The festive season is over, the heat of summer has definitely arrived (and we hope has passed), and for most of us that means our thoughts are now very much back onto work, business, and investments.
The start of 2015 has delivered some great news for the Value Beyond team: Sara had a baby boy, Robert, in early February.
In some not so great news, the Central Queensland area was hit hard by Cyclone Marcia. The damage has been varying across the region, but no doubt there will be lingering effects for a while to come.
For anyone affected by the cyclone, the ATO are offering assistance including automatic deferral for payment of BAS for certain postcodes.
If you require any specific assistance with your lodgements or payments to the ATO, please call us to discuss your options.
Is Cash Flow Causing You Stress?
If there is one common issue that creates stress for businesses, investors, and household budgets alike, it is cash flow.
The problems usually stem from one of two issues – the amount of cash available, or the timing of income and payments.
You need to ask yourself: Do you have a budget? Do you know how much cash you have coming in, and how much goes out (i.e. how much you spend)? Do you know when your bills are due and payable? Do you know the cost of your needs and wants?
Or do you manage your cash flow on gut feel?
Regardless of the source of your income (business, wage or investments), or the complexity of your cash flow, the key is having the information to know your circumstances as this then allows you to make a plan.
If there is one word that provides the secret to cash flow management, it is this: Discipline.
Knowing when payments are due and ensuring that the money is there and available to make those payments requires discipline. Discipline to save, discipline to defer other expenses and discipline to not spend it on other things that might appear to be more urgent or desirable.
Quite often it is the payment of taxes, including GST, income tax and employee superannuation that causes cash flow issues and causes financial stress within businesses, and income tax can also cause the same stress for anyone with income from sources other than salary.
So how do you make it all work?
The first step is to understand your current cash position, and your future incoming and outgoing cash flows.
At Value Beyond we have developed a “4 phase cash flow system” for businesses, which helps step through the confusion of how the profit & loss converts to cash in and out of the bank account. Most importantly this process will let you know how much of the money going through the business actually belongs to you as the owner for your own use.
If you are finding yourself stressed by cash flow, or find it difficult to stay on top of all your payments and keep the bank account in the black, then contact us at Value Beyond to discuss the issues and work out where the stresses are, and a plan to improve your cash flow management.
The ATO Steps Up Debt Collection Efforts
In recent times the ATO has stepped up its efforts to recover tax debts, including income tax and other taxes such as GST and PAYG withholding.
We have noticed an increase in the referral of outstanding amounts to debt collection agencies, and a reduction in the length of time it is taking before debts are being referred for collection.
The latest example of this is the referral to a debt collection agency of a debt for only $358!
As is always the case, communication is the key with any amounts owing to the ATO. If you are having trouble paying your tax debts, then contacting the ATO can allow an extension of time to pay, or the establishment of a payment arrangement to extend the time required to repay the debt.
If you receive a call from the ATO or a debt collection agency, and you don’t know what to do, then ring Value Beyond so we can assist.
This action is particularly important for company directors. Changes were made from 1 July 2012 to strengthen director obligations by:
- extending the director penalty regime to apply to unpaid super guarantee charge
- making directors liable for PAYG withholding and super guarantee charge liabilities that are more than 3 months past their due date
- reducing directors’ entitlement to PAYG credits where the company has failed to pay the amounts to the ATO
As these liabilities can fall onto the director personally, there are some key actions required by directors:
- ensure your company lodges and pays its PAYG withholding obligations by the due dates
- pay all superannuation guarantee by the 28th day after the end of the quarter in which the obligation arises
- if you find that the company is unable to pay its PAYG and superannuation obligations within 3 months after they are due, seek professional advice to work out what you need to do next
The moral of the story for company directors is to know your obligations, and to keep on top of your lodgements and payments when it comes to your employees’ entitlements.
A Reminder About SuperStream
The new SuperStream data standard for superannuation payments starts on 1 July 2015, and requires that businesses report all contributions and payments electronically.
One way to meet all these requirements for employers with 19 or fewer employees is to use the ATO’s Small Business Superannuation Clearing House.
The benefits of the Superannuation Clearing House include:
- Make one secure electronic transaction which distributes the contributions to the employee’s nominated fund
- Reduces time and paperwork that would normally be involved in paying to numerous super funds
- Employee details are stored securely in the clearing house, meaning only contribution amounts need to be entered
- Payments through the Clearing House meet the super guarantee obligations, as well as the new SuperStream data standard
If you employ more than 20 or more employees, then there are other options such as using the clearing house facilities of a public offer superannuation fund. e.g. Sunsuper, Colonial Super etc.
There may be fees payable depending on the number of employees that are members of that particular super fund, however it may still be more cost effective than using a different type of service for this purpose.
For more information on the Superannuation Clearing House to determine whether it is right for you, contact Value Beyond or find more information on the ATO website.