If you're running a business, it's important to keep accurate and up-to-date records of your financial transactions. This can be a time-consuming task, and one that requires skills and expertise to ensure that everything is recorded correctly and in compliance with relevant regulations.

That's where a professional bookkeeper and BAS (Business Activity Statement) Agent can come in handy. A bookkeeper can help you manage your day-to-day financial tasks, such as recording transactions, reconciling bank statements, and managing payroll. They can also prepare financial statements, budgets and cash flow forecasts that will give you a clear picture of your business's financial health and outlook.

A BAS agent, on the other hand, can help you with your BAS and GST (Goods and Services Tax) compliance requirements. BAS agents are registered with the Australian Taxation Office (ATO) and are authorized to prepare and lodge BAS statements on behalf of businesses. They can also provide advice on GST-related matters and help ensure that your business is meeting its obligations under the GST legislation.

Engaging a bookkeeper and BAS agent can help you save time and avoid costly mistakes. They can also provide valuable insights into your business's financial performance and help you make informed decisions about how to grow and improve your operations.

A skilled Bookkeeper and BAS Agent needs to have tertiary qualifications, but it's more than merely having the right qualifications, they need to be detail-oriented, thorough and have excellent communication skills. Some of the key requirements include the following:

1. Bookkeepers need to have a qualification in bookkeeping or accounting that is Certificate IV or higher. Many bookkeepers hold Degrees in Accounting.
2. BAS Agents need to be registered with the Tax Practitioners Board (TPB) as a BAS agent to legally be allowed to provide BAS services to clients. BAS Agents must also hold Professional Indemnity Insurance and undertake regular additional professional training.
3. Bookkeepers and BAS agents must have impeccable attention to detail to avoid errors and ensure accurate financial reporting. Having your accounts in perfect order will save you time at the end of the year when your accountant prepares your income tax returns.
4. Excellent communication skills are essential to effectively liaise with clients to have a clear understanding of their requirements, and also to collaborate with other professionals such as your accountant or the ATO.
5. Bookkeepers and BAS Agents must keep up to date with the continual changes in tax laws, payroll regulations, and other legal requirements to make sure you are meeting all your compliance obligations.
6. The ability to analyze financial data and interpret reports is necessary to provide insights to clients and help them make informed decisions.

Bookkeepers can offer a variety of services, including:

• Managing accounts payable and receivable
• Preparing financial statements
• Reconciling bank and credit card statements
• Payroll processing including WorkCover and Payroll Tax
• Budgeting and cash flow forecasting
• Managing cash flow
• Preparing BASs and IASs, TPAR and liaising with the ATO on your behalf
• Not-For-Profit Board Reporting, audits and acquittal reporting

The cost of engaging a bookkeeper will vary depending on your needs and the scope of work. We will work with you to understand your needs and will then be better able to provide an accurate quote for your work. We prefer to work on a fixed-fee basis so you can better manage your cashflow. Engaging a professional bookkeeper will actually save you money in the long run as they will streamline your workflow and implement procedures to ensure you don't unknowingly make costly mistakes.

Whether to hire an in-house or outsourced bookkeeper depends on your business needs, budget, and preferences. In-house bookkeepers may appear to provide more personalised service, but they are not required to hold appropriate tertiary qualifications nor be registered with the Taxation Practitioners Board (TPB). Outsourced bookkeepers and BAS Agents, on the other hand, will have a much greater wealth of knowledge due to working with clients in many industries. They are also required to be tertiary qualified, registered with the TPB, hold Professional Indemnity Insurance, and undertake continuing professional development to ensure they are fully up to date with the ever-changing rules and requirements of the industry.

Choosing the right bookkeeper and BAS agent for your business is an important decision that can have a significant impact on both you and your business.

Consider the following when choosing a bookkeeper and BAS Agent:

1. Determine your needs: Before you start looking for a bookkeeper and BAS agent, you should first determine your specific needs. Consider the size and complexity of your business, the amount of financial data you generate, and the level of support you require.
2. Check their qualifications: Look for bookkeepers and BAS agents who are registered with the Tax Practitioners Board (TPB). The TPB sets the standards for the profession, and only registered agents are authorized to provide BAS services. You can check their registration on the TPB website.
3. Look for experience: Look for a bookkeeper and BAS agent who has experience working with businesses similar to yours. Ask for references and check their qualifications and reviews from their previous clients.
4. Review their services: Make sure the bookkeeper and BAS agent offers the services you need, including regular bookkeeping, BAS preparation, payroll, and financial reporting.
5. Consider their software expertise: Check their experience with accounting software such as MYOB, Xero, Quickbooks, or other accounting software you use. Find out if they have experience with other software you use such as Deputy, SimPro, Vend etc.
6. Communication and compatibility: Ensure they communicate clearly and efficiently with you, and you both are compatible to work together for the long-term. Your bookkeeper will become your confidant and know your business intimately so make sure your personalities are a good match so you can talk comfortably with them about uncomfortable topics.
7. Fees and charges: Discuss their fees and charges upfront, including any additional costs for services such as financial reporting or payroll. Make sure you understand the fee structure and are comfortable with it before signing any contract.

Welcome to our 'Common Mistakes' series, where we delve deep into the intricacies of the GST system. While the foundation of the Goods and Services Tax (GST) might seem straightforward, like many things in finance, the devil is in the details. In this article, we talk about a topic where mistakes are frequently made: GST on credit card fees and annual card charges.

The Nuances of Credit Card Fees

Firstly let's address a common misconception. Most businesses assume that every expense that passes through their books will have GST included. However, credit card fees and charges are a trap, as GST does not apply to all transactions.

For instance, the interest you pay on credit card balances is exempt from GST (technically, interest is a “BAS Excluded” transaction). What if you’re a business that accepts credit card payments from your customers? The merchant fees you pay your card provider typically do include GST.

Now for the fun bit - Credit card surcharges when you pay bills. Whether GST applies to the surcharge is dependent on whether GST applies to the underlying transaction you are paying. It gets even more confusing when the bill you are paying is a “mixed supply” where part of the bill attracts GST, and part has no GST – insurance premiums, vehicle registration and telephone bills are common examples here. The joy with credit card fees on these payments is that part of the fee attracts GST and part doesn’t so you need to split your credit card surcharge when recording the transaction in your accounts. It’s small details like this that can trip you up if you’re not careful.

Annual Card Fees

Similarly, annual credit card fees are another area of confusion. Annual fees do not attract GST as they are not considered to be the supply of goods or services (because, you know, GST is a Goods and Services Tax).

The Hidden Costs of Misunderstanding

Imagine this: if you’re claiming GST credits incorrectly, not only could you be losing out on claiming GST credits that you’re entitled to, but you could also find yourself at odds with the ATO if you’re incorrectly overclaiming GST. It’s crucial that businesses understand the GST system if they are doing their own bookkeeping and accounting.

Why Engage a Professional Bookkeeper?

This is where the value of an experienced bookkeeper is invaluable. Professional bookkeepers possess an in-depth understanding of the nuances and ever-evolving landscape of the GST system. With their help, you can navigate the confusing maze of credit card fees, annual charges, and other not-so-obvious GST implications with confidence.

While the basic concept of GST might seem easy to grasp, it’s the layers beneath the surface that can complicate matters. The most well-intentioned, diligent business owners can find themselves making avoidable mistakes.

As always, our goal here isn’t to overwhelm or cause panic. It’s simply to emphasize the importance of recognizing when you’re in over your head. Sometimes, a small investment in professional expertise can save you from much larger financial pitfalls down the road.

So, the next time you’re feeling uncertain about the GST implications of an expense or financial decision, remember this article. It might just be time to give your trusted bookkeeper a call.

PS – If you find this topic enthralling, you can find more details in the ATO’s GSTR 2014/2 ruling here - https://www.ato.gov.au/law/view/document?docid=GST/GSTR20142/NAT/ATO/00001&PiT=99991231235958

This “Common Mistakes” article discusses a little-known financial dilemma faced by many Australians: managing HECS/HELP debt alongside the benefits of salary sacrificing. It’s one of those areas where, despite your best intentions, you could end up with an unexpected (large) tax bill at the end of the year. Let’s see what’s going on…

The Basics of HECS/HELP Debt

The cost of tertiary education is not insignificant, and the ability to pay your fees upfront each semester is out of reach for most people. The HECS/HELP program is an interest-free government loan available to eligible students where the Federal Government pays the course fees on your behalf. The loan then is repaid once you are earning an income and your annual wages are above a specified threshold. The threshold increases each year, and for 2023-24 it is $51,550.

It's important to note that while the HECS/HELP debt is interest-free, indexation is applied to the outstanding balance on 1 June each year. Historically the indexation rate has been close to 2%, but it has increased in the last couple of years and on 1 June 2023, it was a sizeable 7.1%.

Understanding Salary Sacrificing

Salary sacrificing involves agreeing with your employer to forgo part of your pre-tax salary in return for benefits of similar value, and you then pay tax on the reduced wages.

The most common thing that employees salary sacrifice is superannuation contributions. This is a very tax-effective way to get money into your superannuation account, as these contributions are concessionally taxed at 15% when received by the fund. In comparison, if you were to make a contribution from your after-tax income, you would have paid tax on those wages at your marginal tax rate. For example, if your wages are between $45,001 - $120,000, the marginal rate is 32.5% plus Medicare Levy (2023-24 tax rates).

There are also other items that can be salary sacrificed, but most attract Fringe Benefits Tax, and those working in the not-for-profit sector can salary sacrifice additional items without creating FBT obligations for their employer.

The Hidden Trap

Now, here's where many get caught… While salary sacrificing can decrease your taxable income, when it comes to calculating your compulsory HECS/HELP repayment, the Australian Taxation Office (ATO) looks at your “Repayment Income”, which is calculated as your taxable income, plus any salary sacrificed amounts**.

To put it plainly, even if you salary sacrifice and consequently pay less tax throughout the year, your HECS/HELP repayments are based on the larger figure – your wages before any salary sacrifice deductions. This can result in a shock at tax time, as many find themselves with unexpected taxes to pay.

Prepare and Plan Ahead

So, how do you navigate this potential minefield?

Consider having extra tax withheld from your wages One proactive step is to ask your employer to withhold additional tax from your wages during the year. It might seem counter-intuitive, especially since the whole point of salary sacrificing is to reduce the tax you pay, but this strategy can prevent a potentially hefty tax bill at the end of the year.

Be Ready for End-of-Year Tax Liabilities If you prefer to keep your money on hand throughout the year, then it's vital to be prepared for a potential tax debt when submitting your tax return. Having savings put aside in a separate bank account can help you be prepared.

Why Seek Professional Advice?

Remember, it's important to not only look at each component of your wages or deductions in isolation but also how they all combine and affect your broader financial picture. Always consider seeking guidance when you’re in doubt, as sometimes, a little investment in professional expertise can help avoid bigger challenges down the track.

Salary sacrificing can be a brilliant strategy for tax minimisation, but ensure you're fully aware of all implications, especially if you're juggling HECS/HELP repayments.

** “Repayment Income” is actually more than just your taxable income plus salary sacrificed items; it’s taxable income plus the following:

• Net investment losses
• Total reportable fringe benefits amounts
• Reportable superannuation contributions
• Exempt foreign employment income

If you like reading the boring stuff, here are links to the ATO with further details:

Indexation rates - https://www.ato.gov.au/Rates/Study-and-training-loan-indexation-rates/
Income thresholds and repayment rates - https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/
Repayment Income - https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/

We all know how inconvenient it can be when you're in a rush and 2FA pops up, slowing down your login. 🙄. There are lots of 2FA options out there and you often get to choose the one that suits you best, whether that be using an authenticator app, using the software’s own app, or opting for the code to be sent by email.

But, using only the one 2FA method every time you log in isn't always the best long-term strategy.

What if your go-to method fails one day? 🤔 Are you prepared? Do you remember your security questions, backup codes, or alternate email/phone details?

Here's a tip: Log in using your backup method occasionally! It's a great way to refresh your memory on those tricky security questions and ensure your alternate contact info is up to date.

When the day comes when you really need that backup method, you'll thank yourself for being prepared! 🔒💡