tracey@metro

Ever wondered where does all your money go?

2012-03-08T13:55:00.000-08:00

I find the word "budget" causes peoples muscles to tense with discomfort followed by descent into defensive mode, then 'Oh sure, I have a budget in my head'. The word "budget" seems to translate into meaning "restriction".
I believe that having an accurate, realistic understanding of the cost of your lifestyle is fundamental to creating a financial strategy that you can comfortably implement, that will;

ease your cash flow constraints
reduce the financial stress in your life and
make it simpler to avoid entering or continuing to be in debt by avoiding surprises.

Having a plan lets you make informed choices on how you use your money.

So how do you start to understand where you spend your money? Develop a plan that

firstly, you identify your core living expenses. For example, know how much you are spending on food, rent, mortgage payments, electricity, rates, telephone, medical insurances, insurances and put an estimate for taking of holidays and make sure you base these amounts by actually looking at the bill notices and receipts or your credit card and bank statements - maybe over a quarterly period then annualise them and total all the costs
secondly, list down your income that you earn from your employment or business, interest or other investment income and total all income
by subtracting the total costs from the total income will let you know your net cash position so you are now more informed and can identify how much you can regularly save or where you need to cut back on expenses. Also known as budgeting. This way you can be prepared for any abnormal expense items that pop up.

No two years are the same,so it is important to do this exercise yearly and review and compare to last year and then forecast your budget. This is a definite way to understand where all your money goes. To help you with budgeting log onto https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-planner
Tracey Sharah Director Metro Accounting www.metroaccounting.com.au small business experts

Mobile technology revolutionising business

2012-02-26T14:03:00.000-08:00

Small business is essential to Australia's success. Small business makes up 96% of all business in Australia and employs over 50% of the workforce. Success in small business longevity is driven by financial competence in the ability to control expenses, maximise productivity, maximise revenue and above all keep our customers happy. Mobile technology can assist in all aspects of these areas. So what type of technology am I talking about? Smart phones, tablets, mobile apps and cloud technology.So how can Mobile technology help business owners become more productive, competitive and profitable?
Mobile technology can:

Reduce paperwork via use of on line documentation
Increase labour productivity using faster applications and greater mobility
Increase customer satisfaction through speed of delivery and increased interaction with your product or service and real time data
Provide more accurate billing
Increase cash flow again through speed of delivery and cost cutting

With this comes challenges such as level of funds required to invest in the technology, required level of internal IT expertise, tailoring of the solution to meet the business needs.

How have you adopted mobile technology in your business?
Tracey Sharah - Director Metro Accounting - an accounting practice committed to driving better client service via technology www.metroaccounting.com.au

Why SAASU rules and the reasons our clients love using it

2012-01-29T14:45:00.000-08:00

Metro Accounting is SAASU certfied which means when you get started with SAASU with Metro Accounting, you're not only in expert 'SAASU Guru' hands (we use SAASU for our own business' accounting and payroll), you're dealing with accountants who are enthusiastic and keen to help and train you in how to best use SAAU.

And enthusiasm counts.

SAASU is a cloud based accounting system. Cloud based accounting systems is a solution to help you reduce or eliminate redundant , time consuming work that is the bane of your business.

Our team's passion for SAASU brilliant time-saving, stress-reducing piece of technology just comes out in how they explain it to clients.Enthusiasm rubs off.

If you're anything like all our clients who have switched to SAASU already, we know you'll be just as enthusiastic as we are about how easy and pleasurable SAASU is to use.

Here are the reasons clients and us love using SAASU:

1. Data files are gone: no more version control data files, SAASU is an on line accounting system, which means you can kiss goodbye loading software into to one computer then having the hassle of sending discs or emailing large accounting data files . Good riddance.

2. The file remains in real time all the time: This means even when we are working on the file you can work on it also - further, we can be looking at the data file with you in real time and assist you with any question you have including data entry queries and look at the numbers with you - all at the same time. Cool.

3. Data entry time is drastically reduced: Data entry is so yesterday. Why, in this day and age, when all the transaction data (amounts, account name, supplier/customer info, etc.) is already available in your banking data, should you have to manually re-enter it into your accounting software? What a waste of your time and money! (Plus that manual data entry introduces plenty of chances for human error.) SAASU allows you to upload or automatically brings 'live feeds' of your bank account and credit card transaction data straight in. No keyboards touched. No download chore. No upload chore. Go have a cup of tea or continue to build your sales.

4.Better decision making: Old-fashioned software that makes you mind your own business (code for 'manually do your own bookkeeping') also puts your business at a disadvantage because your accounting data is lagging behind reality. The data entry issue (apart from the costly waste of it) causes a delay in your accounting data becoming up-to-date. A modern business needs information that is real-time, always up-to-date. How else can you make effective business decisions?

5.Mobility, flexibility, lifestyle: You'll love this one. You can access your accounting data and management dashboard in SAASU from anywhere, from any device with an internet connection. You can see your individual account balances, outstanding invoices, overall cash position, and more. These days, you can run your business from an iPad or similar tablet device. SAASU have a great iPhone and mobile app too. This means you can have a more flexible lifestyle in running your business, and have certainty over the financials and banking when you are not physically present in your business. Go on, call that travel agent now.

6.Data entry slashed, again: The 'Rules' function in SAASU is very clever. You can easily train SAASU to know that certain types of transactions should be coded (according to your Chart of Accounts) in certain ways. It's smart enough to be flexible. Amounts can change, the wording in the transaction can change, but as long as there are certain keywords or other criteria (such as paid with a particular credit card) in a Rule, then SAAU codes all such transactions automatically from then on. Go on. You have more time now.

7.Free online support: SAASU includes free online support . This means it's easy to find answers and get up to speed with SAASU. We include training in our package when we get you started with SAASU. This makes sure you get off on the right foot with your SAASU implementation.

8.Better communication: We find that SAASU encourages better communication and a closer relationship between accountant and client. The ease of logging in together, looking at the same data together, and moving at speed just makes everything work so smoothly. We're more in tune with you, and you get quick answers and even better advice (thanks to the real-time data) from us.

9.The innovation keeps coming: SAASU just keeps innovating. With cloud-based applications like SAASU, you never have to manually run software updates (or bother with data back-ups!). SAASU just update the software and back-up your data for you. That's two more hassles removed from your life. Every 3 to 6 weeks SAASU does a new software release with new and improved features. They are quite an inspirational company to watch in that regard ... but from your perspective, you know you are dealing with a company providing you with the very latest in time-saving and decision-making technology.

Who ever thought accounting software could be so good?

10. Ease of use: SAASU supports invoicing, expensing,purchasing,subscription,inventory,payroll,bank feeds,international currency

11. Security:SAASU maintains impressive security standards and has never suffered a security breach. They maintain multiple redundant backups, utilize SSL encryption, seek 3rd party uptilostme verification, and are fully-transparent about system continuity. We like that. 20/20

12. Cost effective: :from $25 per month or free for less than 20 transactions a month

What are you waiting for - let's fly into the cloud- Contact use now to get started with SAASU - 02 9954 7977 and have a chat to answer your questions and explain how our SAASU Setup and Training Package works. You will be pleased to know it is priced up front so you know exactly what the costs will be in advance.

We like to work that way with everything we do for clients.

Tracey Sharah - Director Metro Accounting - SAASU Certified Business - specialising in small business and SMSF.

Tips to ditch the shoebox accounting - move into the cloud

2012-01-07T14:49:00.000-08:00

2012 is the time for your business to ditch the shoebox accounting and launch into a serious accounting system so you can proactively manage your profit, cashflow and forecast your business decisions. Working off your bank balance to run your business is no longer sustainable. Letting your business data sit in shoeboxes, files of receipts, invoices month after month letting the data accumulate will not signal to you how your business is performing. Understand why an accounting system is essential for your business survival and prosperity.
An electronic accounting system will collect and organise your business information so you can look at the numbers and understand what these numbers are telling you about your business. These numbers are your businesses key financial indicators. The accounting system will have the following features:

Data Collection: Includes business transactions and operations data.

Data Organization: A method of sorting data by date and transaction type.

Accounting Database: Data entry into the accounting software program will form the basis of accounting information.

Financial Statements and Reports: Balance sheets, income statements, budgets, and timetables comparisons will aid in running your business.

Analysis: Regular review of main business indicators to avoid problems like cashflow squeeze and capitalise on opportunities.

The advantages of using an accounting system:

Tracking your expenses:Without constant tracking of your expenses how can you know if your business can afford the cost and cashflow can quickly dry up
Tracking your debtors: How do you know what customers owe you and whether or not they have paid - do not make it a guessing game - the system will track and age your debtors - do not miss out on money owed to you - you have worked hard to earn it
Cashflow crunch: Every business will experience highs and lows of cash cycles. An accounting system will assist to overcome periods of cash shortages and identify funding needs as it tracks who owes the business money and areas for expense blowout and provides a series of reports to manage this process.
Data security: How safe is your shoebox? Have you considered what might happen with your records if something was misplaced, lost or if there was a fire or a flood or theft? An accounting system especially in the cloud provides this data security. The system sits in an independent server that can be accessed via a password and is available 24/7 for any electronic device in the world.
Streamline your accounting fees: Bookkeeping and accounting fees will be much less if data is provided this way. Utilise your accountant to grow your business, access funding, project cashflow, budgets and forecasts for your business rather than annual or quarterly processing.
Minimise audit risk: The ATO audit activity is rapidly increasing. Having real time records in order to answer and questions raised is vital to minimise audit risk and time taken and costs associated with this risk
Business survival: The statistics show that most businesses fail in the first 5 years of their life. The biggest reason for this is poor financial management.It is your responsibility as a business owner to maintain and regularly assess how your business is performing so you can take action where needed to maintain the growth and survive. Without an accounting system and proper monitoring you will not be able to manage money losing strategies in time and you will enter the vicious cycle of catch up.
Financial Difficulty: The price of business ownership is responsibility. Not being able to produce a set of timely financials for your business will not assist you to identify financial difficulty and hence strangle the growth of your business.

The Best Tip: Cloud accounting .........

The future of a business accounting system is an online no version control, no computer operation system based, real time secure system that can be accessed 24/7 by you and your advisor/s to manage the financial area of your business. SAASU delivers this for your business. It eases the way data is entered in a very timely manner and supplies all reports required for your business to allow you to monitor performance and saves hours of time spent on your business administration . It is the simplicity that provides the value.

Metro Accounting is a certified SAASU business. Please contact our office today 02 9954 7977 so we can start to assist you with a simple manageable accounting system to overhaul your business, reduce the stress and provide better profitability for your business.

Tracey Sharah - Director Metro Accounting ,a CPA and a lover of technology for small business and a SMSF advocate

Can you split your super with your spouse?

2011-11-28T16:03:00.000-08:00

One way to look after how your super is performing for you is to look at the advantages of splitting your employer superannuation contributions with your spouse. So how does this work?
If you are working and having your employer contribute your 9% super into your superannuation fund you can on a financial year basis split your contributions with your spouse depending on your spouses age:

if your spouse is aged 55 years or less - at any time
if your spouse is aged 55 years to under 65 years and has not permanently retired from the workforce
contributions cannot be split with a spouse aged 65 years and over.

What are the advantages?

If your spouse is older than you and hence approaching retirement age faster than you, by building up their super member balance your family will have access earlier to a larger pool of monies to fund the start of a pension for your spouse in retirement. Also, when a member of a superannuation fund starts to draw down a pension from age 60 years the pension is tax free.
If you and your spouse are between 55 and 59 years and both have permanently retired from the workforce, you are able to access $165,000 each tax free ( this is for 2012 yr). By splitting the contributions with your spouse this will effectively double the amounts that you and your spouse can receive tax free before turning 60 years.
Splitting contributions with a spouse who is younger than you may allow you to manage any entitlements you have from Centrelink.

What contributions can be split? Your employer and salary sacrificed superannuation contributions.
How much can be split? The maximum amount that can be split is the lesser of 85% of the financial year contributions or cap limit of $25,000 ( if 50 yrs and over $50,000).
How do I organise to do this with my superannuation fund? There is a form that must be completed and submitted to the superannuation fund by the end of the financial year. Note, there will be a fee charged by the superannuation fund to do this split.

Tracey Sharah CPA Director Metro Accounting and co host Eagle Super radio show - specialising in superannuation www.metroaccounting.com.au www.eaglewavesradio.com

Keeping track of your super?

2011-11-20T14:21:00.000-08:00

Do you feel you have lost touched or do not have a relationship with your superannuation? Have you ever looked at your member statement you receive from your superannuation fund? Wondered what it all means? Is it important to read it and understand it? Yes, and I will let you know why.
Your superannuation asset is important - yes it is your savings and how it grows in value is even more important.Your superannuation members statement links you with your super. The statement tells a story. As an employee you are paid a wage plus 9% super and you probably always take for granted that your pay will be in your bank account on a regular basis but, have you ever checked if your employer is making your superannuation contributions for you? This is your money that is being contributed. You are trusting your employer to make this deposit every quarter and your superannuation fund manager to decide where your money is invested and how much the money will earn and the fees they take out of your money.
In particular your superannuation member statement will show you :

Your opening account balance, any transactions made including super contributions that have been made by your employer or by yourself and fees and taxes that have been taken out of your account, and investment earnings your super has earned. Note - your superannuation fund must have your Tax File Number details.
Details of each investment option you hold - the most popular is the balanced option where 50-60% of the investment will be invested in shares chosen by the superannuation fund manager and subject to the volatility of the share market. Has your balance of your super been effected by the recent share market fall?
Any applicable fees and rebates - the superannuation fund manager is paid fees to look after your super and the tax man takes 15% of the total super contributions and earnings your super money makes each financial year as tax. Is the fees and taxes eating away your superannuation balance?
Your personal rate of return - this is what your money has earned from the investments it has been invested into by the superannuation fund manager. How much did your super earn last financial year?
Details of your insurance cover - your superannuation fund holds and pays out of your superannuation contributions for an insurance policy for your death, permanent disability and income protection. Do you know the level of cover you have?
Your nominated beneficiary of who your super will be paid to on your death - it is important ensure this is up to date and in line with your wishes.
Most superannuation funds these days have online log in for members so members can check on a regular basis their superannuation balance and performance.
You can also decide to change the way your superannuation is invested - more and more as the volatility of the economy effects the investment categories there are more options to choose from on how your super balance is invested for example there are cash options as well as shares. All superannuation funds have the ability to provide financial advice to members on the range of investment categories and the respective investment returns as well as advice on how much you are paying in fees.

So what do you think now? Time to re acquaint yourself with your asset - your money - your super?
To help you to see how superannuation has performed in the last 5 - 10 years contact your superannuation fund and ask and also visit www.moneysmart.gov.au. This site has some great information on super. It is important to know and have a relationship with your superannuation because this is part of your financial future.
Tracey Sharah CPA Director Metro Accounting and co host Eagle Super Radio show- specialists in superannuation - www.metroaccounting.com.au www.eaglewavesradio.com

Taxing party times

2011-10-06T23:29:00.000-07:00

The season for Spring racing carnival, rugby events, year end and other staff parties are upon us. Many employers and businesses will be planning to reward staff with a celebratory party or event.
So how does the taxman enjoy the party? Entertainment tax deductions are limited for businesses thanks to the dreaded and inflexible
Fringe Benefits Tax.

Under the Tax Act, employers must choose how they calculate their FBT entertainment liability and most use either the actual method or the 50/50 method.Under the actual method, entertainment is normally split up between employees (and their family) and non-employees (e.g., clients/suppliers).

Expenditure on employees is liable to FBT and tax deductible. Expenditure on non-employees is not liable to FBT, and is not tax deductible.

Using the 50/50 method instead?

Rather than apportion entertainment expenditure between staff, associates and business clients, etc., many employers choose to use the more simple 50/50 method.

Under this method, (irrespective of where the party is held or who attends) – 50% of the total expenditure is subject to FBT and 50% is tax deductible.

Is there any tax break for employers rewarding their employees?

There is a minor benefit exemption that provides an exemption from FBT for benefits given to employees of 'less than $300' which are provided to employees (and their family/associates) and which are infrequent and irregular.

What does this mean for the Melbourne Cup party?

For example is an employer holds a Melbourne Cup party for its employees and their spouses.

If the cost of food and drink per person is $250, and no other benefits are provided.

If the actual method FBT is used:

u For employees attending on their own or with their spouse – no FBT is payable (i.e., the per head cost is less than $300) and no tax deduction will be allowed.

If the 50/50 method FBT is used:

u 50% of the total expenditure is subject to FBT and is tax deductible.

What does this mean for the Christmas Party?

If a Christmas Party and a gift to the employee is provided at the same time to the employee then as long as the cost of the party is less than $300 per employee and the cost of the gift is less than $300 then these treats are both FBT exempt.

Overriding all this though is the reward to the employees to say Thank You for being our most raving fan for supporting our business through your hard work.

Tracey Sharah - Director Metro Accounting - Party enthusiast and small business tax and financial management specialists

How is your super tracking in this volatile market?

2011-09-25T02:23:00.000-07:00

The performance of the sharemarket has spooked us all particularly the returns in our super. The sharemarket has taken a beating with the GFC.

With sharemarkets rapidly moving up and down many people are wondering just how safe their super is. The results have been weak investment returns and people are looking for alternatives.

Super Ratings has reported that in the past 10 years to the end of August 2011 average annual return for super in the balanced option was under 5% - with better options being available with cash options.

On average half the money in super is invested in growth style assets such as shares and managed funds– making share market returns the main driver of the super account balance.
Most people’s standard of living in retirement is dependent on a good performing Australian economy . Despite the relatively strong economy Australians are cautious.
The Australian Bureau of Statistics reports that 80% of Australians 65 years plus receive the part or full government pension. The current annual government pension for a couple is about $29,500. Could you live on this?
So what can you do to look after your super? Take care of your strategy. How far are you from retirement?
ARE YOU STILL CONTRIBUTING?
For those still accumulating their retirement savings with 20 years or so to retirement a high exposure to shares maybe justified as you can live with ups and downs of share markets. You have regular contributions going into your super . The volatility can be used to your advantage because you do not have to draw on your superannuation and opportunities are there to buy in the current market when values are low. Long term traditionally history has shown that your super balance will grow as the share market recovers. It just takes time.
ARE YOU CLOSE TO RETIREMENT?

The mantra of super industry is all about the long term is being tested for those retired or soon to retire. Retirees are required to drawdown a minimum % of capital each year. More conservative investment options with lower exposure to shares and higher exposures to income producing investments will help the money to last longer. More and more people as they approach retirement cannot afford to retire and remain in the workforce.

STRATEGY

Your super has to be performing to give you greater disposable annual income in your retirement if you are to have as certain standard of living. Your strategy is key.Have you assessed how much you need to live in your retirement and can your super support you?A budget will tell you what you are spending now and let you assess what amount of annual income you will need each year to live on in your retirement.

Investment strategy focus needs to be on the return from income and capital growth – constantly monitor this and change your investment strategy to suit.

6 STRATEGIES TO ACTION NOW

1.Review your investment strategy and ensure it is in line with where you are in your life cycle and be realistic about the returns you need now to support your lifestyle you want in your retirement.
2.Salary sacrifice into super – be careful of limits - if you are less than 50years max $25,000 50yrs plus $50,000max
3.Ensure all superfunds you have are consolidated into a single fund or consider a Self Managed Super Fund 1 in 3 superfunds are now managed and they provide greater freedom for your investment strategy
4.Access the government FREE money of super co contribution where you can or spouse rebate up to $3000 contribution for low income spouse
5.Look at a TTR transition to retirement from age 55 years
6.Super contribution splitting with your spouse. Up to 85% of your contributions can be split with your spouse.

The following is a retirement planner you can use to help you assess you position

http://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/retirement-planner

Tracey Sharah Director Metro Accounting specialising in Self Managed Superannuation Funds www.metroaccounting.com.au

Honesty is the best policy. Especially in business.

2011-09-18T20:51:00.000-07:00

What I have learned in business is ..You should always be your first customer in business. Take care of you and the rest follows.
Many times I hear from clients how the business is running their lives and they are so time poor and I feel this many times also.
After 11 years running a business and advising to individuals in business I can share that being honest with yourself can assist you with turning around the feeling of being swamped by the business and time.
Being honest in business means you have tried and true systems in place and you know your numbers, your marketing strategy especially who your target customer is, your staff requirements, your plan for maintaining and growth in business so you can adapt to challenging economic times and you can make the hard decisions as required. Being honest is important to portray in your business dealings and in your relationships you build with your customers and colleagues.
Being honest also is about being strategic with your business relationships. So here is a checklist I use to assist me in being honest about who I want to interact with in business and which relationship I want to build on and it has saved me a lot of time and angst. I hope it can help you to.
Does the person or people you are in relationship with:

Inspire you to want to be in relationship with them by how they work and what they offer;
Practice business in a way that is aligned with your values and the spirit of your business;
Practice business in a way that aligns with what your community and clients would expect;
Show a genuine commitment to their relationship with you (i.e do they reciprocate and demonstrate a a commitment to building a mutually beneficial relationship?)
Do they add something to your business?
Do you have something you can bring to them?
Do they believe in you and your message enough to spread the word about the work you are doing in the world?and become a raving fan.

I truly believe that adhering to these relationship values have helped me learn and nurture my business and assist me with being honest to myself in business. Can you add to this list?

Tracey Sharah - Director Metro Accounting - assisting small business with their tax and financial management of their business. www.metroaccounting.com.au

Do not pay more tax than you need to - hints for employees

2011-09-06T00:41:00.000-07:00

As an employee, there are things you need to know to meet your tax obligations and claim your entitlements correctly so that you do not pay more tax than you need to.
Income
Even if you did not receive a payment summary, you need to include your total income from all of your jobs on your tax return. TIP: It does not matter if you worked full-time, part-time or on a casual basis.
Income includes:

§ salary and wages ( PAYG payment summary)

§ commissions

§ bonuses

§ tips

§ gratuities

§ jury attendance fees

§ income from sickness and accident insurance policies

§ income from Centrelink

§ investment income from bank deposits and shares.

Work-related expenses
You may be entitled to claim a deduction for some eligible work-related expenses. TIP: you must have incurred these expenses in earning your employment income. These can include expenses such as:

§ car expenses, including fuel costs and maintenance

§ travel costs

§ clothing expenses including laundering of uniforms that have logos

§ education expenses - these must relate to the income you are earning in your role

§ union fees

§ home computer and phone expenses

§ tools and equipment expenses,

§ journals and trade magazines.

Record keeping
You do not need receipts if your work-related expenses are $300 or less, but you must be able to show the deduction relates to your income and how you calculated the amount you claimed.
If you claim more than $300 for work-related expenses, you need to keep written records as evidence of the whole amount not just the amount over $300. The $300 does not include claims for car, meal allowance, award transport payments allowance and travel allowance expenses.
Medical Expenses
If you have incurred out of pocket medical expenses over and above the rebates you have received from Medicare and your private health fund totaling $2000 or more you can claim a medical expense rebate.

Here is a checklist you can use as a reference when collating your information for your tax return - refer http://www.metroaccounting.com.au/downloads/2011_Individual_Tax_Return_Checklist%20.pdf

Tracey Sharah - Director Metro Accounting www.metroaccounting.com.au

You do not have to settle for the Vegemite sandwich and bad movies anymore.

2011-09-05T17:21:00.000-07:00

Thanks to the internet - one of the greatest and innovative inventions in the last 30 years our lives have changed forever.

No more do you have to settle for Vegemite sandwiches - you now have so much more information to make more choices.

Bad movie? - then just watch or download the latest online. It's all changed.

So is there brand loyalty anymore?

The internet has connected us with the greatest mind available - now we can go at the speed of light to thinking of something and having immediately in front of us to enjoy. It is setting us free from our old thinking and opens up other options beyond the normal companies that have dominated our world. This is best seen by the options now to choose who you fly with - is it Qantas because they are Australian? no, now we have so many other options to look at with other airlines based on destination and effective pricing.

What about the world of online retailing? You can search to your hearts content to find what you want from whoever you want to match your style and budget.It's mind blowing.

Gen Y are masters at this - they have grown up seeing employees laid off while corporations record bigger profits. They have the power and the world at their feet to search out what they want - shop where they want and find the better value option.

Choice is Gen Y and really our biggest power - it is the now the forefront of every customer experience.

Tracey Sharah - Director Metro Accounting and Mum to Gen Y children

Are you self employed and a contractor? The essential 5 tips you need to know

2011-08-25T20:19:00.000-07:00

Anyone signed on for a job as a contractor needs to know what that means from a tax point of view, or what difference being self-employed will make for meeting your tax obligations.

The status of your engagement is an important distinction – whether you are being put on as an employee or as an independent contractor – and can have consequences for both yourself and your new boss.
What is contracting? Contractors or consultants are self-employed people engaged for a specific task, at an agreed price, with a specific goal in mind, and often for a pre-determined timeframe. They set their own hours of work and take care of their own tax obligations. They aren't paid a salary or hourly rate, and because they are not an employee a contractor's position is more easily terminated than a 'permanent' employee.
Why do businesses like contractors? The benefit for businesses is that when extra work comes in then contractors can be used to meet this demand. It is a way to cover a temporary shortfall in staff, and done properly can offer helpful temporary work to people who need it.
Contractor or employee?
The main differences are that a contractor provides tools and equipment for the job, is paid for results not for time, is free to accept or decline work, and can make a profit or a loss. Also a contractor can delegate duties (or 'sub-contract').
If you are engaged just for your labour, you will be considered an employee rather than contractor from a tax point of view. In sales, for example, even a salesperson working for commission and therefore not receiving a fixed remuneration, will usually be deemed to be an employee.
Many an employer has been caught out when they find that the workers they hired as short-term contractors are in fact deemed to be employees – who expect (and are entitled to) all the usual obligations including to be superannuated by the current compulsory 9%.

HERE ARE THE 5 TIPS:

Have a written agreement in place detailing the scope of the work to be undertaken so it can be determined at that point what the remuneration will entail including super.
Enure you have your tax obligations sorted - ABN , GST for example
Get advice about how you will record/invoice your earnings and what tax deductions you will be able to claim against this work and whether you need to lodge a GST Return.
Find out what type of insurances you need to be a contractor
Make sure you understand your tax position and know about the Personal Services Income tax rules and how you will pay tax on your earnings - you do not want a nice big tax bill as a surprise.

Seek advice from your accountant and to help you
Use the following as a guide:
http://www.business.gov.au/BusinessTopics/Independentcontractors/Documents/Independentcontractorstheessentialhandbook.pdf
Tracey Sharah Director Metro Accounting www.metroaccounting.com.au

Is there flexibility in running your own business?

2011-08-24T21:42:00.000-07:00

What does flexibility mean to you in running your own business?
Is it freedom to make your own decisions? control your future? or to have a work/life balance?
The answer to this question is all the things you have put off doing when you were on the treadmill of employee or corporate life and were yearning to let your entrepreneurial self evolve.
Hence the creation of your business. So it is the "see the opportunity and dive in" rush that drives you.
Do you experience the entrepreneurial roller coaster of emotions? I once asked this at a networking event to Atlassian's founder Scott Farquhar and he explained it is like a swinging pendulum highs and lows of running a business and shared that only the night previous he had woken up in the middle of the night stressed about an issue in his business. I felt so normal after hearing this.
In business you are committed each day as the day begins the rush of motivation diving in. This is what drives you to create what you have - never lose the trust you have in the entrepreneurial self - but be nimble and do not let perfect get in the way of being better.
Tracey Sharah Business owner Director Metro Accounting www.metroaccounting.com.au

How important is sustainability to your business?

2011-08-24T21:10:00.000-07:00

Ever thought about the sustainability journey of your business? and its part in its impact on the sustainability of the planet? How green is your business?

Here are 5 sustainable business questions you should know about your business.

What is your carbon footprint? A carbon footprint is defined as an estimate of how much carbon dioxide is produced by your business to support the running of your business. This includes the energy use of the business, use of recycling, how much waste the business generates, travel methods.
How green are your products and services?

How much energy, water and resources does the business currently use?
How can you improve resource use and efficiency?
How and where do you source your materials from?
Are you using sustainable products and processes?
What is your impact on the local and global community?

3.Do you engage in using greener products? Like recycled paper, long life light bulbs, only using suppliers that use less packaging material for example, use second hand goods?

4. How educated and engaged are your employees? Do all staff recycle paper used, switch off equipment at the power point when not in use, walk to work or use public transport, no longer print documents but use electronic methods, do not use plastic for their lunches?

5. Do you communicate to your customers your commitment to being greener and hence engaging them in being more sustainable?.

Want some guidance? have a look at:

http://www.cleanenergyfuture.gov.au/clean-energy-future/our-plan/clean-energy-australia/

A risky tax return move - going without receipts

2011-08-17T16:22:00.000-07:00

Every year, you swear you'll be better organized, and every year, you still find yourself dashing around the house, digging in drawers for receipts. Why bother? The ATO never asks for receipts anyway, right?

So what is the requirement about having receipts for what you claim in your tax return?

Substantiation of work expenses, car expenses and business travel expenses must be kept. The receipts required to be kept must be retained for five years.
A work expense as a 'loss or outgoing you incur in producing your salary or wages'.

The following records must be kept:
• Receipts and other written evidence: The document must contain
- the name (or business name) of the supplier
- the amount of the expense (expressed in the currency in which it was incurred)
- the nature of the goods or services
- the day it was incurred, and
- the day the document was made out.
• Minor expenses ($10 or less each, and up to $200 in total) must also be recorded in a diary or list, which must include the date the entry was made. Entries in the log book do not need to be signed.
Car expenses: if you use a log book it must be kept for at least 12 representative weeks and is valid for 5 years, if not a log book then details of kms travelled for work related travel

•Domestic or overseas travel (more than five nights): Keep a diary containing:
- the nature of the activity
- the date and time the activity took place
- the duration of the activity, and
- where you engaged in the activity.
What about the $300 threshold?

No written evidence is required if the total of all work expenses (including laundry expenses but excluding travel allowance expenses and meal allowance expenses) is $300 or less.

This includes claims for:

laundry expenses ( you can claim up to $150 without written evidence)
depreciation of property owned and used (or installed ready for use)
election expenses for candidates for government
taxi fares or similar expenses, and
car expenses in respect of overseas travel.
phone,computer and internet expenses ( pro rated based on employment related use)
home office - you can claim 34cents per hour worked

For claims to be allowed, the employee must obtain written evidence
The $300 threshold does not include:
• car expenses in Australia
• award transport expenses
• travel allowance expenses, and
• reasonable overtime meal allowance expenses

Beware THE TRICK: If you are claiming more than $300 in work related deductions then all expenses claimed must be substantiated by a receipt.

If you fail to produce the receipt if questioned by the ATO the deduction will be disallowed.

Tracey Sharah - Director Metro Accounting www.metroaccounting.com.au

Life's long time lesson begins - about money and why we need a bank account.

2011-08-14T14:40:00.000-07:00

My daughter has started her first part time job - at McDonalds. Great I am really proud of her.

This has thrown her into a new sphere where she needs to learn about Tax File Numbers (TFN), Bank Accounts, Wages, Wages Tax, Superannuation and why she has to know all about this.

So us being parents are the ones to teach her this.

Lesson No.1: the Tax File Number (TFN). This can be applied for via her High School as the Tax Office has TFN applications available for students. So welcome to the world of filling out forms - which is a skill in itself.

Lesson No. 2: the Bank Account. A trip to the bank - lining up at customer service in the Branch and we have some more forms to fill out. OK done bank account created - waiting on TFN to add to the account. "Why do we need a TFN" my daughter asks? and "Why does the bank need to know this?" I explain, "the TFN is issued by the government so they can track all income you earn and if you open a bank account."

Lesson No. 3: How do I use the bank account? Introduction to an ATM Card so withdrawals can be made. Lesson on how to use the ATM - anxiety sets in." What if I lose the ATM Card? Why do I need a PIN? What if I lose my PIN?"

Lesson No. 4: Internet banking. A lesson on how this is set up and how to access the bank account electronically. OK easy - children are technology wizards.

Lesson No. 5 - How do I get paid by McDonalds? I explain, "this is automatically deposited into her new bank account electroncially by McDonalds. This money will attract wages tax". "What?" she exclaims. "What is tax?" I explain. "I have to give some of my money to the government? Why?" I explain. "This pays for her school, the hospital she used to have her appendix out, the doctor she sees, the bus she catches, the train she catches, the park she used to play in when she was younger." Oh, OK" she says.

"Any more questions" I ask. "Mum, how do I know how much money to take out? I don't trust myself with my money? What if I spend it all?" ( Secretly she is thinking, great I can buy that mobile phone I want and that handbag I have been wanting). Now my words of wisdom."Well you need to learn how to budget and save your money".

"How do I do that?" she asks - and so it begins the life long lesson of learning how to manage your money.

Tracey Sharah - Mum , Accountant and Director of Metro Accounting www.metroaccounting.com.au

Heard about the US debt crisis? Did know Sydney has $14.3 trillion of debt.

2011-08-04T15:30:00.000-07:00

According to the Australian Bureau of Statistics Sydney has $14.3 trillion of debt but do we ever hear about it? This week the talk was about whether the Reserve Bank of Australia would raise interest rates. They didn't. Shadow Treasurer Joe Hockey mantra in a series of interviews this week in the media was "Reduce Debt" but it seems many are happy to live with debt.

What sort of debt?, housing loans, credit card debt, car debt. Many of us have fallen into the trap of indulging on our credit cards - enticed by department stores clearance sales, mid year sales, sales, sales. Do you know the exorbitant interest rates charged by credit card companies? Paying the minimum on the credit card does not keep any of the debt at bay it only compounds the debt as now you are paying interest on interest.

Is debt part of your life that you live with and ignore? Maybe you are thinking it's not really debt, it's my money. I just have not earned it yet. If I really had to, I could get a second job, cut back spending, sell the house and everything would be fine. How secure is your job? What if the constant income stream stopped and maybe your house value had been slow with capital growth - what if the value of the assets you have did not cover your debt level?

What happened to the old fashion concept of saving your money to buy that item of desire? How do you rid yourself of the debt cycle? Just say no to yourself.

Budget - know where your household money goes and what is left to spend on yourself. Know your cashflow position and do not spend if you cannot afford it. You cannot build personal wealth if all you earn is servicing your debt.

Tracey Sharah - Director Metro Accounting - debt hater and saving fanatic - www.metroaccounting.com.au

Want an easy way to do your tax this year? Use etax

2011-07-31T23:26:00.000-07:00

Do you have a PAYG Payment Summary, a bit of interest income and some work related tax deductions to claim and you want your refund fast?

In 2010 nearly 2.5 million people used etax to lodge their individual tax return.

Individual tax returns must be lodged with the ATO by 31 October each year if you do not use a tax agent.

Lodging your 2011 tax return this year using etax is an easy way to obtain your refund fast.

Your tax return and refund is processed within 14 days by the ATO and the refund is deposited directly into your bank account. etax is downloaded on your computer and is easy to use.

The ATO service automatically uploads into etax all your personal details, wages details, interest and dividend details, HECS, into the etax return simplifying the tax process for you. Refer to the link:

http://www.ato.gov.au/individuals/pathway.aspx?sid=42&pc=001/002/014

The ATO issues alerts to you via SMS to let you now when information is available to download into your etax return

Tracey Sharah - Director Metro Accounting - easing the tax burden www.metroaccounting.com.au

Communicating has changed in business. How have you adapted?

2011-07-28T00:21:00.000-07:00

Technology has changed how we communicate with one another particularly in the workplace.

Email, text, twitter, mobile phone, skype, instant messaging .

Do you now think - how does this client preferred to be communicated to?

We now have to customise our communication to successfully connect with clients, work colleagues, prospects, suppliers - for example:

Ralph - is the email guy
Stephanie - is a texter
Gabby - likes the skype

How do we achieve this?

We need to listen to learn .
Determine what their preference is - ask if you need to.
Communicate - their way

Not adapting could mean that you are disengaged and disconnected to your audience.

Tracey Sharah - Director Metro Accounting Tech Savvy Client focused CPA Firm www.facebook.com/metroaccountingfb

How important is Business Succession Planning?

2011-07-26T22:52:00.000-07:00

Ever wondered what the risks are for your business?
All that time and effort put in building your business can be undone by not considering the risks associated with issues you cannot control.
Does your business partner race cars on the weekend? or maybe base jumping? What would happen if you or your business partner was seriously injured ? could you handle their partner coming into the business or maybe just wanting to exit the business? Could you afford to buy out your business partner?
How would your business handle this? You may have a personal will in place but do you have one for your business? You should and you should look at Key Man Insurance.

. Important things to consider are:

1. Who is involved in the business other than family?

2. How is the business structured? (e.g. company, trust, partnership or a combination of one or more of these).

3. Do you get along with your business partner’s spouse?

4. Does your business partner’s spouse know anything about your business?

5. Who would you like to take over your legacy once you are gone?

6. How does the surviving business partner find the money to buy out the interest of the deceased partner?

7. Do you want to continue in the business once your partner dies?

8. Do you want to have the option to buy out the share of the deceased business partner?

9. Do you want the deceased estate to be able to force you to buy out their share?

It is vital to protect your business after all the business can be the main income stream for you and your family.

Tracey Sharah - Director Metro Accounting www.facebook.com/metroaccountingfb

Doing business in the Cloud - are the risks real?

2011-07-19T23:52:00.000-07:00

76 % of mobile devices are lost offsite or during transit
80% of business are in a break fix cycle - the computer or software not working ( break mode) send someone in to fix it ( fix mode)
Email is the largest single interrupter to modern life - you only have 168 hours to do what you need in a week

Is doing business in the cloud the solution?

The main perceived risks in using In The Cloud solutions are:

Data Security
Quality of the Network - data speed
Service and support
Use of the android to access

BUT - we have been years using In The Cloud applications such as voicemail and internet banking - and how many of you backup on disc or tape what happens if this is destroyed?

Australia is known to be one of highest users of iphones and ipads in the world - Apple knows this - so the android access is a no brainer we love it! we use it! we have it!

The advantages of In The Cloud is: it is about the individual profiling applications they want not about hardware

You control who sees your data and it is constantly backed up
Responsiveness - real time
Available any where any time access to data - totally portable
No version control
No software upgrades - automatic upgrades
No email attachments and HUGE email inboxes
Maintenance Free
Readily accessible online support
Can be used on Macs or PCS
Accessible through the internet

So what are you thinking now? leave that desktop software for dead and think about all the time you will have NOT maintaining that current software and hardware you have.

Tracey Sharah - In The Cloud lover and Director Metro Accounting In The Cloud User www.facebook.com/metroaccounting.com.au

Small Business - can be isolating - what can help?

2011-07-17T17:11:00.000-07:00

Sydney Morning Herald Tony Featherstone article on Live-in entrepreneurs are at risk of isolation and depression really hit home with me. I recently have been on the road seeing clients pre 30 June and noticed a common issue - that isolation is an issue and I believe that getting out and Networking is the key to keeping you sane while you are in business.

Networking is about connecting with others running small business - this is it - it allows you to talk and share with others and find out what others are doing in their business, reflect on what you are doing in yours and re energise your passion for the business.

Some days can be like being in a cloud running a small business - just no clarity. Make a regular commitment to get out and connect - network - there are so many available - do a google search - it is a great way to polish up on your marketing skills and sales skills and to keep you sane.

Read the article - http://content.mycareer.com.au/advice-research/workplace/along-lonely.aspx

Tracey Sharah Director of Metro Accounting - assisting small business to ease the tax burden and helping you manage the COGS of your business www.facebook.com/metroaccountingfb

12 Questions to Help You Determine If You Are Ready to Start a Business

2011-07-16T02:50:00.000-07:00

So - the idea of running your own business has entered your mind - take this quiz to see if you are ready to start running that business ( circle the statement that applies to you)

Q1: Do you have an idea for your business ?

I know exactly what type of business I want to start?
I'm really not sure what type of business to start.
I have a few business ideas that I'm considering.

Q2: Have you researched your business idea?

I've researched the idea thoroughly.
I haven't started my research yet.
I've done a little bit of research

Q3: Have you fully considered the financial implications of starting a business?

I'm still in the process of preparing financially
I'm not financially prepared at all.
I have explored my options fully, and have a financial plan in place

Q4: Do you know what sort of structure should you use to run your business?

I've explored the advantages and disadvantages of each business structure, and I've decided how I want to structure my business
I do not know what structure my business will take
I'm still considering the options for my business structure.

Q5: Do you know who your target audience is?

I do not know who I am targeting.
I know exactly who I am targeting, and have a clear idea of my ideal customer/client.
I've started to think about my target audience, but I'm not completely sure.

Q6: Do you have a business plan?

I have a formal written business plan.
I haven't written down any plan as yet.
I am working on my plan now.

Q7: Do you have a name for your business?

I am still exploring business names.
I already have a business name in mind.
I am not sure what I will name my business.

Q8: Do you know what licences and permits will be required for your business?

I just started researching legal requirements.
I've looked into what is legally required, and I know what I need to do.
I haven't thought about licenses and permits yet.

Q9: Have you thought about what you need to ensure your business works?

I understand my committment required.
I am just brainstorming at present.
I have not thought of this, nor my exposure in running a business.

Q10: Have you talked to other people in your life about starting a business?

I have talked it over with my family and friends and have lined up their support.
I've told a few friends about my business plans, but not everyone.
I have not told anyone about my plans to start a business.

Q11: Do you have goals for both your business and the planning process?

I haven't started thinking about my business goals.
I have outlined a number of short term and long term goals with a time frame.
I have goals, but have not thought about a time frame as yet.

Q12: Are you ready to take the risk required to start a business?

Yes I am completely ready!
I think so, but a little apprehensive.
I am not ready for the risk.

Tracey Sharah - Director or Metro Accounting - 11 years of specialising in everything for small business -
www. facebook.com/metroaccountingfb; http://www.metroaccounting.com.au/ -

How did Metro Accounting become a 100% energy efficient and sustainable business

2011-07-14T17:37:00.000-07:00

In May 2011 - Metro Accounting was awarded by the Better Business Partnership - the regional sustainable business project for the North Shore- 100% energy efficient and sustainable business.

We are really proud of this and what to share what we do in our business to achieve this classification.

We do not use lights - we have a naturally lit office from all our windows on every wall on the 6th floor overlooking Chatswood, Crows Nest, Neutral Bay and we can see all the way to the Blue Mountains.

We do not use air conditioning for heating or cooling. We have natural ventilation from windows that open in our office. Our office is naturally cooled and heated by the sun and cross air ventilation.

Staff either walk to work and/or use public transport.

There is no running water, bathroom or kitchenette inside our office. We use communal facilities.

We have reduced our paper usage by more than 60% via the use of technology. We use only recycled paper.

We 100% recycle all paper and associated products in the office.

We activally participate in the community via volunteering.

Metro Accounting - facebook.com/metroaccountingfb - easing the tax burden and providing solutions to help you manage the COGS in your business

New this year to family tax

2011-07-14T16:36:00.000-07:00

Education tax refund - inclusion of school uniforms www.educationtaxrefund.gov.au

( eligibility for this tax refund is: you must be entitled to Family Tax Benefit A)

From 1 July 2011:The Government has changed the education tax refund to include school-approved uniforms.
Items of clothing including hats, footwear and sports uniforms approved by a school as its uniform may be claimed from 1 July 2012. So from 1 July 2011 start keeping receipts for school uniform items so you can claim them next year

Dependent spouse tax offset phase-out

From 1 July 2011, eligibility for the dependent spouse tax offset will be confined to taxpayers with a dependent spouse born before 1 July 1971.

Low income tax offset - changes for minors

In the 2011-12 Budget, the Australian Government announced changes that will remove the ability of minors (children under 18 years of age) to access the low income tax offset to reduce tax payable on their unearned income (for example, distributions from discretionary trusts, dividends, interest, rent, royalties and other income from property).
This measure will not affect those minors who are, for example, were engaged in a full time occupation at the end of the income year.

Minors will still be able to use the low income tax offset to reduce tax payable on their earned income such as salary and wages.

Paid parental leave

Australia's first national Paid Parental Leave Scheme started on 1 January 2011. Eligible working parents will receive parental leave pay (currently $589.40 a week before tax) for a maximum period of 18 weeks.

Medical expenses

You can claim a tax offset of 20% (that is, 20 cents in the dollar) of your net medical expenses over the set threshold.

The threshold is indexed and changes each year. It is:

$2,060 for 2011-12
$2,000 for 2010-11

Baby bonus

The baby bonus scheme has closed.

Tracey Sharah is Director of Metro Accounting www.facebook.com/metroaccountingfb - Metro Accounting .. easing your tax burden and providing financial management solutions to help you manage the COGS of your business

The carbon tax decision has revealed itself to be a major change to the tax system

2011-07-11T20:50:00.000-07:00

Tax Return lodgement system simplified:

The government has used the carbon tax announcement to simply the tax system and free more that a million Australians from having to lodge a tax return.

This will be achieved by reducing the individual tax free threshold

From 1 July 2012:

The individual tax free threshold will increase from $6,000 to $18,200.

From 1 July 2015:

The individual tax free threshold will increase from $18,200 to $19,400.

The saving to you from this change will depend on what your taxable income will be from 1 July 2012 and beyond.

NOTE: The increase in the tax free threshold means a lot of current existing offsets will be removed as the tax free threshold at the present is $16,000 NOT $6,000 so the increase is only $2,200.

Taxpayers earning less than $80,000 a year will receive an average tax cut of $379 a year but cuts drop for those earning more than $80,000, depending how many children a family has - so no real benefit to those earning $80,000 plus.

What is the cost of the carbon tax?

The figures released by the government show that the carbon tax will on average cost households $9.90 a week whereas average assistance will be $10.10 a week. This is being achieved via tax cuts. Petrol is exempt.

Stay tuned as the story unfolds via the governments big sell.

Tracey Sharah - Director Metro Accounting www.facebook.com/metroaccountingfb