MYOB to end support MYOB AccountRight Classic (v19)

Will your business transition to MYOB AccountRight Online, transform to MYOB Advanced or look for a new software solution?

MYOB announced that as of 30th September 2019 they will no longer provide features, patches, compliance updates or product support for AccountRight Classic (sometimes known as v19) which will also mean the end of ODBC support. 

This is now less than 1 month away, we recommend any clients still using MYOB AccountRight Classic to reflect on your current and future business requirements to understand what software might be suitable for your company moving forward. 

Please feel free to give our office a call 9584 2277 to discuss your options further.

Why VAT uses DocuSign

DocuSign is the electronic signature solution we use to ensure an efficient turn-around time on our business transactions that require a signature. 

We use DocuSign because it eliminates the delays associated with sending physical packages via post, there is no software to install, documents are encrypted and it maintains a complete audit trail of the signing process. 

If you have any questions about how we use DocuSign please contact our office on 9584 2277.

The importance of a sound SMSF investment strategy

If you have made the decision to set up a self-managed superannuation fund (SMSF) and take on the responsibility and control of managing your own super and retirement plans, then no doubt one of the critical aspects you would focus on is having the right investment strategy and approach in place.  Whilst these thoughts should not be confined only to those with a SMSF, the added responsibilities and obligations you take on as a trustee of a SMSF definitely brings it front of mind.

The best place to start is with some of the basics.

Having a sound investment strategy is not only a sensible thing to do, it is an obligation of SMSF trustees.  An investment strategy for an SMSF should consider diversification (investing in a range of assets and asset classes).  This means the trustee should have regard to the risk versus the return of different assets, and have regard to the needs and circumstances of the members of the fund.

It is also important to consider the liquidity of the fund’s assets (or how easily they can be converted to cash) and the fund’s ability to pay benefits (when members retire) and other expenses that arise.  As part of the formulation (and regular review) of an investment strategy, trustees also need to consider whether it is appropriate for insurance (such as life insurance) to be held within the fund for each of the members.

There are many different approaches that may be taken to formulating an investment strategy, and unfortunately this is where some trustees could get it wrong.  You may wish to think about a target that you are trying to achieve with the fund’s investment – for example, CPI + x% return (you insert the “x”) over a 5 year period.  This takes into account the fact that investments (and markets) can and do fluctuate over time.  Many investment strategies also nominate a targeted asset allocation by asset class, as well as tolerances.  Again, as an example, a target of 40% invested in Australian shares, and a tolerance of +/- 20%.  Using this really says that as a trustee you have a target you would like the SMSF to achieve, but the SMSF remains within its strategy if the value of Australian shares across the SMSF’s portfolio stays within 20% - 60%.

Some SMSFs may set a target, but allow the tolerance to be between 0% and 100%.  This may be too wide a tolerance for the SMSF and may not be helpful in assisting them meet their target.

 What you do need to remember though with an investment strategy is that it is never set and forget – as there is a requirement to review it regularly.  You can choose to leave it unchanged, or change from one year to the next as required.  The big question then is how often should it change?

Provided you continue to have your investment strategy in line with the legal requirements such as diversification and liquidity, then your documented strategy doesn’t necessarily have to change unless the circumstances of the SMSF or the members have changed.  Importantly though, this doesn’t mean that you can’t change the underlying investments more frequently.  Considering that an investment strategy is usually set at an asset class level (eg Australian shares), there is plenty of room to make changes within that asset class itself.  There are a number of considerations in making these changes.

Trustees may have intentions to exit at the peak of the cycle.  The problem is you never know when that peak has come.  Just because an asset has performed really well doesn’t necessarily mean it’s time to sell it.  Remember that if you are selling an asset at what you believe is its peak, you should also take into consideration other matters such as transaction costs and tax consequences of selling investments.  These matters may mean you have less proceeds to reinvest.

 One other big item often overlooked is when SMSF trustee’s choose to purchase real property.  This will often be a large percentage of the fund’s value so you should ensure that you have considered and documented why this reduced diversification and reduce liquidity remains appropriate for the fund and its members.

Whilst having a carefully considered and documented investment strategy is vital for a SMSF, you also don’t have to make all the decisions yourself.  There are professional advisers that specialise in SMSFs that can help you develop an appropriate strategy for the fund and its members, and give you a greater level of comfort that the fund is meeting its obligations.

Contact Vawdrey Axton Turner and meet with one of our licensed advisers who can support you to control and manage your own super and retirement plans. Call us on 9584 2277.

Thinking about salary sacrificing your super?

Salary sacrificing into super is effectively a long-term wealth strategy that may help to grow your retirement savings over time.

It is really about sacrificing some of your income now, to save for your retirement and means you’re not just relying on your employer’s regular super contribution of 9.5 percent to save for your future. As you’ll essentially be taking home less money, you may want to consider calculating how much of your income you can afford to give up.

There are a number of benefits to salary sacrificing into super. These include:

  • the amount you salary sacrifice into super is generally taxed at 15 per cent, which for most people will be less than the tax you may pay on that income personally if it was paid to you as salary. This also means you will reduce your taxable income as you’ll essentially be taking home less money

  • what you earn off your investments inside super is taxed at 15 percent, which may be less than the tax you may pay on your investment earnings outside super

  • you have additional money being saved towards your retirement, with these regular savings happening automatically for you.

 There is also the added power of compounding returns. As you start adding more money to your super account, you may earn returns on that extra amount over time. So, it’s that little bit of returns you earn in the early stages that can make a difference in the end.

It is important to note if you’re thinking about salary sacrificing into super:

  • the tax benefit is only available if you contribute no more than $25,000 per year from your pre-tax income. This includes the regular super guarantee contributions made by your employer; and

  • the extra money you contribute into super is generally not accessible until you retire.

Protecting your business from scams

Australian businesses reported more than 5800 scams with losses exceeding $7.2 million in 2018, a 53 per cent increase compared to 2017, according to the Australian Competition & Consumer Commission’s (ACCC).

One of the more common scams targeting businesses is hacking business email systems and impersonating the intended payment recipient. In these cases, scammers request changes to bank account details so that the business makes the payment to the scammer instead of the legitimate business.

According to the ACCC, small businesses with fewer than 20 staff were most likely to be targeted by scammers and accounted for more than 75 per cent of reports received. Businesses were most likely to be targeted with false billing scams but investment, hacking and phishing scams also caused significant losses.

Ensuring all staff are aware of these scams and putting in place clear processes and procedures for transferring money and verifying changes of bank account details are ways businesses can protect themselves.  

We’d encourage all clients to visit www.scamwatch.gov.au to learn more about scams potentially targeting your business. You can also follow @scamwatch_gov on Twitter and subscribe to Scamwatch radar alerts. Businesses can also sign up to the ACCC’s Small Business Information Network to receive emails about new or updated resources, enforcement action, and scams relevant to the small business sector.