3 cloud accounting tips to save your business time and money

Keeping on top of your accounts is a big part of running a successful and profitable business. But you don’t want to spend ALL your time dealing with bookkeeping and accounting tasks, especially when that time could be spent building customer relationships, or developing new products etc.

So, how do you keep your finances in check, while also spending less time on your accounts?

1. Bringing your accounting into the digital age

Switching to cloud accounting can be a revolutionary step for many business owners, especially when you look at the ways you can streamline and automate the basic accounting tasks.

By using accounting platforms like Xero, QuickBooks, MYOB or Sage, you get all the basics of small business financial management, but with the benefits of smart automation.

With most modern cloud accounting software, you can:

• Automate the scanning and digitisation of your expenses and receipts
• Automatically reconcile your bank transactions with your invoices and bills
• Connect your accounts to other time-saving apps for mileage claims or staff expenses.

2. Getting paid faster and with less admin

With a cloud accounting platform driving your business, you also make it easier to send out e-invoices and get paid faster and more effectively.

Improving your payment times and cash collection can make a huge difference to your cashflow position, and also sets the right expectations with your customers – making it clear that you require to be made on time.

Using the invoicing function in your business software, you can:

• Quickly send out electronic invoices as soon as a job is completed
• Set up automated invoices to be sent out at pre-agreed points in a project
• Include payment buttons on your invoice, so customers can pay via PayPal or card
• Remove the barriers to payment and speed up payment times.

3. Getting a better overview of your important numbers

Using cloud accounting isn’t just about automating the time-consuming financial admin tasks.

By recording and tracking all the financial and non-financial data flowing through your system, your accounting platform can actually provide you with a goldmine of useful real-time information.

With cloud accounting providing your reporting, you can:

• Access totally up-to-date real-time information, to improve your decision-making
• Track your performance against targets to see how well the business is performing
• Monitor spending and budgets to keep your cashflow under control
• Understand your return on investment when it comes to sales and marketing activity
• See how promotion has driven sales but reduced your profit, due to discounting.

Talk to us about setting up a more productive kind of accounting

If you want complete control of your finances and business decision-making, updating your accounting software and processes will be key to achieving that goal.

We can help you implement accounting software into your business, so you can maximise the benefits you get from automation and real-time data.

Get in touch to talk through updating your bookkeeping, payroll and more through cloud accounting.

Is your bookkeeping ready for a digital future?

Keeping up-to-date records of your business transactions isn't the most glamorous part of being an entrepreneur, that’s for sure. But, in reality, having accurate and up-to-date bookkeeping is actually one of the core ways to keep your finances (and your business) under control.

Digital bookkeeping is the future of your finance

The digital age has revolutionised the way many business owners carry out their bookkeeping. From digital accounting to real-time data, the modern bookkeeper is now equipped with the tools and resources to make the job easier, more efficient and (crucially) less time-consuming.

When your bookkeeping goes digital, that means:

Your data entry process gets automated

Receipts, invoices and other supporting documents can all be scanned using OCR software. This gives you a digital copy of the paperwork, but also digitises the data and pulls it into your online ledgers. There’s no need for tedious manual data entry, and you also reduce the chances of human error.

Your digital records are available 24/7 in the cloud

Instead of searching through messy hard drives or dusty filing cabinets, all your financial documentation is available at the press of a button. You can pull up the documents you need at any time of day, from any location with internet access. And everything is safely encrypted and backed up.

Your tax returns can be filed digitally

With all your bookkeeping data saved and accessed via your cloud bookkeeping/accounting software, your tax returns become a lot more straightforward. Whether it’s quarterly GST/VAT returns or annual corporation tax returns, you have all the data the tax office needs, ready to send in a digital format.

Your finance data goes real-time 

Scanning and digitising your receipts at the time you make the transaction doesn’t just keep your records up to date. It also gives you real-time data on all your income, expenditure and operational costs. Instead of working with management information that’s months out of date, you have informative real-time data on which to base all your big business decisions.

You’re 100% in control of your finances

By embracing the benefits of digital bookkeeping, you kick your finances into shape. You and your finance team have accurate real-time records of all income and outgoings, and can stay in complete control of the financial management of the business. Your accounts are in tip-top shape and you're ready to file your tax returns at every significant period throughout the year.

If you want to transform your bookkeeping, now’s the ideal time to go digital.

Talk to us about getting your bookkeeping ready for a digital future.

Once you see the efficiency, accuracy and long-term benefits of digital bookkeeping, you’ll understand why going digital is a no-brainer, whatever type of business you run.

Building and Construction Industry Bookkeeping

Are you looking for expert bookkeepers in the building and construction industry?

We know it's a complex industry, and it's been hit hard recently. Getting professional help to get your business finances under control will help ease the stress of pressures that many in your industry are facing.

Engaging a bookkeeper who is a specialists in your unique industry can help you to sustain your business and even thrive in difficult times.

There are many areas of bookkeeping for the building and construction industry that we often see could be managed better (and more profitably) with sound advice and the right software.

• Tracking work in progress
• Applying customer and supplier deposits
• Allocating progress payments
• Accounting correctly for retentions
• Complex payroll and contractors
• Accurate job costing
• GST and BAS payment planning
• Managing the fixed asset register
• Control of inventory stock levels and costs
• Taxable payments annual report
• Accounts payable and receivable management
• Cash flow forecasting and budgeting

Just like your construction work, using the right administration tools always makes the job easier. Businesses often start with simple accounting and business management software but don't upgrade the admin, payroll and accounting tools in line with business changes or growth.

Talk to us if you’re ready to review or upgrade your current bookkeeping and business systems. 

We can advise on the best accounting software and related add-on solutions for your business and help implement best practices to streamline the administration and accounts.

Let us help your business to thrive.

When to Register Your Business for GST

Should you register your business for GST?

Many business owners register their businesses from day one, regardless of income. Others, for example, many sole traders, choose not to register for GST until it is mandatory.

However, it is common that new businesses don’t realise they have exceeded the income threshold at which they must register! This can result in having to pay GST on sales to the ATO even if you haven’t included it in your prices – so you could lose one-eleventh of your income.

When is GST Registration Compulsory?

Your business must register for GST when it makes $75,000 income within a financial year. If you’re regularly making $6,250 or more each month, it’s time to check whether you should register for GST.

It’s good practice to check your turnover every quarter, and when you are getting close to the threshold, check every month. If you’re not yet using online accounting software, talk to us about your options, as this will make reporting and preparing for GST registration much easier.

You must register for GST within 21 days of reaching the threshold.

Special Rules

• You can voluntarily register even if your turnover is less than $75,000. This means you can complete an annual BAS if you prefer.
• If you’re making money through a ride-sharing platform like Uber, you must register for GST immediately. All commercial driving income, regardless of turnover, is subject to GST registration.
• If you want to claim fuel tax credits, you must register.
• If your business is a not for profit, the registration threshold is $150,000 per financial year.
• If you’re not an Australian resident business, the rules for working out GST turnover are different, so talk to us before registering.

Need Help?

When starting a new business, there are many decisions to make, and GST registration is just one of them. Get in contact about the benefits of registering, and we'll help you get set up on appropriate accounting software to help you on your way to business success.

Automation can ease your business workload

Small and medium-sized businesses are spending on average 120 hours a year on admin tasks, according to recent research into productivity at UK SMBs.

If your people are spending 120 hours wading through tedious and unproductive admin, that’s bad for the business and for your overall efficiency. Fortunately, technology and software automation can go a long way towards automating the low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, artificial intelligence (AI), machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

Automated bookkeeping

Just take a photo of your receipts, expenses and invoices and ‘optical character recognition’ (OCR) technology will digitise the output and pull it through into your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.

Automated credit control 

Chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.

Automated payment collection

The easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.

Automated reporting and forecasting 

The better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.

Automated digital marketing

Digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to schedule and post social media content, or email automation that sends a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about embracing the power of automation

If your admin is starting to hold you back, come and talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review you business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

Contact us to discuss your automation opportunities. 

Basics of business tax

Different business structures pay taxes in different ways, so it's important to have an understanding of the basics.

Although there are many taxes that a business might be affected by, the main ones are:

• goods and services tax
• income tax
• pay as you go withholding tax for employees
• payroll tax
• excise tax

Other taxes that a business could encounter are:

• fringe benefits
• capital gains
• property
• vehicle
• other duties and levies administered by state or local governments

Taxes Paid on the Business Activity Statement

Once your business is registered for the relevant taxes, several are reported and paid as part of the monthly or quarterly activity statement.

• GST is collected from customers and paid to suppliers, and you pay the difference between GST on sales and purchases
• PAYG Withholding for employees or suppliers that don’t provide an Australian Business Number
• PAYG Instalments contribute towards an expected income tax bill
• Other taxes paid on the BAS (if applicable) are fringe benefits instalments, fuel tax credits, wine equalisation tax and luxury car tax

Taxes and Other Fees Paid to State Revenue Offices

Some business taxes are paid directly to the state revenue office, such as land tax for property purchases and payroll tax once the state threshold of reportable wages is reached. Other common government duties include stamp duty on property transfers and land tax.

Income Tax for Businesses

Income tax is calculated after the end of the financial year, taking into account any PAYG instalments already paid.

Tax deductions for business expenses reduce your taxable income and, therefore, your tax bill.

If financial gain is made on the disposal of assets, such as property or shares, capital gains tax is paid on the amount of financial gain and is paid as part of income tax.

Income tax for business is calculated differently according to the type of entity.

Small Business Tax Concessions

Your tax agent can make sure you are claiming all the small business tax benefits that you are allowed through concessions that reduce the amount of tax liability.

For example, there are specific concessions for asset write-off, primary producers, fringe benefits or start-up expenses. Concessions also apply in some situations to reduce the amount of capital gains tax payable.

Thinking of starting or changing your business?

Talk to us about adding or cancelling tax registrations, concessions and planning for the various taxes your business will need to manage.

E-invoicing

Is your business using e-invoicing?

It’s a fantastic way to protect yourself and your customers from invoice scams, and it can help you get paid faster. E-invoices replace emailed PDF invoices or links to online invoices. Instead, e-invoices are delivered securely to your clients, even across different accounting systems.

Preventing invoice fraud

Invoice scams are surprisingly common, and can be quite sophisticated.

For example, with intercepted invoices everything looks exactly right, but the bank account number has been altered. When it happens to you, your client thinks they’ve paid you, but the money has actually gone to a scammer. 

Another example is when you receive notifications from suppliers that their bank account number has changed. But it’s not actually your supplier, it’s fake, and your money is going to a scammer.

In the event of an invoice scam, it can be very difficult to get your money back.

E-invoicing prevents these types of scams because the invoices travel directly from one accounting or payment system to another. By directly connecting suppliers with their clients, there’s no opportunity for scammers to intercept the invoices.

Start sending and receiving e-invoices

When you have your accounting software set up for e-invoicing you can send and receive e-invoices immediately.

You can also use e-invoicing if you don’t use an online accounting platform. There are a number of e-invoicing enabled software providers. Talk to us about which one would suit your business.

It only takes a little bit of time to learn how to use e-invoicing.  And once you have implemented e-invoicing you’re more protected from invoice fraud. So, it’s well worth getting it set up!

We can help you set up your accounting software to send and receive e-invoices immediately. Talk to us about how. 

Keeping your business cash liquid – the difference between cashflow and profit

The foundational goal of any business is to make a profit.

As a business owner, that’s one of your key financial aims – to make enough sales, at a big enough margin, to generate profit from your enterprise.

But how does profit differ from cashflow? And why is cash king?

How do profit and cashflow differ?

To really understand the difference between generating profit and managing cashflow, we need to look at what both these terms mean. You might think that delving into the accounts is a job for your adviser, but being in control of your profit and cashflow is an invaluable business skill.

Let’s take a look at the differences:

What is profit? 

Profit is the surplus that’s left from your income once you’ve paid your expenses, supplier bills and tax etc. It's driven by creating a profit margin and generating value from your products and/or services.

What is cashflow? 

Cashflow is the ongoing process of ensuring that the business has the available cash (or ‘liquid’ cash) needed to operate. This provides the money needed to trade, to pay suppliers, to cover wages or to buy raw materials etc.

Why is positive cashflow so important?

‘Cash is king!’ may be a cliche these days, but it’s a maxim which underpins any successful business model. Yes, it’s great to make a profit at year-end, but if you don’t look after your cashflow then the business may not survive as long as the end of the year.

What’s needed is good cashflow management to enhance your financial health. And without a careful eye on your cash numbers, things can quickly go awry.

A business can generate high revenues and big profits, but still be cashflow poor. In other words, it can have profits at the end of the period, but have very little liquid cash to fund it's day-to-day operations over the course of the period.

Talk to us about improving your cashflow management.

Good cashflow management is all about being in control of your cash inflows (income you’re generating) and your cash outflows (what you’re spending). To achieve ‘positive cashflow’ you need to proactively work to keep your inflows higher than your outflows.

As your bookkeeper and BAS Agent, we’ll help you set up detailed cashflow reporting and forecasting, so you can keep the business in that ideal positive cashflow position. And we’ll also look at key steps for keeping your revenues high, margins profitable and meeting your financial targets.

Get in touch to talk through your cashflow management.

Q3 Deadlines for the Diary

Don’t let the relaxed summer holiday feeling distract you from your business lodgement responsibilities!

Lodgement and payment deadlines still apply, although you get a little extra time this quarter for your December obligations.

To help you get organised for the new year, we've highlighted some upcoming business lodgement due dates.

Talk to Us About Lodgement Planning

If we're already lodging on your behalf, lodgement extensions automatically apply. You may have earlier deadlines if you're lodging activity statements and other forms directly with the ATO.

If you need more time to lodge and pay, let us know, and we can help you meet your obligations or arrange a lodgement extension if required.

Some tax return due dates fall within the first quarter of 2022. Talk to us if you're not sure of your business entity's tax return due date.

It's good practice to plan for your lodgement dates, so you're always ahead of the ATO and also for your cash flow planning. Don't get caught out with a penalty for late lodgement!

We are a registered BAS Agent. Get in touch to organise Busy 01 Consulting and First Class Accounts Ovens and Murray to manage your lodgements.