IM Business Solutions https://imbusinesssolutions.com.au Bookkeeping that liberates your lifestyle Thu, 02 Jun 2022 02:08:16 +0000 en-US hourly 1 https://wordpress.org/?v=6.0 https://imbusinesssolutions.com.au/wp-content/uploads/2020/05/cropped-Logo-3.0-32x32.png IM Business Solutions https://imbusinesssolutions.com.au 32 32 End of Financial Year 2022 https://imbusinesssolutions.com.au/end-of-financial-year-2022/?utm_source=rss&utm_medium=rss&utm_campaign=end-of-financial-year-2022 https://imbusinesssolutions.com.au/end-of-financial-year-2022/#respond Thu, 02 Jun 2022 02:03:55 +0000 https://imbusinesssolutions.com.au/?p=849 Key dates and checklist for EOFY 2022

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Yet another financial year has almost rolled around, and with it comes tax time.

And we cannot stress enough that the End of Financial year is such an important time for small businesses. But keeping up to date can be overwhelming as endless deadlines loom.

As June 30 rolls around, there are a couple of key dates and tasks that may need to be checked off your to-do list. So, we have put together the ultimate guide to EOFY 2022…

But before we get into that, a little PSA for you all – remember to connect with your bookkeeper or accountant well before June 30. This will ensure all reporting requirements and deadlines are in order before EOFY.

Ok, let’s do this!

Superannuation
There are a couple of changes to superannuation from July 1. For tax deduction purposes, ensure you pay all superannuation contributions before June 21.

  • The rate is changing from 10% to 10.5%.
  • The $450 superannuation threshold is being removed. Employees will be eligible to be paid super regardless of how much employees earn.
  • Employees under 18 years who work 30+ hours per week will be eligible for super, regardless of what they earn.

Single Touch Payroll
We have now hit the mandatory start date for Phase 2 of Single Touch Reporting (STP) – 1 Jan 2022.

What does this mean? This expansion will reduce the reporting burden for employers who need to report to multiple government agencies about their employees. Which means the right payment is received at the right time.

So, what are the benefits of Phase 2 for employees? Data will be readily available come tax time because it has already been reported to the ATO. Not only this information is shared with the ATO, but it is also shared with Services Australia.

For most employers, STP reporting has already been implemented. However, check your software is Phase 2 enabled.

Pay rates
Check your FairWork award to ensure employees are paid the correct rate. To find an award, use the FairWork pay calculator here.

Stocktake
If you trade stock, an end of year stocktake needs to be completed. A stocktake is imperative to calculating the value of trading stock for business and tax purposes. Make sure you finalise stocktake by June 30.

Need support or advice during tax time? Contact IM Business Solutions in Perth today.

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Business structures: company https://imbusinesssolutions.com.au/business-structures-company/?utm_source=rss&utm_medium=rss&utm_campaign=business-structures-company https://imbusinesssolutions.com.au/business-structures-company/#respond Tue, 26 Apr 2022 22:36:16 +0000 https://imbusinesssolutions.com.au/?p=839 Is the company structure right for your business?

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Over the past few months, we’ve gone through three types of business structures you have to select from when setting up a business. And now we’re going through the final one…a company!

Company business structures are one of the most well-known, and is a separate legal entity, unlike a sole trader or a partnership structure.

A company has the same rights as a natural person and can incur debt, sue, and be sued. However, companies are expensive and complicated to set up. This structure generally suits those who expect the business income to be highly variable and want the option to use losses to offset future profits.

There are two main types of companies:

  1. Proprietary limited companies: a structure that cannot raise money from the general public through share issues.
  2. Public companies: usually formed to raise or borrow public money by listing the company’s shares for trading on a stock exchange.

So now we know a bit more about this structure, let’s go through some pros and cons…

Pros
• Enables flexible business expansion
• Well-defined government agreements
• A range of government grants and incentives are available
• Tax rates can be more favourable
• The company can trade anywhere in Australia

Cons
• Your finances are public
• Reporting requirements can be complex
• A company may be expensive to establish and maintain

So, there you go, our final business structure. As always, we recommend contacting a professional or seeking legal advice before deciding on your business structure.

Want to know more about the company business structure? Contact IM Business Solutions in Perth today.

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Business structures: trust https://imbusinesssolutions.com.au/business-structures-trust/?utm_source=rss&utm_medium=rss&utm_campaign=business-structures-trust https://imbusinesssolutions.com.au/business-structures-trust/#respond Thu, 24 Mar 2022 21:33:12 +0000 https://imbusinesssolutions.com.au/?p=815 The pros and cons of setting up a trust

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Here we go again, our business structure series is back! Last month I touched on partnerships and today I’m going to walk through another business structure known as a trust.

A trust is known as one of the more expensive and complicated businesses to set up. They operate under a trustee, who carries out the business on behalf of other trust members or beneficiaries. Trustees can be a person or company and hold many responsibilities, including incomes and losses, and oversee distributing business profits.

With many parties and assets involved, this type of structure often recommends involving a professional to help with all registrations and setups.

Now that you know a bit about a trust, let’s go through the pros and cons…

Pros
• Assets are protected
• Flexible for tax reasons
• Beneficiaries are not liable for debts
• Beneficiaries pay tax on own trust income at own rates

Cons
• Complex legal structure
• Difficult to make changes once established
• Expensive and time-consuming to set up
• Formal administrative tasks required for the trustee
• A formal trust deed is needed

As always, it is best to consider your own personal situation and contact myself or another business professional before making any permanent decisions regarding your business structure.

Want to learn more about the trust business structure? Contact IM Business Solutions in Perth today!

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Business structures: partnership https://imbusinesssolutions.com.au/business-structures-partnership/?utm_source=rss&utm_medium=rss&utm_campaign=business-structures-partnership https://imbusinesssolutions.com.au/business-structures-partnership/#respond Tue, 22 Feb 2022 03:43:58 +0000 https://imbusinesssolutions.com.au/?p=805 The pros and cons of setting up a partnership

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I’m baaaack! Last month we touched on the topic of sole trader business structures and today I’m here to guide you through our next business structure – a partnership.

It’s critical that as business owners, we carefully consider how we choose to approach our ventures. Assessing all the pros and cons before making any permanent decisions can save us a lot of trouble (and time) down the track.

Partnership structures are known as one of the simpler types of business and are super easy to set up. They include the joint effort of two or more individuals, classified as ‘partners’, who run and equally distribute income and losses. Partnerships allow for shared control and are not required to pay income tax.

Now that you know a bit about a partnership, let’s see if this structure is right for your biz…

Pros
• Inexpensive and super easy to set up
• Less financial burden than other structures such as a sole trader
• Use of different skill sets and ideas from multiple partners
• No reporting obligations

Cons
• Risk of disputes or disagreements in management
• Unlimited personal liability, meaning partners are fully responsible for any liabilities of the business
• Taxed at an individual tax rate based on net share income
• All profits are split despite level of involvement

Oh, and one more thing before we go! We recommend chatting to your accountant or seeking further legal advice before deciding on your business structure.

Want to learn more about the partnership business structure? Contact IM Business Solutions in Perth today.

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Business structures: the sole trader https://imbusinesssolutions.com.au/business-structures-sole-trader/?utm_source=rss&utm_medium=rss&utm_campaign=business-structures-sole-trader https://imbusinesssolutions.com.au/business-structures-sole-trader/#respond Fri, 21 Jan 2022 01:14:33 +0000 https://imbusinesssolutions.com.au/?p=799 The pros and cons of setting up as a sole trader

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Taking that leap of faith and starting a business involves a lot of excitement. But it also involves quite a few decisions – big and small.

One of the first tasks when crafting your biz from the ground up is that ever-so-important aspect of business structures.

That’s why over the next few months, I’ll be diving into each of the 4 business structures to select from when setting up your business.

Today we’re kicking things off and chatting about one of the most common forms of business structures – the sole trader.

The sole trader structure is a fantastic option for small-scale businesses near and far. Those who choose this structure have the option to trade under their name (e.g Megan Black) or register a business name (e.g. IM Business Solutions).

So, let’s see if the sole trader structure is right for your biz…

Pros
• Common for businesses starting out
• Structure is simple and cost-effective
• Only need an Australian Business Number (ABN) to get started
• Can use your individual tax file number to lodge tax returns
• Ability to take cash out of the business as drawings without tax consequences

Cons
• Required to pay tax based on profit from the year
• Fully responsible for any liabilities of your business (unlimited liability)
• This can extend to personal assets to pay any business debts

If you’re going to take one thing away from this blog, we recommended contacting an accountant or seeking legal advice before deciding on your business structure.

Want to learn more about the sole trader business structure? Contact IM Business Solutions in Perth today.

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Christmas parties and gifts: are they tax-deductible? https://imbusinesssolutions.com.au/christmas-tax-deductions/?utm_source=rss&utm_medium=rss&utm_campaign=christmas-tax-deductions https://imbusinesssolutions.com.au/christmas-tax-deductions/#respond Fri, 10 Dec 2021 04:06:23 +0000 https://imbusinesssolutions.com.au/?p=792 A Very Merry Tax-Deductible Christmas

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As soon as December rolls around and the Christmas trees come out, you already know the silly season is upon us *cue festivities by the dozen*.

Contrary to popular belief, there are a lot of things you can’t ‘claim’ when it comes to celebrations over the festive season.

Yep, we hate to be the bearer of bad news, but the ATO doesn’t take a holiday over Christmas.

Speaking of the ATO, they’re also not huge fans of claiming ‘entertainment’ as a business expense. So, when Christmas time arrives, it can be tricky trying to figure out what you can and can’t claim.

To help you better understand the world of tax deductions, we’ve broken it down for all you small business owners out there.

Merry Tax Deductions!

Christmas parties
• No tax deduction as it is considered as entertainment
• Fringe benefits tax (FBT) will arise if the cost per person is more than $300
• No FBT for spouses due to the minor benefits exemption

Transport
• Will attract FBT unless the travel is to or from your employees’ place of work

Meal entertainment
• No tax deduction as it is considered as entertainment
• If you host a party at your work premises, FBT doesn’t apply, whatever the cost
• If you host a function off-premises and the cost is under $300 per head, then you cannot claim a deduction for tax, nor the GST credits – FBT will not apply

Employee & Client gifts
Non-entertainment
• Fully tax-deductible & GST claim
• FBT will arise if the total cost of the gift is above $300
• The minor benefits exemption is also applicable to a spouse or partner of the employee

Entertainment (think theatre, sporting events, etc)
• Not tax deductible and GST credits cannot be claimed unless they are $300+ each
• If they are over $300 then the gift becomes tax-deductible, but FBT applies

If you have any questions about tax deductions, contact IM Business Solutions in Perth today.

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How to price a product or service https://imbusinesssolutions.com.au/how-to-price-a-product-or-service/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-price-a-product-or-service https://imbusinesssolutions.com.au/how-to-price-a-product-or-service/#respond Thu, 11 Nov 2021 00:31:58 +0000 https://imbusinesssolutions.com.au/?p=779 Pricing your product or service shouldn't be guesswork

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Pricing your business can be a tricky task – endless hours can be spent determining whether the right price has been set for your precious product or service.

For some, developing a pricing strategy may seem like wasted time. But I promise you it will be totally worth it in the long run. I mean, who doesn’t want to be rewarded correctly for their time and efforts?!

Many small businesses owners tend to feel stuck when with their pricing. It can seem like a daunting task, and with it comes a bit of reluctance. Understandable if you ask me!

When I decided on my pricing, I spent a considerable amount of time determining the most effective pricing strategy. I started by working backward from what profit I wanted to see. From there, I considered my costs and the time required to complete the task.

And voila! The guide to pricing for IM Business Solutions was born. Might I add, this strategy has been used ever since…whenever a new service is introduced at IM Biz or a client asks for help, this is my go-to approach.

When forming your strategy, pricing should always, and I stress ALWAYS reflect:
~ The time and effort required to deliver the desired outcome
~ Your skills, knowledge, experience, and any relevant qualifications
~ The costs associated with providing your product/service
~ The value that your product or service can deliver

One common mistake I see a lot is undercharging *cue instant regret*. When this happens, it can often lead to a lot of awkward conversations, difficult discussions, and sometimes, unnecessary worry.

I hate to break it to you, but it can have a disastrous impact on the financial health of your biz. Whether it be a one-off sale or an ongoing package, never sell yourself short!

If you are worried that you are costing your business money (eeeek), go ahead and ask yourself the following questions:
1. How did you decide what to charge?
2. Did you consider what profit you would like to make?
3. What about your costs? Have they been covered?

Still unsure if you are hitting or missing the mark when it comes to pricing? Let’s chat! Contact IM Business Solutions in Perth today.

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Our guide to teaching kids about money https://imbusinesssolutions.com.au/how-to-teach-kids-about-money/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-teach-kids-about-money https://imbusinesssolutions.com.au/how-to-teach-kids-about-money/#respond Fri, 10 Sep 2021 03:16:48 +0000 https://imbusinesssolutions.com.au/?p=690 5 steps for teaching money to your little ones

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As parents, we want the best for our kids. They’re our world (hey Indy and Mia!), so we want to prepare them for when they reach an age to discover it themselves. This includes developing those imperative money foundations early in life so they can build on them throughout their journey.

You may not know it at the time, but you can have a lot of influence when it comes to shaping money habits. Trips to the supermarket or shopping centre can be the perfect opportunity to ignite discussions and spark a real interest for your kids.

However, knowing where to start can be tricky. With all tricky things in life, we recommend starting with the basics.

So, we’ve compiled 5 easy steps to help you teach basic money concepts to your little ones. Here we go!

1. Introduce the concept of money
This first step doesn’t need to be complex, start off by explaining what money is and how it is used. This could mean taking out a few notes and coins. I know, I know, in an increasingly cashless society this is difficult, but allowing your kids to see money being exchanged will help them to recognise money and its importance.

2. Describe how money is earned
One of the key steps for kids to understand the value of money is to teach them that it doesn’t magically appear. Telling them the way/s that you earn money is a great place to start. And if you find your kids asking few questions here and there, take the opportunity to strike up a conversation.

3. Explain the difference between needs and wants
Does anyone else remember learning this concept in primary school?! I love to use examples when explaining the difference to my girls, Indy, and Mia. And as your kids grow older, encourage them to consider the two concepts before spending their money.

4. Create opportunities to earn money
Pocket money will be your best friend for this step – it is a fantastic way to demonstrate to kids that they will need to earn money rather than expecting it to be handed to them. Have them involved in chores or other tasks around the house to earn their pocket money.

5. Encourage a habit of saving
Whether it be setting up a piggy bank, bank account, or creating a money goal, familiarise your kids with the process of saving. A savings goal can be great for your kids to work towards something they want, allowing them to prioritise what they spend their money on. Creating a timeline for saving can be a great motivator to help them reach their goal.

If you have any further questions on how to tackle this topic, get in contact with the team IM Business Solutions today.

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Common bookkeeping mistakes you need to avoid https://imbusinesssolutions.com.au/common-bookkeeping-mistakes/?utm_source=rss&utm_medium=rss&utm_campaign=common-bookkeeping-mistakes https://imbusinesssolutions.com.au/common-bookkeeping-mistakes/#respond Wed, 14 Jul 2021 23:13:31 +0000 https://imbusinesssolutions.com.au/?p=679 Steer clear of these 3 mistakes

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Books are the heart and soul of any small business. It is often seen as a task most of us would prefer not to think about, but we all must face it at some point along our business journey.

Over the years, I’ve come across a few mistakes that I know all bookkeepers (including myself) like to steer clear of – aka a big no in the world of bookkeeping.

We’ll let you in on a secret. Bookkeeping can be a gamechanger when it comes to managing and growing your biz. However, when you’re a small biz owner, it can be difficult to know where to start with your books.

That’s why it’s time to take control of your books and avoid these three common mistakes…

1. Poor record-keeping
Did you know that business paperwork must be filed for 5 years (ATO) and 7 years (Fair Work)? When it comes to record-keeping, it’s extremely important to stay on top of things and keep records up to date. These include those small purchases and transactions that may seem insignificant but can save you time and money down the track.

2. Unreconciled accounts
Account reconciliation is simply comparing your books with your bank statement to check for discrepancies. Failing to reconcile often enough means it can be difficult to determine the financial state of your biz. Missing this key step can have a flow-on effect with other records and business decision-making, yikes!

3. Mixing business and personal
This may be an intervention for some, but business and personal expenses need to be distinguished and for good reason. Not only can it lead to messy books, but it will also be difficult to have a clear view of how your business is performing. And yes, I hate to break it to you but that means having separate bank accounts for the business and personal.

Remember, it’s okay to make mistakes. They are a great opportunity to learn something new. The sooner you address any mistakes the less it can cost your business in the long run, yay!

If bookkeeping still isn’t your thing, the team at IM Business Solutions is here to help with all of your bookkeeping needs.

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How to prep for the End of Financial Year https://imbusinesssolutions.com.au/how-to-prep-for-the-end-of-financial-year/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-prep-for-the-end-of-financial-year https://imbusinesssolutions.com.au/how-to-prep-for-the-end-of-financial-year/#respond Thu, 17 Jun 2021 05:14:41 +0000 https://imbusinesssolutions.com.au/?p=673 Stay ahead of the game during tax time

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OMG! The End of the Financial Year is fast approaching. Although we are all wondering where that time has gone, tax time is upon us whether we are ready or not.

With another financial year coming to an end, it’s time to start thinking about what important tasks need to be completed before June 30. After all, organisation is key.

As June 30 looms, preparing for tax time can feel like a daunting task on the already overwhelming to-do list. I know the feeling and I often see it with many of my clients.

Over the years, I’ve come up with some handy tips to manage the busy period, making EOFY a little less stressful – try them for yourself this year (and thank me later).

Declutter
Decluttered space = decluttered mind, right?! I cannot stress enough how important it is to have your paperwork in check as the EOFY approaches. Receipts, invoices, GST returns, BAS statements, employee super contributions…gather and organise them all to streamline the EOFY process.

Stay up to date
Keeping on top of financial data and records is key to a successful EOFY period. Start with ensuring your accounting file is in order and complete any outstanding reporting or tasks that you have not gotten around to doing. It really is the small things that add up when it comes to being prepared for whatever is thrown your business’ way.

Simplify it
This time of year is busy enough, so there is no need to make it more complicated than necessary. Online tools can help to capture everything in one place, such as invoices and banking. With a variety of clever accounting software to choose from, you can keep track of all the data you will ever need for your biz.

Schedule time
You schedule time in your calendar for appointments, so why not do the same to meet EOFY due dates? I like to put time aside to sit down and work towards deadlines before it becomes too late. Oh, and don’t forget to plan a time to meet with your accountant or bookkeeper before the end of the financial year.

Plan ahead
Not only do you want to be organised before the June 30 deadline, think big and plan for the year ahead. With an abundance of financial data at your fingertips, you can step back and review how the year has gone, considering current strategies, future plans, and any pain points that need addressing. Your biz will LOVE you for it in 12 months’ time.

If tax time still isn’t your strong suit, contact IM Business Solutions should you need any advice or support for your business – we would love to hear from you!

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