Australia and New Zealand moves towards an electronic environment on e-Invoicing

Australian and New Zealand government are taking a step towards a paper-free payment through the adaptation of e-invoicing. On 17 October 2018, the two nations announced that they encourage the public to give feedback on how electronic invoicing (e-Invoicing) arrangements can be best managed in both countries by releasing a public consultation paper. This consultation paper will contain public views to help create an independent, fair and equitable governance structure for the everyday transaction of e-Invoicing in Australia and New Zealand.

E-invoicing refers to digitally transfers of information between suppliers and customers. The formats are readable by both humans and machines which means that invoices can directly go through any accounting software.

This offers many benefits such as

  • It can save billions of dollar
  • It increases efficiency and productivity
  • It eliminates manual handling of bills which results in faster payment times and reduces delays, and because of that
  • It can reduce or, if possible, eliminate mistakes from manual intervention.

According to ATO director Mark Stockwell, he said “There’s about $26 billion worth of unpaid invoices floating around at any point in time so if we can speed that up from a sixty or ninety or a hundred and twenty day pay cycle at the moment to a few days, it is going to make a massive difference to the Australian economy.”

He also explained that e-Invoicing is not just about sending a PDF through the email system. It is the end of the traditional ways in administrating with invoices such as scanning, PDF’s, posting, collecting, data entry.

Also, research from Deloitte Access Economics estimates e-Invoicing is approximately 70% cheaper to process than traditional paper or PDF invoices which means businesses will be able to spend less time re-entering invoice data for all levels of government and spend more time on growing their business and could result in economy-wide benefits of up to $28 billion over ten years.

Australia and New Zealand’s Prime Ministers agreed to take action on having the same approaches to e-Invoicing as part of the Single Economic Market agenda which aims to established the Trans-Tasman e-Invoicing Interoperability Framework to set out the policies, standards, guidelines and infrastructure for e-Invoicing implementation in Australia and New Zealand, taking advantage of opportunities arising from the electronic transformation of our economy.

The e-invoicing framework in Australia and New Zealand aims to support and simplify the electronic exchange of information, using international standards, directly between both parties without a need to have the same accounting software.

With bookkeepers being involved with the everyday business processes and the governments’ strong wish on enhancing electronic interactivity, they were urged to stay abreast of e-Invoicing developments due to the government’s desire to get the e-Invoicing framework running.

Reference:

www.ato.gov.au

https://www.accountantsdaily.com.au/bookkeeper/12322-ato-backs-e-invoicing-initiative

Bookkeeper Gold Coast

Advertisements

Bookkeepers to help smaller clients to see potential benefits of STP

Single Touch Payroll also known as STP was introduced by the Australian Taxation Office and commenced on 1 July 2018. This is a part of the Australian Government’s efficient way to make employers in compliance with reporting obligations. It was introduced into Parliament on 31 August 2016 and received Royal Assent on 16 September 2016 as part of the Budget Savings (Omnibus) Act 2016.

This is an online platform providing efficiency and transparency of organizations’ payroll process which bring convenience to employers’ compliance with ATO. STP changes that way employers report their employees’ salary and wage information, pay as you go (PAYG) withholding and super information. It allows the employer to send reports per pay cycle to ATO directly from the software that is STP-enabled or through a third party such as a digital service provider (DSP) to offer STP reporting.

Employers with 20 or more employees are strictly required to report through STP-enabled software starting 1 July 2018, unless the granted a deferral. Legislation to extend Single Touch Payroll to employers with 19 or less employees from 1 July 2019 is still before the Senate and ATO won’t force employers with 19 or less employees to purchase payroll software if they don’t currently use it because different STP reporting options will be available by 1 July 2019 to help smaller employers. However, employers with 19 or less employees can choose to report through STP for now and talk to their software provider to find out what is needed to do to update their software and start reporting.

The Australian Taxation Office also confirmed that employers with one to four employees will not have to buy payroll software to be STP compliant. The ATO ask software developers to build a low-cost solution at or below $10 per month for micro employers which includes simple payroll software, mobile phone apps, and portals. Micro employers are given a number of alternative options that are not available to employers with 20 or more employees such as initially allowing the employers’ registered tax or BAS agent to report quarterly, rather than every pay run. Those who have no internet or an unreliable connection can be STP exempt.

Now bookkeepers are encouraged to explore these options and deliver the information about the benefits of this digital process in payroll accounting. Moving from a complex manual procedure, where there is a susceptibility of error, to an automated and simplified will pretty much take away errors in the payroll process. It brings a real-time visibility over the accuracy and timeliness that is a great opportunity for businesses to have.

Reference:

https://www.ato.gov.au/Business/Single-Touch-Payroll/

https://www.accountantsdaily.com.au/bookkeeper/12262-bookkeepers-urged-to-lead-stp-take-up?utm_source=Bookkeeper&utm_campaign=24_10_18&utm_medium=email&utm_content=1

Bookkeeper Gold Coast

Awareness of the Taxable Payments Reporting System (TPRS)

Bookkeepers have been advised to step up in educating clients about the taxable payments reporting system and its extension to other industries such as businesses that supply courier or cleaning services and to security providers and investigation services, road freight transport, and surveillance or IT services.

Director of Direct Management Diane Lucas mentioned that, due to the total ignorance in the general awareness of those businesses, there is a need for bookkeepers to educate their clients in understanding why this is happening in their industry and explain to the clients how they can assist them in their compliance with the government.

“From a bookkeeping perspective, the implementation shouldn’t be hard. From a client perspective, there will be an education component to that because even in the construction industry, when we take over new clients and ask them if they are aware of TPRS, there is still a fair degree of ignorance amongst the smaller businesses. Having TPRS in the construction industry is a benefit to the bookkeeper sector because we are all aware of it but the underpinning education for those industries is still a requirement.” She added.

In the financial year 2012-2013, business industries under building and construction and government entities were required by taxable payment reporting system (TPRS) to submit to the Australian Taxation Office (ATO) the taxable payments annual report every 28 August. Building and construction industries need to report the payments made to contractors in providing services while some government entities need to report the grants paid and payments made to other entities. The TPRS was introduced mainly to assist contractors in meeting their income tax obligations and to improve tax compliance of building and construction industries with ATO with regards to their obligation with contractors.

Subcontractors, consultants, and independent contractors are considered contractors and they can be operating as sole traders (individuals), companies, partnership or trust.

Generally, the invoice includes that details that should be used in the report. This information is used to identify contractors who haven’t met their tax obligations.

It should include the contractors:

  • Australian business number (ABN), if known
  • Name
  • Address
  • Gross amount paid to the contractor for the financial year (including any GST).

As part of the Federal Budget, on the 9 May 2017, the Government announced to extend the TPRS to business industries that paid contractors under courier or cleaning service businesses. Collection of information begins on the 1 July 2018. The due date for the first report will be on the 28 August 2019 which includes invoices made on or after 1 July 2018. Any unpaid invoices at the year-end should not be included in the annual report for that taxable year.

Also on the 9 May 2018, the Government announced to extend again the TPRS to business that is security providers and investigation services, road freight transport, and surveillance or IT services that made payments to contractors from the 1 July 2019.

Hence, bookkeepers are in advantage to use this opportunity to be the “proactive adviser” in educating their clients.

References:

https://www.accountantsdaily.com.au/bookkeeper/11916-bookkeepers-urged-to-fill-taxable-payments-reporting-knowledge-gap?utm_source=Bookkeeper&utm_campaign=20_07_18&utm_medium=email&utm_content=1

https://www.ato.gov.au/business/reports-and-returns/taxable-payments-annual-report/

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Black-Economy-Taskforce–extension-of-the-taxable-payments-reporting-system-(TPRS)/

Bookkeeper Gold Coast

Substance over form. Delivery Company charged sham contracting activities.

The Fair Work Ombudsman gives notice on the gig economy following the focus on contract shaming due to Foodora Australia Pty Ltd charged with sham contracting activity with its employees classifying them as employees rather than independent contractor.

Contract shaming is the event where the employer intentionally disguises an employment relationship with the worker as an independent contracting arrangement where in fact is engaged as an employee. This is to avoid paying employee privileges with superannuation, workers’ compensation, leave credits, and certain taxes.

Underpaid workers include two 19-year-old Melbourne bike riders and a 30-year-old Indian immigrant residing in Sydney. These workers deliver food and drinks by car knowing they were independent contractors but in reality were Foodora’s employees resulted to an underpayment of $1,621 for the period 2015 and 2016, and missed out of superannuation. Thus, FWO has charged them doing sham contracting activities.

The delivery company claims that they required each worker to have an ABN and signed the “Independent Contractor Agreement” but the FWO said that a mere labeling of the employment relationship as an independent contractor does not make it so. It needs to hold multiple factors in considering if the worker is a contractor or an employee.

 Upon making a significant action, investigation shows that the three workers were actually employees because Foodora has shown that it has a high level of control, supervision, direction over the worker’s hour, location and manner of work. It also required the workers to wear Foodora’s branded T-shirt and food storage boxes, and they were paid fixed hourly rates or amounts per delivery.

It was also found that the workers were not actually conducting their own delivery business nor they did not advertise or promote themselves to do deliveries for the public. Furthermore, they cannot authorise other people to do their delivery duties with Foodora and did not have their own target market, business office, and insurances.

Based on these findings, the Fair Work Ombudsman claims that the workers were lawfully eligible to receive the minimum wage rates and other privileges that apply to their position under the Fast Food Industry Award 2010, plus other entitlements such as casual loading, penalty rates, and superannuation.

 Foodora will be required to pay $54,000 penalties for each of the multiple charges against if proves that they breached the Fair Work Act. Foodora was also asked for back-pay the underpaid workers.

According to the spokesperson of Foodora Australia Pty Ltd, the company will not be able to comment on this matter for now but will be defending the claims and accusations that have been made against the business.

Schedules hearing of this case will be held on 10th of July.

Furthermore to ensure compliance, bookkeepers are encourage to work with HR professionals who are qualified in providing advice, and believes that the new Diploma of Payroll Services will serve as an opportunity for bookkeepers to gain the set of skills and information about many aspects of the HR function, including the Fair Work Act and the Modern Awards, suited for payroll administration.

References:

https://www.accountantsdaily.com.au/bookkeeper/11808-bookkeepers-cautioned-in-light-of-gig-economy-crackdown

https://www.news.com.au/finance/work/at-work/foodora-hit-with-sham-contracting-court-action/news-story/278a1aa53cc5004474eb5a6aef28f4f0

Bookkeeper Gold Coast

Secrets to be a successful investor

The higher the risk, the higher the return. That is the game when you entered the world of investing but is it really risky to invest? Actually, having an understanding of the principles of small investments can help you lessen this risk. This will enable you to manage how and where to invest your savings. However, some investors do not have this knowledge which leads them to failure and wishes that they should have just let their funds stay in banks.

So how can you be successful in investing? This article will give you some tips how.

  1. Set your goal.

Just like any other decision-making problems, an investor needs to have a goal. You need to set objectives for what you want to do with your money. Your goal has to be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound).

  1. Minimize the risk.

Many people do not dare to go investing because of risk so it is very important to understand this. There is a saying that goes “Don’t put all your eggs in one basket.” That is why investors should be wise in investing and diversify your investments. Use your assets effectively to minimize this risk.

  1. Monitor cost

Successful investors consistently monitor and try to minimize cost as much as possible to have a higher return. While investing associates a lot of fees, a wise investor must find those that provide low-cost management fees because investing in higher management fees might drag you down losing money than earning.

  1. Wait, Aim, Shoot

Wrong timing will lead you to failure so investors should not always buy and sell stocks so recklessly because this might lose you lots of opportunities. Investors need to have a full understanding of wise investing and should take time when investing. It does not mean that if stocks go down it will always stay there. No, stocks are prone to change so it is just natural for some to go down and up. Some investors get discouraged with this and sell their investments without thinking. Some investors see this as an advantage because you can invest at a lower price with a higher return on the expectation that it will rise again.

  1. Start now

Why? Starting as early as possible can help you earn more and your money will be bigger when the time of your retirement comes. Investing small amounts regularly is the best start in growing your investments. That is why there is no excuse for not investing. It does not require a lot of money to take your first investment so long as you can invest longer then you will have a better life at the end of the day.

Investing is very scary because of the risk attached to it but having the right management will help you get through this risk. Also to become a multi-millionaire, it is wiser to utilize your assets effectively.

https://www.nestegg.com.au/investing/11145-6-secrets-to-becoming-a-successful-investor?utm_source=Nestegg&utm_campaign=09_11_17&utm_medium=email&utm_content=2

https://www.loansolutions.ph/blog/7-smart-investment-principles-novice-investors/

Bookkeeper Gold Coast

Gaining Competitive Advantage over Customer Loyalty

Businesses have produced many marketing styles just to make sure that their customers stay loyal, happy, and keep on patronizing their products or services. Still, they are having a hard time meeting customer satisfaction because customer behavior is not static and they change preferences over a period of time. Understanding the needs that a customer values at a point in time is challenging but meeting these gives you a competitive advantage over your competitors. These can improve your profit, success, build a great trust with the public, a good reputation, and also helps your company grow.

Customers often buy a lot of business that will always make them happy, so how can you make your customer happy?

  1. Know your market.

It is important to know who your target market is. Selling the right products to the right market is a good start for the business.

  1. Be updated.

Customers tend to go to a business that provides most or all of their needs. The company must be flexible to changes because of different preferences. Thus analyzing what the customers’ value now can reduce customer dissatisfaction.

  1. Be known.

Of course, you cannot build loyalty if nobody is paying attention to you. Offering something valuable to customers but not being noticed is frustrating for the company. How can you engage your customers to you? One solution is advertisements however research shows that having shared values with your customers tend to build loyalty. Shared values are the largest driver of brand loyalty. If the customers have the knowledge that the company does not only perceive about earning money but also perceive to help the public or the environment will attract more customers to come and stay.

  1. Increase customer satisfaction.

A satisfied customer is a happy customer. Extend your services without losing any profit. Show some customer care. Give assistance if needed. Always wear a smile and employees must be well trained and educated as to what the company can provide for its customers.

  1. Measure customer satisfaction.

Measuring customer satisfaction can be a basis for performance and customer’s happiness. It is helpful in improving customer experience. This can be simple but also can be frustrating because not all customers can comply with answering questions for the service that the company had provided them. So, the company must have found a creative way to measure customer satisfaction. The use of Customer Satisfaction Score can be helpful because it is simple and straightforward.

  1. Prioritize customer retention.

One of the things that a company must prioritize especially on those old valuable customers. Remembering birthdays, send emails for feedbacks, answering feedbacks, educating customers with what the company can provide, establish a loyalty program, use creative surveys, and giving the best customer experience can help you in retaining customers longer.

Building trust and confidence between the company and its customers is naturally important. Practicing integrity with what the company offers consistency in providing great customer experience, providing honest information, and being true to their words will show trust. This will interest the customers to stick with this company because they can assure that the company is a reliable and trustworthy.

Reference:

https://www.helpscout.net/customer-loyalty/ Retrieved on 20 March 2018.

http://blog.clientheartbeat.com/increase-customer-satisfaction/ Retrieved on 18 April 2018.

Bookkeeper Gold Coast

Take good care of the oldies

Customers are very important for our business because they are one of the factors to consider in maximizing our business’ profitability and in reaching our goals. So having a bad relationship with our customers due to poor customer experience is a big deal for the decision makers. They should not take these lightly rather they must do immediate actions to prevent it.

For businesses, it is more important to know how to retain existing customers because these will cost less than welcoming new customers. Although young ones tend to shop more than older people, younger customers frequently purchase products from different brands because of their change of preference, trends, or they just want to explore more. This makes them not a candidate as a loyal customer unlike the older customer who was more committed to a brand in a long period of time and that has a great impact on the business if they were not properly taken care. Older customers tend to stick to products that they had tested, proven, and satisfied but there are times that a product reduces or loses its value in time which results in a failure in customer satisfaction.

In order to satisfy customers and make them patronize your products or services, you need to know what they are looking for. Usually, customers likely to be loyal to brands because of the quality, the price, and customer service.

The quality must be as good as when it was the first released or must improve and the descriptions of the product must be feasible. Commonly, if the customer notices that the quality of the product or services have been reduced or there is a difference or no effect as to its benefits, it is more likely that the customer will be disappointed and be your detractors who can wreak havoc about the product and the company, the customer might not purchase again, and even look for an alternative product from another brand that will satisfy their needs. Thus it is important that products must have a consistently good quality or even improve them based on the customer’s preferences.

The price must be adequately consistent with the quality. There must be a balance between cost and benefit. It must be appropriate for the benefits that a customer will get in purchasing the product or service. Overpricing will not appeal customers because there are a lot of alternatives that they can choose. Hence, the company must prove that their product or service is worth every penny.

 A good customer service is the last but the most crucial. Profitability might decrease rapidly if these are not managed properly. It may result in a loss of older customers, new customers, potential customer, a loss of reputation, and even loss of employees. So to prevent these from happening, leaders must make a supportive action such as providing training to customer representatives about good customer service, how to deal with the different kinds of customers, and what are the specific actions to do when a customer has a complaint or concern. Leaders must provide employees all the information and experience need so that they may deliver to the customers the things that they might inquire about the product.

Today, there are many alternatives that a potential or even existing customer may consider so it is easy to change brands. Thus the company must have a strategy on how to handle this problem. They must be updated with the trends and change of preferences of their valuable customers. It must also take into consideration the changes as to age because a customer who is at her/his teens now may have a different preference by the age of 30 so the company must consider these things.

Customers maybe your friends or critics because they can improve or worsen your product or service or even damage your reputation. Remember the power of the word of mouth is the most popular channel of communication. Technology also holds part of this communication thru phones, television, and the most popular social media accounts that I guess almost all of us know about. It can reveal one customer’s bad experience with your company to different people and can spread so easily like a virus. This might not only decrease profitability, it may also decrease productivity on employees or even a downfall for the company.

On my next blog, I will be discussing the how to have the competitive advantage to customer retention and give you some tips on how to do it.

References:

https://www.mybusiness.com.au/sales/3851-youngster-customers-fickle-but-oldies-never-forget?utm_source=MyBusiness&utm_campaign=22_01_18&utm_medium=email&utm_content=4, Retrieved on 14 March 2018.

Bookkeeper Gold Coast