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Take some small steps to better wellbeing

We are living in uncertain times right now. The situation changes daily with new challenges to overcome. We are all feeling the strain. So what can we do to manage the stress and regain some much needed sense of wellbeing?

Research shows that doing something (no matter how small) is the best way to manage anxiety. There is a lot we can’t control right now but there are also things you can do, and simply taking action can help us feel in control and therefore happier.

Here are some ideas:

  • Connect with others - Helping others is good for you. Solving a challenge for a customer, colleague, or friend not only gives them much needed assistance, but is also great for your own sense of wellbeing.
  • Achieve one thing on your to-do list - When you’ve ticked an item off your to-do list the satisfaction of achieving something is powerful. Sometimes the tasks that you put off aren’t so bad after you put your mind to it. Aim to achieve one thing each day to shorten that list and give you a sense of accomplishment.
  • Time out - Do something you enjoy, whether it's a really great cup of coffee, spending time outdoors, talking to friends, engaging in something constructive - even a jigsaw puzzle! (unlike so much of our normal work activities, a jigsaw rewards you with something to show for your efforts). Give yourself time to switch off and re-energise.
  • Movement - Our bodies weren’t designed to sit at a desk all day. Being active for just 30 minutes a day improves your physical and mental health. Exercise not only gives you a welcome distraction from worries by forcing you to shift focus, it also prompts your brain to release chemicals that improve your mood.
  • Routine helps - Our normal routines have changed and it’s easy to spend longer hours at your desk working and missing out on usual breaks. Try to stick to a routine each day so you control your working hours. And get a good night’s sleep.
  • Reflect - Take time to reflect on your achievements during the day. Those little mindful moments can all add up to a great sense of peace and accomplishment. Something we could do with a bit more of when we’re feeling pressure or stress.

Anxiety and stress are a normal part of everyday life, but not when it takes over. If you’d like more resources for yourself or someone you know, there is lots of information on websites like Beyond BlueHealth Navigator, and Mind.

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The Value of a Log Book

When claiming for work-related car expenses, many taxpayers miss out on maximising their claim due to inadequate record keeping. But also, failing to maintain a valid car log book can cost taxpayers dearly in an ATO audit. The car log book is an important piece of tax substantiation for those who use their vehicle in the course of performing their duties. There are two main instances where a car log book is required:  

  • where the individual is claiming a deduction in their personal tax return for work-related car expenses using the log book method, or
  • where the individual or their associate has been provided with a car by their employer and is required to maintain a log for fringe benefits tax (FBT) purposes.

  The purpose of the log book and accompanying odometer records is to determine the business-use percentage of the vehicle. As a general rule, the higher the business-use percentage:  

  • under income tax — the greater the deductions that may be claimed for work-related car expenses
  • under FBT — the lesser the amount of FBT payable for car benefits. The requirements for maintaining a log book for income tax and FBT purposes are mostly identical, although there are some small differences. The main one is that an FBT log book applies to the relevant FBT year (that is, ending March 31) while an income tax log book applies naturally to an income year (that is, ending June 30).

  Things to be mindful of when using a log book include:  

  • the log book is valid for five years – after the fifth year, a new log book will need to be kept. A new one can be started at any time (for example, if it no longer reflects the business use)
  • the log book must be kept for at least a continuous 12 week period – note that the year in which the log book is first kept is referred to as the “log book year”; otherwise it is referred to as a “non-log book year”
  • for two or more cars – for income tax, the log book for each car must cover the same period. For FBT, one log book must be maintained for each car where multiple cars are provided by an employer
  • the log book must reflect the business use of the vehicle – this can be tricky where there is home-to-work travel, travel between workplaces, or if the individual’s work is itinerant in nature
  • odometer records must also be kept – this is crucial for working out the total distance travelled during the year and also for the relevant period that the log book is kept.
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Staying on track with your personal budget

You’ve taken the first step and developed your personal budget for the year. However, don’t set and forget and then expect to achieve your personal finance goals! If you don’t monitor your progress, your spending habits are unlikely to change.

So, what steps can you take to ensure you’re on track with your Personal Budget?

1. Track your spending.
Keep a record of your spending. Consider using an App to keep track; while your bank statement is a great source, some transactions may not be clearly identifiable. Keep receipts for any cash payments.

2. Set aside time each month to review your actual income and expenditure.
Your budget should allow you torecord your actual results for the monthto easily compare to your budget. Also, compare your year to date actual results against your budget.

3. Update your budget if necessary.
After a few months, you may feel that your original budget was unachievable or too generous. If so, make the necessary changes to your budget for the remaining months. Remember, your budget shouldn’t feel confining; it’s simply allocating your income to your expenses so you can take control of your money.

4. Involve your family.
While it may not be appropriate to share your full budget with your children, get them involved in the process to demonstrate the importance of managing your money. Perhaps allocate a specific monthly amount to family activities and get the kids to plan what to spend it on.

5. Seek independent accountability.
Sometimes we start off with great intentions of sticking to budget, then slip back to our old spending habits. Having someone independent hold you accountable will help you achieve your goals. This can be particularly relevant for couples who may not have the same spending habits.

6. Bring fun and light to the process.Budgeting shouldn’t be ominous and scary. While it may not be at the top of your list of fun activities, you can have a bit of fun with it. Maybe you could allocate money towards a treat to indulge in while working on your budget each month.

The enduring value of personal budgeting comes from seeing the improvements in your spending habits and having more money in your bank account. No matter what your personal finance goals are, monitoring your spending and reviewing your budget monthly will help you stay on track.

If you need independent accountability to help you develop your Personal Budget or keep you on track, get in touch!

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The Fundamentals of a Business Budget

A business budget is one of the essential tools in managing your business finances and actively building your business.

A budget shows what you plan to do with your cash over the next year.

For a complete picture of your business health, you need to review the profit and loss statement, the balance sheet, the cash flow forecast and the budget. Taken together, these reports allow you to make informed business decisions and monitor performance.

Why have a Budget?

  • Forecast sales and expenses according to monthly or quarterly variations.
  • Evaluate performance over time, including changes or patterns.
  • Get really familiar with where your money goes and where it comes from.
  • Clarify targets and goals and use the budget to help you focus and achieve those goals.
  • Comparing actual figures to budgeted figures allows you to see potential problems early and plan for unexpected costs.
  • A budget will help you to see the big picture and stay motivated over the long term.

Where to start

A basic budget takes known income and expenses, then makes certain assumptions about the timing of income and planned expenditure. The basic budget is based on cash in and out of the business.

Over time, as you start to see the benefits of using a budget, your budget should evolve into a more sophisticated version that includes non-cash elements such as provisions and depreciation.

Most businesses will start with one budget but soon move to having three budgets.

  1. Business as usual – the next year’s budget is based on current year income and expenses, with perhaps a small adjustment for consumer price index increases.
  2. Worst case – budget is based on a pessimistic view of next year’s performance.
  3. Best case – budget is based on an optimistic view of performance over the next year.

A budget is usually for a financial year, but you can also set up budgets for two to five years.

Once you have one budget (or more) set up, you can then run your current financial reports against the budget to see how you are tracking. This allows you to make rational business decisions in real time to adjust accordingly.

Your can run your financial reports monthly and adjust your budget as needed.

What Next?

Now is a great time to put a budget into place for the coming financial year. Book a time with us to help you create a meaningful budget in your accounting software so that you can use it as a proactive part of your business management, strategy and your success.

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When should you offer casual employees a permanent position?

Recent court cases involving casual workers have increased attention on casual worker classification, which means your workers may be more aware of the ability to convert to a permanent position.

The law has not changed; however, these cases are good reminders for employers to be aware of the rules around converting casual employees to permanent positions.

What Makes an Employee Casual?

  • No expectation or commitment about duration of employment.
  • No guaranteed hours of work.
  • Usually works irregular hours.
  • Is not entitled to paid leave.
  • Can usually end employment without notice.

Note that there is such a thing as a long-term casual employee. Long-term casuals may be eligible for flexible working arrangements, parental leave and long service leave, even though they don’t have guaranteed hours of work or expectation of ongoing work.

When Does a Casual Employee Become Permanent?

This is addressed in most modern awards in a casual conversion clause. Employers should check the relevant award provisions to see if there is an obligation to offer a part-time or full-time position, then follow the directions about offering permanent positions.

Example of Casual Conversion Rules

Each award must be checked for details, however there are similar guiding principles.

  • Casual employees are entitled to ask to change to full-time or part-time employment when they have worked a regular pattern of hours over a set period (usually 6 to 12 months) and could reasonably expect to continue to work those hours as a full-time or part-time employee without significant changes.
  • Employers must specifically notify casual employees about this entitlement within 12 months of the casual start date.
  • Casual employees that do not receive notification of this entitlement are still entitled to request a change to full-time or part-time employment.
  • An employer can only refuse the request if there are ‘reasonable grounds’ such as the employee not working regular hours or there are other significant changes to the current work patterns.

There are more provisions and details in each award’s casual conversion clause – employers need to check the applicable award to make sure they comply with the casual conversion requirements.

Visit the Fair Work Ombudsman Casual Employees webpage for more detail.

Talk to us if we can help with payroll management and assessing the classification of your workers.

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Reduce debtor days and improve cashflow

Managing the gap between the receiving money into your business and paying money out of your business is vital for sustaining viability.

Debtor days is the average number of days taken for a business to receive payment for goods or services. Keeping track of the average number of days for a business to receive payment is important in understanding the cashflow gap you might experience and the impact on cashflow planning and budgets.

How to Calculate Debtor Days

(Year-end receivables amount ÷ annual sales) x 365 days = average debtor days.

Here's an example: An IT consultant has in her terms and conditions that payment is due 21 days after invoice date. But she is interested to know what the actual average payment time is.

Trade debtors at 30 June 2019 = $35,000

Annual sales for 2019 = $478,000

(35,000 ÷ 478,000) x 365 = 26.7 days

With this information, she can either alter her cashflow planning according to the actual time-frame or take steps to reduce the average number of debtor days.

What can you do to reduce the payment times?

  1. Update your payment terms - and make sure the terms are clear on every invoice issued. Don’t forget to include bank details on the invoice!
  2. Regular admin - schedule a regular time for your own administration and get your invoices out promptly.
  3. Send to the right person - when you send invoices, make sure you address the email personally to your contact. Send the invoice to multiple addresses if possible, for example, your contact and the accounts department.
  4. Use technology to your advantage - use automated invoice reminders to notify customers when an invoice is about to be due and then when it is overdue. Do not wait to send notifications manually, let the software do it as soon as the invoice is a day overdue.
  5. Make it easy for your customers – list the payment terms, for example, due in 14 days, as well as the actual due date.
  6. Provide incentives for early payment - for example, a 5% discount if paid within five days.
  7. Offer several payment methods for clients - make it easy to pay by adding an online option such as credit card or PayPal.
  8. Offer instalment payment plans - over a mutually agreed period. This allows you to plan for part payments, rather than being inconvenienced by the whole invoice being paid late.
  9. Do not offer unlimited credit to customers - make sure your terms and conditions include the right to refuse further supply if invoices are outstanding. Request part or full payment before supplying more goods or services.
  10. Talk to your suppliers - Maintain good relationships and clear communications so they are more likely to help you if you need an extension on your bills. If possible, renegotiate supplier terms that suit your business cashflow.

During tough times it can be difficult to get paid on time. Use low activity phases in your business to update your terms and conditions, implement alternative payment options, think about ways of making it easy for customers to pay you and clarify information on your website.

Talk to us about adding payment options, updating your software and improving business systems to assist in reducing the number of debtor days to improve your cashflow. We can also look at average debtor days of your business compared to industry averages and discuss ways of managing cashflow during difficult periods.

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Instant Asset Write-Off – Extension Announced

Businesses will be able to access the boosted $150,000 instant asset write-off scheme for a further six months to the end of the year. By way of background, as part of its emergency COVID-19 fiscal package, the government quin­tupled (from $30,000) the value of assets businesses were able to instantly write -off for the ­period of March 12 to June 30, and expanded the eligibility to cover businesses with turnover of less than $500m (up from $50m ­previously).

Today the government will announce that the more than 3.5 million eligible businesses will now be given until December 31, 2020 to take advantage of this measure. The asset must be installed ready for use by this date. Although it is anticipated that this extension will be supported by Parliament, it is subject to the passage of legislation.  

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Is There Anything I Can Do Before 30 June 2020 to Reduce My Tax?

30 June tax planning generally focuses on three things: 

1. reduce income

2. increase deductions

3. accessing lower tax rates

Before implementing any strategies, it is important to estimate your taxable income and projected tax for the year and consider what you think your income and tax will be next year.

Many tax planning strategies involve pushing income to the following year. Those types of strategies work best if your income this year is higher than what you expect it to be next year. If the reverse is true, these strategies may not be wise.

Below is a list of opportunities that may be relevant to reduce your 2020 Tax if you act before 30 June

Business Income and Deductions

1. Lump Sum Superannuation Contributions

Superannuation paid and received by the superannuation fund before 30 June is tax deductible. There is a contribution cap of $25,000 per individual which includes any super (ie compulsory 9.5%) paid by an employer. Be aware that super funds usually specify that they need to receive monies before the last minute to allow processing time so check with your fund if you are looking to contribute in late June

2. Review and Write off Bad Debts

If there is little or no likelihood of a customer paying an outstanding debt, it can be written off as  a bad debt which reduces profit.

3. Delay Issuing Invoices

This is particularly relevant if you usually send out interim invoices for jobs which are partially completed. You can consider invoicing for the completed job in July meaning that your June invoicing will be lower than usual.

4. Review 30 June Inventory items

Do you have any inventory that is obsolete or damaged that you are likely not going to be able to sell? These items can be valued at significantly lower values or even written off thereby reducing profit.

5. $150,000 Instant Asset Write Off

Any equipment purchased up to $150,000 or motor vehicles up to $57,581 purchase before 30 June can be claimed as a tax deduction in the year you purchased the item rather than depreciating it over a number of years.

Please note that the amount spent is not the amount refunded to you by the ATO. If your tax rate is 30% and you spend $30,000 on some equipment your tax saving will be 30% of $30,000 (or $9,000) not $30,000

Also note that if you purchase a motor vehicle that is only used partly for business you may only receive part of the tax benefit, depending on the structure of your business. 

6. Prepayments

One way to reduce your business profit is to prepay some deductible expenses before 30 June that you would normally pay next year. Expenses such as insurance premiums, rent and interest on loans are common types of expenses

7. Review your depreciation schedule

When did you last look at your depreciation schedule? There may be a number of items listed that you no longer have that can be written off or scrapped. Whatever the written down value is as at 30 June 2020 will become a tax deduction if an item is written off or scrapped.

Be Aware – Except for number 1 above, if you use these strategies the reduction in profit this year will be offset by an increase in your profit  next year (ie you are pushing profits from this year into next year)

Personal Income and Deductions

1. Lump Sum Superannuation Contributions

If you are employed you are no longer restricted to using salary sacrifice to make tax deductible contributions to super. You can now make a lump sum tax deductible contribution direct to your super fund form your personal savings.

Superannuation paid and received by the superannuation fund before 30 June is tax deductible. There is a contribution cap of $25,000 per individual which includes any super (ie compulsory 9.5%) paid by an employer. Be aware that super funds usually specify that they need to receive monies before the last minute to allow processing time so check with your fund if you are looking to contribute in late June

2. Prepayments

One way to reduce your income is to prepay some deductible expenses before 30 June that you would normally pay next year. Expenses such as premiums on income protection insurance and interest on loans are common types of expenses

3. Manage Capital Gains

If you've made a capital gain this year, review your portfolio to see whether it is worth selling any investments at a capital loss to offset the gain. Please note, you can't just sell an asset to trigger a loss, then buy it back. The ATO have indicated they are on the look out for this type of activity and will disallow any losses generated

4. Deduct home office expenses

Don’t forget this one. When part of your home has been set aside primarily or exclusively for the purpose of doing work from home, costs such as heating, cooling and lighting and depreciating your office equipment can be claimed.

The ATO allows 52c per hour for certain home office expenses so keep a record of how many hours you work from home.

Due to the current COVID situation, the ATO have increased this rate to 80c per hour from 1 March to 30 June However, you can’t claim occupancy expenses such as mortgage interest, rent, and insurance and rates unless you conduct a business from your home.

5. Prepay private health insurance

If you are expecting a pay increase which could put you into a higher health insurance tier this will reduce the Private Health Insurance rebate that you will receive. In this situation, prepaying your health insurance is worth considering – speak to your health insurance company

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JobKeeper eligibility for 16 and 17 year old employees has changed

From the fortnight commencing 11 May 2020, JobKeeper Payment eligibility for employees aged 16 and 17 years has changed.

If you have claimed, or intend to claim, JobKeeper payments for employees who were 16 or 17 years old on 1 March 2020, they need to have been independent, or not in full time study on 1 March 2020 in order to remain eligible.  

Your 16 and 17 year old employees will need to complete an updated JobKeeper employee nomination notice and return it to you as soon as possible.  

 

For more information see: ato.gov.au/nominatingemployees

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JobKeeper Payment - rules announced

The JobKeeper payment is for businesses and not-for-profits that are significantly impacted by the Coronavirus pandemic, and the measures in place to restrict it.

The government package will give eligible employees $1,500 per fortnight for 26-week period, running from 30 March to 27 September.

The treasurer has now released rules governing the scheme. We will keep you informed as these are updated.

The one in, all in rule - Employers who opt to participate in the JobKeeper scheme must ensure that all eligible employees are covered. This includes all eligible employees who are undertaking work for the employer or have been stood down. The employer cannot select which eligible employees will participate in the scheme.

Notifying employees - If you have applied for the JobKeeper payment you must notify all eligible employees that you have elected to participate and they will be covered by the scheme. You’ll need to provide them with a JobKeeper employee nomination notice.

Decline in turnover test - If your organisation does not qualify for the month of April 2020 because turnover has not been sufficiently affected, turnover can be tested in later months to determine if the test is met.

Paying employees in the interim - The JobKeeper Payment is a reimbursement scheme that will be paid by the ATO monthly in arrears. Talk to us about your options if you are experiencing cash flow difficulties now.

What if an eligible employee usually earns less than $1,500 per fortnight before tax? - If you want to claim the subsidy for an eligible employee and they have not been paid $1,500 per fortnight since 30 March 2020, employers must pay a ‘top-up’ payment to employees so that they are eligible. It is possible that some employees may receive more than their ordinary pay.

Failure to pay the payment to employees - If you receive the JobKeeper subsidy for an employee, you must ensure that the employee receives a minimum of $1,500 per fortnight, before tax. Failure to do so is a breach of the Fair Work act and may result in penalties as an individual and corporation, plus penalties under the Commonwealth Criminal code.

Superannuation - There are a number of scenarios related to superannuation:

  • If your employee is not working, but receiving the JobKeeper payment, you do not need to pay superannuation.
  • If your employee is working and receiving the JobKeeper payment, employers will still need to pay superannuation.
  • If an employee is having their wages topped up to $1,500 per fortnight by the JobKeeper Payment, the employer does not need to pay superannuation on the top-up amount.

Monthly reporting - participation in the JobKeeper scheme requires monthly reporting including current GST turnover for the reporting month and projected GST turnover for the following month.

Does the JobKeeper payment cover other income loss such as rental income? - No. Only businesses with employees or self-employed people are eligible for the JobKeeper Payment.

Processing payments through your accounting and payroll software - Providers of this software are upgrading now to allow for easy processing of JobKeeper payments within payroll and will be ready by the time businesses receive the first payment.

How to apply

The first step is to register your interest and subscribe for JobKeeper payment updates on the ATO site. This will allow you to check your eligibility. You will also get access to the forms for your employees.

From 20 April 2020, you can enrol for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.

Get in touch with your questions

We can provide further guidance on the JobKeeper Payment and assist with the reporting requirements for your organisation.

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ATO rolls out working-from-home deduction shortcut

Under the new arrangement, taxpayers will be allowed to claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.

The requirement to have a dedicated work-from-home area will also be removed, with multiple people in each household allowed to claim the new rate.

The new method will cover the period starting 1 March 2020 until 30 June 2020, with the ATO open to extending the method depending on when work patterns start to return to normal.

Tax agents or self-lodgers must include the note “COVID-hourly rate” in 2019–20 tax returns should they nominate to use the new method.

The simplified method will cover all deductible running expenses, including electricity for lighting; cooling or heating and running electronic items, phone and internet costs; and the decline in value of a computer, laptop, home office furniture and furnishings.

Under the fixed-rate method, these running expenses were calculated at the rate of 52 cents per hour, with phone and internet expenses and decline in value on computers needed to be calculated separately.

The new arrangement will require records of the hours worked at home and can be in the form of timesheets or diary notes.

ATO assistant commissioner Karen Foat said the new shortcut method would make tax time easier for those who were working from home for the first time in light of the ongoing coronavirus pandemic.

The new method will be supplementary to the fixed-rate method and the actual cost method of calculating running expenses, with taxpayers able to choose the appropriate method for their circumstances.

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NSW businesses set to receive $10k grant

The NSW government has now pledged $750 million to help small businesses across the state deal with the economic impact caused by the coronavirus pandemic.

The grants of up to $10,000 must be used for funding unavoidable business costs such as utilities, overheads, legal costs and financial advice.

To be eligible, businesses must be “highly impacted” by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020.

Business will need to have an ABN as at 1 March 2020, employ between one and 19 employees and have a turnover of more than $75,000.

Businesses will also need to have a payroll below the NSW 2019–20 payroll tax threshold of $900,000.

The grants will be available through Service NSW within a fortnight and remain open until 1 June 2020.

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More Covid-19 Releif for Business

Over the weekend, more relief was announced for business including:
 

Deferral of Loan Repayments 
A little over a week ago, the Australian Banking Association announced a six-month deferral of all loan repayments for small businesses hit by the coronavirus pandemic.
 
On the weekend, this relief has now been extended to all businesses that have loans of up to $10 million. That accounts for just on 98% of all Australian businesses that have loans with Australian banks
 

Commercial Tenancies 
National Cabinet agreed to a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus. 


Commercial tenants, landlords and financial institutions are encouraged to sit down together to find a way through to ensure that businesses can survive and be there on the other side. As part of this, National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies as follows:

  • a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
  • tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
  • the reduction or waiver of rental payment for a defined period for impacted tenants;
  • the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
  • commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus;
  • landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements; and
  • cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.
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COVID-19 Update

We would like to update you on our position with the developing COVID-19 (Coronavirus) situation, and the preventive measures we are undertaking.

 

As COVID-19 continues to circulate, we are monitoring and actively changing required processes as needed, based on relevant recommendations provided by the Australian government.

 

We will continue our work as usual, and we have already taken several steps:

• All of our employees can work remotely if required

• Our internal systems are available from anywhere with an internet connection and proper access rights.

• If needed all of our staff can and will support you remotely.

 

Currently, the following precautions are in effect at both of our offices:

• All staff are up to date with health and hygienic processes.

• All business travel is cancelled until further notice.

• Communication tools are available to all staff.

• We are limiting visits to our client’s offices to reduce risk of exposure to our staff.

 

Since we are technology focused, our staff are able to work remotely for the most part now, or with a few changes.

 

We are here for you and will help you through this situation, so we all can come through it in a good business position for the future.

 

We wish you, your family, and all those you care for to stay healthy and safe.

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Share Market and Capital Losses

With the Australian share market suffering some of its biggest falls since the Global Financial Crisis, investors will no doubt be worried about their own portfolios.  

From a tax perspective, if the price a particular share you hold is currently lower than what you bought it for, this at present is only a ‘paper’ loss.   The loss will only become a real, crystalized CGT loss if you were to actually sell the shares.  

By retaining the shares and taking a long-term view, the market price of those shares may recover above the original purchase price – resulting in a potential capital gain when it comes time to sell.  

The take-home point is that any loss is at the moment is only a ‘paper’ loss – investors only lock in a real, capital loss if they pull the trigger and sell at a loss.  

If you do elect to pull the trigger and crystalize your capital loss, any CGT losses you incur can generally be used to offset capital gains you have made when you have sold other CGT assets during the year.  

CGT losses can also be carried forward in the event that you have no capital gains to offset in this financial year.

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Top 8 things to outsource in your business

If you’re looking to scale your business, you’ll need to spend more time working on it than in it. Finding ways to leverage your time is critical, and outsourcing your least favourite tasks is a great way to do this.

Things you should consider outsourcing in your business:

  1. Digital marketing.
    From your content strategy to your social media accounts, if this is not a strength of yours, outsource it! There are many freelancers who have multiple clients at this level, who’ll likely be more knowledgeable regarding SEO and much more effective and efficient in general.

  2. Graphic design.
    Your brand is a key reflection of your product offering. If you don’t have the skill, software and time to do this well, you’ll potentially damage your brand.

  3. Scheduling and administrative tasks.
    A Virtual Assistant can help you manage anything from your appointments to flights, emails and beyond (virtually anything admin). At a lower level, consider adopting software that’ll automate or minimise processes, such as self-booking appointment apps where your clients can schedule a meeting with you, e.g. Calendly.

  4. Customer feedback.
    Many businesses miss this valuable opportunity to connect with customers and improve their experience. A Virtual Assistant can help, but there are also apps (such as Ask Nicely) that automate the process of asking for feedback; directing happy responses to leave you Google reviews and negative responses back to you to quickly resolve!

  5. Inventory management.
    Too much stock can cause cashflow issues and affect sales price (due to resulting discounting), but not enough equals lost sales. Outsourcing inventory management can help you minimise stock-carrying costs and allow you to focus on more important things.

  6. Payroll.
    This task is best left to the professionals. Outsourcing payroll will minimise the risk of inadvertently getting it wrong, while saving you time and, most likely, reducing the cost of this task. Utilising a payroll product is another great option.

  7. Bookkeeping.
    Do bookkeeping tasks often infiltrate your evenings or weekends? Does the stress of these tasks piling up occupy your mind? Outsourcing these tasks (and the stress) to someone else can be liberating and cost-effective.

  8. Virtual CFO.
    If you find budgeting and forecasting a struggle, a virtual CFO can wear this important hat for you. They’ll monitor the financial health of your business and provide a fresh perspective which will help you make better strategic decisions and improve your results.

Tempted to start outsourcing some of your tasks to free up your time? We can help by taking the last three roles off your hands! We work with a number of our clients in this way, allowing them to focus on what they do best.

While outsourcing takes a little bit of setting up, it’s worth the short-lived pain for massive gain. We don’t have to be jacks of all trades. In fact, this thinking often leads to begrudgingly doing many things poorly rather than doing a few things really well – and enjoying doing them.

Work to your strengths, outsource the rest! Need help? Get in touch.

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How healthy is your working capital?

We all know that cash is king when it comes to business success, but what exactly is ‘working capital’ and how does this financial metric help measure the health of your business?

Working capital is made up of the cash and assets that are available in the business to fund your operations and keep you trading. It’s worked out by taking your current assets (the things you own) away from your current liabilities (the things you owe to other people).

So, why is working capital such a critical metric?

Having the liquid capital needed to trade

It’s possible for your business to be busy, successful and profitable, but for your cash position to still be in poor health – and that can have a serious impact.

If you can’t readily convert your assets into liquid cash, it’s a struggle to meet your cashflow goals, pay your bills and fund your day-to-day operations. But with the optimum level of working capital, you strengthen your balance sheet and put the company in a solid financial position.

To achieve this healthy level of working capital you’ll need to:

  • Proactively manage your cashflow – cashflow feeds your working capital by pumping liquid cash into the company and keeping the balance between assets and liabilities in a strong position. But to achieve this, it’s vital to achieve a positive cashflow position, where your cash inflows are greater than your cash outflows. This means getting paid on time, lowering your outgoings and keeping a close eye on your ongoing cash position.
  • Monitor and forecast your financial position – running regular financial reports helps you stay in control of your finances. With careful monitoring and forecasting of your cash position, you can ensure you don’t end up in a negative cashflow position, without the requisite working capital to trade and fund the next stage in your business plan. Cloud accounting software and business intelligence apps have made it easier than ever to create up-to-date, real-time reports and run dashboards that show your key metrics.
  • Use additional finance when required – if working capital is looking thin on the ground, then additional funding may be needed to bolster your balance sheet. Short-term finance options (such as overdraft extensions or invoice finance) and longer-term business loans can be needed to keep working capital on an equilibrium.

Talk to us about optimising your working capital

Working closely with your accountant is vital if you want to promote the ideal level of working capital in the business. We can help manage your cashflow, monitor your financial metrics and provide access to additional finance and funding when your capital needs a boost.

Get in touch to start maximising your working capital.

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Donations

Australians have been very altruistic in recent weeks, donating millions of dollars to various organisations to assist those impacted by the bushfires. Unfortunately, there have been stories of scammers setting up bogus websites and donation points. For this reason, it’s important to check the veracity of the organization.  One way of doing so is to search the register on the Australian Charities and Not-for-profits Commission website www.acnc.gov.au If an organization is on the register, it will be legitimate. However, if you are donating electronically, you will still need to be satisfied that the website is not fake.   In the case of taxpayers carrying on a business, donations to various organisations that are made for purely business purposes (for example, as a form of advertising) may be deducted in full. This is the case even where the gift or donation is made to a recipient who is not registered as a Deductible Gift Recipient (DGR) with the ATO (see later).   All taxpayers (including individuals, trustees of a trust or superannuation funds, partnerships, companies, residents, and non-residents) are entitled to a deduction for gifts of money or property of $2 or more to nominated funds, authorities, institutions or bodies, or specified persons. However, the claiming of a deduction is subject to the following conditions:  

  • The donation must not be made by will upon death
  • Each donation must be of $2 or more. This may take the form of money, land, personal property, shares etc.
  • You must have evidence of the donation (e.g. receipt)
  • Where property is given, it must be have been purchased by the person making the donation no more than 12 months before the gift was made or be valued by the ATO at more than $5 000, and
  • The recipient of the gift must normally be in Australia (except in the case of overseas aid funds).

  However, a deduction is generally not permitted unless the recipient of the gift/donation a deductible gift recipient (DGR). A full listing of DGRs can be found at www.abn.business.gov.au/DgrListing.aspx   Finally, many families make donations throughout the year. Where this is the case, to maximize the taxation benefit, the higher income earner of the family unit should make the payment and claim it on their income tax return.  

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Your workspace can impact productivity

A great office space is about keeping your people happy, productive and working towards the key goals of your business.

An office is more than a place to put your desks, it is the heart of your business and the space where your people will spend most of their working day. Your office needs to create the right atmosphere for your people and inspire productivity.

A great workspace motivates your team

Engaged employees make their organizations 17% more productive and 21% more profitable, according to Gallup’s State of the Global Workplace report. And keeping your people engaged and motivated is a core aim of your workspace design.

There are some key universal traits that any good workspace will need if your aim is to boost team motivation, productivity levels and, ultimately, profitability.

A good workspace will include:

  • Flexible working options – A good office space should be an environment that's conducive to different types of work. If staff have different roles, and carry out different activities throughout the day, a mix of quiet spaces, communal areas, private meeting rooms and breakout space for catch-ups can cater for this.
  • Access to drinks and refreshments – Somewhere for staff to rehydrate, refuel and stay productive. Offer free coffee and tea. A bowl of fruit or healthy snacks is a nice way to support time-poor employees who don’t have time to head out.
  • Privacy when it’s required – The seclusion of a meeting room is great for making for private calls, having team meetings or carrying out one-on-one conversations with employees and fellow directors.
  • Space to relax and kick back – outside of the usual working day, a more social space in the office provides somewhere where people can hang out and enhance the social side of the team. The ‘creative agency with a foosball table’ has become a slight cliche, but having a space with comfortable furniture and recreational activities can be a real plus for many employees.
  • Great branding and design – The design of the workspace isn’t just about the choice of paint colour; it’s about creating an aesthetic and ergonomic design that reflects your brand personality, but also works as a highly effective space for your people. A professionally designed and branded workspace can have a huge impact on how your staff and customers perceive your company.

Enhancing your workspace

If you’re looking to refresh your office space, think about the elements that will improve the experience for your staff and your customers. A successful office revamp makes everyone happy and boosts productivity.

 
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Set the right growth goals for your business this year

If you’re going to grow your company in the right way, pinning down your goals and having a clear vision for the business from the outset is vital.

You may want to increase profits and create an income that supports your lifestyle, or you are looking to increase market share and aim for hypergrowth. You may even be aiming to increase the overall value of the company to get the best return when exiting the business.

So, how do you define the goal that’s right for you?

Driving your performance over time

Your financial model will drive the way you generate value, so it’s important to make your business strategy fit the goals and type of growth you want to attain.

To set your finances up in the optimum way, you must:

  • Know what you want to achieve with the business – decide if you’re aiming for lifestyle, hypergrowth or return on investment and make this your key business goal.

  • Align your personal goals with the business – so your finances can be set-up to deliver the cash you need, with the best return and the most effective tax liability.

  • Track and measure your performance – allowing you to see how you’re progressing against your goal, and provide a scorecard to drive your ongoing business strategy.

Talk to us about about goal-setting

If you’re looking to grow your business, we’ll help you talk through your core vision, define the most effective goals and set up your finances to achieve these aims.

Get in touch to talk through your business goals.

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Give yourself a present this Christmas

Get outside for a walk!

Owning and working in a small business can eat up all your spare time. Exercise or time for yourself is often the first thing that is abandoned to fit in the many other things you have to do in a day. And while many of us finish the year with lofty goals for exercise in the new year, these lofty goals can be hard to achieve.

Is this you?

Here’s an idea… Instead of setting goals that are vague and big, set smaller more specific goals that are much easier to achieve. Make a point of getting outside every single day and getting ‘a little’ exercise - it doesn’t have to be a gym membership, a bootcamp or going running. Even just a walk around the block will be a step in the right direction!

A study in the journal Preventive Medicine found that just by minimizing sedentary activities, and replacing some of them with light-intensity activities can achieve benefits for your health. So start small and stick to it. Soon you’ll be benefiting from the short time away from work, more time to think, and the fresh air.

  • Start walking - Walking has multiple health benefits both physical and mental. Find out about walking groups in your area or join a friend a couple of days a week.
  • Take the stairs rather than the lift - When the option is there to take the stairs, use them.
  • Replace your daily drive with a bike ride - If your exercise is part of your daily commute it becomes integrated in your day rather than another thing to achieve.
  • Walk ‘further’ to the office - if biking is not an option perhaps you could park a bit further away from the office or get off public transport one stop earlier.
  • Go out for coffee - You may not achieve it every day, but if you find a great coffee shop a couple of blocks away, you'll have a reward to look forward to.

For a healthy lifestyle, the adult recommendation is at least 30 minutes of moderate physical activity on five or more days per week. This will not only increase your quality of life but also your sense of wellbeing. So give yourself a present this Christmas and go for a walk.

Happy Christmas!

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New Rules for Salary Sacrificing Super

Salary sacrificing to super allows an employee to forego part of their salary or wages and have the employer contribute this amount to their superannuation fund instead of paying it as cash. It reduces the taxable value of salary or wages, and is therefore beneficial to the employee in both reducing tax payable and increasing superannuation.

Up until now, employers were allowed to calculate superannuation guarantee contributions (SGC) on the reduced amount of salary or wages.

What’s Changed?

  1. From 1 January 2020, SGC must be calculated on the gross amount of salary or wages, before any salary sacrifice amount is deducted.

    This means employers will have a higher superannuation contribution to make for any employees who previously had their super guarantee amounts reduced because of sacrificing part of their salary to super.

    Example: an employee is paid $100,000 per annum exclusive of SGC and sacrifices $20,000 to super. The employer currently pays SGC on the reduced salary of $80,000, being $7,600. From 1 January 2020, the employer must pay SGC on the gross salary of $100,000, which will be $9,500, an increase of $1,900 per year.

  2. The other big change with this rule is that salary sacrifice contributions will no longer contribute to the compulsory employer superannuation guarantee contributions. In some cases, employers were able to avoid paying any SGC, because the employee salary sacrificed an amount at least equal to the compulsory amount of employer contribution.

    Because sacrificed amounts will no longer be counted towards employer contributions, if an employer has not fulfilled their super guarantee obligation and is required to lodge a super guarantee charge statement, the amount of super owing, (and any charges and penalties), will be calculated exclusive of any salary sacrifice amounts paid.

    Example: an employee is paid $120,000 per annum exclusive of SGC and sacrifices $15,000 to super. The compulsory employer amount of 9.5% on $120,000 is $11,400. As the employee sacrifices more than this to super, the employer currently would have made no further contributions. Under the new rules, the employer must pay SGC on the gross salary, in addition to any salary sacrifice the employee makes. This means an increase of $11,400 per year.

Revise Employee Agreements and Remuneration Packages Now

We recommend that employers review all employee arrangements that include salary sacrifice to superannuation.

Employment agreements and remuneration packages may need to be revised to comply with the new rules so that it is clear that superannuation guarantee is calculated on the gross salary or wage before any amounts sacrificed.

We can assist with reviewing remuneration packages for your employees so you are not caught out by the new rules.

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Rental Property Claims

ATO auditors have recently completed over 300 audits on rental property claims and “found errors in almost 9 out of 10 tax returns reviewed”. He said the most common errors the ATO is seeing are:  

  1. incorrect interest claims for the entire investment loan where it has been refinanced for private purposes
  2. incorrect classification of capital works as repairs and maintenance, and
  3. taxpayers not apportioning deductions for holiday homes when they are not genuinely available for rent.

  Regarding the first category of incorrect claims, interest can still be claimed where a loan has been refinanced. However, the borrowed funds must still be used for a deductible purpose (i.e. in relation to the rental property). Where the refinanced amount is used for a non-deductible purposes (for example, to buy a boat or car, or to make repayments towards the family home), the interest that relates to that portion of the refinanced amount will no longer be deductible.   In respect of repairs and maintenance, in a rental property context, repairs generally involve a replacement or renewal of a worn out or broken part, for example, replacing worn or damaged curtains, blinds or carpets. Maintenance generally involves keeping the property in a tenantable condition, for example repainting faded or damaged interior walls. By contrast examples of capital expenditure include:  

  • replacing an entire structure or unit of the property (e.g. an entire fence, kitchen cupboards, stove etc.)
  • improvements, renovations, extensions
  • initial repairs to defects that existed when you first purchased the property.

  These types of capital expenses are not immediately deductible, but rather must be claimed over a number of years.   The finally category of mistakes, involves claiming a deduction for expenditure relating to the property, even though it is not being rented out, or it is not genuinely available for rent. During these periods, expenses cannot be claimed. To be clear, expenses may be deductible for periods when the property has no tenants and you are not occupying it, providing it is genuinely available for rent. To evidence this, you would need to show that it is being given broad exposure to potential tenants, such as online or newspapers advertisements etc.

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Planning for Seasonal Dips in Cashflow

Seasonal dips in income can be highly challenging when you’re a small business. But there are proactive ways to predict, plan for and overcome these dips in revenue.

The key to dealing with seasonal dips is to know when they’re most likely to occur, and to have measures in place to spread your income and revenue pipeline over the course of the year.

Understanding seasonality in your sector

If your business is seasonal such as pool supplies, or a ski gear specialist, you’ll be used to the peaks and troughs, but many 'non-seasonal' businesses experience times during the financial year where sales and revenue peak – and, on the flipside, where sales and revenue experience a pronounced dip.

When income is low at certain times of the year, it makes for challenging times.

So, what are the key ways to plan for this kind of seasonality?

  • Forecast your seasonality – it’s vital to know WHEN you’re most likely to experience any seasonal dips. Looking at benchmarking reports for your industry is one way to predict the seasonality in your niche or sector. But you can also use your own accounting data to great effect. Look back through your profit & loss reports and spot where the peaks and troughs have occurred over preceding years.
  • Charge a premium in peak time – one straightforward approach is to apply premium pricing for your products/services during the busy season. By increasing your pricing, you boost your overall revenue, giving you more working capital to see you through the leaner months when sales and income are at their lowest.
  • Offer additional peak-time services – offering added extras and other additional service lines during peak time is another way to maximise the season. In the months where customers are most engaged, look to upsell these premium services and offer more value. Satisfied clients will be more inclined to pay for added extras, giving you an increased revenue stream from the same number of customers.
  • Target other markets – exploring other related markets is another useful tactic. When you’re experiencing downtime, look for other ways to monetise your existing assets, products or services. For example, if you’re a hotel where sales peak in summertime, offer discounted conference space in the winter months to boost revenue.
  • Diversify your products/services – if one product/service has a known seasonal dip, look at adding an additional product or service to offset this downtime. For example, a a ski resort could promote bike-riding or hiking breaks during the warmer summer months to keep revenue constant. Likewise a pool maintenance firm could establish an outdoor fireplace business for the colder months.
  • Have a regional e-commerce strategy – If you’re dependent on a small local market, broadening your marketing and e-commerce strategies can help to attract a wider customer base – and bolster sales. Paid advertising through Facebook, LinkedIn or Twitter can easily target new geographical markets, bringing in new customers and giving your revenue a much-needed uplift during seasonal troughs.

Talk to us about planning for seasonality

If your business is struggling with seasonal dips, and the resulting impact on cashflow, come and talk to us. We’ll help you identify the timing of your seasonal downtime, and come up with a clear strategy for stabilising your income across the year.

Get in touch to start beating those seasonal dips.

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Your September quarter superannuation guarantee contribution is due soon

Prepare now for your quarterly superannuation guarantee (SG) contribution lodgement and payment.

Things to review before finalising the quarterly superannuation lodgement:

  • Have you allocated all payroll related bank transactions to the correct accounts?
  • Have you checked for errors such as duplicate pay runs?
  • Have you checked that all payroll categories used this quarter have had super correctly applied or excluded?
  • Have you checked superannuation accrual reports for accuracy?
  • Do you have any salary sacrifice amounts to include?
  • Have you had to make any termination payments this quarter? If so, check which payroll categories have super calculated or exempted.
  • Do you have complete and up-to-date contact details and a super choice form for all employees?

Most superannuation clearing houses (including SuperStream compliant software companies) require payment by the 14th of the month in order to distribute the funds to the relevant super funds for each employee.

If you use the ATO Small business Clearing House (SBSCH) you have until the 28th to lodge and pay.

Checking the figures thoroughly each quarter ensures that you report and pay accurate amounts for each employee. You will also have a more accurate picture of your superannuation liability and be able to plan accordingly.

Penalties for late super can be severe. Superannuation calculations can be difficult if your payroll software is not set-up for correct accruals of superannuation guarantee.

We can help you review of your super set-up and the SG accounts used in your accounting software.

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Delighting your customers for better referrals

The most simple and cost-effective way to grow your business is so often overlooked; happy customers become your strongest advocates. They talk to their friends, family, and associates and refer business to you.

Here are 10 ways to delight your customers:

  1. Meet with your customers more often and take a genuine interest in how they’re doing.

  2. Run customer events. Put on a few drinks, get in a relevant speaker, and invite your customers along.

  3. Acknowledge your customers when they refer new customers to you. Send them a gift to show your appreciation.

  4. Give them a call to check in on how they’re going.

  5. Do business with your customers and encourage your team to do the same.

  6. Refer work to your customers. The ‘Law of Reciprocity’ states that the more you do for others, the more likely they are to do something for you in return.

  7. Go the extra mile; under promise and over deliver.

  8. Make them feel special when they come into your business. Use their name, greet them warmly, and offer them a drink.

  9. Introduce them to your team so they feel more welcome and know who to speak to if you’re not around.

  10. Randomly send them something to show your appreciation for their business. Don’t just do this at Christmas. It doesn’t need to be something big - it could be as simple as forwarding something you’ve read that could be of interest to them.

Remember that, on average, it costs at least six times more to sell to a new customer than it does to sell to an existing one.

So, what are you doing to delight your customers so they become your strongest advocates?

“You can get anything you want in life so long as you help enough other people get what they want.” - Zig Ziglar

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What’s in the forecast?

When we set out on a fishing trip or hike, we always check the weather forecast.

It’s no different in business. The forecast tells us if there’s bad weather (poor cashflow) in store based on the direction we’re heading.

Your forecast will tell you:

  1. Whether you have enough sales in the pipeline to give you the desired level of profit you want for the year.

  2. Whether your margins are appropriate.

  3. If you need to review your pricing or production processes.

  4. If your business is running as efficiently as it could be.

  5. Where savings can be made.

  6. Whether you should invest more to get a better return.

  7. How much money you need to set aside for tax.

  8. How much money you can draw out of the business each month without running short.

  9. How much debt you’ll be able to pay off.

  10. Whether or not you will be able to meet all of the bank’s requirements.

The difference between a business forecast and a weather forecast is that, when the business forecast is showing bad weather, you can do something about it to make the sun come out. The forecast will tell you what’s going well and what’s not, so you can make adjustments to reduce the impact of bad weather.

Just as you wouldn’t go fishing without checking the forecast, you shouldn’t run your business without an annual forecast. So, don’t live in your raincoat, waiting to get soaked - take control and talk to us about getting your forecast done so you know what to expect.

“Planning is bringing the future into the present so that you can do something about it now.” - Alan Lakein

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Drowning in admin? Automation can ease your business workload

Small and medium-sized businesses are spending on average 120 hours a year on admin tasks, according to recent research into productivity at UK SMBs.

If your people are spending 120 hours wading through tedious and unproductive admin, that’s bad for the business and for your overall efficiency. Fortunately, technology and software automation can go a long way towards automating the low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, artificial intelligence (AI), machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

  • Automated bookkeeping – Just take a photo of your receipts, expenses and invoices and ‘optical character recognition’ (OCR) technology will digitise the output and pull it through into your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.
  • Automated credit control – chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.
  • Automated payment collection – the easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.
  • Automated reporting and forecasting – the better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.
  • Automated digital marketing – digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to schedule and post social media content, or email automation that sends a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about embracing the power of automation

If your admin is starting to hold you back, come and talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review you business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

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Ever wondered what Influencer marketing is all about?

With more choice than ever in consumer goods, brands are turning to individuals who will promote products to their large social media fan base.

Each new trend is often an iteration of a previous way of doing things. Companies have long used celebrity endorsement to advertise their brands to customers, but influencer marketing is a bit different.

Made possible through social media, the influencer is not necessarily famous, but they do have a huge online following, whether that’s on a blog or vlog (video blog), Instagram or Facebook. These are people whose full time job is to review or demo products to their fans and followers. And it can be incredibly powerful.

Influencer marketing is based on a relationship between the influencer and their fans. They tread the fine line of balancing the needs of the brand and maintaining the trust of their fan-base. Authenticity is vital and that’s where live-streaming comes in. Because live-streaming is unedited, it is seen as more authentic and real.

China’s top live-streaming influencer, Viya is a Key Opinion Leader (KOL). She has built up a follower base on Taobao of nearly 6.5 million in just 3 years. Her followers, who are all ages, are ready to buy whatever she recommends. In a livestream event in August, Viya facilitated the sale of tens of millions of products from more than 40 New Zealand and Australian brands to her millions of fans.

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Non-compliant payments to workers no longer tax deductible

You can no longer claim deductions for payments to workers if you have not met your pay as you go (PAYG) withholding obligations. This applies to income tax returns lodged for the 2020 income year onwards.

Reminder if PAYG withholding rules require an amount to be withheld, you must:

  • withhold the amount from the payment before you pay your worker
  • report that amount to the ATO

You will not lose your deduction if they withhold:

  • an incorrect amount by mistake – to minimise penalties you can correct the mistake by lodging a voluntary disclosure in the approved form
  • the correct amount but make a mistake when reporting – you should correct the mistake as soon as possible.

You will only lose your deduction if no amount is withheld or reported to the ATO, unless you voluntarily disclose this before they examine your affairs.

This measure aims to level the playing field for honest businesses doing the right thing by their workers. It is part of the government’s response to recommendations from the Black Economy Taskforce.

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Your job description as Director

Most business owners know that every member of their team needs a job description, which should include:

  • Clearly outlined responsibilities and tasks
  • Some specific and measurable KPIs (Key Performance Indicators)
  • A set of clear expectations around core competencies and behaviour

When a job description is clearly documented, it’s much easier to monitor and measure performance. However, as logical as this seems, many business owners fail to do this for their own role as Director of the business.

So, as Director, what should be in your job description?

The most important function of a Director is to maximise shareholder value. This means carrying out activities that drive up returns and business value; by working smarter, not harder.

Your key responsibilities include setting the vision and strategy, managing and mitigating risks, growing the business, establishing the right business structure and holding the CEO (who may also be a Director) to account.

How much time are you dedicating to working ON your business?

To give a general indication… as Director, you should spend an hour or two every week working ON the business. In addition to that, every quarter you should dedicate half a day to ongoing strategy planning and take one to two days every year for an annual off-site planning session or retreat. This is to remove yourself from day to day distractions to do some serious ‘blue sky thinking’.

As Director, you still need accountability.

Appoint someone independent to ensure you adopt best practice as a Director. There are several ways to get accountability. You could establish a quarterly advisory board (with an independent chairperson). Or, you could engage an experienced facilitator to coach you regularly to ensure you’re meeting your objectives. Having an independent accountability process in place will ensure better planning, better decision making and faster progress.

Remember, you’re not exempt from meeting the requirements of your Director role. Like every other role in your business, you need a job description for your role as Director, and it should have clear responsibilities and tasks with KPIs so that you can monitor and improve performance.

So, if you don’t already have a job description, set that as an important task, with a due date, and start thinking about who will hold you accountable.

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The importance of tax planning for directors

Paying tax is something you’re likely to see as a necessary (but not hugely enjoyable) part of running your business. But are you doing enough to plan your own personal tax liabilities?

As a director, you’ll pay your income tax annually on a self-assessment basis. But there are plenty of ways to make this a less costly and onerous task to complete.

Planning ahead when it comes to tax

By taking a forward-looking approach to your own personal finances, and working with an experienced advisor, you can start to minimise your tax costs and maximise the value you enjoy from your own earnings and company profits.

Working closely with us helps you:

  • Know your future tax liabilities – by looking at factors like expected dividend payments, pension provision and additional income to determine what you will owe.
  • Set up an annual tax plan – with provision for when payments should be made and when to set aside the funds needed to pay your income tax bill.
  • Make use of any tax reliefs – so you can claim the relevant reliefs and tax initiatives that are available, to bring down the amount of your overall tax bill
  • Maximise your earnings – by taking your earnings in the most efficient ways and managing your own personal wealth in a proactive manner.

Talk to us about your personal tax planning

If you’re a director looking to achieve the best results from your earnings, come and talk to us. We can review your tax situation, create a robust tax plan and make sure you’re getting the maximum value from your business earnings,

Get in touch

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Professional networking 10-step checklist

Networking can get your business noticed. It can lead to referrals, valuable business opportunities and increased sales. But it can be daunting to put yourself out there, and tricky to get right. Remember that professional networking is a social activity. It’s about building relationships – so leave the hard sell behind. Instead, be open and get to know people.

Here are 10 things you can do to get the most out of your networking experience:

  1. Aim to build relationships
  2. Make networking part of your job
  3. Do your homework beforehand
  4. Show belief in your business
  5. Listen and ask questions
  6. Speak to as many people as you can
  7. Give out your business card
  8. Keep a record of the event
  9. Set yourself a goal for the year
  10. Look for opportunities to connect with people.

If you feel jittery, remember to take a breath, stand back, and let others talk. It builds rapport and shows you’re interested. Now… dive in and meet people!

https://www.xero.com/resources/small-business-guides/checklists/professional-networking/?utm_source=boma&x=boma

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Become a digital business – futureproof your tech

In the online, connected world that we now live in, it’s important for your business to be digital.

Digital technology has revolutionised the options you have available as a small business, with a wealth of cloud-based solutions and apps helping to automate the admin, enhance your productivity, open up your business data and market the company online.

Making the technology work for you

Becoming a digital business isn’t about using technology for tech’s sake. It’s about seeing the huge value and potential of applying digital processes and software tools within the company.

By moving your systems, processes and customer interactions over to digital, your small business can quickly become more streamlined, more efficient and more profitable. And with the ineffective elements of the business removed, you’re ready to grow, scale and expand.

Key benefits of digital transformation include:

Cloud accounting at the heart of the business – cloud accounting moves your bookkeeping and financial management online, giving you access to your accounts, reporting and key performance indicators (KPIs) through your web browser, on any internet-ready device. You can literally run your finances, invoicing, credit control and bank reconciliation from anywhere with Wi-Fi – keeping you in control of the numbers.

Automation of low-level tasks – the manual tasks involved in company admin begin to eat into your business time. Many digital business tools have elements of automation built in, to help you automate the key time-consuming tasks and become more efficient. Automated bookkeeping, automatic bank reconciliation and automated payment collection all put hours back in to the business and help you do more.

Fintech and payments – keeping on top of your finances isn’t just about accounting. Financial technology (fintech) tools help you ensure that money is flowing into the business, cashflow is being managed sensibly and online payments are being made, and collected, automatically – helping to maximise your financial health.

Job management and productivity – planning and running your operations and project work can be tough. But with software project management and workflow apps connected up to your central system, you’re always on top of the workload and resourcing.

Digital marketing and social media – most consumers and business customers will begin a search for products/services online. So having a good website, a bold online presence and the right social media channels in place is vital for your sales and marketing strategy. By positioning your brand in the digital space, you make yourself relevant, easy to find and connected to your ideal customer base.

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Using LinkedIn to boost your business

LinkedIn can be a valuable networking tool for business owners and job seekers. Use the site to increase brand awareness, attract top talent, acquire new customers, promote events, and engage with influencers in your industry.

Here are five basic ways to use LinkedIn to create a business advantage:

1. Create a company page.
Help potential and existing customers and team members learn about your business, brand, products, services, and job opportunities. You’ll need a personal LinkedIn account and verified email address to get started. Here’s how: https://www.linkedin.com/company/setup/new/

After crafting your company’s description, complete your contact details, and upload your logo and cover image. Let your team know the page is active so they can add it to their personal account.

2. Promote your page.
You’ll need followers, which you can get by including links to your page in your outgoing marketing communications. Add links to your page in your team's email signatures, marketing emails, newsletters, and blogs. Include a link on your website and business cards too.

3. Create and join groups.
Promote your business by creating a LinkedIn group connected to your company page. The group allows you to engage with people connected to your industry, build a following, and bolster your reputation.

Also, consider joining existing LinkedIn groups. Don't use these to advertise, simply establish yourself within the group as a thought leader and industry expert by sharing valuable insights and experiences.

4. Engage with other pages and posts!
Regularly seek out relevant people and businesses to follow and engage with. Comment on their posts and share when appropriate. This will likely encourage them to follow and engage with your posts in return. Remember to keep it positive.

5. Publish and share relevant content for your followers.
Now that you’re getting followers, remind them why they should follow your business. Post videos, pictures, and links to your blog to keep your followers engaged and drive traffic to your website.

Ensure your content is of value to your followers and limit promotional posts (to less than 20% of posts). Track the effectiveness of your posts to see what works and what doesn’t, and consider the best times to post - LinkedIn is busiest in the morning and around midday.

The easiest way to learn to use any social media tool, like LinkedIn, is by doing. See what others post and emulate the people and companies you admire. Your next client or new hire may be a direct result of engaging with this platform.

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5 key things to get right when starting a business

Starting your own business is a BIG leap of faith. Will you find any customers? Will you make enough income? These are questions that any founder will ask themselves.

But with the right planning, preparation and support, you can set the best possible foundations for your new enterprise, and take some of the guesswork out of becoming a business owner.

Building the right foundations

So, if you’ve got a great business idea and you’re eager to get your company off the ground, what are the key foundational elements you need in place?

To get your new company trading smoothly:

  • Define your vision and goals – so you know WHY you’re in business, what success will look like and who your target customers will be. If you’re clear about the ‘why’ from the outset, every decision will be easier. Think about who your product or service is aimed at, what their needs are and how your solution solves this.
  • Have a robust business plan – providing you with a clear route map for achieving your goals, with budgets, targets and pre-agreed timelines to meet. This doesn’t need to be a huge undertaking but it will need some thought. A good business plan will evaluate the idea and feasibility, as well as identifying opportunities and obstacles.
  • Get the finance you need – so you have the capital required to start trading, with enough in the bank to cover operational overheads and start generating income. A solid business plan will help you gain buy-in by proving the idea for investors.
  • Measure your performance – once you’re up and running, record and track all financial and non-financial data, so you can measure how well you’re performing and identify, early on, the areas that need attention.

Talk to us about setting up your new business

If you’ve got a world-beating business idea and the ambition to become a business owner, come and talk to us. We’ll help you flesh out your vision, write a workable plan and get your finances in shape for the next stage of the startup journey.

Get in touch.

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Laundry and clothing expenses

Continuing its focus in recent years on work-related expenses, this Tax Time the ATO says it will target false clothing and laundry work-related expense claims.

In 2018 alone, more than 6 million people claimed work-related clothing and laundry expenses totalling nearly $1.5 billion.

ATO Assistant Commissioner Karen Foat said while many Australians can claim clothing and laundry expenses, “it’s unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income”.

“You must have spent the money you are claiming on buying or cleaning eligible clothes. While you don’t need receipts for claims up to $150, we can ask how you calculated your claim. We may even ask your employer if you have a required uniform,” Ms Foat said.

Last year, she said a quarter of all clothing and laundry claims were “exactly at the record-keeping limit. But don’t think that we won’t scrutinise a claim because we don’t require receipts,” she said.

The ATO is also concerned about the number of people claiming deductions for conventional clothing. Some retail workers claim normal clothes because their boss told them to wear a certain colour, or items from the latest fashion clothing line. Others think they can claim normal clothes because they only wear them to work.

The Assistant Commissioner said a workplace may expect an employee to wear clothing items like suits or black pants. But an official ‘dress code’ doesn’t qualify as a uniform, she said, and taxpayers can’t make a claim for normal clothing, even if their employer requires them to wear it, or they only wear it to work.

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Prepare for Finalising 2019 in Single Touch Payroll

If you are already reporting Single Touch Payroll (STP) to the ATO, there is a different process for issuing payment summaries from now on.

Employers must provide payment summaries to employees by 14 July. In the STP reporting system, employers must make a finalisation declaration by this date, in order that the employee’s information will be released in their myGov account and listed as ‘tax ready’.This replaces the need to issue payment summaries. However, if you are unable to make a finalisation declaration by 14 July, you still need to issue payment summaries to employees by other means by the due date.

The ATO is offering additional time up to 31 July 2019 to make the finalisation declaration for employers who have started STP during the 2019 financial year.

STP Payroll Checklist

Be efficient and prepare as much as you can now, by checking the following:

  • Check that your business details, including ABN, registered name and address and authorised contact person are correct in your software.
  • You should already have all the necessary details for all employees, both current and any who have terminated throughout the year if you are using STP. The essential information is full name, date of birth, address and tax file number.
  • Review any terminated employees. Is the correct termination date recorded in your software? Are there any Employment Termination Payments (ETPs)?
  • Review salary sacrifice payments to superannuation for Reportable Employer Superannuation Contributions (RESC) amounts.
  • Check with us for any Reportable Fringe Benefit Tax (RFBT) amounts that should be included.
  • Check that all payroll categories are assigned to the correct ATO reporting category. This includes all ordinary earnings, loadings and penalties, allowances, commissions, bonuses, leave payments and termination payments. You may have other unusual payroll categories—check that you have linked them correctly.

Finalising Single Touch Payroll

It’s important to verify payroll figures before finalising, in order to minimise the chance of errors and having to re-issue at a later date.Once the payroll year is completed at 30 June, you can then analyse the payroll amounts for each employee and cross-check against the numbers in your profit and loss accounts.

Talk to us about making the STP end of year process easier by reviewing and validating your payroll figures prior to finalising the data and lodging with the ATO. The end of the payroll year will be here sooner than you think!

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What does an accountant do?

The best accountants can do much more than just tax and compliance work for your business. They’re troubleshooters and strategic advisors for small business. Basically, having an accountant means that you can operate your business with more clarity and confidence.

Whether you’re working to get a startup off the ground, or taking the reins of an established business, you’ll see value from making an accountant part of your team. When you have the right accountant and a good relationship, you’ll see their influence impacting all the moving parts that make up your business.

Accountants can support you from startup to business exit. Read more on what accountants do to support your business and help you achieve your goals.

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The Five A’s of Change - a process to achieve continuous improvement

Whether it’s a new focus, a new venture or a new year, consciously recognising the process required to change can vastly improve your outcome.

The Five A's of Change breaks it down simply:

1. Awareness.
First we must be aware of what needs to change. Perhaps we want to work smarter, not harder, so we can have more family time and better financial returns.

2. Acceptance.
We have to accept that in order to work smarter we will need to do things differently. There is no magic bullet; effective planning is critical to achieving change.

3. Action.
Once we have a plan; we must actually implement it. Taking action can be simpler than imagined; one step at a time, the momentum for change will grow. But, if we don’t act, planning is pointless.

4. Accountability.
Having someone independent to hold us to account is typically a foolproof way to ensure we act. A bit like going to the gym before work… we’re more likely to show up if we’ve committed to a friend or paid for a personal trainer.

5. Acknowledgement.
Humans are habitual creatures. It takes 21 times to change a habit. By celebrating the success of taking action and forcing change, we help to reinforce that good behaviour. The reaction is a chemical one.

This powerful model is simple and effective. Consider the things in your business that you would like to change and what stage in this process you’re at. What is your next step? Whatever your current situation, empower yourself and make a commitment to real change.

"The secret of change is to focus all of your energy not on fighting the old, but on building the new."- Socrates

Need help making change stick? Check out how we can help you with planning and accountability.

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Creating a small business budget

Small business budgets are empowering. They give you the knowledge and insight to eliminate wasteful spending and get to profitability faster.

When setting a business budget, you need good numbers. Don’t guess at what’s coming in and what’s going out. You could be making assumptions that just aren’t true. Take the time to look into your accounts and dig out the real figures. It might sound like hard work but it’s worth it.

Setting a budget isn’t complicated but it can still help to involve an expert. We can double-check the numbers and help you make realistic predictions about business growth, upcoming expenses, and tax exposure. We can also advise you on what to do if the actual numbers deviate from the predicted ones.

 

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https://www.xero.com/resources/small-business-guides/accounting/create-small-business-budget/?utm_source=boma&x=boma

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Taking the pain out of pricing - how much should you charge?

Figuring out how much to charge is a big learning curve for any business owner. The answer to how to approach it will fluctuate as circumstances and markets change. It is important to revisit the question throughout the lifecycle of your business.

There is no magic formula

All businesses are unique, with an individual offering of products and services. Before you set your pricing, It’s important to look at the whole picture. This will help to ensure you are being strategic and not just following trends.

Gather the dataTo get started, you need to gather as much information as possible. Block out some time to sit down with your business data and strategies. Pricing is essentially figuring out where your products and services are positioned in the market. So keep your business strategies top of mind. It doesn’t have to be a confusing exercise. Just grab a coffee get started.

Here are the first steps to consider:

  1. Record all the costs involved in production. Make sure you include indirect costs, such as assets, insurances, licenses and legal costs.
  2. Now that you have your outlay, consider your current profit margin or what margin you require. Remember there is a difference between net and gross profit margins. Net margins take all operating costs into account.
  3. Do your competitor research. Be thorough in understanding the market and what others are charging for the same service or product or variations of this. What unique selling points (USPs) does your business have that allow you to vary your prices?
  4. Think about your offerings. What extra benefits or offerings do you have that can affect your pricing? Think about cheap and no-frills on one end of the spectrum, versus high-end premium products. Can you create different products at different prices to cater to different segments of the market?

Don’t forget to check in on your pricing regularly to make sure you’re keeping up with your customers and staying ahead of the game.

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Is your business attracting the right talent?

When people talk about ‘brand’ they often think solely from a customer perspective. However, a strong 'employer brand' is also critical, in order to attract the right talent to your business. A company’s employer brand is twice as likely to drive job consideration as its company brand. With a shift in skill-set requirements across most industries, and Gen Y entering the workforce, it’s more important than ever to attract the right potential employees.

So how do you go about attracting great talent to your business? Laura Weaving, Founder of Duo Global Consulting has the following tips:

Your Employer Brand

Gen Z and Gen Y candidates are 61 percent more likely to choose a job based on the perception of the business as an employer. When you have a role to fill, make sure you:

  • Describe the great working environment in your job description and publish this on your website and on social media
  • Add a careers page, with details on the company culture as well as the job
  • Provide some insight into company life, or why people would want to work for you.

Establish your Employer Value Proposition

This is your unique set of offerings, associations, and values that positively influence target candidates and employees. Overall, companies without an employer value proposition and a weak employer brand, report a cost per hire that is almost double that of companies with a strong employer brand. Without it, it’s extremely hard to attract the right potential employees and even harder to hire someone who is the right fit for your company.

When it comes to attracting talent, a strong employer brand therefore not only increases consideration, it is also a smart business investment.

Additionally, if an organisation has a strong employer value proposition and employer brand, especially one that resonates with current employees, it will also have a significantly lower staff turnover rate. Companies with a stronger employer brand have a 28 percent lower turnover rate than companies with a weaker employer brand.

The first step to developing an employer value proposition and effective employer branding is to assess your audience. Organisations need a strategic platform, with a compelling message at its core. This message should be the result of a thoughtful research program which assesses target audiences, tests messages and highlights the mediums in which ideal talent pools will consume your employer information. Without them, you will most likely execute the same recruitment programs over and over again, with the same average results.

Communicating your Employer Brand

Build personas of the types of talent you’d like to hire. And from here you can build your profile of your ideal candidate. These can include:

  • Education
  • Work experience
  • Personal activities
  • Aspirations and goals
  • Values
  • Personal life and family situation.

Once you have that profile, build your questions to ask in order to ascertain whether potential employees fit your ideal profile. You can tailor the advert and medium to speak to that profile.

Succession Planning

You should be looking at what positions you will need to hire in six to twelve months and what skills are required so you can build an internal talent pipeline. You don’t want to be working against the clock when the need arises to hire. Work ahead of that point and build a relationship with your ideal candidate. Additionally, with a lot of ideal candidates being already happy in their current roles, you will require the time to build that relationship.

Ensuring that your employer brand expresses your culture, environment, values and strategic vision is important. Investing to strengthen your employer brand, if done right, should help increase consideration of your company, lower recruiting costs, and decrease voluntary turnover.

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Cryptocurrency Owners

Cryptocurrency owners and traders are required to maintain records in relation to their holdings including records relating to the purchase, sale and transfer of cryptocurrency.

The Australian Taxation Office (ATO) will collect data from cryptocurrency designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014-15 to 2019-20 financial years.

The data acquired will be electronically matched with certain sections of ATO data holdings to identify taxpayers that can be provided with tailored information to help them meet their tax and superannuation obligations, or to ensure compliance with taxation law.

The data to be collected may contain all or a selection of the fields listed for the 2014-15 through 2019-20 financial years:

 

Digital currency owner details

  1.  Name
  2.  Address
  3.  Australian Business Number
  4.  Date of birth
  5.  Contact numbers (fixed line, mobile)
  6.  Email address
  7.  Social media account (Facebook, Twitter, Telegram, Reddit, Whirlpool, etc.)

 

Account and transaction details

  1.  Status of account (open, closed, suspended, lost, etc.)
  2.  Linked bank accounts
  3.  Wallet address associated with the account
  4.  Lost or stolen (crypto)currency amounts linked to accounts
  5.  Unique identifier
  6.  Transaction date
  7.  Transaction time
  8.  Type of (crypto)currency
  9.  Amount (in fiat and cryptocurrency)
  10.  Type of transfer
  11.  Transfer description
  12.  Total account balance

It is estimated that records relating to between 500,000 and 1 million individuals will be obtained.

The purpose of this data matching program is to ensure that taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgment, reporting and payment responsibilities.

The objectives of the cryptocurrency data matching program are to:

■       Promote voluntary compliance and increase community confidence in the integrity of the tax and superannuation systems.

■       Identify and educate those individuals who may be failing to meet their registration and/or lodgment obligations and assist them to comply.

■       Gain insights from the data that may help to develop and implement treatment strategies to improve voluntary compliance; which may include educational or compliance activities as appropriate.

■       Obtain intelligence to increase the ATO’s understanding of the behaviours and compliance profiles of individuals and businesses that have bought, sold or accept payment via cryptocurrency

■       Ensure through compliance activities that individual and businesses that trade or accept cryptocurrency as payment comply with their lodgment, correct reporting and payment of tax (including capital gain and loss) and superannuation obligations.

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What is employee engagement and why does it matter?

An engaged employee is a team member who is fully absorbed by and enthusiastic about their work, and who takes positive action to further a company’s reputation and interests and achieve their goals.

More importantly, what does a disengaged team member look like?
The symptoms range from a negative attitude, poor communication, absenteeism, lack of initiative, laziness, lateness, lack of participation, and doing the bare minimum at work… all the way to actively damaging the company's work output, culture, and reputation.

The impact of having a single disengaged team member can be catastrophic.
The effects are not limited to their own poor productivity and output. This person can infect the core of your culture; damaging morale and lowering the performance of the entire team. They could even cause the resignation of a key team member or, if client facing, cause irreparable damage to your brand.

Improved employee engagement leads to improved productivity and performance.
Numerous studies have proven that companies with engaged employees significantly outperform others. Why is this? People who are engaged in their role want to come to work, therefore take fewer sick days. This ultimately leads to reduced team turnover and less unproductive time spent recruiting and inducting new employees.

Not surprisingly, team members who are engaged feel more supported by their peers and are more likely to work collaboratively, leading to significantly less re-work and wastage. Also, fewer workplace accidents and incidents occur when team members are engaged. All of the above reasons contribute to much higher productivity and profitability.

The Engagement-Profit Chain* is another take on why engagement improves performance:
Engaged employees leads to… higher service, quality, and productivity, which leads to…higher customer satisfaction, which leads to…increased sales (repeat business and referrals), which leads to…higher profit levels, which leads to…higher returns.

There is a difference between employee happiness and employee engagement.
Your team could be happy but not necessarily working efficiently and productively to deliver optimum outcomes.

A number of factors can influence and improve employee engagement. These include developing and utilising Core Values, documenting an effective Organisational Chart, providing clarity on the roles and responsibilities in your organisation, and introducing KPIs to help define what a good day’s work looks like for your team.

Need help building a happy and high-performance working culture? Get in touch.

"To win in the marketplace you must first win in the workplace." - Doug Conant

*The Engagement-Profit Chain was created by Kevin Kruse

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Your Fringe Benefits Tax Return is due soon

If you are lodging your own fringe benefits tax (FBT) return, you need to lodge and pay by the 21st of May. If we are lodging on your behalf, your due date is not until the 25th of June.

Even if you have been paying FBT instalments on your quarterly BAS, we still need to complete and lodge the annual return to assess whether you have paid too much or too little throughout the year.

If you have not paid any fringe benefits this year, or if the amount paid is less than $2,000, check with us as you may still need to lodge a nil return.

Things to consider before finalising the FBT return:

  • Have you paid benefits to employees or associates for entertainment, expense payments, loan payments or any other benefits in lieu of wages and salary?
  • Have you checked which benefits are exempt from FBT?
  • Do you have tax receipts and other records related to the payment of fringe benefits for employees or associates?
  • Do you have the relevant employee declarations, log books and travel diaries?

Remember that you must keep records of all FBT related transactions for at least five years.

As there are some exemptions and concessions available, we can discuss your FBT return with you, to make sure that you are not overstating your fringe benefits and paying too much fringe benefits tax.

Talk to us about how we can assist with preparing your FBT return.

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Funding is the key to your growth plans

Sourcing the right funding for your business can be the first step in achieving your growth goals, or the helping hand you need when you’re in a cash flow hole.

Cash is king when it comes to funding your growth plan. But with the funding market now bursting with a huge choice of traditional and alternative finance providers, knowing what type of finance to opt for, and from which provider, can be a complex decision.

Choosing the right finance for your business

The type of growth you’re aiming for will determine the kind of finance that’s most suitable. So, if a quick cash injection is needed to hire extra staff, you might opt for invoice financing. Whereas a long-term scale-up project would need a larger secured business loan, or private investment.

To make your funding search successful:

  • Know what you need to borrow and why – be clear about your goal, why it’s business-critical and where the additional money will be used.

  • Have a clear budget and a healthy balance sheet – lenders will take you more seriously if you’ve estimated your growth budget and your financials are looking healthy.

  • Look for the best terms and interest rates – a loan on unfavourable terms will be more of a hindrance than a benefit. So shop around and look for providers who can give you the deal that you’re looking for.

Talk to us about accessing the best funding

If you’re looking to access additional finance, we’ll help you work out your budget and search for the best possible funding options – providing the money you need to meet your business goals.

Get in touch and we can help you find your ideal funding.

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Superannuation Guarantee Amnesty will not proceed

The Government’s proposed Superannuation Guarantee (SG) Amnesty will not proceed. To recap, the SG amnesty was to be available for the 12-month period from 24 May 2018 to 23 May 2019. To get the benefits of the Amnesty (set out below) employers must have during this 12-month period voluntarily disclosed any SG underpayments that existed in the past (going as far back to when SG commenced in 1992). For an employer, the tax benefits of the amnesty were:  

  • The administration component of the SG Charge (SGG) would not be payable (this is a $20 per employee, per quarter, for whom there is an SG Shortfall)
  • Part 7 penalties would not be applied. This can be up to 200% of the SG Charge that is payable (note that SG Charge includes the SG Shortfall that is owed to employees)
  • All catch-up payments made during the 12-month amnesty period were to be tax deductible.

  By contrast, under the current law, when SG has been underpaid or paid late, the SG Charge that must paid to the ATO is not deductible, and late contributions that an employer has made to an employee’s superannuation fund and has elected to offset against their SG Charge liability are also not deductible.  

With Parliament having been prorogued for the Federal Election, the legislation to enact the Amnesty (which is opposed by the Labor Party) will not pass into law. Therefore, employers who disclosed SG shortfalls during the Amnesty period will be subject to the current law and not enjoy the Amnesty concessions, irrespective of any assurances offered by ATO employees at the time employers made disclosures. The ATO have however indicated that it will exercise its discretion and not apply Part 7 penalties to these employers. The Part 7 penalties aspect of the SG Charge regime did not require a change to legislation as the discretion to waive penalties already sits with the ATO.   

Going forward, with super funds now reporting to the ATO more regularly (at least once per month), we would strongly urge all employers to pay SG on time and in full by the quarterly cut-off dates. 

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Instant asset write-off changes

In the Budget on Tuesday, the Government announced that it would increase the instant asset write-off threshold to $30,000 and extend it to medium sized businesses with annual turnover of less than $50 million.

The amendments mean there will be three tiers in the 2018/2019 financial year:

1. $20,000 threshold for depreciable assets that are acquired and installed ready for use before 29 January 2019. Only available for businesses with an aggregated turnover less than $10 million.
2. $25,000 threshold for assets first used or installed between 29 January 2019 and 2 April 2019. Only available for businesses with an aggregated turnover less than $10 million.
3. $30,000 threshold for assets first used and installed after the 2 April budget announcement and before 1 July 2020. Available for businesses with a turnover of less than $50 million.

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Set your business up for success with the right structure

The structure of your new business has repercussions in terms of tax, costs and the protection of your assets. When you decide on what structure you’ll use, keep in mind your future plans, because this may impact your decision.

There are three main structures you could consider.

Sole trader:

If you’re operating on your own, this may seem an obvious choice. It’s a quick one to set up and incurs minimal costs. Bear in mind that a sole trading business can be trickier to sell, and you are taking on greater personal risk in establishing the business. It may be worth looking into how you can protect your personal assets, should anything go wrong.

Partnership:

If you’re working with a partner, you could consider this option. It lets you share the load, along with the costs of getting a business established. You’re also sharing the risk and potential liabilities.

Company:

Setting up a company means more admin and higher costs to get going. You’ll become a ‘director’ as the person who runs the company, and a ‘shareholder’ as a part-owner. Companies have additional reporting duties, but you assume less personal risk. Also, the clear structure and reporting involved, may set you up for an easier sale when the time comes.

You could also consider setting up a trust, but as this is a relatively expensive and complex undertaking, it’s less likely you’ll go this way initially. You can change the structure as your business develops, but it’s important to consult with your accountant, lawyer or advisor as you go.

Before deciding, think ahead to the future you want for your business.

Ask yourself:

How am I hoping to grow the business? If you plan to bring on additional people to run the business alongside you, a company or partnership arrangement may suit.

When do I want to sell the business? Again, while selling any kind of business is possible, the clarity provided by a company may be an advantage and make your business more attractive to a buyer.

How sure am I that this business will succeed? It may be that you are setting out to prove a concept or explore a business idea. If this is the case, you may not look to incur too many costs up-front, and a sole-trader or partnership model may appeal.

Whatever you decide, make sure you understand the tax implications. Talk to us before setting out on your new venture.

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GST and BAS tips

Get on top of your record keeping early and be better prepared for lodging your BAS ‒ it can help manage your cash flow and get you your refund faster.

Keep your business on track with these GST and BAS tips:

  1. Keep all of the records you use to prepare your BAS. Generally, these records must be kept for five years.
  2. Only claim GST credits for business purchases that include GST in the sale price from suppliers that are registered for GST.
  3. Make sure you have a tax invoice for any purchases over $82.50.
  4. Fill in the amounts on your activity statement as whole dollars ‒ leave out cents and don’t round up to the nearest dollar.
  5. Lodge your BAS using our online services. It’ll prompt you to correct any errors and allow you to check whether you’ve completed your BAS correctly.
  6. Putting money aside in a separate bank account for the GST you receive may make it easier to pay your BAS and manage your cash flow.
  7. If you think you might not be able to pay, contact the ATO as soon as possible before your BAS is due. Even if you can't pay, you still need to lodge your BAS on time.
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Have you declared all your business income?

When meeting with accountant or sending us in your tax information here are some questions for you to consider when declaring income.

Did you:

  • receive any cash payments?
  • earn income through coupons, vouchers or gift cards?
  • receive income from other activities such as rent from business assets?
  • receive bank interest or money from other investments?
  • receive directors' fees, dividends or franking credits?
  • deposit any income into a mortgage or private bank account?
  • have other accounts that business income is paid into, like PayPal?
  • sell or transfer any business assets?

Make sure to maintain appropriate records including documents that show actual income amounts.

Ensure you provide source documents not summaries to avoid having us guess the types and amount of income.

Remember, we're here to help.

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Conducting successful performance reviews

Your staff are the backbone of your business, and their success is going to help your business succeed. An important, but often-overlooked part of this is holding regular performance reviews.

Rather than being an administrative drag, or something that you or your staff members dread, performance reviews can be a really valuable and constructive process. They can enhance your relationships with employees and the performance of your organisation. Here’s what you need to know:

They need to happen on a schedule

Whether they are every year, every six months or even every three months, it’s important to set a schedule and stick to it. If it comes to the day and your employee finds that their meeting with you has been bumped due to a ‘more important’ commitment, this can send a very clear message to them about how much you value their contribution. Instead, make sure you both know when these meetings are happening. This will also give both parties time to really consider what you want to discuss. Turn up prepared and ready for a two-way conversation.

Prepare for the meeting

Whether you’re having a tough conversation or giving praise, go in with specific examples, and chat with other senior team members to get their supporting feedback. It’s important that you pay special attention to anything that isn’t borne out by the experience of other staff members. This is a valuable opportunity to examine any biases that you might be holding. A tough process, but a necessary one for any manager.

Create the right environment

Put some thought into the environment you want to create. If you have a strong relationship with your employee and you’re looking forward to another constructive conversation, perhaps this is a chat that can happen over an off-site coffee. If this is a more serious check-in chat, make sure you’ve got a private meeting room where you can both talk candidly without worrying about anyone listening in.

Keep a record

Working with an employee over time can be a wonderful thing for your business. It’s really important that you have records which reflects the progress that they have made and the ways in which you have been able to support them. It’s essential to take notes during each meeting and record these notes in a way that you’ll easily be able to access later. This also gives you a reference for what you need to follow up, such as whether you’ve discussed a schedule for a pay increase, professional development opportunities or additions to the employee’s role.

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What you need to consider before you take your business overseas

A globalised and digitally connected world means that your business isn’t restricted to one country. Expanding your business overseas gives you access to new audiences and a little protection should anything happen to destabilise your home market.

But, as with all things in business, proceed with caution. While the saying ‘no risk, no reward’ holds true, it’s important to fully understand what’s at stake before making the decision.

What you need to consider:

Tax implications

It’s essential that you understand the tax implications of this new market before you invest any money or time into your business development. Make sure that this is your first step, and talk to us, we can help.

The local market

Don’t assume that what’s working for you locally will necessarily transfer to a new market. It’s important to research trends, and set objectives specific to the new market. Your product or service might enjoy a lack of competition at home, but that doesn’t mean you won’t find an equal overseas.

As well as market trends, pay attention to the political and economic climate. Make sure that you’re engaged with what’s happening in the area, and understand anything that could be poised to disrupt your business success.

Increased costs

Whether you’ll be shipping from your home country or looking to despatch locally, it’s likely that this could cost you more than it does at home. Don’t forget that if you are using local services for either shipping or production you will probably need to make at least one trip to meet the team who will be supporting your business.

Your website

There are a number of changes that you may need to make to your website. Customers may prefer to shop in their own currency rather than relying on a conversion at check out. You may decide to include some local imagery or add other touches to demonstrate that your new potential customers aren’t just an afterthought.

If your new market speaks a different primary language, you will have to decide whether you will translate your site or let Google Translate do the job for you. Also, find a local language speaker who can check that your product names or company name don’t mean anything that could offend once translated.

Finally, if your new customers are in the EU, you will need to make sure that your business and the way you plan to manage customer data is GDPR compliant (a regulation that protects the data and privacy of EU citizens).

Customer support

Dealing with customers in a different time zone may mean hiring additional customer support staff so that any queries can be dealt with quickly. Companies like CloudPeeps can be good places to find support and marketing team members in different parts of the world.

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6 ways to measure the health of your business

When you’re running a business, it’s easy to get caught up in the day-to-day activity and lose sight of the big picture. Taking stock of the health of your business is important. Knowing where you’re allows for more effective planning, early warning about any issues, and the chance to better chart a course for success.

There are some quick ratios that will help you in order to gauge the health of your business. We can help you to assess your business health and show you how to calculate these vital checks.

Liquidity Ratios

Liquidity ratios are about how quickly you can turn your business assets into cash - which helps you assess whether you’ll be able to pay the bills.

High ratios are better, as this means you’ve got more assets than liabilities.

Current ratio

Current ratio = Total current assets / Total current liabilities

As a general guideline, 2:1 is a good current ratio, but this does depend on the kind of industry you’re in, and the nature of the assets and liabilities.

Quick ratio

Quick ratio = (Current assets – stock on hand) / Current liabilities

This measure excludes your existing stock, which you may not be able to quickly turn into cash, and is seen as a more realistic quick snapshot of your position.

Solvency ratios

Solvency ratios look at sources other than cash flow to see whether your business will be able to settle debts.

Leverage ratio

Leverage ratio = Total liabilities / Equity

This is a measure of whether your business is reliant on debt financing or equity to fund your assets. A higher ratio can make it harder to borrow money.

Debt to assets

Debt to assets = Total liabilities / Total assets

This tells you what percentage of assets is being financed by liabilities.

Profitability ratios

Profitability ratios will let you know how efficient your business operations are. Where possible, it’s good to measure your business against others in your industry.

Gross margin ratio

Gross margin ratio = Gross profit / Total sales

This ratio tells you whether you can cover the necessary business overheads from your sales.

Net margin ratio

Net margin ratio = Net profit / Total sales

This measure tells you the percentage of sales dollars left after you’ve settled your expenses, except for your income taxes.

Checking in on your business health is a great habit to get into. Using these ratios helps you to understand your current business health and allows you to plan. Talk to us about how to calculate the factors in these ratios in order to keep your business on the right track.

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The weakest link: Why security is everyone’s responsibility

For many of us, the internet is not just an intrinsic part of our lives, it’s integral to how we do business. It enables businesses to connect to global markets and complete transactions in minutes.

As we take advantage of the opportunities the internet has to offer, online security becomes a priority. This means being vigilant about keeping sensitive data and information secure from hackers and cybercriminals – just as you’d keep your home or your car safe by locking it.

Statistics from online security software vendor Norton show that 978 million people in 20 countries were affected by cybercrime in 2017. It’s an unfortunate fact that the impact of cybercrime is a reality for all businesses.

However, a system is only as good as the weakest link in the chain. Security needs to be strong on all fronts and it’s important that businesses are committed to protecting themselves and their customers from attacks. As a business, it’s your responsibility to safeguard not only your own information but, more importantly, the sensitive data that your customers and employees have entrusted you with.

Here are some simple, easy-to-implement steps that will help you better protect your information and that of your customers online.

Have strong, unique passwords

Over 80% of breaches occur due to stolen or weak passwords. Always use a strong, unique password for each site you log in to. While this may seem extreme, particularly in an age of multiple logins, different passwords will help prevent a compromise of one login becoming a compromise of many. You can use password manager software to help you use your multiple logins and to generate strong passwords for you. Password manager software securely stores all of your usernames and passwords, on your desktop or in the cloud, so you just need to remember the password for your password manager.

Use two-step authentication

2SA or two-step authentication equates to having that extra deadbolt on the door. 2SA works by having

two layers of security: first you enter your existing password, then another verification code is generated by an app on your smart device.

Update your software

Security threats are changing all the time and new software vulnerabilities are identified every day. Keeping your operating system and applications up to date is your first line of defence. Many attacks exploit a known software vulnerability that could have been patched. Set your system preferences to update automatically and delete applications you don’t use.

Having up-to-date anti-malware (anti-virus software) is another simple but effective way to protect yourself. Anti-malware will scan your attachments and downloads as you use them and alert you to any malicious software detected. Make sure your anti-malware is updated regularly so it’s able to detect new viruses, trojans, ransomware, and the like.

Backup your local data

While computer hardware is pretty reliable these days, failures still happen. Then there are malicious acts such as theft and ransomware, and accidents and disasters that can prevent access to your data. You need to store copies of your backups at a different site from the source systems so a local disaster doesn’t destroy the backups along with the original data. Cloud backup services can address this need and make your data available from anywhere with an internet connection.

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Here’s how to better understand your risk profile

Whether you’re getting into investing for the first time, or looking at how you might expand your existing investment portfolio, it’s important to understand your risk profile. Once you have this key insight, discovering the kinds of investment that will help you meet your goals will be more straightforward.

What is investment risk?

The risk when you make any investment is that you won’t get the return you’re hoping for, or worse, that you might lose your investment completely. You’ve heard the saying, ‘no risk, no reward,’ and this is exactly where that comes from.

High risk versus low risk

When you’re making a higher-risk investment, you’re looking for a higher return or more growth. But, there’s more chance of losing your money, or of seeing short-term fluctuations through market changes. A lower-risk investment generally avoids a ‘negative return’ or a loss of your investment, but will usually deliver lower returns.

Of course, you could opt for a shoebox of money under the bed for a zero risk situation. But even holding on to cash has dangers too, namely that inflation will increase and your stash will decrease in value.

Your investment goals

Before making any investment, it’s essential to set your goals. To do this, you’ll need to understand the following factors:

  • How long are you looking to invest for?
  • What is your overall financial position
  • The type of returns are you hoping for?
  • Do you need access to your money during the investment period?
  • What is your level of investment experience and insight?

Building a diverse portfolio

When you begin to create a portfolio of investments, it’s a good idea to combine different kinds of investments with different degrees of risk. This will help to balance the risk you’re assuming, but this can be a technical process, and it’s best to talk to a professional in the planning stages.

Talk to us to better understand your risk profile.

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Have you got your super sorted?

When you’re employed, your employer makes compulsory contributions to your superannuation. When you work for yourself as a sole trader, or you’re in a partnership, making super payments isn’t mandatory. But, it’s still an important thing to consider.

Retirement savings contributions are there to set you up in retirement. Generally, investing money into super will give you better investment returns than just putting it into a bank account. Plus, because the money is effectively locked away until retirement, there’s no temptation to dig into it in the meantime.

Chances are you’ve worked for an employer at some point, and have an existing super fund to add to. If you’ve never worked for anyone, it’s probably time to set up a fund. You can make regular contributions or make lump sums less frequently, to suit your cash flow. Contributions that you make will still benefit from tax savings, and these can mount up.

Another thing that’s very handy for the self-employed and generally offered through your retirement fund is insurance. Your fund may offer you life insurance and income protection insurance. Make sure that you take the time to really understand these policies, as the payout amounts may not offer enough money to replace the income you earn through your business. You may want to source an additional policy as a top up.

If your business is a company and you employ staff, you are responsible for making super payments for eligible employees. There can be serious penalties for failing to do this, so take the time to fully understand your responsibilities.

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Remote work is on the rise - here’s what you need to know

Remote working has become more and more common as developments in technology have allowed us to communicate and collaborate no matter where we are. In fact, most of us are already logging on from home or holiday already. In May 2018, Swiss serviced office provider IWG released a study that found that 70% of professionals work remotely at least once a week.

Sometimes called ‘telecommuting’, remote work is on the rise, and it’s challenging traditional ideas about where and when work should take place. Offering flexibility to your staff can be a valuable tool to both attract new talent and retain your existing team. But before deciding to offer remote work, you need to make sure you’re able to support this way of working.

Remote work has many benefits for a business. Offering this option can mean that you retain employees through a change in their circumstances, for example, becoming a parent or relocating to a different part of the country. When you’re recruiting, the ability to offer an entirely remote position can mean that you’re suddenly able to consider candidates from across the country, rather than limiting yourself to one area, or to people who are in the position to be able to relocate.

So what do you consider before introducing remote working?

When you’re working with a distributed team, communication is key, and as the employer, it’s your job to provide the resources and systems to make this happen. Typically, these might include:

  • Laptops and other tech as required
  • Compensation if an employee is using their home internet connection
  • A way to stay in touch with the team, beyond email. Platforms like Slack are great for team communication
  • Guidelines around how often and in what way the entire team will catch up
  • Project management tools that are accessible for every worker

With these essentials in place, the biggest factor in making remote work a success is workplace culture. Consider upskilling your management team to make sure they are ready to support your remote staff or even to give them the skills to allow them to do their roles remotely.

Remote working can be isolating for an individual and sometimes the meaning in email and text can be lost so it is important to factor in a regular face-to-face meeting or video conference to bring coworkers together, enable mutual understanding and to build the team culture.

If you’re planning to offer remote work to your team, talk to us to make sure you’re across all of the tax implications.

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What to Consider When Buying an Investment Property

Keen to get into the property market as an investor? Before you start looking, you need to understand that what you’re looking for in a house, that you would occupy, might be different to an investment property.

When you’re hunting for an investment property, rather than looking for features specific to your needs; like commute times or how much you like the kitchen, you’re going to be thinking about the rental yield of the property and whether this would be an asset to your investment portfolio.

Understand your costs

There are additional costs that come with an investment property. Along with mortgage payments, interest rates, body corporate fees, council rates and other property upkeep costs, you may also have property management fees. Build a clear picture of your total outlay and ongoing costs before you assess the investment value of a property.

Do your homework

As well as your own research, it’s important to have building reports, valuations and appraisals carried out before you decide whether to purchase the property. Remember that the market valuation and the bank valuation might be slightly different. This is generally due to the fact that the bank, aka your mortgage provider, will be looking to minimise their risk.

In your research about the property, find out what’s planned for the area surrounding it. Make sure you know about any proposed developments or zoning changes, as these could have a significant impact on the property value. The local council is your first stop to find out what planning applications have been lodged.

Buying a ‘fixer-upper’

Be realistic about how much work the property might need. While you might be able to live among the chaos of a renovation as an owner-occupier, a renovation in a rental property could mean a significant loss of rental income and also a larger time commitment.

Consider a tenanted property

Don’t discount properties with existing tenants. A property that’s already happily tenanted can be a valuable option, as you won’t lose rental income while you look for tenants and you may save on property management fees.

Talk to us before you buy so that we can help you in your property investment.

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How to Plan For a Holiday From Your Small Business

Whether you’re heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it’s important to keep your cashflow under control. This means pre-planning and being proactive.

When you’re not in the office, there are still overheads and salaries that need to be sorted. If taking time off means that less cash will be coming in, it’s essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.

If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.

Tips to minimise the stress of cash-flow over the holiday period

Invoice early - Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.

Chase payment - use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.

Talk to suppliers - a little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.

Review your costs - it’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.

Talk to the bank or inland revenue - if cashflow is tight, make sure you have conversations early so you have everything in place to see you through.

When you’re planning for a break, book an appointment with us. We can help you navigate the holiday period and help you alleviate cashflow worries. So you get a well deserved break.

 
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Proposed Superannuation Guarantee Amnesty

The Superannuation Guarantee Amnesty legislation has failed to pass the Senate into law. With Parliament not scheduled to sit again until February 2019 and the Federal Opposition opposed to the Amnesty, the fate of the legislation is still very much up in the air.

Under the current law, if you've missed a payment or haven’t paid an employees' super on time, you are required to lodge an SG charge statement.

If passed into law, the proposed amnesty will be a one-off opportunity for employers to self-correct past super guarantee (SG) non-compliance without penalty.

The proposed amnesty is intended to be available for 12 months from 24 May 2018 to 23 May 2019.

To be eligible for the proposed amnesty you will need to have:

  • voluntarily disclosed amounts of SG shortfall or late payments that have not been previously disclosed for any period from 1 July 1992 up to 31 March 2018
  • made the voluntary disclosure within the proposed 12-month amnesty period (between 24 May 2018 and 23 May 2019)
  • not be subject to an audit of your SG for the relevant periods.

Periods from 1 April 2018 won't be eligible for the benefits of the proposed amnesty.

www.ato.gov.au/business/super-for-employers/superannuation-guarantee-amnesty

www.mytaxsavers.com.au 

 

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The Top 10 Time Wasters In Your Working Week

There are 1,440 minutes in a day and each of us have the same allocated amount. Some people manage to achieve much more than others. So, how can we free up time to help lead a better business and ultimately a happier life?

The top 10 time wasters:

1. Lack of clear goals. Planning and setting SMART goals provides clarity. SMART = Specific, Measurable, Attainable or Achievable, and most importantly Time-bound. Have your goals documented and visible.

2. A messy desk. Desk clutter equals mind clutter. Tidy your workspace each day before you leave. Also consider how paperless you are; paper is part of the problem.

3. Procrastination and shifting priorities. Avoid unnecessary pick up and put down. Multitasking is a productivity myth. Plan your day carefully and stay focused; don’t deviate unless it’s really necessary.

4. Interruptions (from humans and technology). Establish ground rules for others, and set yourself clear parameters regarding your technology distractions, e.g. turn off your email notifications and only check emails between tasks. If it’s urgent, they’ll call or tap your shoulder.

5. Ineffective delegation (and abdication). Responsibility and doing are not the same. Invest time in creating clear processes and empower others to do more for you. When delegating a task, responsibility still falls on you… and without a clear process, you are setting someone up to fail which will ultimately reflect poorly on you.

6. Ineffective systems. Mistakes can usually be attributed to ineffective systems. Involve your team to get buy in and LEAN up processes where possible. Eliminate systems that don’t add value; always go back to your purpose.

7. Inability to say 'no'. We are defined not just by what we say yes to, but what we say no to. Planning helps us to say no to things that don’t align with our purpose and goals.

8. Ineffective meetings. Every meeting needs a purpose, an agenda and clear objectives. Stick to the agenda, document outcomes and consider which meetings could be replaced with reporting or an online planning tool (such as Trello).

9. Ineffective email use.Think twice before playing email tennis. Ask yourself: 1.) Is the directive clear? 2.) Is the tone correct? 3.) Is it better to walk five steps to have a conversation?

10. Poor planning. Effective planning has three key components: a one page plan (with goals, KPIs and required actions), regular reporting to ensure continuous improvement, and accountability.

What are your biggest time wasters? Identify your top 3 and take ownership and responsibility to minimise them today!

'Regretting wasted time is wasting more time.' - Anon

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Charitable donations may be tax deductible - here’s what you need to know

Donating to charity not only supports the vital work of an organisation or group, but it can have positive side-effects when it comes to claiming tax deductions. To be eligible for a tax credit, you need to make sure that your contributions meet certain conditions, and that you’re making a legitimate claim.

In general, when a charity is an approved donee organisation or registered as a ‘deductible gift recipient’ (DGR), and you donate over a certain amount, you can claim a tax deduction. You can find out if a charity is a DGR organisation by checking their website, calling them, or searching the register for charities.

But, be careful. There’s a difference between making a donation and making a contribution. When you’re making a donation, you must be doing so willingly, without receiving any ‘material advantage’. This means that you can’t be getting anything in return for your cash. So no chocolate bars, no raffle tickets, no movie tickets and no fancy dinners. If you receive anything after handing over your cash, then this is considered a contribution, and you should not claim this as a tax deduction.

Other situations which are commonly misunderstood to be donations are membership fees, expenses incurred by providing volunteer work (or the value of the time spent doing that work), donating gift vouchers, or money donated through a will.

The last two things you need to know are that a tax deduction for most gifts is claimed in the tax return for the income year in which the gift is made. However, in some circumstances, you can spread the tax deduction over five income years. And, just like any other tax deduction you’re hoping to claim, you’ll need to get and keep the receipt for your donation.

The tax department sometimes demands repayment for ineligible deductions. So, as with all things tax, it’s best to avoid penalties by checking in the with the experts.

Talk to us about your charitable donations and ensure you keep receipts for the payments you have made.

 
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Are you a Slave to Your Business?

Your business is there to serve you; not the other way around. In other words; you should never be a slave to your business.

Being a slave implies a victim mentality - that the world has simply dealt you a bad hand, that you have no say in the matter. Perhaps you hear yourself thinking you’re a slave to your business because your clients need you, or your team can’t cope without you, or maybe the economy is busting, or booming… basically, insert any excuse here as to why you can’t change. But it is exactly that, an excuse.

The OARBED behaviour model tells us we must act above the line; that we must stay out of BED, and take Ownership, Accountability and Responsibility for our actions – and choices. So, what’s stopping you from taking control of your business? What must you do to be a victor?

  • Do you need to start going home on time every night?
  • Do you need to stop accepting work from people who don’t respect your payment terms?
  • Do you need to block out calendar time to respect your health and wellbeing?
  • Do you need to implement 10 strategies to grow your cashflow?
  • Do you need to train and empower your team to do more?
  • Do you need more time to plan?

No more excuses - it’s your business, you make the rules, choose not to be a slave!

Need accountability coaching? We can help you be the master of your business.

‘Success isn’t a result of spontaneous combustion. You must set yourself on fire.’ - Arnold Glasgow

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Have You Explored Deep Work?

Think about a typical day in your office...

Perhaps you chat with colleagues, check email, return phone calls, open a work file, check email again – which leads you to your social media feed… A universe of beeps, rings and pings beckons attention and steals productivity. Distraction is the new normal. The culprit: technology.

Multi-tasking is a misnomer because research shows doing two things at once means each task suffers. One study found a typical office worker gets just 11 minutes between interruptions, while it takes an average of 25 minutes to return to the original task after an interference.

It’s worth asking whether you and your team are giving yourselves the chance to put your mind to important tasks. The author of Deep Work – Rules for Focused Success in a Distracted World, says most serious professionals should quit social media and we should all practise being bored. Professor Cal Newport defines Deep Work as "professional activities performed in a state of distraction-free concentration that push your cognitive capabilities to their limit". That sweet spot, where you’re focused and productive, is often referred to as a 'state of flow'.

Five Ways to Improve Flow

A big project is due. You need to minimise distractions to meet your deadline. You must make minutes count rather than stretch your work hours from here to next Sunday. Here are five ways to get into a state of flow, where you’re ultra-productive and focused:

1) Limit social media.

Cull the feeds you rarely use. Maybe keep LinkedIn but cut Instagram. Are you using your Twitter account, or can you get news another way? If Facebook or another site is stealing too much of your time, curtail its use through technology, with an app like Freedom, https://freedom.to/, which can block internet access for up to eight hours at a stretch. Or StayFocused, a Chrome extension that restricts minutes spent on time-wasting websites. The extension is totally flexible, allowing you to set the amount of time you can waste each day, determine which websites are time-wasters, and decide if you’d like to block certain sites altogether.

2) Give yourself a strict time period to work.

This limits procrastination and prevents burnout. Newport calls working 9-5, with no weekend work, fixed-schedule productivity. The more limits you give yourself, the less time you have for wasting. Deadlines such as ‘I have 90 minutes to finish this business case', or ‘I will finish work by 5.30pm each day’, make it easier to keep yourself on task.

Newport says he doesn’t work past 5.30pm and rarely works weekends yet manages a full-time professor job and writes books.

3) Introduce Deep Work strategies:

  • Monastic: isolate yourself for long periods of time without distractions; no shallow work allowed. This is when you squirrel yourself away in a distant room and tell everyone you’re unavailable
  • Bimodal: reserve a few consecutive days when you’ll work like a monastic. For example, you go to your quiet space Monday through Wednesday, then return to your usual routine of meetings and taking calls the rest of the week
  • Rhythmic: take three to four hours each day to perform Deep Work on your project - this strategy might involve blocking your calendar from 8am-12pm each day so you can work uninterrupted

4) Transition to Deep Work.

Use rituals and set routines to minimise friction in your transition to depth. After you decide on your working philosophy, commit to scheduling Deep Work blocks into your diary and stick to them. Scheduling a specific time of day in advance negates the need to use willpower. Also, know where you’ll work and for how long. Create a zone specifically to perform Deep Work.

5) Drain the shallows.

Confine shallow work so it doesn’t impede your ability to take full advantage of deeper efforts that will ultimately determine your impact.

Use time blocking to schedule every minute of your day, and group tasks into blocks, such as emailing, printing, scheduling meetings, etc. Don’t worry if you tweak your schedule multiple times. The goal is not to be a schedule stickler, but to maintain a say in what kind of work you’re doing.

Economist, philosopher and author, Adam Smith, figured out the value of Deep Work in the 18th century: “The man who works so moderately as to be able to work constantly not only preserves his health the longest but, in the course of the year, executes the greatest quantity of work".

Deep Work improves efficiency. Get in touch if you’d like help with other strategies to increase efficiency in your business.

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