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How to ADD a RECORD on the website

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How to access FILING CABINETS on the website

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How to generate REPORTS

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How to add % CLAIMABLE work related settings

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How to use the APP

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How to CREATE a NEW INVOICE

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How to view & resend your saved INVOICES

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How to add & edit your INVOICE SETTINGS

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How to add & edit your CUSTOMERS in invoicing

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How to add & edit saved INVOICE DESCRIPTIONS

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Keeping a Motor Vehicle Log Book

If you use the logbook method, you:

  • can claim the business-use percentage of each car expense, based on the logbook records of your car’s usage
  • must keep a logbook so you can work out the percentage
  • must have written evidence of your fuel and oil costs, or odometer readings on which your estimates are based
  • must have written evidence for all your other expenses.

Example
At the end of the income year, Tim’s logbook shows he travelled a total of 11,000 kilometres, of which 6,600 were for business.
To work out the percentage the car was used for business purposes, Tim made the following calculation: 6,600/11,000 × 100 = 60%
Tim’s total expenses, including depreciation, are $9,000 for the income year. To work out how much he could claim, Tim completed the following calculation:
$9,000 × 60% = $5,400

Valid for five years
Each logbook you keep is valid for five years, but you may start a new logbook at any time.
If you establish your business-use percentage using a logbook from an earlier year, you must keep that logbook and maintain odometer readings in the following years.

Your first year
If this is the first year you have used the logbook method, you must keep a logbook during the income tax year for at least 12 continuous weeks. That 12-week period needs to be representative of your travel throughout the year.
If you started to use your car for business purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year so it covers the required 12 weeks.

Two or more cars
If you want to use the logbook method for two or more cars, the logbook for each car must cover the same period. The 12-week period you choose should be representative of the business use of all cars.

Information your logbook must contain
Each logbook you keep must contain the following information:

  • when the logbook period begins and ends
  • the car’s odometer readings at the start and end of the logbook period
  • the total number of kilometres the car travelled during the logbook period
  • the number of kilometres travelled for each journey recorded in the logbook (if you made two or more journeys in a row on the same day, you can record them as a single journey). You will need to record:

the start and finishing times of the journey

odometer readings at the start and end of the journey

kilometres travelled

reason for the journey.

  • the business-use percentage for the logbook period.

What is work related travel?

The following are example of work related travel:
Travel between home and work: A deduction is not allowable for the cost of travel between home and the normal work place as it is generally considered to be a private expense. This principle is not altered by the performance of incidental tasks en route. The principle is also not altered if the worker is required to have a car available at work, uses a car because using public transport is impracticable, or is required to travel to work outside normal hours.
Travel between home and work – transporting bulky equipment: A deduction is allowable if the transport expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. A deduction is not allowable if the equipment is transported to and from work by the building worker as a matter of convenience. A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace.
Travel between home and work where home is a base of operations and work is commenced at home: A deduction is allowable for transport expenses if they can be attributed to travelling on work, as distinct from travelling to work, i.e., where the worker’s home is used as a base of operations and his or her work has commenced before leaving home.
Travel between home and shifting places of work: A deduction is allowable for the transport expenses incurred in travelling between home and shifting places of work, where the building worker is required by the nature of the job itself to do the job in more than one place. The mere fact that a worker may choose to do part of the job in a place separate from that where the job is located, is not enough.
Travel between two separate work places if there are two separate employers involved: A deduction is allowable for the cost of travelling directly between two places of employment.
Travel from the normal work place to an alternate work place while still on duty and back to the normal work place or directly home: A deduction is allowable for the cost of travel from the normal work place to other work places. A deduction is also allowable for the cost of travel from the alternate work place back to the normal work place or directly home. This travel is undertaken in the course of gaining assessable income and is an allowable deduction.
Travel from home to an alternate work place for work-related purposes and then to the normal work place or directly home: A deduction is allowable for the cost of travel from home to an alternate work place and then on to the normal work place or directly home.
Travel between two places of employment or between a place of employment and a place of business: A deduction is allowable for the cost of travel directly between two places of employment or a place of employment and a place of business, provided that the travel is undertaken for the purpose of carrying out income-earning activities.
Travel in connection with self education: You can claim the cost of daily travel from your home to your place of education and back to home or work to your place of education and back to work.

Telephone – Calculating work related %

You can claim a deduction for the cost of work-related phone calls you make.

If you also use your phone for private purposes, you can only claim that portion of your phone costs and calls that relate to your work-related use of the phone.

You may be able to identify your work-related calls individually on your itemised telephone account. If you do not receive itemised accounts, you can make a reasonable estimate of your call costs based on diary records you have kept over a minimum four-week period, together with your relevant telephone accounts.

Example: Sebastian uses his mobile phone for work purposes. He is on a set plan of $49 a month and rarely exceeds the plan cap.

Sebastian receives an itemised account from his phone provider each month by email that includes details of the individual calls he has made.

At least once a year, Sebastian prints out his account and highlights the work-related calls he made. He makes notes on his account for the first month about who he is calling for work – for example, his manager and his clients.

Out of the 300 calls he has made in a four-week period, Sebastian works out that 240 (80%) of the individual call expenses billed to him are for work and applies that percentage to his cap amount of $49 a month. The other two months that Sebastian reviews are consistent with this.

Since Sebastian was only at work for 46 weeks of the year (10.6 months), he calculates his work-related mobile phone expense deduction as follows:

10.6 months x $49 x 80% = $415.52

Tax Agent vs Accountant

An Accountant is person whose work involves them performing accounting tasks which can include interpreting a financial position or giving business advise. There are different levels and qualification of Accountants and also those who specialise in specific areas.

A Tax Agent is a person or business (usually an Accountant) who is registered with the Tax Practitioners Board and is legally licenced to complete and lodge tax returns.

See www.tpb.gov.au

BAS Agent vs Bookkeeper

BAS Agents are Bookkeepers who are register with Tax Practitioners Board to legally provide “BAS Agent Services”. The most significant of these is preparing and lodging a Business Activity Statement for a fee.

See www.tpb.gov.au for more information

Understanding GST (Goods and Services Tax)

Once you have an ABN (Australian Business Number) and are ‘Registered for GST’ you are required to report and pay the GST you have charged and collected, on income earned, to the ATO.

The GST paid to you, is not your money. You are collecting the GST for the ATO and you must report it on your Business Activity Statement (BAS) and pay it to the ATO.

However, because you are Register for GST, you can also claim back any GST you have paid on expenses that directly relate to the income earned in operating your business. For example GST on the products, fuel or stationery you purchase.

To claim GST back on the expenses you pay, you must have proof of the purchase. If you don’t have the correct proof, you can’t claim back the GST. This means you must have one of the following:

  • cash register docket
  • a receipt
  • an invoice
  • a proper tax invoice (for purchases over $82.50).

You can’t claim for an expense if you are reimbursed for it.

You can’t claim the GST on private purchases or on the private portion of an expense. This means if you use your car 50% of the time for business, you can only claim 50% of the expenses and 50% of the GST.

You can not claim GST if there is no GST included in the price. For example if the supplier of the invoice is not registered for GST or the product is GST Free.

BAS Agent Services – July 2016

While Hard Hat Accounts remains a simple “do it yourself” solution for your bookkeeping, we now also offer a REVIEW and LODGEMENT service. For more information and pricing, please see the BAS Agent Services page.

Change to Terms of Use – July 2016

Our “Terms of Use” have been changed to reflect our new name “Hard Hat Accounts”.

Rebrand to Hard Hat Accounts – August 2016

Hard Hat Bookkeeper has changed it’s name to Hard Hat Accounts.

Mobile Invoicing Feature Added – June 2016

We are pleased to announce Hard Hat now has simple invoicing capability. Invoicing is accessed from our new mobile friendly website. Your invoices can now be created and sent on the go.

What is an ABN (Australian Business Number)?

The Australian Business Number (ABN) is a unique eleven digit number that confirms your business operation is registered with the Australian Government and is your identifier for dealings with the ATO and other government departments and agencies.

To check your own or someone else’s ABN and GST registration visit ABN Lookup:

http://abr.business.gov.au

ABN Lookup

 

ABN’s and GST Registration details are available to the general public so it is ok to tell anyone your ABN but it is illegal for some else to use your ABN or to use a false ABN.

If a business supplies you with goods or services it should quote its ABN. If it does not you must generally withhold 49% from the payment you make to them and send the withheld amount to the Australian Tax Office (ATO). For more information visit:

https://www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/When-a-business-doesn-t-quote-its-ABN/

More information about applying for, updating and cancelling an ABN or to register for GST visit:

https://abr.gov.au/For-Business,-Super-funds—Charities/

 

 

What is a BAS (Business Activity Statement)?

A Business Activity Statement is the form you use to report your GST activity and other tax obligations to the ATO. Your activity statement is personalised to your ABN (Australian Business Number) so it is important that you only use the form sent to from the ATO. You will receive your activity statement before it is due so you will have enough time to complete and lodge it with the ATO. Late lodgement could lead to you being fined.

Apart from annual reporting, your BAS is due every three months. The reporting period and due dates will be printed on the form. Standard dates are:

1 July to 30 September         is due 28 October

1 October to 31 December    is due 28 February

1 January to 31 March          is due 28 April

1 April to 30 June                   is due 28 July.

You will still need to lodge your BAS if you have nil (zero) to report.

You need to keep a copy of your completed BAS each quarter.

You can link your MyGov account to the ATO so that you can receive and lodge your BAS online.

How to pay is on the form.

If mailing, use the envelope provided with your form, you will need to add a stamp. You must send it so it is received on or before the due date

You must still lodge your activity statement by the due date even if you can’t pay on time. A penalty may be applied if you fail to lodge on time, and a general interest charge will be applied to any amount not paid by the due date.

If you can’t lodge and pay on time, you must phone the ATO on 13 28 66 to check whether alternative arrangements can be made.

Am I registered for GST?

To check your own or someone else’s GST registration visit ABN Lookup: http://abr.business.gov.au. Please note: you can NOT charge GST if you are NOT registered.

ABN Lookup

 

 

You will be presented with information about the entity which includes whether they are registered for GST or not. Do not pay GST to an entity who is not registered for GST.

GST Registration

 

What is a “Tax Invoice”?

A tax invoice is a document generally issued by the seller. It shows the price of a sale, indicating whether it includes GST, and may show the amount of GST.

The information in your invoices and even what you call them (‘tax invoice’ or just ‘invoice’) depends on whether or not your business is registered for GST.

If you’re registered for GST, your tax invoices should contain the following information:

  • your business name
  • your Australian business number (ABN)
  • the words ‘tax invoice’
  • an invoice number
  • amount of the sale
  • amount of GST (this can be shown separately for each item or, if the GST to be paid is exactly one-eleventh of the total price, as a statement such as ‘total price includes GST’)
  • nature of the goods or services sold
  • date of sale (if different to the invoice date)
  • an invoice date
  • the purchaser’s identity or ABN (for invoices over $1,000).

When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice from you to be able to claim a credit for the GST in the purchase price. A receipt will suffice for amounts under $82.50.

If a customer asks you for a tax invoice, you must provide one within 28 days of their request.

What is a “tax deductible” expense?

Tax deductible expenses are almost any “ordinary, necessary, and reasonable” expenses that help to earn business income.

Most expenses you incur in running your business are tax deductible. You claim these deductions in the annual tax return for your business or, if you’re a sole trader, in your personal tax return.

Assessable Income                       $

less Tax Deductible Expenses  –  $_________

equals Taxable Income            =   $

What does my Accountant need?

Your Accountant or Tax Agent will advise you of the documents or files they require but generally speaking what they need is information presented in an organised, consistent manner. By doing this, there is less work required by them and you should be charged less.

Some accountants insist that you use the accounting software they are an agent for. If this is expensive or too difficult for you to use, I would question why you need to use this method. In the long run this will end up being more expensive and stressful for you.

Basically what you need to give them is a list of similar expenses collated and added together. The GST should be separated from the expense if you are registered for GST. If you are not sure how to categorise an expense just be consistent (that is, use the same category) for the whole period. This can always be corrected at the end of the year.

You need to keep the invoices, receipts or other documents like bank statements or loan agreements and Activity Statements. Having these filed systemically or electronically will also make doing you tax return easier and faster.

Remember, if in doubt keep it, ask questions and toss it later if it’s not required.

 

Do I have to bank cash I receive?

The answer is no you don’t have to. However, you MUST declare the cash and record it as income received. You still need to issue (paid) invoices or give a receipt depending on the circumstances.

You can not discount a cash payment by excluding the GST.

You can pay for business expenses with cash received and claim them as a deduction if you have the correct proof of purchase.

The ATO keeps a close eye on industries that typically deal in cash so good record keeping is important for all those involved.

 

 

How long do I need to keep my records?

The most important reason for keeping good records is that it’s a legal requirement. By law, you must keep business records:

  • for five years after they are prepared, obtained or the transactions completed, whichever occurs latest
  • in English or in a form that the ATO can access and understand in order to work out the amount of tax you are liable to pay.

You will have to keep records for longer if you use information from those records in a later tax return – for example, if you claim a loss carried forward from a business activity in an earlier year. Under these circumstances, you must keep the records until the end of any period of review for that later return.

In the case of depreciating assets (claimed by declining value not the purchase price), you must keep written evidence for:

  • the entire period over which you claim deductions for their decline in value:
  • and a further five years from the date of your last claim.

You may also need to keep records relating to assets for capital gains tax purposes for a longer period.

If you are in dispute with the ATO, you must keep your written evidence for the later of five years from when:

  • your return is lodged; or
  • the dispute is finalised.

There are penalties for not maintaining the required records and for not keeping them for five years.

What records do I need to keep?

You need to keep records that explain all your business transactions. For example: sales invoices, cash register or credit card tapes, purchase receipt and tax invoices, bank and credit card statements.

You also need to keep records that show how you calculate and used to prepare your Business Activity Statement and Income Tax Return. For example: motor vehicle expenses (this might be a log book) and calculations showing business vs private usage for phone or home office. Depreciation schedules and stock take sheets.

And also documents that show calculations for other tax obligations such as capital gains tax, fuel tax credits, payments to employees and associated documents.

What can I claim?

Most expenses you incur in running your business are tax deductible. You claim these deductions in your tax return. Tax deductible expenses are almost any “ordinary, necessary, and reasonable” expenses that help to earn business income.

Some expenses can be claimed immediately – day to day expenses.

Some are claimed over a number of years that is by their decline in value or depreciation for example capital assets like machinery, tools and computers.

And some expenses by law can’t be deducted for example parking and speeding fines and loans the business makes to others or money drawn by the owner.

Deductible expenses must be related to your business and YOU MUST BE ABLE TO SHOW why you needed to spend the money to carry on your business.

Basic rules for claiming deductions

  • You must have spent the money.
  • It must be related to your job, not private (if partly used for both, only claim the work portion).
  • You must have a record to prove it (receipts, bank statements or diary entries).
  • Claim the deduction in the same income year that you made the purchase.
  • Don’t claim an expense that you have been, or will be, reimbursed for.
  • When you sign your tax return, you are declaring that everything you have told the Tax Office is true and you can support your claims with written evidence.
  • You are responsible for providing proof of your expenses, even if you use a registered tax agent.

 

Comprehensive industry specific lists of deductible expenses are available in “Tutorials” after signing in.

Is it ok to keep electronic records?

At present, you can record the information from your business transaction documents either electronically or manually, although, the ATO is encouraging the use of electronic systems.

The advantages of an electronic record keeping package are that it:

  • helps you record your business transactions, including income and expenses,
  • automatically tallies amounts and provides ready-made reporting,
  • can produce invoices
  • provide summaries and reports for GST and income tax purposes
  • keeps up with the latest tax rates and tax laws, and rulings
  • prevents loss of documents form fading
  • requires less storage space
  • allows you to back up records and keep back-ups in a safe place in case of fire, theft
  • enables you to use your time more efficiently. When planning to use an electronic record keeping package make sure you choose a software package that meets your business needs and the ATO’s requirements. You may want to consult your tax adviser.
  • flexible options for access to your data
  • easily shared when required.

 

Can I use Hard Hat for accruals based Business Activity Statements (BAS)?

No, Hard Hat is programmed to give figures for a “Cash Basis” BAS only.

 

Can I pay by Direct Deposit?

Yes you can, however, we only accept yearly subscriptions via direct deposit.

You need to contact Hard Hat first.

contact@hardhataccounts.com.au

Are my payment details secure?

Hard Hat’s payment options connect you with either Westpac’s Payway system or PayPal.

Any bank account or credit card details stored, are within these external systems and not Hard Hat.

How do I unsubscribe?

  1. Log In to your website account
  2. Main Menu
  3. Settings
  4. In the Unsubscribe box enter your password
  5. Type the text in the Re Captcha box
  6. Click “Unsubscribe” button

How do I change my password?

  1. Log in to your website account
  2. Main Menu
  3. Settings
  4. Password
  5. Confirm Password
  6. Save

 

What happens if I stop paying my subscription?

60 days from your expiry date your account including all data and images will be deleted permanently.

During the 60 day period from your expiry date,  you cannot add records but you can modify existing records, print reports and download your data and images.

Contact Hard Hat Administration of you need assistance.

How do I know when my subscription expires?

Your subscription expiry date is shown at the top of the “Payments” screen from the Main Menu on the website.

How do I pay my Hard Hat subscription?

  1. Log In to your website account
  2. Main Menu
  3. Payments

Select your payment choice and follow the screen instructions.

An invoice from Hard Hat will automatically be added to your expense cabinet.

 

Cash Accounting vs Accruals Accounting

“Cash” basis accounting means you record and report your income and expenses when you receive and spend money (cash).

Where as “accruals” basis accounting means you record and report your transactions based on the date of the invoices you create and receive, even if they have not been paid.

Budget vs Cash Flow

A budget is an estimate of the income and expenses you expect to have over a period of time.

Where as cash flow is the actual money collected and available to spend.

Opening Bank Balance      $  3,500

+ Money Collected             $  8,000

$11,500

– Money Spent                     $ 5,500

Cash Available                    $ 6,000

What you need to be aware of here, is the bills (which may include tax) that you haven’t paid yet. This is where a budget is useful. A budget and a cash flow used together are very powerful business tools.

Cash in the bank does not always mean money you have spare!!

Profit vs Cash

In very basic terms profit is calculated by deducting your expenses from your income.

Income           $10,000

–   Expenses   $  6,000

=   Profit           $  4,000

However, if you have invoiced $10,000 but your customers have not paid you, you may have a profit but you won’t have cash.

Cloud Computing vs Local Hard Drive

Cloud computing means storing and accessing data and programs over the internet instead of your computer’s hard drive. Your hard drive is referred to as local storage.

 

Bank Feeds vs No Bank Feeds

While many accounting products have the capability to feed data from your bank account directly into their software, this process is not advantageous to everyone.

Things you should be aware of are:

  • Every transaction is transferred and recorded, including those that are personal, as well as business.
  • You need to train your software to categorise all your transactions.
  • If you have multiple accounts and transfers between them, this can confuse the software.

Bank feeds are not a time saver or suitable for everyone.

Can I backup my data?

All your data and images can be downloaded and stored externally from Hard Hat. Data can be downloaded in .csv and .pdf formats and images are downloaded to a zip file for easy storage.

Download links are found on the Cabinets and Reports screens

Can Hard Hat Administration see my records?

No they can’t. Administration can see the number of records you have entered but not their content or images.

Single Entry vs Double Entry

Nearly all accounting products on the market are based on “double entry” bookkeeping. This means that for every record entered, a credit entry and an equivalent debit entry are created. Sometimes entries are made up of multiple credits and debits. This is what makes accounting processes complex and confusing to the untrained person.

Single entry, on the other hand, requires only one entry per record.

Hard Hat Accounts is a single entry system and, in most cases, is all a sole-trader needs for their record keeping.

Ask us or seek professional advice as to the suitability of either system.

How many users can I have?

You can have multiple users logged into the one account, on different devices all at the same time.

However, each Hard Hat account is designed to collate the records for one individual’s or one entities Business Activity Statement (BAS) and Tax Return.

Can I change my subscription type?

If you change from not register to register for GST or vice versa, yes you can change your subscription type.

You can only do this by contacting Hard Hat Administration on contact@hardhataccounts.com.au