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A great opportunity exists for you to practice some of your new bookkeeping skills that you may have learnt at university/tafe and earn $$ in the process. An opportunity exists for a casual junior cloud bookkeeping assistant in our virtual team. If this sounds like something you would enjoy, click the link below for more details and to apply now. We look forward to hearing from you.

Christmas presents and tax

Christmas Parties and Presents – and Tax!

Christmas Parties and Presents – and Tax! Christmas is a great time to acknowledge and reward your employees and other associates by celebrating and giving gifts. But don’t get caught out by entertainment rules! Claiming entertainment and gifts as business … Read More

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Do you want to move towards efficient and sustainable digital business administration? We can help you set up digital business systems.

Streamline your business administration with digital record keeping

Streamline your business administration with digital record keeping Good record keeping is the mainstay of accounts management. It assists you to both meet your compliance obligations and provide verification for all your business transactions. The Government requires that relevant records … Read More

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Is your cost of goods sold (COGS) impacting your gross profit? We’ll help you understand your goods-related expenses and drive a better profit margin on your products.

Is your cost of sales affecting gross profit?

Is your cost of sales affecting your gross profit? Do you know how much it costs you to produce each product or service in your range? The better you can understand this cost of sales – or cost of goods … Read More

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Do you want to understand more about PAYGI and PAYGW? If you’re new to business or going to employ people, you’ll need to withhold income tax payments for employees and plan for income tax payments for your business.

What’s the difference between PAYGI, and PAYGW?

What’s the Difference Between PAYGI and PAYGW? Many people new to running a business and employing people are unsure about the difference between PAYGI and PAYGW. They are not the same thing! PAYG stands for ‘pay as you go’. This … Read More

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Cash is King. To work out how fast you can grow your business, you need to look at your projected cashflow. Talk to us. We are here to help.

Cash is not profit, and vice versa

Cash is not profit and vice versa The purpose of a business is to make money, and that means you have to know the difference between profit and cashflow. Net profit is what you have left after you deduct all … Read More

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Should you buy or lease your business assets?

There are certain items of equipment, machinery and hardware that are essential to the operation of your business – whether it’s the delivery van you use to run your home-delivery food service, or the high-end digital printer you use to run your print business.

But when a critical business asset is required, should you buy this item outright, or should you lease the item and pay for it in handy monthly instalments?

To buy or to lease? That is the question

Buying new pieces of business equipment, plant, machinery or vehicles can be an expensive investment. So, depending on your financial situation, it’s important to weigh up the pros and cons of buying, or opting for a leasing option.

First of all, let’s look at why you might decide to buy the item…

Buying: the pros and cons:

  • Pro: It’s a tangible asset – when you buy an item, you own the item outright and it will appear on your balance sheet as one your business assets. As such, by owning these assets outright you increase the perceived capital and value of your business. You can also claim the cost of the asset against your capital allowance for tax purposes.
  • Pro: It’s yours for the life of the asset – once you own the item, you have full use of the equipment for the duration of the life of the asset. Your use of the asset isn’t reliant on you being able to keep up regular lease payments, and if your financial circumstances change then you can sell the asset to free up the capital.
  • Con: It’s an expensive outlay – paying for the item up-front is a large outlay for the business and will require you having the cash to cover this cost. Spending a large lump sum in this way may take cash away from other areas of the business, so you need to be 100% sure that this purchase is the right decision and a sound investment.
  • Con: You may require extra funding – if you don’t have the liquid cash available to buy the item outright, you may need to take out a loan. Asset finance is available from funding providers, but does tie you into a loan agreement that will add to your liabilities as a business – reducing your worth on the balance sheet.

Leasing: the pros and cons:

  • Pro: Leasing has a cheaper entry point – if the item you need to purchase has a large price tag, leasing allows you to make use of the asset without the cost of buying it in full. For startups and smaller businesses with minimal capital behind them, this can make leasing a very attractive option. You may not own the asset, but you can make use of it – and this may be the difference between the success or failure of your business.
  • Pro: You can spread the cost – there is still an associated cost of leasing, but you can spread the cost over a longer period, making it easier to find the necessary liquid cash to meet your lease payments. With this money saved, you can then invest in other areas of the business, helping you to expand, grow and bring in more customers and revenue.
  • Con: You don’t own the asset – there are different types of leasing agreement. Under a capital lease, you do own the asset (once you’ve paid if off). But if you opt for an operating lease, this is a more short-term lease and you won’t own the asset at the end of the contract. Ownership does have its advantages (including being able to sell off the asset if required) so it’s important to consider what kind of leasing agreement you’re entering into and what the advantages/disadvantages may be.
  • Con: You may pay more in the long run – most leasing agreements will attract additional costs and interest on your agreement, so you may well end up paying more than the market price for your asset in the long term. If you can cope with the higher cost, this is fine, but bear in mind that buying outright may have offered greater value.
  • Con: You may lose the use of the asset – if you can’t keep up your lease payments (due to poor cashflow for example) then the owner of the lease agreement may recall the asset. If this item is crucial to your business model, losing this key asset can have a profound impact on your ability to operate. In this respect, leasing is a more risky prospect, but also an easier option for businesses with less cash to splash.

Talk to us about whether buying or leasing is the best way forward

Whether you opt to buy or lease your equipment isn’t always a straightforward decision to make – so it’s a good idea to consult with your accountant early on in the decision-making process.

We’ll help you review your current financial position, assess your available cashflow and look at your regular cost base to decide whether buying or leasing is the right thing for the business.

 


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Choosing the right apps for your business

 

Software technology has evolved massively in the past decade, with cloud-based apps now fundamental to many of the internal and external processes in your business. To ensure you’re getting the best from the available tech, it’s important to choose the right apps and to create the ideal ‘app stack’ for a business in your specific sector

But how do you know if the latest ‘must-have app’ is really going to be an asset or just an additional software cost? The Xero app store is a good place to start so that your apps integrate with your accounting system.

Ascend Solutions connected workflows

Building the perfect app stack

Before you dive headfirst into the Xero app store, it’s important to do your homework and give yourself some firm foundations on which to base your app purchase decisions.

For example:

  • Decide on the main aims of your software systems – Look at the specific aims of the business and tie each app into the various operations within your business model. A construction company, for example, will need a site management tool, staffing solutions, health & safety tools and an inventory app, to mention just a few.
  • Make sure your apps integrate with Xero – Xero’s open API (application programming interface) allows all the apps in the app store to connect directly with Xero. This means that data and financial information can flow seamlessly between your apps and Xero, helping you keep all your management information up to date.
  • Look for opportunities to automate manual processes – if there’s a low-level manual process in your business, try to find a way for your apps to automate this. For example, a credit control app, like Chaser, will send out automatic payment reminders to your customers if their invoice becomes overdue. And a bookkeeping app, like Receipt Bank, will snap photos of your receipts and automatically digitise and code the contents.
  • Research the app market in depth – Look at online reviews, talk to your industry network and find out which apps your peers trust and would recommend. Where possible, try out free trials and demos, so you have had some hands-on experience of the apps in your shortlist. The more user time you have, the easier your purchasing decisions will be.
  • Look for an excellent user interface (UI) – if you and your team are going to be using an app every day, it needs to be easy to use, with a small learning curve. Choose apps that have a great UI and offer a quality user experience. The sooner you can get up and running with your solution, the more value this app will add for the business.
  • Partner with apps who offer excellent customer support – the functionality and ease-of-use of your app are obviously important considerations when you’re looking to buy. But don’t underestimate the importance of solid, helpful and personalised customer support. Look for apps with phone support, good customer service ratings and a happy and satisfied user base – check app forums to get the lowdown on this.

Talk to us about your app requirements

Our job as your accountant isn’t just to deal with your numbers. We can also help you review your operations, formulate the most efficient systems and choose the apps that can deliver the most effective and productive business performance.

If you’re looking to create your perfect app stack, We’ll help you navigate the Xero app store and create a perfectly connected and integrated Xero system.

 


What’s the ideal software for your business?

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Super Guarantee Rate is Set to Rise from July – Are You Prepared?

The superannuation guarantee statutory rate has remained at 9.5% since July 2014. However, plans have been in place for some years now, to increase the rate to 12% incrementally.

In July 2021, the rate will rise to 10%. From then on, the rate will increase by 0.5% each year until July 2025 when it will reach the legislated 12%.

Prior to the delayed 2020 federal budget, there was discussion about the possibility of deferring the rate rise because of COVID-19. However, the rate rise had been postponed from 2018 to 2021, so the plans to start increasing the rate each year remain in place – at least for now.

super guarantee to rise

Prepare Now for the July Rate Rise

  • Review your current superannuation costs for all employees, both hourly and salaried.
  • Review any salary packaging arrangements. Is the agreement inclusive of superannuation or is super paid on top of the agreed salary?
  • For salary packages inclusive of super, you will need to check the contract’s wording to make sure you apply the changes correctly. This change may also impact annualised salary arrangements.
  • Calculate your revised payroll costs from July, showing the current wages and superannuation expense compared to the new rate from July 2021. Highlight the increased amount per month or quarter, so you know precisely what the impact will be.
  • Discuss the super rate increase with your employees now. Let them know that this is the first year since 2014 that the rate has risen and that unless the law changes, there will be an increase of 0.5% each year from now until July 2025 when the statutory rate will reach 12%.
  • Remember – short payment or late payment of super can incur hefty penalties – plan now for higher payroll expenses from July, so you don’t get caught short.

If you’d like help reviewing payroll costs and employee agreements, talk to us now, and we’ll make sure you have accurate reports to make planning for the rate rise easy. Getting organised now means that you’ll be well prepared for your business’s increased costs when the first payment is due later this year.

 

 

 

 


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