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‘Uncertainty’ has been the defining phrase for the first half of the 2020s. The markets are unstable, supply chains have been wobbly and finding talent has been difficult.

But as we head into 2025, and the second half of the decade, what are the major threats, opportunities and challenges that your business should focus on?

We’ve highlighted five of the big business challenges.

Five big business challenges for 2025 (and beyond)

However well-organised you are, there are elements in the external environment that you just can’t control. These external factors can have a serious impact on your ability to trade, grow and turn a profit. So, are you on the ball and ready to tackle them in 2025?

Let’s look at five of the external factors you should be focused on:

Climate change and sustainability

It’s an unpleasant truth, but the environment is in real trouble. As a business, there’s a growing need to demonstrate your environmental responsibility. This means developing a sustainability strategy, investing in green technologies and demonstrating your environmental commitments.

AI and technological disruption

Artificial intelligence (AI) and automation have changed the game in a fantastically short timeframe. Finding the value in this tech is crucial, as well as understanding its limitations. Getting your digital transformation underway will be vitally important in 2025, as will exploring how AI and automation can kickstart your productivity, boost your customer service processes and create a real competitive advantage for the company as a whole.

Skills shortage and transforming your workforce

The ongoing skills shortage, combined with the reality of an aging workforce and changing employment expectations, is a major issue. To overcome the talent challenge, you’re going to need to rethink your recruitment policy, your training and what you do to retain your key people. Things like flexible working arrangements, continuous professional development (CPD) and a great company culture are all ways to attract and maintain your top talent.

Inflation and an unstable economy

The global and local economies are not out of the woods yet. Forecasts may be looking more positive but there’s still the ever-present threat of recession, rising inflation and high interest rates. Getting granular with your financial forecasting will help, as will exploring your options for additional revenue streams, better cashflow management and ready access to business finance.

Regulatory compliance and reporting

Regulatory environments are getting increasingly complex, as governments wrestle with the need for tighter structures. Regulations around your environmental reporting, workplace relations and digital privacy are all likely to get tighter over the coming years. This means allocating time and resources to understanding and implementing the relevant compliance requirements.

Talk to us about overcoming the big challenges

There’s no magic wand that can change these macro environmental and economic factors. But awareness, detailed planning and good use of forecasting can be a major boost.

Come and talk to the Flawless team about your concerns for the year ahead. We’ll help you understand the major external factors and what you can do to make your business more resilient.

New Resources About Pay & Conditions, Enterprise Agreements & Bargaining

The Fair Work system provides the legal framework for workplace relations, setting standards for employee rights, pay, and conditions. These standards, established by the Fair Work Act, are enforced by the Fair Work Commission (FWC) and the Fair Work Ombudsman (FWO). The FWC is responsible for setting minimum wages, resolving disputes, and approving enterprise agreements. The FWO, on the other hand, ensures compliance with workplace laws, investigates breaches, and offers education and guidance on workplace rights.

Compliance with Fair Work requirements is essential for fostering a fair, cooperative, and productive workplace. It also helps businesses avoid penalties, manage risks, and maintain legal compliance when handling critical aspects such as pay, entitlements, enterprise agreements, and bargaining processes.

Understanding these requirements enables businesses to build stronger relationships with their workforce while upholding their legal obligations.

To support employers and employees, the FWC, in partnership with the FWO, has launched new online resources to simplify the complexities of workplace laws. These tools provide clear insights into workplace rights and responsibilities, explain how bargaining influences these rights, and highlight the importance of enterprise agreements in shaping effective workplace practices.

For business owners and employers, these resources offer practical and accessible guidance to navigate workplace laws confidently. Covering crucial areas like pay, entitlements, and agreements, the tools are designed to help businesses manage their obligations efficiently.

By staying informed and leveraging these resources, employers can create fairer workplaces, mitigate risks, and ensure a compliant and productive environment.

FWC Online Learning Portal

The Online Learning Portal features clear and straightforward training videos that explain how the different parts of the Fair Work system connect. The National Employment Standards (NES) set the minimum rights for all employees, while the National Minimum Wage provides the lowest pay rate that must be met.

Awards set out industry-specific pay and conditions, and enterprise agreements are negotiated at the workplace level, offering tailored conditions that must meet or exceed the NES and awards. Employment contracts can provide additional terms but must align with these legal requirements, ensuring fair and consistent workplace conditions.

These videos offer practical insights into employee pay and entitlements, detailing where they come from and how awards, enterprise agreements, and contracts interact. They also cover what enterprise agreements are, how they’re created and when they apply, and include a small business case study.

Additionally, the videos outline the key steps in effective bargaining, including the roles and responsibilities of each party. These resources are helpful for anyone looking to understand workplace rules with ease.

Visit the Online Learning Portal to access supporting resources:

Further Resources

• Download the written summary Understanding employee pay and entitlements (PDF) (DOCX).
• Read Making an enterprise agreement case study (PDF) (DOCX) to see how a small business tailored pay and entitlements for their workplace.
• Watch other videos in this series: Understanding enterprise agreements and Understanding bargaining.

Who Can Help?

If you have any questions about Fair Work requirements, the Fair Work Commission (FWC) and the Fair Work Ombudsman (FWO) are the two key agencies to consult. Together, these agencies play a crucial role in maintaining fair and consistent workplace standards across Australia.

As the New Year approaches, it’s a season filled with joy, celebration, and family gatherings. Yet, for small business owners, the festive period also brings unique responsibilities, especially when it comes to supporting your bookkeeper in managing annual shutdown tasks.

During the holidays, diverse work arrangements and employee leave schedules can create complexities. Some staff are gearing up for annual vacations, others stay on to keep operations running, and there are those with limited leave who may face challenges working around holiday schedules. Your bookkeeper is critical in ensuring smooth payroll processing, tracking leave accurately, and keeping your business compliant.

To ease the holiday workload, work closely with your bookkeeper to confirm any specific requirements, leave policies, and deadlines. Provide any necessary documentation well in advance, communicate clearly with your team about holiday expectations, and encourage everyone to plan for potential closures. Supporting your bookkeeper with timely information and a well-organized schedule will help make this season smoother for everyone involved, setting the stage for a fresh start in the New Year.

What is a Shutdown?

According to the Fair Work Ombudsman, a ‘shutdown’ or ‘close down’ is when a business temporarily closes during a specific period. The reasons may be that it is not viable for the business to operate during this period because it could be a quiet time, or many staff might be away on leave.

The complexity comes when working with varying awards or working conditions and when there is a mix of people going on leave, some remaining at work, some that have no leave, and those that want to work but cannot.

* A shutdown is not the same as a stand down. Reasons for stand down are when employees cannot be usefully employed due to various circumstances, including stoppage of work for reasons for which the employer cannot reasonably be held responsible.

Shutdown Payments Explained

Recent updates to awards (as of May 2023) mean that small business owners must carefully follow new rules when planning a holiday shutdown. Here’s a straightforward guide on how these rules impact employee leave and payment during this period:

• Annual Leave Requirement: You may require employees to take paid leave during a shutdown. You must provide at least 28 days written notice to all impacted employees. The notice period can be reduced through an agreement between the employer and the majority of impacted employees.
• Reasonable: The requirement to take annual leave must be reasonable.
• Options for Insufficient Leave: If employees lack enough leave, you can agree on alternatives like accrued time off, leave in advance, or unpaid leave. These agreements must be in writing.
• Pay During Shutdown: Full-time and part-time employees must be paid if they take leave during the shutdown, while casuals aren’t paid for this time as they’re paid only for hours worked.
• Follow Your Award or Agreement: Some awards allow requiring leave during a shutdown, while others allow only requests. If the award does not specify then employees cannot be forced to take leave or go unpaid without an agreement.
• If Leave is Insufficient and No Agreement: If an employee lacks leave and doesn’t agree to unpaid leave or leave in advance, they’re entitled to their usual wages.

Public Holidays

Public holidays impact employee pay and leave, especially during shutdowns.

Public Holidays During Annual Leave

If a public holiday falls during an employee’s annual leave, it is treated as a regular public holiday, not as part of their leave. The employee will be paid for the holiday as if they had worked that day, and their annual leave balance won’t be affected.

Example: If Mary, a full-time employee, is on annual leave for 7 days, including Anzac Day (a public holiday), she will be paid for Anzac Day separately, using only 6 days of her leave.

Public Holiday Pay and Sick Leave

If an employee takes sick leave around a public holiday, they are still entitled to public holiday pay, provided it’s a day they would typically work.

If an employee is rostered to work on a public holiday but calls in sick, they won’t receive public holiday pay unless they are on paid leave.

Employees Working on Public Holidays

Employees who work on a public holiday are entitled to their base pay plus any additional entitlements as specified in their award or agreement. This may include:

• Public holiday penalty rates.
• Extra day off or additional annual leave.
• Minimum shift length (e.g. 4 hours).
• Agreements to substitute another day for the public holiday.

While employees cannot be forced to work on a public holiday, you can request it if reasonable, considering factors like the employee’s family responsibilities, pay rates, business needs, and their typical work schedule.

Employees Not Working on Public Holidays

Employees (except casuals) who would usually work on a public holiday must be paid their base rate for that day. This rate doesn’t include penalty rates, loadings, overtime, allowances, or bonuses.

You cannot change an employee’s schedule to avoid paying for a public holiday.

Example: If Steven is a part-time employee who only works Tuesday to Thursday, and Anzac Day falls on a Monday, he is not entitled to public holiday pay because Monday is not a regular workday for him.

Tips to Assist Your Bookkeeper

As a small business owner, preparing for the holiday shutdown requires careful planning to support your bookkeeper and ensure a smooth, compliant break for all employees.

Here’s what you need to do:

• Notify Employees of the Shutdown
  Give all employees at least four weeks’ notice of the planned shutdown dates. This advance notice helps employees plan their leave and allows your bookkeeper to begin preparing payroll accordingly.
• Collect Leave Confirmations
  Ask employees to confirm their leave plans for the shutdown period. Work with your bookkeeper to ensure all necessary forms are completed and submitted, clarifying leave dates, intentions, and any special considerations.
• Account for Public Holidays
  Review the calendar with your bookkeeper to identify public holidays during the shutdown. This is essential for accurate payroll and ensures employees receive the correct entitlements.
• Determine Work Schedules During Shutdown
  Confirm if any employees will be working during the shutdown or on a public holiday. Communicate any special pay rates, penalty rates, or adjustments that will apply. Clear communication helps prevent misunderstandings and reduces payroll issues.
• Plan the Pay Schedule
  Decide when leave payments will be made — during the usual pay cycle, before Christmas, or at another agreed time. Share this plan with your bookkeeper so they can manage payroll and ensure employees know what to expect.
• Prepare for the Shutdown Pay Run
  If a pay run falls within the shutdown period, let your bookkeeper know about any specific instructions or changes. Since holiday processing can take longer, allow extra time for the pay run to ensure it is completed smoothly and on time.
• Communicate and Collaborate with Your Bookkeeper
  Throughout the shutdown planning, maintain open communication with your bookkeeper. Ensure they have the information they need to process leave, adjust payroll, and finalise end-of-year tasks.

Following these steps will help you support your bookkeeper effectively, keep employees informed, and ensure a successful transition into the New Year.

A Cyber Warden Bookkeeper Adds Value to Business

In today’s digital age, cyber threats are a growing concern for small businesses. With 43% of cyber-attacks targeting small enterprises and each breach costing an average of $46,000, the need for robust cybersecurity measures is more critical than ever.

If your Bookkeeper has already completed the Cyber Wardens course, you’ve gained a valuable ally in protecting your business from these threats.

The Cyber Wardens initiative, developed by the Council of Small Business Organisations Australia (COSBOA), equips small business professionals with the skills and knowledge needed to secure their digital environments. A Bookkeeper who has completed this course is more than just a financial expert; they are now a proactive defender of your business’s sensitive information.

How Your Cyber Warden Bookkeeper Adds Value
By completing the Cyber Wardens course, your Bookkeeper has significantly enhanced their ability to safeguard your business against cyber threats.

Here’s how this added expertise benefits you:

Advanced Protection: Your Bookkeeper is now well-versed in identifying and protecting crucial business data. This means they can implement effective strategies to secure your financial information from potential cyber-attacks.
Proactive Defence: With their new knowledge, your Bookkeeper can spot and neutralise common scams and digital threats before they impact your business. This proactive approach helps prevent costly disruptions and losses.
Team Leadership: As a trained Cyber Warden, your Bookkeeper can promote cyber safety practices within your team, ensuring that everyone in your business is aware of and follows essential cybersecurity protocols.
Confidence and Peace of Mind: Knowing that your Bookkeeper has undergone this specialised training gives you confidence in their ability to protect your business. It’s one less thing to worry about as you focus on growing your enterprise.
Cybersecurity as a Value-Added Service
Your Bookkeeper’s cybersecurity expertise is an invaluable addition to the services they already provide. Beyond managing your finances, they now play a crucial role in safeguarding your entire business from digital threats. This dual role enhances the overall security of your operations and demonstrates their commitment to your business’s success.

By taking this course, your Bookkeeper has gone above and beyond to ensure they are fully equipped to meet the challenges of today’s digital landscape. Their proactive stance on cybersecurity reflects their dedication to providing comprehensive, high-quality service to your business.

A Course for Everyone
The Cyber Wardens course isn’t just for Bookkeepers; it’s available to all small business owners and their teams. This course is designed to be accessible, offering straightforward, jargon-free training that anyone can benefit from, regardless of their technical expertise. Whether you’re a business owner, a staff member, or a supplier, this course empowers you to play a crucial role in protecting your business from cyber threats.

A Future-Proofed Partnership
As cyber threats evolve, a Bookkeeper who is a trained Cyber Warden ensures your business is better prepared for the future. They can inform you about emerging risks, recommend best practices, and help you stay ahead of potential cyber-attacks. This proactive approach keeps your business resilient and secure.

With a certified Cyber Warden as your Bookkeeper, you gain a financial expert and a partner in protecting your digital assets. Their enhanced skills offer peace of mind, knowing your business is in capable hands.

If you’re not yet benefiting from a Cyber Warden Bookkeeper, reach out to see how they can help fortify your business’s defences. The Cyber Wardens course is available to everyone in your business – take this opportunity to strengthen your cybersecurity. For more information, visit Cyber Wardens – ICB – Enrol now and see how this initiative can enhance your Bookkeeper’s and team’s services.

From the ATO

The instant asset write-off (IAWO) is now law. Eligible businesses with an aggregated annual turnover of less than $10 million may deduct the full cost of eligible assets costing less than $20,000.

Eligible assets can be new or second-hand. They must be first used or installed and ready for use between 1st July 2023 and 30th June, 2024. The $20,000 threshold will apply on a per-asset basis, so you can instantly write off multiple assets.

The IAWO is one of several depreciation methods available to small businesses. It has been offered under changing conditions since 2011; however, it was suspended when temporary full expensing (TFE) was available. TFE ended on 30th June 2023.

The usual rules for claiming deductions still apply. You can only claim the business portion of the expense, and you need to make sure you have records to prove it. For more information about the instant asset write-off, including eligibility criteria, visit ATO – Instant asset write-off for eligible businesses.

The Current Year 1st July 2024 to 30th June 2025

The recent Budget also announced that the measure would continue into this year. However, once again, it is not yet law, and the announcement is subject to parliament’s process.

What is Instant Asset Write-Off?

Instant Asset Write-Off allows eligible small businesses with an annual turnover of less than $10 million to immediately deduct the full cost of assets that cost less than $20,000 rather than depreciating them over several years. This applies to both new and second-hand assets first used or installed and ready for use between 1st July 2023 and 30th June 2024.

Businesses can write off multiple assets, provided each one is under the $20,000 threshold. The deduction is only for the portion of the asset used for business purposes, and proper records must be maintained to prove the purchase and business use. This write-off provides immediate tax relief, helping to reduce taxable income for eligible businesses.

The Role of Your Bookkeeper

Your Bookkeeper plays a crucial role in managing your business’s finances, particularly in tracking all asset purchases and installations. They ensure that each asset is accurately recorded with precise purchase dates and costs. Collaborating closely with your Tax Agent, your Bookkeeper monitors each asset’s cost to ensure it falls below the relevant threshold for the instant asset write-off (IAWO).

At the end of the financial year, your Bookkeeper will highlight any equipment purchases to your Tax Agent. This step is essential to ensure that all eligible assets are correctly claimed in your tax return, maximising your business’s potential benefits from the IAWO. Throughout the year, your Bookkeeper maintains thorough documentation and accurate records, facilitating this process and ensuring compliance and optimal tax outcomes for your business.

If you are unsure if your Bookkeeper is undertaking these important tasks within your business, have a discussion with them and explore the value of having your Bookkeeper keep your asset purchases and important asset records up to date and gaining the maximum results for your business.

Protect Your Information

The ATO has seen an increase in scams targeting individuals’ personally identifiable information (PII).

In 2022, a person’s birthdate was the most common piece of PII divulged to scammers. Nowadays, scammers are getting their hands on far more valuable information.

Last year, the ATO saw an increase in reports of scams targeting people’s PII, including myGov sign-in credentials – the doorway to their ATO accounts and financial information.

PII forms pieces of a scammer’s puzzle that, when completed, gives them a detailed picture of a person’s identity. Scammers can then use this information to steal the person’s identity and commit crimes in their name, such as tax fraud.

The Role of Your Bookkeeper

Bookkeepers play a crucial role in helping clients safeguard their PII. They educate clients on the importance of protecting personal details, and encourage verification of requests for such information. Bookkeepers protect client data by implementing secure practices like encrypted storage and access controls.

Staying informed about security threats enables bookkeepers to provide timely updates and guidance. By promoting best practices and prompt reporting of suspicious activity, bookkeepers help maintain client identity integrity and build trust through proactive management of personal information.

It is important for your bookkeeper to have a conversation with you about protecting your PII – especially your myGov credentials.

Here are some key points to remember:

Stop – Don’t share any PII unless you trust the person you’re communicating with and they have a legitimate need for your details.
Think – Always consider if a message or call could be fake. Never click on hyperlinks to an online login portal from an unexpected source.
Protect – If you notice any suspicious activity on your ATO accounts, contact the ATO immediately.
Your security is our priority, so please stay vigilant and protect your information. These may seem like simple steps, but following them could prevent a scammer from putting your identity together.

If you do encounter a scammer, don’t engage. Report it via [email protected] or use the online form at ato.gov.au/scams.

More information and practical steps to help your clients protect their information are available at ato.gov.au/protectyourself.

Source: ATO – Scams are on the rise. Protect client information

Is it Reasonable?

The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 introduces a significant change to the Fair Work Act 2009, under the heading of “a right to disconnect” for all national system employees.

The amendments will introduce an employee right to disconnect into the Fair Work Act 2009 which makes clear that employees are not required to monitor, read, or respond to employer or work-related contact out of hours, unless refusing to do so is unreasonable.

ICB explains the context:

• The right to disconnect is not that the employee is allowed to ignore communication nor is it that the employee should not receive communication.
• It is that the employee is allowed to raise concerns if the employer is making unreasonable requests for a response.
• Communication is not a problem.
• Unreasonable expectations of a response out of hours could become a problem.
• The new legislation, which commences on 26th August 2025 for small employers, establishes a statutory right for employees to disconnect from work communications if it is reasonable to do so, outside of normal working hours, with provisions for dispute resolution. Larger businesses will be subject to the new provisions from 26th August 2024.

Definition of ‘Small Business Employer’

A small business employer is an employer with fewer than 15 employees at a particular time. If an employer has 15 or more employees at a particular time, they are no longer a small business employer. When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis.

Key Points of the Amendment

Employee Rights
Employees are permitted to disengage from work-related activities during their non-working hours. The change provides that an employee may refuse to:

• Monitor, read or respond to contact or attempted contact from an employer (or third party relating to their work) outside of the employee’s working hours unless the refusal is unreasonable.
  This right is a workplace right within the meaning of Part 3-1, General Protections of the FW Act.

What Practical Steps Can Employers & Business Owners Take Now?

Proper approaches and processes can effectively manage the implementation of the new legislation. In many respects, these laws complement existing obligations that businesses have to safeguard the psychological well-being of their employees. Even if you don’t employ anyone at this stage of your business, this may change in time, and the principles of safeguarding will need to always be considered under these laws.

Employers should proactively review and update their work practices and policies to align with the new regulations. Providing managers with training on the nuances of the right to disconnect is essential. Moreover, employers must handle performance management processes with sensitivity, considering the implications of the new right.

The new law has resulted in many employers seeking guidance on responding to the changes. Please see the checklist below for some practical steps employers can take now in preparation for the start of the changes.

But a determination of unreasonable contact should be discussed with the employee and employer. The right to disconnect is not that the employee is allowed to ignore communication, nor is it that the employee should not receive communication. The essence of the law is that the employee may refuse.

Record Keeping Practices

Maintaining accurate and complete records is paramount for the success and sustainability of your business. Proper record keeping practices are not only essential for compliance but also serve as the backbone of informed decision making and financial stability.

As a business owner, it’s crucial to recognise the significance of meticulous record-keeping. These records provide invaluable insights into your company’s financial health, performance trends, and areas needing improvement. They also facilitate tax compliance, audits, and financial reporting, ensuring transparency and accountability.

Understanding Record Keeping Requirements

By tax law, businesses must maintain records of all transactions related to taxes, superannuation, and registrations. This encompasses documents concerning income, expenses, and any decisions or calculations made for tax and super affairs. It’s important for businesses to grasp which records are necessary and to keep them accurately. Failure to adhere to these regulations can result in legal and financial consequences.

Employment and common law extend the need to keep some records for longer periods.

What is the Law – Document Retention Requirements

In Australia, businesses must adhere to both common law principles and legislative requirements regarding document retention. Common law dictates that corporate documents are the property of the company, but destruction before or during litigation may result in adverse legal consequences.

Legislative requirements vary and include mandates from federal and state laws, such as:

• Privacy (Tax File Number) Rule 2015 Requires companies to securely destroy or de-identify tax file number information that is no longer required by law or for taxation, personal assistance, or superannuation purposes.
• The Criminal Code 1913 (WA) and Crimes Act 1914 (Cth) create similar offences where a person, knowing that any book, document or other thing of any kind is or may be required in evidence in a judicial proceeding, intentionally destroys it or renders it illegible or undecipherable or incapable of identification, with the intent of preventing it from being used in evidence.
• The Income Tax Assessment Act (1936) (Cth) requires retention of income and expenditure records for at least five (5) years.
• The Fair Work Act (2009) (Cth) Requires the retention of employee records for a minimum of Seven (7) years from the end of the financial year in which the document was created. Employers must maintain accurate records for each employee, including general details, pay, hours worked, leave, superannuation contributions, and agreements. Records should be accessible, legible, and in English. Employees have the right to access their records, and Fair Work Inspectors can request them for compliance checks. Failure to keep records or keeping false records can lead to penalties.
  Source: FWO – Record-keeping
• The Corporations Act 2001 (Cth) Imposes various retention requirements, including keeping financial records for at least Seven (7) years, retaining company documents and registers for specific periods, and complying with limitations on legal action.

Businesses must ensure compliance with these laws by implementing proper document retention policies tailored to their specific obligations and circumstances. Failure to adhere to these requirements may result in legal consequences, emphasising the importance of proactive compliance measures.

Source: Document retention and destruction: be aware of legal requirements

What is a Financial Record?

Financial records are important documents that show how a business manages its money. These records include things like:

• Invoices: Papers showing what the company sold and how much it charged.
• Receipts: Papers showing when the company received payments.
• Cheques: Records of payments made by check.
• Books of Prime Entry: Initial records where transactions are first noted.
• Working Papers and Other Financial Documents: Supporting papers used to make financial statements.

These records can be electronic but must be able to be turned into paper if needed. Even if someone else, like a Bookkeeper, keeps the business records, the business owner is still responsible for giving copies to auditors or anyone who has the right to see them. According to Section 286 of the Corporations Act, financial records must be retained for at least seven years after the completion of the transactions they cover. Examples of records that companies should retain include:

• Financial Statements: Including profit and loss statements, balance sheets, depreciation schedules, and taxation returns.
• General Ledgers and Journals: Primary accounting records detailing all financial transactions of the company.
• Cash Records: Records of cash receipts, bank deposits, petty cash transactions, and cheque stubs.
• Bank Statements and Loan Documents: Documents related to the company’s banking activities and any loans it has obtained.
• Sales and Debtor Records: Records of sales transactions and amounts owed to the company by customers.
• Invoices and Statements: Records of invoices issued and received, along with statements of account.
• Minutes of Members or Directors’ Meetings: Documentation of discussions and decisions made during company meetings.
• Registers: Registers of members, options, debenture holders, assets, or any other relevant items.
• Deeds: Legal documents such as deeds of trust, contracts, agreements, and inter-company transactions.

Businesses should also prepare monthly statements to track their financial performance. These statements show, for example, how much money is coming in and going out each month.

Source: ASIC – What books and records should my company keep?

Five Rules for Effective Record Keeping

To effectively meet record keeping requirements, businesses and their Bookkeepers should adhere to five fundamental principles:

1. Comprehensive Coverage: Businesses must retain records related to starting, operating, altering, and closing their operations, ensuring relevance to tax and super affairs. Maintaining clear documentation for expenses relating to business and personal use is essential.
2. Integrity and Security: The integrity of records should be preserved, preventing alterations and ensuring secure storage to prevent damage. Businesses should be prepared to reconstruct original data if their record keeping systems undergo changes.
3. Retention Period: Most records should be retained for a minimum of five years from the time they are prepared, acquired, or completed. Certain records may require longer retention periods based on specific legal stipulations. Businesses should maintain records detailing routine procedures for destroying digital records and be able to furnish them upon request.
4. Accessibility and Format: Businesses must ensure they can readily provide their records upon request. They should maintain information about their record keeping systems to demonstrate compliance with requirements. Records must contain all relevant details to meet tax, super, and employer obligations.

If storing data digitally, they should be prepared to provide encryption keys and access instructions, ensuring data can be extracted and converted into standard formats such as Excel or CSV. If passwords are used for protection, accessibility instructions should be provided. Finally, businesses should organise their data and records with identifiable labels or indexes to facilitate efficient retrieval and review processes.

5. Language: Businesses must ensure that their records are either in English or easily convertible to English.

Source: ATO – Overview of record keeping rules for business

Benefits of Accurate Record Keeping

Maintaining accurate and complete records is crucial for businesses to effectively manage their finances and stay compliant with regulations. It allows them to keep tabs on their financial health, ensuring they know whether they’re making money or facing losses. Good records also empower businesses to make informed decisions and keep track of their financial obligations, such as paying bills on time.

Keeping clear and organised records helps businesses avoid potential penalties from regulatory authorities. By having everything in order, they can easily determine their tax liabilities and demonstrate their financial standing to lenders or potential buyers. Additionally, when it comes to audits, having well-maintained records saves time and effort for both businesses and auditors.

The Role of Your Bookkeeper

The business owner is responsible for understanding record keeping obligations. Even with the assistance of a registered Tax or BAS Agent, the primary accountability remains with the business owner.

However, your bookkeeper is an essential partner in maintaining accurate records and complying with laws. They ensure your data is secure and assist you in understanding regulations. By organising and safeguarding your information, they simplify financial management and enable informed decision making.

Their guidance helps prevent issues by reminding you of regulatory requirements and regularly reviewing your records. With their support, you can navigate complexities confidently, avoiding penalties and legal complications. Trust your bookkeeper to keep your records in order, providing peace of mind and allowing you to focus on growing your business.

ATO Record Keeping Course

The ATO Record Keeping Course provides business owners with essential knowledge and skills to manage their record keeping obligations effectively. This course offers a comprehensive overview of record keeping requirements, emphasising the importance of accurate and organised records for financial management and compliance.

Business owners will learn practical strategies for maintaining clear and detailed records, including documentation of income, expenses, and other financial transactions. The course covers various record keeping methods and tools tailored to suit different business needs and preferences. Additionally, business owners will gain insights into the legal and financial implications of inadequate record keeping practices and learn how to avoid common pitfalls.

By completing this course, business owners will be better equipped to fulfil their record keeping obligations and confidently manage their business finances.

For more information: ATO – Record keeping | Essentials to strengthen your small business

Digital Record Keeping – 2024 View

In the current landscape, leveraging technology is instrumental for businesses to effectively meet tax record keeping requirements. Incorporating tech solutions streamlines processes enhances accuracy and ensures compliance with tax regulations. Cloud-based accounting software allows real time tracking of income and expenses, simplifying record keeping tasks. Automation features further reduce manual input errors and save time, enabling businesses to focus on core operations.

Moreover, they facilitate the creation of summaries and reports for various tax-related purposes, including GST, income tax, fringe benefits tax (FBT), and Taxable Payments Reporting System (TPRS). Additionally, using software ensures compliance with the legal requirements for Single Touch Payroll (STP) reporting.

For businesses utilising cloud storage, whether integrated into their accounting software or provided by a separate service provider, it is imperative to ensure that the storage solution meets the ATO’s record keeping requirements mentioned above.

Businesses should download complete copies of any records stored in the cloud before transitioning to new software providers to prevent potential loss of access to critical information. Consult with the software provider or a professional advisor to understand the specific terms and conditions related to data retention and access after cancellation.

Beyond Technology

Success in record keeping goes beyond technology. It requires a steadfast commitment to compliance and best practices. By prioritising integrity and security, businesses also uphold their reputation, safeguard sensitive information, and foster a culture of accountability and transparency.

Accurate record keeping, with the expertise of Professional Bookkeepers, digital solutions, and accessible small business training, lays the foundation for financial transparency and strategic decision making. This enables small businesses to excel in today’s competitive landscape.

Leading a business can be hard work. But the good news is that you’re not the only founder, owner-manager or CEO who’s treading this path. Networking with your peers is a great way to make connections with other entrepreneurs, while also looking for new business opportunities.

5 ways to improve your networking skills

Being part of a wide network of entrepreneurs and business leaders is about being part of the business community. It’s about giving to the community, as well as being supported by it – and knowing that you’re surrounded by other entrepreneurs who share very similar goals.

So, networking is a valuable thing to take part in, whether you’re a brand new founder, or a seasoned business owner who’s been around the track a few times. But how do you get GOOD at networking? There’s no simple answer to this, but we’ve highlighted five key things you can do to get more from your networking and to give more back to your community.

To become a better networker:

– Be authentic and relational – if you’re going to make a success of networking, it naturally makes sense to appeal to people. Being genuine and interested in getting to know your peers will help a lot. Be yourself, be friendly and take the time to learn about the people you meet. Ask questions about their work, their interests, their goals and what generally makes them tick. This isn’t just about ‘doing business’, remember; it’s about getting to know people as people, and being part of this community.
– Be a good listener and ask thoughtful questions – in networking, listening is just as important as talking. When you’re talking to someone, listen intently, look people in the eye and pay real attention. Resist the temptation to interrupt or start thinking about what you’re going to say next. Instead, focus on understanding their perspective and asking thoughtful questions. Ultimately, you want to make it clear that you’re interested in what this person has to say, and that you’ve found some common ground together.
– Be helpful and offer your expertise – one of the best ways to build relationships is to be an asset to your industry community. Look for ways to use your experience and skills, and offer ideas, advice and help (if people are looking for assistance). This could mean sharing your industry knowledge, providing resources, or making introductions to other people in your network. When you help others, you help the community, underline that you’re a valuable resource and that you’re interested in building relationships.
– Be an asset to your niche/sector/industry – share new ideas, drive innovation and be a voice that stands out in the network. If you want to make an impact, it’s important to stand out from the crowd. A good approach is to be someone who’s known for their expertise, creativity and thought leadership. Get involved in industry discussions, and write articles and blog posts about the big issues in your sector. The more you contribute to your niche/sector/industry, the faster your star will rise.
– Follow up after networking events – getting the networking right is one thing, but it’s important to also get your follow-ups right too. Get people’s business cards, phone numbers or emails and get in touch after the event to touch base. A quick email or LinkedIn message could well be the start of a blossoming new business relationship or friendship. It’s also a good idea to connect on social media and to comment, share and repost your new contact’s posts.
What are the best places for networking?

– Industry-specific events and conferences – industry events are great places to rub shoulders with other professionals in your field. You can get involved in discussions, learn about the latest trends and developments and even present your own sessions.
– Social media platforms – you’re spoilt for choice when it comes to social media sites to help your industry networking. LinkedIn, X(Twitter), Facebook, Threads and BlueSky all help you connect with the people you’ve met through your networking, and build on those relationships to share your insights and ideas more widely.
– Local meetups and workshops – most cities and towns will have regular business meetups and workshops that you can dip into. Business breakfast events and evening get-togethers are a great way to meet local business owners and to find out what’s going on in your local community.
If you’re looking to raise your profile and improve your networking, we’d love to lend a helping hand. We’re connected to hundreds of different business owners and leaders – and we’re more than happy to introduce you.

Our advice is to put yourself out there in your industry community, track down your local business peers and get busy with your content marketing and social media posts.

In today’s digital times, you’re probably used to having unrivalled access to your financial numbers, key performance indicators (KPIs) and cashflow metrics. Without good bookkeeping, the speed and quality of your reporting can quickly fall down.

So, why is fast and accurate bookkeeping so important? And what are the main bookkeeping tasks that your business should be getting right?

The financial importance of good bookkeeping

Bookkeeping is a fundamental part of your financial process as a business. Without it, your accounting software has no financial data to work with, your FD doesn’t have the most current numbers, and your accountant can’t see the current financial health of the business.

Inputting your financial transaction into some form of record-keeping system is also a mandatory commitment if you’re a registered business and paying goods and services or value-added tax. Bookkeeping is what provides you with a historic breadcrumb trail of your finances – allowing you to track your cashflow, revenues and profits over a given period.

How to maximise your bookkeeping

So, bookkeeping is a vital part of your financial management. And the key to having your transactions recorded, available for reporting and accessible whenever you need them.

But how should the bookkeeping process work, in an ideal world? Let’s walk through the core bookkeeping steps and how you can get the most from this financial admin task.

To keep on top of your bookkeeping:

– Scan all financial paperwork – the initial part of the bookkeeping process is to scan and record all receipts, invoices and remittances. This gives you a digital copy of the paperwork that relates to your income and expenses – important when you get around to filing tax returns and expense claims etc.
– Record all transactions immediately – getting your transaction recorded and in the books ASAP is vital. This includes recording both your income and expenses, as soon as they occur, and matching them with the scanned paperwork. This not only helps you stay organised but also means your financial data is always up-to-date and can provide real-time reporting and numbers. This can be a huge help when running the business.
– Categorise transactions accurately – when recording transactions, make sure you’re accurate and categorise each item correctly. Not only does this remove the potential for errors and miss-keying in your books, it also helps you track your spending and income more accurately, so your reports are an honest reflection of your financial health.
– Reconcile your accounts regularly – reconciliation is the process of matching your transactions (both income and expenses) against your bank statement and other financial statements. It’s a key part of your bookkeeping and should be done regularly, to ensure that your balances are correct and that your records are totally up to date.
– Use a cloud-based accounting system – bookkeeping doesn’t involve books (ledgers, in accounting-speak) anymore. In the digital world, you can use cloud-based accounting software, like Xero, to record your transactions and access your financial data in the cloud from anywhere, at any time. This makes it easier to keep on top of your numbers when out of the office (and Xero will even automate the reconciliation process too).
– Outsource your bookkeeping to a professional – yes, you can do your own bookkeeping. But there’s a LOT of value to delegating all the hard work to a professional bookkeeper. If you don’t have the time or expertise to manage your bookkeeping yourself, outsourcing is a smart move. A bookkeeper will make sure your books are always accurate and under control. Plus, they can produce cashflow statements, revenue forecasts and other reports to help your business decision-making.
Talk to us about outsourcing your booking

With today’s cloud accounting software, bookkeeping is a far less tedious task than it used to be. But it’s still a regular, time-consuming job that can take you away from running the business.

If you’re thinking about outsourcing your bookkeeping, and freeing up that admin time, we’d love to talk to you. Our outsourced bookkeeping service will take on your bookkeeping tasks, to streamline the whole process. We’ll also introduce you to automated data-entry tools like Dext Prepare, Auto Entry and Hubdoc, that make snapping receipts and scanning invoices a breeze.

Let us do the books, so you can get back to talking to customers and winning work.

Get in touch to discuss our outsourced bookkeeping.