The Advantages of Using Local Software in your Company

For many Australian Businesses, Australia Day marks the beginning of the Business New Year.  It is a tradition that many Australians take an extended holiday break through Christmas, only returning to work after the Australia Day long weekend. Now that the New Year has set in and the hustle and bustle of work begin, it’s an important time to ensure your business is leveraging off software that will allow for businesses growth. Learn how using Australian built software has many benefits for you and your company.

Business Activity Statement

The Australian tax regime is quite complex compared to other countries. Businesses are required to lodge a business activity statement; larger businesses are required to lodge one quarterly. A business activity statement is a summary of all the business transactions that have been made during that quarter and is quite complex in the categorisation of income and expenses. If your accounting system has not been designed to create an activity statement, you may find that you are unable to source the correct information required to lodge one. As an example, the business activity statement requires separate information for the wine equalization tax (WET), PAYG instalments, fringe benefit tax instalments and deferred company tax. Many businesses have ended up in a position of implementing a new system and having to complete their business activity statement manually. This defeats the object of putting in a new system as it results in the company becoming less efficient rather than more efficient.

Goods and Services Tax

Australian Goods and Services Tax (GST) is a value-added tax but differs somewhat from value added tax in other countries.  Your system needs to differentiate between taxable and non-taxable supplies. The tax office provides a list of exceptions and any stock items that are non-taxable must be identified as such in your system. The system must also be able to deal with ‘mixed supplies’ this means that on a single tax invoice you may have supplies that are goods and services taxable and supplies that are exempt. The total tax on the invoice will not equal 10% of the total invoice amount. Many Non-Australian systems cannot handle this. Additionally, there are strict requirements for the layout of a GST compliant invoice. Systems that can create a generic invoice designed for other countries may not comply with the ATO requirements and standards.

Cash vs accrual GST

Australia allows small businesses to operate on a cash-based GST system. This means that the GST component is only remitted to the ATO once payment has been received from your customer, or paid to your supplier. Businesses with an aggregated turnover of less than $10 million can choose to account for their GST using the cash accounting method.

If you run your business on cash-based GST you should be aware that once you exceed the threshold, you will be required to switch to accrual (invoice based) GST. This means that the GST must be remitted based on your invoices rather than on your cash receipts. Switching from a cash-based GST to an invoice based GST is extremely complicated, and if you intend to grow your business the sooner you switch, the better. Not all software systems can handle both cash and invoice based GST.

Payroll

If you thought that GST legislation was complicated, Australian payroll legislation is even more so. There are very few overseas payroll systems that are able to deal with the complexities of Australian payroll. Terminations are even more of a minefield. In addition to the basic requirements,  if you are operating in an industry with awards, your system must be able to handle the interpretation of these awards. As an example, an employee starting at 7 am in the morning may earn a different rate per hour to the same employee starting at 8 am. The interaction between payroll, timesheets and awards is a complex one. Superannuation legislation is also complex. Australian built payroll systems have evolved over years to deal with these complexities. This is one area where software that has not been localised will not be able to meet the legislative requirements.

Changes in Legislation

The Australian legislation is not only complex but changes frequently. Overseas software providers are not able to be responsive to these changes. Australian providers liaise closely with the ATO and other government regulatory bodies. They are usually involved during the drafting phase of the legislation and are given sufficient time to modify their software to meet new requirements. Recent changes that will impact on your ERP and payroll systems are SuperStream, One touch payroll and electronic lodgment of business activity statements. Stay up to date with the most recent changes and requirements of Single Touch Payroll here.

Terminology

Small differences in terminology make learning a new system unnecessarily complicated. For example, in Australia, we may refer to “stock” where in America this may be referred to “inventory”. An invoice may be referred to as a bill, a stock code may be an item code in a non-stock business and American terms like dunning letters are unknown to Australians. Using terminology more familiar to Australian users eliminates much of the pain of learning a new system.

Why MYOB is the best choice for companies in Australia

MYOB has software for all companies large and small. All of the above localization factors have been incorporated into all MYOB software. Moving from one MYOB product as your business grows means that not only do you comply with the legislative requirements but the users of the system will be familiar with the interfaces, terminologies and workflows. MYOB is a leading provider of business management solutions in Australia and New Zealand. Products include a simple bank feeds service, MYOB Banklink, to cloud accounting product suites, MYOB Essentials and MYOB AccountRight, through to enterprise software for more complex businesses, MYOB Exo Business and MYOB Advanced. If you are currently using MYOB AccountRight you will know that from 30th September, 2019, MYOB will no longer provide features, patches, compliance updates or product support for your MYOB AccountRight Classic desktop software.  Now is a good time to explore the transition to MYOB Exo or MYOB Advanced. Read more about the transition here.

Benefits of using the Australian ERP

 

Approximately two in three Australian businesses use accounting software and of these around 60% use MYOB. Around 60% of accountants use MYOB as their main practice solution.

Take this opportunity to contact your local advisor to learn more about MYOB products. We are located in both Australia and New Zealand to be more accessible for our clients. Call us now on 1300 857 464

Behind the Cloud

Behind The Cloud

We recently had the opportunity to host our Melbourne User Group forum at a datacentre run by NextDC where the attendees were given a tour of the facilities.  If you have been hearing about the recent trend to Cloud-based I.T. services and are wondering how these are provided, the following is a description of how the Cloud is enabled through the use of data centres.

What is a Data Centre and where does it fit in the “Cloud”?

A data centre is a facility providing the infrastructure to host large numbers of server computers.  This type of facility can be run by a company providing hosted software services for delivery of its products or by an independent company which provides the facility as a service to other organisations that need a place to have I.T. services hosted from.

These computers are then accessed remotely in order to provide “cloud-based” computing services, whether this is software hosting, databases, email, central files storage or data backups.

How Does a Data Centre Work?

The core services provided by a data centre are security, internet access and networking, cooling and continuous power.  Because these services are provided on a large scale and to many customers, the cost of their provision is typically lower than having an in-house server room.  The facility will also provide twenty-four hour access to approved technicians and company representatives as well as other business services.

The facility is divided into groups of servers for powering, networking and, especially, cooling needs.  The building is supplied by multiple power cables, each following a separate route from the power grid to the building to prevent an accidental cut to the power.

In the event of the building losing power, multiple redundancies are in place.  This will typically involve diesel, backup generators along with a cut-over system, either a fly-wheel or battery system, to ensure continuous power in the seconds between the external feed going down and the backup generators kicking in.  These redundancies, along with excess capacity of power and cooling, are designed to ensure an up-time near 100% (Tier III facilities are assessed at the level of 99.982% up-time).

Globally, data centres are assessed by the Uptime Institute which maintains a four-tier accreditation process where Tier IV is the highest.  The highest level centres in Australia are currently rated at Tier III and around a dozen are assessed as being at this level.  More information about the rating levels can be found here: http://en.wikipedia.org/wiki/Data_center#Data_center_tiers.

How Do I Access a Data Centre for My Own Cloud Systems?

A third-party data centre can be utilised in one of three ways:

  1. You license use of a hosted software product through the product’s vendor, in which case the use of the data centre is behind the scenes and the vendor deals with data centre;
  2. Through an I.T. services company, where they would use the data centre to house their computers.  You then rent part of these computer from the I.T. company.  Again, the service of the data centre are behind the scenes from your perspective.  This is typically how small- to medium-sized cloud services are enabled;
  3. By purchasing your own servers and networking hardware which you configure and then deliver to the data centre.   They are then hooked into the centre’s power, internet and cooling infrastructure and a secure connection established from your office to these computers.  The best way of imagining this scenario is as an off-site, server room.  This approach is more for large-scale operations.

In either of the first two scenarios, you should be able to ask where the services or products are being hosted from (for example, Australia Post’s digital mailbox is hosted from a Telstra, Tier III data centre).

Each of the servers in the data centre will have their own security systems in place along with firewalls and are accessed from your office through a Virtual Private Network (VPN) or other secure connection which connects you directly with these machines.

Are Data Centres Reliable?

Yes.  The combination of multiple, redundant systems and security of both the internet connections and the physical building are provided to provide surety of service.

What Can This Mean for My Business?

Rather than having to purchase whole servers, then arrange for their setup, networking and maintenance, the use of a data centre or cloud server means that the resources which are leased can more easily be matched with your requirements.  Purchasing server hardware normally involves significant outlay, as the machines are normally provided with excess capacity for future growth over a lifetime of several years.  When acquiring the use of a cloud service, typically option 2 above, the resources assigned can be matched with what is required more closely and then easily adjusted as they change.  The ongoing cost is then less.

How Can I Explore Cloud-Hosted Services for My Company?

Your first port of call would be your I.T. network administrators to review your current I.T. infrastructure.  If needed, we have worked with several, reliable companies and are happy to make introductions.