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Trading Hobbyist: Accounting trap or goldmine?

By Homepage, In the Media, IndustryNo Comments

Trading Hobbyist: accounting trap or goldmine?

Never before has there been such a perfect storm leading to potentially either a goldmine or a nightmare for accountants. In this post, I will attempt to explain why accountants need to be prepared, how we got here and how you can turn a possible disaster into a goldmine for your firm.

It has been written and talked about ad nauseam – the world has changed. Ever since March 2020 we were told to go home: it’ll only be a few weeks and then we can all go back to normal. As weeks turned into months and the months into years and the situation spiralled out of control, many of us struggled with what to do with all this extra time we had on our hands. We were no longer distracted by social activities, ferrying kids around to various sports or being forced to go on holidays.

It was finally here. This was our chance. We were home when not eyeing people off suspiciously at the supermarket, or trying to hold in a cough at the chemist (just a dry throat, I swear). And then the storm hit. The formula looked something like this:

Increased time at home + technology at our fingertips + low brokerage fees = we could all be the Wolf of Wall Street.

Finally living the dream. Sitting around in pyjamas, a bowl of corn chips resting on our enlarged bellies, phone in one hand while keeping an eye on whatever it was Netflix told me everyone else was watching so why aren’t you. And within the phone the power to trade across time zones, across markets, derivatives, options, CFDs, crypto… Endless opportunities to make your millions, or quietly realise a loss that would never be spoken about.

This scenario may sound familiar or chances are you know someone that went down this path. Some people were just passing the time with a flutter, others legitimately trying to build wealth. Either way, we know that a lot of Australians did this.

According to SelfWealth’s (a flat fee retail share trading platform) Annual Report, active traders on their books increased by 105% during FY21 and the total number of trades increased by 147% for the same period¹. The reduced costs associated with working from home and lack of alternatives meant people had a surplus of cash and now that cash became seed capital for their own private hedge fund.

While the popularity of ETFs is growing, only 15% of investors choose this investment type compared to 58% of investors directly holding Australian shares (ASX, 2020)². A key area to watch is the number of investors dipping their toes (and sometimes up to their neck) in the ever-expanding galaxy of cryptocurrencies. According to the AFR, 1 in 5 Australians is likely to buy cryptocurrency in the next 12 months³.

We are now seeing investors using multiple brokers and exchanges to take advantage of sign up offers and referral programs. This may make sense for the investor looking to capture the highest return possible, but it does mean that they may end up with poor records and difficulty in tracking their investments.

Throw into the mix buybacks, stock splits, DRPs, demergers as well as the even more complex world of crypto yield farming and come tax time there will be either underreporting (non-compliance) or a heap of work for someone to reconcile the data and make sense of all the transactions.

While excel has been one of the greatest fintech solutions since Lotus 1-2-3, it does have limitations. Excel formulas can be error-prone, time must be invested for compliance changes and reconciliation back to any data source is limited or non-existent.

Luckily for today’s accountants there exists a whole new world of automation: an ecosystem of data feeds, AI and automated processing that will drastically reduce the amount of time required to keep track of CGT records, produce financials and arrive at a reliable tax optimised position.

The perfect storm has enabled trading and wealth creation for a whole new generation and now this generation needs your help to make sure they do not give it all back with poor tax planning and compliance issues.

References:

  1. SelfWealth Limited Annual Report (2021, June 30)  https://www.selfwealth.com.au/investor-centre/
  2. ASX Australian Investor Study (2020) https://www2.asx.com.au/blog/australian-investor-study
  3. AFR (2021, June 8) Four million Aussies set to buy into crypto https://www.afr.com/companies/financial-services/four-million-aussies-set-to-buy-into-crypto-20210608-p57z2g

When you find the right culture, it all makes sense!

By Culture, HomepageNo Comments

When you find the right culture, it all makes sense!

I’ve found my “happy place” – in a work / culture sense at a place I’d never heard of – BGL.

An insider's experience, coming in from the outside...

After working for incredible, global organisations and an inspirational NFP where I’ve been presented with so many opportunities, I found myself a bit lost during this Covid thing (alongside everyone else!). After taking time off and having the opportunity to focus on my kids, I wasn’t sure what to do next. Volunteering is amazing and a passion, but one needs cash to pay the bills (I know – I’m a dreamer).

I casually looked at a few roles that sounded perfect on paper. It took a few months and stints of contracting, but finally something really caught my eye and it was only after I’d had my first interview that I realised the diamond I’d stumbled upon.

My first interview with BGL was with some guy called Ron and another called Daniel. Must be recruiters? Oh nooo. Ron created, built and has run BGL for close to 35 years. Daniel, as I learned, is the COO and has been integral to BGL for over 20 years (and my boss. Spoiler alert…). For the two most senior people in the organisation to interview me – and it was Round One – made me sit up. These guys really care about the existing team and want to ensure new recruits are a cultural fit.

I was very grateful and nervous that Ron and Daniel thought I had the skills and I made it to Round Two – “The Team Interview”. Have any of you ever been interviewed by your potential future team? I hadn’t and it was nerve-wracking! And then it all made sense. The team is composed of six highly skilled and energetic marketers – it was so much fun to meet them and hear what they are looking for in a new colleague. 

Long story short – I GOT THE ROLE! Don’t want to show off when so many of us are really finding it hard to find work (BGL are hiring…) but I’m loving being part of a culture that gets me and I feel a part of something! Everyone, I mean EVERYONE, is included. Ron bought us all lunch the other day (pre-lockdown). There are no barriers, there’s no pecking order. We are all there to do the best we can and it’s inspiring working with such a talented team of dark horses.

BGL rarely promotes themselves – the culture and the time-saving products speak volumes. Am so grateful to be a part of this awesome team. The moral of the story is: when an opportunity taps you on the shoulder and the culture is a fit, go for it!

CX is Far from a Fad!

By Bec Loves CX, Homepage, In the Media, Industry3 Comments

You may have heard word on the street that Client Experience (CX) is the new industry fad and that if you don’t embrace it, your business is setting itself up for failure. This is a controversial opinion among critics however, only one part of this is true and I can say with confidence, CX is far from a fad!

CX has been around for decades however, it has commonly been mistaken for customer service and pumping valuable dollars into the latest and greatest technology. Although these are contributors to CX, it’s just the tip of the iceberg. The expectations from our clients to deliver on CX is growing day by day. 

CXPA refers to Client Experience as “the perception that customers have of an organisation – one that is formed based on interactions across all touchpoints, people and technology over time”. 

I interpret this as an emotional connection you form with a business based on your experiences with them on all levels. It’s that heart-fluttering nostalgia you get when Mr Whippy drives by playing music, in the middle of summer – Doesn’t that take you back to some fun memories? And Mr Whippy generally drove a beat-up old van and his ice cream machine was probably older than your parents, but the experiences and memories that it gave you evoke a fuzzy feeling every time.

The first question to ask yourself is this: How do our clients perceive our business? 

Many of us have been guilty of drawing off assumptions however, the key to CX is facing the hard facts of what clients really do perceive or feel when they think of your business. The biggest mistake business owners make is assuming their business is perceived a certain way and implementing changes based on this. This is self-sabotage!

Hearing and seeing hard facts or data on this matter can be a hard pill to swallow for some but if you have a genuine understanding of your client’s perception, you’re already on the path to CX success and can start implementing meaningful change.

I could go on about CX for hours and hours and don’t worry, I will! But before I flood you with what I have learnt about the six competencies of Client Experience (and work to convert you into a CX superstar!), I’d like you to think about the following points:

  • Mr Whippy was delivering Client Experience to children decades ago, it’s not a fad that will fade away and it doesn’t mean you need the latest and greatest of everything. 
  • There are two types of business owners in the world, the ones that have already embraced CX and the ones that will be forced to embrace it in order to survive. Which one do you want to be?
  • Client Experience is a genuine feeling and perception of your business.

Let’s make a start on this journey together and pick one point from this post that you can apply in your everyday life. It will make a world of difference and allow you to get a feel for what it is to live CX.

Thanks a million – CAS 360 hit 1,000,000 Annual Reviews!

By CAS 360, Homepage, Industry, NewsNo Comments

Thanks a Million!

Last week CAS 360 passed a major milestone, there has now been more than 1 million ASIC Annual Reviews processed in CAS 360!

This is a massive milestone, and we are so thankful to our clients who use CAS 360 every day to complete their corporate compliance work. Without the faith and trust, you have put into the product we would not have come close to this number, we are forever grateful.  

We built CAS 360 with the intention to streamline and automate as much of the corporate compliance job as possible, the Annual Review was always the centerpiece of this. 

CAS 360 has now over a million times automatically downloaded Annual Reviews from ASIC, automatically alerted the user via the Annual Review Alert, automatically compared the data in CAS 360 to ASIC, and after a few clicks generated the Annual Review document pack, email delivered that pack to the company directors, and automatically marked up for digital signing. 

We hope for all of the CAS 360 clients, we have been able to streamline your processes and allow you to spend more time on other meaningful work. Also, we hope that businesses are receiving their documents earlier and signing them easier than ever before. 

We are also so proud to play a part in generating revenue for our clients. If our clients are charging $250 as a service fee for completing the Annual Review, that means… Oh right,  you’re probably an accountant… You know how much has been generated by firms.

Of course, in 2021 we have made this process even more streamlined with the release of Multi Annual Reviews, allowing users to complete their Annual Reviews for the day/week in one simple process. 

However, we are not done with it yet, we have one of our biggest and best innovations yet to come later in 2021, focused on streamlining one more area of the Annual Review process… Stay tuned!

Lockdowns truly suck

By Homepage, In the MediaNo Comments

Lockdowns affect our entire country. They hurt every sector.

Really disappointing to hear and see people in Victoria and in other parts of the country taking swipes at those in lockdown which are taking place in NSW and across Australia. Those who are should have a good hard look at themselves.

What we have been through in Victoria over the last 12 months is not something I would wish upon anyone. We should be the last to applaud lockdowns given our experience and taste for the devastation they cause. Ron Lesh and I speak often about such matters. The toll is heartbreaking and real.

How short are our memories? How quickly we forget that over the past 15 months, we in Victoria have been locked down for over 170 days with restrictions right through and with us today.

We would have gladly exchanged place with our friends in Sydney to experience the freedom they had at the drop of a hat.

Are we not one Nation? One, people? One hurts, we all hurt?

Lockdowns affect our entire country. They hurt every sector. They hurt people emotionally, financially, socially and physically. No one wins in lockdowns. They are draconian and crippling on all fronts. The hit on mental health is far-reaching, affecting generations to follow well beyond the life of this virus.

The leaders across our states have a lot to give account for and we should all be questioning the harsh, disproportionate measures. The last thing we should be doing is heralding lockdown as great leadership. It is not!

The biggest threat to our country is not the VIRUS. The biggest threat is that we have forgotten what it means to be truly Australian.

Working from home: My observations. For your consideration.

By Culture, HomepageOne Comment

The last 14 months have changed the way we work. With many of us forced to work from home. We have had to adjust by force.

While many employees claim how amazing the arrangement is, cracks are appearing and we are to be concerned.

While in many cases yes productivity has increased, my view is that true engagement has decreased. The glue that keeps people together and helps organisations build great culture has taken a hit and it is a threat to our organisations and people.

On the people front, we have much to be concerned about. The risk of losing team members has never been higher. Firstly as a result of people shortage. Secondly, people are isolated, disconnected and more vulnerable to being poached. Thirdly, they have missed out on much training and development, which takes place professionally and in learning from and in working with their peers. Many are simply just doing their jobs, the same thing day in and day out. Bit by bit, as their skill set remains stagnant, they are becoming detached and concerned about their career advancement.

People’s mental health has taken a hit. In Melbourne, the latest lockdown, while not long, was the hardest. While finally stepping into a sense of normality our freedoms were once again taken from us. Many are suffering. Many in silence. Much of this has been heightened by isolation, fear, the erosion of a sense of belonging and comradery that keeps people engaged, interested and connected.

Human engagement is so important on many fronts. As leaders, our role is to set the vision for the team and to excite and inspire your team towards it. This cannot be done virtually. Social aspect aside, human engagement also allows us to get a better gauge of where people are truly at. Observation is such an important part of encouraging and building a culture of wellbeing.

I am all for a balanced working arrangement. One where there is flexibility that provides a healthy balance of working from home. One that includes enough touchpoints with their peers and the greater team to ensure they are connected and where culture can continue to be built. Human touch has never been more important and failure to encourage it will cost us both the short and long term.

APIs should be free!

By Homepage, In the MediaNo Comments

This is an opinion piece

I think charging for APIs that allow clients to access THEIR data is wrong.

It’s becoming a trend – a bit like buying disparate businesses – companies desperate for revenue decide to charge for access to their APIs. We are seeing more and more of this these days.

APIs for those who don’t know are gateways into your data. They are used by multiple software businesses to connect your apps together.

BGL made a decision on Day 1 of our cloud products that we would not charge for our API. We have reasonably simple rules around who can use the API – but the determining factor of whether the access is available is decided by authorisation from our clients. We authorise the connection – the client authorises access.

I find it interesting however some software companies think they are entitled to a share of revenue earned by the business accessing their API. How ridiculous! The data belongs to the client. The client is being charged a fee for the service provided. And now the client is being asked (and in the end the client will pay for this) to pay for the same data twice. What a racket. It’s almost an exhortation!

So if you are in our industry and your supplier decides to charge your connections (auditors, document providers, other services) for access to their API, please come and talk to us. We are happy to convert your data for FREE and even give you 6 months free to move to our solutions.

The benefits of transitioning to Simple Fund 360 are invaluable! – Bedford story

By Case Study, Homepage, Industry, Simple Fund 360No Comments

The intuitive and easy to use interface has led to processing efficiency. Especially for complex funds with lots of transactions, the processing time has reduced by more than half, which is incredible.

About Bedford

Bedford CA is a highly skilled and proactive firm of professional accountants and business advisors with over 70 years of history behind them.

The team at Bedford CA pride themselves on their proactive, personalised service to their clients. They partner with their clients to set goals and develop strategies to achieve them, from start up to retirement, as well as managing their client’s compliance requirements effectively every year.

About Diana Porta

Diana Porta, client manager at Bedford, is an experienced, knowledgeable, pro-active and engaging accountant with proven skills in Tax Preparation, SelfManaged Superannuation Funds, Auditing and Business Process Improvement.

Diana holds a Bachelor of Business and Commerce from University of Western Sydney, where she was awarded the 2010 Dean’s Medal. She is also a Chartered Accountant through the Chartered Accountants Australia and New Zealand, and is currently working towards her Masters in Economics and Finance through Sydney University.

The Challenge

Inefficient and difficult to use software

Prior to making the transition to Simple Fund 360, Bedford CA legacy systems were hard to manage – everything from digital usability to simple fund processing was difficult.

“Our previous super fund software was not very intuitive and after investing a considerable amount of time and money, there were still inefficiencies in processing super funds across the firm.”

The team at Bedford CA knew they needed a much simpler solution– and they found that in Simple Fund 360.

Why Simple Fund 360

Intuitive, innovative software that adds value to our firm and clients

“We really wanted to move to a leading software provider that demonstrates a commitment to continuous improvements to their product. Other key considerations included: If the software features were intuitive and easy to use? If the reports were easy to understand? And most importantly, if the new software would add value to our firm and our clients?”

The Solution

An intelligent, automated solution - Simple Fund 360

“We were a bit worried about the transition to Simple Fund 360, but the process was very easy. The BGL team imported all the data from our previous software and generated all the documents to set up bank and broker feeds”.

“Now, with the bank and broker feeds up and running, we are able to obtain a lot of information from directly within the software, which has considerably reduced the volume of queries to clients”.

“Processing transactions and year-end adjustments is also really easy and BGL’s Online Help is a great resource for information on processing corporate actions and matching transactions”.

Using Simple Fund 360’s Matching Rules Screen, Bedford’s CA team can now easily view, create and manage funds’ transaction matching rules – which determines the logic Simple Fund 360 uses to automatically code transactions that feed into funds through bank feeds, CSV or other file uploads.

“My favourite time saving features in Simple Fund 360 are the “Drag and Drop” file import feature and the “Transaction Matching – Create New Rule’’ feature. I love being able to “Drag and Drop” csv files into the file import feature and by “Creating Rules” in the Matching Rules Screen, most of the work is done for the current and future years”.

“Finally, the BGL Support Team has been quick and responsive to any issues we have faced so far, and the Simple Fund 360 Product Development Team is continually adding new helpful features”. 

The Results

Our processing time has reduced by more than half and now we can focus on what really matters - our clients!

“The benefits of transitioning to Simple Fund 360 are invaluable.”

“As we continue to automate as much as we can, not only are we saving time on processing, but we’re also streamlining other internal procedures. This helps us to keep a competitive price structure for our clients.”

“Now we can focus on what really matters – our relationships with our clients and assisting them with their compliance.”

ASIC finally admits SMSF fact sheet was – WRONG!

By Homepage, In the Media, Industry, UncategorisedNo Comments

I have said many times that ASIC’s “Are SMSFs for you?” fact sheet was wrong. The use of ATO data to produce a document that was clearly misleading my view was ridiculous.

Well finally the ASIC Chair has now admitted to the House of Representatives Standing Committee on Economics that it failed when this so called fact (I would call it factless) sheet was published.

BGL has been saying based on data for over 200,000 SMSFs the cost of running an SMSF is somewhere between $2,000 and $3,000. It can be higher and it can be lower – it depends – but it is certainly it is NOT the $13,900 published in ASIC’s factless sheet.

I could say “I told you so” but I won’t!

Check out the article below for more info.

https://www.smsfadviser.com/news/19866-asic-admits-failures-in-smsf-operating-costs-fact-sheet

PS: Love Tim Wilson’s comments….