Tim Johnston

Tim Johnston CPA. Tim has 15 years commercial accounting experience within Australia and overseas. His experience as Financial Controller for privately owned and ASX listed companies has provided him with the expertise to ensure your accounts are managed in the most commercially efficient manner to maximize profits, reduce overheads and minimize tax.

Coronavirus assistance for Small Business

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We are all in shock at both the personal and financial devastation caused by Covid-19. Australia’s initial strategy of relying on herd immunity through suppression is being ramped up with stricter travel and social distancing guidelines being introduced every day. This has been recognised by the Federal Government which has been revising their financial assistance packages on a weekly basis.

Small Business Assistance

The response by both State and Federal Governments to assist small business to retain their staff through these troubling times has been impressive and is a reflection of the gravity of the effect on the economy. While the incentives are generous, the cost to fund them will be enormous. I wouldn’t be surprised to see our GST Rate lifted to match New Zealand’s Rate of 15% in the not to distant future. Why not, they seem to be taking the lead with their response to Covid-19 as well at the moment!

Here is a summary of assistance that has been made available to Small Business:

Boosting Cash Flow for Employers

  • Companies who were registered as PAYG Withholders prior to the 12th of March will receive a full refund of their PAYG Withheld over the 6 months from January to June 2020 up to a minimum of $10,000 and maximum of $100,000.
  • Quarterly withholders payments will reflect the PAYG Withheld Totals in their March and June 2020 BAS’s
  • Monthly withholders will only report one months worth of PAYG in their March BAS and will therefore be entitled to 300% of the PAYG withheld int he March BAS in addition to their April IAS, May IAS and June 2020 BAS.
  • Important Note: If you have an outstanding Directors Loan or take your “salary” as a dividend or Directors Loan, you may want to explore changing the treatment of your remuneration to salary to maximise your “cashback”.
  • You will receive a minimum of $10,000 cashback even if are registered for PAYG Withholding but did not pay any wages.

Subsidy for Apprentices and Trainees

A 50% subsidy of up to $21,000 is available for wages paid from 1 January to 30 September 2020

Immediate Write off for Investments

The previous Investments Incentive of a 100% write-off for assets costing up to $30,000 has been increased to $150,000 for assets purchased prior to 30 June 2020. This will revert to a 50% immediate write-off for the 2021 Financial Year.

Important Note: If you are looking investing in capital equipment or perhaps a new company car in the near future then it would be beneficial to make the purchase before 30 June 2020.

Government Underwritten Cashflow Loans

The government will provide a guarantee of 50% to banks to support new short-term unsecured loand to SME’s.

Payroll Tax Relief

Most States are offering a refund of Payroll Tax paid in the last 2 months as well as a payroll tax holiday for the next 3 months.

Please feel free to contact us to find out more about how to utilise the these business incentives to ensure your business survives this unforeseen period.

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Updated Monthly Fees for Xero, MYOB, Quickbooks and SAASU for 2020

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With Xero, MYOB and QB all recently updating their pricing structure for 2020, it’s timely to review the list of feature and pricing comparisons across the different plans on offer.

Hubdoc

One notable new feature for Xero is the inclusion of Hubdoc sue to its recent acquisition. You previously had to pay US$ 20 /month per user and this is now included in your Xero subscription for FREE. Hubdoc automatically uploads your supplier invoices for approval into Xero and also applies the appropriate expense code based on history.

Here’s the basic monthly fees including GST and major product differences for each of the cloud based bookkeeping software as at March 2020:

Bookkeeping SoftwareMYOB Account Right LiveQuickBooks HostedXEROSAASU
 Simultaneous Users51-5UnlimitedUnlimited
Basic Monthly Package (No Payroll)$74$20$27$15
Basic Monthly Package (1 Payroll)$15
Medium Monthly Package$120$35$52$40
Premium Monthly Package$150$50 $67 (5 staff)$70
 Feature Differentials:
 Purchase Orders YYYY
 Detailed Job Costing YYYN
 Detailed Budgeting YYNY
 Time Billing YYNN
 Inventory YYYY
 Offline-Online Synchronisation YNNN
 Pay Suppliers and Payroll directly from software YNYN
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LEAP 2x Review- New Bookkeeping Features

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LEAP have recently completely redesigned it’s program interface and are calling it LEAP 2x. There are no revolutionary new features- the focus of the redesign is mainly on user interface and navigation and while the new menu options take a bit of getting used too, the result is much more user friendly program and easier on the eye.

New Bookkeeping Features

Cost Recoveries– now a separate menu where you can create, view and search for cost recoveries within one place without having to open the matter

Disbursement Payment types– can now use BPAY as a Sub payment type of Electronic Payment within Settings

Pay to and Address Fields- these are now separate fields

Office Accounting and Bookkeeping

Credits Ledger– The Credits Ledger now has its own tab under Office Accounting and a new Apply All button allows you to allocate credit notes to multiple invoices in sequential order.

Invoicing- New Time, Fees or Cost Recoveries can now be created from directly within the invoice.

Not Billable Time- Not Billable time entries can now be included on an invoice as “Not Charged” items with no set amount

Edit Time & Fee Entries– Time and Fee entries can now be edited while you are working on the draft invoice without having to remove them and go back to the original entries.

Trust Accounting & Bookkeeping

Protected Trust Funds– Protected Trust funds can now be allocated to individual invoices. When applying trust funds to invoices via the Trust to Office Transfer function you can select either “All available” or “Protected only” trust funds to show as available to allocate against outstanding invoices.

Please call us if you would like to discuss the new bookkeeping features of LEAP 2x in more detail.

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Important Bookkeeping Reports You Must Know

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The process of keeping accurate business records, also known as bookkeeping, is very important for a variety of reasons.  Not only are you able to track all of the business transactions that occur within a specific period of time, you will also be able to use this information to create useful bookkeeping reports to help further examine the health and profitability of your company.

To give you a better idea of what types of documents you can create from your business records, below is a list of some of the most common bookkeeping reports, and how they can benefit your company.

Banking Reports: These types of report can be created from basic banking sections of your records and can pinpoint specific check details, details of all deposits that have been made over a period of time, as well as any missing or returned checks.

Budgeting Reports: A budgeting report is basically a form of a profit and loss statement.  This can show how the business is doing on the whole, as well as how the projections for the quarter stack up when compared to the actual detail.

Company and Financial Reports: There are a number of reports that can be created from basic financial data that has been recorded on the books.  Here you can examine in depth balance sheet details, cash flow, statement of cash flow, vendor expenses, detailed vendor reports, income sorted by customer, income sorted by service or product, profit and loss by job, profit and loss year to date, profit and loss by class, and other profit and loss details that are broken down by specific criteria.

Customer and Receivables Reports: Basic customer and accounts receivable data can also yield a variety of customised reports.  These reports can include account receivable ageing detail, collections reports, customer balance details, outstanding invoices, unbilled costs by job, and customer transaction lists. Inventory Reports:  Inventory reports can help business owners to track inventory status by item number or by vendor, and also perform inventory valuation.

Custom Reports: In addition to the above mentioned reports, there are also a wide variety of custom bookkeeping reports that can be created as well.  These documents can be extremely beneficial to businesses and can include reports such as payroll details, employee earnings summaries, tax details, worker’s compensation summaries, accounts payable ageing detail, sales by representative details, sales by item number, and vendor balance detail and summaries.

Did you know we do bookkeeping in Melbourne too? Contact us today on 1300 2books

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Comparing LEAP vs Actionstep- Xero Integration

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Let’s face it- most lawyers aren’t really that interested in the way Actionstep and LEAP integrate with Xero. As long as their trust account is all taken care of, they are not really worried about how the information is transferred to their Practice Accounts- that’s for the bookkeeper to worry about!

That’s fine if the firm has a strong Legal Bookkeeper but if not then the Practice Manager or Principal should understand the integration to ensure they are producing accurate management and BAS reports.

The way both LEAP and Actionstep “talks” to Xero is quite different and both have their advantages and disadvantages as outlined below:

Nature of Integration

LEAP- You need to select your method of integration based on your GST registration of either cash or accrual. You can also integrate on a “Hybrid” basis which allows you to run management reports on an accrual basis while still lodging your BAS on a cash basis. Changing between the accounting basis is problematic and requires the engagement of LEAP Consultant.

The integration works using General Journals which creates a messy ledger which can make reconciliations difficult if it gets out of balance. The hybrid integration actually creates a separate GST code that does not get picked up on the BAS reports until the invoice is paid where it reverses the original transaction and re-posts the journal with the correct GST codes.

Actionstep- The invoices and payments for both sales and purchases are replicated in Xero so there is no need for journals. This creates a much cleaner integration and allows you to run cash or accrual management or BAS reports at any time.

Xero has a brilliant bank feed function, however it can sometimes be too clever for its own good. As the invoices have been exported from Actionstep to Xero, when Xero picks up a receipt for the same amount as an outstanding invoice it tries to match it automatically to the outstanding invoice in Xero. If this is matched in the Xero bank rec before it is entered in Actionstep it will not allow you to enter the receipt in Actionstep as it will think that invoice has already been paid. This can be difficult to identify for inexperienced Xero users.

Winner- Actionstep

Credit Notes

LEAP- Credit notes export to Xero as a journal. This works quite seamlessly although their is an ongoing issue with the GST coding on credit notes so the journal needs to be manually adjusted either prior to export or in Xero.

Actionstep- Credit notes in Actionstep are applied to invoices via a payment of $0 so that the credit note can be matched up to the correct invoice. Xero can’t handle a $0 payment so it creates credit note and a payment for the value of the credit note. The payment needs to be deleted via “remove & redo” and the credit note need to be applied against the invoice in Xero.

Winner- both problematic but the LEAP solution is probably easier to handle in Xero

Debtors and Creditors Reports

LEAP- all debtors and creditors reports need to be rune from LEAP as they are only sent ot Xero in journals

Actionstep- all debtors and creditors reports can be run from either Actionstep or Xero

Winner- Actionstep

Summary

Both LEAP and Actionstep work on a one-way integration, meaning that any changes to Debtors or Income in Xero will not flow back to the Practice Management system. This means that your Legal bookkeeper should have a high level of accounting knowledge to ensure the integrity of the 2 systems.

Overall Winner– you would have to say that Actionstep has the more comprehensive and versatile integration but you need to have a better understanding of Xero if things go pear-shaped.

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