A big change for business
Single touch payroll reporting rules are now in effect. Private practice owner Stuart Stevenson and Reckon CEO Sam Allert give their perspectives on this big change for business owners.
Now that changes to the way small businesses report information to the Australian Taxation Office (ATO) have come into effect, it is clear that the financial and psychological burden of administration is hitting small physiotherapy practices. The single touch payroll (STP) reporting regulation was extended to include businesses with 19 employees or less on 1 July, meaning technology to assist in compliance and also to free up time is becoming increasingly important. STP has been designed to streamline the reporting process. Business owners can continue to use their current payroll software although they need to ensure it is updated to offer STP reporting.
Recent research conducted by APA corporate partner Reckon revealed that almost half of allied health small business leaders (46 per cent) say the administration and red tape of running their business is ‘killing the dream’ that made them start it in the first place. On average, allied health leaders spend one of every four working hours on admin and payroll—in contrast, the average small business leader spends one of every eight working hours on similar tasks. Reckon’s Chief Executive Officer, Sam Allert, says ‘having been in business in Australia for 30 years, we’ve seen not only business change and compliance change, we’ve also seen technology change in that time.’
‘Those that can streamline work for peak performance are not only more profitable, but they can invest more time and money in staff…’
SAM ALLERT, RECKON CEO
In May, Reckon launched a hub to help small business owners get ‘in the zone’. Sam says the idea for the hub came about because, in addition to their software solutions, the company wanted to educate small business owners to assist them to streamline work and operate at peak performance. ‘It’s a resource centre so that small businesses can come to this hub, read the information, learn from other businesses and there’s a whole lot of tips and tricks to help you get in the zone and be compliant in terms of your software.’
According to the research, getting in the zone has a proven financial benefit. More than half (57 per cent) of allied health small business leaders said that the pressure of administration makes it hard for them to do their best work to succeed and grow the business. Some of the biggest barriers preventing all small business owners from achieving peak performance include having to do administrative tasks, feeling tired or stressed from work, or interruptions from phone calls and emails.
However, Reckon’s research found nine in 10 (92 per cent) of respondents across all sectors were actively taking steps to get in the zone. Almost half (46 per cent) were structuring their work day by doing things like tackling complex tasks in the morning or following a strict routine, while 42 per cent tried to eliminate distractions, including turning off their email or phone.
‘Those that can streamline work for peak performance are not only more profitable, but they can invest more time and money in staff, and marketing and innovation, to get ahead of the competition,’ Sam says.
APA member and small private practice owner Stuart Stevenson opened his private practice, UC Physio, in 2015 and now has 10 people on the payroll. Stuart is currently using cloud-based accounting software to manage the clinic’s finances. ‘I was first made aware of single touch payroll mid last year by my accountant, who suggested that we start using it in preparation for the obligatory use of STP from July. This way we could iron out any issues that we have before it became mandatory,’ he says.
Stuart has had minimal issues with his software but says that a little extra time each pay is required. ‘My system has a button that allows us to file the PAYG directly with the ATO. The only issue that I have come across is when a mistake is made on pay it is impossible to correct this,’ Stuart explains. ‘Previously I would do the pay on Saturday in preparation for Monday and payment summaries would be emailed on Saturday afternoon. Staff were able to check and if a mistake had been made then it could be corrected individually. STP requires that the pays are filed either on the day or before. As far as I am aware it becomes a big issue to correct if any mistakes are made.’
Stuart says that getting his system set up took longer than he had anticipated. ‘I had issues with the web browser, the AUSKey and a Windows update all going wrong at the same time,’ he says. Stuart has found now that he is setup and it is working well, providing his staff with an information sheet on STP from an accountant has also helped the process. Stuart’s advice to other physiotherapists is to ‘find an accountant who can provide assistance.’
Information from HR in Practice states that the first 12 months of STP will be treated as a transitional period by the ATO. During this period, employers will be exempt from administrative penalties for failing to report on time. Penalties can however be administered in the first 12 months if the ATO has given an employer a written notice advising that a failure to report on time in future may attract penalties.
As an APA corporate partner, Reckon offers a range of STP and accounting solutions for APA members that are designed for the growing physiotherapy business. Find out more about the in the zone hub at reckon.com/au/in-the-zone. The HR in Practice service is also available to APA Business group members to answer questions on the new STP reporting regulations. Email email@example.com.
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