Brendan Lucas

A Next Dimension Accounting survey of Australian businesses and not for profit organisations has confirmed trends towards a major shift in the local employment market.

The survey looked at Australian businesses representing a range of industries and sectors, including private companies and NFP organisations. The majority of respondents were employing entities.

Survey findings are reflective of the wider Australian business environment and highlight issues with understaffing, hiring plans, recruitment problems and projected pay increases.

Understaffing and jobs vacant

Half of the respondents to the Next Dimension survey indicated their business was currently understaffed and a further 20 per cent were unsure regarding staffing levels.

Understaffing is currently a key issue for Australian companies and NFPs, with persistently high Covid case numbers pushing absenteeism to levels that disrupt supply chains and essential services. The survey reflects Australian Bureau of Statistics (ABS) data that shows job vacancies climbed again to 480,000 in May 2022 – more than double the number of vacancies in February 2020, according to the Australian Bureau of Statistics. The spread of the vacancies is also noticeable, with a quarter of businesses reporting having at least one vacancy in May 2022 – more than double the pre-pandemic level (ABS).

Hiring intentions

Most respondents of the Next Dimension survey (60 per cent) indicated they are in the process of hiring more staff, confirming this encouraging trend.  

In a broader sense, in July 2022 labour market insights from the National Skills Commission revealed that “25% of employers expected to increase staffing levels over the next three months.” A report on the recruitment intentions of business leaders from talent solutions provider Robert Half indicates that “More than four in five businesses (82%) are planning to hire permanent employees in 2022, with 44% of Australian employers planning to maintain headcounts and 38% of business leaders planning to expand their workforces by actively adding new positions.” (January 2022)

Hiring difficulties

An overwhelming majority of the Next Dimension survey respondents (80 per cent) agreed that they are currently finding it difficult to recruit more staff. Hiring difficulties that are widely acknowledged in the business and NFP community are also relevant to the surveyed group of employers. With more Australians now in employment and the national unemployment rate dropping to 3.5% (ABS, June 2022 period) the pool of available local workers has shrunk. It has been reduced by shortages of skilled workers from overseas due to border closures during the global pandemic. Australia’s National Skills Commission found that in July 2022, “the recruitment difficulty rate increased by 8 percentage points to reach a record high of 75% of recruiting employers”. 

Imminent pay rises

Survey respondents were asked to look at the next three months and the results were striking. Within 3 months, most of the businesses surveyed (70 per cent) plan to give their staff pay rises.

Real wage increases across different industries have followed the national minimum wage increasing by $40 per week, set by the Fair Work Commission [in effect from 1 July 2022; or from 1 October 2022 for workers in aviation, tourism and hospitality]. Pay rises for workers above the minimum wage are also happening now and the RBA is forecasting “a lift in wages growth from the low rates of recent years as firms compete for staff in the tight labour market.” (RBA Media Release August 2022)

How outsourced accounting services can solve the problem

As a team of experienced outsourced accountants, understanding these pressures and actively shaping our services to address client challenges is a key focus.

The benefits of engaging the Next Dimension team include:

• Rather than relying on one person our clients are supported by a team of professionals
• We implement technology so that businesses and NFPs can make decisions by accessing and monitoring their financial position in real time
• Our costs are fixed for the term of our client’s contract

Get in touch with us to find out more.

There are several changes related to superannuation that apply from 1 July 2022.

One change relates to the super guarantee (SG) rate, which will increase from 10% of an employee’s ordinary time earnings to 10.5% on 1 July 2022.

The ATO advises that the new rate of 10.5% must be used to calculate employee super on or after 1 July, even if some of the work was undertaken before that date.

The removal of the threshold for paying the SG can also impact payroll and accounting systems, as more employees may become eligible for superannuation. From 1 July employees can be eligible for super regardless of how much they earn. The former $450 per month eligibility threshold no longer applies. However, workers under 18 only need to be paid super if they work more than 30 hours in a week.

More detail about changes to superannuation for employees is available from the ATO website. Further changes will be introduced by 2025, when the SG rate is legislated to increase to 12%.

If you have any questions, please get in touch.

Next Dimension Accounting is client and technology focused. We work hand in hand with many charities and not for profit organisations and we are always on the lookout for new methods and tools that support their growth and success.

Online giving has become an entrenched part of donating and NFPs using digital donation tools have seen substantial gains. These are some of the current benefits, trends and implications of digital fundraising options.

The charity sector embraces many forms of giving, from gold coins dropped in a bucket to sophisticated crowdfunding campaigns that raise thousands in minutes.

It is worth exploring the newer electronic forms of donation. Digital donations can reduce your organisation’s admin, plus streamline payments, accounting and tax processes for the donor too. They may also connect your cause with new realms of potential donors. However, also consider the implications for your organisation when you use digital donation tools.

Benefits

Digital donation tools offer a range of benefits, especially to charities operating on a shoestring.

Digital tools automate the donation process. Donors enters their details and the digital tool processes payments and then issues receipts and thank-you letters. This method increases the accuracy of donor information and expedites their receipts efficiently – which is a key concern for many donors. Your office also wins, with less paperwork and the funds transferred and received efficiently. Because automation makes donating easier, it encourages giving on an ongoing, regular basis.

Digital tools accomplish donation admin tasks in a timely way. Because processes are automated you don’t need to wait for someone to be in the office to take phone calls, open the post, or issue and then mail receipts. This is a big advantage towards the end of the financial year when donors want quick receipting for tax purposes.

Digital tools utilise common devices, such as mobile phones, that donors prefer to use for their daily transactions like shopping and paying bills. This makes it simpler for the public donor to act on an impulse to give.

For your accounting purposes, reporting is easier and quicker as the digital tools work from accurate data supplied by the donor and can generate informative reports automatically in your required format. Presenting information to the board becomes easier with the reports that are generated.

The integrations that come with fundraising tools are also worth reviewing. Useful integrations such as PayPal, Facebook or Mailchimp can help with admin and marketing. Integrations like Google Analytics, for example, can make it easier for you to analyse data and interpret giving patterns.

Once your organisation is active online – through tools or third-party platforms – you extend your NFP’s potential reach to the global online audience and can communicate your cause far more widely.

Remember though to consider the financial costs in terms of fees and pricing.

Digital tools and third-party platforms now trending

While many digital tools and third-party platforms are available, we have briefly examined a few that are popular with NFPs:

Shout

• Australian owned	•  QR codes
•  Plugin website integration	•  Online auction capabilities

Shout is an Australian business that offers: tools to fundraise for the web or app; hand-held terminals to accept cards and payments; easy plug-ins for website integration; SMS keyword options for donors, which are useful for large events; QR codes directing donors to your fundraising page with a scan from their mobile phone; and an online auction platform for charities to host silent or open auctions.

Donorbox

•  Overseas platform	•  Code for website embeds
•  Website pop-ups	•  Multiple currencies and languages

Donorbox is a platform that provides a smart donation form for NFPs that embeds directly into your website or as a pop-up. The fast checkout process makes online payments smooth and stress free. The platform offers great functionality with only 1 click to set up a recurring donation. By supporting more than 20 popular currencies  and 11 different languages this platform helps your NFP acquire a global reach. Marketing your campaign is also easier with pop-up donation forms, a donor wall and a goal meter to register fundraising progress – the meter can be within your form design or embedded separately. Crowdfunding campaign pages are also quick to set up and easy to personalise to encourage donors.

My Cause

•  Australian platform	•  No platform fee on donation forms, fundraising and campaigns
•  Provides fundraising tools, including event websites	•  Peer-to-peer fundraising options

My Cause is an Australian business that operates an online crowdfunding and fundraising platform. For Australian charities it provides free fundraising. Donation forms can be tailor-made with your organisation’s branding and colours. Options include SMS giving. Donor contributions are all receipted and the funds are sent directly to the charity. The campaign reach can be extended to family and friends. Event websites offer integrations with registrations, fundraising and merchandise, as well as phone, email and ticketing support to fundraisers and donors.

GoFundMe

•  Overseas platform	•  Expert advice
•  Mobile app to improve donor and organiser experience	•  Fraud protection with donor protection guarantee

GoFundMe is a well-known overseas based business, enabling millions of users to choose a charity and launch a fundraiser for them. It has provided fast and safe fundraising options for eight years. As an experienced market leader in the fundraising space, GoFundMe is able to offer expert customer service and advice around the clock. Its services are trusted by institutions around the world and backed by a donor protection guarantee. Its tools enable funds to be raised quickly, which allows communities to be supported as soon as possible when disasters strike.

RallyUp

•  Overseas platform	•  Caters for all-virtual event or ‘hybrid’ event – virtual and in-person attendance
•  Flexible tools for virtual fundraising events	•  Fundraising activities include silent auctions, raffles and trivia contests

RallyUp is an overseas business embracing new technology to provide interactive online fundraisers. It provides a platform for fundraising activities such as silent auctions, raffles, trivia contests and paddle raises. The tools enable you to manage the whole process of virtual fundraising, including the key event and donor contributions, as well as recurring giving.

Incorporating digital donations in your processes

To incorporate digital fundraising tools in your accounts procedures, keep up to date with advice from the Australian Charities and Not-for-profits Commission (ACNC), such as their crowdfunding guide, and act on these tips:

• Calculate the real costs, such as platform fees or percentage-based plans before you sign up
• If you are a deductible gift recipient (DGR), meet your ATO requirements, for example with the issuing of receipts
• Ensure your collection, storage and use of donor data complies with relevant privacy laws.
• Ensure your Australian charity complies with the different state and territory fundraising legislation.
• Feature your online fundraising facility prominently on the homepage of your website.
• Remember that donations are voluntary and however high-tech your tools are, you still need to communicate your story and explain the worth of your cause.

Recent changes to Australian charity and NFP remuneration reporting requirements will apply to the 2022 Annual Information Statement reporting period.

ACNC Commissioner Dr Gary Johns highlighted the new disclosure rules regarding the remuneration of ‘key management personnel’ in a recent column.

These rules apply to medium and large registered charities and NFPs in Australia that submit a General Purpose Financial Statement. More details of the key management personnel remuneration parameters are here, along with useful case studies.

From 1 July 2023 the ‘related party transactions’ of charities will be more prominently disclosed in the Annual Information Statement itself. 

Which staff does it apply to?

The remuneration disclosure will apply to the NFP’s key management personnel, such as senior staff, management and other responsible people like board members, trustees or committee members, where applicable.

If the NFP engages key management personnel from a separate management entity, such as an accounting service provider, they would report the cost of that key management personnel – calculated by the hour or as a percentage of the single fee, as relevant.

An NFP’s ‘related party’ may include a board member, or a close member of a board member’s family. According to Treasury “The ACNC will provide guidance to assist charities in identifying related parties.”

Why is there a need to disclose remuneration of key management personnel?

Dr Johns points out that although it is right for a charity to pay personnel such as senior staff, and NFP staff members can be highly skilled, experienced and bear responsibility for complex operations, their renumeration should be transparent. “Being transparent about this is crucial in reassuring donors, supporters and the public that a charity is well run and uses its funds responsibly,” says Dr Johns.

Dr Johns adds that improved accountability can actually benefit the NFPs, as it “helps uphold public trust and confidence in the sector and its people”.

What does ‘remuneration’ cover?

The remuneration disclosure will encompass the wages, salaries, annual leave and bonuses of an NFP’s senior staff. It would include their paid long-service leave or a post-employment pension or termination payment.

It also encompasses non-financial items, such as:

• Free or subsidised goods
• Free or subsidised services
• Packaged fringe benefits such as the use of a car
• Medical care fringe benefit
• Housing fringe benefit.

Planning for the new rules

For more background on the issue, the ACNC provides targeted information on its website, such as guides to the renumeration of charity board members. According to the ACNC guides, “Charities should have a clear policy that outlines the manner in which remuneration is determined and the process for its approval.”

If the renumeration issue has raised some questions about your NFP organisation’s financial arrangements for paying responsible persons, discuss them with the Next Dimension team.

There are several things that set accountants apart. While their experience, communication skills, areas of expertise and focus play a role, professional qualifications and ongoing professional development are also key.

Several of our team members are Chartered Accountants. But what does that mean?

Encouraged by a new advertising campaign by Chartered Accountants Australia & New Zealand (CA ANZ) this article focuses on the value of working with a chartered accountant.

What is a CA?

A Chartered Accountant or CA is a recognised accounts professional who has completed a university degree plus the CA program of training and mentoring in chartered accounting.

In Australia CAs must produce references to be eligible for full membership of the professional institute, Chartered Accountants Australia and New Zealand (CA ANZ).

As well as being armed with all the skills of professional accountants, CAs have additional training in auditing and taxation skills.

CA credentials have long been recognised internationally. The professional accounting body dates back to 1854 with the establishment of the Institute of Chartered Accountants of Scotland. Australia’s Institute of Chartered Accountants (ICAAA) was formed in 1928 by Royal Charter and later amalgamated with the institute of New Zealand (NZICA) to become CA ANZ.

In Australia, members comply with the rigorous code of conduct for professional accountants set out by CA ANZ.

Ongoing education

CA ANZ runs the Chartered Accounting Program in Australia and is the only professional accounting body in Australia registered as a higher education provider. CA ANZ is a member of the Global Accounting Alliance (GAA).

Successful completion leads to a Graduate Diploma of Chartered Accounting (GradDipCA): an AQF accredited postgraduate qualification that is internationally recognised.

A practising CA must maintain his or her qualifications by completing 120 hours of Continuing Professional Development (CPD) every three years.

Choose a CA for surety and ease

The benefits of the choosing a CA are no secret to Australian businesses and NFPs. By engaging a Chartered Accountant you can place your organisation in good hands.  

In the search phase of finding either an employee or contractor, choosing a Chartered Accountant has distinct advantages. A simple search of the CA ANZA database can confirm if the candidate is a registered Chartered Accountant. Only Chartered Accountants holding a Certificate of Public Practice and/or who are an approved CA Specialist are on the database. 

With the valued ‘CA’ credential, the minimum standard of a candidate is readily apparent. They will have a recognised accounting or finance degree, CA training and knowledge that is internationally recognised, plus participate in ongoing professional development.

Organisations without the capacity to employ a CA can find a neat solution by engaging outsourced accounting services. Look for an accounting services company that has CAs on staff. The CA can act in different capacities, as a virtual CFO for instance, or providing advice on audit and taxation matters.

Work with a CA to transform your organisation

A CA will bring a big picture approach to solving business issues, based on their education in many aspects of accounting.

It’s one of the reasons the Next Dimension team fields four CAs, in addition to our Founder and Director who is also a CA. Our CA ‘heavyweight line-up’ means that we can provide clients with the full complement of advice and that our clients’ organisations benefit from the depth and range of a CA’s knowledge.

To find out more, get in touch today.

The Australian Government’s Budget 2022–2023 was handed down on 29 March 2022. Following two years of the pandemic, the budget is planning towards a stronger future for Australia.

In the budget the Government highlights that it will deliver its plan for a stronger future through: “Supporting small businesses to adopt digital technology and train and upskill employees with new tax incentives.”

As well as impacting small to medium businesses, parts of the budget address general cost of living pressures and taxpayer obligations. Some measures will assist the charity and NFP sector and rebuilding communities.

Next Dimension will be working with clients on the detail of changes as more information becomes available. Following are some of the key features of the budget for SMEs and NFPs.

Small Business

Government procurement to facilitate SME contractor opportunities

Proposed changes would require Government departments to split up major projects so that smaller contractors have a better chance at competing for contracts. In addition, the Department of Defence will be undertaking limited tenders with SMEs for procurements up to $500,000 from 1 July 2022

Tax breaks for small businesses that train their staff

Those SMEs with an aggregated annual turnover of less than $50 million that continue to train their workers in new skills will get a break. They will be able to deduct an extra 20 per cent of expenditure on external training courses. The effect will be a $120 tax break for every $100 spent on training. Conditions include that the training must be delivered by training entities registered in Australia.

Technology boost for small business investing in digital tools

The SMEs with an aggregated annual turnover of less than $50 million can get a 20 per cent additional tax deduction on business expenses and depreciating assets that support their adoption of digital workplace items such as portable payment devices, cyber security systems, or cloud subscriptions. The deductions will be capped at $100,000 of expenditure per year.

GDP uplift rate set at two per cent

The GDP uplift factor for PAYG and GST instalments will be set at two per cent for the 2022–23 tax year, subject to the legislation passing. This will result in lower instalments for 2.3 million small to medium businesses and sole traders. It compares favourably to the 10 per cent that would have applied under statutory formula.

Support for wellbeing of small business owners

The Beyond Blue program to provide free, accessible and tailored mental health support to small business owners will continue, with funding for the New Access for Small Business Owners of $4.6 million over two years. The Financial Counselling Australia program to provide financial counselling to small businesses facing financial issues will also continue with funding for  the Small Business Debt Helpline funded by $2.1 million over two years.

Fair Work funding

There will be funding of $5.6 million over four years for the Fair Work Commission to establish a dedicated unit to support small businesses, including unfair dismissals and general protections disputes.

Small business financial capability

There will be funding of $8.0 million for the Australian Small Business and Family Enterprise Ombudsman to work with service providers to enhance small business financial capability.

Other measures impacting taxpayers

Taxpayer compliance streamlined with automated reporting

The Government will leverage new technology and update systems to automate tax reporting requirements. This will allow companies to calculate their Pay-As-You-Go (PAYG) instalments based on current financial performance, extracted from business accounting software, with some tax adjustments. This means companies may be able to receive an automatic refund of PAYG instalments where financial performance declines.

There is also a proposal for:  

• Single Touch Payroll (STP) data to be shared with State and Territory Governments on an ongoing basis to enable the pre-filling of payroll tax returns.
• Businesses required to lodge with the Australian Taxation Office (ATO) a taxable payments annual report (TPAR) to be able to opt into automatic reporting supported by new software.

NFPs

The government announced a $2.1 billion Budget package of targeted measures “to further support Australian women and girls as part of our plan for a stronger future”. $1.3 billion is allocated to improve outcomes for women’s safety which includes  investing in community-led prevention programs.

The government also announced $26.9 million investment into allergy prevention and management, which will lead to the creation of two organisations, the National Allergy Council and National Allergy Centre of Excellence (NACE). These organisations will work together to deliver world-leading initiatives and research to improve consumer safety and prevent anaphylaxis deaths.

Flood-affected NFPs, along with primary producers, small businesses and councils, will be covered in an estimated $2.0 billion in support measures for the February/March 2022 floods in New South Wales and Queensland.

With the substantial additional investment provided in last year’s Budget to meet the increasing costs of the National Disability Insurance Scheme (NDIS), there are limited measures within this Budget specific to Australians with a disability. Additional funding is likely to follow completion of the Disability Royal Commission in 2023.

Integration across the aged, disability and veterans’ care sectors

There is a strong focus on integrating the aged care, disability and veterans’ care sectors, with a total of $17.7 million allocated to streamline workforce regulation and promote efficiencies across the three sectors, including:

• $10.8 million to develop a Cross-Agency Taskforce on Regulatory Alignment to implement the next stage of regulatory reforms across the aged, disability and veterans’ care sectors.
• $6.9 million to support the development of co-operatives and other collaborative business models across the aged, disability and veterans’ care sectors.

Conclusion

The Government describes the budget as a plan that “Delivers more jobs as we push the unemployment rate below 4 per cent, supports small business, expands and modernises Australia’s sovereign manufacturing capability, secures our supply chains and invests more in infrastructure, skills and the digital economy.”

Cybercrime is a real threat to Australian organisations.

Founded in 2015, Eftsure is an app that is designed to help companies and NFPs avoid payment error, fraud, cybercrime and financial loss.

Banks don’t match payee names to account numbers, and this can lead to errors, fraud or payments going to the incorrect accounts.

Eftsure takes away risk by allowing suppliers to:

• Log on to a secure portal to input their details
• Eftsure will then verify all required supplier details by matching the payee names to account numbers
• Each time a vendor submits or re-submits their bank details Eftsure automatically verifies that information against its network of suppliers to detect fraud.

Here is what the Eftsure dashboard looks like:

Our favourite thing about Eftsure

Eftsure reduces risks with new suppliers and enables organisations to monitor the supplier’s compliance in real time.

To find out how Next Dimension Accounting can assist your business with any accounting needs, contact us today.

The global pandemic has magnified weaknesses in the accounts function of many businesses.

For example, widespread staff shortages triggered by the pandemic have become a significant issue globally. Microsoft has estimated that more than 40 per cent of the global workforce are considering leaving their employer this year.

A range of problems affecting accounting personnel could have significant ripple effects if left unaddressed. The following are pandemic-related issues that have an impact on staffing:

• The permanent loss of staff members due to long-term illness, care responsibilities, and in some cases, death has been a shocking consequence of the pandemic in many countries.
• Sudden spates of non-negotiable sick days as employees recover from Covid-19, or must isolate due to close contacts, have taken their toll, even where vaccinations and tests reduce the worst outcomes.
• An ongoing shortage of accounts professionals due to ‘the great resignation’ effect of the pandemic has created staff shortfalls and instability.

Whether permanent or temporary, such issues could result in critical service disruptions if accounts personnel aren’t on the ground to collect money, pay regular bills or ensure contract deadlines are met. However, a way to address the potential service gap is to engage outsourced accountants.

Read more in our white paper Onshore and outsourced Key trends for 2022.

Dext is a platform that extracts written information from receipts, invoices and other financial documents to present visible data in an electronic and easy-to-manage format.

You can capture and upload bills and receipts using:

• A mobile phone camera
• Email
• Documents on a computer
• Automatically source from online platforms

Dext is also published to Xero, transforming Accounts Payable to a 100% electronic environment.

How it works

Dext uses OCR (optical character recognition) and templating technology to extract written information from financial documents.

The platform accepts receipts, bills, invoices and other documents in many file formats including JPG, PNG, GIF, PDF, DOC, and HTML.

Dext Prepare extracts the:

• Original document image
• Type of document; whether it’s a receipt, sales invoice, credit note, etc.
• Document Date
• Supplier
• Currency
• Total
• Tax Amount
• Invoice Number
• Payment Method (for Business Plus and Business Premium plans)

Our favourite thing about Dext

Dext offers seamless integration with Xero. It empowers our team to publish any financial documents to Xero efficiently with minimal if any manual intervention.

To find out how Next Dimension Accounting can assist your business with any accounting needs, contact us today.

A key trend in Australian accounting services during 2022 is for clients to outsource but keep it onshore.
 
Our new white paper, Onshore and Outsourced – Key Trends for 2022, explores the latest developments in outsourcing to Australian accounting companies. The findings are especially relevant in the new business environment where staff shortages and key person dependency risks pose a significant threat to businesses and not for profits.
 
After decades in the accounting sector, Next Dimension’s Founder and Director Brendan Lucas says, “While the impacts of the pandemic continue, Australian outsourced accounting services are well placed to operate effectively. Outsourcing your accounts department can provide the combination of external help and local knowledge that Australia’s businesses and NFPs need.”

Read the full article here:

ApprovalMax is an app that extends online accounting platforms like Xero with approval-driven financial controls for accounts payable and accounts receivable.

How it works

ApprovalMax integrates seamlessly with Xero to control workflow functions.

Through ApprovalMax users can:

• Raise purchase orders and create bills via the web interface or on the go using the mobile or web app.
• Remotely review and authorise purchase orders or bills.
• Automate reports to satisfy compliance requirements.

Favourite thing about ApprovalMax

ApprovalMax is one of the essential tools required to create a clutter-free paperless end-to-end process. We have assisted many clients in replacing their “approved stamp” with a multi-tiered approval workflow that has empowered their managers to own their expenditure decisions while tracking their budget in real-time.

ApprovalMax and Next Dimension

ApprovalMax is part of the solution we recommend to any new client who comes on board for the full accounting service. It enables us to do our job properly and reduces the time client teams spend when approving bills for payment. It also improves transparency and provides a full audit trail attached to every bill in Xero,

To find out how Next Dimension Accounting can use expertise and technology to help with the efficiency of your accounts, contact us today.

Technology is revolutionising the accounting industry and that means good things for clients who engage innovative businesses. At Next Dimension Accounting, technological solutions empower us to streamline outcomes and processes for our clients.

These key developments in accounting technology were highlighted in a recent article:

Meetings, screen sharing and dashboards

The COVID-19 pandemic has increased the adoption of video conferencing for both one-to-one and group meetings. Video conferencing coupled with screen sharing capabilities and cloud accounting software with smart dashboards provides high level insights that allow for greater analysis and planning.

Cloud-based accounting software and apps

New and exciting software solutions are being launched each day. The power of apps that link in with cloud-based applications like Xero allows for integrations that empower smart work solutions. Our team stays on top of the latest apps and we regularly brainstorm ways to use those apps to support our clients, expand their knowledge and success.

Automation and AI

One of the main benefits of technological solutions is the efficiencies achieved through automating processes. We are just scratching the surface when it comes to AI and machine learning and its ability to assist with predictive analytics and forecasting.

Data Security

Data Security will continue to be increasingly important to our company and our clients. Having the right user permissions, approvals processes, validation rules and security settings is key to ensuring that the risk of business disruption is minimised and that staff are aware of priorities and protocols. The Next Dimension team takes data security seriously and we take all active steps to ensure that client data is secure.

There are cost and efficiency rewards in store for businesses that keep up with the technology revolution. Clients of Next Dimension can be assured that our team has done the work for you assessing what is on the market, trying out new products and testing programs and apps. If you would like to chat with us about the best technology for your business or NFP get in touch today.

Considering the ongoing impact of the COVID-19 pandemic, the NSW Government has announced several new measures that are designed to support business and not-for-profit organisations, they include:

Financial support

Support for eligible businesses that:

Had an aggregated annual turnover of between $75,000 and $50 million (inclusive) for the year ended 30 June 2021; and experienced a decline in turnover of 40 per cent or more due to Public Health Orders or the impacts of the Omicron COVID-19 strain during the month of January 2022, compared to January 2021 or January 2020; and experienced a decline in turnover of 40 per cent or more due to the impacts of the Omicron COVID-19 strain from 1-14 February 2022, compared to the same fortnight in February in the comparison year used for the above criterion; and maintained their employee headcount from the date of the announcement of the scheme.

Eligible businesses will receive 20 per cent of weekly payroll as a lump sum for the month of February, with a minimum payment of $750 per week and a maximum payment of $5,000 per week. Non-employing businesses will receive $500 per week (paid as a lump sum of $2,000).

Support will be available from mid-February.

Small Business Fees, Charges and RAT Rebate

The rebate has been increased from $2,000 to $3,000. In addition, eligible employing small businesses will be able to use the rebate to cover half the cost of Rapid Antigen Tests (RATs).

The funds can be used not only to offset the cost of RATs, but also other Government fees and charges such as food authority licences, liquor licences, tradesperson licences, event fees, outdoor seating fees, council rates and road user tolls for business use.

Already registered businesses will receive an automatic top-up of $1,000 and newly registering businesses will receive a rebate of $3,000.

Commercial Landlord Hardship Grant

The protections under the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (the Regulation) for small retail and commercial tenants will be extended for an additional two months, until 13 March 2022.

Grants of up to $3,000 per month (GST inclusive), per property, are available for eligible landlords who have provided rental relief waivers to affected tenants. Rent relief waived must comprise at least half of any rental reduction provided.

The program is expanded in 2022 to landlords who claimed the 2021 land tax relief.

The Regulation prohibits certain actions by landlords (such as lock-out or eviction) unless they have first renegotiated rent with eligible tenants and attempted mediation.

If you need guidance or require support analysing whether you qualify for the new support measures please get in touch.

In 2022, the new challenge for Australian businesses and NFPs as they battle Covid-19 repercussions and try to rebuild is simply having sufficient personnel to function well.

There are many benefits of outsourced accounting in ordinary times, where an organisation hires a qualified external accounts team to carry out tasks and manage the accounts and finance functions. With the current staff shortages across Australia, there are even more advantages to having an outsourced accounts team on board.

Key impacts being felt across Australia and how an outsourced accounts team can help

Staff shortages

Since the easing of restrictions that resulted in escalating Covid-19 case numbers across most of Australia, staff shortages have been exceptionally high. Small to medium businesses and NFPs have struggled to operate normally due to absent staff who are either ailing or close contacts of Covid-19 cases. Organisations that could typically draw on a pool of casual workers are confronting the same underlying issue – there are fewer people across the board who are available for work.

Outsourced accounts teams are designed to maximise the potential of NFPs and businesses regardless of internal pressures. Having a reliable, remote team of professionals ready to support critical areas of businesses operation makes sense in an unstable and fast-changing environment. Taking the pressure off other areas of the business also empowers employees to focus on key operational roles.

Broken links in supply chains

A widespread problem connected to staff shortages is that many supply chains are starting to break. Unavoidably absent staff contribute to businesses of all kinds losing the capacity to function normally. In accounts, the broken link might be a few staff members who aren’t there to update the books in time – or just one key person who isn’t there to authorise payments.

Outsourced accounts teams utilise technology that will keep businesses running smoothly. Cloud accounting allows approved personnel 24-hour remote access to relevant data and figures. The ability to track cashflow is particularly relevant in times of uncertainty.

The great resignation

Hopefully, Australia will avoid the experience of countries hard-hit by Covid-19 fatalities during the pre-vaccination period, having to react to a shocking loss of personnel. However, the phenomenon dubbed ‘the great resignation’ where workers leave jobs at historic rates seems to have been experienced here. The number of workers leaving the workforce permanently or temporarily or ‘job hopping’ has increased, and this change has signalled a new vulnerability for the Australian economy. 

Outsourcing is the solution to staff departures. For example, the outsourced accounts team is a collective rather than one person doing bookkeeping/accounting, so you can avoid key person dependency. The outsourced team members use current technology and have prepared the processes and training to ensure that someone who knows the ropes steps in where required. The team solution provides multiple touchpoints that provide surety.

Futureproofing becomes even harder

Ongoing skilled labour shortages are likely to continue. External fixes for the situation may not appear soon, as there are still barriers to skilled workers arriving from overseas.

It will also take time and resources to train up the younger generation of Australian workers.

Outsourced accounting teams help organisations sidestep the ongoing skilled labour shortages. They make the most of automated tasks, reducing account-keeping labour and costs.

Next Dimension’s outsourced accounts team is also on top of training. The team members are up to date with current software and financial/accounting regulations. They are equipped with prepared training modules and the skills to train your team members with the software and processes they need to know.

In addition, your outsourced accounts team also has the capacity to make the contribution of a CFO with knowledge of the regulatory environment. For example, the team can advise on the latest government funding for businesses hit by the pandemic and help with the paperwork. We can explore the best ways to use increased government funding to make your business or NFP stronger in the future.

The hope is for the Covid-19 understaffing crisis to flatten soon. In the meantime, a strong and agile outsourced accounts team will put you in a better position to cope with the slings, arrows and changing conditions of the future.

Next Dimension Accounting provides outsourced accounting services to make businesses and not-for-profits more resilient. Contact us to learn how our team can help.

The recently released directors’ report, the Not-for-Profit Governance and Performance Study (November 2021), bears positive signs for Australia’s NFP sector and the quality of governance. However, respondents also highlighted budget, cash reserve and risk assessment issues.

The Australian Institute of Company Directors (AICD) reported a high level of engagement for this 12^th edition of their regular member survey, with 1,978 responses. Focus groups of NFP non-executive directors across Australia also explored issues related to the survey. The report revealed several findings:

Directors relations with management and staff

On the positive side for NFP managers, 93 percent of Board Directors surveyed agreed that they were “confident their executive leadership is making good decisions”.

This was despite the strains that the pandemic had placed on connections between board and staff. A respondent from one organisation commented, “Board members haven’t been able to visit our on-the-ground staff at our sites for 12 months. It’s made a disconnect between the board and the operational part of the organisation. Nothing replaces going to the site and having a cup of tea with one of the staff members.”

Managing budgets in a crisis – cash reserves

Directors also dealt with budget issues arising from the pandemic impacts on fundraising or operations and diminished revenue streams in FY21. “Almost three-quarters (74%) of the organisations were above or close to budget.”

One respondent commented “Post-COVID-19, budgets have blown out.”

Many organisations responded to the crisis by accessing their cash reserves. A key finding of the report was that 35 per cent of responding NFP organisations “used their financial reserves to fund operations during the last financial year”.

One of the questions for directors was “Does our reserves policy need to be re-visited?

A respondent commented, “You’ve probably discovered parts of your balance sheet you’ve never looked at more closely than ever before. You get very focused on it. All of my organisations have revisited and redone our cash reserve policies, because of this focus now on recognising and being much clearer on how much reserve we need to carry.”

Risk planning

With many NFPs confronting stark realities, the appropriateness of past risk planning and its fitness for the next crisis is a key focus, with one respondent reporting  “Risk has become more prominent in our board meetings than any other issue in the last few years.”

Responses were mixed, as 34% regarded their organisation’s risk frameworks as working only moderately well, and 18% slightly well. Moreover, 7% responded that it did not work well at all. 

Another respondent commented, “Nobody on the board put ‘pandemic’ on our risk register. That one hit us – blindsided. Nobody thought we’d have a pandemic and have to shut everything down. It’s opened our eyes to the possibilities and how creative we have to be in risk planning.”

In terms of being more strategic about risk, one respondent commented “For our board, the most important issue we’re dealing with strategically is diversification of our funding.”

Responses and actions

The AICD report confirmed that responding to the new environment and realigning the organisation will be priorities for directors.

“Responding to changes in the operating environment”, “protecting lives and wellbeing of clients”, and “diversifying income sources” were the top three priorities for directors in the next 12 months.

The top five actions responding directors intend to take were:

• regular review to track progress against goals or targets of the organisation
• improve board composition
• develop a new strategic plan
• improve the use of digital technology, and
• review and update risk management plan.

Other actions included “closer monitoring of financial reporting” and “improve emergency/crisis response plans”.  

Future outlook

The AICD report notes that, “Many directors will be focused on their organisation’s strategy over the coming months.”

Encouragingly, the report found that almost half (49%) of the respondents believe the post-COVID-19 environment will increase opportunities available to their organisation. The second-largest response (32%) is that little or no impact is expected to organisations post-COVID-19.

Support for NFPs

The 2021 report is available from the website of the Australian Institute of Company Directors.

If your NFP is dealing with some of the issues raised, such as budget blow-outs, cash-reserve management and risk assessment planning, Next Dimension can help.

We have the experience and insight required to support NFPs as we transition out of pandemic conditions.

Get in touch today.

The ACNC’s charity register experienced a surge in numbers of people accessing it this year, and more accessible search features for public users have just been added.

Commissioner Dr Gary Johns, the head of the Australian Charities and Not-for-profits Commission (ACNC), reported that the new search features improving the Charity Register have just gone live.

The new features offer the following benefits:

• People can now search for charities that offer various kinds of programs, for example, housing services, animal rescue, disability support and more.
• People can also seek out charities and NPFs that operate in a particular suburb, town or region.

Dr Johns highlighted that the register is designed to allow donors and supporters “to easily find organisations doing the type of work they are interested in supporting, and to allow charities to showcase their incredible work”.

The popularity of the register has confirmed the public need for clear, detailed information.

Some 4.2 million register searches were conducted in the last financial year. The markedly increased usage is up from 3.2 million in FY20 and a million in FY19.

The register is the largest and most comprehensive charity database in Australia and an important regulatory tool. It is free to search and allows the public to confirm if an organisation is registered as a charity.

Charities provide their program details when completing their Annual Information Statement and categorise their programs using a standard classification system. This makes the charity more accessible and easier to find on the register. The improved transparency is also aimed at increasing public trust and confidence in charities.

Dr Johns says, “The Register is a valuable source of information about charities for people working in the sector and for Australians who support it.”

Visit the ACNC website to search for a charity by program if you are interested in supporting charities of a particular cause.

‘Bank rules’ save you from manually creating a new transaction each time you get a recurring or similar type of bank statement line. You tell Xero how these statement lines should be coded and Xero will suggest the right type of transaction and complete some details for you. This saves you time, helps to reduce human error and ensures consistent coding, which leads to more efficient reporting.

Only set up bank rules to reconcile statement lines for which you won’t create a bill, invoice or other type of transaction. If a bank statement line relates to an existing transaction, use find and match to reconcile.

Xero help article https://central.xero.com/s/article/About-bank-rules#Typesofbankrules
Of you want to know more, contact our team.

Xero is Next Dimension’s accounting software of choice.

The Xero app is an extension of that software, allowing people to access real time information on their phones or tablets, anywhere and anytime. Through the free Xero app, you can:

• Pay bills
• View bank connections
• Accept payments
• Reconcile bank statements
• Manage contacts.

How does it work?

Xero makes accounting simple. With the app, you can log in anytime, anywhere on your phone, tablet, or computer, to view your cash flow in real time.

Next Dimension Accounting set up dashboards for businesses and not-for-profits using Xero. By downloading the free Xero app, these businesses and not-for-profits can view the accounting activity that Next Dimension Accounting manages. On the Xero home dashboard, there are overviews of:

• Bank Accounts – Shows your bank balances in real-time and you can do your reconciling from within the app.
• Sales and Purchases – See who owes you money, raise invoices to customers from your phone, and see who you owe money to.
• Profit this Month – Your key financial metrics right at your fingertips.
• Total cash in and out – Users can hover over the bar chart to view the monthly differences between cash in (blue) and cash out (grey) from the last six months.
• Contacts – You can also access customer and supplier contact details when out and about.

This presents a clear overview of the organisation’s financial situation to keep your finger on the pulse of your organisation.

Our favourite things about the Xero mobile app:

“There is no extensive setup required, you can just log in anywhere anytime and important information is at your fingertips.” – Brendan Lucas

Latest Xero news:

Xero has launched their own App Store which includes more than 1000 tools for small businesses offered by Xero and their partners. These tools include apps, add-ons, and integrations that are created and owned by Xero.

The free Xero app has been downloaded by more than 2 million users, transforming the way they do business and manage their accounting activities.

We have become Gold Partners with Xero and our staff have more than a decade of experience in using their software. Xero are one our favourite app providers when it comes to assistance for businesses and not-for-profits.

To find out how Next Dimension Accounting can assist your business with any accounting needs, contact us today.

False billing scams are on the rise. The scammers target you or your business by sending a bogus invoice, letter, web domain or magazine subscription renewal notice, or by charging for a fake register or trade directory entry.

Protect your business through vigilance with payments, identifying scams and reporting them.

Some tips to help businesses and NFPs include:

• Limit the number of people in your business who are authorised to make orders and pay invoices. Cloud accounting software can help by providing for real time oversight of payments so you can react swiftly to potential false billings.

• Ensure all staff members are familiar with the warning signs of false billing, such as callers who claim the government requires you to be on their register.

• Keep a central record of your actual subscriptions and trade listings, with correct renewal dates and details so you can confirm if requests are legitimate.

• If a dubious billing dispute arises and the caller tries to threaten you, cease contact.

• Verbally verify account numbers for new suppliers or for changes of suppliers. Don’t rely on email confirmation (it can be intercepted). Or consider a vendor management system that can automate the process.

It you notice false billing activity, take action:

• Confirm details that seem odd with your regular suppliers, such as banking detail variations.

• To stop a bogus transaction or close an account, if the scammer has your account details, contact your financial institution immediately.

• Report fraud and theft to the police.

• Report a scam to the ACCC using their report a scam page.

• Report identity theft to Services Australia.

• Report Cybercrime to ReportCyber.

• Report financial and investment scams to ASIC and tax-related scams to the ATO.

• Let your industry association and other contacts know about the scam.

Learn more about identifying false billing here.

Compulsory identification numbers are set to capture the operations of Australian company directors, clarify director connections, and disrupt phoenix activity.

The Director Identification Number (DIN) scheme has commenced, and deadlines are approaching for directors to acquire their unique number.

The DIN is a unique 15-digit identifier used to verify the identity of a company director or alternate director. The DIN is permanently assigned to the director for a lifetime and is administered by the Australian Business Registry Services (ABRS), overseen by the ATO.

Details on managing the DIN scheme, current requirements and applications are available from the ABRS.  The scheme applies to a company, or to a registered Australian body or registered foreign company that is a body corporate.

Key dates

Since 1 November 2021 any newly appointed company director must submit their DIN application within 28 days. When the transition phase ends on 5 April 2022 it will be compulsory for a director to have a DIN application before an appointment can happen.

Existing Australian-resident directors (pre-1 November 2021) will have more time to apply, but should prepare before their application deadline on 30 November 2022.

Background

DINs are part of the Modernising Business Registers (MBR) program.

The single DIN will increase director accountability and traceability. DINs will help regulators detect, deter, and disrupt illegal actions such as phoenix activity where a company is liquidated, wound up or abandoned to avoid paying debts and new company is then started, continuing the same business activities without the debt.

DINs will prevent directors using false identities and enable regulators and law enforcement to trace a director’s connections across multiple companies.

Applying for your DIN

To be on the right side of the law, Australian existing and prospective company directors must provide standard identity documents when they apply for their permanent director identification number.

The required documents will depend on resident status and whether the application is via online, phone or paper. Some examples include:

Supporting documents such as a tax file number (TFN) and residential address as held by the ATO.

Identity documents – one primary, plus one or two secondary. See the following list for document examples but note that requirements vary per application method (phone applications require one secondary document but paper applications require two).

• Primary identity documents

(birth certificate; passport; Citizenship certificate or register extract; Immicard; or Visa)

• Secondary identity documents

(Medicare card; Australian driver’s licence or learner’s permit)

Responses to application questions (online, phone or paper)

Online applications are quick but require the creation of your myGovID as the first step.

DIN FAQs

I was made a company director decades ago – what happens to me?

Existing directors must apply for their unique DIN but will have more time. Prepare your relevant identification and myGovID account before the application deadline on 30 November 2022.

I’m a charity director – do the new rules include me?

You only need to apply for a DIN if you are the director of a charity or NFP that is a registered company – limited by guarantee under the Corporations Act 2001. The DIN will not be applicable to directors of incorporated associations under the State and Territory Associations Incorporation Act – unless those entities are a registered body with an ARBN.

I’m a director of a company governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act)

The deadline for applications differs here. Directors appointed before 1 November 2022 need to apply by 30 November 2023. Appointments on or after 1 November 2022 need a DIN application before appointment.

As a registered Australian sole trader do I need a DIN?

No. If you are running a business as a sole trader or partnership you do not require a DIN (unless one of the participants in those structures is also a corporation).

I’m a foreign resident director, will it get complicated?

Existing foreign directors of Australian registered body corporates (pre 1 November2021) also have a 30 November 2022 deadline. They must apply on paper and the application needs relevant identification documents for foreign directors including certified copies and any necessary translation documents.

Compliance

Civil and criminal penalties can apply to non-compliance, and infringement notices will be issued where any person:

• knowingly applies for multiple DINs; or
• misrepresents a DIN to a commonwealth body, company or registered body.

The ABRS issues notifications if a person’s DIN is to be cancelled.

It is likely that in the future ASIC will require DINs to be filed, so companies should keep them on hand.

Advisors should take all reasonable steps to ensure clients comply with the legislation.

Deadline summary

Don’t delay your application.

Australian Resident Director appointed	Deadline for DIN application
Before 1 November 2021	By 30 November 2022
1 November 2021 to 4 April 2022 (inclusive)	Within 28 days of appointment
From 5 April 2022 onwards	Prior to appointment

Disclaimer: This post is intended for general information only and is not intended to constitute legal advice. You should obtain appropriate professional advice for your circumstances.