Don’t Panic Captain Mainwaring!

Tax Return Deadline Day is fast approaching!

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Tax return due dates depend upon a range of criteria. If you are an individual lodging your own tax return, the deadline for lodgment is October 31, 2017. If your latest tax return resulted in a tax liability of $20,000 or more, then your tax return due date is extended until March 31, 2018.

If your tax return is being lodged through an accountant who is a registered tax agent, for most individuals your due date will be May 15, 2018, but this concessional date only applies if any tax liability is paid in full by June 5, 2018.

If you have recently been late lodging tax returns or have an overdue return, regardless of whether you use an accountant or not, you may be obliged to lodge your return by October 31, 2017. If you want to qualify for the May 15, 2018 extension to lodge, you need to be registered as a client with an accountant before October 31, 2017. If you have a bad lodgment history and this year’s tax return is due on October 31, if your accountant lodges your return by that date, you may qualify for the extensions again next financial year.

If your deadline for lodgment is May 15, 2018 and you elect to submit your return early, your due date for payment of tax will vary. For example, if you lodged your return up to February 12, 2018, the payment date would be March 21, 2018. If you lodged the return after this date but before March 12, the payment date would be April 21, 2018.

If your tax return will result in no tax being paid or the issue of a refund, you have until June 5, 2018 to lodge the return.

Once a tax return is lodged, the ATO will issue you with a Notice of Assessment. Typically the payment due date for any additional tax will be 21 days after the lodgment due date or 21 days after the Notice of Assessment is deemed to have been received by you.

Warning!

The tax laws authorise the ATO to impose penalties for late lodgment of a tax return. In addition to penalties, the ATO may levy a general interest charge to overdue unpaid tax liabilities. The GIC rate is currently 8.78 per cent and is reviewed quarterly. You can apply for a remission of penalties and the GIC in part or in full if there are extenuating circumstances. Examples of extenuating circumstances would be ill health or natural disaster.

Here to help…..

If you want to take advantage of the lodgment extensions, make sure you contact CloudForce before 31 October! Call 07 3118 1720 or email nick.pollins@cfbs.com.au

Don’t fall off the Financial Management Cliff

The 8 Most Common Small Business Financial Management and Accounting Mistakes

As a business owner, it is important to be involved in all aspects of your operation. However it is impossible to be an expert at everything. Many business owners struggle when it comes to looking after the Financial Management and Accounting of the business.

Some Financial Management and Accounting mistakes could have a significant effect on your business’ growth and adversely impact your bottom line, clog cash flow and potentially leading to damaged reputations with suppliers, customers and staff.

The following are the top eight common Financial Management and Accounting mistakes that small business owners make.

  1. Substituting a Professional Accountant with an amateur.

Employing a competent Accountant will free up your time and will allow you to focus on both the day-to-day managerial aspects of the business, and the long term strategic decisions. Having a good Bookkeeper and a proactive Accountant means you can know their Financial Position at any time. 

  1. Not understanding the importance of Cash Flow

Every business fails when they run out of cash.

The majority of business owners focus on sales and profits, but cash flow is critical to the success of your business.

A company could be profitable but if it isn’t operated efficiently, it could still have negative cash flow.

New businesses may be able to endure negative cash flow in the short-term in hopes of achieving long-term success. Eventually, every company must focus on creating positive cash flow. 

  1. Failing to plan

Few small businesses have a working budget and cash flow forecast. As a result, they make decisions based on guesswork and have no idea whether their business’s actual performance is better or worse than what they expected. How can you know how your business is performing if you have got nothing to compare it to? Not only is it important to have a budget and a cash flow forecast, but you need to compare your actual results on a regular basis. 

  1. Failing to properly reconcile accounts.

Bank accounts, Accounts Receivables, Accounts Payables and Payroll should be reconciled at least monthly, as a cross check to ensure all transactions are accurately and completely recorded. 

  1. Mixing personal with business funds.

One of the most common Accounting mistakes business owners make is to mix their business and personal finances. Keep a separate bank account and credit card for the business and only use them on business-specific transactions. 

  1. Not keeping a proper paper trail

Paper trails still count, but even those can become digitised. However receipts are kept, the point is that they need to be retained. Receipts provide answers to any mistakes or gaps in Accounting Records and many offer additional deduction opportunities come tax time.

  1. Making critical mistakes with Payroll

Payroll is one of the essential components for a small business and any issues with staff payment can cause demotivation and poor productivity as a result. Some common errors are:

  • Not understanding superannuation requirements for contractors
  • Errors in salary sacrifice arrangements
  • Failing to recognise Fringe Benefits and register for Fringe Benefits Tax
  • Paying employees under the wrong Award
  • Failing to ensure that long service or holiday leave is being accrued at the correct rates and leave loading is paid for any annual leave taken, if applicable.
  • Incorrect calculation of overtime and time worked on Public Holidays
  1. Not embracing a Cloud Based Accounting System.

The ‘cloud’ is here and businesses should be on it. The key features of Cloud Accounting are automated bank feeds, automatically recorded recurring transactions, multi-user access so that your Bookkeeper and Accountant have real-time access, and having a better chance of recovering information if your system is damaged.

 If you want to ensure that you avoid making these common Financial Management and Accounting mistakes, contact Nick Pollins today and find out how CloudForce can help you achieve your business goals.

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