FBT and Entertainment
Are you confused about when an expense is or isn’t entertainment, and whether it is subject to Fringe Benefits Tax (FBT)?
Leading into the Christmas season, hopefully this diagram can help you navigate the maze a little!
They key thing to consider is that if the purpose of the expense is entertainment, then there is no income tax deduction, regardless of the FBT outcome.
The other FBT exemption available is the minor and infrequent exemption – if the expense is not for something that occurs regularly, and is less than $300 per person, then it will be exempt from FBT. It doesn’t make the cost tax deductible, but it can reduce the tax burden when your are enjoying yourself with your staff.
If there is any doubt, give us a call to help you decipher the code!
The Silver Lining of Cloud Software
The topic of cloud computing or cloud software is being discussed more and more, but are you still unsure what it is and how it can benefit you?
Any software that is “in the cloud” is simply software that is hosted by a provider on their own computers (servers), and then accessed by you from your computer, usually via a web browser. One example of the use of the cloud that you are most likely familiar with is email. The email server (i.e. the computer that handles incoming and outgoing emails) is setup and maintained by your internet provider, or the provider of your email address. You do not physically have to use your own computer located in your office or home set up to handle the emails, this is done offsite by your provider.
Typically this involves multiple secure locations and backups, as well as advanced security features such as anti-virus, spam-filters and firewalls to protect the thousands of customers that they serve and ensure a continuous service.
One area that has progressed very quickly in the last few years due to the benefits of cloud computing is accounting software.
How does cloud accounting software differ, and what are the benefits?
Typical accounting software has the following features:
- It is installed on one computer, and requires manual updates
- The working file is usually stored in one location and requires manual backup
- Security is limited to the security on that one computer, or any portable hard drives which the file might be stored on
- Customer support is difficult as they cannot access your computer to make any changes
At Value Beyond we have tried and tested cloud accounting for the past 3 years, and have found a number of benefits for our clients:
- Bank account transactions are automatically fed into the software, eliminating the need for manual data entry which saves time in both data entry, and reconciliation
- Multi-user access makes it easy for us to work with you and your staff, with everyone able to log in at the same time and look at the exact same data (no more emailing bulky data files)
- As the software is maintained by the provider, all updates are automatically available, removing the need for manual maintenance
- All date is backed up automatically, and the security is continuously maintained
- There is no upfront payment, with fees paid by monthly subscription
Where business owners are using cloud accounting software, we are able to access data in real time which has enabled us to provide more timely analysis and more efficient preparation of BAS and tax returns.
By cutting down the complexity of keeping the accounting information up to date, the resulting data is more accurate and timely, and frees up valuable time to report on business trends faster, and allows a faster and more informed response to changing business conditions.
If you are interested in a demonstration of cloud accounting and to discuss how it might benefit you, please contact our office to arrange a time.
What Does It Take to Run A Successful Business?
Ever wondered if there is some sort of secret to having a successful business? Every day we see marketing aimed at business owners trying to sell them the “97 secrets to more customers” and “proven marketing strategies for the new economy”, promising some sort of “previously unknown secrets of the rich and famous”.
While the ways in which businesses interact with their customers has changed dramatically in the last 10 years (think e-commerce and social media), the fundamentals of business remain the same.
Business is still largely about one thing – having a product or service that you sell to customers for a profit. This fundamental concept has not changed in 10 years, 20 years, 200 years, or even thousands of years. There were merchants in biblical times, and I am sure they faced this same challenge on a daily basis!
Any business that is successful in growing has a mixture of these three attributes:
- Quality product or service
- Good value pricing
- Excellent customer experience
Think of the times when you’ve bought something, be it a product or a service, and you came away feeling like it was a great purchase.
It could have been a meal, clothing, shoes, a new car, a new haircut, or even something as large as buying a house.
In making that purchase, there would have been a mix of these three elements, be it the product or service itself, the price you paid, or the experience you had while buying.
Now think of some of the most successful companies, and successful products.
It is not necessary that all three attributes exist for it to be a good purchase. Even just one of these factors at a very high level might outweigh the other two so much that it still feels like a good purchase.
Having said that, if all three exist, then the purchase won’t be just good, it will be great!