The ATO is always on the lookout for business which might be consciously cheating the tax system by claiming non-applicable deductions and credits or by underreporting its taxable income. A good thing is that it releases of a list of risks every year about what they will consider in their tax audits. When it comes to accounting for small business, business owners have to be aware of some warning signs that could invite an audit.
- Underreporting income: The ATO keeps track of businesses’ income each year. If it finds a major reduction in income in a particular year, it can order a tax audit to take a closer look at its finances. In many such cases, businesses are found to be underreporting their income to save tax money. In tax audits, ATO focuses on things like expenses claimed which are over the industry benchmark, capital gains and property transactions, among others.
- Over claimed entitlements: While it’s possible to write off certain business expenses, people take advantage of this and would illegally write off expenses by including expenses related to their hobbies and personal interests in business expenses. This is illegal and can invite a tax audit. Likewise, it’s also important to claim home office expenses correctly. A tax expert specializing in accounting services can help you claim such expenses so that you can qualify for deductions. In addition, it is important to lodge Business Activity Statement (BAS) in a timely manner.
- Excessive donations: The ATO keeps track of all the charity donations that a business makes each year. If you’ve made more than generous donations in a particular year, it can trigger an audit. So, ensure you keep all records and receipts of donations for any explanation needed at the time of claiming deductions.
- Disparity in numbers: Ensure you double check all the numbers in various forms before submitting. To avoid mathematical errors, it’s always recommended to let professional accounting services handle your taxes. Contact a tax agent who specializes in accounting for small business to file various forms. They will make sure that all the numbers add up correctly.
For more guidance and first-class accounting services in Sydney, don’t hesitate to contact DSV Partners today!
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If you’re wondering about the best ways to use your tax refund money, you’ve come to the right place. As one of the most trusted Sydney accountants – DSV Partners has advised a number of clients about how they should spend their tax refund for maximum benefits. The ultimate aim here is of course to make you more financially stable. So, before you head to buy your next unnecessary gadget and start making spur of the moment buying decisions, here are some of the most productive ideas to make your tax refund actually work for you.
- Eliminate or reduce high interest debts: The best thing you can do to reduce your financial burden is to pay off your high interest debts. Paying off your car loans, credit card debt or student loans is a great way to put your tax refund to work.
- Fund your retirement account: In these times, you need a lot of money to lead a comfortable life after retirement. Even for a modest lifestyle after retirement, you should have at least $300,000 in Australia. These numbers are enough to scare anyone but a great way to maximise the growth potential of your superannuation fund is to start contributing towards it from early on. Consult with a financial adviser before transferring your tax refund to superannuation fund. Trust us; you’ll thank yourself for this decision in the future.
- Make work related purchases: If you’ve been thinking of purchasing some work related equipment, such as electronic items, tools and computers, using this year’s tax refund for this purpose is a wise decision. If you purchase work equipment at the start of the year that cost you at least $300, you can claim maximum deduction for depreciating assets on your next tax return.
- Invest: If you are financially sound with no credit loans, you may think of making some wise investments by opening a brokerage account. If you’re a beginner, start with online brokers as they are efficient and affordable for small investors. Consult a financial adviser before you make investments.
DSV Partners are Australia’s most trusted specialists in accounting and bookkeeping services. For more information, get in touch with us today!
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Many businesses fail to pay their superannuation on time. This can happen due to a number of reasons such as cash flow issues, having poor planning or simply because they are too busy to even think about it. Any experienced tax accountant in Sydney can tell you that if you’re late for your superannuation payments even by one day, you can miss tax deductions; you may have to pay hefty fees or you can even invite a tax audit. So, what are some key superannuation regulations? Let’s have a look:
- – Superannuation is paid to the employees once they earn $450 or more in a month.
- – For the year 2016-17, the superannuation obligation is 5% of OTE (Ordinary Time Earnings). You can get more information on OTE by visiting ATO site or by simply asking a good tax accountant in Sydney about it. OTE doesn’t consist of total employee’s earnings. For instance overtime payment is not included to calculate ordinary time earnings.
- – It’s mandatory for all employers from 1 July 2016 to pay their super guarantee liability using an electronic portal called ‘Superstream’. A tax accountant in Sydney who specializes in accounting and bookkeeping services can give you a detailed explanation of Superstream approved methods of paying super.
So, what can happen if you don’t meet your super guarantee obligations?
- You may be liable for a range of penalties or charges on top of the super guarantee charge. The penalties include:
- – Director Penalties: The directors of the company that fails to meet an SGC liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.
- – General Interest Charges: If you lodge an SGC statement but don’t pay the charge by the due date, you incur as additional charge – the general interest charge (GIC). It accrues from the date your SGC is due up to the date you pay your SGC account in full.
- – Administrative penalty: If you pay less SGC than you should because you made a false or misleading statement, ATO can impose an administrative penalty. The base penalty amount can be up to 75% of the shortfall.
- – Other penalties such as Failing to keep records, Failing to provide an SGC statement when required and Failing to pass on a TFN may also be applied.
- If you’ve delayed your super payments, you won’t be able to claim tax deductions. This means that at the end of the financial year, you can expect a substantially higher income tax bill.
- If you fail to pay the minimum superannuation payment, it can result in an Employer Obligation Audit. This is normally done by the ATO to ensure that your business processes are compliant with the legislation.
As a trusted tax accountant in Sydney, DSV Partners can help you with top notch bookkeeping services and accounting solutions, and ensure that all the crucial payments are made well before their due dates. For more information, get in touch with DSV Partners today!
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Cash is king – especially when it comes to start-ups and small enterprises. Bookkeeping services can help you get accurate cash flow forecasts for your business. This will enhance your ability to foresee potential problems that may arise later on and enable you to make sound decisions for growth, progress and prosperity. Like oxygen for a business, cash flow forecasting prepared by an experienced tax accountant in Sydney eliminates the element of chance. Let’s have a look at a few reasons why you should discuss cash flow forecasting with your tax agent in Sydney right now.
- Visualizing your options: Cash flow forecasting will enable you to clearly see all the possible scenarios that could result from your business decisions in 2016. Cash flow forecasting, managed with the help of trusted experts who specialize in bookkeeping services and accounting for small and medium size businesses, can help you make critical decisions including:
- – Product/Service price modelling
- – When to hire more staff
- – The right time for a new project
- – When to change suppliers
- – When change premises, and so on
- Saving time: Cash flow forecasting empowers you to take full financial control of your business. You don’t have to go through endless spreadsheets when a new business idea strikes your mind. With cash flow forecasting in place, all you have to do is test some statistics and equations to know if an idea is profitable. It takes away much of the guesswork!
- Planning growth: Though there are numerous ways you can grow your business, choosing the right one is often confusing. With cash flow forecasting, you can clearly see various feasible growth options and you can easily choose the one that fits your business the best. Furthermore, if you choose a trusted provider of accounting solutions and bookkeeping services, you can choose to do cash-flow forecasting at any stage in your business. If something has changed in your business and you’re not sure whether to continue or not, stop and simply take a closer look at your forecasted options.
It’s important to take an outside perspective and analyse your organisation’s cash flow. This is essential to identify opportunities for growth because you might be too busy to see such opportunities. So, what can you do about it? Take action right now! Call DSV Partners. Trusted accounting and bookkeeping services can deliver beyond your expectations!
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Financial audit is an important tool for business owners looking to achieve their objectives in the required time period. While performing a financial audit, an auditor is required to obtain an understanding of the company’s business and internal controls, an auditor will become aware of and recommend ways that the entity can improve its internal controls over financial reporting or profitability. The auditors’ are also required to preform certain procedures on company’s policies and procedures related to fraud prevention. Any suggestion from auditors will help improve the policies and procedure to prevent fraud. However, you’ll need to choose accounting services that not only specializes in carrying out an effective financial audit but also help you monitor the efficiency and effectiveness of such an audit. Apart from choosing the best accounting services, what steps you can take to enhance the effectiveness of such an audit? Let’s have a look:
- Commitment: As a business owner, you have to make sure that everyone in the organization, including the senior management, is fully committed to this critical process. Without the involvement, encouragement and support of everyone, a financial audit will just be a waste of time and money.
- Anticipate the needs of stakeholders: So, what do you think is the most important thing that most stakeholders want from a financial audit – information and more information. They need an assurance that the management has necessary and effective processes in place to achieve desired financial goals and manage significant risks in future. In addition, the financial audit team has to be responsive to the changing nature of risks and make sure that the strategies remain relevant in the present and future scenario.
- Keep it simple: While it’s true that financial auditors are well versed with all the technical jargon used in financial audit, most of the customers and staff working in an organization do not comprehend most of these terms at all. In order to get the point across, auditors should do everything in their hands to make the reports as simple as possible. If the auditors can take time to explain the meaning of technical terms, such as ‘high-risk’ or ‘significant deficiency’ early on, they have to spend much less time in answering a lot of questions from their audience later on.
For trusted financial audit services in Sydney, contact DSV Partners on 02 9633 4893 or email us at email@example.com today!
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Most of the business owners in Australia can’t answer a simple question: how much is their business worth? This is something that they only consider when they decide to sell their business. However, if you’re a budding entrepreneur in Australia, it’s essential to get an up-to-date valuation of your business regularly. Business valuation is an important step in optimizing accounting for small business. When you know the true value of your business, you can maximize your investment opportunities, make sound decisions, and attain financial security. Let’s have a look at a few reasons why you should consider valuation of your business if you haven’t already done so.
- Investment opportunities: If you know the actual worth of your business, you can make an informed decision whenever any opportunities for investment arise. In order to take full advantage of such opportunities, you have to make decisions quickly, and business valuation helps you do precisely that. Business valuation covers a number of areas, such as financial information, legal structure and the history of your business which can do wonders to attract potential investors and strategic partnerships for your business.
- Expansion opportunities: Not only business valuation can help you get the required funding from financial organizations, it will also provide you a precise benchmark for the growth of your business. In addition to good accounting for small business, business valuation provides you an additional tool to make strategic decisions and grow your business without wasting any time on unnecessary things. These services will also help you identify areas that need attention before you reach the desired level of expansion.
- Making your business future proof – As a visionary business owner, sometimes you have to consider difficult topics, such as legal disputes and personal losses, before they actually happen to your business. This is essential for future proofing your business and even personal life. You’ll need to address questions like who would run your business in your absence or who would know your business valuation and so on. Knowing up-to-date value of your business can help you streamline most of the legal proceedings.
At DSV Partners, we know the importance of business valuations and accounting for small business. We can help you implement some simple strategies aimed at increasing the value of your business. For more information, get in touch with DSV Partners today!
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As the season rolls around, it becomes important for one to start focusing on preparing tax returns. When working with an experienced tax agent in Sydney, you can expect a close relationship, where they work to ensure that your tax returns are filed on time, and in the right way!
How the best Accounting and Bookkeeping Services work?
Many of our client’s tell us about the countless hours they spend to collate their receipts and payments for the year. Good bookkeeping services provider can take the stress out of this process. Good records are first step in preparation of tax returns and determining deductions. As a lot of relevant information are available from books of accounts, if properly maintained. Let’s have a look at few practices that trusted accounting companies follow:
- – Starting the process of information gathering early on is better for the company as well as the tax agent. This is because if any changes have to be made or additional information to be gathered, it can easily be done.
- – This process of detailed information collection exists to ensure that all aspects of your business is covered in the tax return, so that you don’t get into any form of trouble later on, especially as your company scales up.
- – This process might take a while- but it is absolutely necessary, as it guarantees the protection of your company at a later stage.
What you can do to help?
The best accounting solutions are those where all the expenses and income can be carefully tracked and claimed. Towards this extent, any tax agent in Sydney would require some documentation from you. Here are some of the things you can provide to your tax agent in Sydney:
- – Receipts of expenditures/expenses
- – Receipts from claims made by employees
- – Previous tax returns
- – Payroll
- – Proof of income/grants/donations, etc.
The tax agent will collect all these, and create your tax returns from the same. This is the process that will be followed every single year, so it is a best practice for your company to make sure that all the transactions are recorded and are supported by invoices/claims.
Speak to DSV Partners (02 9633 4893) to know more about what else you can do to make the most of accounting and bookkeeping services.
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Behind every successful business, there’s a trusted bookkeeper. No large or small company can function well, or succeed without organization and good bookkeeping services. Many businesses have underestimated the importance of bookkeeping and accounting solutions – but you should make sure that you don’t commit that grave mistake.
Here are our five tips for small business bookkeeping
- Be organized: This is the first and the most important step towards proper bookkeeping. You need to have the right processes in place to ensure that people follow the order in which things are to be done. This will make life easier for you, as everything will already be in the right place, for future reference, or when tax season comes rolling around.
- Use technology: There is no reason for you to stick to the old days of paper and pen. Technologically advanced bookkeeping services can make your business more efficient, and ensure that you don’t lose anything, ever!
- Plan and track your expenses: Every company needs to invest a particular sum of money for its growth and expansion. For better bookkeeping, plan every expenditure and investment. This will definitely help you during tax season, in claiming all the tax deductions and help your company be more transparent in its proceedings.
- Set aside money for taxes: We all know that we have to pay income tax and GST (if GST registered). So systematically put aside money for it. Delay in lodgement and payment of BAS/IAS and Tax Returns can incur penalties and interest charges from ATO. By putting aside money each month or when each bill is settled, it will sting you less when they are due.
- Record your deposits correctly: Businesses are likely to make variety of deposits during the year, from loans, to sales, to investment by business owners. If these are not accounted for correctly, you are leaving yourself open to pay taxes on money that is not income.
All this might sound complex- and it is. However, you can choose to get the assistance of DSV Partners – one of the most trusted providers of bookkeeping services and accounting solutions in Sydney, any time you want. Get in touch with DSV Partners, with any queries or doubts you might have.
Good business practice adds value to every business, in both good and bad times. There are many benefits good business practice may bring to the business, including:
- – The business is more likely to be profitable, have better cash flow and operate with less financial risks;
- – The business may be better placed to respond to future challenges and opportunities
- – The business may be easier to sell in future, and possibly at a better price
- – The business may find it easier to access external finance, including bank finance, if needed.
Implementing good business practice involves identifying the critical tasks that must be done to keep the business in good shape, and having discipline to ensure that those tasks are carried out consistently.
The checklist below is to highlight good business financial practice that a SME can follow. The checklist is not a definitive, however this is intended to start you, the business owner, to think about the actions needed to put your business on the right track.
Strategic Financial Tasks:
- – Set targets for financial performance.
- – Review and analyse financial statements.
- – Prepare cash flow forecast and budget.
- – Review actual performance against budget.
- – Review cash flow forecast with actual.
- – Have a good financial software.
- – Enter data promptly and accurately.
- – Review stock balance and reconcile to physical stock.
- – Review receivable and payable.
- – Reconcile banks.
- – Reconcile GST.
- – Reconcile other material balance sheet accounts like fixed assets, PAYG, superannuation, employee leave entitlements, equity accounts.
As a business owner, it is often difficult to align your priorities when it comes to bookkeeping, accounting and tax. It is usually not a top priority in mind. However a good business advisor and tax accountant in Sydney can help you keep focused on the growth. The tax accountants and bookkeepers here at DSV Partners will ensure that no benefit or documentation slips from your hands. Excellent business advice and meticulous record keeping will help you save thousands, and give your business a huge boost as well. For more information, contact DSV Partners today!
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Chanakya (350 BCE – 275 BCE), a great Indian teacher, philosopher and economist, and the author of the ancient Indian political treatise, “Arthashastra”, said that a strong foundation is key to any successful business and listed seven pillars for an organization:
- – The King or the Leader
- – The Minister or the Manager
- – The Country or the Market
- – The Fortified city or Head office
- – The Treasury
- – The Army or your Team
- – The Ally or your “Adviser”
The choices made by the leader will have a profound impact on the business- be it the choice of hiring a manager and team, market to operate in, or what business advisers to work with. Most businesses focus on hiring a good manager and team, but often forget the importance of a good adviser. Experienced advisers are generally well aware of the problems faced by small and medium size businesses, and they should be able to provide you expert guidance to resolve your business problems right away.
Most often, advisers are hired based on the price they quote rather than the value that they can add to the business. By choosing the wrong adviser, a business can face colossal impact on their finances. A recent example would be the case of Commonwealth Bank financial advisers or, in the past, the case of advisers in Enron Energy and Satyam Computers. In all the above cases the advisers/auditors were not acting towards the interests of their clients.
A good adviser should always be:
- Candid – willing to tell their clients “what they need to hear”, and not “what they want to hear”.
- Objective – able to hear the concerns of the business owners.
- Visionary – looking for new ideas to solve unique problems clients may face, rather than providing a “one size fits all” solutions.
- Informed – able to converse about the trends in your industry, latest developments, and share his knowledge for the benefit of your organization.
Remember, most importantly, a business adviser should be like a friend. He is the one whom you can depend on when problems arise. After all, a friend in need is a friend indeed.
DSV Partners is a suburban firm providing accounting solutions for small and medium size business across Sydney. We provide;
If you are looking for a trusted business adviser who is capable of taking holistic view of your business and provide an effective solution, please contact DSV Partners immediately! We eagerly look forward to working with you.