What Are the Requirements for SMSF Auditing and Reporting?

A self-managed super fund (SMSF) is a private super fund that allows for more control over a person’s retirement savings. It is different from retail or industry super funds; this type enables individuals to choose investments and insurance. 

An SMSF allows up to six members, with most having two or more. These members are trustees who are responsible for the fund. Although controlling one’s own super may sound enticing and beneficial, the individual must be ready to shoulder the responsibilities that come with it. 

Having an SMSF is a significant commitment that entails a lot of work. With this, it’s necessary to know what obligations you will have to follow as a member.

What Are My Obligations as a Trustee?

SMSF trustees have many legal obligations that need to be met, ranging from reporting and record-keeping to administrative responsibilities. They must ensure that the fund complies with superannuation legislation and taxation. Otherwise, they are subject to penalties from the Australian Taxation Office (ATO).

Although it requires a significant amount of paperwork, keeping up with the obligations also ensures that the fund remains eligible for tax incentives under Australian superannuation law. For compliant super funds, member contributions and earnings have a concessional rate of 15% in Australia.

Hiring an Approved SMSF Auditor

SMSF members must appoint an auditor at least 45 before the due date of the annual return. It’s necessary to hire an independent auditor that must not have a financial interest or any personal relationships with the fund trustees. They will be required to register with the Australian Securities and Investments Commission (ASIC).

The auditors will be in charge of bookkeeping and assessment to check if the fund is compliant with superannuation law. They will request documents that need to be provided within 14 days. They also have the obligation to report any non-compliance issues to the trustees and the ATO.

Record-Keeping Duties

When working with SMSF auditors, it’s best to keep records in check to ensure quick and efficient completion of requirements. Doing so can help all parties involved save a significant amount of time and money.

General records include trust deeds, fund member information, a documented investment strategy, trustee declarations, registration documents, and the minutes of trustee meetings. These are necessary to provide complete and accurate information for the SMSF.

Financial year records are also essential for preparing financial statements, tax returns, and an annual audit. Required documents generally include the fund’s income, assets, member benefit payments, and deductible expenses.

Reporting Requirements

Once an SMSF member starts a retirement phase income stream, they must submit a transfer balance account report to the ATO. This report should include details about the income stream. From that point forwards, any event that may affect a trustee’s transfer balance must be reported.

Members must also report any changes to SMSF fund members/trustees to the ATO within 28 days. 

Annual SMSF Supervisory Levy Payments

SMSFs need to pay an annual supervisory levy to the ATO. Trustees need to pay it in advance, meaning they must pay double the annual levy in the first year of the operation.

Hire SMSF Auditors in Australia Today

Managing an SMSF has many benefits, including more control over retirement savings. However, it does have its fair share of responsibilities. By keeping these obligations in mind, you can better ensure that you’re fully protected and compliant with the laws and regulations in place.

If you’re looking for SMSF auditors in Australia, SMB Accounting has you covered. Our professionals will provide you with highly efficient and comprehensive audit work, ensuring that all requirements are covered. Get in touch with us today!

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3 Simple Tips to Keep Your Business in Line with the ATO

Businesses of all sizes must guarantee compliance with Australian Tax Office rules. ATO maintains a close eye on all commercial operations. Failure to comply with their guidelines—whether intentional or unintentional—will result in severe fines. Australian businesses are expected to disclose total income, file complete and accurate tax statements, submit returns and statements on time, and correctly withhold sums needed under the PAYG system.

To make sure your business doesn’t end up in hot water with the authorities, you must ensure that you keep your tax obligations in mind. Here are some basic guidelines for companies to follow to guarantee tax compliance and avoid fines and penalties.

The Need to Identify Business Expenses

It is a must for businesses to be able to identify business-related expenditures since non-business expenses are not deducted. The Australian Tax Office’s “three golden criteria” for defining business deductible expenditures are as follows:

  • If the cost is for business and personal use, you may only claim the amount utilized for business.
  • The expenditure had to be for a commercial purpose, not for personal use.
  • You must keep documents to back up your claim.

Evidence of business expenditure must contain the following items:

  • Name of supplier
  • Nature of the goods or services
  • Date the expense was paid
  • Amount of expense
  • Date of the document
  • Tax invoice number
  • Payment summaries, bank statements showing earned interest, and receipts or invoices for asset purchases and sales are all examples of evidence.

Consider the Costs

There are financial expenses associated with handling tax affairs, such as buying tax reference material and tax software. These expenses may be deducted as well. ATO has highly developed data analytics and data matching technologies used to detect work-related expenditures.

The ATO also possesses the information needed to target internet merchants, credit cards, and share registrations. Given the digital predominance of business revenue activities, caution is advised. Failure to comply with the ATO’s reporting requirements may result in fines of up to 75% of the shortfall amount or the difference between your actual tax due and calculated based on the information you supplied.

Utilize Tax Advice and Other Tools

While hiring tax accountants has a cost, our expertise and experience mean that we can handle the intricacies of tax time and guarantee that you satisfy the ATO’s tax obligations. Other accounting software programs (like Xero) may be used to help manage invoicing, single-touch payroll requirements, and other data. Cloud technology, like Xero, links you with your accountant and centralizes information in real-time, making the process easier for everyone involved. These apps have grown in popularity owing to their user-friendly approach to handling the accounts and taxes of small businesses.

Final Thoughts

Accounting is essential in companies of all sizes. However, it frequently falls to the bottom of the priority list for small company owners, especially when juggling all other duties of managing and sustaining day-to-day operations. It should never be an afterthought. Maintaining balanced accounts may assist you in financially forecasting months in advance and alerting you to possible financial shortages. Accounting knowledge may even help you rescue your company if times become bad.

At SMB Accounting, we specialize in many financial services. Our SMB consultants can help you with your income tax returns, audits, company set-ups, and ongoing bookkeeping and accounting services that will help your business stay on top of its finances. Get in touch with us today!

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How To Survive a Tax Audit: A Checklist for Small Businesses

You’ve got mail! The Australian Taxation Office (ATO) is requesting a tax audit of your business. Since it is your first time undergoing this, you start to think of what you need to prepare for the auditing to ensure that you won’t miss any important detail. 

Surviving a tax audit is no easy feat, as even the most seasoned business owners will be tested. Instead of fidgeting, why don’t you take a good read of this blog and learn what you should do to prepare for a tax audit? Here are some steps you can take to make sure that you have a smooth auditing experience. 

Always Keep Your Records Accurate and Updated

Having inaccurate data will prompt the auditor to dig further for nonconformities. To ensure that the audit will run smoothly and be completed quickly, keep your records updated and error-free. 

One of the ways to organise your records is by using accounting software to store your data. The best accounting program to use should be equipped with the updated tax regulations to comply with them easily. Working alongside your accountant or a tax professional will also keep you in check of the taxes your business should be paying.

Check Your Tax Return Entries Twice Before Submitting

Errors are inevitable. While you are confident that your accountant is competent enough to produce an error-free tax return form, it won’t cost you a penny to double-check the entries. The margin for error gets wider when you enter data manually. You can avoid having erratic entries when you use accounting software.

Organise Your Documents and Keep Files From the Last 5 Years

As a standard practice, auditors only check on the previous year’s tax return. However, they can also audit tax documents covering the last five years, especially if they find enough proof that you are understating your business’ taxable income. If you organise your files regularly, it will be easy for you to take out the necessary documents at any time to back up your claim. 

Correct Errors Immediately

When you spot errors in your tax return, being diligent in rectifying them pays off. The ATO has the discretion to reduce your penalties for the tax entry miscues.

Aside from these must-do tasks, you need to know what the ATO looks for, so you are prepared anytime you get a notification from the office that you will get audited. Below are some of the things about your business that the ATO will probe into:

  • An accurate declaration of all your income
  • Deduction entitlement, credits or tax offsets claimed
  • Accurate reporting and withholding of Pay As You Go (PAYG) figures
  • Accurate calculation and reporting of other tax-related obligations

As a tip, never think even for a second that the ATO will overlook some discrepancies with your tax documents as the institution uses a system that can reveal irregularities and unusual transactions. Not paying the right amount of tax your business owes is punishable by ATO’s laws, and they can subject you to hefty fines.

Conclusion

Follow the guide mentioned above will give you a worry-free auditing experience and pass it with flying colours. If you’re still not confident, you can also consult with an accounting professional. 

Are you facing a business audit anytime soon? SMB Accounting is here to help. Our firm completes income tax returns in a timely manner within our office, whether via personal interview, telephone or email. We also offer a range of accounting services, including business advice, taxation and XERO/MYOB/QuickBooks consulting. Get in touch with us. 

 

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4 Tax Mistakes Businesses Commit During Tax Audits

Every year, the Australian Taxation Office (ATO) becomes stricter in implementing its standards when it comes to good business practices and accurate record-keeping of taxes. If you don’t want to get in trouble with tax authorities, you must adhere to those set standards at all times, or you risk being hunted for during tax or financial audits. Consider the following business mistakes you should avoid, so you don’t put yourself under the ATO’s radar.

Claiming Ineligible Donations

Receiving donations isn’t uncommon, but don’t make the mistake of claiming for donations that are ineligible for a tax deduction. In order for a donation to be eligible for a deduction, it must be a purely charitable gift, with no reward or benefit being accrued by the donor. Another requirement is it must also be made to a Deductible Gift Recipient (DGR) approved by the ATO. One such example of a non-qualifying donation are donations given by a company to a political party. First of all, they are not DGR s and a reward or benefit is already implicit in such a donation. 

Failing to Disclose Shares or Other Assets Subject to CGT

As a general rule of thumb, you need to keep records of all your invoices and every transaction your business has made for at least five years, especially those that are relevant to working out a capital gain or loss from a capital gains tax (CGT) event. Despite this, some business owners still fail to declare shares and other assets that could be subject to CGT. This is a big no-no in the eyes of the ATO, and you can get penalised for any missing records. Make sure you have a complete set of financial and bookkeeping records for your company that includes all the little details in case you’re up for a financial audit.

Claiming Expenses Paid by Cash and Without Receipts

Claiming for expenses paid for in cash and for which you have no written evidence is a common error committed by taxpayers. The ATO always requires written and documented evidence for any expense valued at $300 or more. This can be a document from a supplier of goods and services that contains all the necessary information like:

  • The supplier’s name
  • The amount of the expense
  • The nature of the goods or services
  • The date the expense was incurred
  • The date of the document

 

That’s an excellent example of written evidence that is acceptable to the tax authorities. However, written evidence could also be another document or combination of documents containing the details listed above, such as credit card statements, email receipts, bank statements, etc.

Giving Employees Interest-Free Loans Subject to FBT

Giving loans to employees isn’t something new to businesses. It’s one of the perks of working for an employer. However, what’s wrong is offering employees low or interest-free loans without being aware that they may be subject to Fringe Benefits Tax (FBT). Any loans will attract FBT if there is no interest charged or the rate you’re offering is less than the relevant statutory interest rate. If the employee is also under no obligation to repay the loan, then that’s also subject to FBT.

Conclusion

Tax and business finance can be a complicated and stressful endeavour, especially if you’re under the pressure of a tax audit. What’s worse is, being prepared for an audit is a continuous process. It doesn’t end after the audit results are in and the tax authorities have no major findings. You need to continuously keep good and accurate records and follow the ATO standards even after the audit is done to make sure you won’t be violating anything in the future.

SMB Accounting is your partner when it comes to keeping your taxes and your finances in check. You never have to worry about failing a tax audit and being hunted down by tax authorities. We offer a range of accounting services, including taxation, business advice, and XERO/MYOB/Quickbooks consulting. If you’re looking for a competent accountant in Sunshine Coast, SMB Accounting firm can help. Get in touch with us today!

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3 Key Mistakes the ATO Can Hunt You for during Tax Audits

With the Australian Taxation Office (ATO) becoming stricter year after year, adhering to set standards is absolutely essential for a much smoother accounting and bookkeeping experience.

Whether you’re a small business owner or an executive of a large conglomerate, you likely already know that nothing reigns supreme except for the ATO’s rules when it comes to financial matters. Fines for tax and financing-related blunders are skyrocketing, and related penalties are growing more severe, which is why it’s critical to ensure that you stay in the good graces of authorities.

This means it’s crucial to be mindful of mistakes that the ATO can pick up during tax audits.

Common Business Mistakes You Need to Avoid

With thousands of businesses being penalised by the ATO annually for avoidable mistakes, you must avoid the same fate to protect your finances and status. Staying away from tax mistakes isn’t as difficult as you might expect it to be; in fact, it merely requires simple awareness.

If you want to ensure that your company won’t commit blunders that can land it in hot water during tax audits, here are the pitfalls that you need to avoid:

Mistake #1: Failing to Keep Stock Records

Here’s something you should know: an increase in the value of your stock even in just a single year is classified as assessable income. Alternatively, a decrease in stock value is classified as an allowable deduction.

Some businesses value their trading stock at cost to minimise their taxes and have the lowest possible inventory value. Unfortunately, there are severe penalties for undervaluing business stock, similar to those imposed on businesses for not keeping records at all.

To help ensure that you don’t end up making the mistakes mentioned above, it’s ideal that you keep records of your stock for five years. It’s also worth noting that the records you keep much be written in English or in a form that the ATO can understand.

Mistake #2: Spending Too Much on Christmas Parties and Not Paying Your Fringe Benefits Tax (FBT)

So, you threw a much larger Christmas party last year and invited even your smallest clients to cut costs on tax audits. Well, newsflash: this doesn’t mean that you can avoid your FBT.

Aside from the fact that you can’t file your staff Christmas party under a classification of “staff amenities” for your deductions, actually throwing a party outside does not remove your obligation to pay Fringe Benefits Tax. If you want to avoid FBT the right way, you can celebrate at an after-hours offsite venue and keep the cost per employee for the celebration to under $300 (inclusive of GST).

Mistake #3: Maintaining Inadequate Record-Keeping

Another far-too-common mistake that business owners make is that they fail to maintain a distinct level of discipline with their record keeping. Even the smallest of mistakes when handling accounting and bookkeeping tasks can lead to severe lapses in your records. Unfortunately, these same lapses can result in the ATO levying severe penalties on your company once it finds out that things don’t add up.

If you want to avoid slacking on your record keeping-related work, then consider investing in professional bookkeeping and accounting services for your business’s finances. Through the help of an expert like SMB Accounting, you can ensure that your business has everything it needs to avoid problems with its numbers come tax time and beyond!

Conclusion

When it comes to keeping your business in shape and ensuring that it thrives, nothing is more important than ensuring that you don’t make any mistakes that the ATO can penalise you for. By keeping an eye out for the three mistakes mentioned above, you won’t experience any problems during your next tax audit!

We’re a business accounting firm on the Sunshine Coast specialising in a number of financial services, including tax returns, audits, company set-ups, and ongoing bookkeeping and accounting services that will help your business stay on top of its finances. Get in touch with us today to see how we can keep you in good financial shape!

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Bad Debt: What It Is and How You Can Prevent It

Have you ever considered dealing with a customer who hasn’t paid for the products or the services you provided them? When you do fail to collect the money they owe you, that’s considered bad debt. This is an amount of money that can already be considered lost and should be written off in the books.

In this post, SMB accounting. Your trusted business accountants in Sunshine Coast will break down the basics of bad debt, and what you can do so you can keep it from happening to your business:

Debt Management

Even businesses that are considered successful can still fail if they have trouble managing their cash flow. In truth, the Australian Securities and Investments Commission or ASIC reports that mismanagement of cash flow is among the significant causes of businesses going under.

To minimize the risk of overdue payments turning into bad debts, you need to be able to establish clear terms when it comes to payment. You should also set a tighter credit control as well as a process that will help you motivate your customers to pay immediately. When you have debt management policies and strategies in place, that can also be helpful for when a customer runs into payment problems.

If you fail to deal with frequent bad debt or debts that have reached high levels, you would feel a decline in your business. When this happens, you definitely need to employ credit control and management tactics.

Bad Debt Can Impact Your Business

There are a number of ways bad debts can affect your business, including:

Putting you at risk of not being able to pay your own creditors

Affecting your growth and expansion plans

Reducing your cash flow which you use for day-to-day operations

Putting your business at risk of insolvency

How You Can Avoid Bad Debts

While it is inevitable for any business to encounter bad debts once or twice, there are ways you can prevent them from happening to you all the time. Here are some things you can do:

Perform Credit Checks

Before you offer any credit to customers, especially new ones, you should first perform credit checks. You can also request bank references from your new customers. Even existing customers should be credit checked before being allowed to get credit, especially if in large values.

Set Realistic Limits

You can also set credit limits to reduce potential losses due to bad debts. You can increase those limits if the customer proves that they are reliable and responsible with the payments.

Have Customers Sign Clear Terms and Conditions

When you have terms and conditions documented, and they sign it, then the customers know it would be harder for them to neglect the payment, especially if they will incur hefty penalties or will face legal consequences. You should also have your terms and conditions for credit posted on your website.

Send Your Invoices Promptly

Don’t forget to send invoices as soon as the delivery of the products or services is done. Make sure to double-check the address, too. Don’t wait until the end of the month to invoice as this delay will take away the feeling of urgency and could even influence the customers to pay late because you sent the invoice late, too, or worse, not to pay at all.

Conclusion

Never underestimate the effects of bad debt on a company, especially if yours is a small business that’s still trying to get its footing. When word comes out that you are lenient when it comes to credit collection, customers might abuse you and you’ll end up in debt yourself in trying to keep your business afloat. You wouldn’t want all your hard work to go to waste, so do what you can and also hire a small business accounting expert to help you sort things like this.

SMB Accounting has some of the best business accountants in Sunshine Coast. Contact our team today, and we’ll tell you all about our services!

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4 Tips to Help You Maximise Your Tax Returns Every Year

Tax season is one of the most stressful times of the year. No one will argue that tax returns have always been a difficult thing to manage. This is why hiring a tax consultant is pretty much a requirement if you don’t wanna miss out on receiving potential deductions. With that being said, you also shouldn’t be complacent just because you’ve hired an accountant to help you with your tax returns as there are still ways to increase your tax returns and make the most out of your refund.

There are small changes you can make that will help you get the most out of your tax returns and will make submitting your tax returns easier than it has ever been before. If you want to know more about this, read on for four tips to help you maximise your tax returns every year!

Prepare Your Taxes Early

A lot of the stress that comes with doing your taxes stems from the time constraint. Doing your taxes near the cutoff can put a lot of undue pressure on you. Aside from being stressful, rushing to beat the deadline makes mistakes more likely to occur. This can cause even more problems for you down the line. To avoid this, we suggest that you prepare your taxes as early as possible. Be sure to give your tax consultant all the information and documentation they need as soon as it becomes available to you.

Determine Your Tax Bracket

Aside from preparing early, working out your tax bracket accurately will also help you maximise your returns. The tax bracket that you are in will determine your tax obligations. Now, it’s important to note that tax brackets aren’t always the same year-to-year. This is a common mistake that people often make, as they falsely assume that they are in the same bracket they were in last year. To avoid this, be sure to review the individual and married income tax rates to truly know where you stand and what your obligations are when it comes to your tax bracket.

Review Your Deductions

While it may be obvious, it is something that has to be said: review your deductions. Failing to claim deductions is a missed opportunity as you could potentially be saving yourself a significant amount of money. We suggest checking with the Australia Taxation Office to see which deductions you qualify for.

Create and Use a Receipt System

Lastly, being more organized with your receipts is a great way to maximise your tax returns. While it may seem trivial, tracking and saving receipts is one of the best ways to save money during tax season. Instead of stuffing your receipts in random places, we suggest creating a system for them that allows you to organize and keep track of any and all relevant receipts. And while you can opt to physically organize them, we suggest making use of an app that allows you to digitise receipts as they tend to be more secure and easier to manage.

Conclusion

We hope these tips prove to be useful when it comes to helping you maximise your tax returns. Remember, doing your taxes doesn’t have to be stressful. By taking the time to be more organised and prepared, you make things infinitely easier for yourself.  

If you’re looking for an accountant in Caloundra to help you with your business’s finances, SMB Accounting is here to help. We offer various accounting services, such as individual tax returns, small business accounting, SMSF audits, trust account audits, special financial statements, and more. Learn more about how our accountants can help your business today!

 

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Understanding What Exactly Is Management Reporting

As business managers, it’s important to understand where their brand is positioned in terms of finances and operational performance. Having that knowledge of whether the company is in the red or not can often help you make better choices in the future and steer where the business should be focusing.

A flurry of data can say a lot, but it can be challenging for any regular person to decipher. Management reporting is a phrase that’s often thrown around when it comes to assessing where your business is at, but what does it actually mean? And who’s responsible for it?

Defining Management Report

A management report is a set of information that is given to a business owner and manager to showcase relevant metrics to their performance. The data being shown is often collected throughout different departments and teams in a small company, often taking sales into account.

Most management reporting is often presented via graphs and charts. The visual representation of the product can often make it much easier for managers to absorb and understand the insights it provides rather than construing the raw version. As implied above, management reports are used in order to understand how the business can be lead better.

Management reports are best assigned to an accounting firm that will be able to handle all your financial data. It can be taxing on time and energy to assign someone else within the company to handle this financial report, after all. Allowing a professional to focus on this responsibility will give you accurate data and let you allot resources to focus on business growth.

Interpreting a Management Report

The top three elements business managers will often observe in a management report is budget, cash flow and KPIs. Budget is one of the most important parts of a statement as it provides you with how much your business is working with. The amount of cash in a given period of time can help you manage your goals better.

Cash flow is also significant. Understanding how money is moving in the business in terms of investing, spending and earning will allow business managers to assess the activities going on. If it seems like a company’s cash flow is unbalanced, perhaps too much money is going out of the business with nothing in return. A manager should make a decision to rectify that.

Picking KPIs for a Management Report

KPIs or key performance indicators can differ from company to company, and even more so for the department creating a similar report. The KPIs in a management report is used to answer whether or not the actions of business managers are helping the company progress and meeting its objectives.

Businesses that are offering products are bound to have different signifiers in contrast with a service provider. Here are some examples of general KPIs that all companies use:

  • Productivity of different department staff
  • Employee satisfaction rating
  • Profitability of the business’ clients
  • Return on investment
  • Customer acquisition

Conclusion

Management reporting is something that businesses of any size should be able to utilise. It can be rather crucial in managing a business just right, so having that updated information provided in the report from month to month can be a lifesaver.

Looking for an accountant in Caloundra to handle your management report? SMB Accounting in Australia offers to do your reports, providing individual tax returns and audits to help your small business. Contact us today!

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How Benchmarking Can Improve Your Small Business’s Budget

Now that we’re halfway through the year, it’s the best time to make changes in how you operate your business, particularly when it comes to finances. This is because reviewing your financial budget regularly can identify areas for improvement and spot opportunities for growth.

Budgeting is one of the easiest ways to manage your cash flow since it handles your operational expenditures, though experienced business owners know that the best way to improve their budget for their small business is through benchmarking. When budgeting for larger companies starts to get tricky, benchmarking is one of the proven options that streamline your budgeting process. 

If you’re looking to organise your business’s financial mess, you’re taking the proper steps for improvement by being here. In this article, we’ll share with you reasons you should start benchmarking for your small business. Let’s take a look!

What is Benchmarking?

Benchmarking is when you review your financial records, analyse, and measure your business’s inputs and outputs. With this comparison, you can understand your current situation and compare it to similar businesses in the sector. Having a birdseye view of your finances reveals inefficiencies, high costs, and wastage, allowing you to take necessary action immediately to improve operations and budgeting. 

Fortunately, working with experienced accountants can simplify benchmarking even further with their expert guidance and tools. For one, professionals will utilise efficient methods that will help you compare your business and provide a competitive analysis. With a more streamlined approach to your financial procedures, your business knows what to do next to spend less and gain more.

Although there are benchmarking tools available in the market today, working with an accountant is still highly recommended. This is because working with a professional will allow you to create accurate financial forecasts that will benefit your business. 

Why Should I Start Benchmarking My Business?

  • Gives You an Edge Over Your Competitors: One of the biggest reasons you should start benchmarking is because it helps your business maintain a competitive edge. Seeing as budgeting is an essential factor for a successful business, it’s only right that you create strategies that will help you lead the pack in a competitive marketplace.
  • It’s Cost-Efficient and Effective: The great thing about benchmarking is that it improves your business outlook, allowing you to streamline your expenses. With that being said, benchmarking enables you to reduce your costs while improving your margins and business growth. 
  • Improve Workplace Productivity: A common mistake businesses make is that they keep worrying about their budget. But with benchmarking, you’ll get to identify problems, increasing your team’s productivity efficiently. With this, you’ll notice an improvement in your team’s skills and the quality of their output, encouraging them to feel more motivated at work. 

The Bottom Line: Utilise Effective Tools to Help Develop Effective Strategies for Small Business Growth

Understanding the financial health of your small business is essential for growth, allowing you to create strategies that will streamline operations and give you a competitive edge in the marketplace. 

With the help of credible accountants, you’ll get to use benchmarking tools and strategies that will provide you advantages in the market and improve your team’s work ethic to help them garner their desired results. 

How Can SMB Accounting Help You?

Financial-related tasks can be pretty overwhelming for small business owners like you. Thankfully, SMB Accounting is here to help you.

Our accounting firm offers various financial services like individual tax returns, accounting for small businesses, self-managed super fund audits and more. 

If you’re looking for a reliable accountant in Caloundra to help you run your business, reach out to us today!

 

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Tax Returns in 2021: What is the ATO Looking For During the End of Financial Year?

The end of the year approaches, and while people are getting ready for the festivities ahead, professionals are crunching numbers to prepare for the 2021 tax returns. However, the factors to consider for writing a tax return is trickier now in a post-coronavirus world. 

Speaking of the impact of the coronavirus outbreak, the ATO now set their sights on the boom in home-bound, work set-ups, and other areas that received the most impact from the months-long lockdowns. 

As Australians prepare for the impending tax season to meet the November 1 deadline, the ATO finally unveiled their primary targets, so professionals like you don’t make the mistake of reporting unsupported deductions. 

ATO’s Focus Areas: Key Points for Tax Returns 

ATO puts the spotlight on the effects of the pandemic; that’s why they will be targeting the following for 2021’s end of the financial year:

Work from Home Offices 

There’s no doubt that COVID-19 put a wrench in everybody’s plans, but the biggest impact it made on the economy is its sudden demand for work from home set-ups as home office expenses skyrocketed to a whopping 4.42 million. 

Even business leaders had to unlock their creativity to turn a relaxed environment into a perfect space for productivity, be it investing in ergonomic equipment or turning kitchen tables into a makeshift desk. Nonetheless, that doesn’t mean you can add a new bed as part of your deductibles. 

The ATO will crackdown on specific home office expenses, from basic essentials such as phone, internet, HVAC, lighting, and other business-related costs for an all-inclusive claim of 80¢ per hour. Meanwhile, the ATO also calculator a fixed rate of 52¢ an hour for dedicated workspaces, including computer consumables.

Investment and Rental Properties 

The real estate industry took one of the biggest hits as COVID-related restrictions disrupted their operations, particularly Australians with investment and rental properties. This means their means of income have fallen short due to the little-to-no willing renters when the time for social distancing was at its peak; that’s why the ATO encourages to declare income from all real estate resources and get deductibles for income-producing spaces only. 

Cryptocurrency 

One of the most revolutionary digital assets that paved the way for blockchain technology in transaction-related activities, the economy’s shift to digital solutions solidified the advent of cryptocurrency. 

Businesses that use cryptocurrency to obtain goods or services can get capital gains events, but the tricky part is that cryptocurrency exchange lacks clearly defined records. 

The Bottom Line: Unveiling the ATO’s Top Targets for 2021’s End of the Financial Year Tax Returns 

Tax season can often feel like a bane to all working individuals; that’s why getting a head start on your obligations to the Australian Taxation Office (ATO) can save you from dealing with costly consequences as the COVID-ridden financial year draws near. 

How Can We Help You?

If you’re looking for an accountant in Caloundra to help you with your business’s finances, SMB Accounting is here to help.

We offer various accounting services, such as individual tax returns, small business accounting, SMSF audits, trust account audits, special financial statements, and more. Learn more about how our accountants can help your business today!

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