Accountant's Minute 248
Big changes made to JobKeeper.
The Federal government has announced significant changes to the JobKeeper Program which will apply for versions between now and 31st March 2021.
The challenge for accountants is mobilising the support to assist your clients to navigate the ongoing challenges presented by COVID-19 Coronavirus with some of your clients emerging from the JobKeeper support and others still receiving JobKeeper even though it is now at a lesser amount and the amount that recipients receive will reduce further in January 2021. The government has also introduced the concept of the 80 hours of work over a 28 day period, centred on 1st March 2020 or 1st July 2020.
There is a real opportunity to proactively assist the clients that have been recipients of JobKeeper because they have, at least, a 30% turnover recovery to make to get them back to the sales level that they were at in 2019.
In the next COVID-19 Survival Panel webinar for accountants on Friday, 9th October 2020 at 12-noon AEST we have two outstanding presenters - Matthew Karakoulakis, Principal Solicitor and Partner, AMK Law, Adelaide and Melbourne, will be presenting “Key Intellectual Property Law Principles”. Matthew's presentation will cover some key points including:
The second keynote speaker at this webinar is Mark Holton, Director, Smithink Pty Limited, who will be presenting “What Advisory Software Is Being Used According To The Good Bad Ugly Survey”. An interesting comment in the presentation that Mark is going to make relates to “What is the next software purchase?”
The survey indicates that the answers by the participants indicated that approximately 20% of respondents had nominated Business Advisory Services software as being the next software purchase that they will make.
You can register to attend this free webinar on Friday, 9th October 2020 by clicking here.
In the last COVID-19 Survival Panel webinar for accountants on 25th September 2020, Ashley Evans, Managing Director, AAA+ Financial Solutions and a former bank manager commented on the changes that had been made by the government relative to JobKeeper and JobSeeker. Ashley indicated that “the government needs to start letting the clutch out and then push the accelerator to drive so that the economy will move forward, whilst at the same time, balancing the health issues”. Ashley also referred to the changes proposed by the government relative to the removal of the “responsible lending obligations in consumer protection legislation". Ashley indicated that he supported the changes because the legislation, which was introduced after the global financial crisis, had encouraged banks to introduce very tough conditions which were contributing to significant delays for business people to seek bank loans and other financial support.
The other speaker in the 25th September 2020 webinar was Priscilla Bea Smith, Tax Agent, Senior Accountant, Partner of Cloud Nine Associates Pty Ltd. Priscilla gave an overview of the products and services that have been developed by Cloud Nine Associates Pty Ltd to assist accounting firms to operate on lower overheads and to be innovating with the latest technologies.
You can watch the recording of the presentations made by Ashley Evans and Priscilla Bea Smith in our last webinar by clicking here.
Payment terms for small businesses is back in the headlines with the “Financial Review” publishing an article on 28th September 2020 - "Slow Payers Face Long - Awaited Scrutiny". This report commented on a significant increase in debtors' days outstanding when comparing August 2020 with August 2019.
The article criticised a major retailer for the delay in payment to its suppliers, which the article indicated contributed to the retailer’s strong cash balance at the end of the financial year (“around $449 million”) which, it was stated, is more than double the cash balance at the end of the previous year. The retailer’s payment terms were 120 days – well beyond the Business Council of Australia’s recommended timeframe of 30 days.
The article indicated that “Big companies have been able to easily dictate payment terms because their small suppliers will typically miss out on sales altogether if they do not accept them. There have been no laws in Australia forcing companies to pay bills quickly (although Federal and most State governments have prompt payment policies for their invoices) and companies have been under no obligation to disclose how long it takes them to hand over cash to suppliers".
“But that will change from January 2021, when companies that earn more than $100 million a year, will be required by law to reveal exactly how long it takes them to pay small suppliers, including the shortest and longest payment periods".
“Federal Small Business Ombudsman, Kate Carnell, says some companies previously made excuses for delaying bill payments by defining small businesses as companies with less than 20 people or providing services worth less than $1 million a year”.
“But in September, the Senate passed legislation approving the introduction of the new payment times reporting scheme which relies on tax law to define small business – entities with an annual turnover of less than $10 million”.
“Companies and government enterprises will be required to report twice a year on their payment terms and practices for their small business suppliers. The reports will be made available for all, free, on the Internet".
“The scheme is not as tough as the Federal Small Business Ombudsman would like, because there are no financial penalties for companies that do not pay small businesses within 30 days. The only penalty is being named and shamed. There are fines for companies that do not report at all".
“But Ms Carnell’s office will closely monitor compliance (which is expected to cost companies about $22.5 million a year) and will push for tougher legislation, if payments do not start speeding up".
(Click here) for the full article "Slow Payers Face Long - Awaited Scrutiny".
Want to know more? If you want to know more about the services provided by ESS BIZTOOLS to assist accountants to guide clients through this very difficult time, why not visit our website www.essbiztools.com.au or:
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Episode 248 - Big Changes Made To JobKeeper
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