Business

 

Business Management
 

Advisers to Privately Owned Businesses

Within small businesses, there tends to be only one or two persons who will make all management choices with regards to accounting, finance, personnel, processing or servicing, selling and marketing. This is done without the aid of internal specialists and often with detailed knowledge in only one or two functional areas. The term “knowledge or expertise gap” is an important area which has long been the point of discussion.

Having a full time finance executive or director is not an option for many privately owned businesses. Most often we find that business owners cannot efficiently handle financial matters which results in this part of the business becoming a burden, this is where an external service can help alleviate these issues.

Our clients often feel more secured and confident when they know that their financial affairs are being handled by a professional.

Many businesses face one or more of the following issues:

  • Rapid and uncontrolled growth resulting in cash flow shortages

  • Lower than anticipated profits

  • Lack of adequate finance

  • Insufficient financial and management information on which to base important business decisions

  • Lack of adequate management personnel and structure

  • Inadequate short and long term planning

  • Deciding whether to purchase another business or to expand

  • Issues such as these can be resolved with the appropriate information and advice.

Our aspiration is to be able to assist with the growth and maintenance of our clients business.

Business News

Essential record keeping at year-end
Essential record keeping at year-end

Staying on top of record-keeping all year round can save time, reduce stress for small business owners and help to maximise your tax return. Although record-keeping can seem like a tedious job, it is an essential part of running a business Good record-keeping makes it easier to meet your tax obligations, helps to manage your cash flow and make sound business decisions. Putting the hard work in at the end of each financial year can get your business organised and help you work smarter in the year ahead. Essential business records that must be kept include: Expense or purchase records: You must keep records of all business expenses, such as receipts, tax invoices, cheque book receipts, credit card vouchers and diaries to record small cash expenses. Year-end records: These records include lists of creditors or debtors and worksheets to calculate depreciating assets, stock-take sheets and capital gains tax records. Income and sales records: You must keep records of all income and sale transactions such as tax invoices, receipt books, cash register tapes and records of cash sales. Bank records: Documents such as bank statements, loan documents and bank deposit books need to be kept in preparation for your tax return. Fuel tax credits: To claim fuel tax credits for your business, records must show that you acquired the fuel, used it in your business, and applied the correct rate when calculating how much you are eligible to claim. Payments to employees and contractors: Records of your workers need to be kept, including tax file numbers, withholding declaration forms, contributions to their superannuation, wages and any other payments made to them. By law, business records must be kept for a minimum period of five years for sole traders and individuals and seven years for companies’ and payroll transactions after the record is created, updated, the transaction is completed or the return in which they were included was lodged, whichever is the latter. Records can be kept electronically or on paper, must be in English or in a form that can be easily converted, and thoroughly explain all transactions. Failure to keep the correct tax records can incur penalties from the ATO. #Reporting #Bookkeeping #SmallBusiness #Business

How Single Touch Payroll will impact you
How Single Touch Payroll will impact you

Single Touch Payroll or STP is a new regulation that will change how information such as wages, super contributions, PAYG withheld etc is reported to the ATO. Before STP was introduced businesses previously reported such information to the ATO once a year. The reports then would be submitted to the ATO digitally in a specific format. How STP will impact when you report payroll Previously small businesses would finalise their payroll records at the end of the financial year. They would need to generate and submit to the ATO a: Payment Summary Annual Report. The report would state the amount of wages the business paid, PAYG withheld and superannuation contributions the business made Payments Summary/PAYG Summary for each employee. The PAYG summary would contain information such as the total salary that was paid to the employee, payroll taxes that was collected during the year and the superannuation contributions the employer contributed The introduction of STP means that businesses will no longer need to issue a Payment Summary Annual Report or Payment Summaries to each employee. Why payment summary annual reports are no longer needed STP requires employers to report payroll information to the ATO on a pay-by-pay basis, this removes the need for a payment summary annual report. Instead the employer will advise the ATO once they have made the last pay run of the financial year for their employees. Why employee payment summaries are no longer needed The ATO will use STP payroll reports as the single source of information regarding each employee’s wages paid, taxes collected and super contributions. This will remove the need to issue employees with payment summaries. Employees can access the information that used to be contained in payment summaries through their myGov account. Online Reporting Paper forms for payroll activity will become a thing of the past. Employers will need to submit the information digitally using the SBR (Standard Business Reporting) format. Businesses will need to check how they are currently completing payroll. Businesses may need to change/upgrade their software or find a service provider that will be able to generate reports that are compliant with the ATO’s standards. STP Deadline Businesses with less than 20 employees do not have a STP deadline at current. Small Business Advisors predict that STP will become compulsory from 1 July 2019. For businesses with more than 20 employees, STP commenced on 1 July 2018. How to be STP ready ​ Businesses will need to ensure that they have the software/service provider that will enable them to submit compliant reports every payday. Businesses using online payroll software will need to ensure that the software can produce ATO compliant reports. Businesses that use a desktop payroll software will need to find a service provider that can convert the report so it is compliant, and upload and submit the reports on the businesses’ behalf Businesses that use spreadsheets or pen and paper will need to find a service provider that can convert the data into a compliant report and upload and submit the reports on the businesses’ behalf Depending on what method your business is using you may need to find a new service provider or switch to a software provider that is STP enabled and compliant. Please contact us on admin@lockwood.com.au or 02 9299 7044 if you have any questions regarding STP. #STP

Tax incentives for early stage investors
Tax incentives for early stage investors

In March 2016, the parliament introduced a bill proposing new tax incentives for innovation aiming to encourage new investment in Australian early-stage innovation companies by providing qualifying investors, who invest in such companies, with a tax offset and a capital gains tax exemption for their investments. The new legislation can be quite confusing, so to make it easier we have summarised the changes here. The benefit From 1 July 2016, if you invest in a qualifying early stage innovation company (ESIC), you may be eligible for tax incentives. The tax incentives provide eligible investors who purchase new shares with: a non-refundable carry forward tax offset equal to 20% of the amount paid for their qualifying investments. This is capped at a maximum tax offset amount of $200,000 for the investor and their affiliates combined for their investments in each income year a modified capital gains tax (CGT) treatment, under which capital gains on qualifying shares that are continuously held for at least 12 months and less than ten years are exempt from CGT. Capital losses on shares held less than ten years must be disregarded. Who is eligible? To be eligible for the incentives, an investor must meet the 'sophisticated investor' test under the Corporations Act 2001 or, the investors’ total investment in qualifying companies must be $50,000 or less for that income year. The incentive will be available for investments in companies that satisfy two requirements: That the company is early stage, determined against criteria related to expenditure, assessable income, stock exchange listing and incorporation. That the company is involved in innovation, determined by allowing the company to self‑assess against either a principles-based test or a points-based gateway test, or by receiving a determination from the Australian Tax Office. What is a qualifying startup? Generally, an Australian-incorporated company will qualify as an early-stage innovation company (ESIC) if it meets the tests of being at an early-stage of its development (the early stage test) and it is developing new or significantly improved innovations with the purpose of commercialisation to generate an economic return (the innovation test). The early stage test A company must pass four tests to satisfy the early-stage test: The company must have been incorporated in Australia within the last three income years The company and any of its wholly-owned subsidiaries must have not incurred ‘total expenses’ of more than $1,000,000 in the previous income year The company and any of its wholly-owned subsidiaries must have derived assessable income of no more than $200,000 in the previous income year The company must not be listed on any stock exchange The innovation test In order for companies to determine if they satisfy the innovation test, qualifying ESIC test companies may choose to: Apply their circumstances against the objective tests – must have at least 100 points as judged by the criteria here Self-assess their circumstances against the principles-based test. The company needs to be genuinely focused on developing its new or significantly improved innovation for commercialisation and must have the potential for high-growth, scalability, can address a broader than local market and has competitive advantages Seek a ruling from the Commissioner about whether their circumstances satisfy the principles-based test What are the reporting requirements for the ESIC? ESICs that receive investments from one or more investor entities in a financial year will need to provide information about those entities to the Commissioner by 31 July of the following financial year. ESICs will need to provide this information in the ‘approved form’. If you require any further information or wish to discuss these tax incentives, call us today on 02 9299 7044. Sources: ato.gov.au, innovation.gov.au #ESIC

Essential record keeping at year-end
Essential record keeping at year-end

Staying on top of record-keeping all year round can save time, reduce stress for small business owners and help to maximise your tax return. Although record-keeping can seem like a tedious job, it is an essential part of running a business Good record-keeping makes it easier to meet your tax obligations, helps to manage your cash flow and make sound business decisions. Putting the hard work in at the end of each financial year can get your business organised and help you work smarter in the year ahead. Essential business records that must be kept include: Expense or purchase records: You must keep records of all business expenses, such as receipts, tax invoices, cheque book receipts, credit card vouchers and diaries to record small cash expenses. Year-end records: These records include lists of creditors or debtors and worksheets to calculate depreciating assets, stock-take sheets and capital gains tax records. Income and sales records: You must keep records of all income and sale transactions such as tax invoices, receipt books, cash register tapes and records of cash sales. Bank records: Documents such as bank statements, loan documents and bank deposit books need to be kept in preparation for your tax return. Fuel tax credits: To claim fuel tax credits for your business, records must show that you acquired the fuel, used it in your business, and applied the correct rate when calculating how much you are eligible to claim. Payments to employees and contractors: Records of your workers need to be kept, including tax file numbers, withholding declaration forms, contributions to their superannuation, wages and any other payments made to them. By law, business records must be kept for a minimum period of five years for sole traders and individuals and seven years for companies’ and payroll transactions after the record is created, updated, the transaction is completed or the return in which they were included was lodged, whichever is the latter. Records can be kept electronically or on paper, must be in English or in a form that can be easily converted, and thoroughly explain all transactions. Failure to keep the correct tax records can incur penalties from the ATO. #Reporting #Bookkeeping #SmallBusiness #Business

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Essential record keeping at year-end

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