Author: Glance Consultants

 

As a small business owner, you will likely complete many accounting processes independently. Undoubtedly, this is stressful, and sometimes you may need support to ensure you undertake your business’s accounting & bookkeeping correctly. Below, we will take you through five essential accounting tips all small business owners should be aware of; 

Keep Business and Personal Finances Separate 

While it may sound appealing to have all your finances in one account, combining your personal and business finances can cause many organisational issues. 

Instead, we recommend having a business account that only holds the financial transactions concerning your company. A separate account for these transactions makes bookkeeping, paying taxes, creating financial statements, and finding specific payments much easier. 

Ensure Records are Accurate Through Proactive Management 

Recording financial information is essential and should be done as accurately & timely as possible. You can achieve this by reporting financial transactions as they occur and having organised accounts that are easy to follow and track using accounting software such as Xero.

Complete Financial Statements 

Understanding your company’s financial health will help you project business growth and acknowledge any areas for improvement. Maintaining up to date financial statements is an excellent way to track economic trends and understand your cash flow. 

Understand Taxes and Timeframes

The last thing you want is to miss a tax deadline or inaccurately calculate your tax. To ensure this doesn’t occur, note when your tax is due, and keep your financial statements updated throughout the year. This way, you will have a clear idea of your tax obligations with the assistance of our firm as your accountant & business advisor. It is important to ensure you work closely with your accountant and bookkeeper to achieve this.

Use Accounting Software and Support

There are many things to consider when completing record keeping as a small business owner. To ease your way into these processes, using accounting software that tracks your financial data and simplifies organisation and accounting management will be helpful. 

Still Trying to Figure Out Where to Start with Accounting for your Small Business? We Can Help 

If you require support in relation to your small business’s financial management activities, don’t worry, we can help. Get in touch with our skilled accountants at Glance Consultants today to find out more. 

Trust distribution landscape now more settled

If you carry on your business affairs through a trust structure, there is now more clarity around the law on distributions following much uncertainty throughout the year.

Neither the taxpayer, Mr. Springer, nor the Commissioner has appealed against the Full Federal Court decision handed down in January 2023 (Commissioner of Taxation v Guardian AIT Pty Ltd ATF Australian Investment Trust [2023] FCAFC 3).

Readers will recall that the Full Court ruled against the Commissioner on the section 100A issue, but upheld his Part IVA determination for the 2013 year on the basis that the taxpayer had not demonstrated that absent the scheme (involving a distribution to a corporate beneficiary that was paid back to the trust as a franked dividend and on-paid to the non-resident, Mr. Springer, without any top-up tax) the trust would have done something other than making a distribution directly to Mr. Springer.

The Commissioner was unsuccessful with his Part IVA appeal for the 2012 year, when events were still said to be evolving.

Mr. Springer may well have decided he’s done well enough, having succeeded in challenging all but one of the income years attacked by the Commissioner.

The Commissioner may have been disappointed with the section 100A outcome, but will probably rationalise the decision on the basis that it turned very much on its own facts – at the time the 2013 resolution was made to appoint trust income there was no certainty that the corporate beneficiary would pay a franked dividend back up to the trust.

But he would have been quite pleased with the Part IVA result, which confirms that the 2013 amendments have been effective in disposing of the “do nothing” alternative postulate that was successfully relied upon by RCI, News Corp and Futuris.

The legal and practical upshot of the Part IVA decision is that taxpayers can now be taxed on notional transactions with a very  high tax cost that they would not have contemplated entering into in a million years. Just goes to show that taxpayer success in the courts can be undone by the stroke of a legislative pen.

The Full Federal Court ducked the issue of the ordinary dealing exception, which it was entitled to do, given its conclusion that there was no reimbursement agreement. But that outcome is regrettable at a broader level. Absent further guidance from the Full Court, we are left with some encouraging comments from Logan J at first instance (about the lack of artificiality) which the Commissioner reads down in TR 2022/4.

Hopefully the Full Court’s decision in a case known as BBlood, expected later this year, will shed further light on the issue. Given the decision at first instance, it seems unlikely the taxpayer will succeed on the ordinary dealing question in that case. However, the appeal decision may include some helpful guidance from the Full Court, even if the taxpayer is unsuccessful.

In the meantime, 30 June is rushing towards us, and family trusts need to be considering their position in relation to upcoming trust resolutions. Chat with us to establish your distributions for this year which may be governed, among other things, by your appetite for risk within the confines of the law.

 

Proposed tax on $3m super balances

Individuals with large superannuation balances may soon be subject to an extra 15% tax on earnings if their balance exceeds $3m at the end of a financial year.

 

What has been proposed?

Recently, the government announced it will introduce an additional tax of 15% on earnings for individuals whose total superannuation balance (TSB) exceeds $3m at the end of a financial year.

Those affected would continue to pay 15% tax on any earnings below the $3m threshold but will also pay an extra 15% on earnings for balances over $3m.

The proposal will not impose a limit on superannuation account balances in the accumulation phase, rather it is about how generous the tax concessions are on higher balances.

The government has confirmed the changes will not be applied retrospectively and will apply to future earnings, coming into effect from 1 July 2025. This means your balance in superannuation at 30 June 2026 is what matters initially.

 

What counts towards the $3m threshold?

The $3m threshold is based on your total superannuaton balance (TSB) and includes all of your superannuation accounts. This includes your accumulation and pension accounts and all superannuation funds you may have (such as your SMSF and any APRA-regulated superannuation funds you have).

Further, the $3m threshold is per member, not per superannuation fund. This means a couple could have just under $6m in superannuation/pension phase before being impacted by the proposals.

 

How will earnings be calculated?

Put simply, the extra 15% tax is unrelated to the actual taxable income generated by your superannuation fund. Rather, it is a tax on earnings or increases in account balances over $3m (including unrealised gains and losses).

This means any growth in balances will include anything that causes your account balance to go up – such as interest, dividends, rent, and capital gains on assets that have been sold, including any notional or unrealised gains on assets that increase in value, even if your fund hasn’t sold them.

Apart from the extra 15% tax, the taxation of unrealised gains is what has caused a stir, as currently individuals do not pay tax on income or capital gains on assets that have not been sold.

When looking at how to capture growth in a person’s TSB over a financial year, earnings will be calculated based on the difference in TSB at the start and end of the financial year, and will be adjusted for withdrawals and contributions.

It is also worth noting that negative earnings can be carried forward and offset against this tax in future years’ tax liabilities.

How is the extra 15% tax calculated?

Superannuation funds, including SMSFs, will not be required to calculate the earnings attributable to a member’s balance above $3m.

Rather, the ATO will use a three-step formula to calculate the proportion of total earnings which will be subject to the additional 15% tax.

 

How will the extra tax be paid?

Individuals will be notified of their liability to pay the extra tax by the ATO. This means the ATO, not their superannuation fund, will issue members with a tax assessment.

Individuals will have the choice of either paying the tax themselves or from their superannuation fund(s) (if they have multiple funds).

The tax will be separate to the individual’s personal income tax liabilities.

 

Don’t fret just yet

The measure is due to start from 1 July 2025, so superannuation funds and members still have time to consider their options.

Remember, this measure is still a proposal and must be passed into legislation by Parliament to become law. So don’t rush to remove benefits below the $3m limit just yet as once amounts have been withdrawn from superannuation, it’s hard to get them back in.

If you have any questions or would like to discuss this proposal in further detail, please contact us for a chat.

 

FBT exemption for electric vehicles

With car fringe benefits one of the most common benefits provided by employers to employees, a new ATO fact sheet shines more light on the FBT exemption for electric vehicles.

To recap, in the October 2022 Federal Budget, the government announced that it would exempt from FBT the private use, or availability for use, of cars to current employees that are zero or low emissions vehicles with a value at first retail sale below the luxury car tax threshold for fuel efficient vehicles. This is aimed at making electric cars more affordable, to encourage a greater take-up of electric cars by Australian road users to reduce Australia’s carbon emissions from the transport sector.

The new law applies to fringe benefits provided on or after 1 July 2022 for cars that are eligible zero or low emissions vehicles that are first held and used on or after 1 July 2022 (see examples 1 and 2 in the fact sheet).

To be clear, the new rules apply to cars that are collectively referred to as zero or low emissions vehicles, namely:

■ battery electric vehicles
■ hydrogen fuel cell electric vehicles, and
■ plug-in hybrid electric vehicles.

For such vehicles, an FBT exemption should normally apply where both: the value of the car is below the luxury car tax threshold for fuel efficient vehicles ($84,916 for the 2022/23 financial year), and the car is both first held and used on or after 1 July 2022.

From 1 April 2025, private use of a plug-in hybrid EV is no longer eligible for the exemption unless:

(i) use of the plug-in hybrid electric vehicle was exempt before 1 April 2025; and

(ii) the employer has a financially-binding commitment to continue providing private use of that vehicle on and after 1 April 2025.

Other key points in the facts sheet are:

■ An FBT exemption may apply to a car benefit arising if either:

– you allow your current employees, or their associates, to use a zero or low emissions vehicle (electric vehicle) for their private use, or

– the electric vehicle is considered available for your current employees’, or their associates’, private use under FBT law.

■ If an employer or lessor provides an employee with the use of a car by means of a lease arrangement, the benefit provided is only a car benefit if the car lease arrangement is a bona fide car leasing arrangement.

■ Associated benefits arising from the provision of certain car expenses provided with the electric vehicle are also exempt from FBT. These are not included when working out if an employee has a reportable fringe benefits amount. These benefits may be provided as an expense payment, property or residual benefit, and include: registration and road user charges, insurance, repairs and maintenance and fuel (including electricity to charge and run electric vehicles).

■ Providing your employee with a home charging station is a fringe benefit – the benefit is not an exempt associated benefit.

■ If the use of the car and the associated car expenses are provided under a salary sacrifice arrangement, the exemption can still apply.

■ Even if an exemption applies for the electric vehicle car benefit, you still need to work out the taxable value of the car benefit provided. This is because the car benefit’s value is used in working out if the employee has a reportable fringe benefits amount. This does not include the value of any associated car expense benefits.

■ An employee’s reportable fringe benefits amount is reported on their income statement or payment summary. Employees do not pay income tax on this amount, but it does impact their income tests and thresholds for family assistance, child support assessments and some other government benefits and obligations.

■ The government will complete a review of this exemption by mid-2027 to consider electric vehicle take-up.

Touch base with us, for more information about this new FBT exemption.

 

Reducing the risk of crypto scams

ASIC has released fresh and timely information around crypto scams.

Scammers use cryptocurrencies, like bitcoin or ether, because they are not easily recovered.

Crypto can be sent overseas quickly with limited oversight. If you lose your money to a crypto scam, your money is likely gone. If you buy crypto, only invest what you can afford to lose as it’s a somewhat volatile investment.

 

How to spot a crypto scam

If you’re investing in crypto, watch out for these potential red flags:

1. Unexpected contact

Someone you don’t know contacts you with investment advice or offers:

■ through phone, email, social media or text message

■ claiming to be an investment manager or broker

■ through an online forum discussing crypto.

2. Recommendations from someone familiar

You may hear about it through:

■ an advertisement or fake celebrity endorsement on social media

■ an online influencer promoting a token and claiming to have made huge, quick profits

■ family and friends who have unknowingly been scammed themselves

■ an online romantic partner who asks for money paid in crypto or suggests an investment opportunity.

3. Pressure to take action

You are being pushed to:

■ transfer crypto off your current exchange and invest through their site

■ use crypto to pay an individual or for a financial service

■ download an investment app not listed on Google Play Store or Apple Store

■ deposit money to invest into different bank accounts

■ pay tax or invest more in order to access your funds.

4. Something just doesn’t feel right

You’re not sure about:

■ the crypto investment offers “guaranteed” high returns or “free” money

■ crypto service providers that withhold investment earnings for “tax purposes”

■ strange tokens appear in your digital wallet that you did not trade yourself

■ there is little paper trail for crypto investments you make

■ the document describing the crypto investment (sometimes called a “whitepaper”) is poorly written or non-existent

■ online searches indicate that an entity may be a scam or has bad reviews

■ a work from home job offer that requires you to purchase cryptocurrency.

 

How crypto scams work

There are three main types of crypto scams:

1. Investing in a fake crypto exchange, website or app

Scammers create fake crypto trading apps to steal your money. The giveaway is usually that they ask you to download the app from their website. They may appear on legitimate platforms like Google Play and Apple, but are usually promptly removed. If you find one on an app store, check for overly positive reviews and be cautious.

2. Fake crypto tokens, investments or jobs trading crypto

■ Scam tokens in crypto wallets – A mystery token appears in your crypto wallet, seemingly worth thousands. If you sell it, a “smart contract” is activated. This transfers your legitimate crypto tokens and private keys to the scammer.

■ Crypto ponzi scheme – You are promised large “returns” by investing in crypto. But the promoter uses money from other investors to pay your “earnings”.

■ Jobs “trading crypto” – You apply for a job ad for “crypto traders”, for a fake or impersonated financial services firm. You are told to set up multiple bank and crypto accounts, and are paid well for a few hours of work a week. You think you’re trading crypto for the entity’s “investors” or “clients”, but you’re actually money laundering for the scammers. You could be charged by state or federal police.

3. Using crypto to pay scammers

■ Requests for payment in crypto – An online romantic partner, job recruiters, work from home job, or fake financial services firm asks for payment in crypto only.

■ Giveaway scams – Fraudulent posts on social media offer to match or multiply crypto invested with them in a crypto giveaway scam. Often, this uses fake celebrity endorsement.

■ Blackmail/extortion – You’re told by a scammer they have your internet browsing history, compromising photos or videos. They demand payment in crypto.

 

Take-home message

If you’re uncertain whether you’re being scammed by an unsolicited contact, keep your powder dry and abstain from acting. Contact your advisors before acting.

 

Fending off GST audits

The Government has welcomed the actions of an ATO-led taskforce in relation to what is termed “the biggest GST fraud in Australia’s history”.

The ATO states that the fraud was first detected in early 2022 and involved offenders inventing fake businesses and ABN applications, then submitting fictitious Business Activity Statements in an attempt to gain a false GST refund. In response, the ATO’s Serious Financial Crimes Taskforce set up “Operation Protego” in partnership with the Australian Federal Police.

Warrants were executed in three States against ten individuals suspected of promoting the fraud (which included the use of social media).

Some of the numbers involved are simply staggering in terms of the perpetrators’ audacity:

■ The ATO has taken compliance action on more than 53,000 “clients”.

■ It has stopped approximately $2.5 billion in fraudulent GST refunds from being paid (as at 31 December 2022).

■ Two individuals have been sentenced to jail following their arrest in 2022.

■ There have been some 87 arrests across the country, “with many more to come”.

■ The ATO has commenced writing to more than 20,000 individuals involved in the fraud.

The purpose of our informing clients of this operation goes to GST audits conducted by the ATO and what they will be looking for should you or your business be selected. As a starting point, generally, the ATO will apply at least some level of scrutiny to Activity Statements where there is a refund of $5,000 or more or where the refund is uncharacteristically large for the taxpayer involved.

The key to staving off a GST audit is the obtaining and retaining of tax invoices. As your tax agent, there is no requirement for us to view each and every tax invoice you hold before we make a claim for GST credits on your behalf on your Activity Statement.

However, no claim can be made without you being in possession of a tax invoice.

Tax invoices for purchases of less than $1,000 must include enough information to clearly determine the following seven details:

1. the document is intended to be a tax invoice

2. seller’s identity

3. seller’s Australian business number (ABN)

4. date the invoice was issued

5. brief description of the items sold, including the quantity (if applicable) and the price

6. GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, as a statement which says “Total price includes GST”

7. extent to which each sale on the invoice is a taxable sale.

 

Tax invoices for sales of $1,000 or more also need to show the buyer’s identity or ABN.

The following example shows:

■ GST included in each line item

■ the sale is clearly identified as being fully taxable by the words “Total price includes GST”

■ the buyer’s identity for sales of $1,000 or more.

If you have any questions around tax invoices, or if you are having problems obtaining them, reach out to us.

 

Lost super

Did you know there is around $16 billion in lost and unclaimed superannuation across Australia? The ATO recently indicated this is an increase of $2.1 billion since last financial year and is urging Australians to check their account to see if some of the money is theirs.

 

How to find lost or unclaimed super

Finding lost or unclaimed superannuation is easy and can be done in a matter of minutes. To find and manage your superannuation using ATO online services:

■ Sign in or create a myGov account

■ Link your myGov account to the ATO

■ Select “Super”.

You can then find and consolidate your super.

Alternatively, if you are unable to access ATO online services, you can call the ATO’s lost super search line on 13 28 65. You will need to provide information such as your personal details, contact details and superannuation fund details.

 

Who can have lost super?

People often lose contact with their superannuation funds when they change their job, name, address, live overseas, or simply forget to update their details.

Lost super is superannuation money held by superannuation funds. You become a “lost member” and your superannuation becomes “lost” if you are:

■ Uncontactable – the fund has lost contact with you and your account hasn’t received a contribution or rollover for at least 12 months

■ Inactive – your account hasn’t received a contribution or rollover in five years.

Your fund will hold your lost super until they find you.

If they can’t find you, some types of lost super will be transferred to the ATO.

 

Who can have unclaimed super?

Unclaimed super is money funds are required to transfer to the ATO twice a year.

Generally, super will be transferred to the ATO from superannuation providers for any of the following:

■ Unclaimed super of members aged 65 years or older, non-member spouses and deceased members

■ Superannuation of former temporary residents who have left Australia for six months or more and their visa has expired

■ Small lost member accounts (with balances of less than $6,000)

■ Insoluble lost member accounts (ie, lost accounts which have been inactive for a period of five years and have insufficient records to ever identify the owner of the account)

■ Inactive low balance accounts

■ Accounts held in eligible rollover funds that were transferred to the ATO before they wind up

■ Amounts your fund transferred to the ATO on a voluntary basis when they determine that it is in your best interest.

 

Don’t wait, start looking!

Superannuation is one of the most important investments many Australians will have during their lifetime. Make sure you search for any lost or unclaimed super you may have as bringing it all together may help you save on fees and will also make it easier to manage your retirement savings.

For information on how to manage your superannuation and view all your superannuation accounts, including lost and unclaimed super in myGov, contact us today.

 

 

Click here to view our Glance Consultants newsletter via PDF

 

 

 

 

 

Reporting accuracy is essential for all businesses, and all business owners should strive to achieve this with their records. As a small business, keeping reports up-to-date could be what you need to secure investment and reach your objectives. But why is this? Below, we will take you through the importance of accurate records. 

 

1. Track Business Growth

When investors come knocking and ask you to expand on how your business has grown and evolved, you need to be able to back up your claims with some solid proof and explanations! Accurate reporting enables you to track how your business is performing, identifying areas that need improvement and where you excel. 

 

2. Prepared Financial Statements

Save yourself time and stress by always keeping your financial records updated. You can achieve this by reporting your income, sales, expenses, and other financial transactions as they occur for maximum accuracy. When the time comes, this information will be on hand and ready to be fed into the financial statements, making your accounts much easier to complete.

 

3. Easier Tax Processing

Navigating tax as a small business owner is challenging, so you should do all you can to simplify the process. Having all your business finances in one account or a group dedicated accounts, with accurate records (invoices/receipts/contracts) to back up claims and reporting to account for different periods, will prevent you from guessing any figures while also making the process more streamlined at tax time.

 

4. Better Management 

As a small business, you must build an excellent reputation to increase your chances of success. Keeping accurate records ensures you pay contractors and employees on time while helping you chase up any delayed outstanding payments. 

 

Do You Need Help with Your Company Records? We Can Help 

If you’re a small business struggling to maintain and manage how your company keeps up with recording financial information, we can offer support. Get in touch with us here at Glance Consultants today to learn more about our services.

 

 

No matter the size of your company, you will need to understand how to read financial statements that reflect your business’s economic activities. As a small business, you may need clarification regarding the ins and outs of financial statements, ensuring you know what is required. Keep reading to learn more about financial statements. 

Overview of financial statements

Financial statements record the financial activity, financial status, and performance of a business. The purpose of these records is to give a better insight and indication into a company’s financial activity and performance, whether for investment, tax, or financing purposes or to assess the future of a business.

Financial statement structure 

Financial statements follow a specific layout consisting of three components. 

• Current balance sheet: Presents assets and liabilities. 
• Profit and loss statement: The recording of revenues and expenses in a given timeframe.
• Cash flow statement: Provides an insight into how proficient a business is with managing cash and covers financing, investing and operational activities.

When combined, these three components deliver an easy-to-follow rundown of the current condition of a business’s finances, providing better performance indicators for the business’s financial future. 

How to create a financial statement as a small business

Along with the structure laid out above, your financial statement should also include an income statement, in which you will detail your business revenues, cost of sales sold, and other expenses in a specified time, following a vertical format. Small businesses must include an income statement, as this section will provide insight into the company’s current financial performance and economic prospects. 

Need assistance with your business’s accounting & bookkeeping? We can help

We hope the above information has helped you understand why financial statements are essential for small businesses. Still, we recognise that you may need extra support when preparing financial statements for your business. Get in touch with Glance Consultants today for help with your financial reporting. 

 

 

The record-keeping requirements and methods for calculating working-from-home deductions have changed for the 2022–23 income year onwards. You need to be aware of these changes to keep the appropriate records for your 2023 Tax Return.

As a rule of thumb, it’s important to make sure you have evidence to support your deduction claims.

• Records of all the hours you work at home
• Receipts for all depreciating assets or equipment you use when you work at home
• Records of your personal and work-related use of assets.

The ATO has recently released a finalised tax guidance (16 February) for claiming tax deductions for working from home below. They have confirmed the new revised fixed rate of 67 cents per hour but with stricter record-keeping requirements.

 

Key changes

From 1 July 2022, the ATO has explained that taxpayers who are working from home can claim deductions based on their actual expenses (actual cost method), or they can adopt a revised fixed rate method that uses a rate of 67 cents per hour.

To use the revised fixed rate method, you must meet the following basic conditions:

• You must be working from home while carrying out your employment duties or carrying on your business on or after 1 July 2022;
• You must be incurring specific additional running expenses which are deductible under section 8-1 as a result of working from home; and
• You must keep and retain relevant records in respect of the time you spend working from home, and for the additional running expenses you are incurring.

The running expenses covered by this method are:

• Energy expenses (electricity and/or gas) for lighting, heating/cooling and electronic items used while working from home;
• Internet expenses;
• Mobile and/or home telephone expenses; and
• Stationery and computer consumables.

Separate claims can be made for depreciation of computers or office furniture, repairs, cleaning and maintenance. The threshold cost for depreciation of an asset remains at $300.

A key change is that you do not need to have a separate home office or dedicated work area set aside in your home in order to rely on the fixed rate method.

Also, if more than one individual is working from home at the same time, each individual will be able to apply the fixed rate method if they each meet the requirements listed above.

The revised fixed rate method can also be used by businesses that operate some or all of their business from home to claim home-based business expenses.

We strongly recommend you start to keep the records the ATO has listed in their guideline.

 

The records you need to keep

You need to keep the following records to prove your working from home tax deductions for the 2023 financial year:

• A record which is representative of the total number of hours you worked from home during the period from 1 July 2022 to 31 December 2022; and
• A record of the total number of actual hours you worked from home for the period 1 March 2023 to 30 June 2023.

For the 2024 and later financial years, the ATO expects you to keep a record for the entire income year of the number of hours they worked from home during that income year. An estimate for the entire income year or an estimate based on the number of hours worked from home during a particular period will not be accepted. 

To use the revised fixed rate method and claim 67 cents per hour for working from home expenses in your upcoming 2023 Tax Return, you will need to start keeping a record of your actual hours working from home now.

A record of your hours for the income year can be in the form of:

• Timesheets
• Rosters
• A diary or similar document kept contemporaneously.

You must also keep evidence for each of the additional running expenses that you incurred. The documents you need to keep in order to demonstrate that you have incurred additional running expenses must show what the expense is and that you incurred the expense.

For energy, mobile and/or home telephone and internet expenses, you must keep one monthly or quarterly bill. If the bill is not in your name, you will also have to keep additional evidence showing you incurred the expenses; for example, a joint credit card statement showing payment or a lease agreement showing you share the property, and therefore the expenses, with others.

For stationery and computer consumables, which are occasional expenses, you must keep one receipt for each item purchased.

One benefit is that you no longer need a dedicated home office to use the fixed rate method.

 

Expenses you can’t claim

You can’t claim a deduction for the following expenses if you’re an employee working at home. These include:

• Coffee, tea, milk and other general household items, even if your employer may provide these at work
• Costs that relate to your children’s education such as equipment you buy – for example, iPads and desks, subscriptions for online learning
• Items your employer provides – for example, a laptop or a phone
• Any items where your employer pays for or reimburses you for the expense.

Occupancy expenses are expenses you pay to own, rent or use your home. They include:

• Mortgage interest
• Rent
• Council and water rates
• Land taxes
• House insurance premiums.

As an employee working from home, generally:

• You can’t claim occupancy expenses
• There will be no capital gains tax (CGT) implications for your home.

Contact Glance Consultants on 03 98859793 or at enquiries@glanceconsultants.com.au today about the best way to calculate the deductions and the record-keeping requirements.

Missed the Director ID Deadline?

Have you missed the deadline to apply for a director identification number (director ID)? If so, you can still apply! The ATO says it will take a reasonable approach with directors who are trying to do the right thing. Importantly, directors who need additional time to apply (beyond 14 December 2022), can request an extension of time by completing an Application for an extension of time to apply for a director ID.

To recap, a director ID is a unique 15-digit identifier that a company director applies for once and keep forever. By allowing regulators to trace directors’ relationships with companies over time, director IDs will help prevent illegal activity and level the playing field for businesses. Director IDs are administered by the Australian Business Registry Services (ABRS), which is managed by the ATO.

 

WHO?

You need a director ID if you are an eligible officer of:

■ a company, a registered Australian body or a registered foreign company under the Corporations Act 2001 (Corporations Act)
■ an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).

An ‘eligible officer’ is a person who is appointed as:

■ a director
■ an alternative director who is acting in that capacity.

You also need a director ID if you are a director of a:

■ corporate trustee, for example, of an SMSF
■ charity or not-for-profit organisation that is a company or Aboriginal and Torres Strait Islander corporation
■ registered Australian body, for example, an incorporated association that is registered with the Australian Securities and Investments Commission (ASIC) and trades outside the state or territory in which it is incorporated, or
■ foreign company registered with ASIC and carrying on a business in Australia (regardless of where you live).

 

WHO DOESN’T?

A director ID is not required if you are a director of an incorporated association (with no ABRN) registered with the Australian Charities and Not-for-profits Commission (ACNC), company secretary but not a director, acting as an external administrator of a company, run your business as a sole trader or partnership.

It has also been recently clarified by the ABRS that directors who resigned their directorship before 31 October 2021 are not required to obtain a director ID.

Deceased directors, as they are unable to personally apply, are also exempt.

In summary, if you run a company that is a small business, are a corporate trustee of an SMSF, operate a not-for-profit or even a large sporting club, it’s quite likely that you’re a director, and therefore you’ll need to apply for your director ID.

 

HOW?

The easiest way to apply for a director ID is online at the ABRS website – www.abrs.gov.au/directorID. To access the online application, use the myGovID app with at least a standard identity strength to log in to ABRS Online. You must apply personally – we as your advisor cannot apply on your behalf, however we can advise you around eligibility, and answer any other questions you may have.

While we cannot apply for a director ID on your behalf, we can advise you around eligibility, and answer any other questions you may have.

 

ATO new-year resolutions

The ATO has released its new year resolutions…and there is not a gym in sight!

According to the ATO, the five new year’s resolutions to keep if you want to stay on top of your tax and super in 2023 are:

 

1. Know if you’re in business or not

Are you earning an increasing income from a side-hustle?

If you answer ‘yes’ to a few of the following questions, the more likely it is your activities are a business:

■ Do you intend to be in business?
■ Do you intend and have a prospect of making a profit from your activities?
■ Is the size or scale of your activity sufficient to make a profit?
■ Are your activities repeated and continuous?
■ Are your activities planned, organized, and carried out in a business-like manner? For example, do you:

• keep business records and have a separate business bank account?
• advertise and sell your goods and services to the public, rather than just to family or friends?
• operate from business premises?
• maintain required licences or qualifications?
• have a formal business plan or budget?
• have a business name or an ABN?

We can help you make this call as to whether your side-hustle may be a business.

 

2. Keep business details and registrations up to date

It’s important to keep your ABN details up to date as emergency services and government agencies use this information to support businesses during disasters. Also, if you’re going to earn over $75,000 this financial year, you’ll need to register for GST.

Even if your turnover is below this threshold, it may be advantageous to register.

 

3. Keep good records

Good record keeping helps you manage your business and its cash flow. It also is your defense should the ATO make an enquiry about your affairs, or select your business for an audit. Feel free to approach us if you need assistance with your record keeping practices.

 

4. Work out if the PSI rules apply to you

The Personal Services Income (PSI) rules are a suite of ATO provisions designed to prevent persons who derive income from their personal services from “splitting” or “alienating” that income with other persons, and therefore minimising the overall tax payable.

If you cannot pass one of the tests within the PSI rules and do not have a personal services business determination (PSBD) from the Commissioner, then regardless of the trading structure you choose, your PSI income derived will be classified as PSI, which means:

■ you will be unable to claim certain deductions against your PSI (basically, your deductions will be limited to those of a normal employee)
■ your PSI, less allowable deductions, will be attributed to you, and therefore included in your individual tax return, and taxed at your individual marginal tax rate as though you were an employee.

We can assist you in determining whether these rules apply to you and answer any questions you have.

 

5. Look after yourself 

The last few years have thrown some curve balls at small business, so it’s good to be prepared. If you’re struggling, the NewAccess program can help. It’s free, confidential, and designed for small businesses doing it tough.

Chat with us if you want to know more about these hot-button new year issues.

 

Reduction in downsizer eligibility age

The eligibility age for downsizer contributions reduced from 60 to 55 years from 1 January 2023. This means if you are age 55 or older, you could invest the proceeds of the sale of your family home to your superannuation outside of your standard contribution caps.

 

DOWNSIZER CONTRIBUTIONS

From 1 January 2023, if you’re aged 55 years or older you may be eligible to make a downsizer contribution of up to $300,000 (or $600,000 for a couple) to your superannuation fund from the proceeds of the sale of your home where specific requirements are met.

Downsizer contributions can be a great way of boosting your superannuation after retirement.

As well as the extra capital they introduce, the contributions can also earn investment income that is either tax-free if you commence an income stream with the funds or be taxed at a concessional tax rate of as low as 15% whilst in accumulation phase.

 

ELIGIBILITY REQUIREMENTS

To be eligible to make a downsizer contribution, you must answer ‘yes’ to all of the following conditions:

1. You must be aged 55 or over from 1 January 2023 (or age 60 or over for any downsizer contributions made between 1 July 2022 and 31 December 2022. Note, prior to 1 July 2022, the eligibility age was 65 years and over).

2. The amount of the contribution is an amount equal to all or part of the sale proceeds (capped at $300,000 per person) of a qualifying main residence, where the contract of sale of the main residence was exchanged on or after 1 July 2018.

3. The home was owned by you or your spouse for 10 years or more prior to the sale. Further, your home must be in Australia and must not be a caravan, houseboat or other mobile home.

4. The proceeds of selling your home are either fully exempt or partially exempt from capital gains tax under the main residence exemption or, if the home was acquired before 20 September 1985, would have been exempt.

5. You make the downsizer contribution within 90 days of receiving the proceeds of sale (ie, usually settlement date).

6. You complete and provide the ‘Downsizer contribution into super form’ (NAT 75073) which is available on the ATO website and provide it to your superannuation fund either before or at the time of making the downsizer contribution.

7. You have previously not made a downsizer

Provided that the above conditions are met:

■ There is no obligation to purchase a new home or to move to a smaller or cheaper home…you can even move into another home you own! You simply need to sell your home and meet the above criteria to make a downsizer contribution.
■ There is no maximum age limit to make a downsizer contribution.
■ The downsizer contribution does not count towards your non-concessional or concessional contributions caps. The contribution is in addition to these caps.
■ There is no requirement to meet a work test or work test exemption to make a downsizer contribution, and
■ Downsizer contributions can be made regardless of the size of your total superannuation balance (TSB). This means a downsizer contribution can still be made even if you have more than $1.7 million in superannuation.

 

DOWNSIZER CONTRIBUTIONS COUNT TOWARDS YOUR SUPER BALANCE

While downsizer contributions can be made regardless of what your TSB is, once the downsizer contribution is made to superannuation it forms part of your TSB.

At this point, the downsizer contribution will increase your TSB which may impact your eligibility to:

■ Make carry forward concessional contributions
■ Make non-concessional contributions
■ Receive government co-contributions, and
■ Receive a tax offset for spouse contributions.

Similarly, a downsizer contribution will also count towards your transfer balance cap (TBC), which applies when you move your superannuation into retirement phase to commence an income stream.

So if you intend to use your sale proceeds to commence a superannuation income stream in retirement, it’s important to note that you have a personal TBC of up to $1.7 million on the total amount that can be transferred from a superannuation account into a tax-free superannuation income stream. You can find out your personal TBC by contacting the ATO or logging myGov.

 

PRESERVATION CONSIDERATIONS

Although the age to make a downsizer contribution has reduced to age 55, you should be aware that the contribution will be preserved until you satisfy a condition of release, such as retirement after reaching your preservation age (currently age 59) or ceasing a gainful employment arrangement after reaching age 60.

However, if you have retired or met another condition of release that frees up your superannuation, the downsizer contribution could still be accessed to provide an income stream but it will have to be by way of a transition to retirement income stream, which is slightly more restrictive than a regular income stream, such as an account-based pension.

 

NEED ADVICE?

Although making a downsizer contribution may seem to be a straightforward strategy, there are a number of eligibility requirements and nuances that you must be aware of when utilising these rules. If you’re thinking about downsizing and contributing to superannuation but want more information, we can help explain the rules in further detail and discuss how you may benefit from this scheme, based on your particular circumstances.

 

The importance of cash flow forecasts

As we enter into the new year, with many economists predicting a slowing of the economy, planning your business’s cashflow is more important than ever.

Studies suggest that the failure to plan cash flow is one of the leading causes of small business failure. To this end, a cash flow forecast is a crucial cash management tool for operating your business effectively.

Specifically, a cash flow forecast tracks the sources and amounts of cash coming into and out of your business over a given period. It enables you to foresee peaks and troughs of cash amounts held by your business, and therefore whether you have sufficient cash on hand to fund your debts at a particular time.

Moreover, it alerts you to when you may need to take action – by discounting stock or getting an overdraft, for example – to ensure your business has sufficient cash to meets its needs. On the other hand, it also allows you to see when you have large cash surpluses, which may indicate that you have borrowed too much, or you have money that ought to be invested.

In practical terms, a cash flow forecast can also:

■ make your business less vulnerable to external events in the economy, such as interest rate rises
■ reduce your reliance on external funding
■ improve your credit rating
■ assist in the planning and re-allocation of resources, and
■ help you to recognise the factors that have a major impact on your profitability.

At this point distinction, a distinction should be drawn between budgets and cash flow forecasts.

While budgets are designed to predict how viable a business will be over a given period, unlike cash flow forecasts, they include non-cash items, such as depreciation and outstanding creditors. By contrast, cash flow forecast focus on the cash position of a business at a given period. Non-cash items do not feature. In short, while budgets will give you the profit
position, cash flow forecasts will give you the cash position.

Cash flow forecasting can be used by, and be of great assistance to, the following entities:

■ business owners
■ start-up business
■ financiers
■ creditors

A cash flow forecast is usually prepared for either the coming quarter or the coming year. Whether you choose to divide the forecast up into weekly or monthly segments will generally depend on when most of your fixed costs arise (such as salaries, for example). When you are making forecasts, it is important to use realistic estimates. This will usually involve looking at last year’s results and combining them with economic growth, and other factors unique to your line of business.

When forecasting overheads, usually a forecast will list:

■ receipts
■ payments
■ excess receipts over payments (with negative figures displayed in brackets)
■ opening balance
■ closing bank balance.

Reach out to us if you would like to know more.

 

Can you use your SMSF property upon retirement?

Many SMSF trustees wonder if they can live in their SMSF property once they retire. This is a common question particularly as property is such a popular SMSF investment.

However, despite superannuation being your own money, there are certain rules around accessing your superannuation which prohibit you from not only using your superannuation to purchase a property, but to live it in now and in retirement.

 

Property as an SMSF investment

Superannuation law allows SMSF trustees to purchase property via their SMSF. However there are strict rules regarding the purchase of property and how it can be used.

For example, the law allows you to purchase property through your SMSF provided the property:

■ Meets the ‘sole purpose test’ of solely providing retirement benefits to fund members
■ Complies with the SMSF’s investment strategy which must allow the acquisition of property
■ Is not acquired from a related party of a member (except for business real property)
■ Is not lived in by a fund member or any fund members’ related parties, and
■ Is not rented by a fund member or any fund members’ related parties (except for business real property).

It should also be noted that the title of the SMSF property must be held by the trustees on behalf of the superannuation fund and rent from the SMSF property must also be paid into the SMSF. As owner of the property, your SMSF is responsible for all costs related to the upkeep and maintenance of the property.

As can be seen, the rules around how a SMSF manages investments are stringent and therefore prohibit you from living in a property owned by your SMSF.

 

What is the sole purpose test?

The sole purpose test is an important rule that must be considered when purchasing investments, such as property, by your SMSF.

For your SMSF to be eligible for concessional tax treatment, your fund must meet the sole purpose test. The sole purpose test requires a superannuation fund to be maintained for the sole purpose of providing retirement benefits to its members, or to their dependents if a member dies before retirement.

In other words, the superannuation sole purpose test dictates that your investments must be for the benefit your retirement and therefore cannot enhance your own personal lifestyle needs. Your SMSF will fail to meet the sole purpose test if your SMSF provides a pre-retirement benefit to yourself as a member of the SMSF.

The risk of contravening the sole purpose test could cause your fund to lose its concessional tax treatment and you as trustee could also face civil and criminal penalties.

 

What are my options at retirement?

Upon retirement, the only way you can move into a property that has been purchased by your SMSF is by transferring the property from your SMSF to you as a member in your own personal capacity. This is also known as an ‘in-specie transfer’ meaning your SMSF transfers its asset to you personally.

Undertaking an in-specie transfer will avoid breaching the sole purpose test in the event that you reside in the property as you will not be obtaining a present-day benefit or personal use of an SMSF asset.

An in-specie transfer is only possible once you meet a condition of release (such as retirement after reaching your preservation age or ceasing a gainful employment arrangement after reaching age 60) and are legally allowed to access your superannuation.

 

Beware of perils of tax and duties

It is important to carefully consider any potential capital gains tax (CGT) on a transfer of property between an SMSF and the members of an SMSF in their personal capacity. Generally speaking, if a property is solely supporting the payment of one or more pensions for fund members, CGT may not apply.

Further, any potential transfer or stamp duty must also be considered as it may apply depending on your state or territory jurisdiction.

 

TAKE CARE!

Just because you have reached preservation age or are retiring doesn’t mean you can use or live in your SMSF owned property after retirement. If you’re thinking about investing in property via your SMSF or are thinking about taking your SMSF-owned property out of your SMSF so you can use it for yourself, be sure to contact us for a chat before you make any decisions.

 

ATO finalises Section 100A guidance for Family Trusts

Do you operate your business via a family trust? The ATO released its final guidance material on the application of section 100A on 8 December 2022 – TR 2022/4 and PCG 2022/2. In doing so, it has fortunately clarified a number of issues.

To recap, the ATO in February 2022 updated its guidance around trust distributions made to adult children, corporate beneficiaries and entities that are carrying losses. Depending on the structure of these arrangements, potentially the ATO may take an unfavourable view on what were previously understood to be legitimate distribution arrangements. The ATO is chiefly targeting arrangements under section 100A of the Tax Act, specifically where trust distributions are made to a low-rate tax beneficiary but the real benefit of the distribution is transferred or paid to another beneficiary usually with a higher tax rate. In this regard, the ATO’s Taxpayer Alert (TA 2022/1) illustrates how section 100A can apply to the quite common scenario where a parent benefits from a trust distribution to their adult children.

The final guidance is not the law and represents no more than the ATO’s view about how the law applies. It carries no legal authority, and clients in consultation with us as your advisor may consider venturing out into deeper and rougher waters, depending on your circumstances.

Following the release of the ATO material, there are a number of risk management options going forward:

■ Only distribute to Mum and Dad – This would be quite safe from section 100A scrutiny. No person pays less tax as a result of any agreement, and this is unlikely to be seen as high-risk by the ATO.

■ Continue to distribute to young adult beneficiaries, but hand over the money – If you are happy to give money to your children, this can be achieved while at the same time optimizing tax.

■ Charge board and current university fees – If adult beneficiaries are living at home, they should pay board (just as if they had a job). This will not add up to large sums, but arm’s-length board for a full year could come to about $18,000. This allows for some tax arbitrage without handing the kids any money.

■ Use of bucket company – Having a private corporate beneficiary caps the tax rate imposed on trust income. Franked dividends can subsequently be flexibly allocated through having a trust structure interposed between the bucket company and the beneficiaries. The present entitlement can be lent back to the trustee for use in the business of the trust, although there are minimum repayment conditions. Avoid having the main trust as a shareholder in the bucket company. The ATO considers circular income flows to be high-risk.

■ Be alert for the “no reimbursement agreement” argument –  If you are contemplating making a gift or an interest free loan to another person, ask questions about the circumstances behind this plan. If it was not in contemplation at the time of the relevant appointment of trust income (up to two years ago), but has arisen because family circumstances have changed recently, there may not be a reimbursement agreement.

■ If making gifts, go once and go big – You are unlikely to escape ATO attention if you have beneficiaries making gifts or loans year- after-year. So, where there is a strong argument to support the ordinary dealing exception, try to make it once-off, and for a significant amount if possible.

If you are impacted, reach out to us to determine which option is best for you and your business.

 

Click here to view Glance Consultants Newsletter February 2023 via PDF

 

 

 

 

 

 

 

As we welcome the new year, business owners should consider ways to expand and grow their businesses. Why? Because growth is crucial for reaching the right audience and improving your sales.

Let’s look at the following six tips for growing and expanding your small business, in 2023.

 

Analyse Your 2022 Performance

Look at your successes and failures in 2022 and make a comprehensive list to calculate debt, profit, close ratio, and other key performance indicators (KPIs). Try to stay as objective as you can.

Analysing these factors helps you understand your business outcomes and establish practical business goals for the coming year. You can also develop a spending plan for 2023 based on your financial projections, the team here at Glance Consultants can assist with this.

 

Accelerate Your Digital Transformation 

Transformative technologies play a huge role in businesses. For instance, artificial intelligence (AI), cloud computing, and the internet of things (IoT) have enabled businesses to explore new operations and expand.

These technologies also help automate manual workloads, centralise disparate data streams, and conduct in-depth analyses of huge amounts of data.

Customer relationship management (CRM) systems and enterprise resource planning can help boost productivity and improve business efficiency. These elements are very lucrative for business growth, as an expanding company will have to deal with more data and deliverables.

 

Know Your Numbers 

Your revenue isn’t really yours unless it’s all in the bank. So, it’s important to know exactly what’s owed to you and when. Setting up email reminders through automation software or software such as Xero helps to streamline your payments.

Plus, you should also know your cash position at all times. Why? Because having an overview of your expected cash movements can help you maintain and track your funds. Glance Consultants can assist you with cash flow management.

 

Revise Sales Strategies 

Giving your clients what they want will help you offer a unique selling proposition (USP) and keep your leads interested in your products and services at all times. So, it’s important to analyse market trends and find out what your potential clients are interested in.

Once you do that, optimise your services and goods to what you find in your research. CRM systems can also assist you in developing lucrative sales strategies that are more effective and targeted.

 

Celebrate Small Milestones 

Celebrating milestones is important, no matter how big or small.

But share your company wins with your employees. Why? Because it will help you increase employee motivation and satisfaction, which will, in turn, enhance time-to-completion, task delivery, and business efficiency.

 

Review Your Supply and Costs Chain 

Reviewing the amount your customers pay for your services/products is essential when setting goals for the new year. This is because performing regular analyses helps you see whether or not you’re operating in line with your production costs, demand, and competitors.

A business or competitive analysis will allow you to find ways you could streamline the business process, such as using CRM software to communicate with and save your customers’ personal information.

Similarly, it could help you understand whether you need to make a change in product or service prices.

Contact Glance Consultants today by calling our office on 03 98859793 or emailing us at enquiries@glanceconsultants.com.au

Deciding on how to fund a business is one of the most challenging decisions for entrepreneurs, especially when they’re starting out.

The two major forms of financing that you can refer to include debt and equity financing.

Nonetheless, both major forms of finance come with both advantages and disadvantages that you should consider, particularly if you’re new in the field of business.

 

What is debt financing?

You can refer to debt financing, wherein an external lender, such as a financial institution or bank can lend the business capital you need.

It offers several options for business owners; such as a personal loan, self-funding, debt-based crowdfunding, business loan, or loan from friends or family.

While you can also refer to a home equity loan if you own a property, this option poses higher risks.

 

Upsides

• Gain total control over your business
• If you borrow funds from family or friends, you can negotiate the interest and favorable loan repayment rates to ensure flexibility in the initial business years.
• Settling the business loan interest may be a deductible business expense.

 

Downsides

• Borrowers will need to deal with repayments with interest.
• Generally requires a collateral
• Offers limited opportunities for small enterprises
• If you’re unable to repay the amount you borrowed, there’s a risk that the lender can seize your assets.

What is equity financing?

This form of financing is a means of acquiring capital where the entrepreneur sells their shares in their company or issues new shares.

In other words, equity financing provides the required financing in exchange for part ownership of your business, for instance, selling shares to investors.

It comes in several forms, such as private equity and angel investment firms.

 

Upsides

• Allows you to get finance, even if you can’t get a bank loan
• Continuous advice and learning from investors
• No need to worry about debt repayments
• Enjoy more cash flow for your business
• Investors are ready to wait for a return on their investment (not always!)

Downsides

• Indeterminable payments to investors
• Relinquishment of a portion of the business ownership and profit
• You need to consider the advice of investors’ before decision-making.

Ultimately, by having a deeper understanding of the upsides and downsides of the two major forms of financing, you can ascertain which of them is more suitable for your business at its current level of growth.

Call Glance Consultants on 03 98859793 or at enquiries@glanceconsultants.com.au

 

When you start your business journey, managing your finances may be easy. However, as your business grows, you might start feeling overwhelmed by balancing your books and keeping your finances in check. We get it. Managing your finances is time-consuming, especially when they aren’t your area of expertise. But there’s a handy solution: hire a financial expert to help sort your queries and present practical solutions for your business transactions.

But hiring an accountant or a bookkeeper can be tricky, especially when you don’t know whom to ask for help. If that’s you, don’t worry. We’ll talk about the benefits of accountant and bookkeeper in this article. Let’s dive in!

 

What Does a Bookkeeper or Accountant Do for Your Business?

An accountant or bookkeeper can do much more than reconcile your transactions, prepare your financial statements and your tax returns. They help you maintain a proper record of your finances, advise on tax planning and compliance, and manage your financial reports.

They can also:

• Offer valuable insights
• Reduce your tax bills
• Update your finance books
• Keep track of your payroll
• Help you maximise profits and tax deductions.

But bookkeepers focus more on day-to-day responsibilities, while accountants are responsible for providing tax, accounting, and business advice or financial insights.

 

When Do You Need a Bookkeeper?

A bookkeeper is responsible for recording and classifying a business’s financial transactions. These tasks can include the payment of bills, reconciliations of transactions, loading of expense invoices to your accounting system, payroll etc. Bookkeepers may or may not have a finance degree but usually have a professional qualification.

The motive of a bookkeeper is to paint an accurate picture of your finances. So, what can a competent bookkeeper do for your small business?

 

They Record High Volume Payments

You need a bookkeeper when you have to track high volumes of transactions. This can be tedious and time-consuming. Plus, keeping an eye on cash flow and business growth can take time and effort you don’t have. As a result, you aren’t able to record every transaction you make, and your books become a mess. You can prevent that from happening by obtaining the services of a bookkeeper. They’ll ensure your books are always updated, allowing you to track system flaws and areas of improvement.

 

They Help Make Cash Flow Predictable

Cash flow statements help you sort out the unpredictability of your income and expenses by showing how much money you owe people and vice versa. This will assist in making day to day business decision. So, a bookkeeper keeps you updated on your cash flow on a periodic basis.

 

Automate Administrative Tasks

Their skills help them automate administrative tasks that prevent you from concentrating on your primary business goals.

 

When Do You Need an Accountant?

An accountant can evaluate your financial performance and position. They serve as a more strategic planner, especially during tax time.

 

Wondering if you need an accountant? Here are a few common instances:

Manage Your Debt

From managing the inventory to managing employees, a small business owner has a million things to take care of. But debt is one of the top items on the list. If you find yourself struggling to manage your debts, you need an accountant. An accountant can advise you when to reinvest in your business and find the least expensive borrowing options.

 

Provide Advice on Financial Decision-making

Accountants help your business grow by helping you implement an effective business strategy. They assist in managing your tax debts and assist in liasing with regulatory bodies such as the ATO and ASIC. They can also assist with payroll issues. They prepare your annual tax returns and financial statements including the preparation and lodgement of various statutory documents with the regulatory bodies. An accountant will ensure you are on top of tax compliance so that you are able to focus on your core business.

So, it would be best to work with an accountant when you need assistance with financial decision-making, tax law and obligations, assets investments, cash flow management, entity structures etc.

 

They Can Help Improve Profits

If your business’s revenue has increased, but your profits have not, it’s a sign that you may need to change your strategy and therefore need the assistance of your accountant. A competent accountant can provide key industry specific insights and prepare user friendly management reports that help you recognise where to minimise costs and how to improve revenue in order to increase your profitability. An accountant will assist in minimising your tax liabilities which ultimately lead to increased after tax profits. Part of this strategy could be ensuring you have the correct business structures in place.

 

How to Choose Whom You Need?

Working with a bookkeeper and accountant helps you take control of your business’s financial performance and position. But finding an experienced accountant and bookkeeper is challenging. This is where we come in to the picture.

We help you make the right decisions and gain complete control over payroll, superannuation, invoicing, bank reconciliations, tax return preparation, preparation of financial statements and business strategy.

If you need assistance, please get in touch with us on 03 98859793 or at enquiries@glanceconsultants.com.au

 

What is cyber resilience?

Cyber resilience promotes business continuity, organisational security, and information systems under one unit. The concept is based on providing outcomes despite challenging cyber events, including economic slumps, natural disasters, or cyber-attacks.

Cyber resilience is essential when it comes to ensuring seamless business continuation. The benefits aren’t limited to mitigating financial loss. It also helps reduce the risk of exposure to critical business infrastructure. Moreover, a cyber-resilience company can instil trust and loyalty in its clients. A cyber-resilient company also increases your business’s values and increases your business’s competitive advantage.

What is cyber security?

On the other hand, cyber security is the process of defending your electronic devices and data against malware and malicious attacks. The terms extend to a variety of applications. Some typical applications include network security, information security, and operational security.

Cyber security contains three types of cyber threats: cybercrime, cyber-attack, and cyber-terrorism. These pose potential threats to your computer system when malicious software gain control of your system.

Difference between cyber security and cyber resilience

Cyber security is protecting your business assets, servers, databases, customer information, electronic devices, websites, apps, and data from cyber-attacks. It focuses on dynamic solutions that:

● Protect your business from potential hackers and information leaks
● Combat the expansion of cyberattacks like SQL injections, phishing, malware, etc.

In contrast, cyber-resilience refers to the ability of a business to detect, create risk plans for, respond to, and recover from cyber-attacks. Cyber resilient companies can reduce the impact of a cyber-attack and quickly bounce back from it.

How to build a cybersecurity and cyber resilience program

Integrating effective strategies to ensure the optimal security of your business from cyber threats is crucial. A cybersecurity strategy can help you prevent malicious risks, while a cyber resilience strategy can enable you to mitigate the potential effects of these attacks. So, your company needs to have backup plans for both.

The below steps can help you integrate these strategies into your business process.

● Protect backup data

Data protection is an essential tenant of cyber security. If a cyber-attack occurs, saved data will help to resume your normal business operations.

For instance, if your business was hit with an SQL injection — a type of cyber-attack that takes control of and steals data from your database, your data would be exposed, allowing hackers to leak it online or send you a ransom demand.

Protecting your data would come in handy during this time. Plus, regularly checking your data and storing it on a separate network can help restore your database and ensure better cyber resiliency.

● Discuss mitigation and prevention processes

Cyber security and resilience can only be achieved when everyone in your company is on the same page. They need to understand how important this step is to defend themselves against a cyber-attack.

So, if you want your business to be cyber-resilient, you should ensure your board members understand the right metrics and information. It would be best to explain to them the business risks associated with a lack of cyber resilience and security.

● Simulate a security breach incident

If you simulate a practical example of how your business can be affected in the event of a cyber-attack, it will help you develop strategised cyber resilience plans.

You can also escalate a potential security breach to notify clients and investors while making everyone feel involved.

The takeaway

Cyber resilience and security are essential to business success and data protection. But they aren’t the same thing. Cyber security is the practice of preparing for cyber-attacks, while cyber resilience is about recovering from them.

Businesses need to implement both practices to ensure they can provide their customers with as much security as possible.

Contact our friendly team of trusted advisors on 03 98859793 or at enquiries@glanceconsultants.com.au to discuss your needs and our full service offering.