The recent banking royal commission has highlighted some appalling behaviour on the part of the big banks.
Unfortunately, the recommendations don’t tackle some of the key structural issues that lead to their poor behaviour in the first place. For instance, a lack of separation between their banking and ‘financial product sales’ businesses, which turned ordinary banking customer service clerks into salespeople. Many bank boards also don’t have a mandatory employee representative who can raise issues of malpractice and do something about it from the top down. As a result, the banks have always chased profit at the expense of many individual costumers and as the heat dies down from the royal commission, that same tendency will re-emerge. We’ve had a serious enquiry into banking every 10 to 15 years within the sector since the deregulation of the 1980s because we never fully resolve these issues.
1. They don’t get you the highest possible tax return.
This is a big one for individuals and businesses. Everyone wants to pay the lowest amount of tax possible while sticking within the law. But when you sit with your accountant and they ask you the same stock standard tax questions and habitually punch your details into a computer before churning out your predicted tax bill and quoting you on their fee…. you’re often left doubting that they found every saving possible for you. They’re just doing the bare minimum. Make sure you partner with an accountant who probes you for information, asks follow up questions and gets the information out of you they need to optimise every element of your tax return in your favour. Our staff have deep, up-to-date tax knowledge and they work harder so you enjoy the best possible tax result each year.
With Christmas around the corner, now’s a good time to put some plans in place so you can have a more profitable, less stressful 2019.
Be sure to set goals and plans that are both financial (your budget, loan balances, number of new clients you’d like to attract and personal (holidays, education, credit card balance). The old adage with goals is that they should be SMART – specific, measurable, achievable, realistic and time based. Also, make sure someone knows about your goals and can hold you accountable to achieving them. There’s nothing like a bit of constructive pressure to kick your performance up a gear. With my clients, we break down their next 12 months into 3-month segments and track how they’re doing along the way, making adjustments as we need to.
Once you’re clear on how to set goals, these are some of the areas you might like to focus on in your business over the next 12 months to help take it to new heights.
What are some goals you could develop within each?
What to expect of your Accountant
We all know, from working with tradespeople to real estate agents, there are big differences in performance between the best and worst in any profession.
So, what should you expect from a good accountant?
Here are 5 qualities to look out for. In fact, you should demand them.
As we rapidly approach the end of the financial year, NOW is the time to focus on the best strategies to reduce your tax where possible, to streamline your accounting and bookkeeping procedures, and to forward plan for the new financial year.
Of course the best way to do this is to come in and have a chat with us, so we can discuss your situation and give you personalised advice.
However, to get you thinking, we’ve put together a few tips:
Tax planning strategies
- Top up your super contributions
- Delay invoicing or receipting your income until 1 July
- Realise capital losses to offset against capital gains made during the year
- Small businesses with a turnover under $2 million can claim an immediate deduction for the cost of depreciable assets costing less than $1,000 and certain prepayments (e.g. lease and rent expenses)
- Get rid of slow-moving stock and write-off obsolete stock before 30 June
- Write off bad debts and claim back the GST credits where the debt has been outstanding for more than 12 months
- Review PAYG instalment obligations and consider varying the instalment for the June quarter where the estimate of business income tax payable for the year is less than the instalments raised by the ATO
Accounting & bookkeeping
- Ensure that BAS lodgements and super guarantee contributions are up-to-date
- Behind on tax and BAS payments? Ensure that payment arrangements have been entered into with the ATO and are complied with
- Report salary sacrifice contributions and certain fringe benefits on employee’s PAYG Payment Summaries
- Back up the data file prior to rollover and ensure your records are in good shape
- Review GST codes for profit & loss and balance sheet accounts for correctness
- Have cut-off procedures to ensure matching of income and expenses. For example, ensure suppliers provide the relevant invoices for all purchases and expenses for the period up to the end of June. Also identify work in progress or sales not yet invoiced and raise the relevant invoices for the period up to 30 June.
- Complete stocktakes of inventory. Any unders/overs of stock quantities and spoilage identified from the stocktake process should then be adjusted in the stock module by 30 June and thereby reflected in the financial statements.
- Complete stocktakes of fixed assets. Any adjustments required to the assets register identified in the assets stock take for issues including description, location, quantity and damage/obsolescence needs to be made in the assets module by 30 June and thereby reflected in the financial statements.
- Review the balance sheet and profit & loss statement to confirm:
- Bank accounts and loans are reconciled.
- Receivables and Payables subsidiary ledgers are reconciled to the general ledger.
- GST accounts and PAYG withholding are reconciled to the business activity statements.
- Wages in the profit & loss is reconciled to the PAYG Payment Summaries.
- Capital items such as plant & equipment purchases have not been expensed as repairs.
- Amounts in suspense have been allocated to the appropriate account.
- Fringe benefits tax has been paid on deductions claimed for employees private expenses.
- Material differences to the prior year can be explained.
Planning for the new financial year
There are a few things you can do to improve on the performance of your business this year:
- Prepare/update your business plan to provide solid focus and direction
- Update the budgets for the next 12 months and compare actual to budget.
- Review your current accounting software and upgrade to the latest version to take advantage of new features, or talk to us about other options
- Review credit terms with suppliers and customers and make changes if required
- Review insurances to ensure adequate level of coverage
- Reduce costs in areas identified as excessive in the current year
- Implement new internal control systems to address weaknesses identified
If you need any help at all with your planning, please get in touch. We are here to support you and give you the right advice, whatever stage you’re at.