MYOB AccountRight Live is the next generation of MYOB's flagship small business product and it is now generally available to Australian and New Zealand small businesses.
MYOB AccountRight Live is an Australian first for online accounting; you now have the freedom to seamlessly switch between working on your business data locally (offline) and in the cloud (online). It also eliminates much of the time consuming data entry work from your bookkeeping, replacing it with automated daily bankfeeds, delivered securely from your bank. This means you don't have to enter spend money transaction details, they appear from your bank and you simply allocate them to the right account. Similarly receipting money is automated and bank reconciliations are so much easier.
While the product is brand new, it has been keeping similar attributes to previous versions of MYOB built. This means for any existing client moving to AccountRight Live is really easy. All you need to do is upgrade to the latest version and turn on the online features. No learning a new system, no creating new invoice layouts or forms, no rekeying of data – it all just works.
If you choose to run AccountRight Live in the cloud (online) then you'll be able to work from different PCs, maybe work and home, and you'll be able to share access with your staff, bookkeeper and accountant. No more having to move the file between the three of you.
By running in online mode we will make sure your data is backed-up regularly – both onsite and offsite. One of the great features of AccountRight Live, however, is that you can also back-up your data yourself to your PC any time you'd like – always a good idea when you file a BAS or have your year-end accounts ready – or you can choose to have AccountRight do this automatically as often as you'd like.
As well as MYOB there are other software providers such as Zero, Quickbooks, Saasu offering Cloud Accounting Solutions. If you would like to discuss your specific cloud accounting options please do not hesitate to contact your harris black team member.
Some of the issues affecting the economy at present are:
- Sombre thoughts on China, Europe and some parts of Australia.
- The re-elected President Obama has a massive job to lead the American economy and the areas, devastated by the hurricane, back to prosperity.
- The Federal Treasurer has admitted that the Australian government cannot deliver on its small surplus commitment for 2012/13.
- Economic growth about 2% - not a recession, but not exciting.
- Many business operators are querying the viability of business.
- The Reserve Bank has left interest rates unchanged.
- Politicial "uncertainty" in Canberra.
The government obviously has some concerns with the slowing down of economic activity because it has brought forward its mid-year economic review and is reported to have embarked on a serious review of a wide range of government programs in an attempt to reduce expenditure or defer expenditure to a later time. There has been a 'pause' in approval for some government grant programs in an attempt to defer expenditure to a later time.
The mining industry is facing changing economic activity with decreased economic conditions in China, contributing to lower prices for many mineral products.
Some economists are forecasting a significant improvement in economic activity by mid 2013, which could lead to interest rates rising again.
Other economists have a contrary view in that they're not anticipating improved business conditions in the next 12 months.
Debtors' days outstanding (as advised by Dunn & Bradstreet) is approximately 54 days and the Australian Tax Office has stated that approximately $9B is owed by small businesses on Business Activity Statements. These figures confirm that many segments of businesses are experiencing difficult cash flow situations.
Banks are closely monitoring loan performance by their customers.
All of this highlights the necessity for business operators to closely monitor their business operations including:
- Cashflow management with close attention to debtors, stock, work in progress.
- Calculating regularly the KPIs (Key Performance Indicators) applicable to your business as compared to Budgets.
- Preparing regular financial accounts to monitor actual performance.
It's probably a good time to think about the effect that changing interest rates might have on your business. If you're currently operating with a variable rate, perhaps you should consider locking in a fixed rate.
It's a good time to consider risk management strategies and the variables affecting your business including:
- Debtors' days outstanding
- Interest rates – variable or fixed?
- Business performance
- Bank covenant requirements
Times are certainly "choppy" for many businesses. If you'd like us to review the "Risk Management Strategies" for your business, please contact your harris black team member.
As discussed in the above article, Monitoring business performance and understanding areas of risk can help avoid financial problems. Examples of these include:
- Establish Key Performance Indicators (KPIs) for your business and use them.
- Calculate key figures:
- Sales per unit
- Production per person
- Sales per person
- Gross profit %
- Overhead expense %
- Net profit %
- Benchmark your business against similar businesses.
- Arrange to obtain benchmarking data from:
- Industry associations
- Your bank
- Benchmarking businesses
- Insurance policies on key people:
- Death and disablement policies
- Buy/Sell Agreements with shareholders/partners.
- Understand the covenants that your bank has specified for your finance facility.
- Keep your bank manager informed.
If you would like us to assist you in analysing the risks in your business, please contact your harris black team member.
Knowing your competitors is very important in planning a strategy to successfully operate the business. There is a lot of information freely available in the 'business community' in relation to your competitors. If you have not already done so, why not prepare a list of competitors, together with a strengths and weaknesses analysis on them, as compared to your business. You could conduct competitor research by:
- Closely analysing their website;
- Visiting their business premises;
- Maintaining a file on any advertising material you receive, newspaper articles, etc., that features comments on a competitor;
- Ask your customers who they think your competitors are and ask them to give you comments on their experiences with those competitors.
From this type of research, you should be able to develop a profile on each of your competitors listing their strengths, weaknesses, types of products and the services they provide. This will help you to identify the areas in which you don't directly compete with competitors together with other aspects of your business that needs improvement if you're going to effectively compete with those competitors.
This is all part of the process of identifying your 'unique competitive advantage'. Why not maintain the competitor files on an ongoing basis and allocate a couple of hours of your 'quality time' every three months to review your current business strategies as they relate to competitor activity.
- Focus on the activities in your business, which you can control.
- Know your figures.
- Prepare a business plan.
- Communicate your vision to your team.
- Make sure that regular 'tool box' meetings are held with your team.
- Do the basics well:
- Return emails and phone calls
- Arrive on time to meetings
- Supply great service
- Establish your 'unique competitive advantage' and make sure your team members know it.
- Talk to your customers.
- Employ enthusiastic team members.
- Motivate and lead your team.
- Talk to suppliers – can you negotiate better terms or get them to contribute more than just product?
- Monitor your website – is it up-to-date?
- Develop and utilise the services of a team of experienced and enthusiastic experts as if you were a large business:
- Is your accountant offering more than taxation advice?
- Maintain a customer and prospects' database and send them interesting information on your business' products and services, thus emphasising your 'unique competitive advantage'.
- Think and plan an 'exit strategy' as if you are going to sell the business tomorrow.
If you would like to talk to us in relation to implementing any of these types of tips, please contact your harris black team member.
The Inspector-General of Taxation's report into the ATO's use of performance benchmarks to target small businesses who may not be reporting all their income has been released by the Government and it says that improvements can be made.
The report was sparked by concerns raised by tax practitioners and their clients concerning the ATO's use of the benchmarks. The ATO uses the benchmarks to compare the performance of businesses with similar businesses in the same industry. One purpose of the benchmarking is to help identify potential cases for audits, with a particular focus on unreported cash transactions.
The report made 11 recommendations for the ATO to improve its use of the benchmarks, which the ATO has largely accepted. According to the Government, the recommendations should improve the ATO's risk identification and audit selection processes to further exclude compliant businesses from audits, thereby minimising unnecessary compliance costs in relation to the cash economy and GST obligations.
The Government has made a raft of changes concerning living-away-from-home allowances (LAFHAs) and benefits. Essentially, the Government is restricting access to the concessions. Employers and employees who may be affected need to take note. The changes started on 1 October 2012, although there are grandfathering provisions to preserve tax concessions for a limited time for some arrangements that were in place prior to Budget night (8 May 2012).
TIP: The changes raise significant issues for affected employers and employees. If you have any questions, please contact our office.
A recent High Court case has highlighted a need to take a closer look at contracts for the provision of services or goods. The majority of the High Court recently allowed the Tax Commissioner's appeal in relation to a case concerning whether an airline, Qantas, was liable for GST on purchased airfares where the passenger does not turn up for the flight.
Qantas had argued that no GST was payable on unused fares and that the GST that had been paid should be refunded by the Commissioner. The majority held that Qantas was liable for GST and that the taxable supply for which the consideration, being the fare, was received was something less than the actual air travel – namely, Qantas' contractual promise to use "best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline".
The ATO has recently released details of a data-matching program focusing on contractor payments. Under the program, the ATO intends to collect information in relation to payments made to contractors for the 2009–2010 to the 2011–2012 income years by businesses audited by the ATO's employer obligations area. The program will also cover this financial year. According to the ATO, records relating to around 75,000 individuals and entities who have received contract payments from the employers or businesses will be matched.
WARNING: The ATO says its matching capabilities have grown strongly over the years. This financial year, the ATO expects to match over 600 million transactions.
The ATO has advised that it intends to increase its focus this financial year on property developers who have a history of non-compliance with GST obligations. The ATO has observed that some developers have claimed input tax credits throughout the life of a development, but then avoided paying the GST when they sell. The ATO says it has adopted a new approach of identifying and engaging with these developers prior to the sale of a development.
The ATO has issued a warning for individuals to be aware of arrangements that promote deductions for the purchase of offshore "emission units" that do not exist at the time of the arrangement.
"These arrangements, entered into with an offshore entity which may be incorporated in a tax haven, claim to allow participants to deduct the entire purchase price of the offshore 'emission units', while making only a small initial payment," the Commissioner of Taxation Michael D'Ascenzo said. The ATO warns these arrangements may not be legitimate and that those involved could face a large tax bill, substantial penalties or even prosecution.
The ATO has started offering refunds to some individuals who have exceeded their annual superannuation concessional contributions cap. From the 2011–2012 year, there is a once-only opportunity to have excess concessional contributions refunded. The offer will only be made once. If individuals decide to accept the offer, they will pay marginal tax rates on the amount above the cap, instead of paying excess contributions tax.
An individual's choice as to whether to accept the one time only offer, or not, is a final decision and cannot be revoked. Once a taxpayer has received an offer, regardless of whether or not they accept it, they will not be eligible for an offer in future years. The ATO says the offers will be sent directly to the taxpayer's postal address. Election to accept the offer must be returned to the ATO within 28 days of the issue date of the offer.
WARNING: The refund offer provides some relief, but is not without conditions and limitations. Please contact our office for further information.
The ATO has determined for the 2011–2012 year the amounts the Commissioner will accept as estimates of the value of goods taken from trading stock for private use by businesses in certain specified industries. The amounts (which exclude GST) are as follows:
Tania and her husband Peter Newberry welcomed Addison Maree into the world on Thursday 8th November. Congratulations to the Newberry's.
Harris Black advises we will close on 21 December 2012 and re open on 7 January 2013. We thank you for your continued business and support and wish you a Merry Christmas and a Happy and Healthy New Year.