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  • #967709
    DerekMcKinnon
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    Hi all

    We run a business managing childcare centers owned by clients.

    Our business model has each consultant looking after only four centres, but looking after all aspects of that centre, including doing the books (including BAS and IAS).

    I have recently heard that you need to be qualified to look after books for other companies.

    Does anyone have any information on this?

    Thanks
    Derek

    #1028289
    Dardee
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    The person/entity charging a fee for preparation of the BAS is required to be registered as a BAS Agent or was an existing BAS Service Provider in transition to be a BAS Agent. Thats the abbreviated version.

    http://www.tpb.gov.au/

    #1028290
    DerekMcKinnon
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    But we aren’t charging a fee for BAS. We are charging a service for managing a childcare service, which involves basic bookkeeping. Our staff are university qualified, but in teaching, not accounting/bookkeeping.

    The bookkeeping stuff we do is pretty basic. I’ve done it for our own centres and I’m an engineer.

    Which makes me think that if meeting tax obligations is now so hard, that a university graduate is not qualified to do it for a small business, then perhaps the tax obligations are the problem, not the people.

    #1028291
    Accountix
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    Derek

    Employees preparing BAs’s for the company they are employed by are exempt under the new legislation.

    Of more concern is the fact is that your model has unqualified staff taking care of the bookkeeping. You should at least have someone qualified checking their work, if not, it is a recipe for disaster.

    You should never underestimate the value in any business of having books maintained properly by qualified people.

    Shane Holbeck
    Accountix
    http://www.accountix.com.au

    #1028292
    DerekMcKinnon
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    Childcare books really aren’t that hard. Firstly they are all small businesses running on cash accounting.

    Debtors are taken care of by the childcare software. Accounting software needs one entry a month to show what has come in.

    Creditors aren’t entered into the system until they are paid. For each bill you pay, you enter one line into the accounting software.

    If there is anything you aren’t sure on (and that’s normally only about tax), you ring the accountant.

    The reason we have this model is that by making the management consultant enter the data, they get a clear idea of exactly how all the expenses of the business are travelling. It’s all very well getting a report showing it, but for an extra hour a week to enter the data, you get a much better feel for the business. This business model is therefore superior, but may not be possible under the new regulations.

    Perhaps if we were a big business, bringing in an extra staff member just to overview something simple wouldn’t be such a big deal. But this is another case of the government trying to stop a few cowboys by slugging all of us with much greater costs. Shut down the cowboys, don’t hit all of us.

    #1028293
    Accountix
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    But what about staff and payroll? Do these child care centres not have staff to look after the children?

    #1028294
    DerekMcKinnon
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    Payroll isn’t hard. I did our payroll for over 6 months. It’s all award wages. We use manual processes to track what wages people should get. The biggest problem with payroll is ensuring you enter the hours correctly, but that is more personality based then training based.

    #1028295
    Paul Cunningham
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    Derek, that sounds like a tricky one, but judging from your initial post, I’d say your consultants need to be formally qualified under the new rules to do the BAS for the companies you’re managing.

    #1028296
    Dardee
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    Accountix, post: 33605 wrote:
    Derek

    Employees preparing BAs’s for the company they are employed by are exempt under the new legislation.

    Of more concern is the fact is that your model has unqualified staff taking care of the bookkeeping. You should at least have someone qualified checking their work, if not, it is a recipe for disaster.

    You should never underestimate the value in any business of having books maintained properly by qualified people.

    Shane Holbeck
    Accountix
    http://www.accountix.com.au

    I agree 100%.

    Are these centres registered for GST on a Cash or Accruals basis? I hope they are registered on a Cash basis otherwise some of the practices you have mentioned are concerning.

    #1028297
    Paul Cunningham
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    Dardee, post: 33666 wrote:
    I agree 100%.

    Are these centres registered for GST on a Cash or Accruals basis? I hope they are registered on a Cash basis otherwise some of the practices you have mentioned are concerning.

    Derek’s people aren’t employees of the childcare centres – they’re his consultants/employees. From what he has said, doesn’t that make them like any other outside contractor and shouldn’t they then need to be qualified bookkeepers to prepare and submit a BAS?

    I’m not sure I’ve used the quote thing correctly. I was trying to refer to:

    Employees preparing BAs’s for the company they are employed by are exempt under the new legislation.

    #1028298
    Dardee
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    You are correct Paul. From the information given Derek’s staff should be suitabley qualified. Even though they may not be actually preparing the BAS any determination of GST status of an entry or an entry involving wages etc is seen to be part of the BAS preparation process. Hence the new requirements come into play.

    Do the staff doing the bookkeeping have any bookkeeping/accounting knowledge/qualifications?

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