Tag Archives: Accounting software

Logitech MX MASTER 3S mouse review

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You don’t know what a product can do till you find time to have a good play with it. This is exactly what happened when I reviewed the Logitech Master 3S mouse. I had been reviewing the MX mechanical keyboard and learnt about its extra features. This prompted me to dig into the features of the 3S mouse, and I am very pleased with the outcome.

The Logitech MX Master 3S is a high-quality precision mouse enabling additional functionality with customisable buttons and the use of your thumb.

What makes MX Master 3S mouse different?

This mouse has 7 buttons (including the centre scroll wheel button) and 2 scroll wheels. A standard mouse has 2 buttons and possibly 1 scroll wheel. The two traditional mouse buttons are where you expect them to be. The five additional buttons all come with a default function. Still, by launching the Logi Options+ app, you can customise each switch to perform a task. There are 45 options to choose from, some of which can be seen in the diagram below. Your thumb plays a big role in accessing the extra buttons and scroll wheel.

Further customisation of functions is available by applications such as your browser, excel or adobe application.

The MX Master 3S is great for creative and engineering work where fine detail is important. The mouse optical sensor can be set up to 8,00DPI, allowing precise movement. This mouse will work on a glass table which a normal mouse cannot.

The mouse allows usage on up to three devices by pressing a button on the underside to switch between devices. Further, If you also have an MX keyboard and Logi software. You can control different devices simply by moving your mouse between screens even though they are other Windows and Mac PCs. The keyboard will respond to the device your mouse pointer is on.

What’s in the box

At an RRP of $169.95, this keyboard is certainly at the top end.

Opening the box, you will find the mouse, a Bluetooth dongle (in case your PC does not have Bluetooth built-in) and a USB-C charging cable (USB-A to USB-C). This cable’s quality is excellent and has a Velcro strap for cable management.

The mouse is available in colours of graphite or white.

What I liked about the MX Master 3S mouse.

I previously reviewed the Logitech vertical mouse but found its ergonomic design did not suit me. The 3S, however, does suit me. I find it comfortable to use and extremely responsive, and the extra buttons are easy to reach. The mouse’s height is higher than I was using, making it a bit tight in my desk. I have a separate keyboard shelf that must be fully extended to use the mouse properly.

The game-changer for me has been to customise the buttons. I do a lot of copying and pasting as well as screen sniping and back button, so no surprise these have all been reprogramed. This saves me time and makes the functions so easy to access.

The scroll and buttons are very quiet, and scrolling can be done quickly, which is useful on a web page. The side scroll is also brilliant on spreadsheets.

Setup

The MX mouse uses a low-energy Bluetooth wireless connection. My PC is six years old and runs Windows 10. I charged the mouse to full and turned on the power switch to set up the mouse. With no software being downloaded, my PC immediately produced a popup box asking if I wanted to connect the mouse. I said yes, and it was operational in seconds.

Logitech has a PC application Logi Options+ from which firmware can be upgraded, mouse buttons can be customised, and scroll speeds changed. A handy feature is the customised settings can be backed up to the Logi cloud.

The battery percentage indicator is shown in the app and the windows Bluetooth page. A 1-minute charge will give you 3 hours of use, and a fully charged battery is quoted as providing 70 days of use.

Should you upgrade your mouse to a Logitech MX Master 3S

The Logitech MX Master 3S mouse is an investment in your productivity and comfort. If you are still using the mouse that came with your PC or a cheap one, you will immediately question why you did not get a better mouse sooner.

Whether a professional wanting better accuracy with the mouse or simply a user that a few extra custom keys will increase your productivity, this product will likely pay for itself.

Its design is super comfortable, and the buttons respond with a satisfying click. This mouse allows your thumb to come into play, adding a whole new world for extra functionality.

EFTPOS accepting credit cards

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Depending on the type of business you are running or planning to start, it is important to make it as easy as possible to receive payment in a face to face scenario.  You have two main options today, which are cash or credit card.  In the future, we will see other money transfer options driven by smartphones, but today we will focus on credit cards. You will need an EFTPOS solution (Electronic Funds Transfer at Point Of Sale) to facilitate this. This guide looks at what is involved in offering EFTPOS in your business.

An EFTPOS terminal or machine is an electronic device that assists in transferring funds from a customer’s bank account to your business bank account. To pay at an EFTPOS terminal, your customers must have an EFTPOS card, Debit Card, or Credit Card. You can also load the identity of your credit card onto your mobile phone and use that as a tap solution with an EFTPOS terminal. The EFTPOS solution does need the internet to function. The transaction settlement into your account normally occurs the same day or overnight.

WHY is EFTPOS easier?

EFTPOS is a convenient form of paying for the consumer as they do not need to carry cash. Indeed modern solutions don’t even need a card to be carried with payment able to be done from a watch, phone, or even a ring.

The merchant (you) reduces your need to have cash, less change, fewer security concerns, fewer visits to the bank, less counting, etc.  Instead, money is quickly transferred, and the time taken to tap & go a card is significantly quicker than other methods allowing you to move on to your next customer faster.

One might also argue that using EFTPOS makes a customer less concerned about cost as a tap is more vanilla than counting out notes.

WHAT EFTPOS fees are there?

EFTPOS Solutions are available from different providers, including banks and independent software developers. Some providers offer a flat fee, with other fees applied to each payment option, so it is worth shopping around. Any of the following fees may apply:

  • Price per month. A set fee that will be charged per month up to a certain dollar value of card transactions, after which you will be charged a fee as a percentage of every purchase over that dollar value.
  • Credit card authorisation fees. These are fees charged when an inquiry is made to ensure funds are available on a card before a transaction is processed.
  • Credit card service merchant fee. This fee may be charged by the bank when you process a credit card and is generally expressed as a percentage. Some cards have higher fees than others, like American Express.  It is your decision about which cards you will accept. Some retailers choose to pass this fee onto their customers, but there is government restriction as to how much you can pass on. https://www.accc.gov.au/consumers/prices-surcharges-receipts/credit-debit-prepaid-card-surcharges.
  • Payment terminal and account fees. You may be charged fees for administering your account, installing your payment terminal, or establishing your account. Establishment fees, cancellation fees, and equipment fees may also apply.
  • Chargeback fees. If the cardholder disputes a credit card transaction, you will be charged a fee.
  • Terminal access fee. This is a rental fee for providing and maintaining your EFTPOS terminal.
  • Debit card fees. You may be charged fees for processing debit purchase transactions or for a customer getting cash out at an EFTPOS terminal.
  • Sign up offers. Rental fees or others may be waived for the first x months of operation.

HOW do I pick which EFTPOS terminal is right for me?

EFTPOS terminals can come with several different features to consider when deciding which provider to choose:

  • Portable payment terminals. Not all terminals need to be plugged into a power point, and a portable unit has a battery and uses the mobile phone data network to transact.
  • Connect to a smartphone. This is a device that will connect to your smartphone physically or wirelessly. It allows the credit card to be tapped or inserted to complete the transaction via an app on your smartphone.
  • Payment options. Refers to what payment methods can/will accept Visa, MasterCard, American Express, Union Pay, Diners Club, Apple pay, Google pay, JCB, or Alipay.
  • Insights and analysis. Results and analysis of sales can be done via the terminal.
  • Settlement time. This is how quickly you will see the money in your bank account.
  • Email receipts. The option to email customer receipts rather than giving printed receipts to customers.
  • Receipt printer.  The option to physically print a receipt. It is normally done on heat-sensitive receipt rolls.
  • Terminal location.  The ability to store the GPS location (address) of where the transaction took place.
  • Accounting package.  The ability of the EFTPOS solution to be integrated into your accounting package.  This simplifies backend accounting procedures.
  • Customer Service. This can be telephone support through to a replacement of a terminal.  Make sure you also check the operating hours.

HINT

Beyond the major banks, we also recommend you compare a company called Square which sells a solution you can pick up at Officeworks and have running in minutes via your mobile.

It is also possible to make EFTPOS payments via most accounting packages without needing additional hardware. Note this will require all card details to be entered manually.

SUMMARY – Show me the money!

EFTPOS does not require you to go to the bank or keep cash secure, and the money will be available the next day.  Tap and Go facilities and mobile solutions mean you can collect payment quickly anywhere you can get mobile or internet coverage.

Bad debt – How to avoid it!

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You gave your customer 30 days to pay, but now 60 days have passed without payment. Maybe there is a dispute. Are your cash reserves running dry because the invoices are not being paid? This guide will look at the importance of worrying about getting paid on time and how you can chase up and avoid bad debt.

Bad debt occurs when the payment of an invoice is estimated to be uncollectible. Bad debt is a contingency that must be accounted for by small businesses that extend credit terms to customers when they issue an invoice, as there is always a risk that payment will not be received.

WHY should I worry about unpaid invoices?

It does not matter if it is your best friend that has not paid you or it is a large corporation. If you cannot collect payment promptly, it will affect your cash flow and profitability, and your business will suffer. This situation is further compounded if you have already paid your costs associated with the invoice, such as materials of wages. Essentially you are lending money to your customer, and if you do not have the cash flow yourself, you may be paying interest on a bank overdraft/loan until this invoice is paid, further eating into your profits.

WHAT can I do to prevent bad debt?

When deciding to offer credit to customers, any action you can take upfront to reduce the chance of bad debt is a much simpler process than collecting money from someone who does not want to or cannot pay you.

To prevent bad debts and protect your business ideally you should:
  • Only send out goods or provide services after customers pay their bill
  • Provide simple and clear payment options
  • Invoice customers quickly and properly
  • Give discounts for paying on time or early
  • If you intend to provide credit you should research the customer:
    • Do a credit check (try Equifax, Onedeck or creditorwatch) and ask the customer for references
    • Create a business contract with clear terms and conditions using the help of legal advice
    • Set up effective payment terms
Have a process to manage payments and debt recovery, a good accounting package will help with this:
  • Check contract terms to see when payments are due
  • Ensure you have the right contact details
  • Contact the customer in writing to request payment
  • Keep records of all customer correspondence
  • Set up regular payment reminders (some accounting packages will have an automated system for this)
  • Telephone the customer
  • Send a formal letter of demand

Most important is to create sensible limits on the credit you offer to your customers that they will be able to repay easily.

To prevent bad debts, a factoring company will buy your outstanding invoices from you for a reduced cost and then chase up the debt themselves. It is a fast way to get cash but at a high price as they take on the bad debt risk. (It is unlikely they will not just buy the bad ones)

HOW to deal with bad debt?

The first step is to understand the cause of the debt:
  • How long has it been outstanding?
  • How much is owed?
  • What is the invoice for?
  • Is the invoice disputed?
  •  Is the debtor still trading?
  • How long have you been doing business together?
  • Does the debtor have a history of late payment, is this different to normal?
  • What credit agreement do you have with them and did they sign a Director’s Guarantee?

The sooner you take action to recover your overdue debt, the more likely you will recover your money.

If a customer has not paid you after various attempts, you must decide if the debt owed is worth the additional effort to collect it. For example, $100 is possibly not worth it, but $10,000 is. You must consider your time and cost to recover as well as the likelihood of the debtor paying.

The following avenues can help recover debt:
  • Debt collection agencies – will attempt to collect the debt on your behalf for a percentage of the debt owed.
  • Legal action – a lawyer can issue a lawyers’ letter of demand or start court proceedings.  An online letter service is relatively cheap but going to court is not, however, the recovery costs can be added to the debt.  Court proceedings will enforce an outcome and affect a debtor’s credit rating.
  • Small claims tribunal – provides mediation and a legally binding solution without having to involve lawyers and courts. Is good for resolving disputes. https://www.accc.gov.au/contact-us/other-helpful-agencies/small-claims-tribunals
  • Court – courts will decide on disputes where the amount owed is too high for a small claims tribunal. Consider using a lawyer if your case goes to courts as procedures are more formal and complicated.
  • Community legal centres – can assist with letter writing and filling out court forms https://clcs.org.au/
  • Small Business Commissioner or Ombudsman – advice on how to recover debts and subsidised or low-cost dispute resolution https://www.asbfeo.gov.au/disputesupport

As a small business, you can also take out Trade Credit Insurance which allows a business to insure themselves against bad debts.

As a business owner, you should consider some sort of provision (put money aside) for bad debts, and this is essentially self-insurance. From an accounting perspective, unpaid bad debt can be an allowable deduction as long as it was included as assessable income in the present or even a previous income year and that it is written off as “uncollectable” in the same year that a deduction is claimed.

HINTS

Unfortunately, some scammers ask your clients to pay your recent invoice into a new bank account, being the scammers’ account. Ensure your clients understand that you would not change your payment details, and in the unlikely event you did that, there would be a very clear and robust process in writing and over the phone.

If the business you are dealing with is in administration, liquidation or deregistered, they may not have the ability to pay you. Check whether a company is in liquidation or deregistered on ASIC Registers. https://asic.gov.au/online-services/search-asics-registers/

Let your customer know you plan to take legal action or use a debt collector. This may have an effect without the cost.

SUMMARY – fast action to recover debts

If you decide to offer credit to your customers, you can find yourself in a situation where a customer is refusing or cannot pay your invoice. This is known as bad debt. It is best to have a plan to avoid bad debt, but if it occurs, fast action brings the best results. Your best chance of recovery after your efforts have failed is via a small claims tribunal, using a debt collector or the services of a lawyer.

How to complete a BAS statement

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If you are reading this guide, you may have learned that you must do a BAS statement, and this guide will help you prepare and lodge your statement.

The business activity statement BAS is a form submitted to the Australian Taxation Office ATO by registered business entities to report their tax obligations, including GST, pay as you go withholding, pay as you go instalments, fringe benefits tax, wine equalisation tax and luxury car tax.
(Source Wikipedia)

WHY do I need to do a BAS statement?

If you are a small business that exceeds $75,000 turnover or provides taxi or ride-sharing services, you must register and charge for GST. You need to lodge a business activity statement.

Your Business Activity Statement will help you report and pay your:

  • goods and services tax (GST) – See our essential guide on GST.
  • pay as you go (PAYG) instalments – is a withholding tax that requires you to pay incremental amounts of your business income to the ATO. These payments accumulate towards your expected end of year income tax liability.
  • PAYG withholding tax – You withhold this tax on behalf of your employees. They will get credit at the end of the financial year as part of their personal income tax return.
  • other taxes including wine equalisation tax, fuel tax credits, and luxury car tax.

WHAT do I need to Complete a BAS statement?

The fields you need to complete in your BAS will depend on your business structure and whether you’re completing a quarterly or monthly report or a monthly BAS if turnover is above $20 million.

The ATO will automatically send you a Business Activity Statement when it is time for you to lodge.

When completing your BAS statement, the ATO states:

  • Enter whole dollar amounts – leave cents out and don’t round up to the next dollar
  • Enter each invoice once only
  • If you account for GST on a cash basis your expenses and sales must fall within the period you made or received payment
  • Only complete the fields that apply to you – if you have nothing to report, enter zero
  • If you’re doing your BAS manually, double-check your figures and calculations
  • You can always correct a mistake made on an earlier BAS

The ATO runs webinars on completing your activity statement, and bookings can be made here.

Visit the ATO website for help completing other fields in your BAS:

HOW do I lodge?

The due date for lodging and paying is displayed on your BAS. Lodge and pay on time to avoid any penalties.

BAS due by QuarterDue date
1. July, August, and September28 October
2. October, November, and December28 February
3. January, February, and March28 April
4. April, May, and June28 July

You can lodge:

You may pay your BAS with BPAY, credit, or debit card, and you will need to quote your Payment Reference Number (PRN) if doing online. If you are concerned about managing your business’s available cash, you can pay ahead, which will be credited against your next Quarterly BAS liability.

HINTS

  • Reconcile the BAS figures with your records
  • Check your purchases and sales are reported in the correct period
  • Only complete the sections that apply to you
  • Keep good records as part of your normal accounting practices
  • Ensure your sales reconcile with your bank statements (if reporting on a cash basis)
  • Keep all your tax invoices and GST records for 5 years
  • All claims must be in Australian dollars
  • You cannot make credit claims for invoices that do not include GST
  • Further GST and BAS tips can be found on the ATO website https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/BAS-and-GST-tips/

SUMMARY – BAS is your report on tax to the ATO

Lodging a Business Activity Statement is required if you turnover more than $75,000. Your reporting method is to the Australian Tax office for GST collection, PAYG income tax collection, and business income tax instalments. If you use an Australian designed accounting package, your administration will be greatly reduced. Ensure you accrue and do not spend the money you owe quarterly to the tax office.

Scan invoices and receipts for accounting software

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By any chance, do you have a shoebox of receipts and a pile of invoices that you need to process?
Making sense of all of this can be a real chore and frustrating. A solution is to scan invoices and receipts. In this guide, we will touch on the importance of keeping good records but focus our attention on making this whole process simpler.

Importing of paper receipts or invoices refers to creating an electronic copy of a paper document that can then be stored or imported into an accounting package. Examples of accounting packages include MYOB and Xero

WHY should I digitise my receipts and invoices?

Keeping good records is important for any small business. Whether that is to help manage your costs, for legal, regulatory or tax reasons, or simply to help manage and improve your business. Collecting, storing, and effectively analysing your data is vital.

The Australian Tax office requires you to keep copies of invoices and receipts for five years.
This subject is covered in detail in our guide to Record Keeping for small businesses.

To scan invoices and receipts or to digitise them has the following benefits:
  • Records can be kept electronically, enabling them to be searched quickly
  • Physical copies do not have to be held. Thus, saving physical storage space
  • Electronic copies of invoices and receipts can be directly imported to accounting software packages saving you having to retype the information
  • Electronic importing of these scanned documents to accounting packages can reduce data input errors.
  • Records can be kept easily for legal and government purposes.

WHAT do I need to know about accounting?

An accounting system for your small business can be done manually, via spreadsheets, or through an accounting software package. Visit our guide on Accounting Software to run your business to understand more. The accounting software packages you should consider in no particular order include Xero, MYOB, Quicken, Reckon, QuickBooks and Sage.

You may do this yourself, hire a finance employee, use an external bookkeeper or retain an accountant. Irrespective of how you achieve your record-keeping, digitising those records will save you money and time.

Invoices and receipts are both a cost of running your business and must be measured accurately. These costs have a GST component which must also be tracked.

HOW do I scan invoices and receipts?

Ways to digitise receipts and invoices:

  • Have invoices and receipts emailed to you in the first place. For most business to business invoice transitions, this is commonplace. Even bunnings and coffee shops are now offering to email you a receipt
  • Most of the accounting software package companies referenced above provide an App that allows a paper invoice or receipt to be photographed, creating an electronic version. This process has the added benefit of the information automatically populating in the accounts package.
  • Most modern printers and photocopiers have a built-in scanner. This can be a time-consuming process but utilises resources you already have.
  • Purchase a dedicated receipt scanner.  These purpose-built scanners can scan multiple pages at a time and come with included software to process information from the documents ready for importing into an accounting package. This is a great solution if you have many paper documents that need to be processed.

Suppose you intend to use your digital or scanned image in an accounting package (excluding a provided App). In that case, you need to go through importing that document so it can be used. Your accounting package help function will explain this process.

You should ensure that your records are filed properly within your computer network and that backup copies are kept. This will ensure they can be found and recovered in the event of a disaster.

HINTS

The most common digital format is a PDF file. JPEG files can also be used.

Epson Australia offers the RapidReceipt RR-600W for $699. This wired or wireless scanner can scan up to A4 double-sided documents as fast as 35 pages a minute. The unit features a 100-page document feeder and a 4.3-inch colour display.  The display allows you to scan to a PC, USB thumb drive or cloud storage services such as Dropbox or Google Drive. The included Epson ScanSmart software can automatically extract data from receipts and export to XERO®, MYOB®, QuickBooks® Online or Excel. A side benefit of a product like this is it can be used to scan all sorts of documents like photo’s so you just might find yourself using it at home on the weekend.

SUMMARY – Scan invoices and receipts

Accurate financial reporting to your business is important. The ability to scan invoices and receipts lets you organise financial paperwork and accurately processing piles of messy receipts and invoices. Any method that can reduce errors, increase productivity and streamline the process is valuable.

Utilising the latest tools and equipment for which you probably already have can deliver these results. Teaching yourself, your staff will ultimately remove frustration, make things simpler and help with compliance.

Record Keeping for small business

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Running a small business is about understanding what is going on and about meeting your obligations. You might have obligations to employees, suppliers, the taxman or more simply an obligation to yourself to understand if you are making any money or the ability to look up a past agreement.  This guide will look at why record keeping is important, what you need to keep records on, and how to keep good records.

Record keeping is the activity or occupation of keeping records or accounts.
Record keeping in financial terms is the process of recording transactions and events in a ledger or accounting system. Since the principles of accounting rely on accurate and thorough records, record keeping is the foundation accounting.

WHY should I care about record keeping?

Keeping good records is important for any small business. Whether that is to help manage your costs, whether it is for legal, regulatory or tax reasons, or simply to help manage and improve your business.  Collecting, storing, and effectively analysing your data is vital.

Without adequate records, it would be impossible to measure the health of your business and to keep track of your progress. It also helps avoid fines for doing the wrong thing and demonstrate your financial position if you need a bank loan.

Records must be kept by law for:
  • 5 years for Australian Tax Office purposes
  • 7 years for Human Resources time and wages records
  • 2 years after you have offset a capital loss against a capital gain (individuals & small business)

Keeping good records will make running your business easier and save you time in the long run.

WHAT should I keep records on?

The types of records you should consider keeping include:
  • Client Files
  • Contracts
  • HR required records for 7 years
    • employee details including pay, leave and work hours
    • reimbursements of work-related expenses
    • workers compensation insurance for each employee
    • pay as you go (PAYG) tax instalments
    • superannuation contributions
    • ending employment
  • HR records recommended:
    • resumes and job applications
    • contracts of employment
    • performance reviews
    • trade or registration certificates
  • Business records (for example, business registration, formal meeting minutes etc)
  • General business information (for example, job tracking, customer correspondence)
  • Accounting and tax for 5 years
  • Business expenses
  • Bank statements / credit card statements
  • Annual tax returns
  • Quarterly/Monthly tax filings
  • Payroll
  • Inventory
  • Sales
  • Revenue
  • Petty cash
  • Vehicle logs
  • Invoices
  • Cancelled cheques and cheque stubs
  • Purchase orders

HOW do I make record-keeping easy?

Under Australian law records must be:
  • readily accessible if required
  • must be unchanged and must be stored in a way that restricts the information from being changed or the record damaged (changes may be permitted for correcting an error)
  • in writing (electronic or paper)
  • legible
  • in English
  • explain all transactions
  • accurate and not misleading

A bookkeeper or your accountant can help with this process but this will not remove your need to still be involved in keeping accurate records.

Although you can keep records on paper it will be much easier if you do so electronically.  Refer to our essential guides on expense management, accounting software and payroll software to understand more. If you are concerned about outlaying funds for software you could set up a series of spreadsheets to help manage your accounts.

Other key documents like signed contracts, lease documents etc should be kept in a safe preferably fireproof storage. These documents can also be scanned and stored electronically ensuring you have back up copies.  Refer to our guide on Storage and sharing of files.

Electronic solutions and storage of records have the following advantages:
  • back up records in case of disaster
  • automated processing and provide ready-made reports
  • produces taxation and employment reporting requirements for government submission online
  • keep up with the latest tax rates, laws and rulings
  • save on physical storage space

HINTS

The Australian Tax office (ATO) provides a record-keeping evaluation tool which will help you evaluate how well you are keeping your business records. https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=&anchor=RKET/#RKET/questions

The ATO provides an App for sole traders to help them record business income, expenses, and vehicle trips.  https://www.ato.gov.au/general/online-services/in-detail/mydeductions/mydeductions/

SUMMARY – keep records under Australian law

Record keeping is not just about keeping records for accounting.  Under Australian law, some taxation, superannuation and employment records must be kept for 5 or 7 years. 

Accurate and regimented record keeping will help you find the information you need, provide reporting and make running your business easier.  Modern accounting and payroll cloud-based solutions will not only streamline the process but also produce required government reporting for you.

Lack of record-keeping, false or misleading reporting can result in fines. Always ensure you have backup copies.

Accounting Software to run your business

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You started with a shoebox of receipts, now you have a storage box or maybe you are meticulous and have it all on a spreadsheet.  Either way it is time to start thinking about accounting software. This guide will look at why you need it and lead you through what you should consider in making your decision.

Accounting software, package or system describes a type of application software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, journal, general ledger, payroll, and trial balance. It functions as an accounting information system.
source Wikipedia

Accounting software has changed a fair bit over the last few years with new competition driving new features and simplicity.  Probably the biggest change however is that it is all in the cloud. Put simply this means you rent access to the solution and do everything via the internet.  You no longer have software that you must buy and host internally on extra computer hardware that you must keep safe.  Instead you have a user-friendly solution that you can access from anywhere that integrates with your bank, POS system, etc.

WHY should you buy Accounting Software?

WHY should you buy Accounting Software?

Saves you time – track invoices, manage bills and expenses and pay staff in a few clicks
Tax time ready – calculate GST, PAYG and BAS reports
Built for Australian legislation reporting
Get paid faster – online invoices, pay now buttons and automatic payment reminders
Enter receipts on the move – use your smartphone to take a photo of the receipt from Bunnings. Great for travellers and tradies.
An external accountant or bookkeeper can have instant access at the same time you do
Reporting lets you quickly get a good idea of how your business is going now
Accounting software becomes increasingly beneficial as the business gets more complicated

HOW to make a decision on which Accounting Package

So now we understand that this software solution is so much more than getting a bill in the system, it is about automating the whole process.  Let us look at the features you should consider when selecting which vendor:

  • Different accounting package vendors offer different features and even within the same company they offer different levels which means you only get what you need.  For example, if you have no employees you do not need the payroll functionality. Consider what package you will need?
  • Pay Staff – Do you want payroll integration? Does the system calculate all payroll requirements including PAYG, annual leave, long service leave etc.? From July 2019 small employers with 19 or less staff must report payroll info to the ATO through Single Touch Payroll. https://www.ato.gov.au/Business/Single-Touch-Payroll/ (Be sure to read our essential guide on Payroll)
  • Ease of use – As an untrained small business owner how easy is it to learn to use the package and be assisted through the software to understand what the requirements are of controlling your finances?
  • Invoicing – Send customised, trackable invoices.  Can clients pay right from the invoice?  Can automatic payment reminders be sent?
  • Tax and GST –  Can you easily and automatically track what you owe, and see all your position at a glance?
  • Does the software support Standard Business Reporting (SBR) allowing you to lodge your GST BAS requirements? (Be sure to read our essential guide on GST)
  • Application integration – Can the package be connected to other software solutions you are using?
  • Time tracking and billing – If you charge by the hour are there features that will simplify gathering this data? For example, a smartphone App.
  • Reports and budgets – What level of detail do you need and can you compare against a plan or budget?
  • Track jobs – Does the system track stock, work in progress, orders, jobs, and other task management requirements?
  • Bills and expenses – How easy is it to upload your bills and easily categorise expenses?
  • Point of Sale (POS) integration – Is there a seamless connection to track sales and inventory movements?
  • Inventory – If you hold inventory/stock will this package help you forecast and manage it? Can you barcode scan items in and out if you want to?
  • Bank Reconciliation – Will the system be able to handle multiple bank accounts?
  • Manage customers & suppliers – Can you easily see which customers owe you money, and which you need to follow up on?
  • Take payments – Does the software allow EFTPOS or credit card processing?
  • Cash flow management – Can you see your money in and money out at a glance, and understand quickly what your cash position is?
  • Online accounting – Is there a smartphone or tablet app that lest you enter data or receipts as well as run your business from anywhere?
  • Multi-currency – Does the system need to handle foreign currency?
  • Account sharing – Can you invite accountants, bookkeepers, and partners so they can help you manage your business?
  • Security – What security and backup procedures do they offer to help you protect your data?
  • Customer Relationship Management (CRM) – Does the system keep detailed records on customers including what they buy, how often they buy, and when they buy?
  • Service – What support and training are available, what hours and does that support understand Australian regulations?

HINTS

For more information on what accounting tools are available and the specific features, they offer visit

Free trials are available to help you compare and chances are your financial expert will have an opinion on which one to use.

The accounting software packages you should consider in no particular order include Xero, MYOB, Quicken, Reckon, QuickBooks and Sage.

SUMMARY – Right Accounting Software

Having the right accounting package will save you vast amounts of time and effort and will help keep your business compliant with government regulations. 

Although these modern tools are brilliant in helping you control your business finances they will never replace having access to a financial expert.  We strongly recommend you have access to an accountant or bookkeeper to help guide you.

If you do not have external financial support today you can visit this site to help you find the right person

GST do I have to pay it?

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They say two things are certain in life, death and taxes. We certainly hope your small business lives a long and prosperous life and that you never fall foul of the taxman.  In this guide, we will explain the GST and show you that it is not a tax you pay but instead one you help collect from the final consumer.

The Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. If you are registered for GST, you must add GST on all your applicable taxable sales unless they are GST-free or input-taxed. You are able to claim credits for GST included in the price of business purchases of goods and services.

WHY do I need to register?

If your business exceeds $75,000 turnover or provides taxi or ride-sharing services you must register and charge for GST! You need to register within 21 days of exceeding the turnover threshold.

WHAT are the steps to follow for Standard GST registration?

  1. Register for GST online, by phone or through a registered agent. Make sure you get an Australian Business Number (ABN) first. https://www.ato.gov.au/Business/GST/Registering-for-GST/
  2. Determine which of the goods and services you sell must include GST.
  3. Issue tax invoices when you sell something which GST is included you must issue an invoice clearly showing the 10% GST added.  For example, $100 x 1.1 = $110 inc GST. Under Australian legislation, all goods and services pricing should be indicated as total price with GST included. For example, from the previous example, $110 inc GST, not $100 ex GST.
  4. GST credits for anything that you have bought for your business. Collect tax invoices that show GST has been paid . Link

Australian GST-free products and services
Most basic foods, some education courses and some medical, health and care products and services are exempt from GST.
Exports of goods and services from Australia are generally GST-free.
The supply of a service is GST-free if the recipient of the service is outside Australia.
Further info
  1. Your accounting system should clearly show how much GST you have collected and paid. (Be sure to read our essential guide on Accounting software as this will simplify the process). Ensure you put aside any GST money you have collected, as it must be paid to the tax office and it is not your business’s revenue. You will pay your GST collected minus your allowable credits to the ATO.
  2. Lodge a BAS statement. A Business Activity Statement (BAS) is your report to the ATO on your GST activity. You can lodge online through MyGov, the ATO Business Portal, directly through some accounting software, tax agent, or mail.
    If your turnover is less than $20 million you must lodge quarterly otherwise monthly. More details can be found in our How to Complete a BAS guide.

The Australian tax office requires GST invoices to include certain information and this will differ based on the sale being below or above $1000. The above $1000 format can be used for the lesser value.  The specific requirements and a suggested format can be found here https://www.ato.gov.au/business/gst/Tax-invoices/

BAS due by QuarterDue date
1. July, August, and September28 October
2. October, November, and December28 February
3. January, February, and March28 April
4. April, May, and June28 July

HINTS

  • Keep good records
  • Ensure your sales reconcile with your bank statements
  • Keep all your tax invoice and GST records for 5 years
  • GST is not claimable on private expenses such as entertainment and food
  • All claims must be in Australian dollars
  • When claiming a tax credit for less than $82.50 for you only need one of the following; a tax invoice, a cash register receipt, a receipt, or an invoice.
  • You cannot make credit claims for invoices that do not include GST
  • Further GST and BAS tips can be found on the ATO website

If you sell something that is GST exempt you can still claim credits for the GST included in the price of purchases you use to make your GST-free sales.

SUMMARY – GST do I have to pay it

In summary, GST will be part of your business, so ensure you keep accurate records and employ an appropriate person to help and/or use a software tool to ensure you stay compliant.

Small business accountant is unexpected hero

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By Kerry Agiasotis, Managing Director and Executive Vice President at Sage Asia Pacific

Would you consider your small business accountant an ‘essential worker’? It is a phrase we have heard again and again the past year in the context of medical professionals, grocery workers and law enforcement, however never in the same sentence as ‘accountant’.

For small businesses, that is exactly what they are – essential. While accountants may not be providing medical care or keeping our grocery shelves stocked, they have, in many cases, helped keep the doors to many Australian businesses open throughout the ups and downs of the past year.

While the Australian economy is beginning to recover. March data from the Australian Bureau of Statistics found almost 20 per cent of small businesses think they will struggle to meet their financial commitments over the next three months.

With almost a fifth of small businesses feeling uncertain about their immediate future, there’s all the more need for accountants to maintain their ‘essential’ status in the months to come.

From number-crunchers to trusted advisers

Accountants worked all hours to keep their clients up to date with the latest changes, as the world locked down and the government rolled out emergency stimulus packages.

Recent data from the Australian Bureau of Statistics found that three in five Australian businesses sought external advice, such as accounting services, to navigate the unchartered territory of the pandemic.

As the challenges facing businesses undoubtedly increased, the nature of the accountant’s role underwent profound change.

Many accountants admit they felt more like a counsellor at times while supporting their clients throughout this period. On a more positive note, one of our accountant partners recently noted her highlight was getting to know her clients personally as the pandemic prompted them to open up and have more meaningful conversations.

Fast forward twelve months, and those businesses lucky enough to have access to an accountant have come to realise that accountancy is not just limited to number crunching and financial reporting.

Instead, a small business accountant is a trusted advisers guiding business owners through make-or-break decisions around how best to manage cash flow, revenue streams and whether and how to pivot business models.

Technology the key to success 

Although every accountant has his or her own unique experiences from the past year. I’ve consistently heard one piece of feedback that nobody could have dealt with the unforeseen challenges without technology.

As with many industries, the wholesale adoption of new technologies by accountants throughout the pandemic launched many practices years into the future.

Automated workflows from bookkeeping to tax, dashboards, customised reporting, and data-driven insights allowed them to keep their heads above water while focusing on what mattered the most: the needs of their clients.

Accountants who had instant access to financial and operational data were able to provide the best counsel to their clients so they could make the right decisions in the ever-changing environment.

This trend is accelerating in 2021 and beyond. As cloud-based, automated practice solutions continue to enable firms to become more productive, freeing up time for accountants to focus on running their practice and supporting their customers’ needs with timely counsel.

A trusted partnership for the future

If I were to look for a silver lining in the past year, without a doubt, it would have to be how technology transformed the accountant-client relationship.

It seems ironic that software helped bring people closer together. However, by leveraging new technologies such as cloud-based and automated practice solutions, accountants could free up time to focus on well-needed client counsel. 

Despite the enormous adversity endured, businesses and accountants managed to weather the storm together, finding solutions to the seemingly impossible.

As we look towards the May budget, the reopening of borders, and life after the pandemic, businesses must continue to work even closer with their accountants to leverage new opportunities and mitigate risks that may arise.

By keeping your small business accountant close and recognising the value they provide as essential to your business, you will be well placed to capitalise on the strong economic growth that’s on the cards as we continue to bounce back from the pandemic.

Small Business Answers guide to accounting software can be found here.

How to Invoice

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As a small business owner, you need to keep track of how much money is coming in and how much money is going out. The collection and creation of invoices is a key way to achieve this. Thus you need to know how to invoice.

In this guide, we will look at why, in most cases, legally, you must provide invoices to your customers and how you go about creating one. We will also look at when and how you want to get paid.

An invoice is a time-imprinted business document that itemises and records a transaction between a seller and a buyer. If the goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available methods of payment.

WHY should I invoice my customers?

If your business turnover exceeds $75,000, you must register for and pay GST. See our guide on GST. When you make a sale of $82.50 or more, including GST, you must issue an invoice.

If your business has a turnover of less than $75,000, your customers may demand an invoice, and even if they don’t, it is simply good business practice.  We have written a comprehensive guide on Record Keeping.

Legally you must keep a copy of your invoices for 5 years.  This can be a paper copy or electronic.  These copies will help you fill out your BAS.

If a customer requests an invoice, you must provide it in under 28 days.

WHAT terms should I offer my customers?

Before we look at the invoice itself, a very important decision needs to be made about whether you will offer your customers any credit.  This is when you expect to get paid for the goods or services that you are providing.  Options include:

  • Deposit – You require a percentage of the total upfront to start work
  • Cash on delivery – full payment is made at the time of delivery of the product
  • Payment on completion of work – full payment is made at the time of completing a service
  • Progress payments – a schedule of payments normally with milestones are set through the project
  • Credit terms – the customer is given a set number of days to pay
  • Discount for early payment – You offer an incentive or discount to pay an invoice early, like a 5% discount if they pay within 7 days

Ideally, you get paid early or at the time of delivery, however, many businesses will not accept that if you want to do business with them.  Unfortunately, some companies have conditions whereby you have to accept terms of up to 120 days if you want their business.  This is robbery, and the norm would be 30 days. The longer a business takes to pay you helps their balance sheet, the quicker you get paid helps your balance sheet.

You will also need to decide what payment methods you will accept.  A bank transfer will be the most attractive as it will not attract fees, you don’t have to handle cash, and the money should move to your account within 24 hours. Cash will require you to visit the bank.  If you decide to accept a credit card or Buy Now Pay Later (BNPL – for example PayPal), you will get the money straight away, but you will have to pay a merchant fee in the form of a percentage of the transaction.  This payment form is convenient for the customer and will get the money to you fast. 

Whatever form of payment or payment terms you decide to use, you will need to consider when building your cost model.

HOW to invoice

By far, the easiest way to produce an invoice is through an accounting package.  If you create one manually, this can easily be done using a spreadsheet or word processing application. You will find many templates available in those applications, as well as downloadable templates from the internet.

In Australia, an invoice must include:

  • the heading “tax invoice”
  • Your business or trading name
  • your Australian business number (ABN)
  • date of the invoice
  • a description of the items sold, including the units (hours or goods) and price
  • the GST amount– this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, a statement which states ‘Total price includes GST’ (only applies if you are liable for GST)
  • If the invoice is over $1,000, including GST, you must also include the buyers’ identity or ABN
Example

Tax Invoice

Freds Shop                                                                             17 Fake St
ABN: 32 123 456 789                                                           Your Town State Postcode

Date:  25 March 2021

To:         Valuable customer
              56 Down Rd
              Town State Postcode

Description                                                   Quantity             Total
Widgets                                                          1                           $40.00
Labour                                                            2hrs                     $80.00

Total Price including GST                                                       $132
GST                                                                                              $12.00

HINTS

Now you have created your invoice, you need to send it to your customer, with the most common form these days being via email.  Ensure you have the right contact, and it is also worth copying it to a company’s accounts payable team. You can, of course, hand-deliver or post.

If your customers do not pay your invoices, read more about your options in our guide on bad debts.

The tax office provides guides on requirements for tax invoices here.

SUMMARY – How to Invoice

Accurate invoicing will help you keep your business in check and the ATO happy.  An invoice can be easily created. You can use an accounting package to help with the greater task of managing to invoice and your accounts.  If your turnover exceeds $75,000, you must provide invoices that specify GST.  Invoices are not required for amounts less than $82.50, including GST.