Since heading out on my own in business, I have been extremely lucky that my clients have always paid me…and I hope that continues!

Unfortunately I see many times when other businesses are not so lucky – and today I witnessed a client terminate a relationship with a customer who simply wouldn’t uphold their end of the bargain.

Many businesses incur bad debts that need to be accounted for in the profit and loss statement, as well as recording the GST impact.

A bad debt is an amount due to a supplier that is unlikely to be paid.  The reasons for bad debts are many and varied – but at some point, if the amount is not recoverable, the supplier needs to make the decision to write it off.

Before writing off the bad debt, the supplier, or business can take a number of steps to recover the amount, including:

• send a reminder notice
• send a written letter requesting payment
• phone the customer and request a payment plan (any plan agreement should be followed up in writing)
• engage the services of a debt collector (assuming the cost does not out-weigh the benefit)

During the negotiation process, it is acceptable for the supplier to cease supply until payment is made or alter credit terms.

At all stages of the debt recovery process I encourage you to be calm, polite and reasonable…but at the end of the day you need to look after yourself and your business.

Good luck!

Regards

I’m sitting here preparing this blog entry and feeling a tad “woe is me…” – you see I woke this morning having slept “funny” and have had a crook neck all day!

As such, I am eagerly looking forward to my standing chiropractic appointment this week…especially since private health insurance operates on a calendar year and all claim thresholds have been reset!

One of the most common questions I am asked as an accountant is “should I have private health insurance?” – of course, I cannot answer that!

Whether or not you should have private health insurance is dependent on your own personal circumstances – both health and financial…what I can do is explain the impact of having or not having private health insurance in regards to the financial side of things…

Often, taxpayers are confused between the “Medicare Levy” and the “Medicare Levy Surcharge”:

I imagine that most of you have heard of Medicare, being the scheme that provides residents of Australia with access to health care.  This scheme is funded by the Medicare Levy whereby most taxpayers make a contribution of 2.0% of their taxable income (in some cases there are reductions and exemptions, however these will not be discussed here).

The Medicare Levy Surcharge is different altogether and is in addition to the Medicare levy.  If your income is above a certain threshold, and you do not have private hospital insurance, then you may be liable for the Medicare Levy Surcharge.

If you are unsure if the Medicare Levy Surcharge applies to you, please discuss the matter with your accountant, or Contact us for an assessment.

Regards

You might have just returned to work or your business after the Christmas break;

You might be still enjoying a holiday;

You might be preparing to send the kids back to school…or to school for the first time;

But there’s one more thing I need to add to your “to do” list…your 2014 tax return!

If you prepare and lodge your tax return yourself, without the assistance of a registered tax agent – then your tax return was due on 31st October, 2014 – so if you haven’t yet lodged it, you need to hurry along!

However, those of you registered with a tax agent can avail yourself of the lodgement concessions for using a tax agent – this means it is likely that your tax return is due on 15th May, 2015 (please note that your actual lodgement date depends on your personal circumstances and should be confirmed with your tax agent).

I know that seems like ages away…but experience has taught me one thing…time flies!

Take a look at your calendar, mark off the public holidays, add in a sick day or two and perhaps a “mini-break”…and all of a sudden it’s May!

If you haven’t yet lodged your 2014 tax return, I encourage you to do yourself and your tax agent a favour by gathering your information and making an appointment as soon as possible.

Regards

In case you missed it…I recently celebrated my 40th birthday…and it looks like I’m still celebrating!

Yesterday I received a magazine in the mail which is part of a subscription I received as a gift – I’m so excited!

As an accountant, I need to do LOTS of reading to keep up to date with the legislation, rules and regulations affecting our industry, so it’s nice to sit back and relax with something “non-work” related.

But did you know that there are actually some instances where you may be eligible to claim a tax deduction for a magazine subscription?

You may be able to claim a deduction if:

• The magazine or journal is directly related to your income earning activities
• The magazine or journal is not general in nature
• You pay for the subscription yourself (ie: it is not reimbursed)
• The amount does not form part of a fringe benefit arrangement

It’s definitely worth discussing with your tax agent.

Regards