When Should I Prepare My Business Tax Return?

Many of us have our tax returns prepared through a registered tax agent. As a result, the due date for your return to be lodged can often be pushed back well into the following financial year. Agents get concessions that allow you to lodge your returns from March through to June of the following year. Consequently, a lot of business owners have to wait, and just like it was when you were at school, you try to get everything done at the due date in a mad panic.

There are however benefits to avoiding this approach, and attempting to have your return done in the first half of the year.

Cashflow Planning

Preparing your tax return in the first half of the year doesn’t mean you have to lodge it in the first half of the year. Seeing your accountant early may bring you some bad news (the dreaded tax bill), but at least you know where you stand, and you can start putting money aside for when it is lodged later in the year. The flip side of this is, maybe you are entitled to a refund that you weren’t prepared for, so now you can lodge your return early, and get access to those funds within a few weeks.

Possibly reducing your instalments

When you are prepaying tax liabilities, often you are basing this on prior year tax results. If you are entitled to a tax refund based on overpaying, these instalments can be reduced, meaning more cashflow for you in your business over the course of the next year. Alternatively, if your instalments are going to increase as a result of your increased tax liability, holding off lodging until later in the year will keep your instalments low in the short term, and understanding what they will move to will allow you time to put money aside, to stay in line with your future tax liabilities.

If you want to know more about the benefits of preparing your tax return early, contact the team at Carbon Accounting. Arrange a complimentary 30 minute consultation by calling (08) 9446 8588.


Choosing The Right Bookkeeping Software For Your Business

Using cloud-based accounting software can save you heaps of time when it comes to doing your day-to-day bookkeeping, and quarterly or end of financial year lodgements. But with so many online accounting software options on the market, how do you know which one to choose?

We’ve put together a few points to help you pick one that suits your business.

Desktop & Mobile Options For Bookkeeping Software

How is your internet speed? Is it stable or intermittent? Check your internet speed via the link. This test will tell you your upload and download speeds. Call your internet service provider and ask about your “up time” for stability. Hybrid softwares such as MYOB AR Live are great if you experience intermittent internet. This software can be shared over the internet and doubles as a desktop software.

Accessing Your Accocunts On-The-Go – Are you a trades person or just someone that wants to use all daytime to get your work done? Taking your bookkeeping software mobile is a great way to keep on top of things. Use your phone or iPad to keep up with your book work in the field, raise invoices and get paid on the spot. Fully cloud solutions like Xero and QBO are great for mobility

Features Needed in Bookkeeping Software

Write a list of tasks that you want your software to do for you, and ensure the accounting software is capable of doing them. Some examples:

  • Sales orders
  • Purchase orders
  • Payroll
  • Stock management
  • Single click supplier payments
  • Send customer statements

What reports do you want once you have processed your sales invoices and expenses? Some examples:

  • Details per job / project
  • Report by Profit centre or department Gains and Losses on multicurrency transactions
  • Cashflow
  • Budget vs actuals

Industry-Specific Accounting Software

If you’re engaging a bookkeeping firm, look for someone who uses a range of accounting software. They will look at the features you have listed and the industry that you are in. A bookkeeping/software professional is most likely going to use their experience to add some things to your wish list. They can also suggest names of softwares that you would normally integrate with as you grow and then map back to the correct starting bookkeeping software. For example, if you’re in the hospitality industry, there are some fantastic online applications that can integrate with certain accounting programs, such as online point of sale solution Kounta, or online rostering TSheets.

What Accounting Software Have Your Staff Used Previously?

What software have your staff used previously? If they’ve got experience in one program, they’ll have a head start when you implement the system into the business. However, if it’s a new system, you can train your staff relatively quickly and easily. WiseClick Training have some great day courses in Xero, MYOB and QuickBooks.

A little bit of advice goes a long way when starting up, and it’s important you don’t choose a software on price alone. There are some shockers out there that are really cheap but will cost you more in lost time and productivity very quickly (due to lack of appropriate features). Carbon have specialist bookkeepers that can help advise you on the right choices to make. We see the clients that we setup initially go from strength to strength when using accounting and bookkeeping software that is a great match for their business. Contact our team if you’d like some assistance, on 1300 454 174.

Should i have a fixed or variable home loan? Carbon Group Perth

Should I Fix My Home Loan?

To fix or not to fix? That is the question… or is there another way?

Mortgage. Its origins are Latin and literally mean a “death pledge”. It can certainly feel like that sometimes. How can you beat the market and stay ahead of the game?

The Reserve Bank of Australia has maintained its current stance by keeping the official cash rate on hold at 1.50% for eleven months now and there is an expectation that this will continue for the rest of this year and well into the next one. Despite this though, variable and fixed business and home loan rates have been on the move throughout 2016 and 2017, and they’re on the rise.

With the average standard variable home loan rate nationally at 4.47%, savvy borrowers can currently get fixed rates much lower than that (saving as much as half to three quarters of a percent). That’s a huge saving in what is often the biggest budget buster. With most economists agreeing that when the RBA do eventually make a change to the official cash rate it will be an increase, not a further reduction, is now the time to look at locking in a rate?

Fixed vs Variable Home Loan Rates?

Let’s look at the pros and cons.

Advantages of a fixed rate loan:

The main advantage is cash flow certainty, knowing exactly what your loan repayment will be over the fixed term period. When you are a new home owner, or are perhaps setting up a business, or have some other significant demand on your cash, this certainty can give you great peace of mind. It also protects you from any future rate increases of course – that payment is locked in.

Disadvantages of a fixed rate loan:

They are certainly inflexible and can be expensive if you break the contract. You also miss out on the benefits of any interest rate decreases over the timeframe of your fixed term.

The vast majority of people in Australia choose to finance their home with variable home loans, largely due to the freedom and greater number of options they offer. More than convenience, this flexibility can actually allow you to save substantial amounts of money over the course of your mortgage. How? With a variable loan you have the ability to make extra repayments on top of your scheduled instalments with no penalty. Do this regularly and you could shave years off the length of your mortgage, greatly reducing the overall amount of interest you need to pay. Open an offset account and you can benefit further and save even more.

So if I choose to fix my home loan when is a good time?

Sadly, there’s no one correct answer to this. If we look at the history books a comprehensive analysis by Canstar found that over the last 20 years, around 50% of borrowers who took out a fixed loan SAVED more money than if they’d taken a variable mortgage so with a healthy dose of luck you may be able to use a fixed rate mortgage and beat the market but by no means is it a certainty.

There is a third option of course that sits alongside fixed and variable and that’s to take advantage of BOTH. Split the balance of your loan across fixed and variable and hedge your bets!!

The best advice?

Speak to an expert and talk through with them your own personal circumstances. Then you can make the decision that’s right for YOU.

We love helping so reach out to one of the team at Carbon Finance today!! To arrange a complimentary chat, call us on (08) 9446 8588.


What Your Cash Flow Forecast Says About Your Business

Cash management is one of the biggest obstacles standing in the way of small business success. Having the right amount of cash on hand at the right time is key, it can determine if you’re able to expand internationally or whether you can even afford to pay next month’s salaries.

Luckily, there are plenty of tools available to help business owners stay on top of their cash flow. A cash flow forecast is one such tool and can be used to diagnose the health of your business. Below we’ve written a list of many of the insights that can be gained by simply looking at your cash flow forecast.

Your cash flow forecast reveals…

1. Your level of financial security

Your cash flow forecast shows exactly when – and how much – cash is going to enter and leave your business’s bank account over the next week, month, or year. Knowing this, you’ll be able to predict the security of your business’s future cash position and see whether your financials are in good shape or whether can even continue operating at all.

2. Whether or not you can afford to make certain business decisions

With an accurate cash flow forecast, you can estimate the impact that different scenarios, such as hiring a new employee or a 10% sales decrease, will have on your business. Maybe you’ll have to wait until next year to hire that operations manager or maybe you’ll need to downgrade your software subscription to avoid burning up the cash you’ll have on hand.

3. Early warning signs that your business should prepare for cash shortages

A cash flow forecast can tell you well in advance when your business will be strapped for cash. You’ll be able to see if you need to improve the efficiency of certain business areas or if you should take out a loan or find ways to cut costs.

4. The accuracy of your budgets

Your cash flow forecast will allow you to compare the budgets you’ve estimated for sales and outgoings with the actual amount of cash that flows into and out of your business. By doing this, you can see if your budgets are accurate, or if you need to go back to the drawing board and make some changes to your budgeting strategy.

5. How realistic you’re being about invoice due dates

If you’re unable to pay your employees or suppliers at the end of the month, you should make sure money is coming into your business as expected. A cash flow forecast tells you when cash will actually enter or leave your business rather than the date the bill or invoice was raised. If you find less cash in your account at the end of the month than expected, you may need to do a better job of chasing your clients to pay their invoices.

Consider adding an ‘expected payment date’ to your invoices in addition to their due dates, which will show a more accurate picture of when funds will actually hit your bank account. Cash flow forecasting apps such as Float for can link to your accounting software (i.e. Xero) allowing you to factor expected payment dates directly into your cash flow.

6. If you should seek out where you can reinvest excess cash

You can also anticipate when your business will have more cash at its disposal than usual. With a cash flow forecast, you can know exactly when these cash-rich periods will happen and explore what you can do with these excess funds, such as reinvesting in other areas of the business like employees’ salaries or buying more inventory.

7. If your business is on track to meet its goals and objectives

A cash flow forecast will allow you to see if your business can meet expectations in sales, client growth, turnover, etc. If you’re not on track to meet these goals, your cash flow forecast can also flag the specific areas of your business that need attention – maybe you’ve overspent on marketing & advertising or maybe you need to cancel that weekly fruit basket delivery. Your cash flow forecast will be able to help you identify these areas.

8. If you need to improve your business’s financial planning

Even if you’re developing a revolutionary new product that will change people’s lives, your business’s financial situation cannot – and should not – be ignored. If your cash flow forecast needs help, it’s time to consider investing time to formalise your business’s financial planning efforts with things like cloud accounting software, better cash flow forecasting, or management reporting. Seek advice for your accountant or bookkeeper, who will be able to advise you what strategies are best for your business.

This is a guest blog by Float, for more information visit floatapp.com.


Do I Need Business Interruption Insurance?

As a small business owner, you’ve probably got an adequate level of business insurance to protect the equipment you use, loss in terms of theft, and damage as a result of fire or other natural disaster. But have you considered business interruption insurance? Too many small business owners fail to think about how they would manage if their business couldn’t operate temporarily resulting from a disaster.

Business interruption insurance, often referred to as business income insurance, covers you in the event you suffer an interruption or interference to your business following an insured event which results in a reduction in gross profit. An example of this may be a furniture manufacturing business suffering damage caused by fire. The business not only suffers a material damage loss to contents and equipment (covered in general business insurance), but also suffers a large financial loss due to a reduction in trade. In many cases, this loss can exceed the initial material or physical loss. This is where business interruption insurance comes in.

Business interruption insurance is made up of several key elements such as;

• The indemnity period
• The sum insured
• Increased costs of working

The key focus of this blog is around the indemnity period. The indemnity period is the period of time that a business is interrupted. The indemnity period commences from the date the insured event has taken place through to when the business is back up and running to the same level is was prior to the loss or the indemnity period on your insurance policy expires.

When discussing the indemnity period with your broker, the following points are crucial to ensuring you are adequately covered;

• Dependency on the premises and or location
• The availability of another premises that suits your businesses requirements
• The availability of machinery and equipment to replace the damage items

The above points can have big impacts on the time it may take to get the business back up and running to the same level it was prior to the loss. It’s important to consider these when choosing a business insurance package that suits your needs. Unsure what you’re covered for? Contact the insurance brokers at Carbon Group for a confidential chat. Call us on (08) 9446 8588.

Tips-on-Lodging-Tax-Return Carbon Group Perth

Tips & Tricks To Lodging Your Income Tax Return

We’ve closed the books on the 2016/17 financial year, so now it’s time to lodge your tax return. But before you sit down to complete your lodgment, it’s important you’re armed with the correct information to get started.

Do I need to lodge a tax return?

If any of the following apply you, are required to lodge a return:

• Resident individuals whose assessable income is greater than the $18,200 tax free threshold for the income year
• If you had tax withheld from your employment income
• If you were carrying on a business
• If you paid PAYG instalments during the year and wish to claim back the tax
• A minor who received income from dividends or distributions greater than $416 and had franking credits or PAYG withheld
• The ATO has requested you to lodge a return

When is my 2017 tax return due?

If you are lodging your return yourself (without the assistance of a tax agent) then your deadline is the 31st of October

If you use a tax Agent like carbon Accounting, your due date can be extended. Please contact our office to check your due date as every tax payer is different.

What documents do I need to complete my tax return?

To help make preparing and lodging your tax return easier and quicker, set aside some time to gather the following documents:

• Payment summaries
• Bank statements
• Dividend statements
• Buy and sell documents for investments (i.e. shares or property). This is needed to calculate your capital gains or losses
• Income and expenses for your rental properties
• Details of any foreign income
• Private health insurance statements
• Details of any work-related expenses/deductions you have incurred throughout the year

What expenses can I claim for my tax return?

If you’ve incurred any work-related costs that you haven’t been reimbursed for, you may be able to claim them in your tax return. It’s important to be able to verify costs if requested, so ensure you have invoices, receipts or log books at hand.

• Vehicle and travel expenses
• Clothing, laundry and uniform expenses
• Gifts and donations to deductible gift recipients
• Home office expenses
• Interest, dividend and other investment expenses
• Self-education expenses
• Tools and equipment
• Other expenses such as tax agent fees, union fees, income protection*

These are just a guide so if you want further clarification please make an appointment with Carbon Accounting to discuss your individual affairs.

What expenses can’t I claim on my tax return?

The ATO may be on the lookout for red flags that identify people who are claiming costs which they shouldn’t be. We’ve outlined some of these below:

• Travel between home and work – this is considered private
• Car expenses – the exception to this is if you are carrying bulky tools or equipment that is required for your job and you are unable to keep them at work
• Everyday clothes – i.e. suit, shirt and tie is generally not deductible even if your employer requires you to wear them. Clothes need to be job or company specific in order to claim the deduction.
• Self-education expenses that does not have a directed connection to your current employment i.e. if your new qualifications will enable you to get a better more high paying job then these expenses are not deductible
• Private use of your phone or internet
• Meal expenses – where you are not required to work away from home

There are several ways to lodge your tax. MyTax is a great place to start. If you get stuck, we’re only a phone call away. If you’d like assistance with your tax return, make an appointment with Carbon Accounting to discuss your individual affairs. Call us on (08) 9446 8588.

Understanding-Super-Guarantee-Thresholds-for-Different-Industry-Awards Carbon Bookkeeping Perth

Understanding Super Guarantee Thresholds for Different Industry Awards

If you’re responsible for paying wages, then you’ll be fairly clued-up when it comes to super. The Super Guarantee Act requires employers to provide sufficient super support for their employees. Employers are obliged to contribute a minimum percentage (currently 9.5%) of each employee’s ordinary time earnings to a complying super fund or retirement savings account. Superannuation has to be paid at least quarterly and is due by the 28th day after the quarter end.

Super Guarantee Threshold

Generally, if you pay an employee $450 or more (before tax) in a calendar month, you have to pay super guarantee on top of their wages. If your employee is under 18 or is a private or domestic worker, such as a nanny, they must also work for more than 30 hours per week to qualify for superannuation guarantee regardless of their earnings.

You have to pay super for some contractors, even if they quote an Australian business number (ABN).

You have to pay super no matter whether the employee:

  • Is full-time, part-time or casual
  • Receives a super pension or annuity while still working – including those who qualify for the transition-to-retirement measure
  • Is a temporary resident – when they leave Australia, they can claim the payments you made through a ‘departing Australia superannuation payment’
  • Is a company director
  • Is a family member working in your business – provided they are eligible for super guarantee

What Are The Exceptions When It Comes To Paying Superannuation?

Some industry awards have a reduced superannuation threshold from the standard threshold of $450 gross of ordinary times earnings per calendar month.

Restaurant Industry Award 2010
(Section 30.2 – – Employer contributions (b) The employer must make contributions for each employee for such month where the employee earns $350.00 or more in a calendar month.)

Hospitality Industry (General) Award 2010
(Section 28.2 – Employer contributions (b) The employer must make contributions for each employee for such month where the employee earns $350.00 or more in a calendar month.)

For Employers under the Fast Food Industry Award 2010 the usual threshold of $450 gross per calendar month applies.

If you are classified within these industries, would like help with updating your payroll software with these limits, or would like some superannuation guarantee assistance, please contact our bookkeeping team today on (08) 9446 8588.

why-do-some-businesses-stop-growing-Carbon Group Perth

Why Do Some Businesses Stop Growing?

The goal of most businesses is to grow, whether that be in terms of sales, profit, number of locations/sites, or client base. Whilst some businesses are quick to blame the current economic situation for a slowdown in growth, there are several other factors that should be assessed first. Below we’ve highlighted three reasons why some businesses stop growing.

How Much Do You Value Your Customers?

Customers should always be the number one priority, but as your business grows, it’s often the case that business owners lose focus on their customers. Whether that’s servicing existing ones or finding new ones. Too many businesses get caught in the day-to-day routine and forget that without customers their business wouldn’t exist.

A great way to keep in touch with clients is to offer them the opportunity to give you feedback on a regular basis. This helps business owners and management to keep a check-in with the services they’re providing, making sure it’s in-line with expectations. Add short surveys to your monthly emails, or even better, set-up monthly or quarterly face-to-face meetings. Although technology has replaced the need for some personal interaction, it’s still important to meet in person where possible. After all, you’re not the only business that provides the service/product that you offer, so personal interactions help to differentiate you from your competitors. Another great way to assess the service you offer is to do a mystery shop. Call your office and see how the phone is answered, or get a friend to visit your store and see how they’re greeted.

High Overheads and Manual Processes

When was the last time you assessed the systems you use within your business? What may have worked fine when you were small won’t necessarily work, or be the most efficient method, as you expand. It is quite common to see admin staff support sales, with the salesperson generating an order and manually typing it up, only for admin to re-type the same information into the accounting software to generate an invoice. This makes it hard for growth as every new sales person needs a new admin assistant. A small business may think they don’t have the funds for technology that automates these processes, and the team may have the capacity to be doing tasks manually. However, with the influx of cloud applications, an online system is more affordable than you think. The time saved by removing the manual tasks can be better spent elsewhere, or even save expenses by reducing the number of administration staff required. Get started with making your business run more efficiently, by speaking to a cloud integrator about integrated business management solutions. Imagine telling your admin staff they no longer need to manually re-enter 100 sales invoices every day. Sensational for morale!

It Takes Money to Make Money

How is your cash flow looking? Whilst you’re growing your business, it’s crucial to keep on top of getting paid, so that you have the cash to make investments and action opportunities as and when they arise. The way money flows through a business can make or break growth. You need money coming in on time to pay for outgoings. There will always be a lag between being paid and paying but a successful business controls this. No matter what payment terms your suppliers issue, such as cash on delivery (COD) or 180 day pay cycles, the core principle remains the same. The earlier you are paid, the greater your cash flow. The more cash you have on hand, the easier it is to invest in expanding your business. A major challenge for businesses when they become larger is the volume of invoices and debts as well as the manual work involved in collating the information.

Our advice? Consider better software to control and automate invoicing and debtor management. Not only will this cut-out hours of manual administration work as previously outlined, but you’ll have access to sophisticated dashboards and reports that help to understand your business performance. Reports are great for identifying areas of weakness that can be resolved before they cause too much of a barrier to growth for your business.

what-is-invoice-financing Carbon Group Perth

What Is Invoice Financing

Should you be using invoice financing as part of your business operations? Read on to find out more about invoice financing and how it can drive your business forward.

Invoice financing describes the process of asset based lending, giving companies finance while they wait for slow-paying receivables. Invoice finance allows businesses to borrow money based on sales assets, creating a revolving line of credit. This credit helps business owners to keep on top of cash flow, pay employees and reinvest in company operations without adding any extra liabilities. You are also able to reduce finance costs quickly and easily by making a payment and re-drawing money as and when your business needs it.

Put simply, invoice financing uses the money owed to you to finance your business in between client payments. There are many great reasons to use invoice financing, such as:

  • Your credit line is tied to your sales, meaning you won’t add any extra debts to your account
  • You won’t need to offer any property as security to finance your business
  • Your personal assets are separated from your business
  • No weekly/monthly repayments
  • Your line of credit grows as your business does, allowing you to do more when the time is right

As well as being tailored to your business needs, invoice financing gives your business greater flexibility and allows you to manage your cash flow more effectively.

Invoice Financing in a Digital Space

As technology has advanced there has been a rise in the use of cloud accounting and online invoice financing. With helpful features and real time data, cloud-based technology has revolutionised how businesses manage their accounts and finance.

Now that we are all better connected, it is much easier to keep on top of payments and payees using apps and cloud storage online. Working in real-time, these types of online accounting software programs, such as Waddle, Xero and MYOB allow you access to automated funding that instantly updates your line of credit and live bookkeeping that keeps an account of your transactions.

As we enter a new financial year, now is the perfect opportunity to spend time reviewing your business plan. Carbon Group Perth.

Get Your Business Off To A Great Start This New Financial Year

The 2016-17 financial year seemed to have been and gone before we knew it. How did your business perform? Did you reach your targets? Now that we’ve started a fresh year, it provides the perfect opportunity to dedicate time to reviewing your business plan and performance. Below we’ve highlighted just a few topics to get you started. Spend time on these now for the best possible financial year ahead!

Help With Cash Flow Forecasting

It’s important to plan the year ahead to ensure that your business has the cash to sustain it throughout the course of the year. A cash flow forecast can give you a bit of insight into where you think your business can be, whilst giving you an idea of when those big bills (BAS payments, insurance renewals, tax payments etc) are coming. With that information, you can have an idea of what your business can potentially spend money on in the new year, whilst giving you an idea of how profitable you will be. Online accounting software such as Xero, MYOB or QuickBooks provide a great basis for a cash flow forecast, since data is based on actual figures, available in real-time.

What Is The Ideal Structure

You have so many options as a business owner, with regards to the right business structure for you. The start of the new year presents a great time to reassess your goals, and see if the structure you are currently in is still appropriate for you. Throughout the lifespan of a business, there is often a need to move from one structure (such a sole trader business setup) to another (like a company). This is especially important now, as recent changes to tax legislation has made it less costly to move between structures. Often these changes lead to protection of your personal assets, as well as reduced tax obligations so it’s worth considering your options.

Re-Address/Write Your Business Plan

Every business owner should have goals. Your business plan can help you map a path to achieving those goals. Your goals don’t all have to be financial in nature. Maybe you are looking to spend more time at home, or even exit the business in the near future. A good business plan will not only address your goals, but also give you guidance when making big decisions throughout the course of the year. Assess what’s worked this past year, and what could do with some attention going forward.

We hope that’s got you thinking about your business plan, and given you a few topics to consider straight away. Spend time with your team to gain insights from difference perspectives on your business performance and what you’d like to achieve going forward. If you need any assistance, our accounting team are just a phone call away. Contact them for a complimentary consultation today, on (08) 9446 8588.