Xero and Single Touch Payroll Infographic

 

So, what do you need to do for the best and cheapest solution?

To get prepared for STP and Xero, you can look at digital payroll solutions within Xero subscription or a stand-alone Xero payroll option.

Give me a call and I can give you Xero file a health check (existing Xero user) or Xero setup (for new Xero users) and prepare you for STP if you are unsure of what to do.  I will check the data or set up the payroll for you in time to report for STP, and I will include a training session - one-on-one with a Registered BAS Agent.


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Single Touch Payroll starts 1 July

Single Touch Payroll will change the way you report your tax and super.


Single Touch Payroll (STP) is a new way for employers to report tax and super information to the ATO.  It starts from 1 July 2019 for employers with 19 or less employees.

Your STP ready solution will report the following:

-  payments to employees such as salaries and wages

-  pay as you go (PAYG) withholding

-  super information.

How you pay your employees through your accounting software will not change, but you will be sending the Tax Office this information each time you pay them.

You can start to report any time from 1 July 2019 to 30 September 2019 but if you can not start reporting by this time, you'll need to apply for a later start.  There is an online tool for this.

Get started with STP

If you are using a payroll software, check their website out for valuable information, for example to see if it offers STP.  You can also give them a call.

If you still need to select a payroll software that is STP ready you will need to talk to your Registered BAS Agent for advice.

If you already use a Registered BAS Agent, you can ask them to report through an STP ready payroll solution on your behalf.

If you have 1-4 employees, choose a low-cost STP solution.  Go to ato.gov.au/STPsolutions


MYOB and Xero Bookkeeper

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Announcing an STP solution for the smallest employers - Xero Blog

If you follow legislation in Australia and the news, you would know by now that if you are a business with one to four staff you will need to lodge electronically every pay run with the Australian Taxation Office.


A big thank you to all the Accounting Firms sending their micro-business clients to me for a quick setup.  As the phone calls have been coming in, I have asked each business how they have felt about the new changes.  Most business owners said the would prefer to use Xero Payroll for Single Touch Payroll but did not want to use the full accounting software package.

So, if you are a business that uses Xero you will be glad to hear that there are two solutions for you so you can remain compliant under STP rules:

-  with an expected price of about $10 a month, there will be a new Payroll-only product for up to four employees,

-  There will be an option to add Payroll to a ledger or GST cashbook subscription covering up to four employees ($ to be determined).

So, according to the ATO, there is about 90,000 micro-businesses that use sticky notes, spreadsheets, ATO paper tax tables or combinations of these to get their payroll processed.  So, it is great that Xero is providing a solution.

Tip:  Don't wait until July 2019, opt in to STP now.

For many employers, you may just realise how much time you can save moving over to STP.


MYOB and Xero Bookkeeper 

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Blog:  Single Touch Payroll Extended for all Employers

From 1 July 2019, single touch payroll - the direct reporting of salary and wages, PAYG withholding and superannuation contribution information to the ATO - will apply to all employers.  What employers need to report will also be extended to include certain salary sacrificed amounts.


 If you have 20 or more employees you would already be using single touch payroll enabled software since 1 July 2018.  This also includes payments made to the owners of the business in the form of salary, wages or directors fees.

If you have 1 - 4 employees, MYOB and Xero have announced new $10 per month offerings after the Tax Office asked software providers to provide no cost and low cost payroll options for micro employers.

For micro employers the Tax Office has said that a number of alternative options will be to allow your registered BAS Agent to report quarterly, rather than each time you run your payroll.

The Commissioner of Taxation released a statement indicating that small employers can actually start reporting through single touch payroll anytime from 1 July 2019 until 30 September 2019 with no penalties applied to mistakes, missed or late reports for the first year.

So, ifyou are in an area with no viable internet connection, such as some rural and remote regions, then exemptions may apply.

Do you have less then 20 employees?

You may need to upgrade your system or implement new ones.

When payments are made to your employees or superannuation funds, STP requires PAYG and superannuation contribution details to be reported to the ATO.

When it comes to PAYG withholding, employers will report details of salary and wages paid to employees as well as the PAYG withholding amount at the time the payment is made tothe employee.  Employers have the option of paying the PAYG withholding liability at the same time, although this is not compulsory.

What needs to be reported:

-  salary and wages

-  director remuneration

-  return to work payments to individuals

-  employment termination payments (ETP's) - not compulsory if the employee has died

-  unused leave payments

-  parental leave pay

-  payments to the office holders

-  payments to religious practitioners

-  superannuation contributions (at the time the payment is made to the fund)

-  salary sacrificed amounts (from 1 July 2019.

Employers with poor super guarantee payment history outed

Underpayment or non-payment of superannuation guarantee (SG) is a big issue.  New laws will enable the ATO to advise employees (or former employees) of their employer's poor SG payment and reporting history.

If an employee makes a complaint to the ATO, then the taxation officer is able to make a record or advise the employee about a failure or suspected failure by their employer or former employer to comply with their SG obligations.  They can also share the Tax Commissioner's response to the complaint.  So, if the Commissioner finds there is a problem with SG payments, they can disclose this information to the complainant.



Xero and MYOB Bookkeeper

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Xero and MYOB users ask - Is Single Touch Payroll Compulsory?

Are you a small employer wondering if this is going to affect you.  Well, I will try to answer a few of the queries I have been receiving via email.



If you have 20 or more employees MYOB and Xero subscribers already know about Single Touch Payroll, as this was made compulsory from 1 July 2018.  I am pleased to say that my clients are going great, but there have been a few Accounting Firm clients referred to me that have needed their Chart Of Accounts set up properly to get them up and going.

If you have 19 or fewer employees, between 1 July 2019 and 30 September 2019, you must begin to start reporting to the Australian Taxation Office.

STP changes the way employers report tax and superannuation information to the ATO, aiming to clearly be able to see late or non-payment of SG.

So, when you pay your employees, at the same time your business will report each employees tax and superannuation information.  This can be done directly from your Xero or MYOB accounting software or other STP-enabled reporting software, or through a third-party provider such as a registered BAS Agent (tpb.gov.au).

If you are an employee all this means that you will be able to log in to your ATO online account through myGov and see your payroll information.  This means as an employee you can see reporting and contributions in near real time.

Now, if you are still unsure of what to do, please send an email to me as I have been working late nights for Accounting Firms that have referred their clients to me for a quick setup.


MYOB and Xero Bookkeeper

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Single Touch Payroll - Take Action Now To Be Ready By 1 July 2019



If you are an employer that has 20 or more employees you should already be using Single Touch Payroll (STP).

From the July to September 2019 quarter, if you have 19 or fewer employees, you will need to be Single Touch Payroll ready.

The Australian Taxation Office has acknowledged that for some business owners, getting ready for STP may be hard so there may be circumstances where small business will be allowed to report starting anytime between 1 July and 30 September 2019.

With STP, your payroll information will be reported to the Taxation Office each time you pay your employees, rather than monthly or quarterly via an Activity Statement.

If you are currently subscribing to Xero and you pay your employees and you are meeting your Super Stream obligations, then all you need to do is register for Single Touch Payroll.  Perhaps you have already seen the "Get Started" page from the Pay Run in Xero.

We have provided some step by step instruction at this link, just click here:  xerohelpaustralia.com.au

If you are using another accounting software such as MYOB, then MYOB also has provided a solution for STP that is now ready and compliant.

NOTE:  Broadly speaking, the desktop versions of these softwares WILL NOT be STP compliant.

If you are wondering which bookkeeping or accounting software providers have solutions available or will have solutions in the near future, the Tax Office has a list, just click here:  https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Low-cost-Single-Touch-Payroll-solutions/

If you have 1 to 4 staff members, initially the Tax Office will allow your BAS agent to lodge STP information quarterly on your behalf.  No or low cost ($10 or less) options will also become available to you.

What about if my staff members are myself and my immediate family?

If your only employees are yourself and/or your immediate family (and are therefore a closely held entity), then you are exempt for STP for the 2020 financial year.  From 1 July 2020 closely held entities will have quarterly reporting obligations (that is, with the quarterly Business Activity Statement).  The finalisation date for STP will be aligned with the lodgement of the tax return.

Please feel free to contact me if you would like more information in regards to your STP compliance.

I am currently receiving high volumes of requests from Accounting Firms to assist their clients, as this is the cheaper alternative than $400+ currently being charged by our local Accounting Firms.

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What is the difference between an Accountant and a Bookkeeper?

If I asked you "what do you think is the difference between accounting and bookkeeping", what would you say?  Anyone that doesn't work in the industry would probably say 'none'.  However, it just isn't true that there is no difference at all and I have created a great guide which should make the difference obvious.

A bookkeeper and an accountant have common goals but each one make up different stages in the financial cycle.

If you are a business owner, you probably already know that bookkeeping comes before accounting but some of the functions of both of them may overlap.

What is involved in bookkeeping

Purchases, sales, payments and receiving of money for a sole trader or a business are just part of the bookkeeping process of recording the financial transactions.  The main work of a bookkeeper in a financial cycle is:

-  posting a company's debits and credits

-  update, maintain and balance general ledgers, subsidiary ledgers and historical accounts

-  create invoices and process payroll

-  record the financial transactions of a business

Bookkeeping means maintaining the general ledger.  A professional bookkeeper records day-to-day financial transactions from sales and expense receipts.  Much of this work is now completed by online automated accounting software which makes it much easier to perform this tasks, especially when ledgers are large.

Even though the use of technology makes things easier, your good business processes should ensure that certain transactions have supporting documents.  The information on business transactions that require supporting documents is available at the Australian Taxation Office (ATO).


What is involved in accounting

Record, sort, store, summarise, retrieve and present financial transactions is the process of accounting.  This helps business make that all important judgment call of what is right or wrong for their situation.  The main work of an accountant may include:

-  analysis of the operational costs of a business

-  search for and record transactions that have been missed from the books

-  preparing financial statements

-  complete tax returns including income tax returns

-  help business owners with financial decisions

If you are an accountant you would provide reports and put together the financial indicators of a business.  This is to deliver a better understanding of the profitability and cash flow of a business.  All this information uses the information that the bookkeeper first enters into the ledgers.  Also, accountant can help with financial forecasting and strategic tax planning.

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Online accounting software in Australia

A couple of the main accounting software companies like MYOB and Xero are developing products at lightning speed for small business.


Xero is moving towards mechanising bank reconciliations, an idea it calls "code-free accounting".  It is doing this in two different ways, and the first is how it is capturing data.  It declared at Xerocon that it had acquired HubDoc, an application that "gets" invoices or documents from suppliers.  For instance, you give HubDoc login info to your telco and it will download automatically a PDF of the bill for your telephone and interenet each month, and save it into a folder, your cloud drive or server.

Xero utilises optical character recognition and other different strategies to pull data, for example, date, due date, amount and GST, and adds these to a draft bill for you to check and then ok.

The second step is to give Xero more control over bank reconciliations.  A subscriber of Xero can set up a bank rule for recurring transactions from a supplier and then the subscriber can check a box and Xero will reconcile all transactions for that supplier in the future.  The subscriber won't even see those transactions listed in the bank reconciliation screen.

Reconciliations are much easier with the more information that you provide in these recurring transactions.  It won't be long and all accounting software will make these simple transactions themselves.


MYOB is also working on ways of improvement to the quality of the data and automation.  It allows a direct download of your bank transactions every day plus major suppliers.  MYOB's online accounting software will receive direct transaction feeds from trades' suppliers Reece and Tradelink, plus Officerworks.  

The MYOB subscriber can add a P.O. at the checkout and the Reece integration will allocate each line item to a job in MYOB.  Then, when you invoice your customer, MYOB pulls onto the invoice all reimbursables for that job.  It's all about automating the workflow.

Subscribers can also forward a PDF invoice directly into MYOB for coding and processing.  Also, auto reminders for overdue invoices are out and about which is great for cash flow.




MYOB and Xero Bookkeeping

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Best small business accounting software

If your are starting a new business, a good bookkeeping system provides warning signs if your business is in trouble.

Not having a decent accounting framework in place that will alert your attention to a possible problem means your business could come up short on money, if you run out of cash, your business may fail.

You can set up a bookkeeping framework physically (utilising bookkeeping books), electronically (spreadsheets) or use online cloud based accounting software.  If getting familiar with bookkeeping isn't your cup of tea, then accounting software is the most efficient choice.


What to think about when selecting your accounting software.

Your business is unique and your requirements for your new business will be unique.

I suggest to new businesses to ask themselves the following questions:

-  does this accounting software calculate everything payroll and is STP ready (PAYG, annual leave, long service leave, etc.),

-  what about keeping track of stock, work in progress (WIP), purchase orders, sales orders, jobs, etc.,

-  can the software handle many bank accounts,

-  what about foreign currency if you require this,

-  do you need to track each department within the business and their financial records,

-  what about add-ons,

-  will this new system keep details on customers, what they purchase, how frequently they purchase and when they purchase.


So, which accounting software is for my new business.

With the new laws on Single Touch Payroll from 1 July 2019, there are many no-cost and low-cost accounting software packages out there that allow business owners to effectively control records without a bookkeeping or accounting degree.

Let me know if you would like a list of Free Accounting Software.

Some common accounting systems used by small businesses are:

MYOB
Quickbooks
Reckon
Sage
Xero
Cashflow Manager
Saasu


Get advice

In case you are uncertain which package to choose, speak to your bookkeeper or business consultant.  Also, it is worth checking to make sure your new software package has Standard Business Reporting forms needed to report to the Australian Taxation Office.


Lastly, you MUST be tax compliant in Australia and when you are setting up your new system please make sure all compliance requirements are met.



Xero and MYOB Bookkeepers

 

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All aboard for single touch payroll



Parliament has finally passed laws to mandate all businesses to use single-touch payroll from 1 July 2019.  If you are an Australian employer this means you will have to archive your paper payroll ledgers once and for all.

This news was great news for Amelia that owns a small cafe in Perth, Western Australia that has 3 employees, as last year Amelia was doing payroll by entering numbers into a Microsoft Excel spreadsheet, calculating the days, times and checking the superannuation, tax and then typing out each payslip, all up it was taking about one and a half hours each time to process pays.

We have implemented Xero's platform to generate digital payslips for Amelia and she is now ready for single-touch payroll and our client couldn't be happier because she now says that it has reduced the chance of errors and decreased her payroll processing time to 30 minutes.

With single touch payroll each employer must report tax and superannuation at the same time that they run their payrolls to the Australian Taxation Office, not later on down the track in a months time, etc.

The Australian Taxation Office has confirmed small employers, with one to four staff, will not have to pay large amounts for accounting software subscriptions to adhere to the single-touch payroll laws.

"We have asked software developers to build low-cost STP solutions at or below $10 per month for micro employers – including simple payroll software, mobile phone apps and portals," the Australian Taxation Office said in its advice to small businesses.

More than 30 accounting companies have put forward proposals to the tax office for payroll software costing less than $10 a month.  This includes Xero and MYOB.


If you are a small business, be aware that there are no-cost options and low-cost options - just give us a call.


BOOKKEEPING TEAM


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