How secure are your business funds?

By Joe Smith

The days are gone now for business owners who thought that the biggest security risk in their business was in the cash takings and ensuring all amounts were correctly accounted for then deposited into the business bank account in full.

These days, there are so many different scams going around as well as cyber security risks to businesses that cash will be the least of the worries for a business owner.

One scam to be mindful of is when a ‘supplier’ calls or emails to update their bank account details for your payments.  It is always a good idea to check this by calling you supplier to confirm that it was a legitimate employee calling and that the bank details are correct.  Otherwise you may find yourself paying funds to the new bank account and then getting a call from your supplier asking why the bills haven’t been paid.  Further to this, if you receive notice from a large organisation, you should call a publically available number from their website or yellow pages to confirm the details and change is correct.

Another risk to the funds in your business account is when you are relying on an employee or third party to prepare files to be uploaded to internet banking.  If you are in this position I would strongly advise that you go through and confirm the bank account details are the legitimate bank accounts of the supplier as it is possible for supplier account numbers to be edited so that the funds are paid elsewhere.  I am sure most people working for you are honest however it is always a good idea to do checks.

One of the things that can also be done to reduce your risks is to use software like Xero for your business as this software keeps a detailed history of all transactions as well as when details have been edited or deleted for suppliers or employees.  And there is even a report that can be generated to identify if several suppliers have been edited so that the bank account numbers are identical.

If you would like more information on how you can set up processes or use software to make your business more secure please call UHY Haines Norton on 4972 1300 or email info@uhyhncq.com.au  

When the Tax Office calls

By Steve Marsten

Many Australian taxpayers are likely to receive some ominous-looking letters this year as the Tax Commissioner cracks down on incorrect claims. If you receive one - what ever you do - do not ignore it!

The Australian Office (ATO) has the power to remove deductions and change details that it thinks appear suspicious. They tend to take the approach that “taxpayers are guilty until proven innocent”.

Often we don’t realise that the ATO could audit your return anytime from one month to even several years after it is lodged. They then give you between two to three weeks to respond to an ATO letter, so it’s important to take action as soon as a letter is received. Don’t hesitate to obtain good professional advice on what to do next.

The ATO has access to vast data matching technology to scrutinise suspicious claims and will send data matching letters to the taxpayers in question, querying suspicious entries and outlining the changes it plans to consider.

The fact that more Aussies are receiving these letters says more about the ATO’s improved technology than the number of people doing the wrong thing.

However, the ATO does get it wrong from time to time. Hence for taxpayers who disagree with the ATO’s concerns, there are some steps that can be taken. Often talking to your tax Agent will assist formulating an action sheet to rectify or provide necessary evidence to fix the problem.

Evidenced offered to the ATO can be like a PAYG statement summary, private health statement or bank statement, and deductions can be proven through receipts or supporting records like logbooks.

Once the ATO has the evidence, it will decide whether to alter the return and taxpayers will receive another notice of assessment if the office decides to follow through with the changes.

However, if the taxpayer can’t back up their income or deduction claim, the ATO will consider whether the taxpayer took reasonable care when completing their return when deciding on the penalty.

Often there won’t be a penalty when an innocent mistake is made however, if the mistake resulted in a larger tax refund than the taxpayer is entitled to, then the ATO will expect you to repay the surplus amount, and potentially interest too.

In situations where the ATO determines that the taxpayer did not take reasonable care, was reckless in completing their return, or intentionally disregarded tax rules, a penalty might be issued in addition to repaying any overpayment and interest. It important to take particular note of what your tax professional is advising you.

For more information on the ATO and your rightful claims call the team at UHY Haines Norton on 4972 1300.

The Chicken or the Egg?

By Tina Zawila

Many retailers in Gladstone are finding it tough at the moment.  Frankly, business is slow.  Despite their best efforts to attract customers, offer quality products at fair prices, and contain their overhead costs, many of them are struggling.

At the same time, how often do we hear Gladstone locals (or even visitors) comment that our retail shopping is limited?  We all want more options; more choice, better value, and we want it now! 

So how can this disconnect be?   Is it the chicken or the egg? 

Does an increase in customer demand drive the retail industry, or does an increase in retailers (supply) drive an increase in customer demand?

As customers we need to support our local retailers so that they can continue to operate and offer us local products and services.  If we support our local businesses, these businesses are more likely to expand their offerings, or even open new enterprises.  So reacquaint yourself with our local retailers!

As business owners we need to continually monitor our products and services to ensure we are offering high quality and good value to our customers, whilst maintaining our overhead expenses.  And remember – you can’t sell a secret!  You need to market and advertise your business to your target market.  

Here’s a couple of other tips if you are a business owner:

Connect with your Customer – excellent customer service is the key to increasing sales.  Ask your customer what they need and want and listen!  Then educate them about your products and services.  Remember to let the customer know you appreciate their business. 

 Be Social – One of the easiest, most cost-effective forms of advertising is via social media.  Be consistent with a steady stream of online activity; show your personality to stand out online.

Manage your Money – There are several aspects to managing your financials as a retailer, and if you take your eye off the ball, things can get tight very quickly.  A couple of key items to manage carefully include; your pricing strategy, the effect of discounts/sales, and your stock levels.

If you need further information or advice on how to drive sales and manage your retail business, call the professional team at UHY Haines Norton on 49721300.

Is the Australian Tax System broke?

By Steve Marsten

We have just received the Parliamentary Budget Office (PBO) report into Australia’s future tax base and it paints a picture of declining revenues and increasing demands on the public purse.

The problem is we are an ageing population and trends such as more fuel-efficient vehicles, the decline of smoking and the popularity of wine over beer are all eroding collections from consumption-based taxes that businesses collect on behalf of the Tax Office.

The report shows that income tax from workers has increased from 8.6 per cent of GDP in 1971-1972 to 12.6 per cent by 2015-2016, while the contribution from taxes on consumption (the GST and various excise duties) has only moved from 5.3 per cent to 5.7 per cent over the same period.

Company taxes have declined as a percentage of GDP from 3.3 per cent to 3.2 per cent. This is mainly due to a falling profitability levels.

The report shows that Australia’s future tax revenues cannot be sustained by an ever-decreasing workforce. It’s predicted by 2045, there will only be 2 workers for every 5 retirees.

The point is - that as people age and retire they not only stop paying income tax but increasingly direct their spending to categories which do not attract GST, such as health and medicines. At the age of 65, a large percentage of the demographic are entitled to a tax-free age pension.

The problem with the GST system in Australia is that since the introduction of GST Australian households have spent progressively more of their income on products that are exempt from the GST. It’s always been a flaw in our system compared to New Zealand’s version.

The Australian problem is not about whether we reduce company tax rates to make our companies globally competitive and hence keep jobs in Australia, its whether we have the political will to realise we have a problem and the best means is to address it is the consumption tax.

Both political parties know this has to happen at some stage. They would just prefer the other side deal with it first. We don’t have a Howard or a Keating on the political radar to make these hard decisions. Our leaders of today need grow some together and address this issue for the good of Australia.

For more information contact the team at UHY Haines Norton Gladstone on 4972 1300.