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This tool requires you to provide information on financial viability, financial history and projections for your organisation to ASQA when you apply to become an RTO, apply to change the scope or at a monitoring review. ASQA will use the information provided in this tool to determine the financial health of your RTO with specific attention to liquidity and break-even, whether your RTO can manage the cash flow to pay outgoings, tax debt and other fixed financial commitments. It also talks a lot about non-financial metrics such as projected student and staff numbers. The tool requires the supporting evidence of business strategy, bank statements, payable and receivable reports and details of the intended courses. If you understand these factors in advance, you can proactively plan for submission. ASQA provides higher weight to this document, and you need to work accurately on numbers and projections. It is also crucial that this tool supports your Business Plan, and the two documents talk to each other. The tool needs to be prepared and signed off by a qualified accountant like myself.

The FVRA Tool ASQA requires eleven macros enabled and locked sheets to assess the financial viability of a new applicant or an existing RTO. The tool requires you to provide information on your organisation's financial history and projections. ASQA will use this information to calculate ratios and determine your RTO's financial health. It also requires non-financial information, such as projected student and staff numbers. Before submission, the tool provides results in the form of traffic light signals to indicate whether the base financial requirements have been satisfied or if further assessment is required. The tool requires supporting evidence to ensure that the data is correct. The tool needs to be prepared and signed off by a qualified accountant. Having completed many FVRA Tools for RTOs, I understand the requirements for an acceptable result. I will discuss this in more detail in the following video. ​ Book a meeting with me if you need help or have any questions.

It is exciting to share some tips on completing the FVRA Tool that I have learned over time. These tips will help you get an acceptable result. I will also discuss financial metrics listed on the tool's 'Risk Setting & Weightings' tab. Earnings Before Interest and Taxes (EBIT): This ratio analyses RTO's operational performance without capital and income tax costs. The purpose is to ensure that the provider can generate enough surplus to sustain the education operations in the long run. The Ratio is calculated by dividing the EBIT by the total revenue. A ratio of .10 or higher is a healthy ratio. Interest Coverage: The Ratio calculates how easily an RTO can pay interest on its debts. It is calculated by dividing the EBIT by the Interest expense. The higher the Ratio, the better. It is even better if the RTO has access to interest-free director or related party loans. Employee Costs (Trainer & Admin) to Total Revenue: Employee cost is significant for an RTO and should ideally be .3 or less of the total revenue. Debt Ratio: The debt ratio measures the extent of RTOs' leverage, comparing its debt (excluding related party loans) to its assets. A ratio of .25 or less is a good debt ratio. Again, higher equity contributions or access to related party loans improve this Ratio. Operating Cash Flow: This Ratio calculates the RTO liquidity in the short term to ensure that the RTO can generate enough cash to cover its payables (other than the related party loans). This is measured by dividing the cash generated from operations with the payables other than the associated parties. A ratio of 2 or higher is a healthy result.   Book a meeting with me if you need help completing the FVRA Tool or have any questions.

I share the RTO Accounts approach to completing the FVRA tool in this video. I am always here for advice; please contact me anytime by booking an online meeting. www.rtoaccounts.com/meet Shiv Jaidka Chartered Accountant

If your Registered Training Organisation (RTO) wants approval to become a VET Student Loans (VSL) Approved Course Provider , the applications will open on 15 September 2020 and close on 15 October 2020. If your application is approved, your RTO can enrol students from 1 January 2021. The VET Student Loans (VSL) program provides loans to eligible students wishing to undertake Vocational Education and Training (VET) in approved courses with an approved provider. Your RTO must satisfy the critical financial performance data for approval, among other suitability requirements. A history of sound financial performance (has your RTO earned profits for the last three years). A sound financial management structure (prudent management of your RTO’s cash flow and resources). Satisfactory Current Ratio (is your RTO able to pay debts when they are due). Whether financial support is available to your RTO through bank guarantees and capital injection agreements. Submitting the audited financial statements as part of your application is also advantageous. Link for the application guide. If you want me to review your situation, book a discovery call .

I help RTOs eliminate the stress and confusion of meeting their tax compliance issues by providing easy-to-access, real-time reports using cloud technology. This ensures that your RTO is always financially healthy, protected, and ready for growth. I remove the burden of books and help you translate your numbers into strategies and actions for success. As a Chartered Accountant, I am licensed to complete the FVRA Tool for the initial registration, change of scope, or monitoring review of an RTO. I can assist you in preparing your next funding application.

The Australian Government's Digital ID app, myGovID, is set to undergo a name change to myID . This transition is purely a rebranding effort, and no action is required from your end. Despite the new name and appearance, you will continue to utilise the app in the same manner. Your existing login details, identity strength, and access to government online services will remain unchanged. There is nothing you need to do , and you’ll still have: your same details : don’t set up a new myID; your login details (including email address) and identity strength remain the same continued use : your app should automatically update to myID, or you can manually update it from the App Store or Google Play once it’s available access to services : you can still use the app to securely access a range of government online services. Rest assured, the rebranding maintains the Government's commitment to providing a secure and flexible way to validate your identity online. It's essential to remember that your Digital ID is unique to you and should not be shared. Visit mygovid.gov.au/mygovid-changing-myid  for more details.

JMC Pty Ltd v Commissioner of Taxation You may be recruiting trainers either as an employee or a subcontractor. The nature of the relationship between the parties governs the outcome. We have previously considered the factors to determine whether a trainer is an employee or a subcontractor. Here is the link to the previous blog. In a recent Federal Court case of JMC Pty Ltd vs Commissioner of Taxation, an individual lecturer engaged as a subcontractor by a higher education provider was held to be an employee for superannuation purposes. Facts of the Case: JMC Pty Ltd (JMC) engaged a trainer as an independent contractor. The trainer was issuing invoices under a trading name. The written contract mentioned paying an hourly rate for delivering lectures and marking examinations, with a degree of oversight by JMC. The trainer had the right to delegate teaching services to another person or corporation. JMC also provided the necessary infrastructure and equipment to deliver the lectures. The trainer provided the invoices, and JMC paid the invoices. However, JMC did not make superannuation contributions for the trainer. The federal court held that the trainer was a common law employee for superannuation purposes and was not a subcontractor. The interesting point is that this is a federal court decision and not a matter at the Administrative Appeals Tribunal (AAT). The case has since been appealed to the full federal court. We will keep you posted if the full federal court has a different view. Full details of the case are available at: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2022/750.html Factors to determine Employee or Subcontractor: https://www.rtoaccounts.com/post/employee-vs-subcontractor

We have previously discussed the case of JMC Pty Ltd vs Commissioner of Taxation , in which an individual lecturer initially deemed an employee by the Federal Court for superannuation purposes was later classified as an independent contractor by the full federal court upon appeal by JMC Pty Ltd.  The Tax Office has responded to the case through a Decision Impact Statement.  The ATO's view is that if a contract allows a worker to delegate, subcontract, or assign their work to someone else, even with the employer's consent, the worker will not be considered an employee for super guarantee purposes. However, this applies only if the right to delegate is genuine and not a sham. If the contract isn't clear about whether the worker can delegate, the ATO will decide based on the available evidence about the agreement.  What are the Implications for You?  RTOs and subcontractors should ensure well-drafted contracts that accurately define working relationships. For example, if a trainer can delegate his/her work, defined clearly in the contract, the RTO will not be liable for superannuation. For more information, please refer to the ATO's Decision Impact Statement . Previous posts related to this case: Court Case on Employee Vs Subcontractor  - Aug 2022 Update on Court Case on Employee vs Subcontractor  - Jul 2023 Employee vs Subcontractor Court Case Update  - Nov 2023

Unravelling the 2024 Federal Budget: Key Highlights for Small to Medium Businesses in Australia As business professionals, staying abreast of the latest financial developments is crucial for making sound decisions that will drive your business's success. Let's explore the significant takeaways from the 2024 Australian Federal Budget that directly impact small—to medium-sized enterprises like yours. Extension of Instant Asset Write-Off: The government has announced an extension of the $20,000 instant asset write-off for small businesses until 30 June 2025. Small businesses with a turnover of less than $10 million can benefit from immediate deductions on eligible assets costing less than $20,000 if used or installed by the specified date. Assets that surpass the threshold can be added to the general small business pool, allowing for depreciation at 15% in the first income year and 30% in subsequent years. While a similar measure had been proposed in the previous Budget, it is important to note that it is still awaiting legislative approval. Hence, businesses should exercise caution and be mindful of the applicable write-off limits when acquiring assets. Energy Rebate for Small Businesses: The Budget introduces the expansion of the Energy Bill Relief Fund to provide $3.5 billion in energy bill relief for all Australian households and eligible small businesses. From 1 July 2024, approximately 1 million small businesses will receive a $325 electricity bill rebate. This initiative aims to mitigate cash flow pressures and assist businesses in managing the cost of living expenses. Revisions to ABN System: Previously announced changes to the Australian Business Number (ABN) system, designed to combat black economy activities, will no longer proceed. The government has determined that the enhanced administrative processes initiated by the Australian Taxation Office (ATO) effectively address the integrity issues associated with the ABN system. Consequently, ABN holders are no longer required to lodge their income tax returns or annually confirm their details on the Australian Business Register. Debt Relief Measures: The Budget introduces amendments to grant the Commissioner of Taxation the authority to exercise discretion and refrain from using taxpayer refunds to offset tax debts placed on hold before 1 January 2017. This change is expected to benefit small businesses, individuals, and not-for-profits. While detailed guidelines on when the ATO will exercise this discretion and the turnover threshold for eligible small businesses are yet to be announced, this measure provides a potential relief for businesses facing tax debts. Small Business Support Services: To support small business owners' mental health and financial well-being, the government has allocated $10.8 million over two years from 2024-25 to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program. These programs offer valuable financial counselling and mental health support designed to help small business owners navigate the challenges of running a small business. In conclusion, staying informed about the latest financial developments optimises your financial outcomes. By understanding the key takeaways from the 2024 Australian Federal Budget, you can make informed decisions regarding asset write-offs, energy rebates, tax debts, and access to support services. Consulting with trusted financial advisors and accountants is essential for personalised personalised situations based on your circumstances. For comprehensive details on the 2024 federal budget, visit https://budget.gov.au or download below.