Are you and your business ready for June 30?

With June 30, 2012 just around the corner this is the best time to take stock of your tax affairs and engage in proactive tax planning for yourself and your business. It’s also the best time to review your current year goals and start setting next year’s goals. The trouble most people are facing is knowing where to start. So, what should you be considering in preparation for the EOFY?

• Pay Compulsory Super – pay your superannuation guarantee contributions before 30 June 2012; these payments are tax deductible in the financial year that they are paid.
• Pay Bills – ask your accountant what expenses are worthwhile paying before 30 June as certain expenses can also be tax deductible in the year in which they are incurred.
• Delay Issuing Invoices – consider delaying issuing invoices for work that are close to June 30 and issue them in July, thereby deferring the tax until the next financial year (2012/13).
• Small Business Instant Write-Off Of Asset Purchases –  review your asset register and determin what items needed to be repalced, including obsolete or damaged equipment. If you are an eligible small business you will be able to obtain an instate write-off for equipment purchsed for up to $1,000 (GST exclusive). However, after July 1, 2012 the immediate write-off threshold increases to $6,500 (GST exclusive), so if you have any equipment purchases over $1,000 but under $6,500 this month you may want to consider holding it off until next month.
• Delay Capital Gains Tax – if you sell investment shares or rental properties, remember that for Capital Gains Tax (CGT) purposes the tax is based on the contract date and not the settlement date. Bear in mind that any investment assets sold and ownership was greater than 12 months they may be eligible for the 50% discount tax incentive.
• Stock Take Preparation – know what your stock take obligations are so you have time to prepare for and carry one out.
• Declare Any Bonuses or Director’s Fees Before June 30 – you are not required to pay these by June 30,  but the company must be committed to the payment via a director’s resolution in order for these to be deductible.
• Are Your Books Up To Date? – if not, use this time to get them in order so that your reconciliation are ready for your end of financial year requirements. There are great accounting software both traditional desktop and online versions now readily available and user friendly (including reliable bookkeeping services) that can ensure that this process is as stress free for you and your accountants.
• Business Structures – as tax considerations extend well beyond merely compliance obligations, you should take the time to ensure that your tax affairs are structured in the manner that best suits your needs. The right tax structure will provide the solid foundation on which you can build the rest of your business; and access those certain tax incentives when needed. The structure in which your business is set up will depend significantly on your needs. Each possible structure offers its own advantages and disadvantages. If you think the structure in which you currently run your business may not be the best structure for you, the new New Year is a good time to discuss alternative structures with your tax advisor.
• Take Time To Reflect – it is important to review and reflect on your end of financial year results, even if you’re happy with your results. Did your business achieve what you set out to achieve during the last 12 months? If not, where can your business improve?

Last Friday we held our first information session on the topic of “What is the Cloud?“. We had a small but enthusiastic group of clients and non-clients attend; which was exactly what we were after; a relaxed atmosphere conducive to some good quality discussion.

Our information session covered the following topics:

A basic run down of the cloud and how it works:
Being accountants and not IT professors we first had to lay down a very basic foundation of what the cloud was, which was essentially the delivery of computing as a service, rather than a product over the internet. Although there are numerous arguments on what the real definition of “cloud” is, we kept a simple view on it; in that it is much like a utility such as electricity. We can, through the cloud, subscribe to SaaS (Software as a Service) based on a monthly subscription.

The software and data are hosted by a provider on their servers off site which we can access via the internet through a web browser. From a business perspective the external hosting of software is brilliantly convenient as utilising the cloud allows the provider to take care of all the hardware and software maintenance issues. So as a business owner who is more concerned on using their own time on constructive business issues, you can now say goodbye to wasting time and money on expensive software, annoying periodic software upgrades, expensive servers and licensing issues, as well as the countless hours and money with your IT people to make it all work seamlessly.

Clearing misconceptions of the cloud:
There are many who hold fears on what the cloud offers and are hesitant to making that leap into the cloud. The funny thing is that most of us have already made that leap to the cloud without even realising it. For instance one of the first mainstream applications of cloud based technology occurred 10 years ago through internet banking. It was initially treated with about as much apprehension as swimming with great white sharks, it seemed way too dangerous. However, 10 years later most of us can’t live without internet banking to the point that even our IT-phobic grandparents use it.

Xero, the world leading accounting system:
After establishing the solid foundation and future of Xero, through its investors and worldwide set-up, we were quick to point out how Xero’s concept of a “single ledger” is an embodiment of all the cool things that the cloud offers. The single ledger concept provides a great platform for business owners and accountants to develop a more proactive and meaningful business relationship.

It never ceases to amaze me that every time I demo Xero it wows our clients, and this event was no exception with everyone who attended our session agreeing that Xero is not only beautifully simple but it was also efficiently smart. They were astonished at the differences between the archaic software they were tied to and the time saving methods of Xero; it was a real what the… moment for some attendees. So much so that they were excitedly making the following comments:

• I don’t need to send my file to my accountant?
• I don’t have to roll over at year end?
• I don’t have to spend hours processing my bank statements and then do a manual bank reconciliation after it?
• I don’t need to do my invoices in word?

And my response was yes, yes, yes and yes.

Cloud enables interaction between applications:
We then touched upon the ability to pick and choose cloud applications that would seamlessly communicate with each other. This is perfect for start-ups or any business that need a number of software solutions for day to day running. Xero has software partners that can integrate their software with Xero; as an example Xero can collect accounting data as well as update contact lists from other cloud software.

We then showed some case studies which showed the cloud in action within the business; in real life terms. We had included the very slick Taylor Stitch case study which perfectly illustrated how the cloud solved some key aspects of their business through the use of Vend HQ for POS (Point of Sales) and inventory, Xero for accounting, and Shopify for their online retail shop.

And that was that, over some drinks and food we were able to have some great discussion with business owners on “What is the Cloud?“. We believe the session helped to open their eyes on what is out there in the clouds, to think outside the box, and more importantly see many benefits the cloud could bring to their business.

A big thank you to those who attended, we really appreciate the support, your comments and feedback. We look forward to seeing you all again at our next event in the near future.

Next week on Friday December 2, 2011 we will be hosting our first free information session, here at our Red Hill office, to discuss the phenomenon called the “cloud”; which we believe (if not happening as we speak) will revolutionise the way we all do business.

Our first session will be focusing on the cloud concept and the construction industry.

• What is the Cloud?
• How will it benefit your business?
• What cloud software solutions are available?

We’ve been lucky enough to have as our guest speaker Jason Forbes, Xero‘s Senior Account Manager for Queensland. Xero is a New Zealand company (founded in 2006) who is currently leading the way for accounting software in the cloud. Xero started small with an idea; a concept; a brighter future: to produce “beautiful accounting software” that would be accessible anywhere, any time, on any device. And that’s what Xero did. Five years down the track they have produced a seriously impressive product that has wowed not only our kiwi brothers but the world! Xero certainly has raised the benchmark. A product compatible with other leading cloud software specialising in payroll, e-commerce, inventory, work flow management, point of sale; the list goes on and on. What desktop accounting software can put that down in their CV? Not many.

So come join us, meet us, bounce off ideas with us next week on Friday 2nd December 2011 at 4:00PM (that’s QLD time). Let’s take the leap into the clouds.

Being brought up with Mac computers, I was destined to face many problems when it came to compatibility and the ability to replicate tasks which were performed on Windows based computers. As I have ventured into the accounting industry this problem became even more noticeable when it came to software which would never be made for the Mac OS X system. Highlighting this point is the fact that the Australian Taxation Office (ATO) doesn’t provide its E-Tax platform to Macintosh users. Instead, they offer a tax deduction for any cost incurred in purchasing any emulation software required to use E-Tax. Leading accounting software provider QuickBooks has only this year released its first ever version compatible for Mac, but perhaps it’s too little, too late.

Over the recent months, this problem has become less and less of an issue at Rush & Associates. We have recently joined the “cloud” revolution by introducing Xero to a number of our clients. The beauty of Xero is that it can be accessed any where, any time, as long as you have an internet connection. There is now no need to pay for the annual cost of the most recent release of MYOB or QuickBooks, as Xero regularly performs software updates whenever required. Both ourselves and the client have access to a “live” portrait of their business. Daily bank feeds provide the client with the opportunity to reconcile each transaction, which removes the annoyance of querying clients six to twelve months after the transaction has occurred; which would be done when we were provided with the bank statements for the previous financial year. The problem with traditional accounting method is that information was provided too late. Important business decisions were being made based on past performance. Xero allows business advice to be specific to the problems that they are currently facing.

By adopting Xero we also remove the painful barriers that were previously encountered by Mac users. It was only this week that we had a client contact us asking the questions, “I purchased a Mac, can I still access my MYOB file via remote access?” My old accounting ways initiated the thought of setting up a dual operating system which would provide the opportunity for Windows to be used on the Mac. Suddenly, I realised, what have I been preaching over the last 6 months? Take everything on-line and access the information any where, any time. I came back to my colleagues and suggested that this was the perfect opportunity to offer the client the option to convert from MYOB to Xero. In doing so our client would be able to reap the benefits of their new Mac computer and experience the capabilities that Xero provides by allowing them to access their accounting records via the internet through their chosen device; either a Mac, Windows based PC, or mobile device.

As technology has evolved, I was always hopeful that accounting software would move in the same direction. However, this wasn’t the case until the introduction of Xero. Now, our clients are able to utilise everyday basics, such as iPhone’s and iPad’s to access their accounts and reconcile the company bank account. They are able to take photos of invoices and upload them to the specific transaction to which it relates; removing the potential to lose the receipt.

At Rush & Associates we strive to stay up to date with technological advancements. We regularly review our IT set up to ensure that we meet the needs and wants of our clients. After all, our clients don’t want to have to worry about basic accounting issues, they just want to run their business in the best possible way, and so do we!

This truly is The Beauty of the Cloud.