How Can SMSFs Benefit Australians?

A self-managed super fund (SMSF) is a superannuation fund that is established for a small group of individuals, with a maximum of six members. Each member of the fund is typically a trustee (or a director if the fund has a corporate trustee), which implies they are responsible for the management of the fund in accordance with Australian superannuation and taxation laws.

The basic structure of an SMSF allows members to pool their superannuation resources, which can then be invested across a range of asset classes such as shares, property, and fixed-income products. The key benefit of an SMSF is that the members are the fund’s trustees, giving them the legal authority and responsibility to decide how the fund is managed and how its assets are invested.

Differences Between SMSFs and Other Superannuation Funds

Control and Flexibility

The most significant difference lies in the control and flexibility offered by SMSFs. Members can tailor their investment strategies to suit personal preferences and circumstances, which is not typically possible with other superannuation funds.

Membership and Management

SMSFs are limited to six members (usually friends or family members). This contrasts with other super funds, which have no membership restrictions and are managed by professional fund managers.

Investment Choices

SMSFs provide a broader range of investment options, including direct property, collectibles, and unlisted assets. In contrast, other superannuation funds usually offer a selection of predefined investment portfolios.

Regulatory Responsibilities

SMSF trustees are required to adhere to strict regulatory requirements, including fund audits, financial reporting, and compliance with superannuation and tax laws. This level of regulatory responsibility is generally managed by the fund administrators in other types of super funds.

Cost Structure

The costs associated with running an SMSF can be significantly different from other super funds. While SMSFs offer the potential for cost savings for larger balances, they can be more expensive for smaller fund sizes due to fixed administrative and audit costs.

Top Benefits of SMSFs

1. Investment Choices and Control

One of the primary benefits of SMSFs is the unparalleled level of control they offer over investment decisions. Members have the freedom to choose from a wide range of investment options, including shares, property, fixed interest, and even alternative assets like artwork or cryptocurrency. 

This level of control enables members to actively respond to market changes, align investments with personal values (such as ethical investing), and diversify their portfolio in a way that might not be possible in other types of super funds.

2. Tailoring to Personal Financial Goals

SMSFs provide the flexibility to tailor investment strategies to specific retirement goals and financial situations. Whether it’s aiming for high growth, focusing on capital preservation, or generating steady income streams, SMSF members can shape their investment approach to suit their individual risk tolerance and stage of life. 

This personalisation can be a key benefit for those who wish to take a hands-on approach to their retirement savings.

3. Tax Benefits and Implications

SMSFs offer significant tax advantages, making them an attractive option for retirement planning. Contributions to the fund are taxed at a concessional rate, typically lower than personal income tax rates. The fund’s investment income is also taxed at a concessional rate, and in the pension phase, it can be tax-free. This tax efficiency can result in substantial savings over the long term.

4. Strategies for Optimising Tax within SMSFs

Members of SMSFs can employ various strategies to maximise their tax efficiency. These include timing the sale of assets to manage capital gains tax, using franking credits from Australian shares, and implementing pension strategies to optimise the tax-free status of income streams in retirement. However, it’s important to navigate these strategies within the legal framework and seek professional advice to ensure compliance with tax laws.

5. Estate Planning Benefits

SMSFs offer significant advantages in estate planning. Members can set up binding death benefit nominations that provide certainty over how their superannuation benefits will be distributed upon their death. This aspect is particularly important for those with complex family situations or specific wishes regarding the distribution of their retirement savings.

6. Succession Planning Features

Succession planning within an SMSF can be tailored to ensure a smooth transfer of wealth and management responsibilities. SMSFs allow for greater flexibility in defining how benefits are paid to dependants, which can include lump-sum payments or ongoing income streams. Additionally, the structure of SMSFs can facilitate a more straightforward transfer of control in the event of a member’s incapacity or death.

Who Can Benefit From SMSFs?

Ideal candidates for an SMSF are individuals with a substantial super balance, as this can make the costs of running the SMSF more economical. They should also have a good understanding of financial and legal obligations, or be willing to seek professional advice from SMSF accountants when needed. A suitable member is typically someone who desires greater control over their retirement investments and is willing to actively manage and take responsibility for their superannuation.

While there’s no fixed minimum balance required to start an SMSF, it’s generally recommended to have a substantial amount to make the fund cost-effective. Potential trustees should conduct a cost-benefit analysis or look into SMSF setup services, considering ongoing costs against the potential advantages an SMSF can offer.

Potential Costs or Downsides of SMSFs

Investment Risks

SMSF trustees need to be mindful of investment risks, including market volatility. The responsibility of diversification falls on the trustees, and a lack of diversification can lead to higher risk. It’s crucial to have a well-thought-out investment strategy that mitigates these risks and aligns with the members’ risk profiles.

Some Australians using SMSFs choose to diversify this by balancing both an SMSF and an Industry Super Fund, but the costs involved with managing both could outweigh the benefits.

Penalties for Non-Compliance

Failure to comply with superannuation and tax laws can result in significant penalties and even the disqualification of trustees. Understanding and adhering to the legal requirements is paramount in avoiding these risks.

How to Begin Enjoying the Benefits of an SMSF

New Wave SMSF accountant team

For those considering the benefits SMSFs, New Wave Accounting & Advisory offers comprehensive services to assist in the setup and management of your fund. Our team of experts combines financial planning and SMSF accounting to provide a holistic approach to super funds and retirement planning.

SMSF Services Offered by New Wave

Why Choose New Wave for Your SMSF?

  • Integrated financial planning and accounting services under one roof.
  • Expert guidance through the setup process and ongoing management.
  • A commitment to providing stress-free, cohesive strategies for your SMSF.

Getting Started

We recommend consulting with our team of in-house financial planners to ensure the feasibility of setting up a self-managed super fund and about how you can enjoy the benefits of SMSFs. They can guide you through the process, including establishing the trust, registering with regulatory bodies, and managing the rollover from existing funds. You can request a free call from a member of our team or contact us online to get started.

Find out more about our SMSF accountants and services to help you enjoy the benefits of using an SMSF, like SMSF setup and SMSF tax returns.

Balancing Your Superannuation

Managing your retirement funds effectively often raises a few questions. One of which is, can you have both a Self Managed Super Fund (SMSF) and an Industry Super Fund?

The answer is yes, you can have both an SMSF and an industry super fund, meaning could enjoy the benefits of both. But, operating both may involve additional costs that could outweigh the benefits.

Balancing your superannuation and deciding whether or not to have both an SMSF and an industry super fund can influence your financial stability in the future. For detailed advice tailored to your financial goals, we encourage you to contact us.

Contents

Understanding Superannuation

What is Superannuation?

Superannuation, or “super” as it’s commonly referred to, is essentially a long-term savings plan designed to provide individuals with a source of income in their retirement years. It’s a scheme that supports employees throughout Australia to accumulate savings while they’re still working, which are then used to generate income to fund retirement.

There are a wide variety of superannuation fund types and each varies in their structure, degree of control, costs, and associated risks. Hence, the question of having one or both becomes pivotal in your retirement planning.

Superannuation is compulsory

A key aspect of superannuation is that it’s compulsory. Employers are legally obligated to make contributions to their employees’ super accounts based on a percentage of an employee’s ordinary time earnings. 

This percentage is regulated by the ATO and can change over time, adjusted with inflation and rising interest rates. The current superannuation guarantee rate, as of the latest change in July 2023 is 11% and is expected to rise to 12% by July 2025.

As well as the compulsory payments by employers, Australians can also choose to make voluntary contributions to boost their super savings.

Self-Managed Super Funds (SMSFs)

An SMSF is a private superannuation fund that you manage yourself. It’s regulated by the ATO, and as a fund, it offers the highest level of control over your retirement savings. 

With an SMSF, you’re the trustee, making all the investment decisions and bearing the responsibility of complying with the relevant laws. It’s a more hands-on approach that allows for a wider range of investment options.

According to the ATO, there were 603,432 SMSFs managed by Australians as of 2022.

Industry Super Funds

On the other end of the spectrum are Industry Super Funds. These are funds originally established by industry bodies for their employees but are now typically open to anyone. 

They’re managed by professionals, regulated by APRA, and are generally characterised by lower fees due to their not-for-profit nature. Industry Super Funds offer less control than SMSFs but provide simplicity, ease of management, and a hands-off approach to your retirement savings.

Can You Have Both an SMSF and an Industry Super Fund?

In Australia, there’s no legislation preventing you from operating both an SMSF and an industry super fund at the same time, meaning you can enjoy the benefits of both and diversify your savings. But, there can be additional costs associated with separate sets of fees. 

Despite this, there are several scenarios where having both an SMSF and an industry super fund could be beneficial.

Benefits of Using Both an SMSF and an Industry Super Fund

Coins Going Into Superannuation Fund Jar

1. Diversification

By having both an SMSF and an Industry Super Fund, you’re not putting all your eggs in one basket. Diversification can help spread the risk and potentially increase the chances of steady growth in your retirement savings.

2. Asset Protection

If you hold certain assets in your SMSF that aren’t permitted in industry funds – like property or artwork – you might choose to maintain an SMSF for this purpose, while also benefiting from the simplicity and ease of an Industry Super Fund for the rest of your super.

3. Insurance Coverage

You might want to maintain an Industry Super Fund because of certain insurance coverages that are less expensive or otherwise unattainable through an SMSF.

4. Ease of Transition

For those nearing retirement, having both funds can make it easier to transition from the accumulation phase to the pension phase. You can start drawing a pension from one fund while still contributing to the other.

The Current Super Fund Landscape in Australia: Are Australians Balancing Multiple Super Funds?

Based on the most recent super fund statistics and data from the ATO, it’s clear that the superannuation landscape in Australia is diverse, with a considerable number of Australians holding accounts in more than one super fund.

Single versus Multiple Super Funds

Historically, many Australians ended up with multiple super accounts by default, as they changed jobs and their new employers contributed to different funds. 

However, with increased awareness about the potential downside of multiple super accounts – such as duplicated fees and insurance premiums – there has been a concerted effort by both the government and individuals to consolidate super accounts.

Because of bodies like Moneysmart, the trend for the average Australian is now leaning towards maintaining a single super fund account. This simplifies the management of retirement savings and helps to keep a lid on fees and other costs. But, this isn’t to say that having multiple accounts, such as an SMSF and an Industry Super Fund, isn’t a beneficial move for certain individuals. 

It all depends on personal circumstances, financial goals, and retirement planning strategies.

Why Some Australians Choose to Have Multiple Super Funds

Despite the trend towards consolidation, some Australians still opt for multiple super funds. For example, they may choose to keep their Industry Super Fund while also operating an SMSF. The reasons for doing so often include:

  • Some people value the control and flexibility offered by an SMSF but also appreciate the simplicity and low-cost structure of an industry fund.
  • Others may have specific assets in their SMSF they wish to hold onto, while also benefiting from the diversified investment options of an Industry Super Fund.
  • There are also cases where members want to maintain certain insurance coverages offered by their Industry Super Fund that are not as readily available or affordable within an SMSF.

So while the trend is leaning towards single super fund accounts, having multiple super accounts, including both an SMSF and an Industry Super Fund, could be a strategic choice for some Australians. Though, the decision should be based on individual financial circumstances, retirement goals, and personal preferences.

Financial Implications of Operating Both an SMSF and an Industry Super Fund

Vector Scale Comparing Smsfs And Industry Super Funds

Operating multiple super funds, such as an SMSF and an Industry Super Fund, comes with its own set of implications. It’s critical to understand these before making the decision to maintain more than one account.

Understanding the Financial Costs

Managing multiple super funds means managing multiple sets of fees. These fees can include administration fees, investment fees, and insurance premiums, all of which can eat into your retirement savings over time. Moreover, SMSFs come with their own unique costs, such as auditing fees, ATO supervisory levies, and potential advice fees.

How Does it Compare to the Profits?

Whether or not it’s worth operating multiple super funds depends on your financial situation and goals. The Australian Securities & Investments Commission (ASIC)’s Moneysmart has a comprehensive Superannuation Calculator that can help you assess the impact of fees on your super balance. 

But for tailored advice to your own situation, an accountant or financial advisor with experience setting up SMSFs and managing SMSFs can give you more specific insight.

Comparing SMSFs and Industry Super Funds

Both SMSFs and Industry Super Funds have their unique advantages and disadvantages, and understanding these can help you make an informed decision about your super strategy.

Industry Super Funds

Pros

  • Simplicity: Industry Super Funds are relatively easy to manage. The fund takes care of all the administration, investment decisions, and compliance responsibilities, meaning you can “set and forget” if you choose.
  • Cost-Effective: Typically, Industry Super Funds have lower fees compared to retail super funds, which could result in higher net returns over the long term.
  • Diversified Investment Options: These funds often provide a broad range of investment options to choose from.

Cons

  • Limited Control: You have less control over investment decisions compared to an SMSF. You can usually choose from a range of predefined investment options but can’t select individual shares or property, for example.
  • Potential for Duplication: If you have more than one super account, you may end up paying fees and insurance premiums multiple times.

Self-Managed Super Funds (SMSFs)

Pros

  • Greater Control: One of the main reasons people set up an SMSF is to have direct control over their investment decisions. With an SMSF, you can invest in a wider range of assets, including direct property and certain collectables.
  • Flexibility: SMSFs offer more flexibility in terms of investment strategies, tax management, and estate planning.

Cons

  • Higher Costs: SMSFs can have higher setup and running costs compared to other types of super funds. These costs can be significant, especially if the fund balance is relatively low.
  • Time and Knowledge: Running an SMSF requires a significant time commitment and a reasonable level of financial knowledge. As a trustee, you are also legally responsible for all the decisions made by the fund.

Should You Use Both an SMSF and an Industry Super Fund?

Deciding between having one super fund or multiple, including both an SMSF and an Industry Super Fund, isn’t an easy choice. There are several factors to consider, and it’s often recommended to seek professional advice before making up your mind.

  • Financial Goals: Your personal financial and retirement goals will significantly influence your decision. Are you looking for greater control over your investments, or are you more interested in a hands-off approach?
  • Time Commitment: Managing an SMSF requires a significant time investment. Consider whether you’re willing to put in the necessary time to manage your super fund effectively.
  • Knowledge and Expertise: Do you have the required financial knowledge and experience to manage an SMSF? If not, are you willing to learn or seek professional advice?
  • Costs: Can you afford the costs associated with running an SMSF, especially if you’ll also be managing an Industry Super Fund?

Help Managing Your Super Funds

We can give you a hand

Our SMSF accountant team at New Wave Accountants & Business Advisory has extensive experience advising on these considerations and more. We believe that the decision should be made based on a comprehensive understanding of your personal circumstances, preferences, and financial goals.

Actively managing your super fund(s) is key to ensuring that you’re on track to meet your retirement goals. Whether you have one super fund or multiple, keeping track of your investment performance, fees, and insurance premiums can help you optimise your retirement savings.

At New Wave Accountants & Business Advisory, we offer a range of services tailored to help you effectively manage your super fund. From SMSF setup and compliance to strategic advice on your superannuation strategy, we’re here to provide the support you need.

If you have more questions or need further advice, don’t hesitate to reach out and contact us. Let us help you balance your superannuation strategy and secure your financial future.

At New Wave Accountants & Business Advisory, we offer a range of services tailored to help you effectively manage your super fund. From SMSF setup and compliance to strategic advice on your superannuation strategy, we’re here to provide the support you need.

If you have more questions or need further advice, don’t hesitate to reach out and contact us. Let us help you balance your superannuation strategy and secure your financial future.

Dinosaur accountant using laptop

Is online selling a hobby or a business? When you start asking yourself this question, there’s usually no straightforward answer. Many online businesses begin as hobbies, and at some time, you’ll be able to claim it’s either. An accountant can help you identify the distinctions between a commercial business and a hobby, so you know you’re filing the correct papers.

This questionnaire compiled by the Australian Taxation Office (ATO) helps you determine whether your online selling is more of a business than a hobby:

  • Did you set up your online store with the intention of becoming a business?
  • Did you start your online venture to turn it into a business?
  • Do you pay a fee to maintain your online selling presence?
  • Is one of your primary objectives to make a profit?
  • Do you make consistent profits/sales?
  • Do you charge a premium on items you make yourself?
  • Are your items similar to merchandise sold in an actual “brick-and-mortar” store?

If you responded “yes” to most of these questions, you’re likely running a business, and your incomes are taxable.

The Next Step: Apply for an ABN

You’ll almost certainly need to apply for an Australian Business Number (ABN). An ABN allows you to conduct your internet business like a company and is sometimes needed by law. Aside from that, you’ll need one to register for most Australian website names.

What Exactly Is an ABN?

We’ll go through some of the advantages of having an ABN for your business and when it could be helpful.

  1. Getting a Rebate on GST Paid on Local Purchases

When you’re registered for GST, one obvious benefit is the opportunity to claim GST back on purchases made in Australia, including Amazon seller fees. And you need an ABN to register for GST. To maximise the advantages of claiming GST tax credits, apply for an ABN.

  1. Tax Credits

There are business costs that you may claim as tax deductions while setting up and managing your firm. To claim business expenditures when filing your next tax return, you must obtain an ABN. If you don’t have an ABN, you won’t be able to claim legal business deductions such as motor vehicle expenditures, travel expenses, operational expenses or any applicable capital expenses.

  1. Purchasing an Australian Domain Name

The Australian Domain Name Authority manages domain names that end in .com.au, .org.au and .au in Australia (auDA). Most often known as country code Top Level Domains (ccTLDs), these domains require an ABN before you can purchase them. On the other hand, other domains, such as .com and .org, do not require an ABN and can be acquired by just about anybody.

Conclusion

Selling online, more often than not, is a business. The ATO has begun to data match numerous online marketplaces against information in people’s tax returns in the past years to ensure all relevant revenue is disclosed.

New Wave Accounting is an accounting firm in the Gold Coast dedicated to helping small businesses keep their books and financial figures in check. Make sense of your business numbers by getting in touch with us today!

As a business owner, you need to be mindful of your spending to stay afloat and avoid debt. Creating and adhering to a budget is key to effective money management.

What Are the Benefits of Budgeting for Your Business

Budgeting helps you understand where your money is coming from, where it’s going, and how much you have to spare. It’s an effective tool for helping you reach your financial goals. Here are some of the major benefits of budgeting for your business.

1. Helps You Set and Achieve Financial Goals

Budgeting enables you to set financial goals and objectives for your business and to measure your progress in achieving them. It provides a benchmark for measuring your performance against your goals and helps you stay on track financially.

2. Helps You Track Your Spending

Budgeting helps you track your spending and identify areas where you may be overspending. It helps you identify ways to cut costs and maximise your resources.

3. Helps You Make More Informed Decisions

Budgeting helps you make more informed decisions regarding the allocation of funds. Having a budget in place allows you to see how much you have to spend in each area and how it affects your overall financial picture. This makes it easier to decide where to allocate resources and make decisions that align with your financial goals.

4. Helps You Improve Cash Flow

Budgeting helps you improve cash flow by managing your income and expenses better. By tracking your spending and income, you can identify areas where you may be overspending and make adjustments to ensure that you are making the most of your resources.

5. Helps You Monitor Progress

Budgeting helps you monitor your progress towards your financial goals. By monitoring your spending and income, you can identify areas where you may fall behind and make adjustments to ensure that you meet your goals.

Steps for an Effective Business Budgeting

A well-constructed budget can help you track expenses, allocate resources, and plan for the future. Here are some steps to help you create an effective budget for your business.

1. Assess Your Financial Situation

Before you begin creating your budget, it is important to understand your current financial situation. Look at your balance sheet, income statement, and cash flow statements to get an idea of how much money you have coming in and going out. This will help you get a better understanding of your expenses and help you develop a realistic budget.

2. Set Your Goals

Once you understand your financial situation, it is time to set your goals. Think about what you want to achieve in terms of revenue, profits, and expenses. Setting goals gives you a clear direction for your budget and will help you focus your spending.

3. Track Your Expenses

With all your goals in place, it is time to start tracking your expenses. Make sure you track all your expenses, both large and small. Tracking expenses will help you identify areas where you can cut costs and help you stay on track with your budget.

4. Create a Budget

With all the information available, it is time to create a budget. When creating your budget, make sure you are setting realistic goals based on your financial situation. Also, take into account your goals when creating the budget.

5. Monitor Your Budget

Once you have created your budget, it is important to monitor it regularly. Make sure you are checking in on your budget at least once a month to make sure you are staying on track. This will help you identify areas where you can make changes and help you stay on track with your budget.

Conclusion

Budgeting is an important tool for any business owner to utilise. By creating and following a budget, business owners can ensure that their business is operating financially responsibly and can avoid overspending. Additionally, budgeting can help business owners track their progress and performance over time.

Creating a budget for your business can be a lot of effort, but by working with a business accountant, you can make it easier! New Wave Accounting provides accountants in the Gold Coast area for businesses that need one. We make sure to handle the nitty gritty details of finances and accounting so you can focus on growing your business. Contact us at New Wave Accounting to learn more about our services.

You only have a few weeks left to file your taxes for 2022. Ensure you have your income and deduction records to get the most money back from the Australian Taxation Office (ATO). Here are the key focus areas the ATO will be looking at:

1. Records on Expenses

The records you need to keep for your expenses usually come in the form of a receipt from the supplier. Your receipt must include the supplier’s name, the amount of the expense you are claiming, the date of the receipt or document, the date the expense was paid, and what the purchase was for, such as if you are claiming a work-related expense.

If you cannot provide documentation for a cash payment to a supplier, you will not be able to claim a deduction. However, the ATO may still allow the deduction if the evidence shows that the individual spent the money and is entitled to claim the deduction. This evidence could be a bank or credit card statement that shows the payment was made, to whom, and for how much.

2. Deductions for Working in a Hybrid Environment

To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it. To claim work-related expenses, you must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you must have a record to prove it.

You can only claim expenses that are related to work. For example, if you work from home three days a week and travel to work two days a week, you can only calculate your phone bill for the calls you made for work.

3. Capital Gains Like Assets or Digital Currencies

You need to calculate your capital gain or loss whenever you dispose of a crypto-asset, NFT (non-fungible token), shares or property. The capital gain or loss is the difference between what you paid for the asset and what you sold it for.

Remember, you can’t offset your capital losses against your income and wages. The ATO takes its data collection process very seriously, so any unfair deductions or claims can be penalised heavily.

4. Deductions as a Rental Property Owner

Keep track of all the income you receive from your rental properties, including insurance payouts, retained rental bond money, and even short-term rentals. As all your rental property deductions are entered manually, avoiding complications or discrepancies is important. If you need help, seek a professional to avoid delays or problems with your refund.

Conclusion

This is just a small list of deductions that are common for individuals in Australia. We have written about different tax deductions for individuals before; if you want to read more about what you can claim as a business owner or a high-income earner, you can read them here.

If you still have questions about your tax refund and other individual income tax deductions, plenty of tax accountants and specialists around the country can help you.New Wave Accounting provides end-to-end accounting and bookkeeping services. We are tax accountants on the Gold Coast, working for various industries and creating tailored solutions for every client. We understand how individuals and businesses need reliable accounting and bookkeeping services, and so we’re here to help. Call us at (07) 55041999 to schedule an appointment today!

Beauty industry companies are becoming more and more popular due to their fast-growing market. It’s quite a diverse industry that’s actually a combination of a couple of different market segments, including cosmetology, aesthetic medicine, and hairdressing. But that doesn’t mean that the beauty industry doesn’t need proper accounting and bookkeeping services. In fact, they need it as much as any other business.

If a business owner runs a beauty industry company, then they actually have to maintain not only the accounting and bookkeeping, but also complex accounting, especially when it comes to taxation. Let’s look at how accounting principles work for beauty industry companies.

What Types of Records Must Be Kept for Beauty Industry Companies

Beauty Industry companies, just like any other company, need to maintain certain documentation. These records will differ in number depending on the company’s size, the nature of the business, and the number of taxation issues a business owner is facing.

For example, if a business owner is doing small-scale business, such as a hairdresser, they will need to maintain records of the following:

Cash Register Receipts
These records should include cash register receipts, bank deposit amounts, and checks used to pay for expenses.

Bank Deposit Slips –
The slips must be kept for one year after the end of the year in which the deposit was made. The slips must be kept for one year after the end of the year in which the deposit was made.

Inventory Records –
These records should include what is in inventory, receipts, and sales of products and services.

Check Register –
This record should include information on checks written and payments made.

Credit Card Register –
Any credit card transactions must be recorded in a register.

Credit Card Receipts –
For credit card purchases, receipts are required so that records are accurate and may be audited.

Tax Records –
Tax records for beauty industry companies include sales tax and payroll tax records.

How Are Beauty Industry Companies Taxed in Australia?

Beauty industry companies are taxed the same as any other company. They are taxed on their revenue and must fill out a business activity statement (BAS) each year.
Depending on a business owner’s income levels (both for themselves and for the employees), they will have to complete a tax return.

It is essential for business owners to be aware of their obligations and responsibilities so that they don’t do anything illegal.

How to Organise Your Beauty Industry Company's Accounting and Bookkeeping

Organising the accounting and bookkeeping for a beauty industry company requires not only keeping the records, but also performing the accounting itself. When it comes to accounting, it is always a good idea to use a software. An accounting software will not only make the process of bookkeeping and accounting easier, but it will also prevent mistakes and keep records in an organised manner.

Organising the bookkeeping is also essential. Whether a business owner is running a small-scale or a large-scale company, they need to properly organise their bookkeeping. Organising the bookkeeping means being able to quickly spot any issues. It’s always best to use a software which is meant for bookkeeping organisations. For example, Xero is a software that enables business owners to organise their bookkeeping while providing them with the ability to properly monitor the financial health of their businesses.

Making the Right Accounting Decisions for Your Company


The key to any successful business is understanding how it needs to be managed. The accounting and bookkeeping is no different. Running a business is a huge responsibility, but it can be accomplished. Accounting and bookkeeping are the cornerstones of running a successful business, and so, business owners need to understand how to do it properly.

New Wave Accounting provides end-to-end accounting and bookkeeping services to help you reach your goals. Whether you’re in the beauty industry, eCommerce, medical, or even financial, our Gold Coast accountants will work with you to help you grow your business. Get in touch with us today to book a consultation with us.

Every venture has strategies and business practices that are sure to help boost its sales and clients in the long run. While not all of it may work 100% of the time, it is still advisable to have a couple of them so that you will have a clear trajectory of where your business is heading.

That being said, no company may ever get far without implementing some of the best accounting practices in the industry.

Overlooking them may spell trouble for your numbers as a whole, after all.

In such a case, you may need to take note of the examples below.

1. Never Ignore the Basics

No matter how you look at it, most people in the accounting business are taught how to do the basics right. It is mainly because starting off with these may be the easiest way to ensure that you will be able to effectively transform your company into a success.

As a result, you must make sure that you will be able to:

  • Prepare all the documents you need, such as invoices and receipts, and request a receipt from each and every customer who purchases from you.
  • Keep your financial documents, both digital and hard copies, organised and adequately filed according to your business type.
  • Gather all the details you need to create a General Ledger, which will then help you to create an accurate income statement and statement of cash flow.

2. Never Hesitate to Ask for Help from Experts

Just because you have enough experience on your side doesn’t mean that you will be able to rely on that alone.

When it comes to managing the company’s finances, you must always make sure that you will consult a professional accountant who will be able to guide you through the journey.

Basically, there is no shame in doing that.

A professional accountant will know the best practices that you should execute and the ones that you should steer clear of. With this, you will be able to create a solid foundation for your business to thrive.

3. Innovate with Cloud-Based Accounting Solutions

In today’s digital world, there is no denying that it is quite useful to follow the latest trends when it comes to streamlining your business operations, especially when it comes to accounting solutions.

With cloud-based solutions, you will have the chance to:

  • Cut the time you need to create reports and process the data.
  • Help facilitate the financial activities of your business while still being able to focus on the company’s growth.
  • Be able to access important financial information, such as past transactions and reports, with the click of a button.

In the end, your business will save time and money on unnecessary expenses and expenditures.

4. Learn to Take Calculated Risks

At the end of the day, every company, big or small, has to take certain risks as a whole. It is a proven method in helping them grow and expand further, even if they are unsure if it will actually work or not.

For instance, there are a lot of people who are in the business of business loans because of the potential it has, especially if they pick their clients well.

In this case, they will have a better chance of getting approved, even if they have a bad credit score or a low income.

Conclusion

Overall, these are just some of the best accounting practices that every venture must implement if they want to be successful. The best part about these is that they are easy to remember and simple to implement, making it one way for you to run the company more efficiently.

After all, learning new things is what every entrepreneur needs to do in order to grow their companies into the leaders of their industries.

With all of that being said, if you are looking for the best accountants on the Gold Coast, look no further than our experts here at New Wave Accounting & Business Advisory. We provide end-to-end accounting and bookkeeping services that help scale and grow businesses. Call us today and let us help you crunch the numbers with our well-established accounting practices.

Tax-Free Threshold Meaning

The Tax-Free Threshold (sometimes referred to as the Lowest Personal Income Tax Rate) is a term that applies to Australian taxes and refers to the amount you can earn before you will be taxed. Understanding what the tax-free threshold for Australia is important if you want to make sense of the income tax system.

Australians are able to earn an income up to a certain amount before tax becomes payable. This is called the tax-free threshold, and the amount is $18,200. It means that Australians have a limit by which they can earn money each year before they start paying tax on any income above this amount. If you are an Australian resident with a tax file number, the tax-free threshold could be beneficial to you.

How to Claim a Tax-Free Threshold

To claim the tax-free threshold in Australia, you must:

  • Have a tax file number
  • Be an Australian resident
  • Be tax resident in Australia for at least half of the year (you will need to provide proof of the number of days that you were in Australia for the year.)

If you are a non-resident for tax purposes, you will not be able to access the tax-free threshold. This includes Australian citizens based overseas for more than six months in any given year.

Can You Claim it on More Than One Job?

Generally, you can only claim the tax-free threshold from one job. If your total income from all sources is less than $18,200, you can claim the exemption from each source.

However, if you earn more than $18,200 for the year, you may need to fill out a withholding declaration form and inform one of your employers that you will no longer claim the tax-free threshold from your income.

If you claim the tax-free threshold from more than one employer, your second income source and any other sources of income beyond will be taxed at a higher rate.

What if You Don't Claim the Tax-Free Threshold?

If you don’t claim the tax-free threshold at all for a financial year, then you may have to pay income tax on all your income. For example, if you earned $18,200 in Australia in a financial year and claimed the tax-free threshold, and then you earned $19,000 in a later year and did not claim the exemption, the extra $1,000 will be taxed at the top rate of tax.

How the Tax-Free Threshold Affects Your Pay

If you want to calculate how the tax-free threshold will affect your pay, simply aim to work out your gross earnings first. Then, work out how much of your income will be exempt from income tax, and deduct that amount from your gross earnings. You will then be left with your take-home pay.

Get Your Tax-Free-Threshold

The tax-free threshold is a critical aspect of the Australian income tax system. If you are earning an income in Australia, you may be able to claim the tax-free threshold, meaning you don’t have to pay tax on all of your earnings.

Let a reliable accountant in Gold Coast help you here at New Wave. We provide end-to-end accounting and bookkeeping services. Contact us!

When it comes to allowances, they are treated as separate identified payments made to employees to cover various expenses while they’re working. It can include a variety of things from travel expenses, meal allowances, and the like. Regardless, different allowances need to be understood, all because they have special treatment in the eyes of the Australian Taxation Office

That said, today, let’s delve deeper into travel allowance and living away from home allowance, outlining what each is and their differences from each other:

What Is Travel Allowance?

Travel allowance is money paid to an employee to cover costs they incur while they’re travelling while they’re at work. It can include airfares, rental cars, accommodation, costs for meals and incidentals. The tax treatment of this allowance depends on the length of the trip.

If it’s local travel, that is, the employee’s travel is entirely within the employee’s home base of work or within a fifty-kilometre radius of their home base of work, then the living away from home allowance does not apply.

If the travel doesn’t fall under this criteria, then the living away from home allowance applies.

What Is Living Away from Home Allowance?

Living away from home allowance is an allowance paid to an employee to cover the extra costs they incur while they’re travelling on a work-related business. The rule of thumb is that the employee must be away from their home base of work for a period longer than a normal day’s work. It includes any overnight travel, accommodation, and meals.

The treatment and taxation of this allowance depend on the length of the travel. If the employee is away from their home base for less than a week, then it attracts a flat deduction. If the employee is away for longer than a week, it is a taxable allowance.

If the employee is away on a short-term trip and they are required to sleep away from home, then they can claim a deduction for the expenses associated with that travel as well.

What's the Difference between the Two?

When it comes to tax deductions and treatment, the rule of thumb is that travel allowance is tax-deductible when the employee is away for less than a week, whereas living away from home is taxable when the employee is away for longer than a week.

How Do I Claim for Each?

If you’re an employer and you want to claim a deduction for travel allowance or living away from home allowance, you need to ensure you have the relevant evidence to back the claim up. If you’re an employee who is getting a travel allowance or living away from home allowance, then when you send your tax return to the ATO, you need to ensure that you state how many days you were away from home and for how long along with the rates that were paid to you.

Conclusion

When you’re working and travelling, it’s important that you’re able to get the right deductions and treatment for your travel allowance. This will help you get more money back when you send in your tax return. By keeping a record of your travels and how much you are paid for each, you’ll be better prepared to claim your entitlements when the time comes!New Wave Accounting offers end-to-end accounting and bookkeeping services to help businesses grow. If you are looking for an accountant on Gold Coast to help you out, work with us today!

Congratulations to our Senior Bookkeeper, Brittny Henderson (nee Porter) for being shortlisted for Bookkeeper of the Year in the 2022 Accountants Daily Australian Accounting Awards! This award recognises outstanding Australian bookkeepers who operate in a contemporary environment and have responded to market challenges with innovation.

As a bookkeeper and a leader, Brittny is extremely deserving of this recognition. Her excellent communication skills and the personalised touch she provides each client is admired and appreciated by her colleagues and clients alike. Brittny’s passion for eCommerce has seen her extend her skills and knowledge in this domain and allowed her to offer a highly sought-after eCommerce specialisation in her services. Brittny is known for harnessing the latest technologies and software platforms to achieve better results. She has a high level of knowledge around Shopify, Paypal, Merchant Platforms and tried and tested integrations like A2X, which empowers her clients and gives them clarity and confidence to make informed business decisions.

The Australian Accounting Awards is the premier event in showcasing the depth of talent in the nation’s accounting professionals and businesses, recognising their success and their passion for the sector.

The finalist list, which was announced on Tuesday, 26 April, features over 290 high-achieving professionals across 34 submission-based categories.

Reaching the finalists stage is regarded as an incredible achievement across the Australian accounting industry, showcasing the depth of dedication and commitment each individual and business brings to advancing the industry.

Accountants Daily editor Philip King said: “The Accountants Daily Australian Accounting Awards night is renowned as the premier event each year when the profession recognises and celebrates those right at the top of their game.

“This year it is especially poignant as the first face-to-face awards night since the onset of COVID. It offers the whole industry a chance to come together and mark its exceptional contributions to the national wellbeing through the trials of the pandemic and testing natural disasters.

“Under such difficult circumstances, to be shortlisted from among the hundreds of high-quality entries is a mark of high achievement, one that echoes throughout the profession.”

Winners will be announced at the Awards Gala in June later this year.

Congratulations Brittny and Goodluck!

To learn more about our bookkeeping services, contact Brittny on 07 5504 1999

Newwave Accounting

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