You now need a director identification number (DIN) if you’re a director of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation.
A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with Australian Business Registry Services (ABRS).
Directors will only ever have one director ID. They’ll keep it forever even if they:
If you have a myGovID or apply for a myGovID (different from a myGov account) follow the link https://www.abrs.gov.au/director-identification-number and complete the steps to apply for your DIN.
As always feel free to reach out to our team with any questions or assistance you require. Contact us now
At Accorti Accountants +Advisors we are Business Accountants and are here to help you achieve your goals. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
Having control over how your retirement savings are invested is one of the many benefits of self-managed super funds (SMSF). On the flip side, the responsibilities and management skills required to run a SMSF are significant. This is because you’re accountable for your SMSF’s regulatory compliance—not your accountant, financial adviser, or solicitor. We consider what might make an SMSF more attractive than investing through a super fund, and some of the downsides to consider.
Having an SMSF provides more choice and freedom to access investment options that would otherwise be unavailable through a super fund. This includes assets like art and collectibles as well as physical precious metals and alternative assets like cryptocurrencies.
Unlike investing with an industry or retail super fund, your SMSF can borrow to invest in property or shares, typically using a structure called a Limited Recourse Borrowing Arrangement (LRBAs). This strategy may be an attractive option to help expand your investment portfolio. However, there are restrictions and compliance requirements. The Australian Taxation Office (ATO) has recently warned investors of the dangers of over-investing (and over borrowing) into property within SMSFs.
If you’re an SMSF trustee, you’re entitled to the same reduced tax rates that are available through industry or retail super. Your investment return is therefore currently taxed at a maximum of 15% rather than your marginal tax rate which could be as high as 45% outside of superannuation.
An SMSF fund can have up to six (6) members. Bringing six investors’ money together, offers greater scale to access investment opportunities that may not be available to you as an individual investor. Having scale may also help to keep fees down.
Managing an SMSF is not easy. As the trustee, you need to ensure the fund complies with all relevant regulations otherwise you could face severe consequences for getting it wrong. If the fund is deemed to have breached its compliance responsibilities, penalties can include fines and civil or criminal proceedings. Depending on the transgression, tax penalties could be levied, including fund returns being taxed the top personal marginal tax rate as opposed to the concessional super rate of 15%.
What investors often overlook is the financial and investment expertise required to run, or be involved in running, an SMSF.
As a trustee, you’ll be responsible for creating and implementing your own investment strategy—one that will need to deliver enough returns to adequately fund your retirement. The importance of this cannot be understated.
This means you need to:
You’ll also need to remain up to date on any changes to legislation that affect SMSFs as these may have compliance requirements. An understanding of how to manage legal documents, such as a trust deed, is also beneficial. However, a legal professional could help you with this.
The administration and management of an SMSF is time intensive so if time is something you’re short of, an SMSF may not be a good option. On the other hand, many SMSF investors enjoy the sense of involvement and purpose that running their own fund brings.
If you find you don’t have the time or investment knowledge to manage your SMSF, you can outsource this to investment managers, financial advisers, or other experts. This will come at an additional cost though and may defeat the purpose of “self-managing” your super (ie would you be better served with a managed super fund via an industry or retail fund?).
There is a lot of controversy around what should be a reasonable amount to set up an SMSF. Depending on the fund’s complexity and structure, set up costs, administration, reporting and legal fees can become expensive, so a general rule of thumb is to have around $500,000 as a minimum although there is no legal minimum.
Bottom line: SMSFs are not for everyone, they can offer significant benefits. Running an SMSF successfully requires investment, legal, super and admin skills—or the ability to get help from people who have those skills. A conversation with a financial adviser or accountant could help you decide whether going it on your own is a good option.
At Accorti Accountants & Advisors we specialise in helping clients with establishment and ongoing compliance for SMSFs. Contact us now. We work with clients all over Australia and have offices in Brisbane and the Gold Coast.
The COVID-19 pandemic is a crisis on a scale beyond any level experienced in recent history. The good news is this crisis is temporary. However, the challenge it’s created for business remains. Now is the time to future proof your business to recover, adapt and thrive.
Below are Accorti Accountants + Advisors top 5 tips to improve your business today.
Sales growth may be difficult in the next 12 months. Instead, focus on improving your sales by reducing your sales cycle time. Reduce the amount of time (and resources) required to take an initial enquiry to a completed sale to a happy customer. Map your current sales cycle and look to reduce the cycle time by 25%. To put this another way, try to find a way to deliver 12 months’ worth of sales in 9 months. Look for ways to streamline the process and cut turnaround times. This will bring forward your annual revenue and result in increased monthly sales now (when you need them).
Now you have made the sale lets ensure you get paid for it. Review your payment terms to ensure they are fair to both parties but work for you. Collect deposits, or payment in advance, where possible. Map your cash collection cycle time (debtor days) and look to reduce it by 25%. If it currently takes you 30 days to get paid then look for ways to reduce it to 22.5 days. Ensure you get paid on-time and in full. Provide various payment methods. Automate your collection procedures in your accounting software. Talk to your debtors often and early. Resolve disputes.
Cash is king. You have earned it, and collected it, now put it to good use. Reduce your cash burn by reducing inventory levels and discounting old stock to free up cash, rationalise your staff levels to the current requirements of your business. Examine your profit and loss line-by-line and search for costs that can be reduced or eliminated. Justify your expenditure to determine which expenses are nice to have, must have or critical. Apply Zero-sum Budgeting. Remove waste.
Use this time to analyse your business. Assess your products and services to determine which are growing, which have high and low margins, and which are unprofitable. Consider focusing your operations on the one or two areas that are growing, high margin and you can deliver efficiently. Add value to your customers. Deepen your relationships with customers, staff, and suppliers. Ask for referrals. Develop a reputation as the best in your field.
Focus on building a business with a sustainable advantage. Set goals for the next 5 years. Look for ways to build a better business with long term, sustainable success. Use this process to address shortcomings in your business. Use systems and automation to your advantage. Double down on initiatives that work and remove those that do not. Seek advice and support to reduce risk and improve your likelihood of success. Focus on your strengths and deliver value.
At Solve Accountants we are here to help you build a better future. We are experienced in assisting business owners plan, build and protect their futures. We can help you assess risks and embrace uncertainty with confidence. We can help you find solutions to the big issues impacting your business today. We work with clients all over Australia and have offices in Brisbane and the Gold Coast. If you would like to discuss your business financial recovery or need help please contact us now.
As Australia returns to work in early January 2020, we are all aware of the devastation to our communities and environment due to the recent Bushfires across the country. The current bushfire emergency in Australia is a national disaster on a scale above and beyond any level experienced in recent history (and it continues) …. While there is debate about the cause, emergency preparedness and the National response there can be no debate that this event is a national failure of risk management and has highlighted the impact of “blind spots” in life and business.
While the Government and other agencies were aware of the issue, they mistakenly assumed that the risk was not significant enough to take preventative actions. They were blind to the potential impact and they got it wrong.
In life, this may be the same as ignoring income protection or life insurance. In business the same as ignoring a competitor or cutting corners to save costs. This is not to say that you should take no risk; But you should be aware of the risks you are taking and ensure you understand the impact if you get it wrong.
Do you have blind spots?
While this issue is fresh in our minds, honestly assess your affairs and ask yourself the following:
Business
Personal
This is scary stuff and often ignored because of it. But it is better to think about it now, assess the level risk you are prepared to accept, and plan accordingly then be stuck with the impact of an unexpected disaster. Unfortunately, bad things happen.
We can help
At Accorti we are here to help you build a better future. We are experienced in assisting business owners plan, build and protect their futures. We are able to help you assess risks and embrace uncertainty with confidence. We can help you find solutions to the big issues impacting your business today.
At Accorti Accountants +Advisors we are Business Accountants. We work with clients all over Australia and have offices in Brisbane and the Gold Coast. If you have any questions or need help please contact us now.
#blindspots #riskmanagement #advisory #advice
The ATO announced on 18 December 2019 (just in time for Christmas) an extension to their insurance policy request from insurers for another 5 years to include the year(s) ended 2016 – 2019 as part of their ongoing taxation compliance profiling activities to identify those taxpayers who are not fulfilling their tax and superannuation reporting obligations.
The ATO has been using a variety of data matching measures to identify those individuals who own or control significant assets to ensure that their level of income reported to the ATO is consistent with the taxpayer’s “lifestyle”. The ATO now receives a vast amount of data from banks, insurers, state titles office(s) and other agency to help them identify at risk taxpayers.
Under the program, the ATO has already collected data on insurance policies for the 2013–14 and 2014–15 financial years. The ATO expects to receive information about assets owned by around 350,000 taxpayers from 2015–16 to 2019–20 as part of its data-matching program of work.
ATO Deputy Commissioner Deborah Jenkins said that if a taxpayer reports their taxable income to be $70,000 to the ATO but they have a yacht valued at $3 million then there is likely to be some red flags raised.
Taxpayers who make a voluntary disclosure can generally expect a reduction in the administrative penalties and interest charges that would normally apply.
Are you at risk? We can help you.
At Accorti Accountants +Advisors we are experienced in managing high- value voluntary disclosure(s) and taxation audits with the ATO. If you have concerns you may be at risk, please contact us to discuss your options. Having a plan in place prior to any action by the ATO is prudent.
At Accorti Accountants +Advisors we are Business Accountants. We work with clients all over Australia and have offices in Brisbane and the Gold Coast. If you have any questions or need help please contact us now.
#tax #lifestyle #lifestyleassets #ato #audit
The Christmas countdown is happening, and we are rushing to get everything done to capitalise on all opportunities before the post-Christmas lull. Whether Christmas is a busy period or not, it does cause volatility and dislocation for most businesses. It is not business as usual and that is what causes the problem.
Business owners cope better with predictable and consistent trading conditions, and solutions to issues that arise are easier, it is a very different picture during disrupted periods. Watch out for these five things this Christmas:
1. The headache that is Christmas trading stock – Ho, Ho, No …
If your business sells goods and your activity spikes over Christmas, there will be the temptation to increase stock. It makes sense as long as you don’t go over the top. Having too much post-Christmas stock means you have a lot of cash tied up with stock or will be carrying out of season product. Find suppliers than can work on short notice. Or better still, see if they will place stock on consignment, then you only pay once stock sells. Sometimes it is better to lose a few sales rather than carrying a lot of stock and headaches into the New Year.
Stock management is not just about the cost aspect. Consumers will purchase online if they cannot purchase in store. Retailers can capitalise on this by giving consumers the opportunity to buy online while still in their store if the stock is not currently available or may provide free shipping.
2. The trend to discount
Consumers want a bargain and usually find one. With Black Friday sales stock is usually available. Those consumers waiting for last minute bargains just before Christmas, are left with whatever stock remains.
If you decide to discount stock, it is crucial to know what your profit margins are so you can calculate what you amount you can discount. Carefully consider your strategy and what your business can sustain. Example – a business with 30% gross profit margin that decides to offer a 25% discount needs to increase sales volume by 500% simply to maintain the position they were in beforehand. Quite often businesses end up trading below their break-even point and therefore generate losses.
3. The increased costs of Christmas
Costs increase over the Christmas period. Employing more staff, holiday and other leave costs, downtime from public holidays, and promotional costs all add to the cost of doing business. Keep a close eye on the costs. It is awesome to embrace the Christmas spirit as long as you don’t get a hangover for New Year.
A lot of businesses bring on more casual staff. Make sure you are paying staff the correct pay rates and meeting your Super obligations. Example – Under Retail Award, the rate for casuals (21+ years) starts at $26.76/hr. There is a 3 hour minimum shift for all casual workers. Check the Fair Work website findyouraward to check correct rates.
4. Cash flow headaches into the New Year
Quite often the New Year means quieter trading and also tighter cash flow. The first quarter (Jan-Mar) is usually the toughest quarter for cash flow for the year. Ensure you have a cash buffer heading into the New Year. Don’t over-commit at the end of the year or it will lead to problems in the New Year.
5. Be like Scrooge – chase in those debts
If your customers have accounts, start following up the debtors early. If they are experiencing any cash flow problems, Christmas will increase that pressure. Creditors who chase early and hard get paid first. You don’t want to be the last supplier on payment list – the cash flow bucket may well be empty at that time.
Christmas is a magical time of year. Don’t get caught up in the hype and rush and lose control.
At Accorti Accountants +Advisors we are Business Accountants. We work with clients all over Australia and have offices in Brisbane and the Gold Coast. If you have any questions or need help please contact us now.
#tax #advisory #bookkeeping
The Government has resurrected the Superannuation Guarantee amnesty giving those employers that have fallen behind with their Superannuation Guarantee obligations the ability to self-correct themselves. However, this time the amnesty incentive is strengthened by harsher penalties for those that fail to take action.
The amnesty was originally announced back in May 2018 and was due to run 24 May 2018 – 23 May 2019, but the amnesty failed to secure passage through Parliament after a backlash from those thought that the amnesty was too lenient on recalcitrant employers.
The Australian Government reports more than 7,000 employers have come forward since the original announcement to voluntarily disclose historical unpaid super. The Superannuation Guarantee tax gap is estimated at around $2.85 billion in missing or late Superannuation Guarantee payments.
New legislation to enable the amnesty is currently before Parliament, if enacted it will apply from the date of the original amnesty announcement 24 May 2018 – 6 months after the legislation has passed Parliament. Employers have this time period to disclose voluntarily unpaid or underpaid Superannuation Guarantee payments to the Commissioner of Taxation.
The amnesty applies to historical unpaid or underpaid Superannuation Guarantee for all periods up to March 2018 quarter.
Employers must disclose the outstanding Superannuation Guarantee to the Tax Commissioner to qualify for the amnesty. They must pay in full, or if that is not possible for the business then it must enter into a payment plan agreement with the Australian Taxation Office. If they agree to the payment plan and fail to meet the payments, then the amnesty will not apply.
The amnesty will only apply to voluntary disclosures. The Australian Taxation Office will continue with their compliance activities during the Superannuation Guarantee amnesty period so full penalties will apply if they find the underpayment first. The amnesty also does not include amounts already identified as owing or the employer is subject to an audit with Australian Taxation Office.
Normally, if the employer fails to meet their quarterly Superannuation Guarantee payment on time, they will have to pay the Superannuation Guarantee charge and lodge a Superannuation Guarantee Statement. The Superannuation Guarantee charge applies even if you pay the outstanding Superannuation Guarantee soon after the deadline.
| What employers pay for failing to meet Superannuation Guarantee obligations | |
| No Amnesty | Amnesty |
| Superannuation Guarantee charge comprised of: | Superannuation Guarantee charge comprised of: |
|
|
|
|
|
|
| Penalties of up to 200% of the amount of the underlying Superannuation Guarantee charge (minimum 100% for quarters covered by the amnesty) | No penalties |
| A general interest charge if the Superannuation Guarantee or penalties are not paid by the due date | A general interest charge
|
| Superannuation Guarantee charge amount is not deductible – even if you pay the outstanding amount | Superannuation Guarantee charge amount is deductible |
Under the quarterly Superannuation Guarantee, the interest component is calculated on an employer’s quarterly shortfall amount from the first day of the relevant quarter to the date when the Superannuation Guarantee charge would be payable (not from the date the Superannuation Guarantee was overdue).
The ability to deduct Superannuation Guarantee charge and the reduction in penalties under the amnesty could be significant for employers that have fallen behind with their Superannuation Guarantee obligations.
If Superannuation Guarantee is paid late, special provisions exist within the legislation to automatically protect employees from inadvertently breaching concessional contribution cap limits if the unpaid Superannuation Guarantee is paid to the Commissioner and then transferred to the employee’s superannuation fund. Where the employer makes the payment directly into the employee’s fund, the individual would need to apply to the Commissioner requesting the exercise of discretion to either disregard the concessional contributions or allocate them to another financial year.
If an employer fails to take advantage of the amnesty and is found to have underpaid employee Superannuation Guarantee, they are required to pay the Superannuation Guarantee charge which includes penalties of up to 200%. Outside of the amnesty period, the Australian Taxation Office has the power to reduce the penalty in whole or part. However, the legislation enabling the amnesty imposes tougher penalties on employers that do not voluntarily correct unpaid or underpaid Superannuation Guarantee by removing the Australian Taxation Office’s capacity to reduce these penalties below 100%. In effect, the Commissioner loses the power for leniency even in cases where an employer has made a genuine mistake.
Even if you don’t think that your business has any Superannuation Guarantee underpayment issues, it is well worth completing a payroll audit that will ensure your payroll calculations are correct, and that your employees are being paid at a consistent rate as per their entitlements under workplace awards and laws.
If your business has fallen behind on its Superannuation Guarantee obligations and is eligible for the amnesty, you need to start working through the issues now or contact us to work through the issues for you. There are several calculations that need completing and these may take some time to complete.
If your business has engaged any contractors during the period covered by the amnesty, then the arrangements will need to be reviewed as it is common for workers to be classified as employees under the Superannuation Guarantee provisions even if the parties have agreed that the worker should be treated as a contractor. You cannot contract out of Superannuation Guarantee obligations.
If a problem is revealed, you can correct it without excessive penalties applying under the amnesty.
At Accorti Accountants we can help you ensure you have met your obligations and, in the event you have not, help to resolve.
Contact Us at Accorti Accountants +Advisors located on the Gold Coast & Brisbane, Australia to discuss your super obligations
#accortiaccountants #superamnesty #tax #superannuation #smallbusiness
Question: Am I better off to do business myself or partner with someone?
At Accorti, we get asked this question a lot. And I have asked myself this question many times. This is a question with no easy answers. You will generally not know the answer until after the fact.
I find that for most clients, the question has one main driver: Fear. Fear of the unknown, of failure, of not having all the answers or fear of XYZ….
I recently had a client which had 3 partners in a private company that started several years before coming to us. They had similar goals so “joined forces”. I doubt very much at the time they sat around and said “I’m really scared that I can’t do this on my own, lets join together” but that is what happened (they just didn’t talk about it).
Needless to say, people change and the subtle differences started to magnify. The financial reality of having partners sunk in. As there were 3 owners they all needed to earn a living and therefore too much capital came out to support their respective families, cash flow suffered. Then resentment set in as others were perceived as not pulling their share of the weight.
Ultimately, we then had the disastrous task of unwinding it (a business divorce).
Don’t get me wrong, partners can add tremendous value to your business. Generally, a partner will bring something to the table you lack, normally skills, capital or both. But it is critical you understand your motivation. To help determine whether you are driven by fear, ask yourself the below questions.
If you have reasonable clear answers to the above and realistic means to address them then you need to consider what is the point of having a partner. Why are they coming along? What value are they bringing at you can’t source another way? Be honest with yourself.
If you are still on the fence, as yourself this:
Will the business generate enough profit to support more than one owner? If it can’t … well you know.
In my experience, 9 out 10 times you are better off to go it alone. Sure this might make things a bit harder, take a bit longer, or cause more sleepless nights but you have control of your future. You will make mistakes but we all do (even that partner you want will). But unless the partner can bring something to the table that is truly invaluable, you get along very well, and you want to work together for the next 10-15 years then I’d say go it alone. Or at least try it first.
At Accorti we love to help people find the right answers (whatever they may be).
Contact Us at Accorti Accountants +Advisors to discuss working through these issues, before or after you have “joined forces”
This time of year it seems like everyone is talking about year-end tax planning, strategies to minimise tax, or top 10 tax tips, etc. These are all helpful but really miss the point.
Tax is tax, and yes there are a few things you can do prior to year end, but as long as you have a good accountant this should just be business as usual.
The goal of any business should be to maximize your free cash flow. Period.
At its simplest, Free Cash Flow = Cash In – Cash Out*.
While you can impact both, your accountant will be better able to help with Cash Out (including Tax). We are pretty good at costs, efficiencies, minimising tax and alike. Accountants, on the other hand, are generally not that great with Cash In. We can help for sure, but it is not a natural strength.
So, the questions you as a business owner should focus on, and ideally not just at year end, are things like:
and so on.
As a business owner, a focus on these areas can be profound. It also makes it easier to succeed. Rather than juggling everything you can just focus on one thing: Increasing Cash In. Then leave the rest to people that are better at it.
If you do, and your income goes up, you will likely have higher costs and perhaps tax too. Who cares? Your Accountant will focus on this and make sure there is as much left for you as possible. If they don’t, get a new one!
Focus on Cash In. Let us focus on Cash Out. Trust me, we are better at it!
Cheers,
Michael Binnie
* Free cash flow is more fully defined as: FCF = Net Income + Non-Cash Expenses – Increase in Working Capital – Capital Expenditures
If you are located on the Gold Coast or Brisbane or surrounding areas Contact Us at Accorti Accountants +Advisors for advice on your cashflow.
Want to run your business and not waste time with accounting? We think Xero is the answer. We’ll help you switch to Xero and get online invoicing, live bank feeds, and any integrations you need all in a single platform. #Xero #accounting #smallbiz #startups
Xero allows your business a powerful, yet simple way to manage your business finances from the cloud.
Using Xero as the core business finance system, you will have real control to run your business – basic bookkeeping to efficient online invoices, detailed financial reporting and live bank feeds. And that’s not all…
A beautiful business platform
Being a fully functioning business platform, Xero has an open architecture which allows you to plug-in time-tracking apps, online payment solutions or job-management tools. Whatever business sector you are in there is a range of apps available to customise the Xero system to meet your needs.
Using cloud platform Xero you get:
Talk to Solve Accountants about switching your accounting software to Xero
If you would like a highly flexible business platform for your accounting system, we can help you switch over to Xero.
If you are located on the Gold Coast or Brisbane or surrounding areas Contact Us at Accorti Accountants +Advisors
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Brisbane & Gold Coast Business Accountants.
Accorti Accountants + Advisors is a firm of chartered accountants that provide business accounting, tax, and advisory solutions for evolving businesses in Brisbane and the Gold Coast region.
