|Budgets and Cashflows - explaining the difference
|Information supplied by Calxa
The difference between a budget and a cash flow forecast can sometimes be confusing in the beginning. They can seem to show similar information yet both are very different and have different uses. Both are essential for the accurate financial management of your organisation.
A budget details what you plan to do with your finances for the relevant period of time.
This is usually over 12 months, and focuses on profit. In addition:
A cash flow forecast details when the actual receipts and payments are likely to occur.
One point worth mentioning is not to assume that debtors will pay the following month. Often it may be later which is why it is important to know your Average Debtor Days which may show that payment occurs typically 64 days after sending out the invoice.
This also highlights the value of knowing some important Key Performance Indicators (KPIs) such as:
This information can be found on the Calxa website, click here
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Monday 20 May 2013
Posted by Angel Hayes at 04:32
Superannuation Guarantee Rate
There has been a lot of advertising on television of the increase in the Superannuation Guarantee Rate increasing from 9% to 12%. This has led to much confusion for employees; from the 1st July 2013 the rate is increasing to 9.25%. It is not until the 2019/20 financial year the rate becomes 12%.
To what amounts is the 9.25% applied to?
9% applies to all pay physically paid before 30th June 2013.
9.25% applies to all pays physically paid after 30th June.
The new 9.25% rate is applied to salary (OTE) amounts paid after 30th June 2013, irrespective of when those amounts accrued.
Employers have an obligation under the Superannuation Guarantee (Administration) Act 1992 to pay the superannuation guarantee charge (SGC). The SGC is calculated as 9 %( to 30June 2013) or 9.25% (from 1 July 2013) of the total salary & wages (OTE) paid by the employer to the employee.
Ordinary Times Earnings (OTE) is earnings in respect of ordinary hours of work.
IMPORTANT: Check your payroll programs and make sure they are changed to include the increase of superannuation guarantee (9.25%) before any payments are made in July. This might put extra pressure to finalise the year’s wages and close off/rollover the software earlier than you normally do. Start reviewing your systems now. Check you have all the correct details for your employees such as; address, DOB, FBT information, RESC information.
Impact on June & July 2013 Payroll
1. Consider paying the super before 30 June to get the tax deduction.
2. Check whether salary packages need to be re-engineered
3. In order to get a tax deduction for the 30 June 2013 year the business must have PAID the superannuation out of their bank account into the superfund or at least the clearing house.
4. Check salary packages. Many employees are engaged on a salary package with a total amount which includes the SGC.
5. Review your employment agreements, industrial agreements, minimum wages and awards for direction whether the super increase can be adjusted within the current package or must be added to the package.
6. Start reviewing your End of Year payroll adjustments NOW, talk to us and we will help you through the process.