Fuel tax credit latest rates

/in /by

From 1 July 2021 to 30 June 2022

The ATO’s fuel tax credit calculator includes the latest rates

You can use it to work out the fuel tax credit amount to report on your business activity statement (BAS).

The following tables contain the fuel tax credit rates for businesses from 1 July 2021 to 30 June 2022.

Note: All rates are in cents per litre unless otherwise stated.

Table 1: Rates for fuel acquired from 1 February 2022 to 30 June 2022

Eligible fuel type Unit Used in heavy vehicles for travelling on public roads (see note 1) All other business uses (including to power auxiliary equipment of a heavy vehicle) (see note 2)
Liquid fuels – for example, diesel or petrol cents per litre

17.8

44.2
Blended fuels: B5, B20, E10 cents per litre

17.8

44.2
Blended fuel: E85 cents per litre

0

18.955
Liquefied petroleum gas (LPG) (duty paid) cents per litre

0

14.4
Liquefied natural gas (LNG) or compressed natural gas (CNG) (duty paid) cents per kilogram

0

30.3
B100 cents per litre

0

8.8

Table 2: Rates for fuel acquired from 2 August 2021 to 31 January 2022

Eligible fuel type Unit Used in heavy vehicles for travelling on public roads (see note 1) All other business uses (including to power auxiliary equipment of a heavy vehicle) (see note 2)
Liquid fuels – for example, diesel or petrol cents per litre

16.9 (see note 3)

43.3
Blended fuels: B5, B20, E10 cents per litre

16.9 (see note 3)

43.3
Blended fuel: E85 cents per litre

0

18.565
Liquefied petroleum gas (LPG) (duty paid) cents per litre

0

14.1
Liquefied natural gas (LNG) or compressed natural gas (CNG) (duty paid) cents per kilogram

0

29.7
B100 cents per litre

0

8.7

Note 1: From 1 November 2019, this rate includes fuel used to power passenger air-conditioning of buses and coaches.

Note 2: Claims for packaging or supplying fuel can use the ‘all other business uses’ rate for the appropriate eligible fuel type.

Note 3: From 1 February to 30 June 2021, this rate was 16.9 cents per litre. The rate decreased to 16.3 cents per litre from 1 July 2021 due to an increase in the road user charge. From 2 August 2021, the rate increased back to 16.9 cents per litre due to the August 2021 indexation.

Source: ATO

Jac Gallagher working at her laptop2020 Notch Above Bookkeeping

E-invoicing an easier way to invoice

/41 Comments/in /by

What you need to know about e-invoicing

Most Australian businesses use invoices in some form, either sending them to their customers or to receive bills.

The way they do so, though, can soon change with e-invoicing, the latest government initiative to improve digitisation by equipping small businesses with a new tool to streamline their operations.

E-invoicing is a way to exchange invoices with other businesses that removes the hard parts and makes the whole process faster, more secure and more efficient.

Businesses that adopt e-invoicing can save, too. Each time an e-invoice replaces a paper or PDF invoice, it can save a business up to $20. This can add up fast for the 89 per cent of Australian small businesses (and their bookkeepers) still processing paper or PDF invoices manually.

We know it’s a challenging time for many small businesses right now without adding more to the mix. Since e-invoicing is just starting to roll out in Australia, you won’t see any big changes yet.

Instead, now is the time to register so you can easily get started when it’s ready for wider use – and don’t worry, it only takes a few minutes. With more big businesses and government departments getting on board, take a moment to get familiar with e-invoicing and prepare for the future.

So, what exactly is e-invoicing and how is it different to what I already do?

E-invoicing is a new addition to the toolkit of how Australian small businesses send and receive invoices and bills. Normally, invoices are created in accounting software or manually in a word processor and sent via insecure email or printed and posted. Businesses, or their advisors, then enter the data into their system, manually or with the help of automation tools like Hubdoc, before making payment. E-invoicing, on the other hand, is a way for businesses to exchange invoices directly between accounting systems, removing manual data entry.

What are the benefits of e-invoicing?

E-invoicing promises to make life easier for small business owners and bookkeepers who spend time managing invoices and bills. And since most small businesses trade with each other, they’ll feel the effects fast. For businesses that work with larger organisations or government agencies, they will find it easier to handle the payments process.

Other benefits also include:

  • Speedy payment times: Paying invoices is faster since they arrive as a pre-populated bill, ready to be approved. This reduces the need to manually extract information saving on the admin time. Plus, some government agencies are already committing to faster payment times.
  • Reduced errors: Less manual input reduces the risk of errors being made as well as minimise the likelihood of invoices getting lost in transit.
  • Increased efficiency and accuracy: Standard fields ensure all data is exchanged from ‘machine to machine’. This means invoices pass through fewer hands to get to their destination, so there’s less chance of human error or something going wrong.
  • Greater security: Invoices are exchanged through a secure e-invoicing network, with no human intervention, reducing the risk of fraud. This gives you peace of mind that an invoice will reach the right customer safely.
  • Cash flow visibility: Sending and receiving e-invoices gives a more accurate, complete and timely picture of your cash flow. With all your invoices and bills stored in a single ledger, you can see how your business is performing at any given time and use this to make informed decisions.

What if I already manage invoices electronically, such as in Xero?

E-invoicing differs from other ways of sending invoices as it is software-to-software using the secure, global Peppol network. Think of this as a custom-built way of exchanging invoices when compared to email or the post.

If you already use Xero, sending e-invoices won’t be too different from your usual process. Rather than pushing a button and generating an email, it’ll instead send the e-invoice straight to the recipient’s e-invoicing compatible accounting software (this means it can also access the Peppol network). It will, however, make it easier to know if something’s gone wrong – like if it can’t be delivered to the recipient.

What will change is how you receive invoices. Incoming e-invoices show up automatically in Xero as a draft bill to be approved – no more digging through emails and entering details one-by-one. This will all be included within your Xero subscription.

Can I start using e-invoicing right away?

E-invoicing is a little like sending an email. For it to work, both parties need to be signed up to a provider and connected to the internet. Instead of an email address, however, you will use your ABN. Yes, the same one that’s on all your invoices already. Since it’s early days for e-invoicing, you’ll need to wait until other businesses register to the Peppol network before being able to send or receive invoices with your usual business contacts.

Tell me, why should I register now?

Each business that joins the network means you’re one step closer to accessing the many benefits of e-invoicing. Register now and join the growing number of Xero customers that are already connected. Once your suppliers are on board, you can sit back and watch the bills roll in.

What if I work with government agencies?

Australian businesses that work with certain government agencies can get started right away. Why’s that? Some departments of the Australian government are already using e-invoicing and have committed to paying invoices within five days – much faster than the current average payment times of 23.3 days. The largest federal government agencies can already receive invoices electronically (the smaller ones need to transition by 1 July 2022) and government agencies in New South Wales (NSW) must make the switch by 1 January 2022. So, reach out to your government customers to see whether they’re ready to receive e-invoices.

How do I sign up for e-invoicing?

Registering for e-invoicing is quick, easy and free within Xero – you can do it in just a few minutes. The one registration is required to make sure your incoming e-invoices are delivered to Xero as a draft bill.

Is there anything else I should know?

Xero is working with government agencies and large companies to bring important partners onto the network and improve the benefits for small businesses. Expect to see some familiar names being able to send monthly accounts via e-invoice soon, straight into your draft bills in Xero.

Take a moment now to familiarise yourself with e-invoicing and set your business up so you’re ready to go as the network grows.

Get onto Xero

Xero is Australia’s most popular cloud-based bookkeeping and accounting software. Transform your business with real-time financial reports by making the switch to Xero. Join the Xero tribe today!

Source: Xero

ticking clock

Director identification numbers

/in /by

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.

cogs

Accounting 101: Cost Of Goods Sold (COGS)

/in /by

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.

Entrepreneur working on a project at home

4 Start Up Tips for Budding Entrepreneurs

/in , /by

Entrepreneurs cautioned to keep a lid on costs when starting a business

In the wake of COVID-19, what were once employees are reconsidering how they’ll make their living in a new world.

Cue the surge of budding entrepreneurs!

Starting your own business can feel like you’re in a pressure cooker with newfound worry about when the next dollar will land in your bank account.

However there are some solid and proven steps that owners of business start-ups can take from Day 1 to keep your finances in check and make what should be an exciting process less daunting.

1. Side gig safety net

Picking up a side job could help reduce financial pressure and add some structure to the week.

It’s not uncommon for entrepreneurs who go from full-time employment to no structure find it overwhelming and they end up going back to a job.

If you can find a part-time job and leave your ego at the door – willing to do anything from brewing coffee, washing dishes or doing backroom work – be grateful that you can be fully present in your part-time job and, as a result, be fully present in your business.

2. Hire specialists

Apportioning income in a separate account to hire a bookkeeper is a smart move.

Make sure that you source professional advice from mentors as well as experts in their fields. When you’re starting out, you don’t know what you don’t know, so it pays to ask as many questions early on. Having professional help ensures that you don’t miss something important, especially when it comes to regulation and hitting deadlines on time, not after the fact!

And make sure that you do your tax annually, rather than letting it pile up for several years!

Recordkeeping is much easier with digital technology. Barely anyone hoards paper receipts for expenses anymore. Working with a professional bookkeeper can tick this box from the start of your engagement and keep you organised from the get-go.

3. Keep personal and business expenditure separate

Whether you deal with a bookkeeper or an accountant (or both) this is a golden rule!

The first step is to open up a separate bank account for your business. Doing so not only helps make that mental shift from thinking of your business as a fun hobby or a side project to a serious business, but you’ll be much more confident selling your products or services once your tax and systems are sorted.

Leaving the back end of your business in disarray subconsciously affects how you present to customers.

Entrepreneurs that know the advantages of organising their business into specified accounts can have multiple accounts covering tax and legal costs, operating expenses, savings to invest back into the business and payroll.

4. Keep a lid on costs

Another best practice piece of advice to new business owners is to keep overhead costs low and to use as many free resources as possible.

It’s out there if you know where to look: free software and as many free templates as you can practically use.

Starting as lean as possible could be a game-changer in the long run. Whereas launching yourself into $20,000 to $30,000 of debt puts you under pressure straight away, rather than having an opportunity to just enjoy working, getting out there and finding new customers.

Free Bookkeeping Systems Check-Up

Take our quick quiz to find out how to get more cash and time back in your life.
Start the Quiz

Specialising in Xero bookkeeping, Notch Above is a remote service bookkeeper and BAS Agent that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns. Contact us Australia-wide on 1300 015 130.

financial stream of consciousness

Your Financial Literacy

/in /by

Accurate financial reporting

Why good financial reporting is essential and the consequences of missing the mark.

The importance of accurate, ethical financial reporting can’t be underestimated.

Business Australia recently reiterated this fact in their article Accurate Financial Reporting: 12 Must-Dos, highlighting why good financial reporting is critical to your business for a range of important responsibilities including preparing accounts, evaluating tax liabilities, decision making, planning and forecasting.

The many financial reports that must be prepared for any business provides owners with the information needed to establish sound business strategy, make management decisions and understand if that business is facing opportunities (or challenges).

The article outlines seven reasons why quality financial reporting is so important, the consequences of poor reporting, and then provides 12 best practice steps that business owners can follow either with their accountant or independently, depending on your level of confidence and proficiency.

Business Australia concludes that accurate financial reporting is key to understanding the true position of your business in order to make informed decisions.

Conversely, the dangers of inaccurate financial reporting are extensive, so it pays to get it right.

Closing the gate after the horse has bolted?

The good news is that it’s easy to work with your bookkeeper to tap into more regular reporting that delivers the data in real-time so you’re not retro-fixing your business performance.

Ask the team at Notch Above Bookkeeping about how you can do that at the start of a new financial year. Small business owners are invited to contact us — Australia-wide — on 1300 015 130 or read more at Understanding the numbers.

Notch turtle with a special message

Digital bookkeeping for business

/in /by

The benefits of a digital bookkeeping expert in your business

Bookkeeping using traditional mediums such as hard copy invoicing, spreadsheets or desktop software can create high costs in business.

They’re also notorious time thieves!

However, cloud bookkeeping lets you liaise with your customers accurately, cost-effectively and measurably. Plus, not to mention that you can easily pay your employees on time and make sure you’re keeping on top of your employer and superannuation obligations.

Small to medium-sized businesses owners typically spend too much time keeping the books as it is hard to get experienced digital bookkeeping professionals with apt skills to work within the business. Therefore, outsourcing digital bookkeeping services to an experienced cloud bookkeeping specialist is becoming more widespread among business owners. Outsourcing is easy and streamlined without the need to hire skilled bookkeepers on the payroll.

We’re super excited to see how last week’s Budget measures play out. Particularly the announced investment incentives for the digital economy and the expansion of small business digital support services.

Digital and cloud solutions are very much on the government’s agenda. Partnering with a digital bookkeeping provider, like Notch Above Bookkeeping, helps you achieve your goals, enhances your business reputation, and lets you attract and keep more customers. In coming weeks we’ll explain the top benefits of having a digital bookkeeping expert working for your business.

Here’s the bottom line

If your team lacks the skills, expertise or time, then why not partner with Notch Above Bookkeeping? Being a small business, we understand the value of your business goals. Our team of experienced bookkeeping specialists have years of industry exposure across a number of niches.

We can seamlessly transition your bookkeeping to the cloud, identify the top-performing drivers of your business, improve your business efficiency, plan a strategy to put accurate financials in front of you every month or quarter, and help you better organise your payroll and customers no matter where your business is located within Australia.

Want help with the creation of a customised cloud bookkeeping solution? Reach out to our cloud bookkeeping specialists at Notch Above Bookkeeping to get started.

Simply fill out the form here, and a member of our team will be in touch »

Notch Above Bookkeeping has been providing business owners with accurate and timely bookkeeping services that makes them more efficient and gives them peace of mind for 15 years. Let us help take your business to the next level of bookkeeping digitally, via the cloud! Call us on 1300 015 130.

2021 Notch trust badges

Future topics

  • Engage and keep customers organised more easily
  • Cost-effective bookkeeping
  • Access to advanced financial reporting
  • Stay in sync with the latest bookkeeping best practice

#Xeroplatinumbookkeepers #remotebusinessbookkeepers #cloudbusinessbookkeeping

2021 Bookkeeping Firm of the Year finalist

2021 Australian Accounting Awards

/in /by

Notch Above Bookkeeping shortlisted in the Australian Accounting Awards 2021

Notch Above Bookkeeping has been named a finalist in the Australian Accounting Awards for Bookkeeping Firm of the Year!

The Australian Accounting Awards recognises and acknowledges the achievements of individuals and firms, whether they are in the profession’s most senior ranks or if they’re a rising star within the industry, and rewards them with a prestigious and highly sought-after accolade and national exposure for their contributions.

The finalist list, which was announced on 11 May 2021, features over 300 high-achieving accounting professionals across 36 submission-based categories.

Head of Business Services, Belinda Lever, said she was humbled to be recognised and proud to be named as a finalist in the Australian Accounting Awards 2021.

“Our team’s recognition for excellence in bookkeeping reinforces the strength of our service and dedication to engaging with our clients and connecting with the community.”

“Bookkeeping professionals have been at the forefront of the economic crisis since the start of the pandemic and each has risen to the challenge to support business owners and the broader business community.”

Jotham Lian, Editor at Accountants Daily said, “To the finalists of this year’s awards, congratulations for consistently delivering the best service and outcomes for your clients over the past 12 months.”

“The 2021 awards will be like no other, shining a light on the professionals and firms who led the industry during a time of unprecedented change through the past year of constant obstacles and challenges.”

As digital disruption and automation continue to play out in the accounting industry, successful bookkeeping firms are those that can rise above and continue to capitalise on the business opportunities associated with their vital services.

This award recognises the bookkeeping firm that most effectively drove business growth during 2020, utilising a range of business development principles and tactics. As well as looking at support and servicing initiatives, this award considers the activities, strategies and actions of each bookkeeping firm finalist in terms of driving growth and efficiency.

Winners will be announced at a gala ceremony in Sydney on 18 June 2021. Review a full list of this year’s finalists here.

woman working at laptop

Top tips to get your books in shape for year-end

/in /by

Enjoying a stressless financial year-end

The financial year-end can be a stressful time for small businesses that don’t have their bookkeeping in order. But it doesn’t have to be.

Here’s what you need to get through it, including our tips on how to minimise the drama.

Helpful definitions

What is the Australian financial year? The Australian financial year (also the Australian tax year) runs from 1 July to 30 June. At midnight on 30 June, your business books are closed for the year and you report your financial situation to the government. They use this information to figure out how much tax you owe.

Profit and loss (P&L) statement In its simplest form, a P&L statement shows your income (or revenue) in one column, and your expenses (or costs) in another. Expenses are subtracted from income to show how profitable your business is.

Balance sheet A balance sheet summarises your assets and liabilities. Assets are things the business owns, like work tools, vehicles and cash in the bank. An invoice that you’ve sent but which hasn’t yet been paid is also an asset. Liabilities include debts and bills that you’ve received but haven’t yet paid.

How to have a better end of financial year

For the new financial year, try to set up systems that:

  • limit the amount of work you have to do at tax time
  • give you a running report of business performance (so you don’t have to wait till this time next year to find out how you’re doing)
  • create an automatic audit trail

Online accounting software automates data entry, so your books are always up to date. That’s great for the end of financial year and tax season, but it also means you can create a P&L statement or a balance sheet whenever you like – not just at tax time. And because you’ll have digital records of everything, there’s no need to fear an audit if one comes knocking at your door.

Other crucial things to consider

Some business owners find it useful to use this information like a checklist to keep on track and improve their systems:

  • Use only business bank accounts to pay business bills
  • Get online accounting software that retrieves transaction data straight from your bank
  • Stay on top of bank reconciliation so income and expenses are correctly classified
  • Lodge accurate and up-to-date BAS returns – if not attend to lodgement, arrange an ATO plan and consider how you can keep up to date in the new financial year
  • Ensure super guarantee (SG) contributions are accurate and up-to-date
  • Are your Single Touch Payroll lodgements up to date?
  • Reconcile your payroll and ensure this agrees to Single Touch Payroll lodgements and BAS returns lodged
  • Have your bookkeeper review your automatic bank rules and the GST codes assigned
    to the P&L and Balance Sheet items to ensure you are lodging accurate BAS
  • If your business carries stock, ensure you complete and end of year stocktake

Also, review your Balance Sheet and P&L to ensure you have completed the following items:

  • Bank accounts, petty cash, credit cards, loans and HP/Chattel Mortgages are reconciled
  • Compare your Accounts Receivables and Payables reports to amounts shown on the Balance Sheet to ensure no ‘out of balance’
  • GST and PAYG withholding accounts are reconciled to the June BAS
  • Wages and Superannuation in the P&L are reconciled to the Single Touch Payroll Lodgements
  • Amounts in suspense have been allocated to the appropriate ledger account or, if unsure, complete note in the memo to assist your bookkeeper to determine the correct treatment
  • Personal expenses have not been claimed as business expenses
  • Material differences to the prior year can be properly explained

No wonder business owners’ heads can be left spinning after reading all of that! But that’s where a safe pair of hands like a business bookkeeper can be worth their weight in gold, especially one that uses up to date technology so you and your advisers (and even the Tax Office) can review your business information in real time whenever they need to.

Notch Above Bookkeeping are Platinum Certified Xero bookkeepers and BAS Agents. We help small business owners across Australia to prepare BAS returns and streamline their bookkeeping processes, payroll and accounting records using cloud technology. Call us on 1300 015 130.

#remotebusinessbookkeepers #cloudbusinessbookkeeping #xeroplatinumbookkeepers