Now and then, in business and sometimes other matters, you are requested to sign a Non Disclosure Agreement (NDA). 

My advice is to unchanged, refuse to sign them unless you have too.

Some companies will email you an NDA first and tell you in that email that the discussion is bound by this NDA, the legality or enforceability of this I do not know. 

However, sometimes you must sign it, and sometimes it is fair and reasonable that you do sign it. In most cases, there's nothing wrong with signing the offered NDA. It is likely not personal as many consider it a regular part of doing business, a sign of good faith.

Sometimes you need them too! 

If for example, you get a great idea in business and want to discuss it with a supplier of yours. You do not want them to spread it around, but you do want to talk to them about it, well that is what an NDA is designed to do. Another example might be that you have a client list, a company is going to do some marketing that should be useful for you but you do want your client list kept confidential so again an NDA can be useful. 

Some companies insist that their employees sign it if you work for the US President you need to sign three NDAs. 

Do they work and how much validity do they have, I am not sure but I think you are often better off with one than without one.

Having decided that you would like someone to sign it first and they agree to sign it then how do you get one? You probably do not want to spend money with a lawyer.

This is a problem I faced a short time ago. 

So I did a net search and discovered an Australian government site which supplies NDAs free here.

Fill in the form, and it creates an NDA for you, which you can edit. It appears to be fair and reasonable. You may consider using this. 

Note: I am not a lawyer, I do not pretend to be one, and you would be well advised to discuss this matter with a lawyer.

We were asked and did provide a submission in response to the Australian Competition and Consumer Commission’s (ACCC) customer loyalty schemes draft report 

The final report is available here.

Unfortunately, the final report we feel tends to concentrate in our view on the large loyalty programs and ignore the problems that small and medium-sized businesses (SMB) have here.

Our concerns were several. The first one is that the demands for a privacy statement constitute a significant problem for SMB. These documents can be huge; for example, the Velocity Frequent Flyer Terms and Conditions is about 28,000 words while the Qantas Frequent Flyer Terms is over 20,000 words. Both documents would take over an hour just to read. The cost of producing such a document to an SMB is high, so we were happy that the commission did explicitly accept our solution that a standard privacy statement by appropriate industry organisations should be looked into.

On the other problems, we brought up that SMB would find it challenging to manage a loyalty program over many years the ACCC was silent, and we are disappointed with that. Let say, for example, an SMB business changes its computer system. Now we do not lockout our former customers but many of our competitors do lockout their former customers, I have seen them do it frequently. Many charge hefty fees to run reports on old data files.

A client of ours, asked a compititor of ours to run some reports from his old data. He was quoted $450/hour as he was an unsupported user. When he asked how long it would take, he was told it was unclear but as a punt about 5 hours but it could take longer.  

Now if there has been a change of ownership, this may involve an exchange of legal letters first, which costs a lot before the SMB business owner can get access to the information required, and this takes time. So if there is a dispute other this with either the customer and/or the former owner, it may be impossible to get the required information. The prospect and reality of fraud here are huge. 

One tip, I do feel is that if you are buying an SMB that uses a point-based loyalty program that you clear up this problem before taking over. 

Your point of sale system has value and needs to be considered in your business insurance policy. It does not take long for a thief or a fire for you to lose it.

In my experience, the major insurance companies, on cost give a very competitive insurance rate, but you need to be aware that often

Chancy in the sense that often for the most unexpected reasons. 

I have seen them reject claims and the person being insured get nothing. 

They rarely move quickly.

I have seen people being arguing over the settlement for a long time.  It is not a lot of fun when you have a $20,000 bill that you paid for an emergency installation, because you need to have a working computer system is still not reimbursed a year later.

They often do not pay all

Particularly with fraud when the numbers get very high the insurance companies pay only a percentage. Say on a $1 million dollar claim, the judge nominates you for a  10%  legal slap on wrist, well that will be to you $100,000 plus maybe legal fees which will not be reimbursed.

There are several points I would recommend that when getting your business policy you consider.

When getting your business policy you consider.

Physical damage

How much is it going to cost you to install and replace the damage? 

You need here to also consider portable business equipment, like your mobile phones and laptops.

Loss of business while it is being replaced

These costs can quickly add up.

If you offer services like phone cards, bill payments, etc, you may not be able to sell these products until the computers are up and running.

You may need more staff to do the ordering.to record sales, etc

Your VIP club which now on many of our sites is generating about 4% of their trade is off.

If you have a website, it may be affected too.

Then there is loss of goodwill.

Public, Products, Privacy etc. Liability

Here is a horror scenario that happened. A power spike caused a monitor to explode, which sent flying glass throughout the shop. Luckily it was after hours, and the shop was empty, but what would have happened if it was when the shop was open and busy?

Privacy laws and the consequences of breaking it are very scary. There are special policies for this too.

If your EFTPOS is hacked, you might be responsible click here. It would not take long, with skimming your EFTPOS to build up a fair bill. Say you do 40 a day, over six days = 240 EFTPOS transaction. Say $2,000 taken off each that is $500,000+ plus damages plus legal etc.

Miss use of your systems, have a read here.

This is all worth thinking about this when making your business insurance policy.

Single Touch Payroll (STP), I had a few enquiries today about it and questioned the advice sheet we issued about when they need to be ready for STP. What is happening, I think, is that all these salesmen for payroll and accounting systems are starting to push everyone to get the systems that they are giving my clients questionable and possibly misleading information. 

The current situation is listed as

• Large employers with 20 or more employees should now be reporting through STP, or have applied to us for a later start date.
• Small employers with 19 or less employees will need to report through STP any time before 30 September 2019 - this is a gradual transition, and not all employers will start reporting at the same time.  
• If you're an employer with four or less employees you will have additional options."

If all your employees are family members, you can still get more time.

But overall, most SMB organisations need to decide on how they will handle STP soon, but if you need more time, the ATO will probably give it to you, and what is right is that they have announced that there will be no penalties for mistakes, missed or late reports for the first year.

Unfortunately, the banks did decide *NOT* to get involved, so now, if you have not decided how to handle STP, you need to look at the list of ATO-approved solutions.

Note although many of these say that they are free, in the details, you will see they do have costs in the fine print. Looking through the list, the only free option that I liked was Payroller. Although I confess, I have never used it and have no idea how good it is.

Of the accounting packages, looking at this list that my clients use, Reckon I saw will now be $5 per month extra, and MYOB will be $10 per month. 

One big problem I do see with all of this is that in a large business, the payroll is done by the paymaster, and the petty cash office does the disbursements (petty cash). In SMB, these officers are the same people who prefer to do these together, so saving them time and money as it's only one transaction. The problem with STP is that these disbursements will if done as now will, show in the STP transfer, which is sure to cause issues with an ATO officer trying to reconcile the figures they are getting as they do not consider a disbursement a payroll item. The only solution is to split these payments and do them separately, which will cause more work and extra costs to the SMB business.  I cannot see a solution to this the way it is now. Whatever way you decide to go, you need to investigate this problem.

I hope this all helps.

Update: Some people pointed out that they are upset as they feel that the ATO is forcing small businesses to engage 3rd parties with extra costs. I know the problem as I have been using a combination of an old payroll package and a spreadsheet I programmed many years ago. These have worked just fine.

Well, there is nothing we can do; you now need to either download some phone app and manually enter the info or use a current payroll package that costs and will give you no benefit. 

The NSW Supreme Court a few days ago here, made a stunner of a decision that a commercial owner of a Facebook page can be sued for comments made by other people on their FaceBook page.  If you want to read a non-technical article with a decent discussion on the matter, click here. This is well worth a read. 

Although most were stunned, I was not as I do know something about these matters as we were taken to court by a competitor and part of our defence was we felt some of the comments said about us were pretty bad and in fact, they were making up comments about us online. In our case, they settled out of court giving us a substantial five-figure settlement so it never got to a decision, but here it did which is the problem. 

This matter will undoubtedly go to appeal. All that the judge ruled here is that there is a case abd that it can go to trial. It may require a change in the law because if it stays, it will have a dramatic impact on our rights of freedom of speech. 

Okay, what can we all do about it *NOW*? 

For now, those that run online a site including Facebook pages, need to make changes. Currently, we allow whoever wants too, to write what they want on our pages. Now it looks like the court expects us to vet all comments before they are published or at least to delete any comments in a reasonable time or we can be sued too. Currently, I check our Facebook page almost every day, and so far I have never deleted any comments there, but I reckon that now I may need to be prepared to do so. I suggest you do something similar too until this matter is resolved. Knowing our courts and parliament on an urgent matter like this, this matter will be with us for many years. 

As the end of the financial year approaches, many of you, as are most people now, considering their plans for any last minute changes this year and what they are going to do next year. 

There are several considerations that you should be aware of approaching 30 June date.

Currently, the new EFTPOS rates are starting to roll up, and they all seem to be up.  If you intend to stick with your present provider, I suggest you find out now what the new rates will be. If you want a comparison, Assembly thought Westpac (which if you are with Westpac is an extremely inviting option) and Tyro EFTPOS both of which we interface into now have good deals. These rates, I think they are going to look in retrospect a lot better when you are in 2019/20. If you want to know more, let us know ASAP as we are looking at ten days left.

Also, the government accelerated investment allowance for 2018/9 ends then too if you are looking at upgrading your computer and/or software requirements well again it is only ten days left.

PS If you are starting to budget for the next year, check out your new insurance rates, I got a shock when ours came in. 

The End of the financial year is an essential time for businesses. We all need to complete the bookkeeping for our tax returns and plan for the new fiscal year. Putting the hard work now can help you get your business organised and prepare for the year ahead.

As a minimum, I would suggest you need to get the following in order 

Sales reports
Stock Valuation
Customers Outstanding
Subagents Outstanding (if applicable)

Creditors Outstanding (if you do it from the point of sale software)

You need to go over these now as you need to see what can be written off in the debts and stock if you wish to claim a tax deduction for this year.  Otherwise what will happen is these losses may end out in next year's financials.

 Click here for a webinar on End of Financial year reporting from your point of sale software. It discusses in detail these reports

Although not required from our software, I do recommend that you do make a special End of Year Backup to store in case you need to refer to it. The 30/June this year is a Sunday. You may also want to check out the ATO Record keeping evaluation tool

Also, note that your stocktake needs to be done very soon, which we will have a webinar on very soon.

The end of the financial year is just coming. We know that this will be for all of us is a very busy time.

Here are some steps from your point of sale software required.

Contact your accountant and get a list of documents that they require. Although our software does not require any additional handling for the end of the financial year, I would suggest as a minimum you need to prepare the following documents

Sales reports
Stock Valuation
Customers Outstanding
Creditors Outstanding
Subagents Outstanding

To do this I would suggest that 

1. Review your bad debts and credit the accounts that you deem to be bad debts to zero. Otherwise, you may find yourself having to pay income tax and GST on these debts.
2. Looking at the creditors listing, crediting out what is not going to be paid.
3. Review your stock. Consider writing off old stock.
4. Take an end of year backup of your information and file it away somewhere. Remember you will need to keep this for seven years at least after you lodge your return. Please do not use any EL Cheapo USB sticks

To help you we are doing some webinars on these subjects

1. Stocktake 
2. Sales reports 
3. Stock Valuation 
4. Customers Outstanding 
5. Creditors Outstanding 
6. Subagents Outstanding

This is a map from the Wikipedia of the legality of cannabis by states now in the USA. On October 17, 2018, Canada became the first G7 nation to legalise recreational cannabis fully.  In both places the retail market is enormous. The legal US Cannabis industry grew by about 25% a year to $10.4 billion in the U.S. in 2018, and it now employs more than 250,000 people.

So many retail experts think that soon will come a cannabis boom to Australia. I know I just spoke to one of these experts. To give you a feel of how big they think it is going to be the Australian legal cigarettes sales are about 6 billion dollars, the Australian Cannabis Market he was expecting to become about $22 billion. That may be long term and include cannabinoid-based medicines which are predicted to make a significant impact on the pharmaceutical business. 

Based on the US figures, for retail and using their tobacco industry sales as a base which are 125 billion U.S. dollars, so based on that in Australia, as a first level approximation, I would expect about 500 million dollars and such an industry would employ about 12,000 people. That, of course, would grow as time moves on. You can see why these experts are excited.

What I do know is that currently, medicinal cannabis farms are sprouting up around Australia, with demand for the product ramping up. 

Is it coming for recreational use in Australia, I think so but when I have no idea. It certainly does, however, give food for thought. 

Here is a famous picture of the Facebook CEO Mark Zuckerberg showing his Facebook likes here.

What happened is that when people blew up the picture where I put the arrow in what they found was this.

What he had done is put some tap over the camera and microphone of his laptop. Obviously despite having some of the best I am sure computer security professionals in the world, to check his computer he still feels he needs to do this too.

It is certainly the sign of the times as privacy has never been more under threat as it is now with computers and the internet. Although the Australian goverment with both sides approval has taken admirable action on private companies abusing people'e privacy, it certainly has expanded dramaticly the power of its own abuse of privacy again with both sides approval. 

Now if you're concerned what kind of data is collected by Microsoft in its latest Windows 10 at least there is something you can do to increase your privacy.

The problem is that Windows 10 requires to send information to Microsoft so that it can serve us better. Now where do we draw the line on what we are prepared to give will be different for everyone?

If you are concerned about this, I suggest that you download this free program and checkout the trade off between what you need and what information you are sending that you feel  goes too far. It is available here.

.

With our POS Software, you can have an integrated website. That is a big plus.  Then what you will have is a shop that can take orders all the time. 

Now what you need to consider is a name for your online shop. Here are some points I recommend for an Australia shop.

1) Do not try and save a few dollars by selecting .NET, .BZ, .COM, .ORG, etc extension. Australians want to see your website with a .COM.AU extension. 

2) The shorter and easier it is to remember the name, the better. If it complex, it will be harder to find. 

3) Make it relevant to online. Say for example your name was Simon White and you owned a stationery shop in the suburb of Moorabbin.  If your business name was "White Stationery shop", how is that going to help your business? On the other hand, a name like "Moorabbin Stationery shop", would alert Google and Bings search engines that you sell stationery in the Moorabbin area. It would come up in people's searches. 

4) Keep it as short and simple as possible. I suggest that you pick a name that is easy to spell and simple to pronounce. 

5) Do not be too clever in your name eg haveagr8tday is not good nor is komputer.

6) Check your proposed name that you do not get in trouble eg if your name is McDonald and you open up a hamburger shop, there may be problems.

Bonus tip

For most SMB, I suggest looking at your location and what you do to make your name.  See point (3).

There are my tips, 

The tax writes off as it works for an SMB currently if it wanted to buy a point of sale system for $5,000.

Now it does not cost a business $5,000 as it can claim the GST. So 10% of this is GST which will be coming straight back, so the proposed cost is $4,545.45

- 100% of this would be allowed as depreciation

- If the company tax rate says 27.5%, which means the business will get back $1,250 in income tax credit.

 Which means that the business needs to fund this purchase in the first year needs $3,295.45 

Now the Labor proposal is to reduce the depreciation allowed to 20% if the asset is over $20,000 which this is not so 

- As the government does allow depreciation of computers now at  25% so most people would use that.

- If the company tax rate says 27.5%, which means the business will get back $312.50 in income tax credit.

Which means that the business needs to fund this purchase in the first year needs $4232.95

** Which means that the business needs to fund this purchase in the first year requires an extra $937.50 **

As the current government did not make the investment allowance permanent despite many requests to do so and it appears that the Labor party has indicated that it will be replacing it with their own scheme.  This may be your last chance to take advantage of this scheme.

If you want to take advantage of the instant asset write off, I suspect it is very dubious that you will get as good a deal as this later. So if you are looking to acquire or upgrade a point of sale system from us, NOW is the time.

The controversial Department of Social Services Cashless debit cards is now moving to trial which we are involved in. 

How it will work in a few months is that some people on social welfare are issued by the department of social security with a debit card. These cards look and work like a regular debit card except it restricts the purchase of some goods such as alcohol and some forms of gambling. It also does not allow the user to withdraw cash from the account.

From you the merchant view, if you are on the trial, you will need to mark all restricted items in your shop in your point of sale software. This includes items that you do not sell but potentially could sell. The list will be provided. Now the idea is that when you ring up a sale, your point of sale software at the time of purchase will signal to the EFTPOS unit that a restricted good is on the list. If it is a department of social security debit card, while attempting to process, you will get a message that the sale has been declined. You will not be told why.

Much still has to be determined which is yet to be determined how the social security department will handle it eg if you do not have a point of sale system, if you use a stand-alone EFTPOS unit, if you use stand-alone terminals to sell goods, if you sell many goods by a department, etc. 

How big will it go, who knows, currently it is aimed at what appears to me to be a small number of indigenous Australians who have no choice, they must go on it but as about 5 million Australians receive some money from the government potentially it could get that big. For all its worth, I have spoken to a few merchants in the areas who have seen first hand the problems of alcohol and gambling on the trial and they are all in favour of the plan. 

Just a quick question?

Say you brought some software with a lifetime licence, how long would you expect that this software will work for you? 

This question has been puzzling us since a client of ours brought it to our attention yesterday. They purchased some software over the net, subject to the laws of the "State of New York, USA" and paid extra for a lifetime warranty.  After six (6) years it has stopped working. 

When they argued with their supplier that they had a lifetime warranty and so it should still work, they were informed yes they purchased the item with a lifetime warranty and that the "End-User License Agreement" clearly stated

so apparently their lifetime warranty on this software is six years. 

I have verified that this was the "End-User License Agreement" when they did buy it.

I decided to do some investigating on their behalf and discovered that the term *lifetime* in "lifetime warranty" has several different meaning 

It may mean

a) Forever

b) No matter how long the original purchaser owns the product.

c)  For how long that product can be reasonably expected to perform based on the way the buyer uses it.

d) The lifetime of the manufacturer

e) Three years

f) But this was the kicker; however, the seller defines it as long as he conspicuously discloses what ‘lifetime’ means. 

In some states in the US, I saw that could be something like as long as we sell that version of the software. For example, if they sell version (2) and now version (3) comes out, so they drop version (2), well version (2) lifetime is over and so is your warranty.

Note in Australia, under ACCC guidelines action can only be taken ten years maximum after purchase, which I suppose puts its own limit on the goods warranty.

I suppose like always remember the saying "Let the buyer beware."

The good news is that the instant asset write off has been extended for this financial year and even better has been increased from $20,000 to $25,000. This tax write off has saved heaps of money and cash flow for my clients.

Here is how it works

Say you were to buy a point of sale system for $5,000. The first point is to the ATO it does not cost $5,000 as 10% of this is GST which you will be getting straight back so the proposed cost is $4,500.

The system without the Instant Tax write off would allow only 15% of this would be allowed as depreciation, which works out to a tax deduction of $675

- As the company tax rate is say 27.5%, the business would get back $185.63 in income tax credits.

** This means the business needs to fund this purchase in the first year $4,314.38 **

However, with the Instant tax write off in place

- 100% of this would be allowed as depreciation

- If the company tax rate say 27.5%, which means the business will get back $1,237.50 in income tax credit.

** Which means that the business needs to fund this purchase in the first year $3,262.50 ** which is $1,051.88 less

This is a fairly substantial saving!

The bad news is that the government did not make it permanent and it appears that the Labor party if elected will not renew it, but replacing it with their own scheme which has some advantages but in this case only gives here a 20% write off. 

** Which means that the business needs to fund this purchase in the first year $5,252.50 ** which cost you $990 more.

If you want to take to take advantage of the instant asset write off it closes the 30th of June this year and if you miss out whether you can get as good a deal like this next year, I suspect is very dubious.

So if you are looking to get or upgrade a point of sale system from us, NOW is the time.

  The government outlawed betting on "synthetic lotteries" which are now in effect which we were told would effectively sign the death warrant for gambling companies like Lottoland in Australia, but Lottoland isn't going. I doubted they would as there is too much money involved.

Check out the lottoland site. Currently the US power at $571 million looks interesting, plus they have a new product "Jackpot betting." 

In April 2018, I wrote my personal views

-The medium to long-term for many of my clients on Lotto is worrying, and for point of sale suppliers like us, this is alarming. 

-The existing commissions from TABCORP are not enough?

-TABCORP continuing strategy is growing its digital business, and it is affecting my clients.

-The reality is that the Australian lotteries products in the days of the internet are now being outclassed.  My clients do not have access to many products that the internet offers, e.g.  $A571 million US Mega Millions jackpot here that the internet consumer does. 

-My clients have been hit by huge and unreasonable demands for shop fits. To support these shopfitting demands many have been presented with estimates of its benefits that I question.

Today I do not see despite what some claimed would happen once Lottoland was stopped from selling synthetic lotteries that my clients would be getting a share of the online sales, much better commisions and there would be a reduction in the demands for shop fits. 

Finally, I do not see that those of my clients that supported the move to ban Lottoland got much in exchange for their support. 

Note I am happy to take back all or any of these comments if someone can show that any are wrong.

There seems some confusion over when a receipt must be issued. So I decided to check on behalf of our clients.

In some places eg Victoria under consumer law it states that a receipt must be issued if the transaction is over $75 EX GST, which is where people are getting confused.

So if someone purchased $80 worth of goods in Victoria, the merchant would probably be okay under Victorian consumer law not to issue a receipt.

However, if they purchased the same $80 worth of goods in QLD, the merchant is required under their consumer law to issue a receipt as it is over $75. 

However, in all of Australia, the retailer under ACCC is required on all sales over $75 to issue a receipt

So I think that our software is correct.

You need to issue a receipt if someone purchases over $75.

Another point to consider here is that regardless of the amount, all state consumer laws and the ACCC agree that a receipt must be issued on any transaction if the customer demands one. 

I hope this clears up the confusion.

 Although I do not want to name names, one of our clients, a small newsagent has finally settled with one of their old suppliers their case. The amount of money our client has recovered about a quarter of a million dollars which is not all their loss and they have to bear their costs which will make a substantial dent to the payout figure.  I will not be surprised if it is over half the payout amount.

So I think it is a good example to discuss the dangers of taking on agency sales in modern retail. 

An agency sale is a product for sale that a retailer markets on behalf of another organisation e.g. transport tickets,  bill payments, dry cleaning drop-offs, transport, lotteries, etc. Often the payout is seen partly in the number of customers coming to the shop to get these items. As the margins on these products tend to be low, to get a decent return you need a lot of sales which became the problem here as you will see. Say you make $20,000 at 2% margin you are looking at a million dollars of turnover. 

What happened here is that the supplier gave our client an electronic key once our client had signed the appropriate forms and also gave the supplier their bank account details. 

The problem is that someone else got a copy of my client's electronic key and soon they were trading on this account. As they were selling my client got billed for their trade. This other business did about $100,000 a year of trade in these goods and over time, the amount grew to about a quarter of a million dollars. 

This was only noticed by accident when an item was sold in this other business that my client had never traded. My client then immediately questioned this sale. Soon a stop was put on the account. Then my client requested as it was an error for a full refund of a quarter of a million dollars.

A dispute started.

No-one disputes that these trades were done by someone else.

However, the supplier stated that the only way for this key to have gone to this other business was if our client or people associated with our client had intentionally or otherwise given this electronic key to another business. So my client is at fault. My client does not feel that this happened. Also, my client's lawyers stated that even if this was true, it was the supplier's fault as their security is clearly not good enough as all a person had to do was copy an electronic key. 

Now you would think that it would be in everyone's interest to find out who this other business was? Well not really as it might establish who is at fault and if that other business did not have a quarter of a million dollars, then whoever is left with the blame and so probably the debt they would not be able to be recovered.

However, both sides did agree that my client was at fault for not having proper control over their accounts, something they are legally supposed to do. 

So began a three-year case which went on and on until finally, both sides came to a deal.

Here are some points that I think came out of this legal case

1) You need to audit your agency sales, your point of sale software needs to produce reports detailing your sales which you need to match up to the supplier's figures.

2) You need to ensure adequate security of your computer system. The supplier's argument that someone who knew what they were doing *could* get a copy of the electronic key given access to my client's computer system is valid. 

3) The authorities were not helpful, and the legalities are not straightforward.  Here is suited both parties interest not going to the police.

4) Agency sales even if they do not make much profit can generate a lot of turnover so giving a high risk.

In a story that sounds very familiar to an Aussie, the German courts have ruled that Lottoland may not run in Germany and Lottoland may not accept German gamers. Apparently in Germany Lottoland is taking about 7% of the local lottery sales now.