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Getting Onboard with Falcon

Falcon will require tax file numbers and run identity checks before we can take over as your accountant. All parties will be notified of the change.

Once we fulfil our legal obligations we can then act as your accountant.

At Falcon we have certain legal obligations and need to verify our clients which involves checking their photo id. This is a normal process with most agencies and will minimise the risk of fraud.

If you are unsure how to inform third parties or advice your existing accountant of the switch, call us for a chat to discuss how we can do this for you.

Xero Tips

When both bank accounts are in the same Xero file, coding bank transfers is simple.

During reconciliation, make a rapid transfer. You can enter a reference but not track using this method.

Select the Transfer tab on the bank reconciliation screen for the bank statement line you want to reconcile.

Choose a bank account.
If the statement line indicates that a payment has been received, choose the bank account you used for the transfer.

Provide a reference for the transfer transaction.
Click OK. After confirming the transaction in one bank account, go to the other bank account and double-check that the transfer happened as expected.

A profit and loss account and a balance sheet are included in the financial statements we generate for you. These total up all of the transactions that took place throughout the year, including those that came from the company’s bank account (s). The problem is that Xero must record such bank transactions as income or costs in the profit and loss account, or as an asset or liability on the balance sheet. During the reconciliation process, you can only do this by providing an account code.

Your BAS must include the following information:

For GST reasons, income must be stated.
Expenses for which you can claim GST
Transactions that are GST-free (such as bank fees, interest, and wages)
Transactions with a zero percent GST rate (mainly for imported and exported goods and services)
When you reconcile Xero, you’re ensuring that each transaction is assigned to one of those four categories automatically.

Once you believe you will no longer receive (any or all) amounts owed by your customers, you can write them off as a bad debt. When using Xero’s invoicing system, you can follow these instructions.

By writing off (part of) your non-paying customers balances, you’re won’t be paying tax on income you won’t receive.

Create a clearing account in Xero

Set up a separate current asset account for each type of bulk payment you receive, for example, Mastercard, Visa, or American Express. Make sure you enable payments to this account.

Choose the clearing account in the Paid To field to apply a payment to an invoice. After that, make a bulk payment to the same clearing account in your bank account and reconcile it. Payments to your bank account and invoice payments will dismiss each other out, simply leaving the clearing account with a zero balance.

Assign the clearing account to your online sales system

If your Xero invoices are marked as paid, make sure to adjust the settings of your online store or payment processor so that the payment is reflected in the clearing account.

For instance, edit the settings in your payments processor or online store so that when you make a payment using a current asset account such as ‘Mastercard Clearing Account’, the transaction will go through.

When a payment processor or bulk receipt shows up in your Xero bank account, create a new receive money transaction and assign it to your clearing account using the Create tab.

If your statement details are the same each time, you could set up a bank rule to do create the transaction for you.

Create a receive money transaction coded to the clearing account.

Check your clearing account balance

You should regularly check the transactions in your clearing account using the Account Transactions report. Total payments implemented to your invoices on a specific day must match the bulk receipt you assigned when reconciling. If the balance is not zero, it could be due to:

  • Invoices for which you have not yet received payment
  • Payment has been received in your bank account, but individual invoice payments have yet to be downloaded by your online store or payment processor.

Handle a customer refund

If you refund a customer for part or all of a sale:

  1. Create a sales credit note for the amount of the refund. Reference the original invoice number on the credit note.
  2. Apply a payment to the credit note by entering a cash refund and selecting the clearing account as the payment account.

The money taken in should equal the total of the invoices minus any credit notes in your clearing account.

When reconciliation is done, the total amount of sales should be credited to the clearing account.

You should regularly check the transactions in your clearing account using the Account Transactions report. When reconciling, total payments applied to the invoices should match your allocated bulk receipt. If the balance is not zero, this could be due to one of two factors:

  • Invoices for which you have not yet received payment
  • You’ve received payment in your bank account, but your online store or payments processor hasn’t downloaded the individual invoice payments yet.

Business Tips

If you want to start a business, you must decide on a name, establish the proper governance structure, and file for incorporation. We outline the advantages of starting a business and the steps involved in setting one up.

  • What exactly is a company?
  • Deciding on a company name
  • Making a decision on corporate governance
  • Establishing company officeholders
  • Registering the company
  • Set up a shares register

In both a court-ordered liquidation and a creditors’ voluntary liquidation (which has not embraced the simplified liquidation process), the liquidator’s responsibility is to:

  • collect, sell and protect the asset of the company
  • enquire into the current situation of the company and inform creditors of it,  including:
    • unfair preferences ( the payments that are made to a creditor before others) that may be recoverable
    • transactions that are not for profit that may be set aside
    • prospective complaints against the company’s executives such as insolvent trading
    • Recovery of creditor-defeating dispositions, particularly those relating to unlawful Phoenix activity
  • Look into the company’s failure and any potential criminal activity by anybody associated with it, then report your findings to ASIC.
  • after paying the liquidation costs, such as the liquidator’s fees, distribute the asset collection and sale proceeds. Priority creditors, including employees, will be paid off first (subject to the rights of any secured creditors), followed by unsecured creditors.

A trust is a commitment made to a person, group, or other body to hold assets for beneficiaries.

A Trustee is a person who is in charge of supervising the assets owned by a Trust. A Trustee must follow the Trust Deed’s instructions (the document which establishes the trust and outlines what its purpose and operations are).

A beneficiary is someone who receives a benefit from the Trust’s assets. The beneficiary’s rights are outlined in the trust deed.

The person who first contributed the assets to the Trust, established the Trust Deed, and chose the Trustees is known as a Settlor.

The Trust Deed names all Trustees, Beneficiaries, and Settlors.

A SMSF – Self Managed Super Fund is a fund that is setup and a way the member can save for retirement.

Benefits of a SMSF

  • Flexibility and control
  • Investment choice
  • Accountability
  • Protection from creditors
  • Effective tax management

A director is someone who has been elected or appointed to arrange company affairs. They can be, but aren’t necessarily, a shareholder of the company. Every company is required to have at least one.

A director is obliged to act honestly and in the best interests of the company (and its shareholders), with reasonable care at all times.

A shareholder is someone who has an investment with a company by owning shares. In small-medium businesses, a shareholder may also be an employee, a director, or a shareholder-employee, participating in day-to-day management.

A fund or entity that is eligible to receive tax-deductible gifts is known as a deductible gift recipient (DGR). DGR endorsement includes two types:

  • an organisation that is directly endorsed by DGR
  • an organisation that solely qualifies as a DGR in connection to the funds, authorities, or establishments it manages. In this case, only gifts to the fund, institution or authority are tax deductible.

Visit the not-for-profit section of the ATO website for more details on deductible gift recipients.

As a small business operator, it is important you protect your interests when you deal with other businesses. Here are some steps to keep your business safe.

Ask questions when dealing with other businesses

Manage and resolve disputes

Get trusted business advice

Review loan and credit contracts

End of Year Financials

We aim to have your accounts done within 28 days of receiving all the information we require from you. If there are going to be any delays (which sometimes happens when we’re really busy), we’ll let you know up front, before we get started.

Also known as the chart of accounts which is an index in th eledger of all financial accounts of a company.

There are 5 major accounts as follows:

  • Assets
  • Equity
  • Expenses
  • Liabilities
  • Revenues

Fixed assets are subject to depreciation, which is a non-cash expense. There are two approaches to this:

Accounting for the fixed asset’s typical wear and tear as a business expense each year lowers its worth (and eventual selling price); and

Claim the cost of the fixed item over several years (small assets can be claimed in full the year they are purchased).

The cost of a fixed asset is spread out over its useful life in this way. It’s a profit and loss account cost, which implies it lowers your tax bill.

The dates are as follows:

  • self-employed/Sole trader: From 1 July to 31 October of every fiscal year, you can file your tax return alone. Contact them for more information if you file through a registered tax agent.
  • Partnership: Each financial year, from 1 July to 31 October, you may file your partnership tax return alone. Contact them for more information if you filed through a registered tax agent.
  • Company: Different dates are used for filing company tax returns. Most company tax returns are due on 28 February of each fiscal year, however, we advise you to check the ATO website for your particular deadline.

1) Establish a productive working connection with your accountant right away.

2) Make sure you know single-touch payroll (STP).

3)Utilize your accounting software to the fullest extent, and if you don’t already have it, get it.

4) Before EOFY arrives, prepare yourself and anticipate it.

  • Reconcile your accounts
  • Reconcile your payroll
  • Look at your accounting software
  • Review your working capital
  • Create a valuation of your assets
  • Set financial targets
  • Establish a cash flow forecast
  • Comply with ATO