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Instant Asset Write Off the plus and minus

POS SOFTWARE

$25K instant tax writeoff

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.

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Lottoland Australia still kicking

POS SOFTWARE

  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.

 

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Law on issuing a receipt

POS SOFTWARE

Receipt_message.png

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 it is required on all sales over $75 to issue a receipt

So I think that our software is right.

You need to issue a receipt is someone purchases an amount over $75.

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

Hope this clears up the confusion.

 

 

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Another court case over

POS SOFTWARE

 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.

 

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Lottoland stopped in Germany

POS SOFTWARE

lottoland.png

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.

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Burden of proof

POS SOFTWARE

 

A few people asked me today, what principle is there an obligation and responsibility on the person making a claim was to say "that I had 1700 newsagency clients" on the net or anywhere else for that matter, to provide evidence for their claim, e.g. there was an independent audit done by these people, under supervision of these people that .....

This is called the burden of proof,

 

 

 

 

 

 

 

Australian Lottery and Newsagents' Association (ALNA) took a beating today

POS SOFTWARE

I think talking to people today and reading the communication going round that the ALNA took credibility beating today.

 

The claim being made I believe from Calvin Ayre, but it could be Lottoland that the ALNA is in a severe financial problem (something I doubt) and that its claimed membership of 4,000 is 80% less. All this the ALNA has denied.

This has been picked up by quite a few gaming news sites.

Game intelligence

i-conseils SAS

PlayerOne

The daily payoff

Some of these are claiming that the ALNA is lying.

For those that have not followed the dispute on membership, what happened is that Lottoland got financial documents from the Australian Securities and Investments Commission. When these were examined and then analysed by dividing the subscription revenue by the yearly member fee, they stated that ALNA has about 707 paid members., not 4,000 that the ALNA is claiming.

The ALNA replied that it never claimed 4,000 but 2,000 business and then claimed that 4,000 such business exists. From what I can see this looks what the ALNA did say although possibly Lottoland has some or perhaps many words spoken by representatives of the ALNA that do not make this distinction.

I was thinking about this and for someone to make a claim honestly that they have about 2,000 members they need at least 1501 members, and then they can round up. Now the ALNA claims that it has 400 members in an affiliate group who are not specified and the ALNA represents them, so that leaves the ALNA needing 1101 members. The ALNA further claim that many of these members have more than one business and one unspecified has 58 businesses which if we are talking lotto is a sizeable organisation.

Plus the ALNA claims the 707 figure is in error as many of its members do not pay the yearly fee claimed but less so one could say 800 or 900 plus some being multishop businesses it is possible that the 1101 member figure can be reached, thus making the 2,000 claim accurate in a strictly mathematical sense.

Overall I would say that both sides claims here are plausible, but I look forward to hearing more.

Finally that this dispute beside being nasty is unnecessary, I believe this is not a dispute between lottery franchisers and Lottoland but one between TABCORP, Lottoland and the federal government over a billion dollars a year of revenue.

Banking royal commission

POS SOFTWARE

It is appalling the news that is being reported from the Banking royal commission here. It appears that the banks have been both contemptible and wrong. It appears that people have been charged for services and advice that they never got, some of these people were actually dead for years. As I know a few of my clients use such financial advice services if so I would suggest checking the bills.

Privacy policy update.

POS SOFTWARE

 

 

I got a lot of enquiries over this, and although I stress I am not a lawyer, and this is my understanding of the law.

* All organisations in Australia have an obligation to protect peoples privacy but not all the laws refer to all organisations.

* All websites must have a privacy policy. Here is our privacy policy on our website, please fill free to copy and modify it, if you do not have such a privacy statement now. As our system talks directly to Shopify, you can use the Shopify privacy policy generator too.

* The current new laws are based on existing privacy laws and there are many laws about privacy both State and Federal. In my state of Victoria, there are seven laws listed for Victorians in the Wikipedia here plus there are a further eight laws listed that would cover us federally.

I found the Victorian government very useful in this, and they gave me here a free template to create our privacy statement.

* What really stunned us when we were briefed about these new laws is that a violation of the privacy laws may occur even if the information is false. For example, say I put in the computer a client's date of birth as 01/01/1990 and this is not true. It may not matter if a data breach occurs as it appears in the data that your birthday is 01/01/1990.

As all states have their own laws, if you have any queries you should address it with your state government authority or your state industry body.

The legal dangers of blogging

POS SOFTWARE

I spoke about this before of the legal dangers of blogging. If you need another example well this blogger said it “was a huge free speech, political communication and public interest matter” what he blogged. The courts do not see it like that and now he has been found here guilty of contempt of court and is looking at possible jail time.

If you are going to blog, please be careful.