Accounting + Taxation
Debunking the Myths About Cloud Accounting
You may have already heard about ‘the cloud’ but if you are not sure about what it means for you and running your painting and decorating business, then read on.
What is ‘the cloud’?
Cloud computing lets you keep information on a remote server [the cloud], instead of trapped on a desktop computer. You can access your data from a smartphone, a tablet, a laptop, or a desktop—wherever you have an internet connection.
You may already be using the cloud. For example, if you have a Hotmail or Gmail account, or if you use internet banking, these are already in ‘the cloud’ as the software and data is stored remotely [in the cloud] and is accessible from any computer, not just your computer.
What is cloud accounting and what are the benefits for your business?
Cloud accounting [sometimes referred to as online accounting] operates in this way.
Not only can you access your data via any device, but you can share the data with your bookkeeper or accountant so that there is only ever one data file. This improves the accuracy of the information as it is all located in one file so information like bank statements and invoices can be automatically uploaded and processed, you can invoice on the road and in between jobs, reduce paperwork in the office and it allows you to interact with your accountant or bookkeeper in real-time. Dealing in real-time allows you to be on top of your financial information, make better business decisions and streamline your taxation obligation processes.
There is no need to install or upgrade the software, you can pay manageable monthly subscriptions and you can integrate other add-on applications to help run your business more efficiently. For example, an add-on software that can provide job management or manages stock control.
Is ‘the cloud’ safe?
Industry specialists advise that yes, your data is relatively safe in the cloud—likely much more so than on your own hard drive. Cloud accounting software suppliers invest in infrastructure that has multi-factor authentication and encryption in order to ensure your data is secure and safely stored.
Which cloud accounting system?
When deciding on which cloud accounting system, consider whether the core functions will suit your needs: will it be quick, convenient and easy to use, does it have add-on products that will be suitable in helping run your business.
If you’re unsure, then liaise with your accountant to ensure you have the right product for your needs. A few cloud accounting packages currently available in the market place include Xero, Intuit, QuickBooks, MYOB Essentials, Reckon One and Saasu.
Claiming Work-Related Expenses
To know what you're eligible to claim before lodging your tax return, the ATO has developed a flyer specifically addressing common work-related expenses for building and construction workers. These claimable items include car, travel and clothing expenses and depreciation of tools and equipment.
According to the ATO, to claim a deduction for work-related expenses:
- You must have spent the money yourself and weren't reimbursed
- It must be directly related to earning your income
- You must have a record to prove it.
You can only claim the work-related part of expenses. You can’t claim a deduction for any part of the expense.
For a full list of common work-related expenses, click here
The ATO website has plenty of information to help people correctly claim the work related expenses they are entitled to so visit ato.gov.au/occupations to read more about this.
An ATO online quiz lets you test your knowledge on common work-related expenses. You can access the quiz on the ATO’s Let’s Talkplatform https://lets-talk.ato.gov.au/mydeductions