Entering customer opening balances and historical sales (MYOB)

As part of the initial setup of your company file, you need to enter customer opening balances & historical sales. This will enable you to enter customer payments against sales that were made prior to the time you began to use your MYOB software. The date you began using your software is known as the conversion date, & historical sales you made for which you are yet to receive payment are known as pre-conversion sales.

Note: For supplier opening balances and historical purchases the principles & process are the same. Historical sales and purchases will also not generate Baslink figures, so your BAS must be done manually for these periods.

Enter the opening balance of your Trade Debtors account 
This account represents the amount owed to you by your customers. To do this:

1. Go to the Setup menu & choose Balances then choose Account Opening Balances. The Account Opening Balances window is displayed
2. Locate the Trade Debtors account, then in the Opening Balance column enter the sum total of what your customers owe you as at the time you began to keep your records using MYOB software
3. Click OK.

Enter previous sales
Entering the sales you made prior to using your MYOB software which are still unpaid, in other words your pre-conversion sales, will allow you to record payments subsequently received against these sales. To do this:

1. Go to the Setup menu and choose Opening Balances then choose Customer Balances. The Customer Balances window is displayed
2. Click Add Sale. The Historical Sale window is displayed
3. Enter the details of the pre-conversion sale as per the following example
   
   
   
4. Click Record
5. Click OK to the alert regarding cash reporting
6. Repeat steps 2 - 5 for all your pre-conversion sales  Note: You need to enter historical sales for all customers that had pre-conversion sales which were still unpaid as at the time you began to use your MYOB software

When the total value of the pre-conversion sales you have entered equals the opening balance figure for the Trade Debtors account, the following message is displayed: Congratulations! Your total outstanding invoices equal the balance of your linked receivables account. You’re ready to use the Sales Command Centre.

Employees v Contractors - Common myths dispelled

1. Entitlements for contractors and employees are vastly different and therefore business taxpayers may have different obligations depending on how their workers are classified.
   
2. It is important that businesses classify their workers correctly or they risk incurring substantial penalties for not paying the appropriate entitlements to their workforce.
   
3. Common myths listed by the Tax Office include:
   
   • A worker having an Australian Business Number (ABN) must be a contractor;
   • Assuming common industry practice will apply to all workers in a taxpayers business;
   • Workers employed for the short term or to get extra work done during busy periods are contractors;
   • Businesses should only take on contractors to avoid paying superannuation guarantee contributions; and
   • Workers with specialist skills or qualifications should be engaged as contractors.
     
4. Further, if a worker wants to be considered a contractor and the business taxpayer feels obliged to take on the worker as a contractor, the business may still face penalties, interest and charges for not meeting their tax obligations.
   
5. Whether a worker is an employee or a contractor is not a matter of choice but depends on the working arrangement and specific terms and conditions under which the work is performed.
   
6. The Tax Office has also developed a decision tool that businesses can use to determine the correct classification of their workers.
   
7. For more information, click here.

The tax withheld calculator is now released

1. To assist employers in withholding the correct amount of tax for the 2012/13 financial year, the Tax Office has now released the 2012/13 tax withheld calculator (TWC).
   
2. To use the TWC, employers will require various employee details, including information provided on employee tax file number declaration, withholding declaration and Medicare levy variation declaration forms.
   
3. To use the TWC online, employers can choose from a number of calculators, including:
   
   • Individual non business calculator;
   • Labour hire calculator; and
   • Voluntary agreement calculator.
     
4. The associated Tax Office guide to the TWC and tax tables also clarifies how the TWC is used, including explanations on:
   
   • Payee details;
   • Medicare levy questions;
   • HELP or SFSS debts;
   • The display of results; and
   • What happens when there are 53 weekly pays or 27 fortnightly pays in a financial year.
     
5. The guide also provides information about the definition of Australian resident, the Commissioner’s instalment rate (CIR), gross earnings, what happens when a TFN is not provided and how the tax-free threshold and various tax offsets are claimed.
   
6. The TWC has been updated to reflect the ceasing of the temporary flood and cyclone reconstruction levy (flood levy) from July 1, 2012.
   
7. To access the TWC, click here.

Immediate deduction for environmental protection activities

1. Since July 1, 2001, tax legislation has enabled some types of capital expenditure to be immediately deductible against assessable income. Environmental Protection Activities (EPA) is one such type of expenditure.
   
2. EPA are activities undertaken to prevent, fight and remedy pollution and to treat, clean up, remove and store waste from a site where a taxpayer partakes in an income earning activity.
   
3. An income earning activity includes activities that are carried on, or proposed to be carried on, for the purpose of producing assessable income (other than a net capital gain), exploration or prospecting, and mine site rehabilitation.
   
4. An immediate deduction is also available for expenditure on EPA relating to a site where the pollution or waste was caused by another entity which leased the site from the taxpayer.
   
5. A deduction is not available for:
   
   • EPA bonds and security deposits;
   • Expenditure on acquiring land;
   • Expenditure on constructing or altering buildings, structures or structural improvements; and
   • Expenditure that forms part of the cost of a depreciating asset.
     
6. A recoupment of expenditure may be included in the taxpayers assessable income

Salary sacrifice arrangements for employees

1. Salary sacrificing is often referred to as salary packaging or total renumerating packaging. It is an agreement between an employer and an employee where an employee agrees to forgo future earnings in return for the employer providing them with benefits of a similar value.
   
2. There are no restrictions on the types of benefits that can be packaged, although arrangements generally include fringe benefits, exempt benefits and superannuation contributions.
   
3. Common fringe benefits include:
   
   • Cars;
   • Property, including shares, goods and real property; and
   • Expense payments such as home loan repayments, school fees and child care costs.
     
4. Exempt benefits include:
   
   • Protective clothing and tools of trade;
   • A portable electronic device;
   • Computer software; and
   • A briefcase.
     
5. Employers are exempt from paying fringe benefits tax (FBT) on exempt benefits, although various conditions must be met as outlined in the guide.
   
6. Salary sacrificed superannuation contributions are not fringe benefits but are considered employer contributions when paid into the employees’ complying superannuation fund.
   
7. Implications of entering into an effective arrangement include:
   
   • The employee paying less income tax on reduced wages;
   • The employer may be liable to pay FBT;
   • Salary sacrificed superannuation will be taxed in the superannuation fund at 15% or 30% depending on the level of income of the employee; and
   • The employer may need to report certain benefits on the employees’ group certificate.