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Archive for October, 2011

Local Or National Accountants, Does It Matter?

Prior to the days of the Internet, a small business owner would usually be restricted to choosing a locally based accountants to deal with their business administration. However, since the Internet has made it easier to gain access to a multitude of services and products, a business can outsource bookkeeping duties to a national accountants, anywhere in the country. With the importance of location out of the equation, the other factors to consider are whether the online national accountants is qualified to deal with your business, the cost and access details.

A locally based accountancy would have been preferable to a national accountants before the Internet, as frequent trips would have to be made to hold meetings, deliver documentation and other aspects. An accountancy firm which was based locally would keep travelling and communication times and costs to a minimum. Sending information by post was previously the most convenient method to communicate, even with a local accountants. However, if any queries arose, or further information was required, the telephone was often the only method of communication left open to both parties, which isn’t always convenient and can be expensive.

As a large number of people now deal with all aspects of their life online, it makes sense for a business to do the same. Online accountancy is low cost, speedy and convenient and also allows you to select an accountancy from anywhere in the country. A national accountants will offer the same service as a locally based accountants, but will provide increased accuracy using real time information, and convenience. The costs will be kept low as the national accountants maximise the efficiency of online accounting to reduce overheads, passing the savings on to the client.

When a business owner is deciding which accountant will be beneficial to the company, it is imperative that they decide whether face to face contact is important to them. A large number of business owners are happy to submit documentation and provide information, leaving their accountant to deal with ATO. Some business owners would rather meet occasionally to discuss their business, which would probably mean a locally based accountants for convenience.

Deciding on a national accountants gives greater choice than being restricted to a locally based accountancy. The size of the accountancy should also be considered, as a business needs attention all year round, especially when staying within relevant filing deadlines. A small, locally based accountants may provide an excellent service, but what happens if they are taking annual leave or are sick? Choosing a national accountancy will provide freedom to choose a company with several accountants who are able to deal with a business. An online accountancy provides freedom of choice so that a business owner will be able to manage his business, knowing that administration is dealt with in a timely manner, wherever they are situated in the country.

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QuickBooks Hosted By Reckon Online, What it is?

QuickBooks, hosted by Reckon Online

QuickBooks, hosted by Reckon Online is an online version of Quicken’s QuickBooks Enterprise desktop accounting software and is hosted from two data centres operated by the licensee for Quicken in Australia. It is not related to the five cloud versions of Quicken available in the US.

QuickBooks, hosted by Reckon Online is the only online version of QuickBooks available in Australia. Reckon Online is an arm of Reckon Limited, a company listed on the Australian Stock Exchange which owns the Australian licensee of Quicken software, Quicken Australia.

Because QuickBooks, hosted by Reckon Online is the hosted QuickBooks Enterprise desktop version, users can buy QuickBooks Enterprise for their laptop and download the company file for working offline.

Reckon Online has integrated QuickBooks with tools that let it access information on remote hard drives and print reports to local or remotely networked printers. Payslips, invoices and remittance advices can be emailed directly from a linked email address.

Other Australia-only features include real-time BAS lodgement through Reckon GovConnect, which pre-fills your lodgement form with data direct form the Australian Taxation Office. Users receive real-time feedback and lodgement confirmation. QuickBooks “hosted” also has a tool to calculate payments for paid parental leave, in compliance with the Federal Government scheme.

Business performance can be monitored by using a customisable company snapshot tool. Customisable fields and graphs allow you to design a ‘snapshot’ that presents the most significant information that impacts business decisions, down to transaction, customer or supplier details.

Activity-based settings control which areas of the software a user has access to based on their role. The data file is backed up daily, and updates occur automatically to keep the software in line with changes to legislation.
Another security feature is an audit trail to help a business’ accountant identify trouble spots and mis-postings within the accounts.

QuickBooks “hosted” has detailed inventory management that can track expenses, inventory and component levels for assembled products. Payroll management includes the ability to create and schedule payments, email pay slips to employees, and split pay into multiple bank accounts.

QuickBooks “hosted” can work with multiple currencies and has multi-company reporting which combines reports from subsidiaries, divisions or branches.

Reckon Online charges $295 a year for every PC user. Mac users pay $415 a year, a 40 percent premium, which covers the cost of special software (a virtualisation tool by Citrix) that Reckon requires to display the hosted QuickBooks on a Mac computer or mobile device.


Why set up a trust?

In the past trusts tended to be the investment vehicle of the rich, however in recent times many Australians from all walks of life have begun using trusts to hold their assets. So why do people invest using a trust?

Tax benefits: You be able to reduce your tax bill by distributing income to family members with lower taxable income. We recommend that you seek financial advice from your accountant to find out what benefits you may receive.

Asset protection: Trusts allow you to control & receive income from assets without having them in your name. This may protect these assets in the event that you are sued or go through a divorce. Specialist asset protection lawyers can assist you to structure your assets correctly to prevent losses.

Estate planning: Some trusts may allow you to effectively pass assets on to future generations without paying excessive taxes or going through estate disputes.

How do you set up a trust?

You can set up almost any standard trust (Discretionary, Family, Unit) online using Cleardocs, Shelfco, Law Central or Corporate Express. You may be able to set up a Hybrid trust, SMSF trust online however many people prefer to use an accountant.

Once the trust deed has been created and signed the settlor places a nominal sum (usually $10) in the trust. The deed can be sent to the state government for stamping and then the trust is fully operational.

We strongly recommend that you see an accountant and seek financial advice before setting up a trust. Online trusts are a cost effective way to set up a trust, however they will end up costing you more in the long run if you don’t set up the trust in the right way.

How can a trust own assets for someone else?

Assets are held “in trust” for beneficiaries who receive income and other benefits from these assets without actually owning them. The trustee is the one who manages the trust for the beneficiaries.

For example if you buy a property in a trust then the title deeds may show “ABC Pty Ltd As Trustee For The Smith Family Trust”. In some states such as QLD only the name of the trustee is shown on title e.g. “ABC Pty Ltd”.
Understanding Trust Jargon

Here is a list of trust related terms & jargon that you might come across:

Appointer: The appointer has the power to fire the trustee and appoint a new trustee. The appointer is specified in the trust deed.

As Trustee For (ATF): This is a legal term meaning that the asset is owned by one entity as trustee for another or that the entity is acting as trustee.

Beneficiary: The person(s) that receive benefits from the assets held in trust. Generally this is in the form of trust distributions.

Company constitution: If the trustee is a company then there is a company constitution guiding how the company is to be run and what rules it must follow.

Corporate trustee: A trustee that is a company.

Director of trustee: The director of the trustee company.

Held in trust: Assets owned by the trust on behalf of the beneficiaries.

In Its Own Capacity (IIOC): A legal term meaning that a trustee is acting on behalf of itself. For example a trustee may apply for a loan in the following name “ABC Pty Ltd IIOC & ATF The Smith Family Trust”.

Individual trustee: A trustee that is a natural person, i.e. not a company.

Settlor: The person who settles (opens) the trust by depositing the first money in it.

Stamp duty: A fee paid to your state government when opening a trust.

Trust deed: The legal document governing the operation of a trust. The trust deed names the trustee, beneficiaries, settlor and appointer and contains the rules that they must follow when dealing with the trust.

Trust distributions: Income or assets distributed from the trust to the beneficiaries.

Trust registration: The act of stamping and registering the trust with the state government.

Trust: A legal instrument used by one party (the trustee) to hold assets on behalf of another (the beneficiaries).

Trustee: The person or company that runs the trust and manages the assets on behalf of the beneficiaries.

Unit holder: The owner of units in a unit trust.

Unit: A share of a unit trust which denotes entitlement to a share of the assets within that trust.
Trustee duties & powers

The powers that the trustee has are listed in the trust deed, and so may vary from trust to trust. Generally the trustee has few limits on its powers as long as it is following its duty by acting in the interests of the beneficiaries.

Lenders will always check your trust deed to make sure that the trustee has the power to apply for loans for the trust.

As a general rule trusts are required to lodge a tax return just like a company or a person. Trusts are charged the highest possible level of tax which is why income is usually distributed to the beneficiaries at the end of each financial year.

Taxation rules for trusts are complex and vary between different trust types. Contact your accountant for specific financial advice for your trust.


Accounting & Bookkeeping Group Australia

07 3102 5860, 0403595274