The difference between Accounting and Bookkeeping
Date posted: Wednesday, February 18, 2015
We find that all businesses are the same: they want to get on with what they do best: serving their customers and making money. Managing their finances and doing tax is the last thing on their mind.
So while outsourcing these kinds of services is usually necessary, there’s often some confusion about what the business actually needs – Bookkeeping or Accounting? Neither? Both?
Bookkeeping is more about the day-to-day of a business’ financials, keeping records of transactions efficiently and consistently. In a lot of ways, good Bookkeeping prepares relevant documents for an Accountant, and for tax time. Their tasks can include:
- Recording financial transactions
- Posting debits and credits
- Managing accounting software and keeping it up to date
- Maintaining and balancing legers and historical accounts
- Completing payroll
- Sending out, paying and chasing up invoices
On the other hand, Accounting is a higher-level process that uses the compiled information to make financial models and look at the business with a wider, strategic perspective. Within Accounting itself there are additional specialisations but in broad terms Accounting includes:
- Preparing financial statements
- Analysing cost of operations
- Completing tax returns
- Working with the business to help them understand financial decisions
Often, a small to medium-sized business (SME) will actually need services from both professions – but you’d be surprised how few people can help. Bookkeepers, while important, only really do half the work you need done, while Accountants require your financials to be at least somewhat organised before they can get to work.
Luckily, our team at Pakenham Tax + Accounting can do both, all under the one roof. We’re experts at both the nitty gritty of Bookkeeping as well as all Accounting and Tax services you might need.
If you need help with managing your personal or business bookkeeping and accounting, don’t hesitate to get in touch.
Sign up with Pakenham Taxation + Accounting to receive tips on how to better manage your personal and business tax.
What’s the Fringe Benefits Tax (FBT) and How Does it Impact Me?
Date posted: Wednesday, February 19, 2014
As an employer, you are required to pay a tax on non-cash (or fringe) benefits provided to employees. These benefits include services and privileges allowed to employees as well as physical goods.
What is classified as a ‘fringe benefit’?
To put it simply, benefits provided to an employee because they are an employee are considered to be a ‘fringe benefit’. This includes giving employees:
- Company cars for personal use
- A cheap or discounted loan
- Private health insurance
- Entertainment in the form of meals or recreational activities
What is not classified as a ‘fringe benefit’?
Employers are not required to pay FBT on the following goods and services:
- Employee relocation expenses
- Superannuation
- Work related items such as protective clothing and tools
How does this impact me?
Whether you’re an employee or employer the Fringe Benefits Tax impacts you. While employers pay the FBT, fringe benefits must also be reported on an employee’s PAYG payment summary and tax return.
Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs within the Cardinia Shire.
Sign up with Pakenham Taxation + Accounting to receive tips on how to better manage your personal and business tax.
What Happens If My BAS Is Late?
Date posted: Wednesday, February 5, 2014
Now that you’ve read our handy table on this financial year’s BAS deadline dates, we bet you’re asking yourself ‘what happens if I don’t get my BAS in on time?’
To put it simply, if a business doesn’t lodge their BAS before the specified dates, the ATO may issue a failure to lodge penalty.
While your next question may be ‘how much are the penalties for getting your BAS in late?’, fines differ based on the size of the business, the length of delay in lodging and the lodgement history of the business.
If your business is unable to pay their tax instalment on time, they are still required to lodge an activity statement by the specified deadline. For companies in this position, a deferral of payment or payment arrangement is possible.
Still have questions? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses within the Cardinia Shire and outer south-east suburbs including Pakenham, Berwick, Cranbourne, Officer, Beaconsfield, Garfield, and Drouin.
