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Director identification numbers

Preparing for director IDs

If you want to become a director or are already one, you’ll need a director ID.

Director identification numbers (director ID) are a new requirement for all company directors, designed to help combat illegal activity by making it easier to trace directors’ relationships with companies.

Company directors have been given 12 months to apply for an ID.

A director ID is a unique identifier you need to apply for once and will keep forever. It will help prevent the use of false or fraudulent director identities.

Australian company directors have one year to apply for their unique director identification number before fines of over $1.1 million are issued for non-compliance.

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation will need a director ID.

How to apply for your director ID

Directors can apply for a director ID from November 2021 on the new Australian Business Registry Services (ABRS), a single platform administered by the Commissioner of Taxation that brings together ASIC’s 31 business registers and the Australian Business Register.

The fastest way to get a director ID is to apply online. It’s free to apply and you only need to apply once. Directors must apply for a director ID themselves and will be required to produce myGovID along with two identity documents from a list, including their bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary and PAYG payment summary.

While existing directors will have a year to apply for their director ID, new directors appointed between 1 November 2021 and 4 April 2022 will have just 28 days after appointment to apply for their director ID.

New directors who are appointed from 5 April 2022 will be required to apply for their director ID before appointment.

The director ID will be attached to a director permanently, even if you cease to be a director, change your name, or move interstate or overseas.

Once you have obtained your director ID, there are important steps you can take to help you use, view and update your details.

How we help you

Looking for a Xero Certified Bookkeeper for your business? Are you drowning in paperwork? Cash flow problems keeping you awake at night? Learn how Notch Above Bookkeeping can solve all these problems here or call our business bookkeeping team Australia-wide on 1300 015 130.

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Stapled super funds

Extra ‘super’ step when hiring new employees

Most new employees are eligible to choose the super fund into which employers pay their super guarantee contributions.

Currently, when a new employee doesn’t choose their own super fund, the employer must pay super contributions into their default fund.

From 1 November, if any new employees start, the employer may have an extra step to comply with the choice of fund rules.

If a new employee doesn’t choose a super fund, the employer may need to request their ‘stapled super fund’ details from the ATO.

A stapled super fund is an existing super account that is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.

The change aims to reduce account fees by stopping new super accounts from being opened each time they start a new job.

From 1 November, employers will be able to request stapled super fund details for new employees using Online services for business.

What employers can do now

To make sure you’re ready when the time comes, check and update the access levels of your authorised representatives using Online services on behalf of your business. This will also protect the personal information of your employees.

Please contact Notch Above’s Business Bookkeepers Australia-wide on 1300 015 130 if you have any queries about stapled super funds prior to 1 November. We are Xero Platinum Certified bookkeepers operating via Xero cloud bookkeeping.

Source: ATO

ATO Payment Plans

There may be times when cash is tight and paying bills on time difficult

At these times, payment plans with your creditors may be helpful.

But did you know that the Australian Taxation Office (ATO), one of the biggest creditors to small businesses, allows payment of tax debt by instalments as an option?

An ATO Payment Plan is a way for businesses to pay their debt by instalments. Arranging for your business to have an ATO payment plan can provide a legal and convenient way to respond to an overwhelming tax debt.

A payment plan can be set up online via a myGov account, over the phone or by an authorised agent and can help small business owners:

  • Manage cash flow
  • Repay tax debt
  • Avoid unnecessary insolvency action
  • Keep business operating

When setting up a payment plan, you need to consider how much you can pay so you can meet each scheduled instalment, including interest that may accrue on any overdue amounts.

You still need to lodge your activity statements and tax returns on time, even if you can’t pay by the due date. This will show the ATO that you’re aware of your obligations and doing your best to meet them.

The ATO has a payment plan estimator tool that can be used as part of your initial discussions on a payment plan that might work for your business.

If the ATO requests that you demonstrate your businesses viability, they will request additional financial information and explanations regarding the need for the payment plan.

Default of a payment plan

If you miss or are late with a payment on your existing payment plan, this will automatically default a payment plan. Failure to lodge activity statements and tax returns on time and paying them in full by the due date will also automatically default an existing payment plan.

By defaulting a payment plan, it creates bad payment history and should be avoided where possible as it will make it more difficult to put plans in place in the future if needed.

Contact us and we can talk to the Tax Office on your behalf to try to arrange a payment plan for your BAS debt. If you are a Notch Above Bookkeeping client currently supported by us, this service is included in your monthly package.

NewAccess for Small Business Owners

Program aims to give small business owners, including sole traders, the support they need

NewAccess for Small Business Owners is a free and confidential mental health coaching program, developed by Beyond Blue.

The program uses Low-intensity Cognitive Behavioural Therapy (LiCBT) that allows participants to recognise the way they think, act, and feel and break unhelpful thoughts.

Over six sessions, coaches with a small business background will work with you to overcome difficult issues, providing you with practical skills to manage stress and get you back to feeling like yourself.

At your first appointment your coach will complete an initial assessment with you, and develop a program tailored to your individual needs.

NewAccess for Small Business Owners is available nationally by phone or video call.

Why you’ll love NewAccess for Small Business Owners 

  • A free and confidential mental health coaching program, developed by Beyond Blue.
  • Designed to support small business owners like you, manage life pressures so you can move forward
  • The structured six session program will give you practical tools
  • You’ll work with a coach who will guide you through a tailored, personal program
  • No doctor’s referral or mental health treatment plan required – so you don’t have to visit a doctor first
  • It’s available via phone, video call from Monday to Friday 8am to 8pm AEST.  The program is closed on public holidays

NewAccess for Small Business Owners uses Low-intensity Cognitive Based Therapy (LiCBT) to recognise the way we think, act and feel. You will have a Coach to help you tackle unhelpful thoughts and behaviours, using an individual plan that you develop together.

NewAccess for Small Business Owners is available nationally by phone or video call. To read more about NewAccess coaches, the program or how to make an enquiry, visit https://www.beyondblue.org.au/get-support/newaccess/newaccess-for-small-business-owners.

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Accounting 101: Cost Of Goods Sold (COGS)

Why knowing your COGS is important

The Cost Of Goods Sold (COGS) refers to the cost of producing an item or service sold by a business.

Key points

  • Knowing how to calculate COGS can help determine if your business is profitable
  • Calculating COGS correctly can inform a proper price point for an item or service
  • Understanding COGS can help you better manage stock, tax and your business.

Correctly calculating the Cost Of Goods Sold

Calculate the COGS by adding the cost of stock at the start of the financial year to purchases made throughout that year. Then, subtract the cost of stock remaining at the financial year-end. The final number will be the yearly COGS for your business.

By subtracting the annual COGS from your annual revenue, you can determine gross profit. Remember, to arrive at an accurate COGS figure, you’ll need to value your stock.

The COGS may include:

  • Materials used to create a product or perform a service
  • Labour needed to make a product or perform a service
  • Overhead costs directly related to production (for example, the cost of electricity to run an assembly line).

The Cost Of Goods Sold excludes:

  • Indirect expenses (for example, distribution or marketing)
  • Overhead costs associated with general business operations
  • The cost of creating unsold stock or services.

There are other stock costing factors that may influence your overall COGS. The Australian Taxation Office refers to these methods as First In First Out (FIFO), Last In First Out (LIFO) and Average Cost.

Significance of COGS in Profit and Loss reporting

The Profit And Loss Statement or ‘P&L’ is a summary of business income and expenses over a specific period. Ideally it should be prepared at regular intervals (usually monthly and at financial year-end) to show the results of operations for a given period.

Profit or loss is calculated in the following way:

Sales — Discounts and Commissions = Net Sales — Cost Of Goods Sold = Gross Profit — Expenses = Net Profit

Calculating the COGS varies depending on whether a business is retail, wholesale, manufacturing or a service business:

  • In retailing and wholesaling, computing for COGS during the reporting period involves opening and closing stock. This includes purchases made during the reporting period.
  • In manufacturing, it involves finished-goods stock, plus raw materials stock, goods-in-process stock, direct labour and direct factory overhead costs.
  • In the case of a service business, the revenue is derived from the activities of individuals rather than the sale of a product so therefore calculating COGS is a smaller task due to the low-level use of materials required to earn the income. Opening and closing work-in-progress, valued as time spent on jobs yet not billed, forms part of the COGS calculation in a service business.

Having accurate COGS data can help show you how your business is performing. Besides being a driver of business profit, it can help you set prices for your products.

To delve further into the concept of the COGS in your business, how to calculate it and how to apply it, contact the cloud business bookkeeping team at Notch Above Bookkeeping, Australia-wide, on 1300 015 130.

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Minimum Wage Rate 2.5% increase

Queensland Minimum Wage Rate will increase by 2.5%

Minimum wages in the Retail Award increase from 1 September.

The FWC’s Pay Calculator and Pay guides now have updated rates.

For the list of awards that will increase later in the year, see When does the increase start?

Following the Annual Wage Review 2021, the Fair Work Commission (FWC) announced a 2.5% increase to the national minimum wage and all award wages. The increase to award wages is happening in 3 stages. The FWC has also issued decisions to change some terms and conditions in several awards.

What do you need to do?

You can find the new minimum pay rates in the FWC’s Pay Calculator and Pay guides, for all awards that increased from 1 July and 1 September 2021. The Pay Calculator and pay guides will be updated for the awards increasing in November closer to their start date. For the list of awards that increase in November, see When does the increase start?

You can also use Find my award if you’re not sure which award applies to you.

Who does the increase apply to?

The increase applies to anyone who is paid minimum award wages or the national minimum wage.

Most employees are covered by an award. If you’re not sure which award applies, use Find my award.

If you’re covered by a registered agreement, you should check it to see whether this increase affects you.

For anyone not covered by an award or an agreement, the new national minimum wage is $772.60 per week or $20.33 per hour.

When does the increase start?

The new national minimum wage applies from your first full pay period on or after 1 July 2021.

There was also an increase to the Super guarantee for all eligible employees from 1 July 2021.

The increase to minimum award pay rates is happening in 3 stages.

The increase doesn’t affect employees who already get paid more than their new minimum wage.

1 July 2021 award increase

Most awards increased from the first full pay period on or after 1 July 2021.

1 September 2021 award increase

The increase for the Retail Award applies from the first full pay period on or after 1 September 2021. This means if you have a weekly pay period that starts on Mondays, the new rates apply from Monday 6 September 2021.

You can find the new minimum rates in our Pay Calculator and Pay guides.

1 November 2021 award increase

21 awards increase from the first full pay period on or after 1 November 2021. Read more »

Please note, wage rate changes will need to be done manually which we do in consultation with our payroll clients. We strongly recommend that you make time to check your settings.

For assistance, contact our Xero Platinum Certified business bookkeepers at Notch Above Bookkeeping, Australia-wide, on 1300 015 130.

Source: Fair Work Ombudsman

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Australian SMBs record strongest sales growth in June

Xero Study

Study reveals that Australian small businesses enjoyed their best sales in June 2021.

This was ahead of the latest COVID-19 restrictions in New South Wales, Victoria, and South Australia. 

The data — released by Xero — is based on aggregated and anonymised transactions from hundreds of thousands of small businesses. It examines the health of Australia’s small business economy from the Xero Small Business Index.

Index hit a record high

The Index grew 12 points to 144 points in the months leading up to the restrictions, reaching its highest level since January 2017. It’s also the sixth month in a row that small firms have outperformed the national average.

“Xero’s data reveals Australian small businesses were continuing to show positive signs of recovery at the end of the 2020-21 financial year,” said Joseph Lyons, Managing Director Australia, and Asia, Xero.

“This is despite June’s data capturing the bulk of Victoria’s fourth lockdown.”

The agility and resilience of the small business sector were most evident in the strong growth in sales, hitting a three-month high.

“Recognising the series of significant events that have transpired since June, we will be looking to our July metrics to understand how the return of lockdowns in three states has truly impacted the small business economy’s recovery.”

Lowest payment delays

The rise in June was largely supported by a 2.9-day fall in time to be paid, which is now at a record low of 20.1 days, and strong sales growth despite stay-at-home restrictions being in place in Melbourne for the first 11 days of June and in Greater Sydney.

This is only the second time since tracking began in January 2017 that this metric has dropped below 23 days.

The substantial drop in payment times corresponds to the end of the Australian financial year.

New Zealand and the United Kingdom both saw a similar drop in payment times at the conclusion of their fiscal years in March.

Both countries’ gains were then reversed in subsequent months’ data, so Australia will have to wait until July’s results to see if the pattern continues

Strongest sales growth

Sales in small businesses, after adjusting the annualised two-year growth, increased 10.7 per cent year-on-year. This is a significant increase from May 2021 sales growth of 6.3 per cent on an adjusted basis.

The sales performance came despite stay-at-home restrictions in place in Melbourne for the first 11 days of June and in Greater Sydney from 25 June.

Victoria recorded the slowest sales growth of the states, rising 9.3 per cent year-over-year on an adjusted basis.

News South Wales had not yet been impacted by the Greater Sydney lockdown with sales up around the national average of 10.6 per cent year-over-year.

Using annualised two-year growth, healthcare and social assistance and rental, hiring, and real estate services were the strongest performing industries for June 2021, year-over-year. Meanwhile, hospitality and arts and recreation experienced the lowest sales growth.

Jobs continue to rise

Across Australia, small business jobs rose 4.3 per cent year-over-year on an adjusted basis in June 2021, with the Melbourne lockdown in early June putting the brakes on jobs growth.

However, across the country, there were significant state-based differences with Western Australia recording an increase of 8 per cent year-over-year on an adjusted basis, compared to Melbourne which recorded a rise of 2.8 per cent year-over-year.

Despite a softer national small business jobs increase, this is the fourth month small business jobs were above 4 per cent year-over-year on an adjusted basis, illustrating small business continues to make a strong contribution to Australia’s job recovery in 2021.

Meanwhile, the Australian Bureau of Statistics said that in June 2021, 27 per cent of businesses reported having difficulty finding suitable staff to fill jobs and almost one in five businesses did not have enough staff based on current operations.

SMB wage growth remains steady

As per the study, wages in small businesses, as measured by average employee hourly earnings, rose 3.4 per cent year-over-year.

After adjusting for the effect of the low result in June 2020, the wage increase was 2.7 per cent year-over-year, exactly the same as it was for May and still down on the pre-pandemic pace of growth of around 3 per cent.

Notch Above Bookkeeping has your business up and running with Xero quickly and accurately. We can help you install the software, configure your security settings, import your business data (chart of accounts/suppliers/debtors/employees) as well as set up your invoicing, payroll and taxation requirements. We also provide advice on the best Xero package for your needs.

Contact us to get Xero, the world’s easiest cloud accounting system setup and working for your business on 1300 o15 130 (Australia-wide).

Source: Xero

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QLD COVID-19 Business Support Grants

2021 COVID-19 Business Support Grants

For lockdown-impacted businesses in Queensland

Program closes 16 November 2021

Your business or not for profit organisation may be eligible for financial support through the 2021 COVID-19 Business Support Grants, if it has been affected by the August 2021 COVID-19 lockdowns in Queensland.

Applications for the 2021 COVID-19 Business Support Grants opened at 12pm (midday), 16 August and will close on 16 November 2021. All eligible businesses who apply for a grant during the 3-month application period will receive funding.

joint Queensland and Australian Government support package for Queensland businesses has been announced. The package includes support for non-employing sole traders and expands on support for eligible small and medium businesses, and large tourism and hospitality businesses.

Successful applicants will receive the total value of the boosted grants ranging from $1,000 to $30,000 depending on your business or not-for-profit organisation.

Non-employing sole traders update

The online application form will be available in September. Check the eligibility criteria, and register your interest. For queries about the grant for non-employing sole traders, phone the Office of State Revenue on 1300 300 734 and choose option 5.

Available funding

You may be eligible to receive a grant, based on the payroll size of your eligible business or not-for-profit organisation in Queensland. This grant may be used for business expenses.

Business type Payroll size Available funding
Employing Queensland small businesses and not-for-profit organisations less than $1.3 million $10,000
Employing Queensland medium-sized businesses and not-for-profit organisations between $1.3 million and $10 million $15,000
Employing Queensland large-sized tourism and hospitality-focused businesses and not-for-profit organisations more than $10 million $30,000
Non-employing sole traders based in Queensland n/a $1,000

For specific information on who can apply and access to the eligibility checker, visit the Business Queensland website.

Timeframes

Employing businesses: Applications opened at 12pm (midday), 16 August 2021. Completed applications will be processed in the order we receive them.

Non-employing sole traders: Applications are not currently open. The online application form will be available in September 2021.

Don’t miss out

If you have any queries or need any additional support around applying for a 2021 COVID-19 Business Support Grant, please contact the team at Notch Above Bookkeeping on 1300 015 130 before the closing date on 16 November 2021.

Source: Business Queensland