Trading stock includes anything business produce, manufacture, acquire or purchase for manufacturing, sale or exchange.

Trading stock does not include
• Standing or growing crops, timber or fruit. They are only countable when they are harvested.
• Stocks of spare parts held for repair and maintenance.
• DVD’s owner who lend DVD on rent.
• Consumables used in manufacturing trading stock such as cleaning agents or sandpaper.

Businesses who deal with inventory must calculate opening at the start of the year and closing stock at the end of the year. This will help us to decide how much is the assessable income.

Exception does exist for small business. If you are running a small business and your turnover is less than $2 million per year. In this case, you don’t need to count opening and closing stock if the difference is less than $5,000.

Business can use 3 methods to value the trading stock

• Cost price – Cost incurred by the business to bring the stock in use. The cost may include Freight, custom charges and delivery charges. For manufacturing industry we include all the full cost work in progress, labor and material charges plus any other fixed and variable cost.
• Market selling value - The current value of the stock you sell. In this mention you cannot undervalue the sale price of the stock of any other reason.
• Replacement value – The price of the similar item you purchases in normal buying market on the last day of the income year.

You may chose different method to value your closing stock; however your closing stock valuation method of the last year should match with opening stock of this year.

Contact us today, to find us how we can help you with your bookkeeping and end of year stock take.

What can you claim on your tax return?

Now that we have entered the new financial year, everybody is thinking about the taxes. It is a bit daunting task for most of the tax payers to put together the information required for claiming work related expenses and figuring out what can be claimed.

Below is some information that will help you to get organised for claiming work related expenses on your tax returns:

• Work related car expenses can be claimed by one of the four methods prescribed by the ATO if you use your car for work purposes, however please not travel from home to work place and vice versa cannot be claimed.

• Any travel expenses such as fares, accommodation, meals etc.

• Expenses for purchase of compulsory uniform, protective clothing, safety shoes etc and the laundry expenses as well. If you work outdoors, you are entitled to claim expenses for buying sun protection such as sunscreen, hard hats etc.

• Telephone, internet etc for the work related use.

• Union fees or subscriptions

• Self Education expenses for a course related to your income producing activity.

• Home office expenses.

• Any interest payments or other investment expenses.

• Donations/Charity

• Expenses incurred for payments to the tax adviser for the prior year returns.

• Superannuation contributions.

• Net Medical Expenses over $2,060.00, this includes expenses for you, spouse or any dependants.

• Any other expenses you might incur in relation to your income producing activity.

For financial year 2011-2012, there is no need to make a claim for Education Tax Refund and it has already been paid to the eligible taxpayers in June 2012. No records are required and ETR will be replaced by Schoolkid Bonus in January 2013. Call us today to find out more about it.

Want to find out more about what you can claim specific to your industry? Contact Sunny from MAS TAX Accountants Cranbourne on 1300 664 796 to make an appointment and we will ensure that you get the maximum tax refund possible.

Author – Sunny Kaur, MAS TAX Accountants Cranbourne

This email address is being protected from spambots. You need JavaScript enabled to view it.

The end of financial year is fast approaching and all the employers are requested to provide Payment Summaries/Group Certificates to their employees by 14th July. For all the small business owners who manage their own bookkeeping, this can be a tricky bit, as most of them do not know how to generate electronic payment summaries from their accounting software.

Rather than filling out the old fashioned payment summary forms sent out by the ATO, which is time consuming, most of the accounting programs allow to generate payment summaries electronically, which can then be emailed or printed out, also you can generate an electronic file for lodging your annual PAYG withholding statement with the ATO, which needs to be sent to the ATO by 14th August.

As MYOB is one of the most widely used accounting/bookkeeping program in Australia by small business owners, below is a video demonstrating steps for generating Group Certificates/Payment Summaries in MYOB. In my next blog, I will demonstrate how to generate group certificates in QuickBooks and in SAASU and XERO in subsequent blogs.

If you require further assistance, feel free to contact HS Bookkeeping Service on 1300-664-796, also attached below is the ATO document with the guidelines on completing payment summaries.

Guidelines for completing Payment Summary

If you’ve made a decision to contract out your bookkeeping requirements, CONGRATULATIONS! you have identified that you simply cannot do everything. Below are few pointers that will provide a guide to hire a good bookkeeper:

1) Qualification and Experience: In accordance with the Tax Practioners Board, it is mandatory for any one providing a bookkeeping service to complete at least a certificate IV in Bookkeeping or higher. If the bookkeeper does not possess the relevant qualification, then you will be wasting your time, energy and money with them. Also a qualified bookkeeper without any practical experience would be useless, since you will be their Guinea Pig where they will be practicing their knowledge to gain experience and skills within the practical work environment. A good bookkeeper should have the relevant qualification and at least few years experience.

2) BAS Agent : It is essential you make sure your bookkeeper is a registered BAS agent, since this will ensure that the candidate has got the appropriate expertise and qualification.

3) Insurances: According to a new law, it is mandatory that each and every bookkeeper has professional indemnity insurance, ensure you check their insurance policy so that you're not liable for the fines imposed by the ATO for any blunders in your BAS.

4) Basic Knowledge of Your Industry: Ofcourse, you can’t expect the bookkeeper to be an expert in every industry to being with, but it assists when they have an idea of how your industry operates. Figures are dealt with exactly the same in order to get calculations however in some industrial sectors there might be different factors to be aware of which will be useful to your bookkeeper.

5) Attention to Detail: Simply because somebody is a bookkeeper does not necessarily mean they may be always detail-oriented. You certainly do not have enough time to double-check their work so ensure the person you hire is skilled enough to deal with the minor details.

6) Hire A Bookkeeping Firm: A freelance bookkeeper might not always have the time to get things done on the schedule you would like and as per the ATO deadlines. A bookkeeping firm like HS Bookkeeping Service however are going to have number of bookkeepers readily available to manage your requirements and respond to any queries that arise.

7) Flexibility: It’s better to hire a company that provides a flexible service which is customized for your particular requirements rather than off-shelf plans which don't often suit your purposes.

8) Ease of Contact: If you're a business owner who spends most of the working day doing your work then you'll definitely reap the benefits of having the ability to talk to or see your bookkeeper outside work hours.

9) Accounting Softwares: Bookkeeper should be able to understand the modern day business accounting software’s and not the old pen and paper type bookkeeping.

10) Personality: As a business owner, you should be able to communicate with your bookkeeper about any concerns you have, so it's essential that individual is friendly in their attitude and tone. There's no reason working with a bookkeeper with many years of experience if you're discouraged by their attitude.

Additionally you can judge a bookkeeper by the price they are charging, if you're quoted too low, then the bookkeeper does not value their services and you wouldn't want to do business with someone who isn't confident of themselves. If they have quoted you very high then you'll know that they're over charging you, any bookkeeper who is quoting you a reasonable and fair price will be honest, reliable and genuine.

Contact HS Bookkeeping Service today for any or all of your bookkeeping requirements on 1300 664 796 and get your bookkeeping done by the bookkeeping professionals.