10 Housekeeping tips to improve business performance in Perth

To ensure success in the new financial year, you can do some basic housekeeping to improve business performance in Perth.  There is a lot of planning that goes into running a successful business, so with just a little forethought you can make life easier for yourself.  Check out our top 10 tips to set you up for a good new financial year.

1. Revisit your business plan

When was the last time you looked at, let alone updated, this critical business plan?  Take the time to review it and think about how your business has changed and how this needs to be reflected in your business plan.

2. Set your business goals

What do you want to achieve this year?  What do you need to change or implement to ensure you achieve your goals?  Be specific so you can actually measure results and see whether you can accomplish them by year’s end.  Also make sure you schedule regular reviews to see how you are tracking in relation to your business goals.

3. Build a marketing plan

If you want to grow you need more customers and if you want more customers you need people to know about you.  Therefore it’s essential you plan how and when you are going to promote your business.  It is also essential that you have money available to spend on business promotion if you are to succeed.

4. Consider your hiring needs

If you plan to grow your business consider whether you need additional staff.  Take the time to plan ahead while time permits – this will give you plenty of time to find the right people before things get too busy.

If your budget is tight, consider hiring casual staff instead of full time staff.

5. Invest in technology

If you’ve been putting off purchasing new technology for your business to keep costs down, this could be a false economy.  If it will assist you to deliver a better service more efficiently, then it may be worth the investment.  Look at your cashflow then consider your options – is it worth getting a loan to help spread the payments to ensure you have cash in reserve, or can you lease or hire equipment in the short term?

6. Make sure you know what’s going on in your industry

Every year you should take the time to research what’s happening in your industry to keep up with changing technology, market demands and new competition in the market.  All this information ensures you can stay on the front foot and plan for changes in the near future should they be necessary.

7. Reassess your online brand

Google yourself!  Check out your website – does it need refreshing?  Also consider what worked for you in terms of marketing this year.  This is a great time to tweak your online strategy so that you identify the tools that helped your business grow and cut back on those that didn’t.

8. Get organized

If you’re like a lot of business owners, your desk is cluttered and so is your computer desktop.  Spend a few hours cleaning up and discarding things you don’t need.   Also tidy up your computer files.  This will not only make things easier to find but also save you time and stress.

9. Refresh your employees’ skills

Now is an ideal time to offer supplementary training to your staff to refresh their skills or develop new ones.  For example, perhaps they could update their computer skills and knowledge of your software management systems.

10. Get smarter

Your employees aren’t the only ones who could learn more.  Are there any skills you are lacking?  Is there anything that could make your business more successful?  Try to regularly read industry blogs, books, magazines etc to remain up to date with the trends in your industry.

If you would like support in achieving your business goals, call us today on 08 9204 3733 for an obligation free meeting and business review.

The start of the new financial year is a great time to review your business activity during the previous year and use what you have learned in order to plan for the new financial year.  Here are some tips to make the planning more productive.

Get your team involved

Business planning works best when it’s a team effort.  Involve your key staff and your advisors such as your accountant, your mentor (if you have one), plus others who can contribute meaningfully to the planning (e.g. an IT expert if you envisage a major website overhaul).

Hold a planning meeting and invite people to discuss all their ideas and suggestions; also, try to hold the meeting away from the business to avoid distractions and interruptions that daily activities can create.

Review your business

Start with a review of your business as it currently stands, focusing on three key questions:

• Which things that work well for us at the moment should be kept?
• What’s not working − what should we drop or do less of?
• What has the most business potential for the future?

Decide on changes

Combined thinking with your staff may produce some required changes.  For example, when planning for the new financial year you may need to change your existing products and services, seek new markets or distribution channels, or change your business model entirely.

While these changes require a general consensus, bear in mind that resistance can arise when people feel that their comfort zones or their jobs are being threatened.  Address these issues right at the start.

Figure out capacity

Any changes will likely require some investment in new skills, new products or services, or changes in capacity.  If so, ask your accountant to complete a return on investment (ROI) analysis.  This will enable you to calculate how much extra business needs to be generated for a reasonable return and whether extra staff and/or funds are required for the anticipated growth.

Get everyone on board

So you’re planning for the new financial year and have established where you want to take the business.  Concentrate on the next 12 months by setting some end-of-year goals, then work backwards to create the stepping stones that will take you there.  Your role now is to get everyone on board by clearly communicating the plan to them.

Consensual goals are more motivating than imposed goals, so get at least your key staff involved in the goal setting.  Immediate goals are easier to focus on than longer-term goals, so make sure each person understands what is required from them this week, this month, this quarter and so on.

Maintain the focus

Business planning is done at the beginning of the year when optimism and motivation levels are high, but this can fade quickly when staff become caught up in their daily activities and new projects.

Business goals will be overlooked unless you set regular meetings to review progress – say every 90 days.  Once your staff realise that they will be required to  attend and provide progress reports, they will be more motivated to maintain their focus.

If you are looking for help in planning for the new financial year why not speak to the experienced team of professionals at BSN & Co?  We can assist you develop a strong plan based upon a review of your activity last year and your goals for this year.  Call us today on 9204 3733 for an obligation free meeting.

We regularly publish brief notes of advice/comments on tax topics plus related matters in “dot point” format for you to skim through and consider.  Hopefully these will be of interest to you:

• Company tax rate for ‘small business’ (SBE) companies reduction from 30% to 28.5%, effective 1 July 2015, was announced in the budget.

• The highest marginal tax rate is being increased by 2.0% for what is described as a “temporary (3 year) budget repair levy” and with the increased Medicare levy those earning over $180,000 will pay 49%!

• The Medicare levy was increased to 2.0% from 1 July 2014 to fund the National Disability Insurance Scheme.

• The medical expense rebate is being phased out in 2015 – only available in 2014/2015 to those taxpayers who claimed in 2013/2014.

• The superannuation guarantee charge remains at 9.5% until 30 June 2021, increasing 0.5% every year thereafter.

• Employers who engage contractors where the contract is wholly or principally for the contractor’s labour are still required to make superannuation guarantee payments on behalf of the contractor, even though he or she may quote an Australian Business Number (ABN).

• Overnight work related travel within Australia – a travel diary is only required for extended travel (more than five continuous nights) where the travel is not undertaken exclusively for employment purposes – i.e. there is a private use element to the travel.

• Overnight work related travel overseas – a travel diary is required where travel is for more than five continuous nights.

(In both “overnight work” cases written evidence of airfare and accommodation costs are nevertheless required.)

• Borrowers with tax deductible interest may pre-pay up to twelve months’ interest and claim a deduction for the pre-payment (available to small business entities and non-business individuals).

• The ‘two year’ CGT rule in respect of dwellings bequeathed is measured from the date of death to the date the beneficiary ceases to legally own the dwelling – i.e. the date of settlement, not the date the sale contract is signed!  This contrasts with the CGT position on acquisition or disposal of investments where the contract date is the relevant date for CGT purposes and not the date of settlement!

• The ‘two year’ rule, if exceeded, is no longer applicable; it is not pro-rated!

Traditionally, 30 June each year brings forth a rash of initiatives through which the level of taxation for the current financial year may be reduced.  Consult your tax advisor about the following:

Timing of Income

Where possible, defer receipt of income until after year end.

Timing of Expenses

Where possible, incur expenses prior to year end.

Bad Debts

Review debtors and, where debts are unrecoverable, physically write off before year end to claim a tax deduction.

Trading Stock on Hand

Scrap any obsolete or damaged stock by year end.

Superannuation

Ensure payments for employees or by self-employed persons are physically made (and received) on or before year end.

Pre-payments

Immediate deductions are available for:

• Pre-payment of salary;
• Expenses <$1,000;
• Individuals, for non business expenses incurred on or before 30 June for the next twelve months – e.g. interest on rental property.

Superannuation Rebates

Contributions made on behalf of a low or no income spouse of up to $3,000 can attract an 18% rebate – i.e. $540.

Superannuation Co-contributions

The Government will contribute up to a maximum $500 to add to eligible employees’ personal contributions to superannuation funds of up to $1,000, subject to an assessable income (reportable fringe benefits, reportable employer superannuation contributions and salary sacrifice superannuation contributions) limit of $34,488, phasing out at $49,488.

Motor Vehicle Expenses

Where significant employment or business use of a personal motor vehicle is claimed, maintain a log book for twelve weeks to maximise the tax deduction and keep records of all expenses.  The log book must be renewed every five years.

Record the financial year end odometer reading.

Small businesses (turnover <$2m) can claim an instant deduction for motor vehicles used for business 100% and costing up to $20,000 if purchased between 1 May and 30 June 2015.

Plant and Equipment

Review your asset schedule to scrap obsolete, worn out, lost or stolen items to maximise your depreciation claim.

Delay the disposal of any plant and equipment likely to be profitable in terms of written down value until 1 July.

Small businesses (turnover <$2m) can claim an immediate deduction for assets acquired, first used or installed ready for use between 12 May and 30 June 2015, costing under $20,000 (GST exclusive).

Home Office Expenses

If carrying on a business from your home, pro rata tax deductions for interest or rent, insurance etc are available but impact on the main residence exemption from capital gains tax.

Directors / Employees’ Entitlements

Ensure any 2015/2016 salary packaging arrangements are in place before the commencement of the new tax year.

Bonuses and fees for the 2014/2015 year need to be approved at meetings and in place prior to 30 June 2015.

Private Company Loans

Any loans to shareholders or associates during 2013/2014 need to be repaid on or before 30 June 2015, unless a formal loan agreement is in place.

Sale of Investments

Delay the sale until after year end where a gain is anticipated to defer tax for a year.

Crystallise any capital losses in the tax year to offset against any gains made in the same year.

Timing of disposal under a contract for capital gains tax purposes is generally the date of making the contract, not settlement.

 Capital Gains Tax Concession

Assets need to be held for at least twelve months to access the 50% discount for individuals and trusts and the 33⅓% discount for superannuation funds.

Ceasing Business / Sale Business Assets

Consider redundancy payments for employees.

Plan “golden handshake” payments for after the tax year end.

Small business capital gains tax relief measures may be available for:

• 15 year exemption
• 50% reduction
• Retirement exemption
• Replacement asset rollover

PAYG Payment Summaries

Summaries and summary statements for employees are required by the Australian Taxation Office by 14 August, otherwise substantial penalties apply.

Superannuation Fund Expenses

All expenses of a fund ought to be paid by the fund in order to claim a tax deduction.

Depreciable Plant Costing $300 or Less

Salary and wage earners and rental property owners will be entitled to an immediate deduction if plant for work related purposes costing $300 or less is purchased before 1 July 2015.  Some purchases you may consider include:

• Beepers and pagers;
• Books and trade journals;
• Briefcases/luggage or suitcases;
• Calculators, electronic organisers;
• Software;
• Stationery; and
• Tools of trade.

Clothing Expenses

Purchase or pay for work related clothing expenses prior to the end of the income year, such as:

• Compulsory, non-compulsory (and registered) occupational specific and protective clothing;
• Other expenses associated with such work related clothing such as dry cleaning, laundry and repair expenses.

Self -education Expenses

Consider pre-paying the following self-education items before the end of the income year:

• Course fees (but not HELP fees), student union fees and tutorial fees;
• Interest on borrowings used to pay for any deductible self-education expenses.

Also bring forward purchases of stationery and text books (i.e. those which are not required to be depreciated).

Other Work Related Expenses

Employees can pre-pay any of the following expenses prior to 1 July 2015:

• Union fees;
• Subscriptions to trade, professional or business associations;
• Magazine and newspaper subscriptions;
• Seminars and conferences;
• Income protection insurance (excluding death and total/permanent disability).

Note:  When pre-paying any of the above expenses before 1 July 2015, ensure that any services are provided within 12 months of the payment and before 1 July 2016.  Otherwise, the deductions must be claimed over the period of the pre-payment.  Any expense under $1,000 is exempt from pre-payment rules.

Five steps to save time and money in the new financial year

The end of the financial year is a great time to review the past year of your business and make changes to set yourself up to save money in the new financial year.  We have listed 5 key things that you can do now to improve your performance in the next financial year.

1. Review monthly subscriptions and pay annually before the end of the financial year

Pay as many of your expenses before the end of the financial year to minimise your tax bill.  By paying annually rather than monthly, you will usually save yourself money and it’s surprising how quickly it all adds up. Most companies offer a 10% discount for upfront payment. First, check that you use the service and will be continuing your subscription.  Can you get a better deal by using another company and save money in the new financial year?

This is also the perfect time to review other services you are paying for.  Do you still use them? Are there any you can cancel?  It’s easy to forget about the odd $20 or $50 per month subscriptions but they all add up and if you are no longer using the service this can be a great way to cut costs.

2. Consider cloud accounting for the new financial year

There are lots of cloud accounting options to choose from, all come with different add-on’s and facilities, so there is bound to be one that is right for you and your business.  Cloud accounting software is a great way to save time and money on your accounts and makes managing your finances easier than ever before.

With packages from just $40 per month it’s not a big investment. Time and cost savings on your account preparation will easily outweigh the cost of the service.

Cloud accounting software also provides you with a range of reporting and monitoring tools that will make managing your business far easier and help you improve your business performance.

Some key benefits

• No spreadsheets and end of year panic
• Better communication and up to the minute advice from your accountant
• Real-time reporting and knowing exactly where you are financially
• Being able to access your accounts, invoice for work and reconcile your accounts anytime, anywhere using any device that can connect to the internet.

3. Outsource those small, nagging projects

Start the new financial year on the right foot.  Get all those little projects completed before the end of the financial year or hire someone to do them for you early in the new financial year.  This will save you time and effort trying to fit these in around managing your business, leaving you free to focus on growing and improving your business.

4. Purchase any small assets or consumables

Are there any purchases you need to make for the new financial year?  Now is a great time to make them as they can be claimed on this year’s tax.  Think through all of your business processes.  Could you do them more efficiently and effectively by investing in new technology or tools?  If so, now is the time to purchase them to save money in the new financial year.

5. Review your financial position and plan for next year

Now is the time to lay down your plans for the new financial year.  What do you want to achieve, where do you want your business to be this time next year?  Meeting with your accountant can be a great way to get assistance in making a proper plan for maximising your chance of success.  This is also the perfect time to review your achievements from last year.  What went well, what could have been done better?  Learn from your experience and let it inform your plans for the new year.

This is also a great time for a financial health check – plan your cashflow for the new year, identify any potential shortfalls and plan for them now.

Set yourself up for your best financial year yet!  If you want to discuss your business, your plans and how we can assist you to achieve them, call us today for a free business and financial health check on 9204 3733 or fill in the form below and we will contact you.