Welcome to our Blog!
No, it’s not contagious. It’s not even medical!
STP = Single Touch Payroll and like most acronyms, it lacks something in the explanatory detail stakes.
It was birthed out of the ATO and while it sounds like it offers a short cut, in reality payroll remains as complicated and full of pitfalls as it always has been.
STP is about providing wages, tax and superannuation details to the ATO on a progressive basis at each pay run. There will be no further need to produce Payment Summaries (formerly a long time ago Group Certificates) at the end of the financial year. Employees can access their details through their myGov account.
So what lies between the S, the T, and the P?
First, a small potted history.
If your business has more than 19 employees, you’ve probably been using STP since July 2018. From July 2019, it is the turn of businesses with fewer than 20 employees.
If you have fewer than 5 employees, there are additional options as there also are for closely held employees ie family members, directors and shareholders, and trustees and beneficiaries.
“But I use an Excel spreadsheet and a wages book!”
You can continue to use the Excel spreadsheet or talk to a bookkeeper or your accountant about having a bit of an upgrade. The wages book can still be used as the basis for calculating wages paid and issuing payslips. However, there is now another step in the wage cycle process and, if you have 5 or more employees, you may need to look seriously at cloud accounting solutions which include payroll.
In the next month or so, a number of no-cost or low-cost (under $10 per month) online Single Touch Payroll solutions will become available for micro employers with fewer than 5 employees. Think of the expense as offsetting having to hand write (or getting someone else to hand write) Payment Summaries by 14th July.
There are specific steps to follow in setting up for STP and most accounting packages provide these details. After all, they don’t want to lose you as a customer to someone else who appears to offer a more ‘user friendly’ option.
Contact your bookkeeper or accountant for assistance in regard to STP (or anything else for that matter) and, by the end of July, you will have forgotten about any hassles in getting past STP.
Bookkeeping, weather, phones, children.
A bit on weather.
Have you happened to notice how warm it’s been lately (let’s just say for the last 6 months and be done with it) in the Great South East?
A bit unseasonal you could say unless you’re over 90 and ‘it was always like this when I was young’.
Not so many nights ago it was possible to be outside until almost 7 but now it’s dark by 6.
If you’ve had a tough day at the office or been on roofs repairing solar panels, you probably don’t care too much when it gets dark as long as it does at some point. (Give a thought here for people who live somewhat further away from the Equator).
Ahem. Bookkeeping and weather?
It has been conclusively proven (somewhere for sure) that warm breezes through the office/dining room/lounge window at night is not conducive to catching up on any paperwork let alone figures. That’s particularly the case when mixed with mossies and beer and baths for the kids and story book reading and ironing a shirt for tomorrow. Now that’s certainly fantasy!
In one respect at least, it doesn’t matter whether your business figures are located on your home/office computer or in the cloud. Somewhere along the line, there needs to be checks as to the veracity (or correctness) of the transactions with regard to with whom they are linked externally, the dates of the transactions, and the placement of the transactions in the business file ie income or expenses or something else.
If a business is registered for gst, that also must come into the equation.
These things are best not done at the last minute or when it is too hot or dark to do anything else. Concentration is a key requirement here and distraction is as close as a phone call or a reality television show.
Bookkeepers work around figures all day. Unbelievably, we find that interesting! While we aren’t immune to the weather conditions, we are generally immune to phone calls on somebody else’s mobile and to their child throwing a tantrum.
If any of the above resonates with you and your business paperwork, ask yourself if there’s an opportunity here to swap a headache on warm nights for a bit of ‘me-time’ and utilise the services of a bookkeeper who doesn’t mind working figures in the heat of the day.
The path to paperless.
Like all good journeys, it begins with the end not in sight.
There may be an imaginative idea of desks with two (or more) computer screens in an open plan environment with clusters of fiddlewood plants (ubiquitous in shopping centres these days) and the occasional staff member.
How to get to there from a four-roomed office shared by 8 staff (who are always there) using their own desks with a computer screen, keyboard, photos of the family, and (in this environmentally friendly age) a personalised reusable plastic coffee cup? Ranged along a wall are several archaic looking filing cabinets of which at least one hasn’t been used (or, indeed, opened) in the memory of the current staff!
Four rules of the road.
1. Stay in the centre of the road. If a bill / invoice / receipt arrives electronically (ie via a computer or phone), don’t automatically print it. Consider if it can be filed somewhere on your server and use a second screen to view the information while using the primary use screen to do whatever is required in processing.
2. Ignore any ‘Stop’ signs. If something arrives that appears to be ‘too hard’, almost immediately send it on to someone else. Ideally to someone who may be more experienced in handling it. On no account, print the email, then collect it from the printer and then put it in (someone else’s) basket.
3. On the motorway, constantly vary your speed. It isn’t about doing the same amount of work as the other employees. True, you may do the same hours but that’s not the same thing. The paperless office requires shifting gears to address different matters and deciding how best to tackle a problem that you might have once printed out in 40 pages (one side only). Now, you need to consider how to leave the matter electronic but still do the same work on it (and with the same notes in the margins).
4. Never indicate. Nobody really cares where you are going unless you happen to get in their way. There will be detours which looked like the correct way ahead at the time and that can be tough to get back from. However, the detour will inevitably add to the final flavour of your paperless office.
The oxymoron part?
It will come to pass only if that first step doesn’t happen.
PROCRASTINATION, FATIGUE, TASKS, SYSTEMS
Do the easy stuff first … and get nothing else done!
You have surely had one (or many!) of those days where you couldn’t get motivated and weren’t really sure why that was the case.
The easy way out is to get ‘stuck into’ those jobs that require relatively less in the way of brain power or physical exertion and, after they are done, attack whatever is left.
Except, ‘whatever is left’ is usually still ‘left’ at the end of the day!
That’s because we are not working to a plan. We don’t have to form a plan for the next 30 years. A plan for the next 30 minutes (or the next 30 days) may be all that is required.
It can take a while for a wish to become a habit and it can take just as long for a wish to form a plan to become a habit of planning. And then there is the commitment to the plan.
Do the hard stuff first ….. and get everything else done too!
A look at ‘whatever is left’ may reveal ‘that’ job which could/should have been done as a priority.
It may be a matter of not quite knowing where to start or knowing how to approach it or not knowing how to do it. It may even be the expectation that this job is going to take all day and nothing else will get done!
There is a saying: ‘Nothing is so fatiguing as the eternal hanging on of an uncompleted task’.
I’m not suggesting that the job be put off eternally but you get the drift.
The job just keeps nagging away at the inner recesses of your mind to the detriment of being able to fully focus on anything else.
The solution is to get it either out of the way or start on it and that may reveal what you need to know to get it completed. That in itself can be liberating enough! It might even allow time to get all the other ‘lesser’ jobs done.
So, in your business, is there a ‘procrastinated’ job that’s been hanging around and impinging on your well-being?
Does it drag you away from enjoying life (in general) more effusively?
Would it be liberating to let it go either by getting it into perspective in terms of the bigger picture or by letting someone else do it?
Business Budgeting: it’s more than an ‘add-on’!
BUSINESS, DIRECTIONS, GOAL SETTING
Have you been on holidays recently away from your home in (or about) the Redlands?
Did you take a punt on how to get where you were going or did you use your mobile phone for traffic holdups or places to stop along the way?
And what has this to do with business budgeting?
How familiar are you with the numbers in your business? These are the basic numbers such as sales levels, staff wages, product purchases, rent and utility costs, profit.
All these figures are signposts similar to what you see on the side of the road. They won’t get you to where you are going but they might suggest how far away you are from your destination.
But, what if you don’t know where you are going? Then the signs may simply tell you no more than where you are.
Looking back to look forward.
Do you know how those figures have differed from a previous period?
Differences raise questions such as ‘What has changed since back then?’ and, more importantly, it raises the query as to why the figures have changed. Perhaps the figures haven’t changed and, again, the ‘Why’ question remains.
It takes us away from the signposts and brings us back to concentrating on the road. What has been the condition of the road since you left and the amount of traffic and that ominous persistent rattle somewhere under the bonnet?
There are parallels here for your business. You need to know how you got to here from back there. How difficult was it? And how were you slowed by other similar businesses that you seemingly were unable to differentiate yourself from? And is your business fine-tuned or a bit clunky?
Your destination: here or further along the road?
If you don’t have an answer to the above question, it may as well be here!
You have used your business figures as signposts to look at the past and now you have to decide if they can tell you something about the forward journey.
Projecting historical figures into a future scenario is budgeting because it enables you to track progress using quantifiable signposts.
However, they won’t get you to where you want to be. To do that (and to use the travel scenario) you’re going to need good tyres, adequate fuel, knowledge (as much as possible) of the road ahead, minimal distractions, and maximum support!
Birkdale Bookkeeping Services isn’t a travel agency but we can help you in how your business progresses from here to wherever you want it to be.
PROCEDURES, SYSTEMS, PRACTICE
It’s not just in your head.
You have a business in Redland City and it’s been going along quite nicely for 5 or 6 years.
Your family helps with the business and they understand both how you think and how you want the business to run.
Now it is growing and you need to look outside the family for employees who have the required expertise to take the business to the next level.
How do you explain the ethos and workings of your business from ‘off the top of your head’?
At best, it comes across as a jumble of thought bubbles and ideas and, at worst, it is a mishmash of confusing directives and misunderstood information.
It becomes part of the business.
Having documented business systems benefits you in a number of ways.
Happy staff and satisfied clients
It makes it easy for staff (particularly new ones) to reference processes and to undertake upskilling or training in unfamiliar areas. They can also do this independently without constantly impinging on the business owner’s time.
Staff can more quickly come to grips with processes and that saves you money and time (both yours and theirs).
The need to clarify aspects of the system can also be a useful tool for pinpointing areas of the system documentation in need of an upgrade.
Clients also appreciate receiving a consistent level of service no matter who they are dealing with.
This can apply to both front office transactions as well as back office communications.
Holidays and happy endings
Documented systems means it is easier for you to take a holiday knowing that the business is in good and knowledgeable hands. You won’t have to phone in every day to check on what is happening nor even use your mobile to access the accounts!
At the extreme, moving on from your business into another field or into retirement will be easier if a prospective buyer can see what happens on a day-by-day basis. The documented system becomes an integral part of your business and will attract a premium on the selling price leading to a more profitable outcome than you may have otherwise expected.
The initial setting up of a documented system can be difficult but, in the short (and long) term it pays continual dividends to your business.
BUSINESS, BOOKKEEPING, SYSTEMS, PROGRAMS, FIGURES
Bookkeeping is a desk with lots of paper.
The idea that bookkeeping has to involve mounds of paper covering the desk and it eventually ends up in a neat pile is quite an old concept.
It was the predominant view as recently as 20 years ago even though the move from ledger books to computerisation (think Myob, Xero, and plenty of others) was well under way. It remains the view today in many businesses where a physical filing system is driven alphabetically or by date or by something else!
That particular invoice may need to be recovered sometime down the track and the business owner will know exactly where to get it from. Of course, it is never needed and the silverfish have a glorious time.
It is difficult to turn around the idea that something printed is never disposed of or that an electronic copy is every bit as good as a physical one and can be just as accessible.
Lots of paper produces figures.
Figures are produced from all those bits of paper put together in a non-random fashion so the business owner can ‘prove’ to the ATO that the business is not doing anything disreputable.
If it weren’t for the ATO, getting the business figures would be such a waste of time! Apart, that is, from finding who hasn’t paid their invoice and what bills are outstanding and knowing whether the business is progressing or going backwards.
It is still widely held that the balance in the bank account is a good indicator of the health of the business!
The figures are keys.
The bank balance is indisputable but has to be backed up by a set of other figures that tell a broader story.
That set of figures can be both historical and projecting forwards as budgets. Both are important for knowing where a business is, where it has come from, and where it hopes to go.
If the figures produced from the paperwork aren’t used for these purpose, it really does beg the question of what use are they.
Armed with these figures, the business owner can make decisions that are now-based, in tune with reality, and with an eye for where the business needs to go.
At Birkdale Bookkeeping Services we love to help business owners get their paperwork out of sight and to assist them with how they view the resulting business figures.
Endings are just beginnings.
New Year’s resolutions. Do they last much longer for you then the thought? Or, in the middle of the calendar year, do you think that next financial year will be better? Was there a resolution to make that happen or simply a hope that the stars will somehow line up? At the start of anything is a good time to plan for making sure the essentials line up. So, what are the essentials?
How would you describe your product or service?
It’s essential that you keep up to date with changes that impact whatever it is your business offers. The longer you have been in business, the more likely your clients are to expect you to be on top of recent developments and the less likely they will be to accept a “I’ll get back to you on that” response.
How far can you go?
That’s not just about geographical limitations. It’s also to do with how many hours can you fit in a day before you start to take short cuts. Alternatively, is there room to take on an extra employee or to simply say to a potential client “I’m not in a position to take on that project right now”?
Where are your strategic alliances?
That sounds like a recipe for wargames but it equally has a role to play in seeking support (and encouragement) from peers, family, and others in your industry. It is occasionally useful (and comforting!) to realise that the challenges you are facing are not restricted to you and your business.
Do you have a ‘Get out of jail’ card?
I hope not. It would imply that you don’t enjoy the business you are in. An alternative ‘card’ could be ‘You have landed on a station. Take a free throw’. That would mean you are enjoying the ride and the challenges and now is the time to plan into your coming year some ‘me’ time.
Over the years, I’ve seen any number of businesses go down the chute because the owners took their eyes off the ball ie off what was central and immediate to their business.
Unless you have a bookkeeping business, it is safe to say that bookkeeping is not central to your business. It might be of immediate concern if your record keeping and BAS returns are in a muddle but, even then, it isn’t immediate to the success of your business.
You may even get to the point of acknowledging it would be useful to know where your income has gone and why the bank account is so low and why expenses seem to be going through the roof.
For you to find out the answers to these questions means you have to take time out from your business to organise the paperwork, to systemise it into an accounting program, and then to decipher the resulting reports looking for answers to your original questions.
As bookkeepers, we do this all the time. It isn’t safe to say we can do this with our eyes closed but we do carry around the experience which we then apply to your particular business model.
That experience extends to knowledge of how to effectively use your accounting program in your business, how to organise the paperwork (real paper or stored electronically) so you can easily find it again when you want to know the details of a bill from 2 years ago, and to alert you to potential cash flow crunch points before they become cash flow catastrophies.
And this can all be done either at your business premises or remotely or with a mixture of both.
It means you are not up till midnight missing out on family time (or sleep time).
The success of your business in both longevity and growth is our priority.
A remarkable human being, Stephen Hawking, passed away earlier this week.
He was remarkable not only for the power of his mind but for his resilience in never giving up in the face of enormous physical challenges. A brilliant mind trapped within the confines of an ailing body.
How often in your own business do you feel hemmed in by circumstances seemingly beyond your control?
Is there a different angle from which to view this set of difficulties?
There will now be many copies of Hawking’s ‘A Short History of Time’ being taken down from bookshelves and dusted off. For many readers, this second opening of the book will not get much beyond the first attempt.
It doesn’t have to be like that when you stand back and read your business. There could be an immediate awakening of insight that eludes you when you are head down in the nitty-gritty of everyday putting one foot in front of another just to get through.
Use this insight and seek out the views of people you trust for their vision and experience and wisdom. It is amazing how a view from someone else appears, in hindsight, to be so obvious that you don’t understand how you didn’t see it yourself.
Be resolute in applying back into your business the insights you have gained either through your own efforts or from others. It is equally important that you get through to the final chapter which is about reviewing at a point down the track what you learned and assessing these valuable lessons into the future.
Hawking may not have got to the singularity of comprehending how the universe is but he laid down a path on which many a scientist and researcher can now walk.
This is a fitting epitaph (for anyone): He used his abilities and created a path where nobody had trod before. He stayed the course. He looked down at his feet for obstacles and looked up at the stars for inspiration.