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Technical. Reliable. Fun.
BK Pod brings you the latest bookkeeping news, industry updates and conversations with industry leaders, Kelvin Deer, Peter Thorp, Kellie Powell and Darren Hagarty. From technical content to current events, BK Pod is an easy to listen to audio experience, packed with essential updates and insights for our bookkeeping community.
Kellie (00:09)
Well, hello, I'm Kellie Powell, and welcome to this episode of the BK Pod. This podcast, specifically for bookkeepers, will keep you up to date and informed from the latest news, legislative changes, and industry updates. There is always plenty to chat about. Well, it's our first episode for the new financial year, so happy new year everyone. We hope that you had a chance to catch your breath after another busy end of financial year.
And that you're ready for everything the new financial year has in store. Let's hope that 2027 is a little kinder to bookkeepers than some of the previous years we've had. This year, of course, the big focus is Payday Super And although it officially commenced on 1 July, for many bookkeepers, the real work is certainly ongoing or beginning as clients really continue to transition to the new rules.
And update their systems and processes and just work through those practical challenges that no doubt come with such a big change. As always, we're here to help and support as much as possible. So let's take a look at what's coming up in this episode today. First up, we have Kelvin, and Kelvin takes a step back from the day-to-day work, client work, and
Puts the spotlight on your own BAS practice. So July is one of those times of years that you can pause and reset and ask whether your business is really set up for success for the coming year. In this segment, Kelvin's going to explore some of the practical areas every BAS agent and bookkeeper should be reviewing as they head into their new financial year. So things like capacity, your client fit, pricing, engagement letters, your systems and software.
Quality management system and lots more. So it's a timely reminder that looking after your own practice is just as important, if not more important, than looking after your clients. Next up, you'll hear from ABA directors, Peter Thorpe and Kerrie Jarius, as to the latest from representation space. This episode they're going to be chatting about some of the learnings from just the first couple of weeks of Payday Super. So that should be interesting.
Then we have Darren that's going to join us. Once again, his latest edition of Getting Technical focused on the transition to Payday Super. So while much of the conversation around Payday Super has centred on how the new system works, Darren explains why the real challenge lies in the transition itself. So July 26 brings a unique overlap, as we know, between the old quarterly super rules and the new payday super regime.
And that creates a number of practical traps for employers and advisors alike. He discusses the statutory order of collecting those super contributions in July and the ATO's compliance approach during the first year, the loss of the late payment offset, and of course the closure of the small business super clearing account, and the practical issues BAS agents need to understand as they guide their clients through what is a massive change.
So there is plenty to cover in this episode. Let's get started with Kelvin.
AustBook (03:39)
Well, good day everyone and happy new year. 2027 Financial Year. Where does the time go? Welcome to this segment of the BK Pod. I'm Kelvin Deer ABN Director, and today I want to talk about the start of the new financial year, but just not from any old angle. So normally this time of year we're talking about client issues, lodgement reports, deadlines, payroll finalization, super, etc. And of course, all that matters, but today.
I just want turn the lens around and talk about your practice. Because the start of the new financial year, in my mind, is one of the best opportunities BAS Agents and Bookkeepers have to stop, reflect, and determine if your business is set up for the year ahead. Because it's a really great chance to focus on the clients you have, the capacity that you have within your business, the regulatory environment in which we're now operating and
Course, there's been plenty of changes in that. The software that you use and whether it's still fit for purpose, and of course the risk that you carry, and are you charging enough for that risk? And in my view, I think a number of practice problems come from tolerating what I would say would be really small misalignments. So things like you know, that client who's always late with the information that you're seeking from them, and then that puts you on the back foot.
the fee that hasn't moved for some years and therefore, you know, you're not really getting value for the time that you're putting in. an engagement that has become more complex than what your original engagement letter probably said. perhaps a staff member who is doing work without the review and therefore creating a risk for your business. Or it could simply be a process that is in your head or someone in your practice's head and not in a practice system.
So today I want to talk through the practical areas BAS Agents should be looking at as they get their practice underway into the new financial year. I want to start with capacity because for me, capacity is essential to deliver quality. And as we know, quality has become a real focus for tax practitioner board and has been there for the tax office for some time. So, and by capacity, I don't mean
how many clients do you have? That's not capacity. Whilst the client count itself is useful, it really is misleading when it comes to capacity. So 10 simple clients, for example, may be easier to manage than two really complex and messy ones. And a client with clean records, clear and reliable communication, they of course may take very little emotional or operational bandwidth from you, but yet another client who pays a similar fee.
might absorb hours and hours of your time, chasing them down, correcting the information that they've given you, explaining what's happening with their file and reworking stuff if they're not getting you the information that you need. So I guess instead of asking, well, how many clients do I have, I think the better question probably is how much capacity do these clients consume?
Now how do you do that? Well, I would be looking at your client list in a number of ways. I think the first is time. How long does the work really take you to do? Not what you quoted, not what you hoped it would take, but rather what time does it actually take you to perform that job? The second is complexity. Are there multiple entities, multiple payrolls, multiple awards to interpret? Do they have high staff turnover that you have to deal with?
i are there messy systems, whether they're paper internal systems or an incorrect tech stack? are there historical problems with the file or unusual transactions so all things that can create sort of a level of complexity and therefore impact your capacity. the third issue with capacity is risk. Now is this a client where errors, late information or poor internal controls
create exposure for you or your practice. And that can be either with the ATO or the TPB in respect to the code of conduct. And finally, there is also client behavior. Do they communicate well? Do they meet the deadlines that you've set for getting responses to queries back? Does the client take responsibility for their part in the financial process? Or do they treat your practice like a bit of an emergency department for their own poor
Planning abilities. And in my mind, capacity planning is not just about whether you can physically get the work done. It's about whether you can do the work properly and to a certain standard and quality and get paid for the work that you do. And that means having time for review, time for supervision, time for documentation, time for professional judgment, and really just time to think. That's capacity.
And once your practice runs over capacity, it's that quality that suffers, the quality of the work and the errors start to creep in. You start to see more rushed work being done, you start to see more rework being done, you see client email sitting too long in your inboxes, and you see your deadlines not being met. And that really isn't a sustainable operating model.
So, my first recommendation for the new financial year is basically do a capacity stocktake before the year consumes you and takes over. Look at each client, look at each recurring service, look at your lodgement calendars, your payroll cycles, and look if if you do have team members at who does that work and then who reviews it. So capacity, one to have a good look at. The second practice issue to think about.
is your client list. The beginning of the new financial year is a natural point to ask, are these still the clients that I want to build my practice around? And this can be an uncomfortable question because BAS Agents and Bookkeepers are incredibly loyal. They know the client history. They know the client family. They really are part of that business family. And you know the story. But importantly, you also know that you know whether there's a mess behind those numbers.
But loyalty must not become an excuse for your business to suffer. And every BAS practice should have some version of client segmentation. And it doesn't have to be fancy. For instance, you might simply group clients into some four basic categories. Your ideal clients, your good steady clients, the ones that you have to offer a bit more higher support to, and the ones that really are a poor fit for you and your business.
Now, obviously your ideal clients are the ones who value your work, respect your processes, they pay you on time and for the effort that you've put in. And they provide you all that information on time and therefore they fit the direction of your practice.
Your good clients, they're the reliable ones, they're profitable, even if they're not perfect. Then we get down to the high support clients. Now, these ones might be still worthwhile, but they need to be priced and managed accordingly. And then, of course, we have the poor fit clients. These are the clients who ignore your deadlines, you set them, they argue about your fees, they constantly operate outside your engagement scope, and they treat you or your team poorly.
And ultimately what they're doing is creating risk that is disproportionate to the fee that you charge. And I think the hard truth of the matter for this client is that they may not deserve a place in this financial year for you. And that's not being harsh, it's simply being professional. Because sometimes the answer might be to reprice them. Sometimes it might be resetting their the client expectations about how they work with you.
It could be about narrowing the scope of the engagement to ensure that the work that you're doing for them gets done and gets done on time. And sometimes it could just be insisting on the client having better systems to make your life that little bit easier. But the unfortunate thing is that there could also be a time when you need to think about disengaging. Because a practice really can't grow in a healthy way if it's carrying too many clients who drain your capacity.
They might drain your morale and as a result, they're also draining your margin.
All right. The third area to discuss for a new financial year look is engagement letters. Now I know engagement letters aren't the most exciting topic to be talking about. They never are, but they are one of the most important. And the mistake that I see being made is that they get treated as a once and forget sole document. And they shouldn't be. Your engagement letter should reflect the work that you actually do, the risks you actually carry.
And the boundaries that you need to have in place with each and every client. And this year, I'd be paying particular attention to three areas when it comes to engagement. First is, of course, payroll and payday super. Now, with payday super, that part of the operating environment, payroll services now carry a lot more timing pressure and therefore potentially more risk. If your practice is involved in processing payroll,
the super calculations that come with it, the payment workflows or advising around payroll deadlines, then your engagement terms now need to be really clear about what you do and what remains the client responsibility. ABN has set up a really good payroll and payday super engagement letter. So go into your member center, have a look at it and download that for use with your client.
The second type of engagement letter, and these can either be incorporated into one, or I actually recommend this particular one being just a separate authority style letter. And what I'm referring to here is the new AML CTF obligations. Now, where AML obligations apply to services that you provide, and for BAS agents particularly, that involves payment style services.
And if you do that, your practice needs to think about how your engagement terms support those practical requirements. So the supplier authorities will be something that you'll be wanting to focus on if you do provide a payment style service. And again, ABN has just released a really great range of AML authority information. There's, I think, six resources that I've created there.
So again, jump into your members center in the AML section, go and have a read of the master paper, and then we've got a four-stage best practice authority flow that you really need to think about implementing within your practice.
The next thing I want to have a chat about when it comes to engagement is Scope Creep. Now, Scope Creep's one of those really silent profit killers. And it often sounds harmless, but it usually comes in the form of, can you just check this? can you just fix this? I need just this little bit of help with this software. can you just explain this to one of my employees? I just need you to look over this extra payroll run for me. And ultimately, those words, can you just?
should set off a little pricing alarm in your head. And at the start of the year, your engagement letter needs to really set out what is included, what is excluded, what assumptions your fee is based on. And if you are going to charge more, how does that additional work get charged? And I think the important point after that is you then have to enforce it. If you ever get that can you just from your client, that's the little pricing mechanism that you say,
Of course I can do that, but it's going to come at an additional cost. I'll send you an adjusted scope or quote.
A really good engagement letter sitting in the file, of course, isn't much use if you or your team keep absorbing that extra work because you simply feel awkward about raising that additional fee. So think about that scope creep. Think about how you might price it. Think about how you might have that conversation when you get that can you just question from your client. All right, moving on. The next issue is pricing. Great segue into pricing. And my view on pricing is pretty simple.
If the work has changed, your fee needs to be reviewed. If the risk has changed, your fee needs to be reviewed. And importantly, if your client behavior has changed, that fee needs to be reviewed. And of course, there are always costs. Costs are changing regul regularly, and we've just seen a real cost increased cycle come through with of course the the war in Iran that for some reason
Really giving us a real cost and inflation boost in Australia. So let's face it, costs is one of the biggest issues in running your practice. Insurances, software charges, your increased compliance costs have just come through from regulators. So you're now doing more work for the regulator, whether it's AML, whether it's TPB, or whether it's payday super.
And the fee really needs to be reviewed to reflect those increased costs. I think with Payday Super AML and those supplier and payroll requirements, every BAS agent in the country should be reviewing their compliance costs and charging accordingly. No ifs or buts. That one for me is a must. And I believe many BAS agents are still underpricing work because they are pricing from memory. They're pricing what
The job used to look like, not what the job has become. So the start of the year is a great time to compare price to reality. Look at the actual time you're investing in the client. Look at what write-offs you might have had in the past in terms of time in versus unbilled hours. Look at the email chains that you're getting from your clients. What rework have you done? How much time have you invested in the client?
to review what's being done or how much time a senior is reviewing a junior's work. And I think importantly, look at your cost and time structure and then what you have to do as a professional BAS agent to stay educated and up to date.
In addition to this, I think I'd also encourage BAS Agents to stop thinking about fees only in terms of time. Time, of course, matters, but it's not the only pricing metric. You're basically pricing your expertise. You're pricing in your responsiveness to your client, the risk that you're taking. And of course, you're pricing the responsibility that you have as a professional BAS Agent in dealing with their work and the quality that you're providing. And all of that has a value.
All right. In addition to time-based billing, you may also have fixed fees. now these also require maintenance and review. So a fixed fee, of course, isn't a lifetime price promise. It's a commercial arrangement based on assumptions at a point in time. And if those assumptions change, then the fee needs to change also. And importantly, when you're communicating price changes with your clients, you need to be clear, you need to be early.
In the pricing cycle. So don't sort of change the price and let them know the day later. Think about when you're going to change price and communicate it. And when you are communicating, just use clear, calm language when explaining those reasons. You don't need to apologize. You simply need to explain what has changed, what is included, what the new fee applies to, and any options that the client might have to reduce it, for example.
They might want to do a certain element of the role that you're doing when it comes to record keeping. Now, the right clients, of course, may not love a price increase, but they will generally understand it. Unfortunately, the wrong clients usually tell you something by the way they respond. And then we go back to the first item I spoke about, which is, are those clients fit for your practice?
All right, the the fifth issue I want to address briefly is your QMS quality management system. Now, for many practices, the first round of QMS work was about getting something documented. And that's understandable, it was all new. it was a new requirement. And I think the first job is offered just to get a framework in place. And we did that really well here at ABN with the QMS intensive. But the next stage is now more important. This next stage is about.
Does your QMS actually reflect the way that you manage your practice and the way that it operates? Because a QMS isn't just a folder that gets opened, you know, sometimes when things go wrong. A QMS really does have to help with those practical questions about how your practice operates in multiple areas and identify the risks that could hurt you and your business. And I think the new financial year is a really great time.
To review your QMS against the risks, the ones that you identified last year, or ones that may have emerged over the past 12 months. What went wrong last year? What worked? What did I get stuck on? Do I need more staff, more support? what client risk got created, etc., etc. That's how QMS becomes really useful. And it should evolve with the practice and make the practice more consistent.
it makes the practice more defensible when dealing with the ATO or the TPB. And of course it's less dependent on memory as you start to build those systems.
That brings us to the next area, your systems. And I think at least once a year, every practice should do some sort of a systems review. Who accesses the files in terms of my client, if I have staff in particular? who has access to the payroll systems, because there's some really sensitive data in there. Who has access to my online services for agents? who has administrator access in any of the accounting work software?
Do you look at former staff or former contractors and see whether they're still connected anywhere to any of those systems? And if they are, have a system in place to remove them. What about multi-factor authentication? Do you have that in place? How are your passwords dealt with? Are they shared? Or is there a password authenticator in place in your practice? And how is that managed? What about documentation? How do you store them?
Is it consistent? Does your practice operate in a way that where anyone wants a file, they know where to access it? What about review notes? Are they retained? Are they maintained on file? And again, in a systemized way so that if someone picks up a file to answer a query, they know where any review notes are. And of course, there are also those client instructions. Usually they're documented. They should form part of your systems and processes along with your engagement letter.
And ultimately, all of these things aren't just an IT issue. they're a genuine practice risk issue. And this connects directly to the confidentiality, supervision, and quality management issues that the TPB set out in the code of conduct. And of course, it ultimately impacts your professional indemnity insurance. So the new financial year is a really good time to get in.
and review that area. So put that one on your hit list as well.
All right, the next item I want to highlight is your team, if you have any, and of course your own professional obligations. So for solo practitioners, this means looking honestly at your workload, what CPE you're doing, your PI insurance levels, the systems that we just spoke about, and of course, any sort of backup processes for disaster recovery type stuff. And we see more and more disaster recovery plans.
Being implemented these days. Now, for practices with staff or contractors, it means asking whether people are doing the right work, do they have the right training? And importantly, do they have the right supervision? So you can't just assume competence just because someone's been around for a while. They have to be educated, they have to be trained, particularly where we're seeing new or evolved roles with Payday Super and of course AML CTF.
Now, whether it's just you or a larger team, identify those training priorities for the year and perhaps build a training calendar. Keep your CPE records current. ABE has a CPE register there for you in your member center, ready to go. Review your levels of PI because let's face it, compliance risk is rising. And I think you need to make these things just part of your annual rhythm. So, you know, it's not a panic task.
If if someone makes a complaint, your PI is there to to assist you. so you need to understand how it works.
All right, the final point I want to talk to is a strategic one. And the new financial year should not only be about cleaning up, it should also be about choosing your direction. So ask yourself, what kind of practice am I building? And what are the opportunities that are arising for me? For example, do I want to focus more heavily on payroll and become a payroll specialist to other BAS agents? We have heard that some BAS agents are looking to exit payroll.
Just simply because of the complexities involved. Do you want to fill that void? Do you want to become a payroll specialist? Have a think about that. Am I happy building a bookkeeping and best compliance practice? If so, do I want to build something more around industry specialty or software specialty, for example, inventory? So have a think about building a compliance best practice. No matter which way you jump.
You really do need to have the right systems, cloud systems in place. And sometimes that can be a specialty in itself, dealing with your clients in cloud system software. So again, that can be another specialty that you can start building your practice around. The other thing you need to consider is could you be better focusing on a smaller number of complex clients that are high touch and high profitability?
That also comes, of course, with a little bit of risk if you lose one of those high clients and you need to replace them, as opposed to having lots and lots of smaller clients. But they can be very profitable, those high-touch clients. Am I happy being a sole practitioner? Another question you might like to ask yourself. Or could I build a scalable team? Alternatively, you might be looking to wind down. We've seen a number of people sort of
Think about their lot in life and starting to wind down and therefore build yourself a lifestyle practice as you hit the highway and travel around the place. Cloud systems enable us to do that these days. So is that something you want to consider? And importantly, there is no one right answer. But what is right is that you start the year to align your business model with your goals. What work do you want more of? What work do you want less of? What clients do you want to attract? What clients don't you want to accept anymore?
your service pricing or discontinuation if there's a service that you don't want to do anymore, and what risks do you no longer wish to carry because your PI cost or the cost or the risk of doing that work no longer fits your profile? Those are the practice questions that you really need to consider. So if I had to bring this back to a simple list checklist for BAS agents for the new financial year, it would be this.
Do a capacity stop take, review your client list, update your engagement letters, review your pricing, revisit your QMS, check your systems and software, review your and your team's training, supervision, CPE, and of course your registration and insurance, and then decide deliberately what sort of practice you're building this year.
These are the areas that give you the ability to serve your clients well without sacrificing the health of your own business or your personal health in the process. And that to me is the real new financial year reset. I'm Kelvin Deere. Thanks for listening. Bye for now. See you next episode.
Peter Thorp (29:23.054)
Well hi there, KJ. happy new year and stuff. The thirtieth of June has come and gone. Everything that was old is now new again. Income statements and ATO, end of year the requirements, payroll tax, accountants' end of year demands. It just seems like a bookkeeper's work is never done. as we know, the first of July ushered in the payday super regime. And you and I have been working in various tax office payday super groups over the last couple of years.
And now that regime is alive. a full assessment, I guess, of how this thing is going to play out will take time, because there's probably a lot more payday super issues that have yet to be experienced. but just today I'd just like to get your initial thoughts as a practitioner who does a lot of payroll, where we're at as at today. So look let's let's just start with some of your initial reactions because you've probably been through a few pay runs since the thirtieth of June. So what what are your initial thoughts?
Kerrie Jarius (30:22.286)
First of all, happy EFS. Yep. Welcome to 2027 and all the changes that it will bring. So it's going to be a tumultuous year, I think, of change with everything and trying to cope with this. The sky didn't fall in and the sun came up on the first of July. So that was all good. We've got around 60 payroll clients and they range from
Peter Thorp (30:24.428)
Yeah.
Peter Thorp (30:37.912)
Yeah.
Kerrie Jarius (30:48.888)
two or three employees right through to 150 employees per rap pay run. So we do have a lot of payroll. the software didn't crash. That was great. It wasn't like the Y2 2K thousand thing where they said, everything's gonna fall off the perch.
Peter Thorp (31:03.64)
Yeah, your computer won't work, the lights will go out.
Kerrie Jarius (31:06.2)
Yeah, all those conspiracy theories never came to be, which we didn't think they would anyway. But yeah, so I think it's a little bit I don't want to say non-event because it's not a non-event. And that was something that we did want to stress to people that it isn't a non-event. there's a lot to be done and I think everybody's still a little complacent, I would say.
Peter Thorp (31:31.158)
Yeah, I think that's fair. things are fair call. It it's you know, if you've got through a pay run then it it's sort of working at the moment. but there's still a lot of things we haven't experienced, you know, we haven't got through to like a a super like well even the cross the end of the quarter for the June quarter and there's a whole lot of things that we won't have tested yet, haven't had to deal with a rejection or anything like that. So I think there's plenty still to experience.
But look, let's just look at some of the the the quite specific aspects that you would have already tested. and look, let's start with you mentioned payroll software, so let's look at that first. as you said, most mostly your clients are probably gonna be using MYOB and Zero, if that's right. and we're both of their modules for Payday Super Ready, as far as you could see.
speaker-4 (32:16.749)
Here we go.
Kerrie Jarius (32:21.732)
when you're considering the short period that our DSPs or the software providers had from legislation to implementation, it's a bit of a miracle. there's still some fine-tuning to be done, but that's that's gonna come. So I think the pay modules were by and large pretty ready. They a lot of the DSP seem to have done a lot of work prior to the legislation being going through Parliament. So
They had a little bit of a head start, but there was a lot they couldn't do until we actually got some of those details. So I reckon they did a great job.
Peter Thorp (32:59.65)
Yeah, that when they were working right up to the death or most some of these things to get their final versions out. And in many cases they were waiting on tax office specs for certain components to it. So I think you you're right. I think they did a mighty job if if can get the first pay run through un un unhindered by this. just on that, did the the actual pay the the versions that they put up, did the look and feel change significantly or they were they any of changes it's just a little bit more subtle than that?
Kerrie Jarius (33:28.118)
I think the changes to the big ones like MI Band Zero and QBO, they changed the look and feel prior to 30 June. So there was no big surprises when we went in and did that first pay run. We'd already seen the drop down menus, we'd already seen the process that we were going to use. So I think they actually did a pretty good job of gently getting people into a new process. And they actually did a pretty good job of making it fairly user friendly as well.
Peter Thorp (33:57.932)
Yeah, well that that's kudos to these guys. look we we know through that consultation period that the software delivery by thirtieth of June was gonna be extremely tight. and p and probably not to leave enough time for for bookkeepers and their clients to adjust. And that's probably how it's played out. But did you have enough time, you think, to adjust, educate your staff and your clients about the changes in the software itself, or were you able to run through fairly seamlessly?
Kerrie Jarius (34:23.949)
I think because we had the knowledge and we had we were keeping up with what was going, we did the webinars, all that sort of thing. We proactively managed most things. So the education was probably the key part. updating all that checklists and processes and stuff, we tried to do that in that quieter period in the first couple of weeks of June. So and also we had to adjust our rosters to make sure because there's no
There's no give and take anymore with actually doing the payroll. It has to be done on the day now. You can't, you've got no I'll I'll do it the day after or things like that. It has to be done on the day. So we had to make sure that all our staff were on the same page for that as well.
Peter Thorp (35:05.036)
Yeah. Yeah, that's probably a the process more than the software was probably a a chunk of education. actually just on that, the the the even the terminology, so we know we've got the the terminology you know QE is now in. and d and that actually forced some changes, didn't it, to the how you set up an employee and the various classifications. Some of them might have been fairly subtle, but was that a big task or did that go fairly smoothly?
Kerrie Jarius (35:32.974)
I think the DSP's also helped as well. So some of the softwares they actually pushed you into checking your payroll categories and and things like that. So that was good. But what is this QE that you speak of? Most people don't even know what it is at the moment. And the term the changing terminology is going to be extremely confusing, but we've said that from day dot. Yeah. So
Peter Thorp (35:45.614)
Yeah.
Kerrie Jarius (35:57.154)
Yeah, there's still a lot of lack of knowledge around QE and what it is. And then we've also got the contractors, which everybody's sort of put their head in the sand a little bit about, up until now. It's not a really big thing to straight off, but it will be later. So there's still a lot of education to be done. And I think QE is something that we really need to
Get people to understand that it's not a myth. Just look at think about OTE with just a couple of things added in.
Peter Thorp (36:28.46)
Yeah. and look you're probably right that that there's a fair bit of education went on and I'm guessing that there's probably clients of bookkeepers that still don't know what QE is, but they're still dealing with it because the bookkeeper's got it. I I wonder a little bit about those that don't use a bookkeeper for for payroll and now confronted with this the change in terminology, but that's not a subject for today. I'm not sure if you've needed any support from any of the software companies, or
or material from them, but do you think they supplied enough support to get th through that that initial phase?
Kerrie Jarius (37:02.796)
I think they actually did and there was lots of pop-ups in the software saying, Are you aware this is happening? We were bombarded with emails from every which way but loose. we got them from the super superannuation clearinghouses, we got them from the the software providers. So there was a lot of bombarding of information out there and if and there was plenty of support and education there if you needed if you needed it.
We just watched all the normal updates and of course, you know, Bookkeeper Radio and ABN's updates as far as what Kelvin did with it all with Payday Super, which was excellent. So I think there was a lot of support out there.
Peter Thorp (37:46.316)
Yeah, yeah, which is good good to hear. look, you would have had dealings with clearing houses already, given your process and pay. So let's have a quick look at that experience. I'm gonna start probably with the commercial clearing houses. That's those that are embedded in software like your zeros and your MYOBs. And we're not gonna touch on the small business clearinghouse, which is now defunct. but the ex your experience in dealing with the clearinghouse, so you're processing the the the super guarantee.
through the mainstream software. was it fairly seamless, given that it's embedded in payroll, d or did you come across any changes to the process, like new notifications and what have you?
Kerrie Jarius (38:29.196)
I think the stuff that was embedded in software, which is the majority of what everybody's using, it's embedded in software if you're using the major software accounting packages. I think that was that was really well done and but it's always been pretty easy to use. And it was just a matter of tweaking it. But the whole thing of if you've got a payroll of a weekly payroll and then you've got monthly salaried employees, you've got sixty four payments to do.
And everybody says, it's just a press of a button. As bookkeepers, we know you've got to do the reconciliations as well. And if something bounces back, in some ways it's easier because you've got a smaller pool to look at what went wrong. but you've still got all that to do. And I think that's what clients don't realise is that we don't just press a button, we do all these reconciliations to make sure it's right as well.
Peter Thorp (39:23.17)
Yeah, yeah, that's the the difference is I suppose you can push the button, but what have you pushed? look, one of the one of the bugbears that we had through the whole process of consultation was the like the the lack of the apparent lack of visibility that an employer's got over whether or not they've actually satisfied the seven business day obligation, i.e. the though it's gotta get from your bank account into the employee super fund inside seven days. At a practical level, is that still the case? Do you
Do your employers, your employer clients that you've already dealt with, have they got e the faintest idea whether or not their super guarantee has been received into the employee super fund within the required seven days?
Kerrie Jarius (40:02.914)
What did I say? Zero. It nada. Absolutely no vision whatsoever.
Peter Thorp (40:06.764)
Nada. Yeah.
Yeah. Which is which is a flaw. And it's a flaw in design. and they haven't as I see it, moved to to make that visible, which just leaves the employee in the dark. until such stage as someone taps them on the shoulder. Good news I guess is that for the first year we have a PDS in place that says that we won't beat your clients up if they've had a fair dinkum go at it and it misses the seven days. But
I'm very interested to see what it's going to look like into year two. Hey, listen, I know you deal with a number of special clients that don't quite fit the conventional employer mold with with ABNs and what have you, and they report their their their material through the through the WPN system with holding withhold of payer notification, I think, or something like that. were you able to mo migrate these guys through into the payday super regime pretty easily?
Kerrie Jarius (41:04.184)
This one's been really challenging for us because they don't fit anywhere and they're small and nobody wants to anything to do with them. So you your social clubs, your like we do embassies because we're based in Canberra, so they're not not an Australian business. so we've really struggled with that. To try and get these people something that we could actually use has been really difficult and there's very few
None of the software suppliers are interested in the WPMs. You can't do it in a lot of the softwares. You've got to do it externally. So yeah, that's been a real challenge for us. we have had some solutions al along the way. We we're using worker at the moment, which has been a good solution, and that's not a plug for worker. It was just that that was that one of the few that were offering a solution. So it's been difficult.
Peter Thorp (41:58.082)
Yeah. good. Yeah, and look it it's probably gonna continue to be a little difficult. It I guess it's one of those edge cases they didn't have a lot of time for, when they're rushing this thing through. but
Kerrie Jarius (42:11.314)
It's a small area too. It's not a lot of people. So it's not a commercial viability thing. there's no real good commercial reason to actually look after WPNs. No.
Peter Thorp (42:22.584)
No, so it's w it is one of those loose ends that this system has as it went past the first of July. So while we're just on those clearing houses and we said we're in a touch base with Tax Office Small Business Super Clearinghouse that expired on the thirtieth of June and you and I were in one of the or two of the consult groups had dealt with that. I look I think this is a personal opinion, I think it was one of the one of the worst handled elements of the payday super transition by the tax office, but everyone's entitled their own opinion.
look, you you knew that that that expiry was coming. So how did you approach that with any of your clients that were still using the the the tax office clearinghouse?
Kerrie Jarius (43:02.766)
I think if you had a bookkeeper or a bass agent, you're okay because you're pre-warned. You moved things off the the clearinghouse, but to be honest, it was an absolute disaster. We told them it's going to be a disaster, the disaster hasn't hit yet. the disaster's gonna hit when everybody's trying to do their June super and they open the clearinghouse and they can't do it. And generally speaking, it'll be people that don't have bookkeepers. They're the ones that are going to
speaker-4 (43:17.985)
Night.
Kerrie Jarius (43:30.434)
Go to sign in, even though I know they've had all the emails and all the the notifications, and most of them have probably ignored them. I think when they go to there's going to be a lot of June super that it's going to either be scrambled or late, or then they're going to go, well, what do I do now? If you're a WPN, well, good luck.
Peter Thorp (43:41.037)
Yeah.
Peter Thorp (43:50.957)
Yeah.
Yeah. Look, I think absolutely on the money. I mean the the grief with that one, by and large, I don't think's hit. as you say, the our profession was well informed and probably moved clients off in time, probably extracted the reports I was supposed to do, but twenty eighth of July when those people you speak of go to lodge their their S G through the clearinghouse, that might be when they find out how successful this was or not. probably bookkeepers of about
actually solved some of their own problem for them by by doing the hard work and the heavy lifting.
Kerrie Jarius (44:29.15)
How many we had tens of thousands of employers that were still using the the clearing house in for their March lodgement? Yeah. So there's tens of thousands of people that are gonna go, my goodness gracious, what have I done? How am I gonna fix this? They haven't downloaded their information and they can't.
Peter Thorp (44:45.164)
Yeah, remember it. That's that's gonna be a challenge. anyway, that'll that'll play out over the next little bit, and we'll see how that fares.
Kerrie Jarius (44:55.628)
You know that's been one of my pet hits.
Peter Thorp (44:57.824)
I know, I know. Sometimes one of the few times I see you get angry is when we're talking about that clearinghouse. But anyway. Hey, this is another element that you will have confronted already with payday super transition is is actually dealing with clients. Do you think clients were fully aware of the payday super changes and do you think they really appreciate even now the gravity of failing to meet that seven day obligation?
Kerrie Jarius (45:23.128)
The shorter answer is not really. We've tried to educate them. I don't think the media's really grabbed this very much at all either. So the mainstream media, there's been bits and pieces on it, but there's been no really good honest reporting on how it affects people or the gravity of it. So I don't think they've really got much of an idea. I know if they've got a bass agent or a bookkeeper, they're going to be better at educated than most. But I think if you listen to the pub talk out there,
People are still they say, no, I'll do what I want. I'm not gonna do that. They don't realise it's legislation and there is penalties if they don't do it. Maybe not straight away. First year, as you said, we've got a PDS that's going to protect us. But as we go down that track, I think things will change and until they start dishing out penalties. Are they going to take it seriously? I'm not sure.
Peter Thorp (46:15.192)
Yeah, I I I think with 30 odd years of the old system and and a pretty poorly enforced system, it's pretty hard for them to take it seriously, isn't it? look there's this process because it's now down to that per payday incident is it actually involves the involves the employer more in the routine of processing processing super. And as you said, if you don't do it on day one, you're
you're in trouble in making the seven days. have you experienced you know with with bookkeepers having any trouble adjusting to these new timeframes and and and meeting their own personal component of the obligation, albeit it might just simply be to authorise the the payment or initiate the payment.
Kerrie Jarius (47:01.652)
I think it's human nature. It's not part of our it's not embedded in our routine yet. It's still too early. So people are forgetting to do it. They just simply forget to do the super and they go, no, I forgot to do the super yesterday. Yeah or I've got that one client who only does it's only just like a a direct debit for their pay each week. And at some stage you usually used to record that and then pay the super at the end of the month and then you go and
Well, I've actually got to be diligent and be there on the day and do that now. so and then we've got clients forgetting to actually approve the super. If the bookkeepers have got the approval, then they do it at the same time, hands. But clients are just forgetting, they're not realizing the importance of it, I don't think. Not
Peter Thorp (47:49.502)
aren't they? They they'll have some component that even if it's just the approval to keep moving it with without that, it stops. and I guess they're probably a bit insulated because it is the first year and tax office are going to take a softly, softly on the seven day thing. but by the end of the year they ought to be looking to be pretty well on top of it and you know without fail. So I just wonder how that how they're gonna slot into that routine of every payday being available to to do their little bit. So anyway, so
So far you've had to do a little bit of prodding of clients to keep them Yeah. So yeah, maybe they just learn over the next twelve months and it becomes routine. But it's it's gonna adjust the way they work. look cash flow, we spoke about a lot was made of probably one of the things that it did make a lot of noise about in the media was about the impact of on cash flow of bringing forward of super. and it was flagged as a as an issue.
Yeah, particularly for some employers where cash flow is tight. I I think the bookkeeping community had helped by adjusting by vo look by voluntarily bringing forward super guarantee payments in the lead up to June. I've had stories of people bring it to monthly and then some actually already on payday for a while. have you had any clients struggling with the bring forward cash flow requirement this thing brings?
Kerrie Jarius (49:08.834)
I think if a client was struggling before, anybody who was struggling to meet their payroll requirements and their and the actual payroll cost is going to have trouble regardless because that's an additional expense that they're doing each week. So if they didn't carefully plan that transition and the transition of having enough cash there
We were sort of encouraging people to do like we do with a GST account, put some extra money in your GST account so that we could do it. And we did make sure that all our clients were actually paying monthly at a minimum before payday super started. So I think people with bookkeepers helped, but those who are in trouble, it just because they have to do it on payday doesn't mean they've got the money.
Peter Thorp (49:57.368)
No, that's right. Yeah, exactly. Yeah, you can't legislate the money being available. so it works. And I look I I think the that next hurdle it being the well, shortly next week, isn't it? The or thereabouts for the for their June quarter, is gonna start bumping into pay run. So that's probably gonna be a testing point for some of those businesses that were already already struggling.
Kerrie Jarius (50:17.166)
Especially if they've got a full quarter of super that they haven't paid as well.
Peter Thorp (50:20.758)
Yeah, if they hadn't moved to monthly, that's gonna be that's gonna be the ulch point for those tightly held ones. Yeah. have you what what w what have you found about the mindset of your clients towards payday super? Are they just getting on with it or are they anti or are they making a lot of noise or is it just well, just the the the new world?
Kerrie Jarius (50:38.902)
I think with all things, it depends on the personality of your client. Some people were really, were really quite panicky and they just wanted to get it done and they and it was the fear of the unknown and let's let's get it done and let's and just tell me what I need to do and I'll do it. And then you've got the other end of the spectrum that is that have put their their head in the sand and really don't give a damn. So there's the awareness is
is varying. But if you got if they've got a bookkeeper or a bass agent, I would say most people's awareness is pretty good. It's the ones that don't have that regular help that I think are going to struggle.
Peter Thorp (51:16.438)
Yeah. what about employees? Have you had any any contact from employees of clients tackling the payday super question like where's my money? Wasn't it supposed to be paid on payday, that sort of stuff, or have employees been rather quiet today?
Kerrie Jarius (51:32.93)
Surprisingly very little really. There's been the odd person who actually sits there and on the edge of their seat waiting for their super to hit to their super account, particularly if they're close to retirement or they're actually doing some budgeting and stuff like that. P employees like same as clients, some people are really on top of it and some people aren't. But I don't think employees are really that worried about it. We haven't had many direct inquirings from employees. Some but not a lot.
Peter Thorp (52:02.85)
Yeah, okay. It'd be interesting. But I don't think the government message has been all that strong out there prodding employees either. So as you say the earlier, the the marketing for this thing's been a bit on the s underwhelming side. But anyway. look, there's no doubt gonna be elements or there are elements of payday super that yeah, we're we're we get to deal with like refunds and rejections from super funds and clearing houses, voluntary disclosure statements, tax office compliance programme, and that's still
Up in the air. We're not really sure what shape that's going to take. super guarantee charge assessments and and more. So maybe we'll have a chat again in some months down the track. but we'd like to and and sort of tackle some of those issues as they're unfolding. But would you like to give our listeners a quick summation of your first few weeks impression of payday super?
Kerrie Jarius (52:53.506)
I think in a nutshell, it's really early days. if you've got a bad stage and you're a bookkeeper, then you'll be fine. I think our clients are all our clients are going to be okay. The others that have no idea will br come into the fold as they find out or they realise what they have to do. So I think it it's
There's a not a lot at the moment that we can do until we start getting some of those rejections and seeing the timeline that it's going to take. So I think people didn't realise that in the background of what was going on behind the scenes for our software, our DSPs or our digital service providers, the amount of work that they had to do to implement this system. And I really got to take my hat off to them that the whole thing didn't crash on the first page.
After the first of July. So with as with a lot of things, they didn't see the work that went into how the software was going to cope with the sheer volume, how the clearing councils were going to cope with the sheer volume. And I haven't seen too many problems with that so far. So look, watch this space. I think as we get into the technicalities in the next few months, then we're going to start seeing that we might have some challenges, particularly in getting things back in time.
Peter Thorp (54:15.298)
Yeah. I think you I think you make a really good point. I you know, the I mean we were working furiously several meetings a a week with this thing and thinking this thing's not ready, this thing's not ready. So it's an absolute testament to all of the people in the in the chain from employer through to employee super fund that this thing has worked as smoothly as it has thus far, as you say, early days. but look, thanks for your time today, KJ. We will see you next time and thanks to our listeners for tuning in.
Darren Hagarty (29:22)
Hello and welcome to the BK Pod. My name is Darren Haggerty and I'm a director of ABN. And today I want to spend a few moments telling you about a recent edition of our getting technical publication entitled Payday Super Beckons the July SG Collision. With Payday Super commencing on 1 July 2026, it's easy to think of 30 June as a clean dividing line. Quarterly Super on one side, Payday Super on the other.
The reality is not quite that neat. This edition looks at what happens during July twenty twenty six when the final quarter of the old SG regime remains very much alive, while the first obligations under the new payday super regime can arise almost immediately. In other words, for a brief period, employers and BAS agents may find themselves managing obligations under both systems at the same time.
The article explores why that overlap matters and in particular examines the ATO's draft transitional guidance dealing with contributions made during July. One of the key themes is that contributions paid during the overlap period may not always be applied in the way an employer expects. The statutory ordering rules can produce outcomes that are surprisingly counterintuitive, particularly when looked at from an employee-by-employee perspective.
We also touch on the ATO's first-year compliance approach and explain why a favorable compliance stance should not be confused with a change in the underlying law. The edition then examines another significant change that may catch some employers by surprise: the disappearance of the familiar late payment offset mechanism as a general remedial tool once payday super commences. And finally, we look at the practical implications of the closure of the small business super clearinghouse.
Overall, this edition is less about the mechanics of Payday Super itself and more about navigating the transition from one regime to another. Because while Payday Super may begin in one July, the old world doesn't quite end on thirty june. Enjoy the read.
Kellie (31:42)
Well, that brings us to the end of this episode. Thanks for joining us again today, and we hope you found it informative and you picked up a few practical tips that you can take back into your own practice. Before we wrap up, I did want to just highlight a couple of things for our ABN members. We recently added six new resources to the Member Centre designed to help you navigate some of the newer compliance requirements and strengthen your internal processes.
These include our new BAS Agents AML CTF survival kit, along with a suite of payment authority templates covering client payment authorities, standing authorities, approval processes, and review processes. So if you're yet to see those in your member centre, it's well worth taking a look and downloading them. They will help you in your practice.
Finally, a reminder about the Bookkeeper event taking place from 8th to the 10th of October on the lovely Sunshine Coast. I'm very excited about this year's program. The agenda has been released and it's shaping up to be one of our best events ever. Plenty of practical sessions, technical content, and lots of opportunity to connect with bookkeepers from right across the country. So if you're already joining us, jump into the event website, have a look through the agenda so you can start.
Planning your time with us. And if you've been thinking about coming but haven't booked yet, there is still time. We have just a handful of tickets remaining. So if you'd like to join over 400 of your bookkeeping colleagues for what promises to be an amazing few days, don't leave it too late. You will find everything you need to know on the Bookkeeper event website, which you can find at bkevent.com
Thanks again for listening today. We look forward to catching up with you again in the next episode of BK Pod. Until then, take care and have a great month.