Pherrus Financial Services is a financial advisory firm based in Bella Vista, New South Wales, Australia. The company provides a range of financial services, including accounting, tax planning, wealth management, and business advisory services.
They have a team of experienced professionals who aim to provide tailored solutions to their clients’ financial needs. While some clients have had positive experiences with Pherrus Financial Services, others have expressed dissatisfaction with their services.
Sadly my experience, gave rise to the latter. As a new customer, I couldn’t have been more disappointed with the service.
Detailed Review
Though not directly mentioned, it was inferred my appointment with Pherrus Financial Services had to be in person, because of the private nature of our discussions. Immediately, I was skeptical as to how productive this meeting would be.
However, Pherrus Financial Services was strongly recommended by a successful friend and gave them a glowing recommendation.
I own a simple company that receives commission from dropping shipping, and have very little overheads. Everything is online, hence expenses all relate to the running of a website, which is predominantly content creation.
I was seeking standard tax accounting advice, nothing out of the ordinary. I was not looking to establish an entity in an overseas tax haven, nor was I looking to create a complex structure of the purposes of asset protection (previous tax accountants all suggested this, however, it’s not necessary unless you are in a high risk industry).
But it didn’t turn out that way.
Despite arriving early at the office, I had to wait for over half an hour. Eventually, an overdressed man who seemed more like a salesman than an accountant greeted me.
Tax Accounting Advice
In Australia, there isn’t much tax minimisation that can be performed for a company. There could be several ways to structure how income could flow through to an individual, however, as a company per se it is relatively simple. Income less claimable deductions will give tax payable.
However, Pherrus Financial Services suggested potential methods to save on tax.
Accrual Accounting vs Cash Accounting for GST
The first suggestion was to create two entities, one applying accrual accounting whilst the other applies cash accounting, to take advantage of GST.
Cash accounting is creating book keeping entries based on your cash transactions. It should tie exactly to your bank balance as the asset position, and any cash movements from the start to the end of the accounting period is reflected as a profit or loss (excluding any purchasing of other assets with cash).
Hence, it is quite easy to book entries per cash accounting. All transactions should tie back to the cash movement.
Accrual accounting requires booking entries and reporting for items that are also owed. I.e. you haven’t paid it yet or collected it yet, but is legally obligated to be fulfilled.
In essence, accrual accounting is a timing difference to that of cash accounting.
If all things remained equal, no changes to tax rate year on year, then the tax payable over several years would lead to the same final position.
Therefore the Pherrus Financial Services suggestion to use cash and accrual accounting in two entities provides no benefit.
In addition, because my company owns and operates a website with income derived outside of Australia, the average GST return is under $100. To take advantage of accounting methods for GST purposes is simply a waste of time.
Lastly, if this could result in a material benefit, there is no doubt that the ATO would see through this, and penalise you for tax avoidance.
Insolvency laws
The second suggestion was to possibly take advantage of insolvency laws.
Insolvency laws typically apply to entities that are in financial distress, cannot pay their debts and are usually loss making.
My company is neither loss making, nor does it have debt. In fact, it is running a profit and it is owed money (outstanding creditors).
I’m not an expert in this field, but it seems extremely unlikely to use tax insolvency laws for my company.
Outcome
I travelled over two hours via public transport, and was kept waiting for half an hour for a meeting that lasted 15 minutes.
I was charged $198 (including GST), and was given advice that was wrong and illegal.
I would not recommend using Pherrus Financial Services.
About Pherrus Financial Services
Address: 313/29-31 Lexington Dr, Bella Vista NSW 2153, Australia
Email: admin@pherrus.com.au