There are a lot of terms used when we start to talk about the GST or a BAS in the BAS Agents’ world. We BAS Agents know what they mean of course but do you as the client or interested reader know what they mean? Here is a list of GST tax terms and their meanings:
…How to Speak “GST” Read More »
The area of “meal entertainment” is an absolute minefield for accounting professionals like us. It can be very difficult to know when an expense incurred by a client relating to food or drink should be recorded with GST or not. Luckily there is a resource out there via the ATO that brings some clarity to the situation.
…Meal entertainment: when does GST apply? Read More »
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!
…Netflix Tax – A Bookkeeper’s View (from the Trenches)Read More »
Netflix Tax – A Bookkeeper’s View (from the Trenches) Read More »
For some time now, larger IT companies have been charging GST to their Australian consumers. Examples of these are Google, Adobe and Linkedin. They are doing this because of a new law that began formally on 1 July 2017. This new law is known colloquially as the “Netflix Tax”, requires all international companies with an annual GST turnover of $75K or more and selling services and digital products to Australian consumers, to enter the Australian GST system. While most of us aren’t too impressed with the 10% price hike on these products, GST registered business owners understand that they can claim the GST back in their BAS which alleviates the sting a little……or so they thought! Sadly, this is not the case with this new law. The “Netflix Tax” tells us something different and if you’re not paying attention, you or your BAS Agent are likely to get things wrong when processing your next BAS. Read on.
…Registered for GST? What you need to know about the Netflix Tax.Read More »
Registered for GST? What you need to know about the Netflix Tax. Read More »
At this time of year we’re all thinking about Christmas and one of the best songs for the festive season is “The 12 Days of Christmas”. In keeping with this theme, this week we’re bringing you our 12 very best bookkeeping tips – it’s our gift to you! These tips will suit business owners at every stage, from start ups to old hands. Enjoy!
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12 Best Bookkeeping Tips (you’re welcome) Read More »
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!
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!
However, what I don’t like is a fully automated accounting file that:
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!
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?
Off you go, leave your comments below.
Has bookkeeping become over-automated? Read More »
So you have an awesome bookkeeper who keeps your business accounts super organised. S/he keeps on top of slow paying customers, reminds you to pay your bills, provides some pretty slick-looking reports and has those boring conversations with your accountant that you always avoid. Sounds like you’re onto a winner – good for you! Now you’ve decided to go one step further and you’re going to ask your bookkeeper to prepare and lodge your BAS on your behalf. Okay, well before you do, you’d better ask him/her these 3 key questions:
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Want your bookkeeper to prepare & lodge your BAS? Better ask these 3 questions first!Read More »
Want your bookkeeper to prepare & lodge your BAS? Better ask these 3 questions first! Read More »
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:
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!
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.
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!
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!
I’m getting a cleaner for the same reasons you should get a bookkeeper Read More »
It’s pretty obvious that I’m a fan of blogging. I’ve been writing this one for some 5 years now and really enjoy doing so. The other day I got to thinking about whether other bookkeepers blogged at all and thought that it would be great to get a list together of some of these blogs to share. I asked some fellow bookies on FaceBook and also did my own research via Mr Google. After searching some 30 pages on Google I found a few gold nuggets, 24 of them to be exact! Here is my list of 24 awesome Australian bookkeeping blogs:
…24 awesome Australian bookkeeping blogs Read More »
Unless you are a bookkeeper or other tax professional, you probably won’t know what a suspense account is or how to use it. It certainly isn’t a group of bookkeepers waiting with bated breathe for something but you could be forgiven for thinking it was! A suspense account is an account to which transactions that are unclear or require further discussion are allocated i.e. they are kept in suspense. The suspense account is used frequently by tax professionals but maybe something quite foreign to business owners. If it is used properly, the suspense account can be very helpful for both parties in terms of bookkeeping.
Never ever guess where and/or how transactions should be posted in the accounts. This will result in your tax professional firstly having to find those erroneous transactions and then secondly having to reallocate them to their correct accounts. This takes time and costs you money! Instead, set up an “other expense” account and call it “Suspense” then allocate any transactions that you are unclear about to this account. Next, advise your tax professional about what you have done and why. He/she will allocate these transactions to their correct accounts for you. This helps to avoid mistakes and double-handling of transactions.
As you process a client’s accounts you are likely to come across transactions that are not clear to you. Never guess or assume that you know what a transaction is, instead just post it to the suspense account. Once you have reconciled all of the other transactions, you will be left with a list of “query” transactions in the suspense account. Send this list to your client and ask for further information about the transactions and if necessary, copies of the invoices or receipts to assist you. When you have all of the required information, you will be able to properly allocate the “query” transactions as required. By putting these transactions in the suspense account, you will still be able to reconcile the bank account to ensure the closing balance is correct.
Some tax professionals don’t like suspense accounts, preferring instead to leave query transactions out until they can discuss them with the client. I prefer to use a suspense account because doing so allows me to reconcile the bank account which may uncover other issues such as missing transactions or double-entered transactions etc. I also like the idea of putting all “query” transactions into one account so that a report can be raised from that account and given to the client to review – it’s nice and tidy :-). Business owners doing their own data entry can also benefit greatly from using a suspense account. Instead of wasting valuable time trying to work out what to do with a troubling transaction, they can simply allocate it to suspense and ask their bookkeeper or tax agent to deal with it. A suspense account, in my opinion, is a very handy little tool!
When your accounts are being kept in suspense………. Read More »