In My Honest Opinion (IMHO)

Accessorial Liability: when to stay and when to run…


An accessory to a crime is a person who participates knowingly and voluntarily in the commission of a crime. An accessory can be categorised as before or after the fact (the commission of the crime).   They need not be actually present at the scene of the crime in order to be held liable. 

Legalmatch.com

In the bookkeeping world, there is much chatter about “accessorial liability” especially in relation to those providing payroll services for clients. So what is this about and what does it mean? Basically, as per the above quote, if you are involved in contravening the Fair Work Act 2009 and are knowingly doing so, then, if investigated by the Fair Work Ombudsman (FWO), you could be classified as an accessory to the contravention and be prosecuted accordingly. In simple speak, if you are involved in performing payroll tasks for a client (or your employer) and you know that something is being done illegally or incorrectly in relation to the payroll and you do not do anything to rectify it, you have just made yourself an accessory. The FWO is clear about this and there are no if, buts, or maybes. No excuses accepted. So there are 3 aspects to accessorial liability – being involved, knowing it’s happening, and doing nothing to stop it. Is this scary for bookkeepers? You bet your life it is!


Should I stay or should I go now?

So if you’re a bookkeeper reading this and you’re not already scared about your involvement in your clients’ payroll, then you should be! In general, you do your best and bring your expertise and knowledge to the task, and hope that all will be well. But is that enough? Perhaps not it seems. The FWO will have us believe we need to do more in order to avoid becoming an accessory to payroll contraventions. So what can you do if you suspect something is out of kilter with a client’s payroll? Athena Koelmeyer from Workplace Law makes the following suggestions:

  • Arrange for a payroll audit to be performed by a professional HR service. This will uncover any anomalies and errors being made and assistance will be provided to rectify them.
  • Make sure that appropriate processes are in place and are being followed correctly. These processes should include:
    • ensuring employers (your clients) are across their obligations under the Fair Work Act 2009, modern awards and any record-keeping obligations
    • ensuring employees are properly classified under their relevant award
    • ensuring employees pays are correctly in terms of minimum rates of pay, allowances, penalties and loadings
    • ensuring all payroll records are compliant and correct
    • keeping up to date with changes to modern awards, especially pay rates, allowances, loadings, penalty rates etc.
    • conducting regular audits of your payroll set up, especially when using generic software
  • If you discover any anomalies with your client’s payroll, communicate this immediately with the client and ensure that they rectify the situation. Keep written records of the steps that were taken to repair the issue/s. If neither you or your client can rectify the issues, seek professional advice and assistance. Do not ignore the situation.

The above is great advice is should be followed if you are going to provide a best-practice service to your client. As bookkeepers, however, we all know that in reality, making clients cross the t’s and dot the i’s is not as easy as it sounds. Some clients take your advice on board and some don’t for whatever reason. So what is Athena’s advice if you find yourself working with a client who is openly flaunting Fair Work laws and who refuses to make any improvements? Basically, her advice is to

RUN FORREST, RUN!

Athena says you always have to come back to the accessorial liability provisions under section 550 of the Fair Work Act when making your decision about whether to persist or leave. She says that where you are involved (processing payroll) AND you know that payroll processes as above are not sufficient, AND you don’t do anything about it (even if you tried to), you will be seen as an accessory in the event of prosecution. While this is not the forum to go into possible charges and legal consequences of said prosecution, I’m sure you’ll agree that you do not want to go there! Athena recommends that you should terminate your engagement with these types of clients immediately, no questions asked, and just walk away. Before walking away, always put your concerns and any steps taken to rectify the situation in writing to the client and retain this as your record in the event that you are pursued by the FWO. She also advises that you should report non-compliant clients to the FWO as an extra means of protecting yourself. Athena says, and I quote:

If a payroll provider makes a client aware that their systems are not compliant, refuses to participate in the contravening conduct and terminates the relationship with them, then the payroll provider has done all that they can do to make the client aware of their non-compliance and not participate in any contraventions.

Payroll HQ

In my opinion, there isn’t any job worth doing where you are putting yourself at risk of litigation and possible jail time. If you are reading this and you think you may be at risk, then get some advice from a trusted advisor and/or your bookkeeping association. If you are sure you are at risk, then take Athena’s advice and run, run, run, and don’t look back!

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Netflix Tax – A Bookkeeper’s View (from the Trenches)

My last blog was all about the new “Netflix Tax” and was really just an informational blog outlining what, how and when etc. In this blog, I want to look at the tax from a bookkeeper’s perspective and provide a real “from the trenches” viewpoint. All is not what it seems with the Netflix Tax!

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Goody Two-Shoes

Recently I was asked by a client to put a hold on the payment of his employee’s SGC (super guarantee contribution) due to an ongoing dispute between them. I of course, refused to do this because it is illegal to hold SGC payments and/or not pay them at all. Did I do this because I’m a little “Goody Two-Shoes” who always does the right thing? Well, to be honest, there probably is a little bit of that involved, but the real reason why I didn’t play the game with that client is that I am a BAS Agent. As such, I am bound by a strict code of conduct which dictates what I can and cannot do. If being a BAS Agent also means you have to be a “Goody Two-Shoes” then so be it – I’m guilty as charged.

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What you need to know about Single Touch Payroll

The Government are starting to push through some rather drastic measures in regards to how small business reports to the Australian Tax Office (ATO). In my last blog, I wrote about one of those new measures, Simpler BAS – a new way to report GST for SME’s. In today’s blog, I will introduce another new reporting method called “Single Touch Payroll” (STP). As the name suggests, STP will affect business owners who are also employers. Read on to find out some facts if this affects you.

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Simpler BAS – simpler in name only?

The ATO has recognised that there are too many labels to complete on the BAS – you can see just how many if you check out my blog series on BAS Labels – way too many! So, to make things easier for small business, a new “simpler BAS” will be introduced from 1 July 2017. It has been designed to help businesses reduce the time spent on BAS compliance and its associated costs. So how exactly does the “Simpler BAS” work and will it actually simplify our business lives? I’m not so sure…….

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Can you cash out your annual leave? Yes you can!

A recent reform via the Fair Work Commission has seen a major change to the way cashing out of annual leave is treated. For those who don’t know, “cashing-out” means an employee can receive their annual leave as a lump sum payment whilst still working i.e. instead of taking time off work. So how does this work and what does it mean for those affected?

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Has bookkeeping become over-automated?

Automation Text With Gears On Top

This week’s blog is another in our IMHO series and is about an issue I believe has the potential to become a big problem in the bookkeeping world.

YOU: So what is this issue?

Well, lately I’ve started to think that perhaps all of this automation currently occurring within our client’s online bookkeeping files is not such a great thing.

YOU: What? Are you kidding?

Yeah, I hear you – I kind of can’t believe I’m writing this myself!

For the uninitiated, by “automation” I’m talking about cloud-based bookkeeping software that is enhanced by “addons”. So basically, you have the original accounting program and a bunch of other programs integrated with that accounting file. The idea is that these “addons” will make the accounting file perform better but more than that, remove the need for users to have to do many tasks manually, thereby saving them time (and sanity).

YOU: Well, that’s a good thing right?

Yep, bloody fantastic…………. WHEN THE WHOLE SYSTEM IS WORKING CORRECTLY! (yes, I’m shouting ?)

YOU: Doesn’t it save users time?

Absolutely.

YOU: Doesn’t it help us to remember to do tasks and thereby stop things from falling through the cracks?

Oh yeah, you bet it does!

YOU: So what’s the problem?

Glad you asked. ? ?

This is going in caps because yes, I am shouting…….again!

AUTOMATION THAT IS NOT REGULARLY CHECKED BY AN ACTUAL HUMAN BEING WILL LEAD TO A BOOKKEEPING DISASTER!

YOU: But isn’t automation set and forget?

No, I hope not! (The work still needs to be checked on a regular basis)

YOU: So, are you saying that automation can cause errors to occur?

Exactly. Why? Because users think automation = perfection i.e. what could possibly go wrong?

THIS IS NOT THE CASE!

The work still needs to be checked and reviewed regularly by a human being, preferably by your bookkeeper (or other accounting professional).

I’m not against automation, far from it! It does reduce the workload and makes the accounting process a real pleasure……..if it is set up correctly and is monitored regularly.

For medium to large operators, it’s a god-send – 100’s of transactions being created daily without having to touch a computer. Imagine what they can do with the time instead? Go on a holiday, go to the movies, go out for tea or even just get on with running the business itself! Heaven!

You get the picture – automation removes the need to spend hours doing manual bookkeeping.

I LIKE IT!

However, what I don’t like is a fully automated accounting file that:

  • Is not checked by a human being on a regular basis
  • Has not been set up by an experienced, “accredited” user of the addons being utilised
  • Is transacted upon by users who do not understand the addon software or the effect/s it has on the general ledger

All of these things = one thing ⇒ an accounting file that is progressively being destroyed by backend software on an hourly or daily basis.

YOU: What does this mean for users of the file?

For bookkeepers , it means hours of repair work. For business owners it means a nervous breakdown followed by a very large bookkeeping bill!

YAY!

NOT!

Honestly, as a bookkeeper of nearly 17 years, I would rather do the hard yards and do the manual data entry than have to spend hours fixing accounts that have been mutilated by addons which haven’t been regularly monitored.

YOU: What a waste of time! Manual data entry? Are you crazy? She’s obviously one of those old fashioned bookkeepers!

You called it – it’s true, I am! But at least the accounts would be done correctly, first time, every time.

Do you think things will come full circle and we will return to the “good old days” of manual data entry?

Well that last comment was tongue-in-cheek of course………….

I don’t think anyone wants to return to those days……EVER!

But you know what? Given the choice between doing manual data entry or repairing an accounting file that is full of erroneous data due to over-automation, I know which one I’d choose any day!

YOU: So has bookkeeping become over-automated?

Perhaps.

YOU: Do you dislike automation?

Yes, if it causes more problems than it solves! But no, if it’s set up correctly and is regularly transacted on by experienced and trained users.

So it’s your turn now. What do you reckon?

  • Is automation going to end up causing major bookkeeping headaches in the future?
  • Are we headed for a bookkeeping Armageddon?
  • Is it a mistake to completely turn our backs on manual data entry?
  • Are we complicating the accounting process by automating everything?

Off you go, leave your comments below.

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I’m getting a cleaner for the same reasons you should get a bookkeeper

I did something different this week – I employed a house cleaner. Do I really need a house cleaner? Probably not. Can’t I clean my own house? Yes, you bet I can – after 30 years of marriage I’ve had loads of practice! So why a cleaner now? Basically, I’ve decided that my time, especially in terms of my business, is precious and I need to spend it wisely. I’ve finally realised spending 3-4 hours per week cleaning, washing etc, is NOT a wise use of my time. I should be using that time to work in/on my business or just simply relaxing. It’s time to stop trying to do everything myself and give myself a break.

So this move to outsource my cleaning got me thinking…….

There are probably hundreds of business owners out there like me trying to do it all – the actual work, the marketing, customer relations, administration AND…… the bookkeeping. While outsourcing is nothing new, it is certainly hard for some to do and when it comes to bookkeeping, some find it very difficult to let go! But I promise you, by outsourcing your bookkeeping, your business will improve and you will certainly be happier! In my honest opinion, you should engage a bookkeeper for the same reasons I got a cleaner. Here are those reasons:

Time

Like me and my house cleaning, you’ve looked after the bookkeeping for your business for ages and are doing a pretty good job, so why outsource it? Simple! You’ll get more time to get your work done or to work ON your business. You’ll also get more time for YOU. Instead of working after hours and on weekends on your bookkeeping, you can do something else, something you like doing. It’ll be good for the soul, your sanity and your business!

Skills

I’m pretty good at cleaning. I’m careful and do a thorough job. I’m good at it but are my cleaning skills better than those of a professional cleaner? Probably not. My cleaner uses better cleaning agents, better tools and seems to get tasks done much faster (and better) than I can – obviously she knows a few tricks that I don’t know! If you engage a bookkeeper, you’ll find that story will be exactly the same. Even though you’re pretty good at your own bookkeeping, your bookkeeper will always do a better job because s/he has been trained and educated in the field. Like my cleaner, your bookkeeper will do the work faster and better than you’ll ever be able to do it.

Jobs

By outsourcing your bookkeeping (or in my case, the cleaning), you’ll be giving someone a job or helping someone else’s business grow. This can only be good for your local economy. It’s a win-win. You get back some much-needed time and your bookkeeper gets a job or a new client – yay!

Networking

Getting a bookkeeper could be a great networking opportunity – no, really! A contract bookkeeper has many clients and some of those clients might just need the type of service you are providing. Your bookkeeper might even need your services – who knows! The point is, we are more likely to buy from those we know and trust. Your bookkeeper could be your greatest advocate (I’m hoping my cleaner will be one of mine!).

 

There’s an old saying, “just because you can, doesn’t mean you should”. Sure, I could have battled on, working full time and then spending the weekend cleaning, washing, ironing etc – I’m certainly more than capable! The problem with that scenario is that there is a distinct lack of FUN involved! I’m sure if I continued in this vein, I would have ended up burning out, not enjoying my work, my family or my life! Here’s my tip for all you hard-working solopreneurs – in the words of Molly Meldrum, “do yourself a favour” and stop trying to do everything yourself! Outsource what you don’t need to do (even if you can do it) and focus on doing what you’re best at – the actual work! This could be the bookkeeping or perhaps another aspect of your business; whatever it is, delegate it and get your life back!

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IMHO: 3 Reasons why the GST should be broadened and the rate increased

The Goods and Service Tax (GST) in Australia is now 14 years old and it’s rate and structure have not changed since it was first implemented by the Howard-Costello Government in 2000. A debate is currently brewing among our politicians and industry groups about whether or not the GST should be broadened and/or the rate increased. I for one, am in support of both options and below are my 3 reasons for this support.

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