Well, I don't know about you, but I can't believe it's already the end of another quarter. It seems like only yesterday I was submitting the final BAS for the June quarter.
I have managed to have a bit of down time during the last month most notably attending the biggest Bookkeeping and Accounting event in the Southern Hemisphere - Xerocon.
This was an interesting few days catching up with my peers and to find out the future of our industry. There was much talk about AI and how all cloud based industries must protect themselves from cyber-attacks, and the recent Optus Data breach has certainly shown us just how vulnerable we all can be.
To that end, the ATO have been working with all software providers to improve security features. One of these is the introduction of eInvoicing and I'll have more information about that below.
Another thing which was discussed was the introduction of STP 2. Due to some issues being experienced by other software providers, Xero have taken the step to get a further extension of time to implement to the 31st March 2023. More of that below.
Xerocon was also an opportunity to speak with the app providers which connect directly to Xero. It was great too to hear of the new Xero acquisition Planday. This is staff management app which includes rostering, staff time tracking, communication and payroll which will integrate with Xero. This is a major app used in Europe, and is being updated for the Australian market and will be released soon. Initially, this will be set up for retail industries, so if you are interested, get in touch.
Another exciting Xero announcement was their partnership with Cogo. Cogo have launched their Business Carbon Manager app via the Xero App store to help small business measure their current carbon footprint and provide tailored advice on how business owners can take action to reduce this footprint in order to gain competitive advantage. Let me know if you want more information.
All in all it was a great 2 days in Sydney at my first face to face conference for 3 years! As you know, this wasn't a small undertaking
for me and I'm pleased to advise I returned in one piece!
So now to get into the nuts and bolts of a couple of things:
First of all a quick recap.
Single Touch Payroll (STP) was mandated (with some exemptions) from 1 July 2019. This was an initiative from the ATO whereby all payroll information was lodged with them every time you paid your staff. The report included the gross wage, tax withheld and super information matched against your staff tax information which was made to your staff on their MyGov accounts. This removed the requirement to issue Payment Summaries (group certificates) at the end of the financial year.
As of 1 July 2021, this initiative has been expanded to report on all items which make up the gross wage such as industry allowances, reimbursements etc. This is know as the "Disaggregation of Gross". This information can then be shared across other government agencies such as Child Support or Centrelink.
From 1 January 2022, this updated reporting through STP 2 became mandatory unless you had an exemption. Some of the larger payroll providers made applications for such an exemption on behalf of their customers. Xero applied for, and was granted, and extension of time to comply intially to 31 December 2022, however, they have recently announced they have received a further extension to 31 March 2023.
This covers all their customers, so if you are currently using Xero Payroll to report your STP to the ATO, there is nothing you need to do yet.
Having said that, you will no doubt have seen emails coming through from Xero about how they are rolling out the update over 3 stages with stage 2 being rolled out now. Here is a great infographic from them to explain these phases.
Over the next month, where I process wages for my clients, keep an eye out for an email from me for authorisation to update your staff to the end of stage 2. If you look after your own wages and want me to update you employees for you or check you have set them up correctly yourself, please get in touch. Fees apply.
As I am a Xero only practice, if you use another software, I am not in a position to assist. Please contact either the software provider or your trusted advisor for assistance.
With cyber attacks on the rise, it's no surprising the ATO and software providers are looking at ways to ensure the safety of your data. One such initiative is the introduction of eInvoicing. This has been introduced successfully in Europe, predominantly Scandinavian countries and has now been introduced here. Please note, this is not mandatory, however, if you deal with Government Agencies and use eInvoicing, you may receive payment for your invoices quicker in future.
So what is it and why has it been introduced?
I'm sure you have all heard of the horror stories of large invoices being intercepted by scammers who then contact the customers to update bank account details and to show this on updated invoices. Business have lost thousands this way with often no recourse for the payer to get their money back or the supplier to get their payment.
One simple way to avoid being caught out is to contact your suppliers when you receive a request to update account details to ensure the request has come from them in the first instance.
Another way is to use eInvoicing. This is where an invoice is sent through a secure eInvoicing network - Peppol - from one accounting software system to another.
Peppol has been developed for this purpose and commenced internationally in 2008. It is now used in 40 countries worldwide and how it works is once you and your supplier have registered with Peppol, it will transfer the data from one system from your supplier to you as a draft bill in Xero.
The way it matches the information, is upon registering, you are matching your ABN to your data file. Your supplier will use your ABN to identify you and send the eInvoice. Peppol simply reads the ABN destination and transmits it direct. Think of it like a secure telephone exchange I guess.
Here's a quick overview taken from the ATO website to show how it works
If this is something that you want to know more about and would like to set up to be able to receive eInvoices, let me know and I can help
you get set up.
Finally, just a quick reminder of a few things:
So quite a newsletter this quarter and I hope you get some information to help. As always, if you have any queries at all, don't hesitate to get in touch.
I am off again later next week for a conference with my professional association. Please can you submit any timesheets through as early as possible so I can ensure they are processed before banking cut offs.
In the meantime, keep safe, and remember to support small business wherever you go...