6 Simple steps to better business cash flow in Perth

Whether you already run your own business or are about to start one, cash flow is one of the most important aspects of running your business and you need to ensure you are on top of it at all times, especially when you consider that poor cash flow is the main reason most small businesses fail.  It really is an area you can’t afford to overlook.

To help you we have put together our 6 simple steps to achieve better business cash flow in Perth:

1. Get your invoicing right

Invoicing is a major part of better business cash flow in Perth.  Once you’ve delivered a product or service, don’t delay in issuing an invoice as that can hurt your cash flow and your business.  You should get into the habit of issuing an invoice immediately the job is done.

Consider asking for either an upfront payment or part way through the job.  It’s a reasonable request.

You have already outlaid money for products or services provided to your customers, so the sooner you invoice them, the sooner you’ll receive payment.

2. Keep your books accurate and up to date

Achieving better business cash flow in Perth is reflected in your accounting and reporting, so make sure your records are updated regularly so you can check the financial state of your business at a glance.  If you are struggling to do this consider engaging a bookkeeper for a few hours a week to assist.

3. Keep on top of debtors

Don’t be too lenient with customers who are slow in paying.  A polite yet firm approach will usually deliver results, but don’t be afraid to take more formal action if you need to.  There are a lot of debt collection agencies you can use to assist you.  Sometimes, just knowing that you are on top of your outstanding invoices and prepared to take action is enough to encourage even the most difficult of customers to pay up.

Keep a close watch on your accounts receivable turnover at all times.  If it’s trending up, it might be time to step up your efforts in chasing payments and you should act sooner rather than later.

4. Keep your accounting simple

If you’re not confident about your record and bookkeeping practices, engage an accountant.  Use quality accounting software, so you’ll always know how your business is performing.

What’s more, a reliable accounting system will help you track and report on operating margins and inventory turnover.  Having a good handle on this will help you achieve better business cash flow in Perth – and take advantage of new opportunities.

5. Keep your business and your personal finances separate

This is essential if you want to understand your business cash flow and forecast how it might change.  That way, you’ll know how financial your business is and you’ll be in a good position to use excess resources to strengthen and grow your business.

6. Try to set aside some funds

Access to reserved funds will make or break your business, so set aside some funds so that you can take advantage of new opportunities as they arise.  This will also provide a cushion if you need to manage unexpected events.

Building a reserve of funds puts you in a position of strength.  To achieve this, you may need to pay yourself a little less in the short term, but in the long term it will put your business on the path to success.  That ultimately means more money in your pocket.

So, if you run a business and want help to achieve better business cash flow in Perth contact the experts at BSN & Co.  We will be happy to help.

Most people accept that if they run a business they’ll need an accountant, yet when it comes to their individual tax situation, they are not so keen to do the same.  Of course, you can get your tax returns done on the cheap to meet your legal obligations, but why not pay that bit extra and engage an accountant to get the best possible outcome?

Doing your own tax returns is a personal choice, usually influenced by how many income streams you have.  If you have one job and only have simple investments, preparing your own tax returns may be fairly straightforward.  However, you risk missing out on claiming deductions you may not be aware of as tax laws are complex and subject to change.  This is one good reason why you should engage an accountant in 2016.

So why should you engage an accountant in 2016?

1. You may not be making the most of your tax position

Australia has one of the most complex tax systems in the world, therefore the chances of you knowing everything you can claim for are unlikely.  This means that you may pay less tax if you engage an accountant to do your tax returns.  They can also advise you on the best way for you to make additional savings in the future.

2. You might not be keeping complete records

Let’s face it, none of us want to get into trouble with the ATO, therefore it’s essential to ensure that you are keeping all necessary paperwork and that everything is kept together.  A good accountant will be able to advise you on what records you need to keep and for how long.

3. Extra benefits

An accountant can also advise you about your personal finances.  They will get to know you and your finances well, therefore they are perfectly placed to discuss the benefits of, for example, investment properties, family trusts, capital gains tax etc.

4. Stress free lodgements

Last, but certainly not least, when you engage an accountant they will ensure that you are aware of all necessary deadlines so that you are not faced with any late lodgement penalties.  For those of you who are juggling busy work and personal lives, this will reduce stress at the end of the financial year.

The Bottom Line

If you are looking for an easy quick fix at tax time, there are plenty of options out there.  However, in order to get the most out of your claims, you need to be organized and have a good accountant on your side.  This will free you up so you can get on with attending to other important things in your life.

So, if you are looking for an accountant and want to benefit from expert advice to help minimise your tax liabilities, speak to us today.

7 simple steps to pay less tax in 2016

If you want to pay less tax in 2016, the secret is knowing what to do.  We have outlined below 7 easy ways to cut your tax bill in 2016.

As much as it’s possible to pay less tax in 2016, it is not something you can do a few weeks prior to the end of the tax year.  Reducing your tax liability takes careful planning and requires you to take action now to ensure you minimise the tax you have to pay.  This is where speaking to a professional is essential.

They will advise you as to what can or cannot be claimed and, most importantly, they can tell you when any action needs to be taken.  Here at BSN & Co we have helped many clients reduce their tax.

1. Government co-contribution:  If your total income is $35,454 per year or less, you are less than 71 years of age and you make a $1,000 after-tax contribution to your super fund, the government will contribute $500 to your fund.  The amount of government co-contribution reduces for every dollar you earn over $35,454 and ceases once your total income reaches $50,454.
2. Spouse contributions:  If your spouse is under 70 years of age and earns less than $10,800 per year, you can make a $3,000 after-tax contribution to their super fund.  This will qualify you for a tax offset of $540.
3. Salary sacrifice:  This means making a super contribution from your gross (pre-tax) salary.  Your salary sacrificed super contributions are taxed at 15% in the fund instead of at marginal rates.  At the same time, by reducing your taxable income you may move to a lower income tax bracket which will help you pay less tax in 2016.
4. Tax deductible contributions:   If you are fully self-employed, mostly self-employed or an unsupported person (no super is being paid on your behalf), you can make contributions to your super fund and claim a full tax deduction up to the cap.  This strategy may be appropriate if you have made a considerable capital gain from the sale of a property or shares because this deductible contribution to your super fund may offset this assessable gain.
5. Insurance premiums:  Some insurance premiums, such as those for income protection cover, are generally tax deductible as an expense incurred in earning your income.  This is a great way to protect yourself and your family and allow you to pay less tax in 2016.
6. Managed funds:  These distribute capital gains which you must report.  Timing of the sale of an investment will determine which year the capital gain or loss is assessed, so triggering a gain/loss before or after 30 June may make a difference to your overall tax bill.  This is why it is important, before continuing, that you consult with your tax adviser so they can best advise you on how to pay less tax in 2016.
7. Prepayments:  An individual can claim a deduction for prepaid expenditure for a period not exceeding 12 months.  The most common types of prepayments include:

• Income protection insurance
• Interest on investment loans for share portfolios and/or rental properties
• Memberships and/or subscriptions
• Rental property expenses such as insurance, rates, repairs and maintenance and strata fees

Our Tax Accountants at BSN & Co regularly advise clients who work in a range of industries.  If you need assistance with tax planning in 2016, we are offering a 20% discount off your last accountancy fee when you switch to BSN & Co.  Contact us by completing the form opposite.