Late payments can cause serious cashflow issues and stress for small-business owners.
According to the early results of an inquiry into payment times and practices that is currently being undertaken by The Australian Small Business and Family Enterprise Ombudsman (ASBEFO), big businesses and some governments in particular are taking longer than ever to pay small businesses, with almost 50 per cent of small businesses experiencing late payments on at least half of the bills owed to them.
Here are five tips to help you deal with slow payers:
The simpler you can make it to pay, the less likely that your customer will put paying you in the “later” basket. There are many apps and programs that you can use to send professional invoices quickly and collect payment online straight through the invoice itself, with a “Pay Now” button to allow immediate payment. Some payers might still wait until the deadline, but some might pay immediately just to get it off their to-do lists.
Accept a range of payment types so that your customers can pay in the way that suits them best. Consider offering the full range of payment options, including credit and debit card, EFT, cash and PayPal.
Keep track of when invoices are due and send a reminder a few days in advance. Perhaps dedicate a certain time each week or day to check your invoices and send reminders to customers who are late or even approaching the due date. Of course, handle it with diplomacy and tact by tailoring the reminder message if possible to ensure that it is polite but also clear about your expectations around payment.
Ask yourself if it might be possible to adjust your payment terms from 30 days to, say, 15 days, to increase the chance you’ll be paid on time.
You could consider offloading the work of reconciling accounts to a trusted bookkeeper like SWAG. We have a range of packages available to take away some or all of this burden for you.
Can we help?
SWAG knows that running a business is busy. There’s little time to spare, and we want you to have one less thing to worry about. Your books, payroll, taxes, debtors, creditors – all those accounting tasks you probably find distracting and disruptive to your business operations – can be handed over to us.
Please get in touch with the SWAG team to find out how we can help you.
The Institute of Certified Bookkeepers recently sent us through this helpful end-of-financial-year timeline, and we thought it was a great little timeline to help you prepare for a stress-free (well, mostly) end-of-year. As they so aptly point out in the introduction to this timeline by quoting Benjamin Franklin, “By failing to prepare, you are preparing to fail.” Strong words perhaps (after all, we are here to help you!), but food for thought nonetheless.
Here’s their helpful timeline:
21 April: Lodge and Pay Monthly IAS/BAS – March
28 April: Lodge and Pay Quarterly BAS – January to March Check employees have signed authority to email payment summaries
Prepare your end-of-year plan
21 May: Lodge and Pay Monthly IAS/BAS – April
28 May: Fringe Benefits Tax annual return – due date for payment
21 June: Lodge and Pay Monthly IAS/BAS – May
25 June: 2017 Fringe Benefits Tax annual return – lodgement due date for tax agents (if lodging electronically). Payment (if required) is due 28 May.
Prior to 30 June: Super Guarantee Contributions must be paid (to fund) by this date to qualify for a tax deduction in the 2016–17 financial year.
30 June: Have stocktake completed
14 July: Prepare and distribute Employee Payment Summaries
21 July: Lodge and Pay Monthly IAS/BAS – June
21 July: Payroll Tax annual reconciliation
28 July: Lodge and pay Quarterly Business Activity Statement, unless extension is available
28 July: Pay June Quarterly Superannuation Guarantee (unless already paid before June 30)
14 August: Lodge Employee Payment Summaries
21 August: Lodge and pay monthly IAS/BAS – July
25 August: Lodge Taxable Payments Annual Reports
Meet with trusted advisor to finalise the ‘end-of-year’ file
Send final ‘end-of-year’ file to accountant
21 September: Lodge and pay monthly IAS/BAS – August
Last month, we wrote a short news update about the fact that fuel tax credit rates increased in February (rates are indexed twice a year, in line with the consumer price index, or CPI). We also included links to the latest rates, as well as the ATO eligibility tool and calculator that you can use to calculate your claim. Today, we wanted to take you through the process of using the ATO’s fuel tax credit calculator.
Where can I access the fuel tax credit calculator?
You can access it here: ATO fuel tax credit calculator
What do I do?
Go to the calculator, then simply click whether you are calculating entitlements for an original BAS or calculating an adjustment or correction for a previous BAS, select the BAS cycle relevant to you (monthly, quarterly or annually), and then select the relevant BAS cycle start date. The options are clear and easy to read.
You can then click on ‘Add’ to select details such as fuel type and business use, then add the quantity in litres (L). You then get an opportunity to make any adjustments (although you do not have to). Finally, click on ‘Calculate’.
The result
The result, as can be seen in the picture above, clearly sets out the exact fuel tax credit amount you are entitled to, even showing you exactly what to write in labels 7D and 7C on your BAS. In the example we did just to test the calculator, we entered 100L.
Can we help?
If you need assistance, please get in touch with the SWAG team. We’ll be glad to help!
Hands Across the Water is an Australian, New Zealand and Thai charity set up by Peter Baines, a former NSW Police Officer sent to Thailand following the 2004 Boxing Day Tsunami. One of their most well known fundraising events is the Business Blueprint Hands Ride, which SWAG Director Sheree has just completed. Here’s what Sheree had to say:
“We did it! 66 riders rode 500 km in 5 days, in temperatures well above 40 degrees. We were pretty much off the beaten track in Thailand, riding along breathtakingly beautiful beaches and through picturesque countryside. There were hills to climb, temples to visit, and friends to be made.
It was challenging but made achievable by the fantastic support from Tour De Asia, who set up our route and provided the bikes, sunscreen and refreshments at every stop to keep us at our best, and the generosity and care of fellow riders who encouraged and educated us novice riders, and stayed by our sides. It was truly a team effort.
We visited the slums of Bangkok and the houses being built there by Hands Across the Water. We took a rather perilous bus ride to meet a group of boys at another Hands home, and planted teak trees with them.
We were joined by Peter Baines on the last day of the ride, who took us to the temple where it all began for him, before riding in to Baan Tham Namchai to meet the children. It was very emotional, seeing their excited faces, giving them hugs , learning their names and giving gifts. The children entertained us with song and dance and we joined them for both lunch and dinner, with the best still to come when they joined us at our hotel for a pool party the next day. It was so much fun!
A heartfelt thanks to all who supported me on the ride and for the contribution they have made to the children of Hands Across the Water. If this is something you think you might like to be a part of next year, please give me a call.”
Sheree
If you use Mozilla Firefox as your browser, you need to make changes to your browser to continue to use your AUSkey. If you don’t make these changes, you won’t be able to access the portals or other government services using your AUSkey.
From 7 March 2017, the latest version of Mozilla Firefox (version 52) will not support AUSkey. A browser extension is now available for Windows users to access services that require an AUSkey in preparation for the Firefox upgrade. Mac users will need to change browsers, for example to Google Chrome, with the Chrome browser extension.
If you need further help:
If you need help or experience issues using AUSkey, contact the AUSkey Technical Helpdesk.
The changes to the superannuation (super) system, announced by the Australian Government in the May 2016 Budget, have now been approved. Most of the changes will commence from 1 July 2017.
Although you might not be affected by the changes now, it is important to be aware of the changes for your future. If you think you are affected or could be in the future, consider seeking financial advice.
Do the super changes affect you?
Keep informed about updates
To stay updated on these changes, check this page on the ATO website.
The Australian Small Business and Family Enterprise Ombudsman (ASBEFO) is currently undertaking an inquiry into payment times and practices in Australia, with preliminary findings confirming that big businesses and some governments are taking longer than ever to pay small businesses.
Early results from the inquiry – which is being conducted by the ASBFEO in partnership with state-based Small Business Commissioners (SBCs), the Council of Small Business Australia (COSBOA), the Australian Institute of Credit Management (AICM) and the Institute of Public Accountants (IPA) – has found almost 50 per cent of small businesses experience late payments on at least half of the bills owed to them.
The inquiry has also found the practice of late payments is getting worse, with approximately 60 per cent of small businesses reporting an increase in the trend over the past 12 months. Almost 70 per cent report that the practice has reduced business profitability, with many business owners acknowledging it has a serious impact on their mental health given the added stress and anxiety late payments – and the associated cash-flow problems – can trigger.
Based on the inquiry survey data, it’s becoming quite clear that big businesses – particularly large multi-nationals – are exploiting the power imbalance that exists in their relationship with small business people who simply aren’t in a position to argue for better payment terms – or to demand immediate payment – for fear of destroying their relationship with the larger company.
The inquiry has also found the practice is not limited to one sector, with the impact of extended and late payments rippling through the entire economy.
You can read more about the inquiry, view the Inquiry Issues Paper, and provide your feedback, at http://asbfeo.gov.au/inquiries/payment-times-and-practices.
The New World of GST Codes – Simpler BAS
The ATO has simplified the GST reporting system to make it simpler for a business to conduct its trading with less complexity in applying the GST law. To trade in Australia, a business must:
(This is compulsory once your turnover is more than $75,000 pa for a business, or $150,000 for not-for-profit entities. Transport providers must register regardless of turnover).
– Code sales where GST applies to the “GST” code.
– Code expenses that have GST that you are allowed to claim back to “GST” code.
– All other sales and expenses can be coded to “Not Reportable” or “Excluded” codes.
It will no longer be required to report export sales, GST free sales, capital purchases or non-capital purchases on the BAS.
You will still need to report PAYG Withholding, PAYG Instalments, Wine Equalisation Tax, Fringe Benefits Tax, Fuel Tax Credits and Luxury Car Tax if required for your business.
You or your bookkeeper may still choose to use multiple tax codes for reporting or auditing purposes; however, the BAS reporting will be simplified.
You are still required to keep all records as required by the ATO to validate all business transactions.
Who does it apply to?
Under the new “Small Business” definition, any business with turnover below $10m will lodge the new Simpler BAS.
When?
The Simpler BAS system starts on 1 July 2017.
Why?
Simpler BAS has been introduced because of the complexity of applying GST law to business—that is, different types of sales have different types of GST classifications, and the same goes for expenses. The BAS reporting has required allocation of every sale into one of at least six different reporting options, and expenses into seven options.
The allocation between these reporting classifications has been inaccurate and does not alter the amount of GST to be paid or claimed. The government is simplifying business by allowing a business to report with a basic system that is closely aligned to just getting on with doing business.
Can we help?
Contact us if we could be of assistance.
Please find below, from the ATO, key lodgement dates for 2016–2017:
| If lodging paper copy | If lodging through registered BAS agent | |
| BAS | ||
| Apr – Jun 2016 | 28 July 2016 | 25 August 2016 |
| Jul – Sep 2016 | 28 October 2016 | 25 November 2016 |
| Oct – Dec 2016 | 28 February 2017 | 28 February 2017 |
| Jan – Mar 2017 | 28 April 2017 | 26 May 2017 |
| Apr – Jun 2017 | 28 July 2017 | 28 August 2017 |
| Monthly Activity Statement & IAS | ||
| July | 21 August 2016 | 21 August 2016 |
| August | 21 September 2016 | 21 September 2016 |
| September | 21 October 2016 | 21 October 2016 |
| October | 21 November 2016 | 21 November 2016 |
| November | 21 December 2016 | 21 December 2016 |
| December | 21 January 2017 | 21 January 2017 |
| January | 21 February 2017 | 21 February 2017 |
| February | 21 March 2017 | 21 March 2017 |
| March | 21 April 2017 | 21 April 2017 |
| April | 21 May 2017 | 21 May 2017 |
| May | 21 June 2017 | 21 June 2017 |
| June | 21 July 2017 | 21 July 2017 |
| 2017 PAYG withholding payment summary report |
14 August 2017 | 30 September 2017 |
| Superannuation Guarantee Contribution – Monthly | ||
| July | 21 August 2016 | |
| August | 21 September 2016 | |
| September | 21 October 2016 | |
| October | 21 November 2016 | |
| November | 21 December 2016 | |
| December | 21 January 2017 | |
| January | 21 February 2017 | |
| February | 21 March 2017 | |
| March | 21 April 2017 | |
| April | 21 May 2017 | |
| May | 21 June 2017 | |
| June | 21 July 2017 | |
| Superannuation Guarantee Contribution – Quarterly | ||
| Apr – Jun 2017 | 28 July 2017(30 June 2017 to be eligible to claim in 2017 income tax return) | |
| Jul – Sep 2017 | 28 October 2017 | |
| Oct – Dec 2017 | 28 January 2017 | |
| Jan – Mar 2018 | 28 April 2018 | |
Can we help with lodgement?
Contact us today and we’d be pleased to assist.
Fuel tax credit rates increased on 1 February 2017.
Rates are indexed twice a year, in February and August, in line with the consumer price index (CPI), released towards the end of January and July.
Fuel tax credit rates also vary depending on when you acquire the fuel, what fuel you use and the activity you use it for.
How to check the rates and calculate your claim
You can view the latest rates on the ATO website here.
You can use the ATO eligibility tool and calculator here.
Need help?