Interaction

So you've heard people talk about it but what exactly is VOIP? Here's a brief summary of what VOIP is, the pros, the cons and what you need to get started.

Voice Over Internet Protocol (VOIP) is basically voice communication over the internet and is now widely used in todays consumer market and business sectors to reduce telephony expense...no more expensive phone bills!

VOIP for home use

Back in the days when the internet was not so popular, which is hard to believe I know, we were all paying extortionately high international call fees to keep in touch with our friends and/or family members. Now, thanks to the rise of internet and VOIP, international communication is no longer an expensive task at all.

What do you need to make a VOIP call at home?

The setup of a home VOIP is fairly straight forward and can be done within minutes. Most VOIP routers bought from the VOIP provider would have been pre-configured which makes everything to be plug-n-play. A typical VOIP configuration for the home user requires the following items which can be easily obtained from any computer store:

1. A VOIP provider (click here for a comparison list of Australian VOIP providers)
2. An internet conection
3. A VOIP enabled router (some standard internet routers have these built in but others don't, you will need to check)
4. A traditional telephone

VOIP for business use

In the business environment, the telephone system is usually be more complicated. Generally speaking, a receptionist will be the first point of contact of all telephone calls. After the call has been answered, the call are is put on hold while the receptionist intercoms the desired colleague. The call is then put through to the corresponding person.

The above scenario would easily be achievable with a PBX (Private Branch Exchange). A PBX is a switch which can be transferred calls back and forth. There is both office based PBX hardware and cloud based PBX systems on the market. While they all can get the work done, the office based PBX hardware usually costs thousands of dollars up front but the cloud based PBX usually un on a monthly subscription basis.

What's good about VOIP?

• Its cheap! Since VOIP is all based on the internet, the cost for using VOIP is comparatively lower than the telephone companies. The difference is even more significant in long-distance communication.
• A conference call can be done anywhere with anyone. It is not limited geographically, or to the number of people participating in the conversation. 
• It enhances efficiency.

What's bad about VOIP?

• VOIP relies on a stable internet so the quality of the internet connection can greatly affect the quality of VOIP. In the case of a blackout or your internet connection drops out then VOIP is not usable at all.
• This also means that it may not be as reliable or clear as traditional telephone.

What we think

Whilst VOIP can bring a lot of convenience and savings in cost, it is always limited to your internet connectivity.  Also, you should never solely depend on VOIP as your only telephone system. Always have a back up plan such as a mobile phone just in case you need it in an emergency.

Xero’s Acquisition Mantra:
Xero has maintained it’s speciality is delivering a Small-Medium accounting tool focusing on the single ledger since it’s inception. Looking to open up it’s platform through it’s API to other developers.

Workflow Max is widely used by Accountants in the Modern Practice as the preferred Workflow tool featuring document storage, Tax (in New Zealand) and the ability to track leads and communication with clients.

Xero & Workflow Max History

Xero openly acquired 15.9% of WorkflowMax in December, 2010 in order to assist in facilitation of building out the tax modules for New Zealand.

The acquisition of the remainder of WorkflowMax has been undertaken to tighten up the links between WorkflowMax’s practice Management and Xero’s Practice Management suite. With all accountants with >20 Xero subscriptions now getting WorkflowMax gratis.

From Left to Right: Chris Spence (co-founder), Guy Pearson (Interactive Accounting), Gavin George (co-founder). Xerocon 2012 (NZ)

Xero’s intentions for WorkflowMax

Xero will leave WorkflowMax as an application in it’s eco system as a standalone and will not close it’s integration points in the open market with the view that other firms and clients that use it will continue to build up Xero’s accounting partner acquisition.

Personally, I can’t wait for Xero’s design and UX/UI team to have a field day with this application!

There is an ever increasing move for Accounting firms to move online, this acquisition will no doubt speed up the process. With Hubone’s sync engine (Microsoft, WorkflowMax and Xero sync tool) and Practice Ignition (client facing modern practice) coming in to production shortly, our industry is set to speed up it’s move towards a connected way of doing business.

Congratulations

A huge congratulations to Gavin and Chris, WorkflowMax’s Co-Founders, their lean, mean and green application has come a long way since I first laid eyes on it in 2009 and I’d like to take this opportunity to thank them both for providing kick ass service, a great sounding board and a beer or two from time to time.

It was Valentine’s Day yesterday (in case you wondered why you were in trouble today) although love was not the main reason why over 200 accountants and bookkeepers gathered at Four Points Sheraton, Sydney....The Xero Roadshow had come to town.

After receiving our name badges other Xero goodies and a coffee we headed into the main room  to take our seats and quietly unwrap and devour the chocolate heart that the Xero team had lovingly placed on every table....apologies to the woman who arrived late next to me who didn't get one. 

Wayne Schmidt, Xero National Sales Manager and owner of the shiniest shoes I have ever seen, kicked off the day in his usual charismatic and infectious style with an introduction on Xero and what lay in store for the day ahead.

After a brief break Joel Hanna, National Training Specialist and Xero Jedi Knight, ran through some of the processes involved in converting customers from MYOB into Xero amongst other Jedi like tips and tricks...the force is strong with this one.

Lunch came and I caught up with the guys from Fathom, one of the events sponsors. Usually, the mention of analysis and reporting tools doesn’t really get blood pumping, however, one look at this new add on for Xero and I realise this is something completely different. At last someone has come along and actually ‘designed’ a reporting and analysis tool that is easy to understand for the even most financially illiterate and also looks totally awesome...good work guys.

In the afternoon there were more helpful tips from Xero Jedi Knight, Joel Hanna, on the general use and configuration of Xero...the force is strong with this one.

After another chocolate heart and more coffee, Chris Ridd, Managing Director of Xero Aus, touched on some of the new Xero features to come this year including:

• Ability to import and export budgets
• Integrated payroll
• Xero personal bank feeds
• Report packs (closed and full release)
• Android app
• Purchase Orders
• Tax code updates

It’s going to be an exciting year for Xero and users of Xero!

Stuart Mcleod, General Payroll Manager and Founder of Paycyle, then took us through the introduction of Payroll to Xero. A huge win for Xero, as this is one of the features that was felt as missing in the Xero offering. Stuart explained that as well as getting it’s own button on Xero it will also include the following features:

• Xero style reports
• Super and tax liability in money going out
• Leave liability included in balance sheet
• PAYG liability hooked to BAS reporting
• Time sheets for employees 
• Expenses syncing as reimbursements

This is great news for users of Xero, congrats to Stuart and the team. We look forward to it’s implementation in April!

Wayne then wrapped up the day with a summary of how we are now living through a new evolution of computing, coming from the first industrial computers, then to PC’s and now The Cloud. He’s right, computing has come along way and when he harked back to past computing practices and software such as Wordperfect and Lotus123, I’m glad it has.

Don’t be left behind, if you haven’t already moved your business to the cloud, then maybe 2012 is the year to do so. Exciting times are ahead!

Never is a tax topic more hotly disputed, misunderstood and argued than that of fringe benefits tax especially when it come to Meal Entertainment. With fringe benefits season just around the corner the issue will once again rear its ugly head.

It is easy to understand the position of many small business operators who take a clients and business associate out to lunch or down to the local coffee shop. These types of social meetings are a great way to start a business relationship, build a repore with a key person, seal the deal or to express gratitude. Many come to the conclusion that if it is a meeting has a direct nexus to their business that the cost of meal and drinks is a business expense and fully deductible.

The ATO are clear on this – not only is meal entertainment not deductible it is also subject to Fringe Benefits Tax. The ATO’s argument is that food and drink are sustenance for our body and therefore not business related and are of a private nature.

The ATO have produced the following scenarios and outlined what the deductibility and Fringe Benefit treatment are.

Minor Benefits – Exemption from Fringe Benefits

To be eligible for this provision the taxable value must be under $300 per employee and be infrequent and irregular.

The ATO have stipulated that “it is not appropriate to specify the number of times associated benefits that are identical or similar to a minor benefit, or benefits provided in connection with the minor benefit, can be provided while satisfying the 'infrequency and irregularity' criterion. However, the more often and regular those benefits are provided, the less likely that this criterion would be satisfied”

This is an absolutely impractical response from the ATO and honestly has many accountants in our industry frustrated that there are not clear guidelines on this issue. In Taxation Ruling TR 2007/12 It concludes that an employer who provides a Christmas party for its staff fails to qualify because the benefit is not infrequent as a Christmas party is arranged annually for the staff and hence occurs on a regular basis. On the other hand the ATO have released a fact sheet entitled Fringe Benefits Tax and Christmas Parties and includes the use of the minor benefit exemption in the examples it provides.

Our position at Interactive Accounting is to concentrate on the regularity instead of the frequency so that if the benefit is provided on a regular basis, every week, month, quarter or year then it does not qualify for the exemption. If the benefit occurs ad-hoc or on a one-time only basis then it will qualify as a minor benefit.

Conclusion

If you are incurring and claiming meal entertainment in your accounts you have two choices. Keeps records and pay the appropriate FBT or have the meal entertainment that is applicable to you and your employees paid out as dividends. If you are unsure about your obligations please contact support@interactiveaccounting.com.au

Remember: GST is only claimable on the tax-deductible portion.