Interaction

Latest Xero Update

Payroll number of days in a year changes for new organisations (AU)

Xero has removed the option to choose the number of days in a payroll year for new organisations. The default for all new organisations is a 364 day payroll year, however there is no change for existing organisations.

Batch deposits

You can now easily mark sales invoices as paid, generate deposit slips and quickly match deposits during bank reconciliation in Xero- ideal for batch processing of cheques. Batch deposits are also handy if your customers make single payments for multiple invoices.


  • Step 1

In accounts receivable, select the invoices that make up the batch deposit. Then select the ‘deposit’ button below.



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  • Step 2

Select the bank account and enter the deposit reference.


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  • Step 3

‘Print Deposit PDF’ slip or ‘Email Receipt’.


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Faster Spend/Receive Money data entry

You can now enter transactions directly from the Account Transactions tab.

 

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You can now also quickly switch bank accounts when you're working on the Account Transactions tab.


New Profit and Loss report added

A new Profit and Loss report has been added with a clean look and a powerful layout editor, offering editable account groups and formulas. Great if you want to customise your profit and loss.

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Export invoices and bills

It's now easy to get your invoice data out of Xero - not just summarised totals, but line-by-line detail. You can export up to 500 invoices, bills, credit notes, prepayments and overpayments to CSV at one time.

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Receipts for customer invoice payments

From an invoice payment you can now thank your customers for their business and send or print a receipt. Further to that, you can create standard branding themes and email templates specifically for receipts.

Use Xero's new contact search when you're entering transactions. Simply enter at least three key letters of your contact's name.

There is now improved search for contacts when entering transactions. For example, if you want to find one of your taxi contacts, enter 'taxi' and all your contacts containing taxi in their name appear. You can also search for the primary contact person for your contact's organisation.

New inventory item fields

Do you want to add a different message or a purchase/catalogue code for your suppliers? Now you can tailor the default item description seen by customers or suppliers.

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Internet Explorer 8 support discontinued

You can no longer log in to Xero using Internet Explorer 8. If this affects you, please upgrade or switch to a supported browser such as Google Chrome.

Interactive Team Monday, September 22, 2014
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Tax Update for September

The number of legislative tax changes have slowed down in August, mostly due to the winter recess in Federal Parliament. This gives us the perfect opportunity to stop, take a breath and refresh all the recent changes to individual tax, superannuation and as matters affecting small business in this new financial year.

New Policy on individual name changes

Gone are the days that upon changing your name (most common in the case of marriage or divorce), all you needed to do was change it upon lodging your next income tax return. The ATO have advised that from now on if a tax return is lodged with a different name, whether it be first or surname, (without prior notification to the ATO) they will stop processing on the return immediately.

In a major initiative to help stamp out identity theft and tax fraud, the ATO will need to be advised prior to this lodgement occurring of any name changes.

Superstream

Previously we have reported on the new superannuation reporting scheme being introduced titled Superstream. The initial ruling was for employers with twenty or more employees to need to comply with this new regime from 1 July 2014, with employers with less than twenty employees required to begin on 1 July 2015.

Due to unforeseen problems implementing the scheme, employers with twenty or more employees are ‘encouraged’ to comply during this financial year, but it won’t be enforced until 1 July 2015. Essentially this gives larger employers a twelve month window in which to make the change without breaching any regulations.

Employers with less than twenty employees now also have a twelve month window in which to make the changes, meaning it won’t be enforced for them until 1 July 2016.

Small Business Concessions

As reported last month, the carbon tax has been officially repealed. At this stage, the mining tax and all of its associated small business tax concessions still is yet to be repealed. It is still seen as just a matter of time. One of the key concessions that is packaged up with the mining tax is the $6500 immediate asset write-off.

Given it is expected to be reduced from $6500 to $1000 within this financial year, we are advising all clients that from 1 July 2014, any assets purchased with a value greater than $1,000 will need to be depreciated and not claimed as an immediate deduction. Stay tuned for further updates on this matter.

Repeal of Tax Cuts Bill

With the removal of the carbon tax and the impending removal of the mining tax, the government has also moved to repeal the bill handing individual taxpayers a tax break from 1 July 2015. This bill was intended to move the tax free threshold from it’s current level of $18,200 to a new level of $19,400. It also moved to change some of the marginal tax rates. This move will now not proceed.

New CGT tool for individual taxpayers

The ATO have introduced a new online calculator to help individual taxpayers assess their CGT liability and whether they qualify for the CGT 50% discount. When making a business or investment decision and you are unsure of the tax consequences, don’t hesitate to contact the Interactive Accounting team. We are here to help. If you would like to take a brief look yourself prior to doing this, the calculator is simple and easy to use and can be found here.

As always, if you are concerned that some of these changes may affect you and you wish for further advice, don't hesitate to contact the Interactive Accounting team.

Interactive Team Tuesday, September 02, 2014
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What Can you Claim in your Individual Tax Return?

It's that time of the year to lodge your individual tax return! Here’s what you should be keeping track of outside what’s claimed in your business return or what your employer provides you.

Business % use of

  • Mobile phone 
  • Home Internet

Other deductions

  • Union fees and subscriptions to trade, business or professional associations Professional seminars, courses, conferences and workshops .
  • Reference books, technical journals and trade magazines. 
  • Tools and equipment and professional libraries. You maybe able to claim an immediate deduction for an item that cost $300 or less. Otherwise, you claim a deduction for the decline in value of an item over its effective life. 
  • Items that protect you from the risk of injury or illness posed by your work or your work environment, such as hard hats, safety glasses and sunscreens.  
  • Repair costs for your computer. 
  • The decline in value of your computer.

Home office expenses

Keep a diary of the details of your actual costs and your work related use of your home office. Alternatively, you can use a fixed rate of $0.34 cents p/h for heating, cooling, lighting and the decline in value of furniture in your home office.

Motor Vehicle Expenses

You can choose one of four methods to work out your car expenses. If you qualify to use more than one method, you can use whichever gives you the largest deduction or is most convenient. These methods are:

  1. Cents per kilometre 
  2. 12% of original value 
  3. One-third of actual expenses, or 
  4. A logbook.

Travel Expenses

This question is about travel expenses you incur that are directly related to your work as an employee. They include:

  • Public transport, air travel and taxi fares. 
  • Bridge and road tolls, parking fees and short-term car hire. 
  • Meal, accommodation and incidental expenses you incur while away overnight for work. 
  • Expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as utility trucks and panel vans. 
  • Actual expenses (such as any petrol, oil and repair costs) you incur to travel in a car that is owned or leased by someone else.

Work-related clothing and laundry

This question is about expenses you incurred as an employee for work-related:

  • Protective clothing Uniforms. 
  • Occupation-specific clothing. 
  • Laundering and dry-cleaning of clothing listed above.

You can claim the cost of a work uniform that is distinctive (such as one that has your employer's logo permanently attached to it) and it must be either:

  1. A non-compulsory uniform that your employer has registered with AusIndustry (check with your employer if you are not sure), or 
  2. A compulsory uniform that can be a set of clothing or a single item that identifies you as an employee of an organisation. There must be a strictly enforced policy making it compulsory to wear that clothing at work. Items may include shoes, stockings, socks and jumpers where they are an essential part of a distinctive compulsory uniform and the colour, style and type are specified in your employer's policy.

You can also claim the cost of:

  • Occupation-specific clothing which allows people to easily recognise that occupation (such as the checked pants a chef wears when working) and which are not for everyday use 
  •  Protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include fire-resistant clothing, sun protection clothing, safety-coloured vests, non-slip nurse's shoes, steel-capped boots, gloves, overalls, aprons, and heavy duty shirts and trousers (but not jeans). 
  •  You can also claim the cost of renting, repairing and cleaning any of the above work-related clothing.
You cannot claim the cost of purchasing or cleaning plain uniforms or clothes, such as black trousers, white shirts, suits or stockings, even if your employer requires you to wear them.

Self-Education Expenses

Self-education expenses that are related to your work as an employee and that you incur when you do a course to get a formal qualification from a school, college, university or other place of education. To claim a deduction for self-education expenses, you must have met one of the following conditions when you incurred the expense:

  1. The course maintained or improved a skill or specific knowledge required for your then current work activities.
  2. You could show that the course was leading to, or was likely to lead to, increased income from your then current work activities, or 
  3. Other circumstances existed which established a direct connection between the course and your then current work activities. 
You cannot claim a deduction for self-education for a course that relates only in a general way to your current employment or profession, or will enable you to get new employment.

Medical expenses

Legislation has changed regarding eligibility for the net medical expenses tax offset, restricting those who can claim and what medical expenses can be claimed. To be eligible to claim this offset you must have either:

  1. Received this offset in your 2012–13 income tax assessment; or 
  2. Paid for medical expenses relating to disability aids, attendant care or aged care.

Documents to keep:

  • Medicare Benefit Statement. 
  • Private Health Insurance Claim Benefit Statement. 
  • Chemist receipts or statement. 
  • Receipts or invoices for payments to hospitals, doctors, dentists, opticians and chemists for expenses relating to an illness or operation. 
  • Documents for any payments made to residential aged care facilities.

You should keep these documents that relate to you, as well as payments made for your dependants. This generally refers to your spouse and children, but may also include other dependants.

If you have any questions about your Individual Tax Return, don't hesitate to contact the Interactive Accounting team. We're here to help!

Source : ato.gov.au

Interactive Team Monday, September 01, 2014
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Xero Payroll Changes and Helpful Tips




As you might have noticed, the way Xero payroll works has changed a bit. The main difference for pay runs created after the 18th of August is that bills no longer need to be created after the pay run is posted.

Don’t like reading? Xero explains the payroll changes in their video here.

How does it work? How do I reconcile wage payments? What do I do with pay runs created prior to the 18th of August?

Excellent questions!

New payroll works by utilising what’s called a clearing account. By default the account is 804 called “Wages Payable - Payroll”, but it might differ for your organisation depending on your payroll settings.


When a pay run is posted, the balance on the account increases. This makes sense as when you run a payroll you record wages, but since you have not yet paid them from your bank account, you owe them to your employees. This amount is recorded as a liability in the Wages Payable account and will be reflected in your balance sheet.

What happens when wages are physically paid? Well, your liability needs to be decreased! This happens when you reconcile the wage payments to account 804.



But wait you may say, if I already added something to account 804 when I posted the pay run and now I reconcile to the account again, would it not further increase the total on the account? A good point, the total on the account should revert back to $0, as payments made to employees are offsetting the liability on the account. Here is how it looks within the account.



Once wages are reconciled, it is a good idea to check if account goes back to $0 and is cleared (hence it is called clearing account by accountants).

For any pay runs created prior to the 18th of August, nothing has changed. You will still be able to create bills and match wage payments to the bill.

Another minor change is ...

Now you can add notes to an employee record in Xero! Unfortunately no file attachments yet, but it is a move in the right direction.



Interactive Team Friday, August 29, 2014
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Xerocon Sydney Wrap Up 2014

Every year Xerocon comes to town and its a great opportunity for our new staff to attend and really get an understanding on how big Xero and the ecosystem is. The target audience is accountants but here’s what’s important for you, our Xero users.

Xero’s New Market Space

The size of Xero’s add-on ecosystem is now over 350 integrated applications. Previously, it was difficult for you to be able to find the specific add-on application you're looking for. Xero has announced its new Market Space making it far easier to navigate through the different applications and see user ratings.

You can check it out here.

If you need to help deciding what app is right for you, just contact us and we'd be happy to help you.

New Features coming up soon…


  • Batch Deposits - Just like batch payments you'll shortly be able to easily batch your income invoices. Great if you have a merchant facility. We've been waiting for this one for a while and we're excited to see its launch as it’s going to save heaps of time! 
  • Files will be available in the employment section so you can attach contracts and other documents to employees. 
  • Expanding the functionality from the API. For example, CGU will be able to assess your workers compensation liability from your Xero file.
  • More from your Xero dashboard. You'll have better visibility over your cash-flow and business performance with more graphs and data displayed on your Xero dashboard.
  • Improvements to reporting section so you will be able to create your own reports, formulas and layouts.
  • Quotes are coming soon so it will be seamless to turn quotes into sales. 
  • Submitting bills through the mobile app will make it easier for those paying for expenses via a company credit card to upload receipt straight to Xero.
Interactive Team Monday, August 25, 2014
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