It is a very common mistake when the January arrives that we get the date wrong.  How often in the past two weeks have we stop ourselves as we write 2019 instead of 2020 in the date.  When we are entering transactions into our accounting software it is very easy to get the date wrong as well.  It happens all of the time.

The best way to stop this from happening is to use the period close options in your software.  This will prevent you from accidently entering your transaction as January 2021 instead of January 2022.  It will not stop you from entering December 2021 transactions as December 2022 but software systems usually give you a warning about this.  So how do you close off a period?


To close off a period in Xero you will need Advisor level access.  You then select Accounting, Advances and Financial Settings.  Once you are in this section you have the option to Lock Dates. Pick a date that is practical, and remember there are two options – one for all users and one that still allows Advisors to make changes.  I suggest you fill in both sections.

Xero period close.PNG


To close a period in MYOB choose Setup along the top of the MYOB program.  Then choose Preferences and pick the Security tab.  This gives you to option to Lock Period.

MYOB Period Close.PNG


If you are using QBO you will need to go to the Setting icon in the top corner, of the screen. Choose Accounts and Settings, and then pick the Advanced Tab.

QBO period close.PNG

These changes will not prevent you from entering future dated transactions, so keep your eye out in your accounts for these.   There is a future dated report you can run in MYOB but the other programs don’t have future dated reports.

Closing off a finalised period is a great habit to get into, particuarly once a BAS has been lodged or your accountant has finalised your accounts. Hopefully you will find this little tip handy as we grapple with getting the date correct in this new year.

I don’t think a day would go by when we are not asked about PAYG Instalment.  It causes a great deal of confusion and distress for tax payers.  The tax office letters that are issued are written in ATO language which means no one can easily understand them.  Perhaps this will in some way help you to interpret what this is all about.

If you are older you may remember this as “Provisional Tax”.  When the New Tax System was introduced in 2000 the name was changed to PAYG Instalment.  Personally, I prefer to call it Advance Tax – because that is essentially what it is.

Advance Tax is levied on taxable income that is earned outside of your normal wages and salaries income.  Wage and Salary income has tax deducted by your employer, but other sources of income (business or investment income) are only taxed when your income tax return is lodged.   The ATO prefer regular payments of this tax so they call it in, typically on a quarterly basis.  If you are lodging a quarterly Business Activity Statement it will be incorporated in your calculation.  If you do not lodge a BAS you will be issued with an Instalment Activity Statement to make this payment.  If the amount is very small you may elect to pay it on an annual basis, but for the majority of tax payers this becomes a quarterly event.

The tax office base your instalment amount on what they know about you.  That information comes from the last income tax return you have lodged.  The ATO are not aware of any changes in your business activity, or your investments.  It is entirely based on the assumption that if you had to pay tax in one year then you will need to pay the same amount of tax again in the next year.

In the perfect world

In the perfect world (according to the ATO) you would lodge your tax between July and August.  The ATO would be aware of the tax you needed to pay on your business and investment income and work out the appropriate instalment amount. We will use the example of a taxpayer with $8,000 in tax on business income that was payable in the 2019 tax year (as the next couple of years aren’t a great example for steady income).

The ATO will be expecting the taxpayer to earn a similar amount of business income in 2020.  In fact, they anticipate that they will need to pay a little more than that as they expect the business income to increase in 2020 (called a GDP adjustment).  The GDP adjustment for 2020 is 5% so the ATO will expect the taxpayer to be paying $8,400 in tax in 2020.

The ATO will then ask for $2,100 in PAYG Instalment in September 2019, December 2019, March 2020 and June 2020.   When the taxpayer lodges their tax return for 2020 the actual tax for the year will be calculated.  The $8,400 will be deducted from this calculation so they will not have as much to pay at tax time.  If your tax is less than the $8,400 they will get a refund for the difference. Essentially, the tax payments are spread throughout the year rather than having them all paid in one hit.

It is not always a perfect world

There are plenty of variations on the above assumption and often this is where the confusion lies. I will discuss a few of things that can happen and try to explain them.

1.       You do not lodge your return in July / August.  If this is the case the instalment that has been missed will be caught up in the first instalment payment you need to make.  We will use the above example and assume you lodged your return in October.  The first instalment will be on the December BAS and that will be for $4,200, followed by $2,100 in March and June.  The higher first payment causes a lot of stress for many tax payers.

2.       The above example can be very stressful for new business owners who don’t lodge their return until around May.  They will not only receive a tax bill for their 2019 income tax in May, they will also receive a full year of Instalment in June for a similar amount.  Unless they are aware of this and have been setting aside money, the cashflow implications can be immense.

3.       We see more confusion when you are already in the PAYG Instalment system and you lodge your income tax return.  The ATO will send out a letter adjusting your PAYG Instalment amount and it will be based on a combination of what you have already paid for the year, and what you are needing to pay for the year. The letter you receive tells you how much you need to pay for the entire year (which is sometimes a big scary figure) and we suggest that tax payers wait to see what is on the next Activity Statement before they panic too much.

Alternative calculation methods

The ATO will give you the option of how you wish to calculate your PAYG Instalment on the first BAS that is issued with instalment in the income tax year.  The options are to pay the calculated amount, or to pay an amount based a percentage of your turnover.  The percentage you are to use will be provided by the ATO.

The percentage method can be advantageous for business owners who have cycles in their business income.  If the business has high sales, more “advance tax” will be paid.  If the business is not turning over as much, less “advance tax” will be paid.  Note, the calculation is based on turnover not profit so the alignment is not perfect.  The method you use is your choice.

If you do not make a choice the predetermined fixed amount will be applied, even if you have not lodged your forms with the ATO.  There are taxpayers out there who ignore correspondence from the ATO only to find that a number of instalment amounts have been applied to their tax accounts.  This is more common for individual taxpayers who have investment income as they are not preparing regular activity statements. This is often first realised when the debt collectors come chasing.

Can the PAYG Instalment amount be varied?

It can, but is should only be varied if there is a reason for it.  The most common reason is that there is a “significant change” in the business or investment income.  You may also vary your instalment if there is a change in the business structure, or if the business is not continuing.  We suggest you discuss variations to your PAYG Instalments with your accountant.

One note on this, the instalment can only be varied for the current income tax year.  Everything is reset on 1 July.  Unless the ATO know otherwise, the Instalment amount that had been varied is likely to reappear/readjust on your September BAS.  It may need to be varied again for the new financial year if you want the varied amount to continue.

PAYG Instalment is not something to be feared.  It is not a new tax.  It is just a “prepayment” plan for the tax you are going to have to pay at year end.  If you are in any doubt speak with us and we can advise if the instalment still seems relevant to your business performance and guide you if there is a need to revise the amount.  We always suggest setting some money aside for tax on a weekly basis so there is no big shock when those tax bills do arrive from the ATO. Tax is a part of life and a part of doing business.  You only pay tax if you are making money, and ultimately that is what it is all about.

We are going back to basics this week. I find it interesting that something as simple as a number can cause confusion, so we are going to deep dive into the ABN today.

ABN = Australian Business Number. I know it is symantics but you only need to refer to it as an ABN, not ABN Number. I have seen it referred to as an ABN Number even by politicians. You do not need to refer to it as an Australian Business Number Number. That is just the waste of a word.

The ABN was introduced as a public identification record for businesses with the implementation of GST in 2000. An ABN is distinct from a TFN (Tax File Number) which is a private record. All tax payers have a TFN. All Australian businesses should have an ABN.

Australian Business Number

Public Information

Applies to Businesses only

Tax File Number

Private Information

Applies to all Taxpayers


The word Business is important. The right to apply for an ABN is only available to businesses. In the early days it was simple to apply for an ABN. You only needed a TFN and the online application was simple. This resulted in many unnecessary ABN’s being granted without there being a genuine business behind it. Recognising this problem, the application process is now more robust with specific questions asked to confirm that there is a genuine business.

So why the need for this public form of identification? It is to enable transactions to take place with knowledge of the business behind the transaction. Are they registered for GST? Is the ABN valid and does it belong to your supplier? It is the responsibility of the person paying a business to check these things.

Yet how often do we check the ABN? This should be a part of your regular bookkeeping routine but it is often overlooked. Many businesses do not understand the requirement to check ABN’s. Is it part of your routine?

Legally, if your supplier does not provide a valid ABN on an invoice, you are required to withhold 47% from the payment and pay that to the ATO. There is an exemption for transactions under $75. I am sure most of your suppliers charge you more than $75.

If you have neglected to withhold this money and the ATO discover this, the 47% withholding will be levied on you. You do not want to get caught with this.

Fun Fact: In 2017 Michael Andrew the Chair of Treasury’s Black Economy Taskforce reported that more than 40% of all ABN’s quoted in the Northern Territory were for Bunnings. The fraudsters are getting tricky and relying on our tardiness at checking these things.

Tradies are part of the Building & Construction industry and are required to provide details of all subcontractors they pay (who are also in the Building & Construction Industry) to the ATO. The report includes the name, ABN, GST withheld and value of the payments made. How easy is it for the ATO to identify payments to non-valid ABN’s, or payments including GST without GST registrations!

It is such a simple thing to check but it can have series consequences if you don’t get this right.

When you are setting up a supplier in your system, always enter their ABN. Most systems now have the option for you to check the ABN when it is entered. There is an algorithm behind ABN’s so a fake ABN should be identified as fake. However, you system will not point out that the ABN does not belong to the supplier (eg the Bunnings problem in the NT), so you should check the name and the GST registration.

If your system does not do that, search ABN lookup in your browser and you will have the opportunity to check the details online. Once you have done this once per supplier you should be fine. Please take the time to do this. You don’t want to be caught out over a simple number.

As technology develops there are more and more apps on the market and our tech savvy clients are looking to integrate this technology into their business lives. The information is over whelming and we advisors need a way to stay on top of this and identify the best apps for our client

At Jigsaw it has always been our intention to make your business life better through knowledge and technology. I have spent a lot of time on the knowledge side of things, but it is now time to start with the technology. There are countless options out there but where do we start?

Advising our clients that they should have a stack of 5 different applications to have a well functioning business, and then leaving them to navigate their way through is not going to help anyone. There needs to be a tailored, systematic approach so that the products work in the way they were designed, and work for your specific business needs. We want you to be on the cloud, we want you to use apps in your business but we want you to do it strategically.

Let’s get back to the very basics. Why the cloud? What is the cloud? When travelling on an airplane do you look down into the clouds and wonder if you are going to see a whole bunch of files flying around there? Ok, maybe not – but I can’t help think about cloud computing whenever I am in a plane. The definition of the cloud according to Microsoft (and they should know) is :

“a term used to describe a global network of servers, each with a unique function. The cloud is not a physical entity, but instead a vast network of remote servers around the globe which are linked together and meant to operate as a singe ecosystem.”

What this means to me is connectivity. Let me explain from my own experience at Jigsaw Tax. When we started Jigsaw Tax we had one office in Goulburn. In that office we had 3 people working and their computers were each connected to a server. Our server was a big computer that was in a locked cage because that is where all of the important data was stored. Each night we would run a back up of the server and each night I would take the previous day’s back up home with me so we had a second source of data in the event the building burnt down. If you are a Millennial this will seem like a history lesson, but there was a time before the cloud and there are still a lot of businesses that operate from a local server.

If I wanted to work from home, I used a system where I would dial in over the internet and “capture” my computer. I would then use a second computer (at home) to do work on my office computer and access the server and the data that way. When we expanded our staff base into a second location we had to set up 2 computers for each staff member – one attached the server at head office and the other at the staff member’s location. It was clunky, expensive and inefficent.

We quickly saw that to expand our operations effectively we had to find a new solution. Our journey moving to a fully online, cloud accounting firm began. Today all of our staff have at least 2 monitors on their desks (but only one computer). We minimise our use of paper which is good for the environment. We store all of our documents very securely on cloud platforms which means they are accessible and not taking up value office space. We use Xero as our accounting and tax software, and as this is cloud based it means we can access our data anywhere, anytime – for our laptops, tablets or phones. We can have staff working for us anywhere.

Our cloud journey is not all about Xero, although we truly love Xero. We have worked with a mixture of applications (apps) that give us greater functionality. Some of our attempts have worked, others have not, and it is important to recognise that what might work for one business may not be the best solution for your business. Or it may be that a better product has launched that serves your needs well. As an example, we started using a system called Docusign to get electronic signatures from our clients. We have now changed to a new program called How Now, which does the same thing, but also allows us to store client documents on a portal just for them. When we made the decision to go with Docusign, How Now did not exist. Docusign is still a great product but we have found an alternative that serves our needs better. With any app we integrate we research, do a cost benefit analysis and make an informed decision before we make any changes.

The beauty of Xero is that was is built with the vision that it would integrate with apps. Xero’s founder Rod Drury recognised that Xero could not be everything to every business, so the platform was built so that it could be adapted by adding on functionality through 3rd party apps. It is this vision that has set Xero apart from it’s competitors. It is priced for small business but has immense power if used effectively.

Many of these apps also integrate with other software providers but our focus will be on Xero. Xero has over 700 apps that connect to it. We will be exploring some of the relevant apps and helping to guide you in your journey.

Think about your business. Are you still doing things the old way? Is there a possibility that you can be doing things better? How much time is it costing you to not doing things as efficiently as you can be?

With restrictions easing in New South Wales yesterday – Monday the 11th October 2021 – we wanted to give an update on our office movements. Under the direction of the health guidelines, we will be operating a skeleton crew of staff within the physical offices, while the rest of the team will continue with our working from home arrangements. Our offices will remain locked at these times, with drop off options available. 

We are continuing to encourage all our clients to utilise our many online platforms to get in touch with us. We are still available for Zoom and phone meetings and would prefer not to rush back to face to face appointments. If you do need to drop documents into one of the offices, we respectfully request that you contact us so we can ensure someone will be there to collect them by calling us on 02 4821 7069 or via email at . Goulburn does have the box drop if you prefer to continue using contactless methods.  

We will slowly start reintroducing face-to-face appointments over the next couple of months. As we do this, we must comply with the health guidelines that are provided to businesses at this time. These include the use of a COVID-19 safety plan, providing hand sanitizer for use, having everyone use the QR code or manual check in options and the use of face masks to be worn within the office and any common areas of the building by all our staff and clients.  

Joanne will recommence visiting the Goulburn office on Tuesday and Wednesdays from November onwards. She does not want to rush her return to regional NSW from Greater Sydney, as not all our staff are fully vaccinated in Goulburn due to eligibility constraints and supply issues that have affected regional NSW.  

Jigsaw is treading lightly with the return to our normal. We will continue to keep you updated with all our changes, and we thank you for your continued partnership with us.  


Jigsaw Tax and Advisory 

Ok ladies and gentlemen, we all love something that is free and helps us in our daily lives. Although the ATO is often seen as the enemy for business owners, they do try to help us out by providing tools to use in our businesses. The free ATO app is one such tool that I recommend to clients. It is relatively simple and allows you to do things on the fly, which can be really helpful to the Tradie when we get back on the road.

This app is not targeted at Tradies. It is targeted at all taxpayers, the bulk of the Australian population. It is an abbreviated version of the ATO website, giving us access to certain tools to assist us to be better tax citizens. Tradies are taxpayers too, so why not use some of the tools available.

The app is broken up into 3 sections, individual, business and superannuation. You can make some of the functions your favourites for quick access and I would recommend that as you are not going to use all the functions. To save you time, here are a few of my favourites.

Tax Withheld Calculator

This is a very simple tool that allows you to put in the gross pay for an employee and calculate the tax that needs to be withheld from that pay. There are options to change the settings so that you can calculate without the tax free threshold, withhold more for a HECS/HELP debt and other variations, but in its simplest form you type in the gross payment and press calculate.

I know we should all be using a payroll software provider, but often tradies are working out pays without access to accounting software. The pay run comes after the fact, and this is a great way to make sure the pay has been calculated correctly.

This is the feature of the app I use the most and the main reason I recommend the app to many of my tradie clients.

ABN Lookup

Did you know that it is your responsibility to check that you have been provided a valid ABN by your suppliers? If you have not been provided a valid ABN it is your duty to withhold 47% from the payment and direct this to the ATO. The onus is on you, the payer of the invoice to check this.

Why would someone quote an incorrect ABN? The answer is pretty obvious to me (the cash economy), but most Tradies don’t even consider it when paying their subbies. In 2017, details were released that over 40% of ABN’s quoted in the Northern Territory were for Bunnings. Clearly the Bunnings ABN has been misused, but how many “customers” noticed the wrong ABN had been quoted. If you are caught out during an audit paying these subbies with no ABN, and not withholding the 47%, the ATO can assess you for that amount. It is worth the few seconds it takes to check an ABN. Of course, you can do that on the internet but this tool allows you to do it on your mobile device.

Record keeping “My deductions”

This function is available for any taxpayer to take a photo of their receipts and store their expense claims online. The ATO want you to link this to your Tax File Number with the idea being that this data will be prefilled into tax returns in the future (for individual taxpayers). This has been promised for a few years now and has not happened, not that I have seen at least.

I am a little dubious about giving the ATO more info than they need to be honest, but it can be a handy way to keep a record of your receipts. My concern is that if the ATO recognise you are saving non-deductible receipts to the app you may be the target of an audit. Not all receipts presented to your accountant become tax deductions. I personally would prefer that filter to be done without the ATO’s input. Just my opinion.

If you don’t link your TFN to the program and lose your phone, you will probably be losing all your receipts as well, so please be careful using this function. If you have not linked the app to a TFN make sure you keep a copy of your receipts elsewhere. I think it is particularly aimed at the individual taxpayer as there are much better solutions for business (although they are not free). However, this may be a better alternative than losing all your receipts.

Business Performance Check

This is not available for all business types, but essentially it is a benchmarking tool. A number of the trades are included in this benchmarking tool so it is worth spending a few minutes looking at this.

You put in a few basic details (turnover, expenses etc) and it gives you a performance graphic comparing you to your industry.

Why is this important? Businesses who sit outside their industry benchmarks are targets for an audit. It may indicate that you are working in the cash economy and that is what the ATO are looking for. It could be that you do not really fit into that business category. It is important that the industry indicator on your tax return reflects the correct business you are in so as to avoid a benchmark based audit.

This tool may also help you understand how your business is performing compared to your peers.

Of course there are other functions on this app including fuel tax credit calculators and payment plan estimators (for ATO debt repayments) so take the time to download it and explore. It costs nothing and may save you some unnecessary stress in the future.


While we hear a lot of talk about the NSW COVID-19 Grants, JobSaver and the federally administered COVID-19 Disaster Payment as the suite of assistance available to small business, the subject of rent relief has not gained the same headlines and media attention.  There is a great deal of confusion about how the rent relief packages work and I am sure many businesses have been too overwhelmed to look into this.

For the majority of small businesses, their two largest costs (apart from the cost of the goods they sell) are wages and rent.  The COVID-19 Disaster Payment is designed to cover the wage expense, but what happens with rent?  Is this meant to be covered by the Grant and Jobsaver?  What if you are still struggling to meet this expense?

The big issue is that that rent relief follows a Code of Conduct, not a defined set of rules.  I think back to high school were we had a code of conduct, but not everyone abided by it.  It was not the law, it was an expectation, and that is why the National Cabinet’s Code of Conduct is not as simple to access.  It required you to negotiate with your landlord and come to an agreement.  If that negotiation fails then you need to take it further (maybe you tell the Playground Duty Teacher), but that doesn’t guarantee an outcome.

The first step to gaining any rental relief is to open the negotiation.  You need to contact your landlord or your landlord’s property manager to start the conversation.

Like any good negotiation, you should come to the table armed with facts.  Right now, you do a have a few tools that can help your negotiation.  Remember, landlords are not necessarily small business owners.  They most likely cannot get COVID-19 Grant or Jobsaver, and they possibly can’t get the Disaster Payment either.  You are asking them to give up your rent because the Code of Conduct says they should.  It would be very helpful if you can help them understand there is some help for them too.

What the Code of Conduct suggests

The following words come directly from the website

Under those principles, property owners are required to offer tenants rent relief proportionate to the tenant’s decline in turnover. Waivers should make up at least 50 per cent of any rent relief provided. Rental deferrals make up the balance.

The rental deferrals can be made up over a period of two years or the remaining life of the lease – whichever is greater.  Some tenants may already have this in place from the first lockdown and need to renegotiate the deferral from that as well.

Your landlord has a right for proof that your turnover has been impacted so that they can work out the adjustment required (and work out that the relief is legitimate).  Anticipate the need to provide this information and provide it with your request to expediate an outcome.

Read the Small Business NSW Facts and Questions weblink above as it contains some helpful information.  Know your facts before you ask.

What assistance is there for the landlord?

It could be helpful to direct your landlord to the assistance available to them.  The assistance can be in the form of land tax relief or access to a payment of up to $3000 per month from the Hardship Fund.

The land tax reduction is obviously only available to landlords who pay land tax, and most of those who have a 2021 land tax liability should have paid this already for the year.  Revenue NSW will refund up to 100% of the 2021 land tax liability or reduce the land tax payable in line with the amount of the rent reduction given to the tenant.

This is available now through Services NSW at the link below.  There are a number of things you will need to provide in the application, including information to show your tenant was eligible for either the Microgrant, the Grant or Jobsaver, along with other eligibility criteria.  Below is the link to the information and the application.

Not every commercial landlord pays Land Tax, so a $40m Hardship Fund has been established providing relief of up to $3000 per month for landlords impacted.  The landlord need to show that their primary source of income is from rent, along with a bunch of other criteria.

This fund has not been opened as yet but it will be available in October.  You cannot apply for both Land Tax relief and this payment, so a decision must be made for the best option. For more details see the website below.

What if we can’t come to an agreement?

If you cannot reach an agreement with your landlord you are entitled to apply to the Small Business Commissioner for dispute mediation.  While hopefully it will not come to that, if you do need these services below is a link that explains how mediation works.

We know it is tough out there, both for the tenants and the landlords.  Being informed about the relief available as a tenant or as a landlord will hopefully help both parties to come to a reasonable outcome.

Nothing like a change in the eligibility for stimulus money being sent out on a Friday afternoon to ruin your weekend.  We were notified of the need to retest JobSaver eligibility for the fortnight 30 August – 11 September on Friday the 10 September.  The phone calls started, the details were sketchy, yet if you wanted to get this fortnight’s payment you needed to retest now.

Taking a deep breath and uttering a few swear words, I realised there was no point looking at this until Monday as we had not reached the end of the fortnight on Friday.  Maybe some more details would come out over the weekend.

Low and behold, I log in to look at the criteria for retesting and it has changed once again.  We now need to retest for the fortnight 13 September – 26 September.  While this is a very welcome backflip by the NSW Government, it really makes you wonder who is making the decisions and on what basis.

This change makes significantly more sense.  Jobsaver was designed to cover businesses during the lockdown period.  Parts of regional NSW have now come out of lockdown, so there is a requirement to retest to be eligible.  This really should be based on the region you live in.  It is ludicrous that the NSW Government expect businesses in Sydney who have been locked down for over 12 weeks, with no real end in sight, to have to retest.  But retest they will – unless the rules change again this week.  Nothing surprises me anymore.

Essentially, despite getting the notification in your inbox asking you to declare that you continue to meet the eligibility criteria, I ask you not to make that declaration yet.  Today is 13th September.  You will not be able to make this declaration until 26th September.

The declaration is twofold.  Firstly, you need to declare that you have maintained the staffing levels (at least maintained the employment relationship) that you initially agreed to.  Secondly, you need to declare that you are still experiencing a 30% decline.

The catcher on this – it must be a comparison to the same period that you originally compared to.  If you compared to 2019, then compare to 2019, if you compared to 2020 or 12 June 2021-25 June 2021 then you need to compare to those periods.  You can’t switch to the best period. Your comparison should also be on the basis that you report your BAS, either Cash or Accrual.

Below are a few common questions or things you need to know that have been asked over the past few weeks.

  • Can I still get the COVID-19 Business Grant as well as JobSaver?

The COVID-19 Business Grant was designed to cover the first 3 weeks of Sydney lockdown.  Many regional businesses or Tradies will not qualify for the Business Grant.  JobSaver was designed to take over after those first 3 weeks.  So, while you should qualify for Jobsaver if you got the Business Grant, you don’t necessarily qualify for the Business Grant if you qualify for Jobsaver.  You only qualify for the Business Grant if you can demonstrate the decline in turnover between 26 June – 17 July.  If your decline in turnover is after that date you are ineligible for the Business Grant and can only get JobSaver

  • Do I have to pay Jobsaver to my staff?

No, despite the name Jobsaver is for the business, not for wages.  You can use it to help pay wages but you do not need to pass this on to your staff.  If your staff are working reduced hours or have been stood down you need to direct them to Services Australia for the Disaster Payment.

The reference to saving jobs is because you need to declare that you will maintain the employment relationship.  It does not mean the funds need to be paid to your staff. You can stand your staff down if you don’t have work for them. Standing down staff does not end the employment relationship.

  • How do I record this in my accounts?

Jobsaver needs to be paid to the business, not to you personally.  It is what we call NANE (non assessable, non exempt) income.  While you don’t pay tax on this, you still need to show it as income in your business accounts.

I suggest you set up a new income account called NSW JobSaver Payment and record the funds there.  There is no GST on this income.  If you have received the NSW Business Grant set up a separate income account for this, again free from GST.

  • Deductions for expenses incurred in earning NANE income

The ATO have updated their guidance about the various government grants that are non assessable.  They have advised that any expenses incurred regarding the application process are not tax deductible.

If your accountant or bookkeeper has proportioned their invoice to include the application for the grants you need to proportion your tax deduction accordingly.  However, if the expense is incidental to expenses that would normally be incurred in carrying on your business you can claim a deduction for the whole expense.  The wording of invoices will be important in determining this.

Stay tuned.  The rollercoaster has not come to a halt as yet.  I am sure there will be more twists and turns are we continue this ride.  It certainly makes it difficult to predict too far into the future.

Some businesses are not necessarily great when it comes to marketing.  For example, much like accountants, tradies are good at what they do and believe that their strengths are in their technical skills – and marketing is left to those people who work in sales.  The thought of marketing and sales brings up images of the pushy used car sales person, and that is not what your business is about – right?

I truly believe in service industries (and let’s face it we are all here to provide a service to someone), the best type of marketing is the provision of excellent customer service.  If you go above and beyond in the services you provide, customers will tell their friends.  There is no greater complement you can get than a referral from a customer. Even if you think you are too busy for new customers right now, isn’t it great to have that choice?  What a nice problem to have – too many people wanting to use your services.

Think about your business – are you doing something just a little different to your competitor to earn a great reputation?

I want to talk about a business that is nailing the service model – and it is not a trade business, rather an online fashion business.  I love good news business stories and this one ticks many boxes as it evolved in regional NSW.  You may have heard of it – it is called Birdsnest.  (If you are a guy reading this you will not have heard of it so don’t stress).

I know what you are thinking – what can an online fashion business have to do with my family’s trade business?  I am constantly looking for ideas and inspiration everywhere.  When an experience stands out to me enough to tell other people about it, there must be something to learn from that business.  Let’s start with their story.

Birdsnest is located in Cooma NSW which has a population of around 7,000.  If you are not sure where Cooma is, it is the town on the way to the NSW snow fields where you stop at McDonalds before you hit Jindabyne.  Some people stop at the McDonalds a little earlier on their journey to the snow – in Goulburn.  Goulburn is where my business is based.  Both towns are famous for their McDonalds, sheep and for being cold.  Neither would be considered a place to go to build a national business.

Yet that is exactly what Birdsnest has done.  It employs 140 local staff in Cooma.  Their online fashion business has that point of difference due to its customer service focused.  In their own words:

Over 85,000 women have told us about their body shape, favourite colours, their lifestyle and other elements that are important to them in creating the perfect wardrobe. We have responded by designing our own in-house labels to address those needs. Our range now consists of nine ‘bird brands’ along with carefully curated styles from our favourite brands and suppliers which we hope you love. We are constantly trying to extend the size range and offer sizes 8 to 18 in most styles with some now up to size 24.

Yes, they have lovely clothes, but it is the service that sold me.  The first time I purchased something from Birdsnest I got the typical email saying my parcel was on its way – as is typical with online shopping.  I was really surprised when the parcel arrived the very next day.  Not only was my parcel beautifully packed but there was a hand written note thanking me for my purchase, and welcoming me to the Birdsnest family.

I also received the beautifully curated seasonal brochure which I shared with my Aunt.  She purchased something and called me to express her delight at the speed of the delivery, the packaging and the personalised note.  All this would have taken only a few extra minutes to do, but it made the brand stand out.  I was an instant fan and so was my Aunt.

I ordered something from Birdnest later and along with my package and the hand written note, I received a cookbook.  This 60 page book contained the favourite recipes of the Birdsnest staff.  It shared their names, job roles and reasons why these recipes were so special to them.  It bought the culture of the workplace into my home and made me realise why the customer service is so exceptional.  The people are real, they have stories.  The business has a story, it is a regional business making it big, while maintaining its country values.  As the person buying the clothes, I want to be part of the story as well.  This is better marketing than any paid advertisement I have seen.

I am not suggesting you make a cookbook or write a personal note to each client, but how much attention do you pay to customer service?  Do you (or your staff) answer the phone with a smile? Do they arrive on time for a quote or a job?  Do you provide a text message to update your customer on the arrival time?  Do you provide your quotes and invoices in a professional manner?  Do you thank your customers for the business they have extended to you?

The public do not necessarily know which business has the best skills.  Go onto any community Facebook page and you will find people asking for recommendations.  We rate our Uber drivers and our AirBNB hosts on their service.  It will not be long before we will be doing the same thing with our Tradies, Accountants and other service providers.  Maybe we already are doing this (Google Reviews, Facebook Reviews)?  Don’t be left behind.  Start thinking about what you can do to stand out from the crowd.  Get inspiration from others, and sometimes that means looking beyond your industry for ideas.

Sometimes it is the smallest things that create the best results.