How to set up the paperwork for a shared workspace

When sharing a commercial space, you can bypass the rigidity and expense of a lease by setting up a licence to occupy with a Shared Office Licence Agreement.

f251a555-79c4-41bb-923e-ab8d7ccf4de9

If you’re considering a shared workspace – such as a room, office or clinic – you may think you need to set up a full retail or commercial lease. But you don’t have to lock yourself and your tenant into a rigid lease agreement to share a space cooperatively. Instead, you can set up a licence to occupy with a Shared Office Space or Licence Agreement.

What’s the difference between a lease and a licence?

A lease is a registrable interest in the property in exchange for rent and is for the exclusive use of the tenant for a specified term. A licence, on the other hand, gives the licensee a right to use a space in a particular way, for a fee. Both have their positives and negatives, but a licence may be highly beneficial for both landlords and licensee in some cases.

Use a Shared Office Space Arrangement when you want to rent a commercial space to somebody (called a licensee) for their non-exclusive use. This space could be a space that’s shared among a number of licensees, or one that the landlord can share or freely access. A ‘space’ can include (but is not limited to):

  • a room;
  • shared office space/work space (such as in a factory);
  • an area in a retail store, a clinic, a chair (such as a hairdresser chair);
  • a booth/kiosk;
  • storage space in a garage; or
  • a studio.

A lease, on the other hand, gives the tenant exclusive access to the premises and provides them with an interest in the property that is only one step down from ownership. Obviously, this is not ideal for a landlord who requires ongoing access to their property or wishes to share the space.

An example of how a Shared Office Arrangement works

Consider a pharmacist who rents out space (often a small room or a partitioned area) to a nutrition consultant. The licensee (the nutritionist) will be able to work from this space within the premises, but the licensor (the pharmacist) will retain access.

The nutritionist (the licensee) pays a licence fee to retain this space for ongoing use, and the licence will usually include facilities, amenities and outgoings. The licensor and licensee would share things like the toilets, storage areas, waiting areas, kitchen area, common areas and reception areas (facilities), as well as refrigeration, tea and coffee making facilities, laboratory equipment (amenities) etc. depending upon the business and needs of the licensee.

While the licensee would be able to use these facilities and amenities, they would not be required to pay for rates or electricity for these, as the licence fee would cover their share of outgoings.

The convenience of a Shared Office Arrangement rests primarily with the shared use – on days where a licensee isn’t using the shared workspace, their space can be used by the landlord or another licensee.

Who benefits?

  • The Landlord benefits by earning extra income, offering diversity in complementary products or services that may improve their business, or filling an area that would otherwise be vacant.
  • For the licensee, the benefits are flexibility, not being tied down to a lease, not paying dead rent for space they don’t use and – as with the landlord – being able to offer a cooperative product or service that may be complementary to their own product or service.

Unlike a lease – which can heavily restrict both landlords and leases in the above cases – a licence does not fall under the legislation of a residential, commercial or retail lease, so it’s a much more flexible arrangement and can be highly beneficial when both parties desire flexibility.

Caution needs to be taken, though, as some landlords have been known to pass off leases as licences, which is illegal. Regardless of what a landlord calls a lease, it’s still a lease and is bound to the same legislation and regulations, so just calling a ‘lease’ a ‘licence’ is not sufficient by law. A licence is a far simpler document that has terminology and language that is significantly different to that of a lease, so really, there should be no confusion if you use the correct documentation!

 

 

The right bookkeeping habits to set you up for success

324251ff-e4c2-469e-9349-215cbda4f325

Bookkeeping is fundamental to any business but it’s far from anyone’s favourite task. The reality is that as a small business owner, making sure your records are accurate and up-to-date is vital yet many neglect this aspect of their business. By law every business is required to maintain proper, detailed records.

We can’t stress enough how important it is to organise and automate your accounts from the moment you start your business so that you’re in the best position and the end of the financial year.

Here are five tips to getting your bookkeeping right and your accounts on track:

#1. Don’t find the time. Make the time.

Like anything else, unless you schedule a time and keep to it you’re unlikely to get the job done. Pick a set window of time and stick to it. Once you get in the rhythm you’ll find that it is great to regularly review how your business is going and feel happier knowing you’re in control of your cash flow.

#2. Get the right technology for your business needs

With the right software and add ons you know that each part of your bookkeeping and accounting process is taken care of. If you are unsure which software to select, get in touch with Wamit Bookkeeping Services  today.

#3. Understand your tax and compliance obligations

Keep up-to-date with your requirements and obligations on the ATO website. All businesses must register for an Australian Business Number (ABN) and if your revenue is over $75,000 then you have to apply for GST registration. You’re obligated to keep receipts but you can now do this electronically. Don’t forget to complete and lodge your Business Activity Statement (BAS) monthly or quarterly.

With the right bookkeeping and accounting programs, you can streamline and automate these processes knowing that you’re compliant.

#4. Do away with shoe boxes and filing cabinets

You’re required by the ATO to keep all records for at least five years. These records need to be accessible and secure and covers everything including invoices and receipts for sales and purchases, payments to employees and organisations like Superannuation funds and PAYG tax, tax return information, and bank account and credit card statements.

While a filing cabinet is okay, you can now choose from a number of digital platforms like Dropbox Business and Receipt Bank to store this information.

#5. Don’t be afraid to ask for help

It’s not a failure to reach out for help and advice. Consulting or hiring a bookkeeper and accountant as your business expands can give you the clarity and assistance you have been desperately needing. These services are also tax deductible and ensure that you are meeting all your requirements while focussing on other parts of your business.

Call Wamit Bookkeeping Services today

Give us your books and we’ll give you back your life

Are you feeling overwhelmed because your accounts are not up-to-date, you don’t have time to get them organised and you don’t know where to start? Wamit Bookkeeping Services can help.

Having your own business can be a challenging endeavor. The first and most important step is to make sure you have the foundations laid correctly. Getting it right from the first day sets the tone for any business meaning that profits can be a lot higher and success can become a constant.

Running a business comes hand in hand with time-consuming and unavoidable admin tasks. Bookkeeping is one such task, but it is tremendously important to the health of your business as it:

  • Keeps you safeguarded and compliant in the eyes of the taxman
  • Presents valuable data which you can use to run your business successfully

As your business grows, it’s smart to have absolute control and visibility of your financial position. You need to make sure that it’s set up in an efficient way and you can make sound management decisions based on accurate, timely figures

As a business owner perhaps the biggest stress is the unknown. When something surprises you, you often get stressed, start worrying about what else could be missing and it can quickly spiral out of control. Stress can cause a business owner to make bad decisions and make you feel downright miserable.

Keeping a track of your business’ finance will cut down your stress at the office. Financial mistakes can be made when cash flow isn’t monitored, planned and predicted where the motivation is too closely centred on the figures and their outcome, as to actually managing the numbers.

Knowing the numbers allows you to make good decisions. If you want to be successful, and if you want to reduce your stress, you need regular bookkeeping systems in place for bank reconciliations, monthly historical cash flow reports and rolling cash flow projections. As a business, this will give you the confidence with being in control, anticipate and implement contingency planning if necessary, rather than bracing for a looming crisis.

Wamit Bookkeeping Services are able to deliver on site or off site bookkeeping services. Our services are as flexible as possible to maximise the benefits for our clients. We will visit your business and set a course of action customised to your situation.

We have a network of highly skilled and compliant bookkeepers that are up to date, knowledgeable and accurate in their management of business accounts and systems. All our bookkeepers are also the subject of ongoing quality control reviews.

Unlike many of our competitors, we also offer a no obligation initial consultation that is FREE. So contact us today to find out how we can help you work smarter, grow faster and live better!

Bookkeeping Methods Every Entrepreneur Should Practice

Bookkeeping is the process of organizing transactions in financial records, keeping them easy to understand and up-to-date. Accurate and timely knowledge of the financial health of the organization is necessary for management to be able to make real-time business decisions. At the same time, the bookkeeper has to ensure that the records follow any government regulations and standards set as well as be able to adjust to any added laws. Below are seven essential tips for bookkeeping services.

A common difficulty for entrepreneurs is to keep the financial department stable and smooth sailing. Being able to accurately track your costs and income allows the business to estimate how much of it goes to future costs and how much can be reinvested into the business. When the financial year ends, it is usually a race to complete the backlog of entries and accounts. You should be certain that you and your employees are well-equipped to handle that level of pressure.

Here are important bookkeeping tips to remember:

  1. The company should choose the software that’s user-friendly and fits its needs without breaking the budget. This should be done before operations begin and bookkeeping performance with the acquired tools should be periodically reviewed and assessed. The right software would help set proper systems in place.
  2. Personal and professional should always be kept separate for the financial department’s ease of tracking and avoiding the risk of heightened confusion. Some businessmen make the mistake of using their personal bank accounts for business transactions, mixing records and funds for personal expenses with the cash flow of the business.
  3. A well-trained bookkeeper can give better insights regarding cash flow in and out of non-banking channels and be able to handle the bookkeeping involving such transactions better. As these channels can lack proper recording, cash flow going through non-banking channels can be confusing to those unfamiliar with them.
  4. Should you opt to use the services of a bookkeeping service company, ensure that the package you avail of meets all the needs of your business.This should be properly assessed and studied as needs can differ from business to business and involve different factors.
  5. Weekly review of accounts is a must if you want to avoid cramming at the end of the year. The right staff with access to the right software would ensure a much smoother process. You’ll be able to organize all the financial data properly and meet the year-end deadline.
  6. As mentioned earlier, the government has regulations and standards that businesses are expected to follow. Bookkeepers should guarantee that these conditions are met when making the financial records. Any discrepancies could result in fines, which are only added costs and hassles that can be avoided, or worse, depending on the law.
  7. Hardcopies and softcopies of proof of any transaction should be kept for tracking purposes. Any recorded transaction without evidence of it having taken place would be a cause for doubt and should be investigated.