Division 7A Consultation Paper
Single Touch Payroll - Small Business Next
Single Touch Payroll (STP) is an Australian government initiative that changes the way businesses report on salary or wages, Pay-As-You-Go (PAYG) withholding and superannuation. Under STP, this payroll information will be sent electronically from the business' payroll system directly to the Australian Taxation Office (ATO) at the same time as the employer pays their employees.
Employers with 20 or more employees have been required to utilise the Single Touch Payroll system from 1st July 2018.
Small business employers:
- Legislation to extend the Single Touch Payroll to include employers with 19 or less employees is currently before Parliament
- Businesses with less than 19 employees can elect now to utilise Single Touch Payroll system if you wish. To find out more about this, we suggest that you talk to your software provider to find out what you need to do to update your software and start reporting
- The ATO has stated that it will not force employers, with 19 or less employees, to purchase payroll software, if they don't currently use payroll software. The ATO has indicated that different STP reporting options will be available by 1st July 2019 to help smaller employers.
Micro employers (1 - 4 employees):
- The ATO has requested that software developers build low-cost STP solutions at or below $10 per month for micro employers - including simple payroll software, mobile phone apps and portals.
- The ATO has indicated that they have received over 20 expressions of interest from software developers and will publish a register of the successful expressions of interest that they have received by 30th November 2018.
- The ATO has indicated that micro employers will also have a number of alternative options that are not available to employers with 20 or more employees – such as initially allowing the micro business' registered tax agent or BAS agent to report quarterly, rather than each time the business prepares a payroll.
- The ATO has also indicated that exemptions to STP reporting will also be available, if you have no internet or an unreliable internet connection.
- The STP will streamline reporting to the ATO and will make it easier for employers to meet their obligations as an integral part of payroll processing.
- Employers, who report through STP, will no longer need to provide employees with an end of year payment summary.
- STP will allow the ATO to better assist employers who are having difficulties meeting their PAYG withholding and superannuation obligations.
- Using their myGov account, employees will be able to interact securely with the ATO to view the year-to-date salary or wage amounts, PAYG withholding and superannuation entitlements.
- Salary or wage information and PAYG withholding amounts reported through STP will be prefilled to the employer's Business Activity Statement (BAS).
- If you are currently utilising a computerised payroll system, we suggest that you have a discussion with your software provider to gain an understanding of the upgrading that will be necessary with your present system or should you obtain a new system which fully incorporates Single Touch Payroll.
This is obviously a big change which is going to affect all small businesses. If you would like to have a discussion with us relative to the development of a strategy for your business, please do not hesitate to contact the accountant in our organisation with whom you normally deal.
The Reason for Marketing is to Generate Some Interest
Marketing is a process, not a one-off event. When you examine the marketplace, only 3% to 4% of your potential customers are ready to buy at any one moment in time. The main reason for marketing is to generate some interest by using a time-based process, such as a "drip" campaign of communicating with potential customers until they're ready to buy. This can be built around four words – "interrupt, inform, educate and offer".
How might you "interrupt" potential customers? This could be done via email or a telephone call, to advise them of your product or service followed up with information, video or webinar, which will inform the potential customer of how your products can assist them in their day-to-day business operation.
Cost Control An Ongoing Task
Cost control strategies should be part of an ongoing activity, not just considered once a year. A good idea is to create a checklist of the key costs being incurred in the business with an analysis being performed on the cost and reviewed on an ongoing basis to see whether value for money is being obtained.
In some instances, it may be found that it is necessary to increase the amount of money that a business is spending under a particular cost heading, so as to get a significant improvement in value for money. If this helps the overall performance of the business and bottom-line profitability, then that additional expenditure is money well spent.
However, in most cases the ongoing costing review will be centred on an analysis as to whether the incurred cost is still justified and whether the business is receiving the best possible deal from the suppliers of the product or service
When undertaking a review, it's a good idea to ask a question "Why are we incurring this expense?"
Is it necessary that the business incur this expense so as to continue to service your customers at the highest possible standard? Or is it an expense that is frivolous and a luxury in today's market that your business could do without?
Is the product or service being acquired of superior quality to that required to meet your customers' requirements? Are you buying a "brand name" when that is not necessary?
Many small and medium sized businesses have established a cost control review committee which meets throughout the year to consider the various costs that have been incurred by the business and, after some investigation, to determine whether that cost should still be incurred or whether changes can be made to the type of product or service that is being acquired, so as to reduce the overall cost impost to the business.
A dollar saved in purchasing of products or services goes directly to bottom-line profitability of your business.