Interaction

Introducing Nick Shirley - Graduate Accountant

I joined the Interactive Accounting team in February 2015 as a graduate accountant. In addition to my interest in accounting, I bring with me years of experience managing and working with different retail companies, big and small.


I completed my Bachelor of Accounting in mid-2014 and spent the second half of last year working as an accountant with a Canberra-based, mid-tier firm. The firm specialises in delivering high-quality, business services to the private sector and my focus was primarily on compliance.


In my early twenties, I spent two years living in London, during which time I worked with a small, expanding business and gained great exposure to the challenges that this brings. My time in London was also filled with a lot of travel and good times. Hemingway once said, “If you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you.” For me, this sentiment holds true for my time in London.


After returning from London, I moved to Sydney and started working for American Apparel. This is an exciting, growing company with shops and offices all around the world. I started as Manager of the company’s first Sydney store and was then promoted to acting National Operations Manager. During this time I was responsible for opening two new stores as well as a long list of operational and managerial duties.


Since then, I’ve also worked with smaller local businesses, helping them expand in their respective markets. Now that I am starting out as a professional accountant, I believe that all of these experiences give me a valuable insight into what it takes to run successful businesses.


One of the things that attracted me to Interactive Accounting is the fact that it is a truly modern accounting practice. With a focus on utilising the latest technology combined with high-level customer service, I’m glad to have joined a team that is at the top of their game.

My first month with the firm has been an eye-opening one. I was fortunate to start within a couple of weeks of the company retreat. It was a good opportunity to meet and get to know our Melbourne team as well as take part in a number training and team building activities.


Over the next couple of months, I’m looking forward to developing strong working relationships with our clients and working within an environment that embraces change and is continually looking to improve.



Interactive Team Wednesday, March 11, 2015
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Australian Tax Office Payment Arrangements

We’re coming up to a busy time of year when BAS and income tax returns are due and many small businesses find themselves struggling to include Australian Tax Office (ATO) debts in their cash flow projections. Small businesses currently account for 63% of all outstanding ATO debts, which has sparked a push to toughen up on unpaid debts and unlodged returns, including business activity statements.  To help ensure you survive this busy time, we’ve put together a how to guide for dealing with ATO debts.  

What if I don’t lodge my return or pay my debt?

The ATO have a range of penalties which they can impose for failing to lodge and pay your tax returns on time.  These include:


  • Interest on any outstanding debt accrued at 9.75% p.a

  • Failure to lodge on time penalties - $170 per 28 days up to a maximum of $850

  • Failure to maintain proper records or supply a document to the ATO – up to 75% of your liability

  • Utilising a debt collection agency to recover the debt

  • Issuing a garnishee notice to recover all outstanding amounts from your bank account

Can I get a payment arrangement?

The most important thing to remember is that the ATO aren’t a form of finance, however they do understand that running a small business can be tough and they are often willing to work out a fair and reasonable payment arrangement if need be.  Here are a few tips to help make negotiations more simple:


  • Ensure all outstanding lodgements are brought up to date;

  • The ATO often require an upfront payment of 50% - however if this isn’t possible, offer as much as you possibly can e.g. 25%;

  • The payment arrangement cannot go for any longer than 24 months;

  • Make sure you have taken appropriate steps to ensure the debt level does not happen again e.g.meeting regularly with your accountant or monitoring your cashflow closely on a monthly basis;

  • Estimate how much your need to put aside each month to ensure you can pay your next BAS at the end of the quarter in addition to your instalment and move this to a separate bank account;

  • Make sure the repayments are reasonable for your budget - defaulting on a payment arrangement give you a bad record with the ATO and can make future dealings more difficult.


I have a payment arrangement, now what?

The key to maintaining a payment arrangement is to make sure that you keep paying your installments on time in addition to all future activity statements.  If at any time you have difficulty making your repayments, let the ATO know in advance and they may be able to grant a small extension for this repayment.


For more information, on ATO payments, interest and penalties, see the ATO website.


If you want help, contact support@interactiveaccounting.com.au
Interactive Team Tuesday, March 10, 2015
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March 2015 Tax Update


Research & Development Tax Incentive


For some time now, we’ve been discussing the proposed changes in the rates at which the R&D Tax Incentive will be paid from 1 July 2014. The changes outlined were to change the amounts from 45% (for turnover less than $20 million) and 40% (for turnover greater than $20 million) to 43.5% and 38.5% respectively.


In an interesting development, the Senate has voted down these proposed changes. As a result, for the financial year ending 30 June 2015 and beyond, the rates will remain unchanged, ensuring startups receive the level of R&D funding they currently experience. Great news!


Superannuation: Taxation of Excess Non-Concessional Contributions


Federal Treasury has released exposure draft regulations on the proposed changes to the taxation of excess non-concessional contributions. Non-concessional contributions are any contributions made from a person’s post-tax income (formerly known as undeducted contributions).


Prior to these changes, excess non-concessional contributions could attract excess contributions tax of up to 93%.


The proposed regulations primarily enable superannuation providers to release amounts to individuals that make an election to release non-concessional contributions. The amendments also allow payments under release authorities to meet certain tax liabilities for temporary residents.


The regulations also address the time period for the amendment of assessments to provide the Commissioner with four years rather than the standard two year period where an individual makes an election to release non-concessional contributions from superannuation. Treasury is seeking comments on the proposed changes by 18 March 2015.


ATO moving with the times - One Touch Payroll


On 28 December 2014, the Government announced proposed reforms to the tax and superannuation reporting obligations for employers called Single Touch Payroll. The ATO have now followed up on this announcement releasing a discussion paper detailing the proposed reforms. Single Touch Payroll would require all employers to electronically report payroll and superannuation information to the ATO when their employees are paid using Standard Business Reporting enabled software.


It would also provide a digital channel to simplify the addition of new employees by streamlining TFN declarations and Super Choice forms, and could also notify superannuation funds and government agencies when an employee ceases employment. While employers will be encouraged to use single touch payroll from July 2016, the implementation is planned to be staggered.


Employers with Withholding greater than $100,000 will be expected to use the system from July 2017 and all other employers by July 2018 (some exemptions may apply in exceptional circumstances).


This is an initiative that is expected to have a significant impact on all employers. The ATO is aware that introducing this system will have some negative impacts on business and so is seeking feedback and comments on the proposed operation of the new system. The closing date for submissions is 6 March 2015.


Interactive Team Monday, March 09, 2015
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Why cloud software is starting to get interesting

I started using cloud software like Xero, WorkFlowMax, Unleashed and Shoeboxed for the first time in 2011. Accountants like me became known as early adopters and it was electrifying to be involved in the early stages of the small business cloud software revolution. It was well overdue.

Back then, whilst it was exciting, the little-talked-about truth is there were times where it was challenging and frustrating. The first versions had good basic features but little customisation. A lot of our clients ran businesses that were predominantly professional services, small retail and trade who shared common business models but differed in how they managed their invoicing, payroll and inventory. This meant that early versions of these products only catered for ~80% of client needs. We spent a lot of time creating workarounds and promising that the features and customisation they needed were on the ‘Roadmap’ and coming soon.

Four years on and the advancement of Xero and other cloud products has been as astonishing as its adoption rate. Now that ‘cornerstone’ products in this ecosystem have completed building core functionality and customisation, it now comes down to the “interesting” time where these products can now look to cater for more of the market in more ways. I believe some will keep it simple and broad, utilising the API to allow third-party software to create custom ‘connected solutions’ that a business can custom integrate together to suit their needs. Others will pick one or two verticals and concentrate on building a very robust solution to cater for their specific needs. The first relies on low-cost high volume subscribers whilst the latter will have a high-cost low-volume business model.

What would you prefer?

This will depend on your business model, the size of your business and what legacy systems you have in place. Let me share our experience as an example of the challenges rapid growth can present.

Our business has grown significantly in the last four years and we now have this connected suite of tools we use to run our business that are integrated by API’s. It works really well and is scalable for our current business model. However, as we grow the number of services we offer requires more sophistication and it exposes gaps in functionality.  There have been a couple times where we’ve had to plughole with workarounds. While I loved the flexibility and Lego approach in choosing our suite of products tailored to our needs, I hypothesise what the longevity of our current approach is. I have to admit, there are times where I dream of an all in one product that catered for our needs, current and future. I even wrote about it here. A rich, robust, logical and intuitive product that instead of having 15 chrome tabs open, I had just five, where I could retire products to improve our efficiency rather than adding them.

Cloud-accounting still only represents 8% of the Australian Market and a 2014 survey confirmed that 69% of accountants are already using online accounting software. This represents a huge opportunity for software developers to build products for some 2 million small business in the Australian market alone that let’s face it are probably using Excel. From my perspective, I thought a lot of the enterprise desktop based companies such as MYOB AccountRight, SAP and Reckon were not investing enough in the growing cloud market.  

I was pleased with the release last week of MYOB Advanced. I believe this is an indication that the level of investment targeting business who will become mid-large businesses is increasing. This is great news because not only are the likes of small business software investing in developing more robust and targeted solutions but there is also enterprise level software being modified for smaller businesses.  

Our goal here at Interactive Accounting is to help you grow your business to reach its full potential, this includes using products that are scalable. While we have experienced less than a handful of clients who needed to transition into an enterprise system, it’s comforting to be able to advise you that there will be a greater abundance of cloud solutions available in the near future.

Lisa Callaghan Tuesday, February 10, 2015
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Xero releases Quotes

Long awaited feature “Quotes” has been released in Xero. All users that have been using Invoice Templates, Draft Invoices or Word as a work around can celebrate that quoting can now be done within Xero.


We know that many of you, in the absence of Quotes, have been using quoting add-ons like Quotient and QuoteRoller. If you have gone through the investment of setting up custom templates and a sales tracking process, we recommend that you continue to use those products.


Quotes are great for low frequency sales such as professional services businesses, as the feature has its limitations. There is a simple workflow but no tracking or reports so if sales are core to your business, this is unlikely to be robust enough for your needs.


If quoting is a core part of your business process and you want to find the right solution then contact the team at YourModern.co who can provide you with a systems assessment. Just call Dan Farthing on 0408 353 355.


Here’s a short video to learn how to use quotes

http://vimeo.com/113970830


Other new releases in Xero

Copy quote to purchase order or bill In addition to copying a quote to quote or an invoice, you can now also copy a quote to a purchase order or a bill.

Filter new reports by tracking If you use tracking, you can now filter any of the new style reports by your tracking categories.

Repeating journal placeholders On repeating journals, you can now insert placeholders in both the Narration and Description fields.

Interactive Team Monday, February 09, 2015
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