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Business

What Should Your SMSF’s Starting Balance Be?

September 21, 2015

ASIC recently released information sheets giving the view that SMSFs with a starting balance of $200,000 or less are not in the clients best interest and are more likely to be scrutinised. Let’s look at the reasons why this can be criticised and the benefits of a SMSF irrespective of the starting amount:

– Public Funds may not allow a specific type of binding death benefit nomination whereas trustees of an SMSF can specify this nomination which allows for a level of certainty when it comes to Estate Planning
– Certain strategies which can give a large increase to long term retirement income are not available in a Public Fund. LRBAs to buy direct shares and property is an example of this
– Focus on the long term costs and returns not the short term. 7 per cent fees in an SMSF with a 20 percent return is more beneficial than 2 per cent fees and 5 per cent return in a Public Fund over the same period

There is no evidence that a SMSF with a balance of less than $200,000 is less efficient or beneficial than a wealthy Public Fund. It’s all about what will be there for retirement in the long term and certainty for the trustees for Estate Planning, you don’t want your death benefit becoming subject to a public offer trustee’s payment policy. It’s not at all about how much is in the fund now!

At Bricks & Mortar Superannuation we can sit with you and look at what you have now and what you would like at retirement. Using our Retirement GAP calculator we can plan a strategy that suits you.

By Aletia Bowen, Co-Founder of Bricks & Mortar, part of the JWA group of companies

Business

Tax Breaks On The Cards

July 1, 2015

We’re (almost) famous! Check out this article from the Gold Coast Bulletin this week:

BARTERCARD is preparing to maximise the 2014-15 Federal Budget’s tax benefits for a host of its member businesses. With just a couple of days to go until the end of the financial year, members will be able to minimise the amount of tax they will pay, by using trade dollars and taking advantage of the government tax concessions.

Bartercard trade dollars can be directed towards goods and servi-ces such as accountancy fees, uni-forms, printing and other operational supplies. Accountant Joe Walsh, from Joe Walsh and Associates, said the big news this tax time “has been the Budget and the tax concessions for small businesses under $2 million turnover”.

“This, combined with Bartercard facilities, makes the tax season a good opportunity for small business,” Mr Walsh said. “Tax planning is always about accelerating expenses and defer-ring income, generally speaking, and a good thing about Barter-card is the flexibility to gain an extension of barter dollars – like an overdraft – and spending that before June 30 will have an instant tax offset up to $20,000.

“Any consumable, from printing, advertising, stationery, packaging and staple supplies to capital deductions and equipment such as furniture, computers, cars, tools, blinds, printers and carpets, or prepaid services like accounting and bookkeeping – basically anything that brings forward your expenditure line – can be immediately written off.

“Making the purchases with Bartercard dollars gives eligibility for a dollar-for-dollar deduction, so the two combined is good news indeed for small-business members.”

Bartercard founder and South Gold Coast franchise principal Andrew Federowsky said his team’s aim was to offer business solutions for clients. This year’s Budget was obviously positive for small business and we look forward to helping our members achieve the best possible tax outcomes,” Mr Federowsky said.

Business

A Whole New World?

May 31, 2015

On a recent road trip to Dubbo Zoo the kids’ Nana thought it would great for us all to visit a museum and show the youngsters a bit of history. After about half an hour into our visit I found this old accounting machine, which really got me thinking about just how much the job has changed!

This ‘bookkeeping machine’ was basically a calculator and printer all rolled into one, built specifically for doing things like payroll and company billing. Machines like this were everywhere from 1900 right up until 1980, when the first computers started to take over.

When I first started as an accountant, we didn’t use these (I’m not that old!) but everything was still very long winded. We used to write up everything in ledgers, reconcile and cross check, and then post a journal to the accounting program.

Today, we use Xero, which basically does all those jobs in a split second.

Xero is a software program that has direct feeds from whichever bank a client uses. Our clients use it in conjunction with us, so it has really changed the way we interact with them. We can now do realtime accounting on a daily basis, and they can access exactly what we can see, all live on their computer or even their phone. I’m always on my phone with clients, analysing what happened last month and forecasting the future.

The software memorises every single transaction. It can match up income and expenditure, and basically reconcile the whole lot for you, just pending your approval! It even suggests where things should be coded and posted to, and gets smarter as you use it.

Xero isn’t the only thing to have changed the way we do business. All our documents and files are now scanned in electronically and stored in the cloud, so as long as I have an internet connection these days I can work as if I’m at my desk in the office – no matter where I am in the world. When I’m out seeing clients, I have a ‘magic’ book and pen that I write up notes with and it scribes it back to my laptop or iPad, which is then easily converted into typed up notes which I can email to clients or staff for the next steps in the project. Makes my life a lot more efficient!

I hadn’t really considered how much the job had changed, until I saw this accounting machine. It’s not even that old, it was first used only three years before I was born! I think the biggest change for me is how much more time I get to spend actually talking to people nowadays, giving them quality face to face time and being able to actively research things for their businesses, instead of being stuck inside reconciling, cross checking and double handling data!