 1997 (ITAA 1997) requires that taxpayers must keep records of all acts, transactions or events which could reasonably be expected to give rise to a Capital Gain or Loss through a Capital Gains Tax Event (refer Capital Gains Tax section). These events may have already happened or could be future events. These records must again show details of how the acts, transactions, events or circumstances are relevant in calculating whether a capital gain or loss has been made. These records must be held for 5 years after it is certain that no CGT event can or will happen.

Electronic versus Paper Records

Particularly relevant for the CGT record keeping original records can be transferred into an asset register. This can be kept in paper format or electronically, however, it must be secure and software should provide an audit trail (of additions and deletions) so that entries cannot be easily altered. It must contain all the relevant information and can be maintained by the taxpayer or by someone else (eg. Your registered tax agent). Where paper records have been converted to electronic records they satisfy requirements if they are not altered once stored, kept for five years and can be retrieved and read at any time by Tax Office staff.

Further Information: Keeping Good Records is a section on the ATO website specifically for small businesses.

Simplified Tax System

Tue, 20 Sep 2016 06:51:17 GMT

The Simplified Tax System (STS) is an alternative method to determine taxable income for eligible small businesses with straightforward financial affairs. Participating in STS is optional.

The key features of STS are:

Cash accounting rather than accruals accounting
Most business income and deductions will be recognised only when they are received and paid.

A simplified depreciation system (capital allowances):

Depreciating assets that cost less than $1000 each will be written off immediately and claimed as a deduction in the year in which you started using the asset or installed it ready for use, for a taxable purpose.
Other depreciating assets which have an effective life of less than 25 years will be pooled and depreciated at the diminishing value rate of 30%.
Depreciating assets with an effective life of 25 years or more will be pooled and depreciated at the diminishing value rate of 5%

Simplified treatment of trading stock:

Tax payers will only be required to account for changes in their trading stock on hand or do stock takes at the end of the year where the difference between the value of opening stock and your reasonable estimate of closing stock exceeds $5000.

To qualify for STS in an income year you must meet all these requirements:

Be carrying on a business in that year
Have an STS average turnoverfor that year of less than $1m
Have the total of the adjustable values of the depreciating assets held by you and your grouped entities at the end of that yearas less than $3m.

FURTHER INFORMATION: See the Simplified Tax System section at the ATO website for more information.

Starting a Small Business

Tue, 20 Sep 2016 06:48:33 GMT

Starting or buying a business necessitates risk, research, passion and planning. Just like a game of chess, to succeed you need to make the right opening moves.

The harsh reality is that enthusiasm, money, talent or a great idea is not enough to guarantee success in business.

The business evaluation and establishment phases can be periods of great anxiety due to a combination of excitement, uncertainty and financial risk. Make no mistake, the risks are real as the latest figures from the Australian Bureau of Statistics suggest that 42% of new businesses won't be around in 3 years time. Even though franchising is considered to be the most successful form of small business, a 2008 study indicates:

Only 81% of franchisees are profitable
58% of franchisees generate a profit of less than $50,000 per annum
3% of franchisees generate a loss of more than $50,000

The small business journey can be both challenging and rewarding and we are here to guide and support you. Having previously assisted so many clients in your situation we would like you to benefit from our experience and help you make the right opening moves. Too often people starting a business simply end up creating a ‘job' that denies them the freedom and flexibility they set out to achieve.

Successful businesses have clear objectives, produce quality products or services, understand theirmarket, manage their money properly and are good employers. They also keep quality records and have a close relationship with their accountant. When establishing your business it's important to seek sound professional advice from qualified accounting and legal sources. Our clients enjoy a ‘business coach' relationship and we work on your business to develop strategies, systems and processes to ensure your marketing generates a better return and repeat business. We use tools and techniques to monitor sales, productivity and make your financials more meaningful.

Your business success is important to us because Small Business is Our Passion.

To help our clients we have produced a booklet that contains valuable information about starting a business. It covers a number of topics including:

Choice of Business Structure
Tax and Business Registrations
Buying a Business or Franchise
Record Keeping Requirements
Accounting Software Options
Business Insurances
Employer Obligations
Legal Issues
Permits & Registrations
Claiming Motor Vehicle Expenses
Preparing a Business Plan
Preparing a Cash Flow Budget
Vehicle & Equipment Finance Options

Full copies of the booklet are available from our office.

Superannuation Guarantee

Tue, 20 Sep 2016 06:47:11 GMT

As a small business owner you will have superannuation obligations for your employees. There is a minimum earning cutoff (currently $450 per month) where most employees, full, parttime, casual or even contractors will need to have a superannuation contribution made of a percentage of their ‘ordinary time earnings' (currently 9%). The exceptions include employees under 18 years who worked less than 30 hours in a week and employees over 70 years of age.

Prior to the 1st July 2008 superannuation may have been paid on a different earnings basis such as that contained in an industrial award. However after 1st July 2008 the earnings base for most employees is their ‘ordinary time earnings' generally being what they earn for their ordinary hours of work. Payment can be made to an eligible superannuation fund or you can pay any late contributions to the ATO superannuation guarantee charge but you forego a tax deduction and may be charged additional interest and penalties.

Superannuation contributions are tax deductible in the year the payment is banked or available for banking by the superannuation fund. The superannuation guarantee legislation was brought in to ensure adequate income for Australians when they retire

Employers must make superannuation guarantee contributions on behalf or their eligible employees at least quarterly (28th October, 28th January, 28th April and 28th July). The superannuation guarantee is selfassessed so records must be kept of superannuation contribution payments and that you have offered your eligible employees a choice of super fund.

Taxpayer Penalties

Tue, 20 Sep 2016 06:45:00 GMT

Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid these charges, ensure you pay the full amount of tax you owe by the due date.

The main charges for failing to meet tax obligations are the:

General interest charge (GIC) - Applies to a variety of situations,whenever outstanding amounts are due to the Tax Office.
Failure to lodge on time penalty (FTL) - If a return is not filed by the due date.

Where a tax payer is audited and an amended assessment is raised, further penalties of up to 75% of the additional tax levied may be applied.

The Land of Business Start Up Opportunities

Tue, 20 Sep 2016 06:41:30 GMT

A recent study suggests Australia has the second highest rate of start‐up businesses in developed countries behind the United States. According to research compiled by the Australian Centre for Entrepreneurship (ACE) in partnership with the Global Entrepreneurship Monitor (GEM), one in ten of all Australians are involved in an early stage enterprise.

Last year, GEM interviewed more than 140,000 adults in more than 50 countries. By surveying the adult population, GEM identifies entrepreneurs at the earliest stages of business creation. ACE participated as the Australian GEM partner, surveying 2,000 Australian adults.

The research found 10.5% of the Australian adult population was actively engaged in starting and running a new business in 2011. This suggests we have 1.48 million early stage entrepreneurs with 40% of them being women. This means 8.4% of the Australian female adult population is involved in starting or running a business. These are staggering statistics and the research also suggests that 80% are starting because their founders identified opportunities while only a small number set up business because of job loss or out of other necessity. As such, Australia is outperforming the US at the moment where necessity driven entrepreneurship has soared because of fewer employment opportunities.

In terms of job creation, a third of Australia’s early stage entrepreneurs expect to create at least five new jobs in the next five years, while 11% expect to create 20 or more new jobs over the same time-frame. These jobs will primarily be consumer oriented (such as retail) or in business services as between them these industries account for 65% of new entrepreneurial activity.

According to the research, Australians are more confident about their ability to start and run a business than budding entrepreneurs in most other developed countries. Around 50% of Australian adults believe they can identify opportunities for business start‐ups while 12% of Australians not currently involved in entrepreneurial activity intend to start a new business within the next three years. While this paints a rosy picture, 31% of established and new businesses closed during 2011. This is fairly average for developed economies and shouldn’t necessarily be interpreted as failure because many businesses close due to successful business exits or their owners found better or alternate opportunities. Other studies conducted by ACE have identified that Australia has very few closures that could be considered ‘disastrous’.

Australia is also ranked the second easiest place in the world to start a business behind New Zealand according to a report by the World Bank. The study found it was possible to set up operation in Australia in two days and after just two procedures. It might be hard to believe but Australia ranked fourth with regard to ease of obtaining credit, behind Malaysia, South Africa and the United Kingdom. While Australia may rank highly when it comes to the ease of starting up, it was ranked 10th with regard to the ease of doing business. The report suggests the Australian governments have done a good job in making the country a relatively easy place to set up a business but the red tape associated with running a business is onerous.

While starting a business sounds simple there are a large number of issues to address including structures, asset protection, insurances, tax and GST registrations, claiming car expenses, software selection not to mention finance, branding, marketing and issues around employing staff. If you are thinking of starting a business call us today!

Top Web Tools For Business Owners

Tue, 20 Sep 2016 06:39:54 GMT

Technology can give your business a competitive edge and there are a number of web based tools available to help business owners. Most of the tools listed below are designed to help you develop, manage and grow your business.

Dropbox gives you a safe and secure place ‘in the cloud’ to store your documents and files. With Dropbox you can have 2GB of free storage space or if you need more space you can subscribe to one of their paid business plans. In addition, you can access the files via the internet or your smart phone or tablet and you can also share files, which is great for files or documents too large to email or if you are working with an outsourced team member

Google Alerts lets you set an alert for your industry, your business name, your name and any topics that are relevant to your area of expertise. You can see who is talking about your business, respond to any criticisms or thank someone for a mention or endorsement. Google Alerts will also help you stay up to date with what is going on in your industry, identify any relevant news stories and alert you to any blogs you may be able to guest post on.

Skype is a great alternative to face‐to‐face meetings and provides free calls and video conferencing to other users. You can stay in touch with interstate or international clients and outsourced team members. It can also help you control your phone bills

MailChimp will help you manage one of your most valuable business assets, your customer database. Your database obviously needs to be up to date and MailChimp lets you tailor your email and newsletter campaigns, share them on social networks and track your results. If you have fewer than 2,000 subscribers on your database you can send up to 12,000 emails every month at no charge.

Google Analytics can provide you with valuable information on the people who are visiting your website. You can see which online marketing campaigns are working best, what keywords are attracting prospects and what content is working. You can then formulate more targeted marketing campaigns and edit your website content to attract more traffic to your site and turn browsers into buyers.

Survey Monkey. Surveys are incredibly useful business tools and can provide you with information to help you grow your business. Survey Monkey allows you to create surveys to help you identify the needs, wants, frustrations and challenges of your target market. You can gain valuable customer feedback and product or service evaluations.

SourceBottle.com is a fantastic way to intercept media call‐outs from journalists who are looking for sources to input on their story. With the story angle already set and the story definitely going forward, all you need to do is pitch why your expert opinion or experience will be best for the story.

7 Things Your Business Should Be Doing In 2013

Tue, 20 Sep 2016 06:37:54 GMT

Let’s face it, most small business owners are time poor. It’s no surprise given you need to juggle the management of staff, bookkeeping, invoicing, marketing and daily business operations. You also need to monitor the economy, industry trends and technological change.

With the speed of technological change accelerating, business owners need to adapt as a result of the rise of social media, the dominance of Google and the explosion of smart phones and cloud computing. In fact, the way we do business continues to change with business owners constantly searching for productivity gains to save time and improve their bottom line profits. For example, five years ago every business had a fax machine but courtesy of email and scanning technology they are almost redundant.

We have identified seven key technological changes that most business owners need to adopt to stay competitive:

1. Websites are a Marketing Magnet

Your website needs to be more than just a billboard that simply lists the who, what and where of your business. It should be your marketing hub that draws prospects to your business with social media links and information that targets your niche markets and ideal customer. It should be a marketing magnet and your virtual sales manager available 24/7. It should not only detail your business information, opening hours, products and prices but it should create sales and track visitors to your site so you can create a pipeline of prospects to contact.

Everybody looks for products and new suppliers on the web and if your website is not set up to capture prospects details in exchange for an ebooklet or newsletter, you could be missing out on sales opportunities. Of course, if you are capturing the contact details of the prospects who visit your site do you also have a follow up system in place to convert them to customers?

Consumers want to be able to complete their orders online and they are too busy and time poor to wait for the call back, email or personal visit. Their mission is to find what they want, pay for it and move on. If you sell products then a shopping cart is an essential part of your website because if your business can’t satisfy them with a few clicks of the mouse, they will quickly move on to one of your competitors that offer instant purchase gratification.

Your website will always be a work in progress and remember, Rome wasn’t built in a day. Don’t feel overwhelmed with the need for instant change but create a wish list of features you want on your website. Make a commitment to read and research about search engine optimisation (SEO), blogging and software to integrate your contact management, payment processing and automated marketing campaigns.

2. Abandon the Cheque Book
The convenience and speed of online banking means there are very few reasons why you still need a cheque book. Online banking, Paypal, direct debit services and secure shopping carts mean the old cheque book is almost extinct.

If you are still paying your bills by cheque or don’t accept electronic payments to your bank account then it’s time for change. Everything is difficult until you do it the first time and there are other benefits with electronic banking. For example, most accounting software programs will let you import your electronic bank statement that could potentially slash your bookkeeping time and you might save bank fees as well.

3. Search Engine Optimisation (SEO)
Very few people forecast the dominance of Google in Australia. Ten years ago Yellow Pages was the starting point in the purchasing process but today Google is the consumer’s best friend.

Having a great website is a terrific start but if no one can find your business online it is a complete waste of time and money. It is crucial that your business appears on page one of Google searches. If you’re a plumber, what happens if you Google ‘Plumber in your Suburb’? You can access these statistics and the results are staggering. For example, there are close to 6,000 searches per annum for ’Plumber Richmond’ and what if you could attract 5% of the traffic? Would an extra 300 calls a year help your business?

To optimise your website for Google you need fresh and relevant content plus make sure you also claim your inbound links from well credentialed websites like Hotfrog and True Local. This is just the tip of the iceberg but SEO must be on your radar in 2013 and beyond.

4. Using Web-Conferencing
Face to face meetings will always be the most effective way to do business and build relationships but the travel time, expense and inconvenience can be a big obstacle. Web-conferencing provides the next best thing to a face to face meeting and with free VOIP carrying voice, webcams and screen sharing for the visual, participants don’t need to leave their own desk to do business.

5. On Line Training
There are a range of fantastic online training tools available for small business operators at surprisingly low cost. Again, like meetings, by receiving your training or conducting staff training online you have reduced the cost of bringing the trainee and trainer together. If you have Gen Y staff think about videoing all your systems and procedures because this demographic don’t want to wade through massive procedure manuals when they can watch instructional videos. It will also make the staff induction process faster and simpler.

6. Paperless Office
Once upon a time each and every transaction required a piece of paper. Thanks to technology those days are nearly gone because we can now review and action almost everything online. Apart from the time saving there is less impact on the environment and going ‘paper less’ could also save expensive office space and even make your business more valuable

7. Social Media

This is huge and if your target market is Gen X and Y customers then you need to have a social media presence. Social Media has changed the way people connect, discover and share information. It is the technology that connects people whether it’s to share content or just to chat.

Social networks like Facebook and LinkedIn are the places where social interactions happen while Social Media Marketing is the way to use that technology to build relationships, drive repeat business and attract new customers through friends sharing with friends. In a sense, social media marketing is really just word of mouth referrals powered by technology.

Recent surveys suggest that 75% of people are somewhat or highly likely to share content online with friends, coworkers and family and 49% of users do this at least weekly. According to Constant Contact’s 2011 Small Business Attitudes & Outlook Survey, 73% of small businesses and organizations have started using social media marketing and 62% of those not using it expect to start marketing through social media within the next 12 months.

Here are some ways you can use social media to promote your business:

Build your brand by telling customers and prospects who you are and what you can do for them.
Drive Sales by giving customers offers that are so good they’ll share them with their friends.
Listen and respond to what your customers are saying about you online.
Build deeper relationships and trust with your customers so they keep coming back for more.

Like the accounting profession, your industry probably has more innovation on the way. History tells us that the sooner you embrace change and adopt the technology the better. Invest some time to educate yourself as to how Twitter, Facebook and Pinterest could potentially grow your business.

Thinking Of Starting Your Own SMSF?

Tue, 20 Sep 2016 06:36:32 GMT

It’s no coincidence that interest in selfmanaged superannuation has skyrocketed since the global financial crisis (GFC). The loss of investor confidence in superannuation fund managers combined with the lure of controlling your own financial destiny has seen an explosion in the number of Self Managed Super Funds (SMSF) in this country.

With almost $408 billion under management, SMSF’s are now the largest and fastestgrowing segment of Australia’s $1.28 trillion superannuation industry. That figure is triple what it was just five years ago. As at September 2010, there were about 434,000 DIY funds with more than 830,000 members. This means that less than 3%of the 32 million superannuation accounts in Australia are in a SMSF but they own almost a third (31.9%) of all the assets.

One of the key motivators for moving to self-managed super is greater control. Your own superannuation fund provides members with control over the range of investments, the management fees and the tax bill. They offer a wider choice of investment options compared to ‘offtheshelf’ super funds including corporate bonds, managed investments, listed shares, listed investment companies (LIC’s), exchange-traded funds (ETF’s) and direct property.

Flexibility is another key benefit of a SMSF. Apart from the wider choice of investments, your account stays with you wherever you go provided you remain within the framework of Australia’s superannuation laws. You can transfer personally owned listed shares and managed funds directly into a SMSF and they can own ‘business real property’ (property used wholly and exclusively for business). SMSF’s also let you take full advantage of tax and super law changes as soon as they come into effect and they arguably offer even more tax benefits when you consider the ability to segregate accounts and to share imputation credits. They provide families with a way to pool their resources, grow their wealth together and transfer wealth between generations. These benefits are not available through conventional superannuation products.

Who Should Have One?

You should only consider a SMSF if you’re attracted to the key benefits of control, flexibility and the tax advantages. Remember, if you have a SMSF you are also responsible for the administration and you must ensure that any funds in your SMSF are invested for the ‘sole purpose’ of accumulating savings for retirement. Given a SMSF is run by related parties, the funds can’t be used for your personal benefit but most breaches of the rules relate to acquiring assets from members or relatives, buying the wrong assets, getting the fund's money confused with their own and providing financial assistance to members and relatives. These are serious transgressions that carry heavy penalties.

To be successful you also need a sound investment strategy and we are often asked what sort of balance is required to set up a SMSF? Research suggests one in four funds have a balance of more than $1 million and a further 25% have assets of between $250,000 and $550,000. Only one in seven funds in the research done by Russell Investments had less than $250,000 in assets. This supports the $200,000 figure proposed by the Federal Government as a minimum level for an economically viable self-managed fund.

This is just the tip of the iceberg when it comes to SMSF’s but you don’t have to know everything about SMSF’s to have one. It is one of our specialist areas and if you are looking to establish your own fund call us today.

Small Business Motor Vehicle Tax Writeoff

Tue, 20 Sep 2016 06:34:19 GMT

The Government will provide Australian small businesses with an instant tax writeoff of the first $5,000 of any motor vehicle purchased from 2012/13. For example, a tradesman on a 30% marginal tax rate, buying a new $33,960 ute would receive an extra tax benefit of $1,275 in the year he purchases the vehicle. The remainder of the purchase value can be transferred into the general small business depreciation pool, which is depreciated at 15% in the first year and 30% in later years.

These reforms will be available to all small businesses, including sole traders and businesses operating through trusts, partnerships and companies. This new small business instant writeoff will effectively replace the Entrepreneurs Tax Offset (ETO), which will be abolished with effect from the 2012/13 income year.

Statutory Formula Reforms for Car Fringe Benefits

Over the next four years, the existing statutory fractions ranging from 7% to 26% applied when working out the taxable value of a car fringe benefit using the ‘statutory formula’ method will be phased out and replaced by a flat rate of 20%.

Under the ‘statutory formula’ method, the taxable value of a car fringe benefit depends on the relevant statutory fraction applied to the cost of the car. Currently, this statutory fraction decreases as the distance travelled by the vehicle increases. The new flat rate of 20% will apply regardless of the distance travelled during the year. The 20% flat rate will only apply to new vehicle contracts entered into after 7:30 pm (AEST) on 10 May 2011, and will be phased in over four years as shown in the table below.

Turn Old Customers Into New Business

Tue, 20 Sep 2016 06:32:24 GMT

If you’re like most small business owners, you want to build a business without spending a fortune on advertising and promotion. Instead, you want to cultivate repeat business and maximize referrals from satisfied customers.

Frederick Reichheld of Bain & Company suggests that it costs 6 to 7 times more to acquire a new customer than retain an existing customer.

His research also indicates that businesses lose as much as half of their customers over a 5 year period but businesses who boosted customer retention rates by as little as 5% saw their profits increase by between 5% and an incredible 95%.

There are some valuable lessons for business owners in this research. Firstly, your marketing strategy needs to focus on retention before acquisition. If you think, once a customer, always a customer – think again. Secondly, you need to have regular ‘touch points’ with your customers through newsletters and emails to remain top of mind.

Incredibly, the vast majority of business owners don’t keep in contact with their customers after the first sale is over. For example, when was the last time you went to a restaurant and they asked for your contact details? When was the last time a tradesmen sent you a newsletter or any correspondence (other than the invoice) after the job was completed? The fact is, most trades people don’t maintain a customer database and simply ‘retire’ the business when they stop working. In most cases, if they maintained a good quality customer database (complete with customer history) they would probably be able sell the business and the goodwill they created over years of service. It’s no coincidence that most franchises incorporate some form of database management into their operations.

From the moment you acquire or start your business you should assume that one day you will want to sell or merge it with another business. To maximise the return on your investment you need to keep the business ‘investor ready’ and a customer database is an essential part of any valuable business. The database essentials include your customer’s name, postal address, purchasing history and email address. From there, the type of information you will want to store in your database will vary depending on the type of business you run. Maintaining your database can sometimes seem tedious, however, it will always be a work in progress and combining your customer database with a consistent and targeted marketing effort will pay handsome dividends over the life of your business.

A customer retention strategy is all about ‘working smarter not harder’. Using reliable systems to capture and update the data will let you sort your customers into groups like how often they buy from you, the types of products they prefer, their location and their average dollar sale. At a mouse click you can identify clients in that group and target them with specific marketing messages. Your database program also needs the functionality to generate emails or print mailing labels.

Your database can be a consolidation of everything you know about every contact, prospect and customer combined into one, easytouse computer program. It might include the customer sales history from your accounting software, email addresses from Outlook and the content from your contact management program.

Microsoft Office applications like Microsoft Access are commonly used and ‘off the shelf’ programs like ACT are not expensive. Most of these programs offer a standard way of capturing customer information, sorting information and producing reports.

In summary, your customer database is a valuable asset and the marketing possibilities are endless.

The greatest compliment we receive from our clients is the referral of their friends, family and small business colleagues. Thank you for your support and trust.

Do You Really Need A Website?

Tue, 20 Sep 2016 06:29:11 GMT

Australian consumers are becoming increasingly comfortable buying their goods online. This has created a wave of controversy recently with prominent business owner Gerry Harvey petitioning the Government to start charging GST on all products purchased online from overseas.

In fact, we are witnessing a major shift in Australian buyer behaviour from instore browsing to savvy online bargain hunters.

You need to recognize that the market is changing and competitors are no longer just in your local area. The strong Australian dollar has also made purchasing from overseas sources more attractive, while the rapid uptake of smart phone technology is increasing the volume of search traffic to providers of goods and services with websites. Consumers now use their smart phones to search for suppliers, compare the best deals and organise home delivery because it’s simpler and more convenient.

Despite these trends, Australian businesses are lagging behind. Research by the MYOB Business Monitor found 65 percent of Australian businesses don’t have a website. The findings also revealed that businesses established for more than 10 years are less likely to have a website (25%) than maturing (32%) or new (36%) businesses.

This prompts the question, “Is building a website really worth the time and money?

According to the research findings, the short answer is absolutely! 30% of businesses with a website reported their revenue had increased in the past 12 months, compared with 23% of businesses without a website. Nearly half (44%) of businesses surveyed agree that they would sell more and get more work if they used the internet better for marketing.

The business types least likely to have a website include:

Agriculture, Forestry and Fishing (19%)
Construction and Trades (23%)

The business types most likely to have a website include:

Manufacturing and Wholesale (49%)
Finance and Insurance (45%)
Retail and Hospitality (45%)
Business, Professional and Property (37%)

Your business needs a web presence so your customers, clients, prospects, potential employees and even investors can readily access information about your business and the products and services you offer. If you are going to take this leap of faith it must look good and contain quality content that ‘talks’ to your target markets. First impressions count and a well designed site can project the image and professionalism of a much larger business. The inverse is also true with large businesses often producing a poor website.

So, what are you waiting for? It’s time to build a website to boost your bottom line.

Start Your Business Engines

Tue, 20 Sep 2016 06:27:23 GMT

A recent report from the ABS titled, ‘Australian Business Entries and Exits' has just buried the myth that four out of five businesses fail in the first year of operation. The report suggests that of the 2.07 million businesses operating in June 2007, 85% were still there a year later and 74% two years on. Of the 316,867 new business entries in 2007 - 08, 71% were still there a year later and there is no explanation as to why 29% ceased. No doubt some were sold and others may have merged.

Of course, some businesses fail but what does failure really mean? If you start a business and realise six months later that you need to change direction and close that business down to start another venture, is that failure? The important point is, most people in business succeed. Surprisingly, the GFC didn't have a big impact on business failures in Australia. The entry rate for new businesses during '2008-'09 was down slightly, from 15.3% to 14.4%, presumably because the GFC deterred people from starting their own business. However, exit rates remained steady at 15.4% for 2007-08 and 2008-09.

As you would expect, the survival rate for startups was highest for those businesses with annual turnover of $2 million or more (85.6%) and lowest for those businesses with less than $50,000 (65.6%). The survival rate for startup businesses that employ staff (82%) is much higher than those that don't employ staff (67%) which may seem odd given many startup business owners are advised to start small, keep costs down and defer the decision to employ staff. The moral of the story is if you have the knowledge and experience in your industry, networks, contacts, financial backing and quality staff in the sales and operations area you have a very good chance of success. In fact, in some cases it will fast track your business success.

The study also profiled businesses in Australia. In June 2009, Australia had more than 2 million businesses. A large percentage of Australian businesses were in the construction industry (17%), followed by professional, scientific and technical services (11%). Rental, hiring and real estate services accounted for 10% of all Australian businesses. There are 1.2 million businesses who are literally sole traders with no staff and there are only 6,349 businesses in Australia with more than 200 employees. This is less than 1% of all Australian businesses that employ staff and the micro sector (with 1 4 employees) makes up 68% (497,098) of businesses who employ staff in Australia. The next rung up is businesses that have 519 employees 233,957 (32%).

Despite all the negative press and lack of finance available, the GFC hasn't destroyed the startup sector in Australia. Indeed, there are plenty of opportunities for smart startups to grow and prosper. Starting a business is a bit like a game of chess that requires the right opening moves. If you're thinking about starting a business come and talk to us today because we are passionate about small business and the success of our clients.

Thinking Of Starting A Small Business?

Tue, 20 Sep 2016 06:26:26 GMT

One of the most important decisions you need to make when starting a small business is the choice of business structure. You should be mindful of the fact that your business can affect:

The safety of your personal assets
Your income tax position
The continuity of the business upon change of ownership and
What registration process you will need to take

There are a number of factors you need to consider regarding the right structure for your new business.

These include the type of business you are setting up, if and how many others are involved in the business, how you want profits (or losses) to be shared and who is going to be legally liable for the debts of the business. Other considerations include the anticipated profitability of the business, the relationship of the owners and the financial and tax positions of all the parties involved. When evaluating your choice of business structure you should look to:

Maximise the Protection of Your Assets
Minimise Tax Exposure (including Capital Gains Tax)
Allow for Admission of New Partners or Investors
Comply with all Legal Requirements

In selecting the type of business structure you always need to consider the potential future application of the discount capital gains tax concessions. In most instances, your particular structure will be some form of compromise between asset protection, income tax, flexibility of income distribution and capital gains tax relief.

The type of legal structures used by Australian business operators in June 2009 showed a 5% drop in the number of partnerships and a 2.5% drop in sole proprietors. In contrast, there was a 3.3% increase in trusts while the number of companies remained stable compared to the previous year.

When It’s Time To Sell Your Business...

Tue, 20 Sep 2016 06:24:58 GMT

It is forecast that 41% of Australian businesses will change hands in the next five years as most owners near retirement age. This would represent the largest shift in business ownership in Australia's history and could have serious consequences for business owners, particularly those relying on the sale proceeds to fund their retirement.

The likely flood of sales also has wider consequences for the Australian community and economy. Given small business employs around 40 per cent of all Australian workers, if a number of small businesses were to cease operation because they were unable to sell, Australia's economy could be directly affected. Struggling businesses may also fall into the hands of overseas buyers which could have an impact on prices and potentially the quality of goods or services.

Many baby boomer business owners will probably find themselves in a very competitive environment because the ageing population suggests there will be fewer buyers in the market. Not only that, the ongoing Global Financial Crisis (GFC) means financial institutions are carefully scrutinising loan applications which is limiting the pool of potential business buyers. Only those businesses with proven financial viability and profitability, together with strong asset backing, will be in the running for loan approvals.

Therefore it is important to think like a buyer. They are looking for things like growth opportunity, wellhoned organisation and management systems, a quality management team, a diversified customer base, acceptable age and condition of plant and equipment and protected intellectual property. It's also incredibly important to structure the sale to minimise tax and if you're looking at a lower sale price than originally expected you must ensure you walk away with the most tax effective outcome.

Only those business owners who are truly prepared are going to achieve the best price. Planning greatly increases the likelihood that you will pass the greatest value (with the least potential liability) to your family and heirs, allow its successful continuation and protect the interests of your employees. It is important to note that planning for the effective transition of a business requires a substantial lead time and if you are contemplating selling the business to an outside party, the actual sale process can take months as the buyer undertakes a due diligence process and negotiates the price and various terms.

So, when should you start planning the sale? The simple answer is, it's never too early for a business owner to engage in advance planning to maximise the value of a business. Similarly, it is critically important that business owners develop and communicate a plan for the effective operation of the business in the event of the owner's sudden absence (due to death, disability or other emergency).

We are living in uncertain times with financial markets and the economy struggling to find some degree of stability. There is little any of us can do to control such global issues but the ‘smart move' is to exercise control over the things we can control. For business owners, this means there is no time like the present for crafting a plan for the future, or revisiting an existing plan to ensure you are still on track.

If you need any help with your business succession plan please do not hesitate to contact our office.

Your Website Is Your Marketing Hub

Tue, 20 Sep 2016 06:22:10 GMT

In the current economic climate your marketing has to achieve more for less. Increasingly your website will be the first point of contact with potential new customers and what type of impression are you making? History tells us that businesses that make the right marketing moves now will emerge from the downturn in a stronger position.

One of those ‘right moves’ is maintaining your marketing efforts and your website should be your marketing hub and attract more visitors, hold their attention and sell to them.

Remember, internet marketing is cheaper than other types of media so let’s look at how you can expand and improve the effectiveness of your website.

Search Engine Optimisation (SEO) – This is used to improve your listing position in search engines like Google. SEO is the art and science of developing page text, keywords, metatags and subject headings that will get your website listed higher in a search engine’s results page. If you haven’t already done so, then now is the time to invest in hiring a web developer to optimize your site using their knowledge and purpose built tools.
Lock In Visitors - Keeping people on your website and getting them to return is a key strategy. Some proven methods include informative free reports such as ebooklets and newsletters they can subscribe to from your home page. This strategy also captures their contact details for future marketing campaigns.
Landing pages should be visually attractive to visitors and introducing rich media such as video can provide a very powerful way of promoting products while a blog provides an informal way to update people on what’s happening with the business and get feedback from visitors. Rework your marketing copy until every single webpage is a perfect sales letter because these improvements will mean better conversion and improved search engine rankings.
You’ll know what’s working and what needs working on by analysing your website statistics. Are the majority of visitors coming to just one page and then leaving? Are visitors starting a shopping cart but then abandoning it? The answers to these questions will help you and your website designer make the necessary changes to improve your website and increase your return on investment.
Prominent Contact Details Make it easy for visitors to contact you by listing your phone number and email address on every page. Sounds obvious but so many websites hide this information.

Small Business Entities

Mon, 19 Sep 2016 14:30:33 GMT

To qualify for Small Business Entity concessions in an income year you must:

Run a business in that year
Have an annual turnover of less than $2 million for that year and the previous year

The ATO provides a list of concessions small business entities may elect to use and include concessions for Capital Gains Tax (refer CGT page).

Election is optional and the rules are designed to reduce the tax and compliance costs for small businesses, enabling you to claim a full deduction for certain prepaid expenses.

Two main Small Business Entity concessions include:

Simplified depreciation rules - Most depreciating assets that cost less than $1,000 each are written off. Most other depreciating assets are pooled and depreciated at 15% in the first year and 30% in the subsequent years if their effective life is less than 25 years. If the effective life is over 25 years then the rate is reduced to 2.5% in the first year and 5% in subsequent years.
Simplified trading stock rules - Businesses only need to conduct stock takes if the value of the stock has not increased or decreased by more than $5,000 over the year.

FURTHER INFO: see the Small business entity concessions essentials section of the ATO website.

Know Your Key Numbers

Mon, 19 Sep 2016 14:17:25 GMT

A recent article in the Australian Financial Review suggested the three main reasons for small business failures were:

Poor financial management (28% of failures)
Poor accounting (16%)
Lack of management experience (15%)

So how do you recognise the warning signs in a business? Key Performance Indicators or KPIs let you monitor what is happening in the business and the power of KPI's comes from a simple concept What you can measure you can manage. KPIs let you know where you stand at any given moment so you can adapt or change your strategy to improve your results right there and then. Knowledge is the power that drives better results and the following KPI’s are simple to track.

Sales - You would be amazed how many small business owners do not have access to an accurate sales figure. Sales are the first indicator of the business trend (up, flat, down).

Gross profit margin as a percentage of sales - This compares the prices you charge your customers with the prices your suppliers charge you. An increase is good, flat lining could be satisfactory while a decrease is an alarm bell.

Profit before tax as a percentage of sales - Ideally this figure should increase but flat could be acceptable but a decrease is definitively a warning sign.

Cash flow forecast - Calculation = Cash at bank + Cash in over the next four weeks – cash out over the next 4 weeks. This calculation for each of the next four weeks will tell you if you have enough money to pay your bills at the end of the month.

Debtor Days - Calculation = Accounts Receivable / Sales x 365. This tells on average, how many days it takes for the money to reach your bank account after you have issued invoices. A decrease is good sign while an increase is an issue.

Creditor Days - Calculation = Accounts Payable / Purchases x 365. This tells on average how many days you take to pay your suppliers. Monitor that figure and compare it to the debtor days. Ideally, creditor days are equal or higher than debtor days. If it is lower, you need to either improve your collection or negotiate better payment terms with suppliers to avoid a cash flow problem (Danger!).

Inventory Days - Calculation = Inventories / Purchases x 365. This tells you on average, how many days the goods you purchase stay in your warehouse or on your shelves before you manage to sell them to your clients. The lower, the better.

Number of customer complaints as a percentage of number of sales - Your customers will stay with you and buy again if they feel looked after, so measuring the number of complaints and taking action to reduce that number helps to build a sustainable business.

Ideally your KPIs need to be tailored to your business and should track those things that clearly tell you at a glance how your business is performing. If you're not measuring your KPIs how will you know if you're on or off track at any given moment? If you don't know the answer to that question it's unlikely you'll achieve your goals.

Negative Gearing Flavour Of The Month?

Mon, 19 Sep 2016 14:15:20 GMT

If you have been reading the press lately you would have seen some bold predictions about future property values on the back of relatively low interest rates, a shortage of affordable housing and rental increases. Despite the threat of higher borrowing costs, groups like QBE LMI predict property prices in Melbourne will grow by 19% over the next three years.

Property research company, BIS Shrapnel, tell us that house prices have risen by an average of 9.4% a year since 1966 when a house could be bought for just $9,350! The median Melbourne house price is now more than $480,000 and BIS Shrapnel forecast this will rise to a staggering $1,056,199 in 2021. Given these facts could it be time to buy an investment property and what are the tax implications?

Clearly, buying an investment property is a significant financial commitment that should be thoroughly researched, carefully planned and most importantly, it must be financially sound. As your accountants, we see our role as helping you understand the tax and cashflow implications of this popular strategy. Many clients think they can’t afford to buy an investment property (or an additional one) so let’s compare the cost of owning a 20 year old flat or unit (costing $400,000) against purchasing an inner city ‘off the plan’ apartment for the same price.

This comparison is purely for illustrative purposes and should not be interpreted as a recommendation to buy any particular type of property. We have made a number of assumptions in producing this table including:

The cost of both properties in Victoria is $400,000
You borrow the full purchase price including stamp duty, conveyancing and legal costs
The interest only loan is at the rate of 7%
Rental income from the ‘off the plan’ property will be slightly higher ($385 vs $340)
Depreciation on furniture and fittings in year one for the ‘off the plan’ property will be $5,000 while the depreciation deduction would be negligible for the established property because of the age and value of the fittings
Construction costs for the off the plan property are $220,000 giving an annual building allowance claim of $5,500
Your marginal tax rate is 31.5% (taxable income between $35,001 and $80,000 at 2009/10 rates)

Given these facts we have prepared a comparative ‘profit and loss’ report and note the following points of difference:

Stamp Duty Savings apply because buying ‘off the plan’ means you only pay stamp duty on what is ‘established’ at the time of purchase. In the example below you will save $18,272.
These stamp duty savings mean you borrow $18,272 less to fund the ‘off the plan’ apartment. As a consequence, your annual interest expense is $1279 less than buying the established property
Depreciation (wear and tear) on fixtures and fittings in the ‘off the plan’ property would be substantial and it is a ‘noncash’ expense that does not involve the payment of any funds
Building Allowance is another ‘noncash’ expense that lets you write off the construction costs of the building. Generally speaking, a residential investment property built after 18th July, 1985 can be depreciated at 2.5% per annum.

The financial analysis of the two properties indicates some significant differences. The after tax cost of owning the ‘off the plan’ apartment in year one is forecast to be only $6487 or $125 per week. The established property is forecast to cost you $12,583 or $241 per week.

This case study was designed to highlight the affordability of a negatively geared property and the impact of the ‘non cash’ deductions for depreciation and building allowance. In no way does it imply that an ’off the plan’ property is a better investment than an established property. We stress the importance of the property's capital growth to the overall wealth creation strategy. If you are thinking of buying an investment property we urge you to consult with our office before you commit to the purchase.

Become A Business Brain Surgeon

Mon, 19 Sep 2016 14:11:29 GMT

Are you working longer and taking home less than your staff? Are you working all hours of the day and night and still barely managing to keep your customers happy? Are you unable to delegate or outsource work to give you more time to work on your business? If the answer to any of these questions is yes, maybe its time you learnt what Brain Surgeons do.

Most business owners we talk to believe almost everything they do in their business, only they can do. They have learnt from experience if they give work to someone else, they mess it up. And then they spend twice as long fixing things. But this is not what Brain Surgeons do. When they operate on a patient, they are not in charge of the theatre the theatre nurse is. They don’t open up the patient, or close. They leave that to a junior surgeon. Everything is prepared for them, and someone else mops up the blood later. All they do is the brain surgery. And some marketing before hand (client needs), and afterwards (client satisfaction).

How is this possible?

Hospitals have very sophisticated systems, and everyone is highly trained in their use. There are checks and counter-checks. Nothing is left to chance. And the very expensive surgeon, the most highly trained person in the theatre, only does what he or she has been trained to do. They don’t waste their time doing jobs others can do. In other words they don’t spend dollar time on penny jobs. So the brain surgeon only does the brain surgery, and a bit of marketing.

This is, of course, a rather simplistic description of a brain surgeon’s job. And I hasten to add an apology to any brain surgeons reading this if they feel insulted (after all, you never know I might need their services in the future some might argue my need is immediate!) The point of this for business owners is to understand where the real brain surgery is in their business. The part of their job that is most valuable to the business. The part only they can do, which for most business owners, is only a very small part of their time.

Examples of brain surgery are: the marketing of your business, the relationships with your key customers, or if you are a consultant, the analysis of the problem you have been asked to solve. Not data entry, or possibly even data collection. And not the bookkeeping. So the challenge for business owners is to identify what part of their role is brain surgery. Theoretically, everything else can and should be delegated or outsourced. So you can spend more time on what generates your business income.

A great theory, but how can you make this happen in the real world?

Business Systems. When you delegate or outsource, you need to document what the person who is doing the work will receive and what they will return to you, complete with standards and the form in which they will provide it to you. Then all involved need training in the system. This takes some work, but for a small investment in your time, the dividends are huge.

The theatre nurse does not know how to do brain surgery, but they know before the operation, what equipment the surgeon will need, and when they will need it. They will also know how the theatre and patient are to be prepared. Detailed procedures will have been developed so everyone in the theatre will know their role, and the brain surgeon will have optimised his or her time doing what they have been specifically trained to do.

When you know where the brain surgery is in your business, you will be able to leverage your time. You will spend more time with your customers, and more time working ON your business, rather than IN it. Ultimately, you will have a business that runs without you.

Reproduced with the permission of Dr Greg Chapman MBA, author of “The Five Pillars of Guaranteed Business Success”.

Visit www.FivePillarsBusinessSuccess.com and download a copy of his free Mission Statements Made Easy Tool.

New Small Business and General Business Tax Break

Mon, 19 Sep 2016 14:09:30 GMT

The Federal Government previously announced that it would introduce a temporary 'investment allowance' giving business owners an additional tax deduction equal to 10% of the cost of eligible depreciating assets. The tax deduction is on top of the usual capital (depreciation) deduction. Qualifying assets costing $1,000 or more will attract the extra deduction provided they were acquired between 13 December 2008 and 30 June 2009 and are installed, ready for use by 30 June 2010.

The Government has now 'upped the ante', increasing both the amount and the scope of the allowance to be known as the 'Small Business and General Business Tax Break'. The tax break can effectively provide a significant reduction in the cost of new plant, equipment, furniture and fittings, vehicles and machinery. Second hand assets do not qualify with the exception of demonstrator vehicles while cars using the ‘cents per kilometre' method of claiming expenses are ineligible.

Under the revised provisions, small businesses with an annual turnover of $2 million or less can claim an additional tax deduction equal to 30% of the cost of eligible assets. These include assets costing $1,000 or more acquired from 13 December 2008 to 30 June 2009 and installed, ready for use by 31 December 2010.

Other businesses can claim the same deductions on eligible assets costing more than $10,000. Assets eligible for the allowance are most new, tangible depreciating assets and new expenditure on existing assets used in carrying on a business. Land and trading stock are excluded from the definition of depreciating assets and will not qualify for the deduction.

To illustrate the benefit, a small business that buys and installs a computer costing $2,000 before the end of June 2009 can claim an additional $600 tax deduction (i.e. 30% of cost) in its 2008/09 tax return.

Financing Asset Acquisitions

Instead of soaking up your working capital or line of credit (i.e. overdraft) to acquire these capital assets many businesses will finance the acquisitions. Pending the passing of the legislation, the investment allowance will be available to businesses when financing asset acquisitions with Hire Purchase Arrangements or Chattel Mortgages.

With lease arrangements, other than luxury car leases, the actual ownership of the asset resides with the lessor and as such, the business acquiring the asset will not be eligible for the investment allowance. As the lessor may be eligible for the investment allowance, finance companies may pass the tax saving on to the lessee but this requires confirmation in each case. If the finance companies do pass on the tax saving, employees who are salary packaging motor vehicles will also benefit from this investment allowance.

For luxury car leases, being leases in respect of passenger vehicles acquired for more than the depreciation cost limit ($57,180 for 2008/09), the taxpayer is required to treat the lease as a loan transaction for tax purposes and as such, claim interest and depreciation deductions, as opposed to the lease payments. In being eligible for the depreciation deduction, the taxpayer is therefore entitled to the Investment Allowance on these vehicles. However, it should be noted that the Investment Allowance is capped at the depreciation cost limit (30% x $57,180 = $17,154).

Tax Bonuses

In March and April 2009 the Government will be providing low and middle income households and individuals with one off payments as part of its $42 billion 'Nation Building and Jobs Plan'. The payments will not be taxable or deemed income for social security purposes.

1. Tax Bonus for Working Australians
This bonus payment will be available to Australian resident taxpayers who paid tax in the 2007/08 financial year (after taking into account available tax offsets and credits). The payment is subject to an income test and eligible taxpayers will receive a:

$900 bonus where their 2007/2008 taxable income was $80,000 or less
$600 bonus where their 2008 taxable income was between $80,001 and $90,000
$250 bonus where their taxable income was between $90,001 and $100,000

Taxpayers will not need to apply for the bonus as the Australian Tax Office (ATO) will automatically make the payment after determining eligibility. However, the tax bonus will only be paid to taxpayers who have lodged their 2007/08 tax return by 30 June 2009.

Note that the ATO has advised people to contact them by the middle of March 2009 on 1300 686 636 if they need to change their address or bank details to ensure the money is deposited into the right bank account or the cheque is mailed to the correct address in early April 2009 (e.g. the address or bank account recorded on your 2008 tax return).

2. Single Income Family Bonus
This oneoff bonus payment of $900 is for families with children that have one main income earner (i.e. families who, on 3 February 2009, were eligible to receive Family Tax Benefit (FTB) Part B). The payments will be made automatically by Centrelink from 11 March 2009.

3. Farmer's Hardship Bonus
The Government will provide a oneoff payment of $950 to farmers and ruraldependent small business owners who, on 3 February 2009, are receiving certain income support and exceptional circumstances relief payments. The payments will be made in the fortnight commencing 24 March 2009.

4. Back to School Bonus
This $950 payment is for families eligible for FTB (Part A) on 3 February 2009 for each eligible child of school age (aged 4 to 18 on 3 February 2009).

5. Training and Learning Bonus
This $950 payment consists of two categories. Eligible students and secondly an additional incentive for social security recipients to return to education and training.

Donations to Bushfire & Flood Emergency Relief Funds

The Tax Office have announced a practical approach to assist those donating to help the victims of the Victorian bushfires and Northern Queensland floods.

People who give to ‘bucket donations' can claim a tax deduction equal to their contribution up to $10 in their 2008/09 tax return without the usual need to keep a receipt.

If people use the web or phone to make a donation over $10, their web receipt or credit card statement will be satisfactory. Others should be provided with a receipt for their contributions.

This also will apply to donations collected through third parties such as banks and retail outlets. Taxpayers should be reminded that only donations to approved organizations (listed as 'deductible gift recipients' at http://www.ato.gov.au/) can be claimed as a tax deduction.

Education Tax Refund Reminder

The Treasurer has called on parents to make sure they keep their receipts to make the most of the new Education Tax Refund. Eligible families will be able to claim a 50% refund (through their tax return) for key education expenses up to:

$750 for each child undertaking primary studies (maximum refund of $375 per child, per year); and
$1,500 for each child undertaking secondary studies (maximum refund of $750 per child, per year)

Qualifying education expenses include :

laptops and home computers and associated costs
home internet connections
printers
educational software
trade tools for use at school
school text books and stationery

Parents entitled to FTB (Part A) for children in primary or secondary school for the relevant financial year are eligible for the Education Tax Refund, as well as parents who would be eligible, but for the fact that the child receives certain payments or allowances, such as Youth Allowance, Disability Support Pension, and ABSTUDY Living Allowance.

How To Save Dollars On Your Mortgage

Mon, 19 Sep 2016 14:05:12 GMT

According to the REIV, the average Victorian homebuyer’s loan has grown to $283,000 which represents a 267% increase since 2001.

Australian families are generally able to borrow around 6.5 times their household income and with the recent interest rate rise and the threat of more to come, it is an opportune time to put your mortgage under the microscope.

Let’s look at the 3 ways to reduce the term and cost of your mortgage:

Get a Cheaper Interest Rate

To illustrate the benefit of a mortgage rate reduction, a 0.7% reduction in rate would save you more than $33,000 over the term of a 25year, $250,000 mortgage. According to a recent survey, the average rate paid on variable rate loans is 7.78% per annum, not the standard variable rate advertised by most major banks of 8.32%. In most cases the standard variable rate is only there so that the big banks can discount it. It’s a great marketing strategy because it makes consumers feel like they’re getting a great deal.

It’s vitally important you choose the right home loan that suits your personal needs. If you want the option of paying off your loan sooner or want a redraw facility, then a fixed home loan is probably not for you. Most lenders also have some sort of ‘deferred establishment fee’ that is charged if the loan is repaid in full within a certain time frame (typically 45 years) so make sure you check the terms and conditions of your loan.

You should also be wary of ‘professional loan packages’ that offer a great rate and bonuses like ‘free’ credit cards. Most banks usually charge you a $300$400 annual fee for the privilege. The same interest rate discounts can be achieved through a basic home loan without any annual fees which means you are actually paying up to $400 per annum for a credit card. Before you sign on the dotted line for a loan we strongly recommend you speak to one of our affiliated mortgage brokers.
Make more Regular Payments

It’s always surprising to learn how many people stick to monthly home loan repayments. By paying fortnightly you can save thousands of dollars simply because there are 26 fortnights in a year – the equivalent of 13 monthly repayments rather than 12. For borrowers who divide their monthly repayment by four and pay weekly, the savings are even higher.
Make Early Extra Repayments
If you are in a position to make extra lump sum repayments on your mortgage you can make the greatest impact by making the payments early in the life of the loan. Every extra dollar you pay off early in the loan early generally means a reduction of the principal and therefore the total interest payable.

Where to Next? Simply bring in or fax your latest mortgage statement and we will put your mortgage under the microscope and calculate the potential savings from an interest rate reduction. Our affiliated mortgage brokers have access to a panel of over 30 lenders with hundreds of different loans and can identify the right loan for you. Call our office today to see if we can save you some money!

Play It Safe With Online Banking

Mon, 19 Sep 2016 14:01:44 GMT

Online banking has become a way of life for most Australians. Understandably, some people have reservations about the security of online banking.

After all, if I can access my own details via the internet, can someone else do the same?

Generally speaking there is very little to be concerned about, however, as hackers become more sophisticated in their scams, we need to be more diligent.

As a guide we recommend you:

Closely monitor your bank balance and transactions

Reconcile your bank account(s) monthly

Take some time to check your credit card statement and watch for duplicate transactions and unknown vendors

Always log onto Internet Banking by typing the website address directly into your internet browser address bar

Do not access Internet Banking from a link on an email

Read the security tips on your bank’s ‘login’ page

Contact your bank immediately you become aware of a problem

The banks will always tell you that their systems are safe. However, safe does not mean foolproof. The ‘fool’ is the one who gets scammed and doesn’t realise that it has happened. The ‘proof’ is what you provide to the bank to get your money back.