ATO warns small businesses on sales suppression software

The ABC has reported the ATO is clamping down on small businesses using sales suppression software to minimise tax.

Ms Jenkins said the ATO was also cracking down on the use of sales suppression software that disguised the transactions within a company’s records.

“There is some really sophisticated software out there that is helping people avoid paying the right amount of tax.

“But whether it is cashless payments or whether it is the use of platforms or apps, it means there is really a trace of your transactions.

“We use merchant data and other sources of information to identify where things just don’t look right. Then we go and have a chat to them and say, ‘Hey, can you explain?’

In the mid 1990s there was sales suppression scam operating in the newsagency channel. I became aware of it because my newsagency software company lost businesses because we refused to offer such a facility.

There was a software program into which the retailer could enter a code and then an amount of cash they wanted to take out of the business unreported. A second set of records was maintained for the ATO and another records for the business owner.

I know because the software was demonstrated to me several times, by someone who had worked for the software company that created the software. They had approached me. I did some more checking with newsagents and discovered the facility in the software was being used.

The matter was reported to the ATO. At their then Box Hill office in Victoria they assembled a task force including representatives from the ATO, Federal Police, Federal Attorney General office. Victorian State Revenue and Victorian Attorney General office. Several of us with knowledge were brought in for a demonstration of the software. There were several follow up meetings with the ATO in Sydney.

Eventually, my software company stopped losing sales due to us not having the tax avoidance facility in our software.

Any retailer deliberately and systematically underreporting their income to avoid tax deserves what they get from the ATO and from any suppliers they impact through their actions.

  1. We refuse to help any retailer avoid tax.
  2. We will not code for tax avoidance in o0ur software.
  3. We will report it if we see it.
  4. Retailers and taxpayers need to be able to trust POS software.

How our POS software company helps retailers go cashless if they want

Cashless retail is a thing. It is growing in retail, especially small business retail where trading in cash is challenging with banks withdrawing services and some increasing fees for handling cash.

Tower Systems, in its POS software, helps small business retailers transact without cast cost effectively, safely and quickly. We do this in myriad ways including…

Lower cost direct EFTPOS. We have negotiated excellent, competitive, rates for our 3,000+ customers for direct connect broadband EFTPOS, making accessing EFTPOS cheaper as well as faster and safer. This makes using EFTPOS at the counter as fast as cash if not actually faster.

Direct integration with EFTPOS. This means there is no extra keying of sales amounts, no separate terminal. No slower process for handling. Fewer mistakes. Easier end of shift balancing. More certainty for customers and for the business.

Easier access to cashflow finance. Through the EFTPOS arrangement, there is access to cashflow finance that can help the business better managing capital needs with greater certainty given the flow of funds between EFTPOS and the business bank account.

Direct Xero integration. This means less keystrokes, less accounting and bookkeeping fees, less mistakes and greater business certainty thanks to a more robust base off data on which business decisions can be made.

Business process advice. This includes migrating your end of shift from cash and other payment methods to other only, eliminating the float, making services payments easier and more.

Tower Systems can help retail businesses that want to transition to cashless to achieve this. We are not advocating this as we recognise each business owner needs to make the decision that is right for them. Our message is we are here with a plan if you want it.

As retailers ourselves, the questions about whether to go cashless in retail as well as how to go cashless in retail are as real for us as other retailers. Indeed, these are questions we have right now … hence, our preparation of plans and considerations, so we are positioning ourselves for our retail businesses and are happy to share this with other retailers in our small business retail community.

Cashless is growing in use in retail. We think it is useful and appropriate for retailers to learn how to deal with this. We are here to be a sounding board for anyone interested.

Advice for small business retailers on dealing with employee theft by a minor

This advice is from our vault of business management advice for indie small business retailers. This vault contains advice on many diverse aspects of small business management, often far removed from the POS software we are known for.

Today our advice is about how to deal with employee theft by a minor in a retail business.

If you suspect an employee aged under eighteen of theft from your business you need to be careful as to how you navigate this. It is important to take time to decide the appropriate plan of action before you approach the suspect to even investigate the matter. The wrong approach could have challenging consequences for you, your business and the person you suspect.

Our suggestion is that the moment you have a suspicion, invite the suspect and a parent in for a meeting. Have someone else there as well, as your witness.

  1. Present your evidence and invite their response.
  2. Ensure you are civil, factual and not emotional.
  3. Listen to their response without interruption.
  4. If they ask what you want to do about it, be sure you have a reasonable response ready. If there is agreement on this, move forward.
  5. If there is not agreement on what you propose, or if they deny the theft, you need to be ready with your next course of action. This course of action should be reasonable and focussed on getting to verifiable truth.

If there is agreement that theft occurred and the employee is casual, my suggestion is immediate termination with you paying out what is owed by law. Put it behind you. Never speak of it outside the business. To constantly revisit it, especially outside a major city, can be debilitating.

If there is not agreement, ask they other side what they want to do. It could be that even though they deny it they are happy to walk away from the business. If this is not the case, you could suggest mediation. The Fair Work Obmudsman office could possible play a role here. You could equally suggest that both sides take the matter to the police.

The reality is that once you make a complaint to parents you have to be prepared to follow through, to see the matter to a reasonable end.

My core message today is that handling the suspected theft by someone under eighteen takes care and planning, to ensure that you, your business and the suspect are all dealt with fairly and safely.

Get a video recording of your live POS software demonstration and questions

In a demonstration of a commitment to customer service and transparency, Tower Systems is leveraging secure, smart and mobile technology to offer anyone a free video of the live and interactive demonstration of the Tower POS software.

This is an offer for any retail business owner, their consultant or their accountant. It is risk free, putting the needs of the customer at the centre.

Thanks to smart online meeting technology, we can bring together retail business partners, their accountant and others for an online, live and interactive demonstration of our POS software. Better still, we offer you a video recording of the demo every question you ask, and our answers.

While we welcome live in-store demonstrations, with work scheduled today and distance, online live demonstrations are more popular. Here at Tower Systems we have invested in technology to deliver a quality online demonstration where there software is shown live, all questions are answered and open discussion is encouraged.

Our demonstrations are 100% customer driven. This is why a video of the demonstration is good as it reflects the personalised nature of what has been covered, the questions that are business specific that have been answered. The approach demonstrates the realness of the approach taken by Tower Systems in serving customers.

If you have ever wanted to recall, for certain, answers given or promises made in a sales situation, we make it easy because, to us, transparency matters.

The demonstration video offer from Tower Systems its another way the company backs itself, its promises and its personal service. It demonstrates a point of difference that small business owners love because … retail is personal … after all.

We offer locally developed and highly tuned software for specialty retail businesses including garden centres, produce / farm supply businesses, jewellers, bike retailers, pet stores, toy shops, gift shops, homewares shops, fishing and outdoor businesses, newsagents and adult shops.

To find out more about our POS software and support for specialty retailers…

  • WA / SA/ VIC: Tim Batt. 0401 833 917.
  • NSW / ACT / TAS: Nathan Morrison. 0417 568 148.
  • QLD / NT: Justin Randall. 0434 365 789.

Tower Systems is an Australian POS software company serving 3,500+ specialty retailers in Australia and New Zealand.

How our POS software co. helps small business retailers pitch their economic value

Through a range of assets, our POS software company helps small business retailers pitch the value of small businesses and local retail businesses in Australia.

These assets are readily available for any to use. Many are unbranded, too, making their use even easier.

We research the content we create and ensure it is accurate as well as easily understood for people in the community. We want them to pick up on the small business value narrative and through this better support small businesses, especially small business retail.

We are grateful for the opportunity to serve in this way.

POS software as a community service

We are grateful for the opportunity to help community organisations access our POS software for a fraction of the usual cost, through our community support program.

For many years, we have helped community organisations that do good and valuable works, by providing access to our software on an on0-going basis sometimes free, sometimes for a token cost.

This community work is part of the Tower giving program where we help community organisations spread the joy off their community works with greater surety and efficiency.

We appreciate being able to do this.

Beware this email scam

A client received this email recently…

Hello!

I’m a programmer who cracked your email and device a few months ago.
You entered a pass on one of the sites you visited, and I intercepted it.
This is your password from  xxx@xxx.com on moment of hack:
XXXXX

Of course you can will change it, or already changed it.
But it doesn’t matter, my malware updated it every time.

Do not try to contact me or find me, it is impossible (in ‘from address’ is
a random contact).

Through your email, I uploaded malicious code to your Operation System.
I saved all of your contacts with friends, colleagues, relatives and a
complete history of visits to the Internet resources.
Also I installed a Trojan on your device and long tome spying for you.

You are not my only victim, I usually lock computers and ask for a ransom.
But I was struck by the sites of intimate content that you often visit.

I am in shock of your fantasies! I’ve never seen anything like this!

So, when you had fun on piquant sites (you know what I mean!) I made
screenshot with using my program from your camera of yours device.
After that, I combined them to the content of the currently viewed site.

There will be laughter when I send these photos to your contacts!
BUT I’m sure you don’t want it.

Therefore, I expect payment from you for my silence.
I think $868 is an acceptable price for it!

Pay via Bitcoin.
My BTC wallet: XXXX

If you do not know how to do this – enter into Google “how to transfer money
to a bitcoin wallet”. It is not difficult.
After receiving the specified amount, all your data will be immediately
destroyed automatically. My virus will also remove itself from your
operating system.

My Trojan have auto alert, after this email is read, I will be know it!

I give you 2 days (48 hours) to make a payment.
If this does not happen – all your contacts will get crazy shots from your
dark secret life!
And so that you do not obstruct, your device will be blocked (also after 48
hours)

Do not be silly!
Police or friends won’t help you for sure …

p.s. I can give you advice for the future. Do not enter your passwords on
unsafe sites.

I hope for your prudence.
Farewell.

This email is a scam. It was mentioned by the federal government recently as a scam, too. The best protection is to ensure you have your data backed up in the cloud, that you change passwords regularly and that you do not pay the ransom.

Note: we have removed identifying details from the email.

Tower Systems participates in newsagency channel strategic planning conference

Tower Systems is the only newsagency software company to participate in the recent ALNA (industry association) hosted newsagency business strategic planning conference.

Meeting with the top newsagency channel industry leaders, our leadership team participated in the conference and associated workshop to help develop strategies for the future of newsagency businesses in Australia.

The conference and workshop were engaging, intense and extremely valuable. We are grateful for the opportunity to represent our newsagency customer community and to work on their behalf.

Here is part of the note from ALNA outlining the plans for the day…

We believe that considering the future of customer behavior, disruption and opportunities for our retailer’s is part of our industry leadership role at ALNA. We would like to invite you to join us to learn about some insights and what we are working on for the industry, and to participate in discussion to help us to provide a focused vision for our future.

ALNA’s aim is to represent the interests of our members with innovative solutions to government, regulatory authorities, industry partners and stakeholders. Our culture of actively exploring and implementing new strategies and professional services to support continuous improvement, growth, and the success of our members and the industry, will help ensure that we remain our members and stakeholders preferred choice for professional advice, support, and educational programs into the future. It forms our core vision of being collectively invested in success.

While we will not share here details from the event, it is fair to say it was an important event focussed on the future of the channel, delivering leadership opportunities to those there based on the data insights confidentially shared and the discussions that flowed from these data insights.

Being in the room positions Tower Systems to provide more help and support to small business newsagents as they navigate challenges and change and as they embrace growth opportunities in some segments of their businesses.

New friendships were made and new opportunities explored as we worked through initiatives designed to make newsagency businesses more relevant.

Our advice to newsagency suppliers who were invited but declined is that next time they should say yes and participate. This is what being a good citizen in a small business channel is all about for a supplier.

It is illegal for your POS software to offer tools to avoid tax

The federal government passed ;legislation a while back making it illegal for POS software companies to offer tools that facilitate the hiding of business income for the purpose of reducing your taxation obligation.

Here at Tower Systems we have never offered such tools.

We think it is wrong for any business to hide income for purposes of reducing taxation obligation.

We have participated in several panels with the Australian Taxation Office on matters related to POS software including this area of software compliance so as to not facilitate tax avoidance. We are grateful for the opportunity to be part of the conversation that led to tighter rules in this area.

Years ago, we had a competitor that did this, a competitor that facilitated the avoidance of tax by retailers using their software. They promoted it. It was common knowledge in retailer circles at the time. We saw live how a secret facility in their POS software was used to avoid tax. Once we saw it ourselves, we reported the matter to the Australian Federal Police and other authorities. The tax avoidance tools in the software were demonstrated too the authorities.

That experience is not the only time we have seen this. It frustrated us that tax avoidance facilities were being promoted as a differentiator to our software. For sure, it cost us revenue. I sucked then and still sucks today. Those perpetrating the tax avoidance scheme within the software company should have been jailed in our view.

However, we move on.

Today, the message for retailers is that the ATO has a range of tools, benchmarks and more at their disposal that enable the discovery of tax avoidance. Trying to avoid tax is a mugs game.

Retailers are better served focussing on smart engagement and operation, using their software to builds stronger and more successful businesses. This can be done if you use smart software that focusses on new traffic and new opportunities for a brighter future. that is, software that is backed by business advice and professionalism to help retailers achieve excellent results.

Tower Systems helps small business retailers beyond the software to ethically build stronger and more successful businesses. As retailers ourselves it is what we do, with pride and pleasure.

Help for drought affected small businesses

Tower Systems has several businesses in our client base that have been drought affected. We have reached out with help and resources to assist.  We have also spoked with government agencies to understand the resources available so that we can connect our customers with these as appropriate.

One such resource for drought affected small businesses is through the ATO, the Australian Taxation Office. Here are some details of their drought assistance eligibility criteria:

To work out if you are eligible for small business entity concessions, you first need to work out if you are a ‘small business entity’ in an income year. You must review your eligibility each year to check if you are able or required to use a particular concession.

From 1 July 2016, you are a small business entity if you are a sole trader, partnership, company or trust that:

  • operates a business for all or part of the income year, and
  • has an aggregated turnover less than $10 million (the turnover threshold).

From here on, when we say:

  • ‘small business’, we mean ‘small business entity’
  • ‘turnover’, we mean ‘aggregated turnover’.

From 1 April 2017, the turnover threshold for fringe benefits tax (FBT) concessions increased to $10 million.

The $10 million turnover threshold applies to most concessions, except for:

  • the small business income tax offset, which has a $5 million turnover threshold
  • the capital gains tax (CGT) concessions, which continue to have a $2 million turnover threshold.

For previous income years, you are a small business if your turnover is less than $2 million.

Find out about:

See also:

  • Are you in business? – determine the differences between a hobby and a business for tax purposes

Our Tower Systems POS software company helps small business retailers in a range of practical ways from direct assistance to operational assistance. We do this because we believe in small business and because we are grateful to be in a position where we can help. Gratefulness is best expressed through practical help in our view.

Advice on avoiding the impact of a ransomware attach on your retail business

Ransomware / malware can come in many forms. Every computer connected to a network in any way is at risk.

There is no guaranteed protection but there are important steps to take. This advice sheet provides advice designed to reduce the risk to your business. Ransomware often comes in the form of a harness looking business email, seeking you to click on something that makes sense.

Often, if the recipient clicks on the attachment in the email, the ZIP file, on a PC running Windows they would have been locked out of the computer and subject to ransomware.

A ransomware attack is where money is demanded to unlock your computer. Often, the computer is not unlocked even after a payment is made.

More and more businesses including small business retailers are being affected by these malicious attacks, they are being locked out of their businesses.

You can reduce the opportunity of being hit by an attack by taking care with emails.

If you are not sure of the sender, ignore the email. Tell everyone who has access to your email. Lay out your ground rules and demand discipline.

Here is our best-practice advice to protect against Ransomware:

  1. Ensure you use professional, up to date, virus protection.
  2. Ensure you have a good firewall with strong settings.
  3. Do not click on emails or attachments unless you are sure of the sender.
    1. Be particularly wary of ZIP files in emails.
    2. The ATO will not email you.
    3. Your bank will not email you.
    4. Australia Post will not email you, not like the example I have posted.
  4. Ensure all passwords you use are strong.
  5. Consider using an email filtering facility.
  6. Do not allow remote access to your computer unless you are certain of the person accessing.
  7. Ensure you have strong passwords. A strong password should include: some CAPS, some numbers and at least one special character. Check your password at: https://howsecureismypassword.net
  8. Change your password regularly.
  9. Run an up to date operating system.
  10. Have rules on computer use: no games, no online gambling, no porn, no personal emails.
  11. Have an overarching rule: do not open any email or go to any website unless you are certain.
  12. Use a cloud backup service like the Tower backup service. This provides the fastest recovery.
  13. Have multiple backup devices for additional protection.
  14. Do not use automatic file replication programs / facilities such as Dropbox or Google Drive. If a file is encrypted with malware / ransomware it will upload to the account and infect other files.

Most ransomware attacks can be avoided by careful scrutiny of your emails and websites you visit.

We need a Royal Commission into retail shopping centre development and retail tenancies in Australia

We, Australians, small business retailers, suppliers to small business retailers, local towns, all of us need a Royal commission into retail shopping centre development in Australia and the behaviour of shopping centre landlords.

There is enough evidence to indicate that an appropriately skilled and resourced Royal Commission could uncover behaviour that is illegal and harmful to our economy and small businesses and families that rely on the small businesses.

I appreciate that the areas I think the suggested Royal Commission cover are broad and could be better served as two investigations. However, the two issues feed into each other. I think they are best considered together.

WHAT IS A SHOPPING CENTRE?

For the purposes of my proposal, I suggest that a shopping centre is a retail development with fifteen or more shops of any size.

While I am sure there is misbehaviour to consider in smaller centres, for management and focus, a threshold of fifteen tenancies, or similar, is needed. Otherwise, any Royal Commission would run too long and cost too much.

RETAIL SHOPPING CENTRE DEVELOPMENT.

This is the beginning of the issue. Whereas in the US and other countries growth in retail tenancy space is flat or declining, in Australia it continues to grow. Some say we already have far more shops that the population can support.

In regional and rural locations the challenge is that a new centre is usually located outside town and its development can gut the centre of town, diluting or killing off the heart of a small town.

In some cases, mid-size centre development tis driven by competition by the two major supermarkets and aided and abetted by several other anchor tenants and supported by Tatts keen to be in all new centres.

  1. Do we need more shopping centre space?
  2. Should there be controls on approving this?
  3. What is the economic impact of the current growth in retail space in Australia?
  4. What is the social impact of the current growth in retail space in Australia?
  5. What is the impact, specifically on small business retailers of the growth in retail space?

LANDLORD BEHAVIOUR.

Talk to any small business tenant in a shopping centre and they will have at least one landlord story that causes them stress.

There is the landlord who did a handshake deal with a party that was negotiating to buy a business. the landlord squeezed and the family business closed. The new tenant moved in without paying goodwill.

There is the landlord that took too long on centre re-develoopmnent, making decisions that saw a 50% drop in shopper traffic, and refused any compensation for retailers.

There is the landlord that permits one sore to be on a % deal where they pay 9% of turnovers in rent with a shop next door not able to have such a deal and managing and occupancy cost of 32%.

There is the landlord that strong-arms retailers verbally, never in writing, never in a way that can be used against them.

There is the landlord that takes a marketing levy every month and spends this on activities that offer no benefit whatsoever to retailers.

There are hundreds of stories.

The Royal Commission needs to listen to stories, all stories. Tenants need to be able to do this confidentially as the fear of reprisal by landlords is real.

  1. Do landlords act unlawfully?
  2. Do landlords treat retailers differently?
  3. Do landlords act in secret knowingly harming small business retailers?
  4. Do landlords abuse funds they collect from retailers for marketing?
  5. Are landlords fulfilling their obligations in terms of bringing traffic to shops in their centres?
  6. How are the various roles of employees paid in landlord businesses? What are their incentives?

There are many other questions to answer. My goal here is to kick off the discussion.

WHY?

Too many families are losing their businesses, homes and other assets. Too many small business operators are having their personal situations, including health, negatively impacted. Too many small business operators are losing their life. Yes, this issue is that serious.

Small business retailers feel helpless. They want their business. It has been their life’s work. They fear without it they will have nothing. This can see them agree to a lease that is at its very foundation doomed inappropriate for their business.

Landlords have the upper hand. They are in control. Too many people in landlord businesses are bullies and aware of how to bully without being caught.

The best way to resolve this is to shine a light. Only a Royal Commission c an have the authority and power to do this.

I get that Royal Commissions are popular right now. This suggestion, however, is important given that those most impacted are also those most vulnerable – small businesses, run by families. Were are told small business is the business backbone of our country. However, there is evidence to suggest that small business retailers are disadvantaged in terms of shopping centre development and retail teensy negotiation.

Here at Tower Systems we only serve small business retailers with our POS software. In our view, small business matters. This is why we support the push for a Royal Commission into shopping centre development and retail tenancies.

This post first appeared on a blog last week in a post by the CEO of Tower.