With the end of the 2013 Fringe Benefits Tax (FBT) year approaching on 31 March 2013, it is a good opportunity to take advantage of the last 4 weeks as well as plan for the coming FBT year. There are also income tax benefits that can help the overall tax position for the income tax year ending 30 June 2013.
What is FBT?
Fringe Benefits Tax is a tax on benefits provided by an employer to an employee or the employee’s associate (e.g. spouse). Examples of benefits include car benefits, meal and entertainment benefits, loans to employees and their associates and accommodation benefits.
When FBT was legislated in 1986, it was described as “the end of the long lunch”, because whereas boozy lunch business meetings were previously deductible, FBT now taxed them.
How does Salary Packaging work?
Read more about salary packaging.
The Changing Face of Accounting Software
Long gone are the days where the only option for businesses was to enter all payments and receipts into cash books, and manually total each page to “balance the books”.
However, with the rapid changes in technology that are providing us endless choices of software and options for using them, how do you choose the best option for your business?
Cloud or Desktop?
There has been a lot of talk in the last few years about the use of software in the “cloud”. Essentially cloud software is hosted on multiple servers in diverse locations both locally and internationally, and the software is accessed via an internet browser.
This gives the benefit of the software being accessible anywhere you can get internet access, as well as providing access to multiple users at the same time. There is also no need to email the current file to other people, maintain backups or worry about your hard drive crashing.
As most cloud systems are purchased on a subscription basis, there is the concern of what happens to the data when the subscription ends. Other issues may be security of the information, and who owns the data within the accounting package.
The key things to consider when deciding on whether to upgrade or change accounting software:
- How many years do you intend to use the software for? If only short term, then the changeover may not be worth it. If for a longer period, then greater benefits might result.
- Do you have a lot of data entry to do? Cloud systems generally automatically feed bank account and credit card transactions directly from the banks, saving a lot of data entry.
- Do you have employees and need a payroll system? Check the features of your proposed software to ensure it meets your needs.
- Do you require any other services to integrate with your accounting software? As cloud services are internet based, they are generally easier to integrate with. Check with the providers of your accounting software and add-on services to ensure they are compatible.
If you are unsure of what choice to make, contact us at Value Beyond and we can assist with the decision. We can also guide you with your accounting processes to ensure that you are running as efficiently as possible.