S & H Tax Accountants

Category: Accounting

Understanding the Deadline for Individual Tax Returns in Australia
Understanding the Deadline for Individual Tax Returns in Australia

Each year, Australian residents are required to lodge their individual income tax returns with the Australian Taxation Office (ATO). Understanding the due dates and associated rules is crucial for staying compliant and avoiding penalties.

What Is the Deadline for Lodging an Individual Tax Return?

In Australia, the standard deadline for lodging an individual tax return is 31 October following the end of the financial year, which runs from 1 July to 30 June. For example, for the 2024–25 financial year (which ends on 30 June 2025), the deadline for lodging a return is 31 October 2025.

What If You Miss the 31 October Deadline?

If you miss the deadline and haven’t arranged to lodge through a registered tax agent, you may face penalties or interest on any tax owed. However, the ATO generally applies penalties at its discretion and considers factors such as:
- Whether you have a history of late lodgements
- Whether you are owed a refund
- The reasons for the delay
Using a Registered Tax Agent

One way to extend your lodgement deadline is to engage a registered tax agent. If you do so before 31 October, your agent can often secure an extended deadline on your behalf—sometimes as late as May the following year, depending on your circumstances and whether you have outstanding prior-year returns.

However, you must be on the tax agent’s client list before 31 October to qualify for this extension.

Early Lodgement and Pre-filling

While the financial year ends on 30 June, tax returns can generally be lodged from 1 July onward. However, many individuals wait until late July or early August to lodge, allowing time for income data (e.g., from employers, banks, and government agencies) to be pre-filled by the ATO. This can reduce the likelihood of errors and the risk of audit.

Key Takeaways
- 31 October is the main deadline for lodging individual tax returns if lodging yourself.
- Using a registered tax agent can extend your lodgement deadline.
- Lodging early is possible, but pre-filled data may not be fully available until later in July.
- Late lodgement may attract penalties, but the ATO can apply discretion.
Final Tip

If you need to lodge your Tax Return, contact S & H Accountants now. We have a wonderful team that consists of well qualified, extremely professional and vastly experienced. If you’re unsure of your obligations or feel overwhelmed, consulting with S & H Accountants is the best idea. Staying informed and organized is the best way to ensure you meet your tax obligations without stress. Contact S & H Accountants today on 03 8759 5532 or you can email us on info@sahtax.com.au
12/05/2025
Australian Securities and Investment Commission (ASIC)
The Australian Securities and Investments Commission (ASIC): Ensuring Fair and Transparent Financial Markets

The Australian Securities and Investments Commission (ASIC) is the national regulatory authority responsible for overseeing and regulating financial markets, institutions, and consumer protection in Australia. As one of the key pillars of Australia’s financial regulatory framework, ASIC plays an essential role in maintaining the integrity and stability of the country’s financial system. This article will explore ASIC’s key functions, responsibilities, and impact on the Australian financial landscape.

Overview of ASIC

ASIC was established in 1998 following the consolidation of several earlier regulatory bodies. It operates under the Australian Securities and Investments Commission Act 2001 and reports directly to the Treasurer of Australia. The Commission’s headquarters are located in Sydney, with offices across the country, ensuring its ability to supervise and regulate Australia’s diverse and dynamic financial environment.

ASIC is an independent statutory body that is empowered to enforce laws and regulations, monitor financial markets, and protect investors. It has broad authority over a range of financial entities and activities, including stock exchanges, investment banks, insurance companies, financial advisers, and superannuation funds.

Key Functions and Responsibilities

ASIC’s role is multifaceted, but its key responsibilities can be broadly categorized into regulation, enforcement, and consumer protection.

1. Regulation of Financial Markets

ASIC oversees Australia’s financial markets to ensure that they operate fairly, efficiently, and transparently. It is responsible for enforcing market rules that promote integrity and prevent market manipulation, insider trading, and other unethical practices. ASIC works closely with other regulatory bodies, including the Reserve Bank of Australia (RBA), Australian Prudential Regulation Authority (APRA), and Australian Competition and Consumer Commission (ACCC), to maintain a stable financial environment.

One of ASIC’s most important roles is its oversight of the Australian Securities Exchange (ASX), the primary securities exchange in Australia. The Commission ensures that listed companies comply with corporate governance rules, disclosure requirements, and financial reporting standards. It also monitors trading activities to detect and prevent illegal practices like insider trading and market manipulation.

2. Financial Services Licensing and Supervision

ASIC is responsible for granting licenses to financial services providers in Australia. This includes investment advisers, brokers, fund managers, and insurance companies. To receive a license, these entities must demonstrate compliance with rigorous standards relating to honesty, competence, and financial soundness.

Once licensed, financial service providers are subject to ASIC’s ongoing supervision. This includes ensuring they adhere to Corporations Act provisions, such as those concerning disclosure of fees, conflicts of interest, and fiduciary duties. ASIC also works to ensure that these businesses maintain appropriate conduct when dealing with investors and consumers.

3. Consumer Protection

One of ASIC’s central objectives is to protect consumers from financial harm. This includes safeguarding individuals from misleading financial advice, fraudulent investment schemes, and other unfair practices. ASIC enforces strict rules governing advertising and financial promotions to ensure they are not deceptive or misleading.

ASIC also educates consumers about their rights and responsibilities in financial transactions. It provides resources on topics such as investment risk, superannuation, credit, and financial literacy. Its MoneySmart website is a key tool for empowering Australians with the knowledge to make informed decisions about their finances.

In addition, ASIC handles consumer complaints and disputes regarding financial services. It has the authority to take action against businesses that engage in unethical conduct or fail to meet their obligations under the law.

4. Enforcement of Financial Laws

ASIC is empowered to take enforcement action against individuals and entities that violate Australian financial laws. This includes initiating investigations into suspected corporate wrongdoing and bringing enforcement actions before the courts.

ASIC’s enforcement powers are broad and include penalties such as fines, disqualification from director positions, and criminal charges. It can also take civil action to seek financial compensation for affected investors. Over the years, ASIC has successfully prosecuted high-profile cases involving corporate fraud, market manipulation, and breach of fiduciary duties.

ASIC’s Approach to Regulation

ASIC employs a risk-based approach to regulation. This means it prioritizes its efforts based on the potential risk posed by financial products, services, and practices. By identifying areas of high risk, ASIC can allocate its resources effectively to protect investors and ensure the stability of the financial system.

ASIC has also embraced technological advancements and modern regulatory practices. For example, it has adopted data analytics tools to monitor market behavior in real time and identify unusual trading patterns. Additionally, it is increasingly focused on fintech (financial technology) and regtech (regulatory technology), leveraging technology to streamline regulatory processes, improve compliance, and promote innovation in the financial services industry.

Key Achievements and Challenges

Achievements:
- Stronger Corporate Governance: Through its oversight, ASIC has contributed to significant improvements in corporate governance standards across Australian companies. It has worked to ensure that listed companies meet high standards of transparency and accountability in their financial reporting.
- Prosecution of Financial Misconduct: ASIC has led numerous high-profile legal actions against entities involved in financial misconduct, including corporate fraud, insider trading, and breaches of duty. This enforcement has sent a strong message that financial misdeeds will not be tolerated.
- Investor Education and Protection: ASIC’s commitment to consumer education through initiatives like MoneySmart has empowered Australians to make better financial decisions and protect themselves from scams and fraud.
Challenges:
- Adapting to Technological Change: The rise of fintech and cryptocurrency markets has presented new regulatory challenges for ASIC. It has had to adapt its regulatory frameworks to keep pace with these emerging technologies while ensuring the protection of consumers and the integrity of financial markets.
- Resource Constraints: Despite its broad mandate, ASIC has sometimes faced criticisms about insufficient resources to tackle the scale and complexity of its regulatory responsibilities. Some stakeholders argue that ASIC could do more to prevent misconduct before it happens, rather than reacting after the fact.
ASIC in the Global Context

ASIC is an active participant in the international regulatory community. It is a member of key global bodies such as the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB), and it works collaboratively with regulatory authorities in other countries. This international cooperation is particularly important given the increasingly global nature of financial markets and cross-border financial crimes.

Conclusion

The Australian Securities and Investments Commission (ASIC) plays a crucial role in maintaining the integrity, stability, and fairness of Australia’s financial markets. Through its regulatory oversight, enforcement activities, and commitment to consumer protection, ASIC ensures that financial markets operate efficiently and transparently. While the challenges facing ASIC are evolving, particularly with the advent of new technologies, the Commission remains an essential body for safeguarding the interests of Australian investors and consumers, ensuring a robust and well-functioning financial system for the future.
14/01/2025
What is Accounting
What is Accounting?

Accounting is the process of recording, classifying, summarizing, and interpreting financial transactions to provide useful information for decision-making. It serves as the language of business, enabling organizations, investors, managers, and regulators to understand financial performance and position. Accounting involves the preparation of financial statements such as the balance sheet, income statement, cash flow statement, and statement of changes in equity. These statements help stakeholders make informed decisions about the allocation of resources, investments, and strategic direction.

Accounting can be divided into several branches:
1. Financial Accounting: Focuses on the preparation of financial statements for external users (such as investors, creditors, and regulatory bodies).
2. Management Accounting: Involves the analysis of financial data for internal management purposes, helping businesses with budgeting, cost control, and performance analysis.
3. Tax Accounting: Deals with preparing tax returns and ensuring compliance with tax laws.
4. Forensic Accounting: Involves investigating financial discrepancies, fraud, or disputes.
5. Auditing: Entails the independent review of financial statements to ensure accuracy and compliance with accounting standards.
Advantages of Accounting

Accounting offers several benefits that contribute to the effective management of businesses and organizations:
1. Informed Decision Making: Accurate accounting records provide a solid foundation for decision-making. Financial reports allow business owners, managers, and investors to analyze past performance, forecast future trends, and make strategic choices based on solid data.
2. Compliance and Legal Protection: Accounting ensures that a business complies with regulatory requirements. Accurate financial records help businesses avoid penalties for tax fraud or misreporting. Proper accounting also protects companies in case of legal disputes, as financial statements can serve as evidence.
3. Financial Control and Planning: Accounting helps businesses control costs and plan for future expenses. By tracking income and expenditures, managers can identify inefficiencies, reduce waste, and allocate resources more effectively. It also helps with budgeting and setting financial goals.
4. Attracting Investors and Funding: Investors and lenders require clear, well-organized financial statements to evaluate the financial health of a company. A solid accounting system builds trust and transparency, making it easier to attract investment and secure loans.
5. Improved Financial Transparency: Accounting promotes transparency by ensuring that financial information is systematically recorded and reported. This helps maintain accountability to stakeholders, from investors to regulatory bodies.
6. Business Performance Measurement: Accounting provides various tools, such as profitability ratios and return on investment (ROI), to measure and evaluate a business’s performance. This helps business owners assess whether they are achieving their financial goals and where improvements can be made.
Disadvantages of Accounting

While accounting offers many benefits, there are also some limitations or challenges that businesses may face:
1. Complexity: Accounting can be complex and requires a deep understanding of financial principles, tax laws, and regulatory requirements. Small businesses without dedicated accounting professionals may find it difficult to maintain accurate financial records.
2. Cost of Implementation: Implementing an effective accounting system can be costly, particularly for small businesses. Costs can include software, accounting staff salaries, training, and compliance with regulatory standards (e.g., GAAP or IFRS).
3. Risk of Human Error: While accounting systems are designed to reduce errors, mistakes can still occur. A miscalculation, inaccurate data entry, or failure to follow correct accounting procedures can lead to significant financial discrepancies.
4. Time-Consuming: Accounting tasks such as preparing financial statements, managing payroll, and reconciling accounts can be time-consuming. For small businesses, this may take valuable time away from other essential activities, such as sales, marketing, or customer service.
5. Depersonalization of Decision-Making: An over-reliance on accounting data may lead to decision-making that focuses too much on numbers and not enough on qualitative factors such as customer satisfaction, employee morale, or market trends. Some argue that financial data can sometimes obscure the broader picture.
6. Potential for Fraud or Manipulation: Though accounting systems are designed to maintain accuracy and transparency, they can be vulnerable to manipulation. Companies may engage in “creative accounting” practices to inflate profits, hide losses, or evade taxes, which can mislead stakeholders and harm the business in the long run.
7. Limited Scope: Accounting, while essential, does not provide a comprehensive view of all business aspects. It primarily focuses on financial transactions and may overlook factors like employee engagement, brand equity, or customer loyalty, which are also critical to long-term success.
Conclusion

Accounting is a vital function in any business, helping to ensure financial accuracy, legal compliance, and informed decision-making. It provides valuable insights into financial performance, aids in managing costs, and plays a key role in attracting investors and securing funding. However, it is not without its challenges. If you need assistance with any tax or accounting obligations, contact S & H Tax Accountants, call us on 03 8758 5532 or you can email us on info@sahtax.com.au
28/11/2024
Mastering the basics: A guide to accounting principles for small business owners
As a small business owner, you know that managing your finances is crucial to the success of your business. But with so many accounting principles and practices out there, it can be challenging to know where to start. That’s where we come in! In this guide, we’ll break down the essential accounting principles that every small business owner should know. We’ll discuss how these principles can help you keep track of financial transactions, create accurate financial statements, and make informed decisions for your business. So, let’s dive in, shall we?

Why Are Accounting Principles Important for Small Businesses?

Accounting principles are the foundation for any successful business. They provide a uniform framework for recording and reporting financial transactions, ensuring consistency and accuracy in your financial records. By adhering to these principles, you’ll be able to:
- Make better financial decisions based on accurate and reliable data
- Monitor your business’s performance and identify areas for improvement
- Meet legal and regulatory requirements for financial reporting
- Build trust with investors, lenders, and other stakeholders
Let’s explore some of the key concepts you need to know.

IFRS: International Financial Reporting Standards

International Financial Reporting Standards (IRFS) – as the name implies – is an international standard developed by the International Accounting Standards Board (IASB).

IFRS is used in more than 110 countries around the world and is a set of principles that help companies around the world show their financial information in a clear and consistent way. Think of it like a common language for money matters, so everyone can understand and compare how businesses are doing financially, no matter which country they’re from.

Accrual Accounting vs. Cash Basis Accounting

When it comes to accounting methods, there are two main options: accrual accounting and cash basis accounting.

Accrual Accounting is the more widely accepted method, where you record transactions when they are earned or incurred, regardless of when cash changes hands. For example, if you invoice a client for services provided in December but don’t receive payment until January, you would record the revenue in December under accrual accounting.

Cash Basis Accounting, on the other hand, records transactions when cash is received or paid. In the example above, you would record the revenue in January when the payment is received.

Double-Entry Accounting: The Backbone of Financial Record-Keeping

Double-entry accounting is a fundamental accounting principle that requires every transaction to be recorded in at least two accounts: one as a debit and one as a credit. This system ensures that your books are always balanced and makes it easier to detect errors or discrepancies in your financial records.

Here’s a simple example: When you purchase inventory for your business, you would record the transaction as a debit to your inventory account and a credit to your cash account.

By using double-entry accounting, you’ll have a clear and accurate picture of your business’s financial position, allowing you to make better financial decisions.

Practical Examples and Case Studies

To illustrate how these accounting principles can be applied in practice, let’s look at a few real-life examples:
- Example 1: A local coffee shop owner uses accrual accounting to record sales and expenses. They track their daily sales and expenses, recording them as they are earned or incurred, rather than waiting for cash to change hands. This allows them to monitor their cash flow and make informed decisions about purchasing inventory, hiring staff, and investing in new equipment.
- Example 2: A freelance graphic designer uses cash basis accounting for their business. They record income when they receive payments from clients and expenses when they pay for software, supplies, or other business costs. This simple approach helps them stay on top of their cash flow and ensures they have enough money to cover their expenses.
Becoming knowledgeable in accounting principles has the power to transform the way you run your small business. A strong grasp on your financials enables you to make informed decisions and accelerate revenue growth.

If you need assistance, we’re here to help.

When choosing accounting methods, it is essential to choose the one that suits your business. As for small businesses, the cash-basis accounting method can be quite effective, however large businesses tend to use the accrual accounting method to manage their transactions. If your business needs assistance in deciding which accounting method would be more appropriate for them , please contact S & H Tax Accounting. Our team of accountants are well-qualified and rather experienced, we aim to provide the best service to our customers. Please book an appointment today, call us at 03 8759 5532 or you can email us at info@sahtax.com.au
05/06/2023
What is a balance sheet and how does it help me manage my finances?

You’ve likely heard the phrase “in the black.” Your balance sheet is the tool that shows you whether your business is indeed “in the black.”

Your balance sheet includes a section for your assets (things you own or will receive that have value), your liabilities (what you owe to others) and equity (retained earnings and funds from investors) at a specific time. The relationship between these three sections shows how financially healthy your company is. If your assets outweigh your liabilities, you’re in the black. However, if you have more liabilities than assets, you’re in the red – which is undesirable.

But how does a balance sheet help you to manage your finances? Read on to find out.

Track your assets and liabilities over time

Most companies prepare a balance sheet quarterly, but you can certainly complete yours more or less frequently than that. The key is to prepare one regularly to understand how you perform over time.

When you have a set of successive balance sheets, you can clearly see how your assets and liabilities measure up on average. For example, you may have had a costly period with critical equipment requiring replacement or repair. That balance sheet might not look so good if that’s the only one you have to interpret.

But when measured against other balance sheets, you may see that it was just an anomaly from which you have handily recovered. Perhaps the improvements even helped you to earn more money once they were complete. There’s no way to know unless you use several balance sheets together.

Measure risk

Your assets act as security for your business because if you found yourself in a situation where you had to, you could sell them to cover your debts. This is how you determine how liquid your business is. Your balance sheet easily identifies how much you own and how much you owe, so you have an easy way of assessing your liquidity.

This also enables you to determine how much risk your business faces. If you find you couldn’t readily pay what you owe by liquidating your assets, it would be clear that you couldn’t currently take on any more risk by borrowing money or buying something new.

Calculate decisions

Similarly, your balance sheet will help you see if now is a good time to spend your money or if you should hold off. For example, if your business is healthy, with plenty more assets than liabilities and easily able to pay shareholders, that would indicate a good time to make some capital improvements.

If you find things more precarious, your balance sheet will guide you to hold off on making any major purchasing decisions until you’re in better shape. It may even indicate you need to find a way to offload some debt to get back on track.

Use with other financial statements

Your balance sheet helps you see your assets and liabilities clearly. It becomes even more useful when used with the other two main financial statements: income statements and cash flow statements.

An income statement (which may also be called a profit and loss statement or an earnings statement) shows your revenues, expenses, and profitability. It tells you what you earn and the costs you incur to make that revenue.

Your cash flow statement will show what money came in and went out of your business during a specified period. Its primary purpose is to highlight your ability to operate based on how money moves through your business.

Together, these three financial statements give you a clear picture of how your company operates and how financially healthy it is.

Final thoughts

If you’re unfamiliar with financial statements, a balance sheet can initially seem intimidating – especially if it shows that you’re in the red. However, once you prepare one for your business, you will find it invaluable to help you see where you stand and what you can do about it.

Get in touch to have your balance sheet questions answered and learn more about how we can help you prepare this critical financial statement.

Recording your financial information is a useful way of identifying your financial position. S & H Tax Accountants are able to assist you with recording your financial information accurately as well as being able to guide and assist you to reach your financial goals. Whether it be a balance sheet or income statement, our accountants can do it all. Book an appointment today at S & H Tax Accountants, call us at 03 8759 5532.

15/05/2023
Bookkeeping Basics for Small Business Owners
On average, small business owners spend 10 hours each week recording, organizing, and processing financial transactions – everything from accounts receivable and payable to employee payments, expense receipts, and supplier invoices.

While the process may be time-consuming (and tedious!), effective bookkeeping is the foundation of sound financial management – which in turn, is the lifeblood of your business.

Feeling overwhelmed by mountains of paperwork and complex calculations? Here are three bookkeeping basics to help ensure a healthy financial future for your small business.

Faithfully track expenses

Accurate and consistent expense tracking is crucial for claiming tax deductions and lowering your overall tax bill. Plus, analyzing expenses can offer crucial insights into spending patterns and the overall profitability of your small business.

Small business owners should consider using a mobile app for simple, consistent expense tracking. Options like Expensify and Receipt Bank help do away with manual data entry with automated functions, including:
- Receipt data capture via your smartphone’s camera (no need to hold onto paper receipts, which can get lost or misfiled);
- Synchronization with your phone’s GPS to track mileage of business travel; and
- Importing bank and credit card data, plus integration with accounting software.
Systematic invoicing and filing

Efficient invoicing is about more than ensuring you get paid in a timely fashion. An invoice is an official record of the terms of each transaction and must be completed accurately to avoid errors in your bookkeeping process.

Here are a few tips for professional invoicing:
- Ensure each invoice includes all the important details: contact information, a tracking number, a detailed list of products or services rendered, and a breakdown of the total amount due;
- Provide an electronic receipt to reduce waste and create a “paper trail” if there’s ever a dispute; and
- Maintain an invoice-filing system that records when you sent the invoice, to whom, when payment was made, and any reminders sent out.
An online invoicing tool can streamline this aspect of your bookkeeping process and provide an efficient backup filing system.

Save time with accounting software

By law, every business is required to keep organized and timely financial records. However, manually posting income and expenses to ledgers and journals is time-consuming – not to mention stressful for the math-averse.

Shave some time (and stress) off your weekly bookkeeping with an all-in-one accounting software solution like Xero, QuickBooks, ClearBooks, or KashFlow.

Online bookkeeping offers numerous advantages, such as:
- Instant reports and real-time insights on profits and loss, customer accounts, payroll – and your overall financial “big picture”;
- Simplified data entry so you can collate and print invoices, purchase orders, and payroll much faster than with manual methods; and
- Improved accuracy through automation (once data is entered, the software handles all subsequent calculations and processes – including invoicing).
When it comes to accounting, vigilance is the key to mitigating risk and ensuring the long-term profitability of your small business. Be sure to set aside time each day, week, and month to update and review your books to catch any red flags and ensure your finances are on track.

At S & H Tax Accountants, we understand that keeping a record of your transactions, organizing your documents and keeping your receipts can be very tiring. That is why we are here to provide you with the highest level of service possible. We have well-qualified staff members who are able to help you. Book an appointment today, call us at 03 8759 5532 or email us at info@sahtax.com.au.

The post Bookkeeping Basics for Small Business Owners appeared first on S & H Tax Accountants.
19/04/2023
When to raise your prices

It’s an inevitability in every business – you have to raise your prices to continue making a profit. There are many factors that go into deciding how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).

While it may seem like you just set your prices or recently adjusted them, this is a task that should be done once a year at minimum – preferably more. Read on for some signs your business is ready to charge more.

1. You have a loyal customer base

Once you’ve been in business for a while, it’s likely that you’ve built up a loyal base. People will return to you when they know they will get a quality product. They’re also more likely to return when they get to know you personally.

If your business has a lot of customers who bargain shop because you offer rock-bottom prices, choosing to raise your rates likely won’t go well. Wait until you’ve established a base of loyal customers who will be happily willing to pay more knowing they’ll get fantastic, personal service from you.

People buy from those they know, like, and trust, so once they get to know, like, and trust you, they’re likely to keep coming back. Build relationships to foster that customer base.

2. It’s been a while since you raised your rates

The rate of inflation is reason enough to raise your prices, otherwise you’re operating at a loss. Keep track of the rate of inflation each year and adjust accordingly. People generally understand raising prices in times of high inflation–even if they don’t like it–since every business on earth must either keep up, or accept the loss to their bottom line. It’s just good business sense.

For decades, the average rate of inflation has hovered somewhere around the 3% mark, with some years worse than others. If you’ve paid attention to the news lately, you’ll know that things are a little different in 2022. Take into account what’s going on in the bigger picture, and then adjust your rates accordingly to avoid absorbing the hit.

3. You’ve added value

This doesn’t necessarily mean that you’re offering more literal services for the same price. Value can also come in the form of increased experience or new skills. When you and your staff have added value to what they’re able to offer, that can and should be passed along to your customer base. People are almost always willing to pay more for a superior product or service.

4. Your competitors are charging more than you

Be sure to take a look around to see what your direct competitors are charging. As your business evolves and becomes better with time, check to make sure that you’re comparing yourself against other businesses of the same class.

If you don’t keep up with regular rate increases, you may be surprised to find that competitors you initially considered to be equal to you have raised their rates significantly. You will then find yourself in a position where you have to raise your rates significantly in one go just to keep up. Keep on track by regularly checking what they’re doing.

5. Your close rate is over 80%

Some people like hard and fast numbers, so this is a good rule of thumb. You want to aim for your close rate to be between 75-80%. If it’s lower than that, you likely have an issue with perceived value. If it’s higher than that, you’re probably overworked and also attracting mostly bargain hunters – not a true loyal customer base.

If everyone is saying yes to your prices, you probably aren’t charging enough.

Final Thoughts

There is a lot to consider when raising your rates, and you don’t want to do too much too fast. Make a point to reevaluate your rates every six months, and you’ll find that you can keep your customer base while also keeping up with the increased cost of doing business.

If you need advice, on how setting new prices may effect your accounts and how this would then effect your costs, please contact S & H Tax Accountants. We have qualified staff that can help you in the best possible way. Book a consultation with one of our accountants today, call us at 03 8759 5532 or emails us at info@sahtax.com.au.

12/09/2022
The differences between wages, salary, commission, and bonuses

There are a few different methods that employers use to pay their employees, and while they may have similarities, they each also have their own implications for your business and its employees. On top of that, there may be a blended model at play, in which you offer two types of compensation at once, such as a wage and bonuses.

How you pay your employees will impact your finances and your reporting requirements.

Read on to learn the differences between the main ways of earning money in the workplace.

Wages

Most entry-level positions offer an hourly wage in exchange for work. An hourly wage might be $10. So if the employee works 8 hours that day, they would be compensated $80 for that day.

There are minimums set by law which vary depending on where the business operates. Typically, the minimum wage is directly related to the cost of living in that area.

Generally, there are a set number of hours that can be worked in a week, and working beyond that maximum entitles the employee to a higher rate of pay. There may be premiums associated with working undesirable shifts, or an even higher rate of pay that employees are entitled to for working on holidays.

Because of the number of hours worked, the specific days worked, and overtime, the amount an employee will potentially earn each year can vary widely when paid with hourly wages.

Salary

A salary is the standard compensation for management and upper-level positions. It is an agreed-upon annual total, where a certain number of hours worked per week is expected – typically 35 to 40. There will be other requirements outlined, such as how many days per week are expected.

Depending on the schedule, the total salary is divided into equal payments for each pay period. Often, a salary is agreed to as an annual figure, with each payment equally divided by the number of payments. If you pay an employee a salary of $60,000 a year once a month over 12 months, you would pay $5,000 each payment, not accounting for any deductions.

How a company manages its payment schedule will vary from company to company.

Any other pay, such as overtime worked, commissions earned, or bonuses, are separate from salary. Many companies don’t offer overtime pay for extra hours worked, but they may offer commissions or bonuses for performance.

Commission

This is a form of compensation that is based on performance. The amount an employee receives can vary drastically, depending on how well they perform in a pay period.

Commission is typically a calculated percentage of the value of goods or services sold. It is meant as an incentive to drive employees to make sales. For example, you may offer to pay $1,000 as a commission for each car sold. An employee who sells 10 cars in the pay period would receive $10,000 commission.

All earnings made by commission are counted as taxable income.

Some salaried or hourly positions offer a commission on top of regular earnings. However, some positions, especially those in sales, can be based solely upon commission. This means that if the employee doesn’t sell anything, they don’t get paid.

Bonuses

A bonus is a compensation type that is not guaranteed. It is usually tied to some kind of company goal, usually driven by sales or performance. A bonus might be awarded on an individual basis, or for a team or other work group.

The idea behind a bonus is to create an incentive to meet a specific goal. It is rewarded when the goal has been reached, or evaluated at specific times. Bonuses are offered on top of a wage, salary, or commission.

Because of the unofficial structure, bonuses are loved by some and loathed by others. It can be motivating to receive a bonus, as it’s completely separate from what an employee already earns. However, it can also leave employees feeling disgruntled if they feel they weren’t supported well enough to reach the goal and therefore missed out on the bonus. If the goals are unrealistic, employees may also struggle with motivation even if they are offered a bonus.

Final Thoughts

Whatever payment structure your company follows, make sure you are consistent and fair as an employer, and follow all applicable laws. Contact us to learn more about different forms of compensation and what they mean for your bottom line. S & H Accountants Melbourne offer payroll service for small businesses. Contact S & H Tax Accountants Melbourne to discuss your payroll needs.

05/09/2022
How to Make Work-from-home Work for Your Team
More companies are exploring their options when it comes to employees working remotely. There are numerous reasons for doing so:
- Increased worker morale
- More flexibility in work schedules
- Enhanced cost savings by not paying for office space.
With all the benefits, it makes sense that employers are considering whether or not working from home can work for their team.

Here are 3 steps you can take to make working remotely as successful as possible.

1. Be upfront about your policies

You’ll need policies about what you expect from your team as they work from home. Do you need them working Monday to Friday, or is their schedule somewhat flexible? Are there meetings you’ll require them to be part of? Are there certain procedures or security protocols they still need to follow?

Have a policy book or set of guidelines that specifically lay out your expectations for employees who work remotely. In it, include the expectations you’ll hold yourself to, as well. Will you be available at certain hours if they need you? How much time do you need to respond to emails or phone calls? Will the company check in on employees periodically to see how they’re doing?

Setting your expectations upfront allows your team to work more cohesively because they know what you expect from them. While you probably won’t foresee every issue that could come up, you can address some common areas of uncertainty.

2. Communicate more than you used to

When staff is in the office, they have access to additional information they may not have when working remotely. In the office, they might share information about a project while standing in the breakroom or pop in for a quick chat about a client. When they work remotely, they don’t have those same opportunities.

If there’s a question about whether your team should know something or would want to know it, share it, so you can be certain they know everything they need to. Not everyone will get that information through the grapevine when they work remotely, so you’ll need to be vigilant about sharing it yourself, or delegating someone to keep everyone informed.

These days, there are many possible channels, including phone, email, text, IM, Slack, Zoom, and Skype. Do you have different channels that you use depending on the information being shared? Make sure employees know the best methods of sharing information depending on the purpose.

3. Encourage informal communications

One thing your team might miss is the social aspect of gathering in one space. Previously, they saw each other every day and likely had informal chats at break time or throughout the day. Schedule a group lunch or break time and encourage your team to join. Don’t make it mandatory, as they may have other pressing priorities –such as feeding their own children or walking their dog.

Having the space available gives them the opportunity to catch up with their colleagues and feel part of the team. Make sure the lunch chat is informal–don’t encourage talking about work.

Final thoughts

There may be other things you need to do, such as providing your team with necessary equipment or technology access to enable them to do their job successfully. It’s also always a good idea to ask your colleagues regularly for feedback on what is working well and what is more challenging when working from home, and adjusting as necessary.
08/03/2022
E-invoicing: A Huge Cashflow Win for Australian Businesses

The Australian government has made some important announcements over the past few months with regard to e-invoicing. In the 2021-22 Budget, the government committed $15.3 million to increase the adoption of e-invoicing, which guarantees accelerated payment terms.

In this article, we will look deeper into what e-invoicing is and how any type of business can benefit from it.

What is e-invoicing?

Over 1.2 billion Business to Business (B2B) and Business to Government (B2G) invoices are exchanged every year– most of which are sent as paper invoices or PDF invoices attached to emails. According to the ATO, the average invoice processing cost for a paper invoice is $30.87, while the processing cost for a PDF invoice is $27.67 on average. These methods are costly because they require manual data entry and validation.

Through e-invoicing, processes can be automated, and invoice data can be quickly exchanged between the systems of the buyers and suppliers. E-invoicing can reduce the cost of processing to $9.18– 66% cheaper than the cost of processing a PDF invoice.

Australia has adopted the Peppol framework (Pan-European Public Procurement Online), which is a globally recognized standard and process for exchanging e-invoices and e-orders that is currently being used in 39 countries across the world. Suppliers and buyers must send their invoices through their systems to a certified Peppol Access Point, which will verify the data and then send it on to the receivers’ certified Access Point and into their system.

In other words, data will be shared almost instantly, eliminating the need for manual data entry or manipulation.

How businesses can benefit from e-invoicing

The Australian government believes that e-invoicing can help the economy save $28 billion over 10 years. Sounds awesome, but what does this mean for businesses? The following are some of the key benefits of e-invoices.

Automatically connects you to other buyers and suppliers

Using e-invoicing allows you to become automatically connected with every other buyer and supplier in the network. This allows you to automate invoice processing.

Highly secure and prevents the risk of invoice fraud

PDF invoices can be easily intercepted and manipulated. With e-invoicing, the sender and bank account details are validated before transmitting the data. The network is highly secure and only accredited Peppol Access Points providers can exchange documents. They follow strict security protocols to prevent intrusion and implement multi-factor authentication and data encryption.

Improves cash flow management

Late payments can negatively affect businesses. Meanwhile, buyers can miss out on early payment discounts due to lost or slow processing of invoices. Through e-invoicing, the whole process will be accelerated, bringing significant benefits for both parties. In Australia, the federal government and other government agencies guarantee 5-day payment terms for e-invoices.

Are you ready to transition to e-invoicing? Get in touch with us today for professional guidance.

23/12/2021
How Accounting Software Can Increase Profits

Most small business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses, and view real-time financial reports to manage cash flow and make better business decisions.

But what many business owners don’t take advantage of are key insights that can improve customer care and increase sales. Here are some smart ways you can use your accounting software to help boost your bottom line.

Gain insights that increase sales

If you’re not tapping into your accounting software analytics to better understand your customers, you’re missing a major opportunity to close more sales.

Most accounting software can highlight your biggest spenders and buying trends. How would knowing who your best customers are, your biggest selling products, and how much each customer spends impact your marketing decisions – not to mention help you fine-tune your sales strategies?

By the same token, when you know which products and services aren’t selling, you’ll be able to make more profitable purchasing decisions. Most accounting software offers inventory tracking to help you decide what to keep on the shelves, which products to sell off at a discount, and which items to phase out altogether.

Improve customer care and boost profits

Accounting software can offer peace of mind when you know your financials are accurate and up to date. But another major advantage of an online accounting solution is how much time you’ll save by automating processes like invoicing and payroll – giving you more time to follow up with clients and seek out new prospects.

We all know how important the personal touch is when it comes to sales. So why not use your accounting software customer data to help remember your customers’ birthdays or thank them when they’ve hit a milestone – spending more than $5,000 on your products, for example?

With enhanced customer data at your fingertips, your business will earn a reputation for personalized service. You’ll be able to respond quickly when a customer calls with a question about a product or an order. And you’ll be able to suggest substitutions and offer valuable add-ons based on their buying preferences, so upselling becomes a snap.

How will you use accounting software to grow your small business?

Savvy business owners take the first step toward better profitability when they stop thinking of accounting software as simply a financial management solution and start thinking of it as a comprehensive tool for business growth.

You may be surprised at the many ways accounting software can help you better serve your customers or improve your sales strategies when you look at its true potential.

Now that you have a handful of ideas for making better use of your accounting software, what will you do differently to enhance customer care, improve your profits and continue to grow your business?

If you need assistance with managing your accounts, such as recording your information in an accounting software, please feel free to contact S & H Tax Accountants. We have wonderful staff members who are qualified and always ready to help. Book an appointment today at S & H Tax Accountants, call us at 03 87590 5532 or email us at info@sahtax.com.au

17/12/2021
A Beginner’s Guide to Cash Flow Forecasting
Nobody wants their business to fail. Although it’s impossible to predict the future with 100% accuracy, a cash flow forecast is a tool that will help you prepare for different possible scenarios in the future.

In a nutshell, cash flow forecasting involves estimating how much cash will be coming in and out of your business within a certain period and gives you a clearer picture of your business’s financial health

What is Cash Flow Forecast?

Cash flow forecasting is the process of estimating how much cash you’ll have and ensuring you have a sufficient amount to meet your obligations. By focusing on the revenue you expect to generate and the expenses you need to pay, cash flow forecasting can help you better manage your working capital and plan for various positive or difficult scenarios.

A cash flow forecast is composed of three key elements: beginning cash balance, cash inflows (e.g., cash sales, receivables collections), and cash outflows (e.g., expenses for utilities, rent, loan payments, payroll).

Building Out Cash Flow Scenario Models

It’s always good to create best-case, worst-case, and moderate financial scenarios. Through cash flow forecasting, you’ll be able to see the impact of these three scenarios and implement a suitable course of action. You can use the models to predict what needs to happen especially during difficult and uncertain times.

In situations where variables shift quickly such as during a recession, it is highly recommended to review and update your cash flow forecasts regularly on a monthly or even weekly basis. By monitoring your cash flow forecast closely, you’ll be able to identify warning signs such as declining revenue or increasing expenses.

How to Improve the Accuracy of Your Cash Flow Forecast

In cash flow forecasting, your estimates are based on historical data. This means having accurate historical data is critical. Below are some tips for improving its accuracy:
- At the end of the week or the month, input your actual results or the cash that was received and cash spent. This will allow you to identify which items you got wrong in your estimates and evaluate why you got it wrong. This analysis may lead you to identify bigger issues and help you make adjustments to your assumptions.
- Carefully evaluate all of your assumptions. Just because it’s correct now doesn’t mean it will be true for the future. Go through everything, especially when it comes to sales, and validate it.
- Don’t forget to include annual payments, loan payments, credit card debt payments, and estimated taxes.
- It’s almost impossible to forecast where your business is going to be longer than one year out. You’ll introduce more risk and greater uncertainty the further out your financial scenario models go.
Get Expert Help With Cash Flow Forecasting

Whether your business is growing, fighting for survival, or you simply want to run your business better, a cash flow forecast can help you make business-critical decisions that impact the financial health of your business.

To get expert assistance with your cash flow, chat with our team. Get in touch to book a one-on-one consultation with our advisors and we’ll work out a plan to help you keep more money in your pocket.

We understand that the cost of living has risen now, which now may affect the cash flow forecasting. S & H Tax Accountants are able to guide you and your business into a more stable financial position. We have an excellent team of accountants that are well qualified , experienced and always willing to help. Book an appointment today with S & H Tax Accountants, call us at 03 8759 5532 or email us at info@sahtax.com.au.
19/02/2021
How to Move Your Brick and Mortar Retail Store Online

eCommerce is growing rapidly, and recent research estimates that it will make up over 22% of global retail sales by 2023.

With these statistics and the changes COVID-19 has brought, it’s more important than ever to take your retail business online if you want to stay competitive. It adds another revenue stream and keeps your business humming even while your brick and mortar doors are closed. In this article, we will guide you through launching an online storefront.

Things to Consider Before Starting to Accept Online Orders

Many businesses fail due to poor planning. So take the time to put together a business plan for your online business launch. Key decisions to make include:

1) Hosting your own eCommerce site or working with a third party ordering system

Managing your own eCommerce site allows for greater customization and is cheaper because you won’t have to pay a monthly fee to a third party for processing orders. However, it involves more work upfront and is more time-consuming.

For those who don’t have the technical expertise to create your own website, there are a lot of tools and eCommerce platforms that have user-friendly, drag-and-drop page builders at your disposal. Some popular platforms include Shopify, BigCommerce, Ecwid, Volusion, and 3dcart.

On the other hand, you can opt to list your products on an established eCommerce site and pay a higher monthly fee. This will dramatically speed up your online business launch. Some of the best options include Amazon, eBay, Etsy, Bonanza, and Facebook Shops.

2) Delivery of orders

You need to figure out how to fulfil orders before they start coming in. You can choose to manage the delivery yourself or work with a third party order processing and shipping platform.

Processing and shipping logistics can be complex. You need to set shipping rates and methods, take care of the packaging and marketing strategy, as well as determine the radius of your delivery zone– if you’ll only deliver locally, domestically, or internationally.

If you don’t want to go through the hassle, you can work with a reliable third party to take care of all these for you. Aside from saving you from the stress, you will also be able to ensure that your customers will receive the products in a timely manner.

3) Marketing your online store

Once you’ve launched your online business, it’s time to make it thrive. There are various marketing methods you can use such as online advertising, optimised content marketing, email newsletters, and social media.

Creating optimised content is a cost-effective way to drive organic traffic to your site, but it can be time consuming. The same is true for email newsletters and social media. However, you can always hire professional content marketers who can help you craft engaging SEO content to push your site higher on search results.

Meanwhile, online advertising ensures that your content and products get seen. If you haven’t tried your hands on online advertising yet, it is recommended to start small and gradually increase your ad budget as you start to see positive results. Also, you should continuously refine your ads to yield better outcomes.

Getting Your Financials On Track

We understand that managing an online store is hard work, especially if you run it side by side with your brick and mortar shop. By partnering with our advisors, we can significantly ease your burden and take care of the financial side of your business, while you focus on growing.

Get in touch with us to find out more about how we can help you.

04/12/2020
Ways to benchmark your business

For many business owners, determining the success of a business comes down to how much profit the company makes. Of course, finances are an important measure of a company’s overall success. If you don’t bring in more than you spend you won’t be in business for long. Profit, however, isn’t the only important benchmark by which to measure your business.

There are other important factors business owners can and should evaluate to determine how well their company is doing now and to predict its future success.

Measure customer satisfaction

Customer satisfaction tells you a lot about how much repeat business you can expect. If customers are satisfied with the products and services they receive from you, they’re likely to come back and refer you to their friends.

If they aren’t satisfied, they might never come back.

Take the time to measure customer satisfaction. You can ask in person, or send out surveys or reviews. Take pleasure in positive feedback. When customers suggest areas for improvement, listen to them. Even if they weren’t fully satisfied with their experience, customers value feeling heard. If you can take their criticism and make constructive changes, you may bring some customers back.

Measure the number of new customers

Repeat customers are great for your bottom line, but you can’t rely on them forever. Their priorities or financial situation might change. They might move away or no longer need your services.

That means that if you’ve had the same 20 customers for the past few years, you need to start looking for new business.

The best way to track customers, and determine how many new clients you draw in, is to develop a client list with email addresses that you can check. A loyalty program can help you determine which clients are repeated and which are new, and it can even help you develop your email list.

You can also offer a referral program in which existing customers bring in new business and receive a gift for doing so.

Measure employee satisfaction

Profits and happy customers are vital to business success, but so are satisfied employees. How happy your workers are is an important benchmark to keep track of because it tells you how motivated your staff is, which can affect customer satisfaction. It also helps you predict staff turnover rates.

Conduct regular performance reviews to determine your employees’ strengths and areas of improvement. Use the reviews to determine how satisfied your employees are and how they could be more fulfilled in their roles. They may want more responsibility—which in turn can make your job easier and make your business more efficient. Or they may need more training, which can improve your customer service.

Offer professional development and opportunities for growth. Just as it’s expensive to bring in new customers, it’s also costly and time-consuming to find, hire and train new staff.

Final thoughts

Naturally, your finances tell you a lot about how successful your business is. Keep track of your financial health and know your income statement, balance sheet, and cash flow statement. If your business isn’t profitable you may need to make some changes to keep it going.

On top of that, however, you need to measure how satisfied your customers and employees are and how many new customers you bring in to determine your current and future success. Luckily, those are fairly easy to determine.

Get in touch with us to see how we can help your business.

24/06/2020
Killer CV or CV? 5 Blunders That Could Kill Your Chances

Your CV is one of the most important documents you will ever create but a single mistake could send all that hard work straight to the recycle bin. Hiring managers and HR executives sort through hundreds of CVs for every job opening. That means they may spend only a few seconds on each one.

If you make any of these 5 blunders, you could be dooming your chances of getting the job.

1. Fancy Fonts

Your CV should be polished and professional, not showy. Even if the job you are seeking has a creative bent, your CV is not the place to show off your artistic talents. Avoid fancy fonts, unusual colors, clip art, and other flourishes – they take more from your CV than they add.

2. Misspelled Words and Grammatical Errors

No matter what your past accomplishments, misspellings, and grammatical errors are sure to send your CV straight to the trash. With so much on the line, there is simply no excuse for sending out a CV that is not letter-perfect.

3. A Lack of Accomplishments

Your future boss does not want to know what your daily duties were. He or she wants to know what you were able to accomplish in the past and what you can bring to the organization in the future. Your CV should focus on what you have been able to achieve thus far in your career, and the skills you will use to build more in the future.

4. Not Using Keywords

The first person to read your CV may not be a person at all. Search engine robots and automated systems are often used to sort CVs and look for key job skills. If your CV does not include the keywords the robot is looking for, the document may never make it to human eyes. If you do not know which keywords to include, just take your cue from the job description.

5. Going On and On

Your CV should not tell your life story, and it certainly should not resemble a novel. Keep your CV short and sweet; limit it to a single page wherever possible. The goal is to make the CV easy to read, even for hiring managers who are pressed for time.

When it comes to landing a job, knowing what to avoid can be even more important than knowing what to do. Learning to recognize and overcome these common CV blunders may not guarantee you the position but it can improve your odds.

21/05/2020
How to create an advisory board for your business

Many remarkable entrepreneurs, including Warren Buffet, Sheryl Sandberg, and Richard Branson, have credited their success, in part, to the advice of their mentors.

An advisory board is an informal group of mentors whose collective business expertise—and objectivity—can help you make better, more informed decisions, thereby accelerating growth.

Unlike business consultants (whose fees may well exceed your budget), advisory board members may agree to provide advice pro bono, for a small stipend, meal, or reimbursement of travel expenses.

These tips will help you create a first-rate advisory board that can immediately help improve your bottom line.

Selecting board members

When deciding who you’d like to join your advisory board, think first of your purpose—the goals you most need to accomplish—as well as your own strengths and weaknesses as an entrepreneur.

If you want your board to serve in a general business development capacity you’ll want a legal advisor, accountant, marketing expert, and business owner from outside your industry who can meet on an ongoing basis.

You may also want to bring together an advisory board for a very specific purpose—to solve a problem or achieve a short-term goal. In that case, you’ll be looking for advisors with expertise in a particular area who will meet on the understanding that once your goal is achieved the group will dissemble.

Tips for finding advisors

It’s ideal to have between three to five advisors serving on your board who can fill any critical knowledge gaps and offer key business insights.

When looking for advisors, start with your own business network including any organizations or associations you belong to, your local business community, previous employers and colleagues.

LinkedIn can help you discover new connections in your area through your business groups as well as the network of people you already know.

Another option is to ask the business professionals you work with—your accountant, lawyer, or financial advisor—if they can suggest any good candidates for your advisory group.

Get the most out of each meeting

Plan to meet with your advisory board regularly—at least every quarter. If you meet any infrequently than every few months you’ll risk losing focus and momentum.

Between meetings, it’s wise to send along relevant interim reports to keep your group informed and engaged. Likewise, you’ll want to distribute any relevant documentation—business plans, financial statements, and other reports—in advance of each meeting to generate more productive discussions.

Although advisory meetings can be quite informal, drafting an agenda can save time and help maintain focus when your advisory board gets together.

Final thoughts

Working with an advisory board can yield some appealing side benefits. You may find the preparation required before a meeting helps keep you thinking analytically about your business and encourages you to keep striving toward your goals.

Your board’s network of connections can also be an advantage when you’re looking for capital, partners, vendors, experts—or even new customers.

A small business with an advisory board may also be less risky for potential lenders, who may be reassured that a business owner isn’t making all the key decisions on her own.

21/05/2020
Tips for writing effective performance reviews

Without knowing your break-even point, you can’t make informed business decisions.

The performance review has become a rite of passage in the business world, yet many managers and employees fail to make the most of the opportunities these important discussions can provide. When used properly, the annual review process can provide managers with real insight into everything from employee perception of the company to ways to make the firm better and more profitable. When not properly used, the annual review process is worse than useless – a waste of time and a way to foster resentment and bad feelings among the rank and file workers.

Whether the firm you work with has been using annual reviews for years or has just implemented such a policy, it is important to use the process to its full potential. While managers will need to adapt these ideas to meet the needs of their own companies and their own employees, there are some things all supervisors can do to make the reviews they give more useful to themselves, their workers and the companies they work for.

Concrete Goals

One of the most frequently cited sources of frustration on the part of workers is the lack of concrete goals. Many companies and individual managers set goals that are vague at best, making it difficult for employees to tell how they are doing.

That lack of specificity can be a real problem when annual review time rolls around. Without concrete goals that can be measured fairly, it is difficult for managers to assess each of their workers and assign proper grades for each area of responsibility.

Setting goals that are easy to identify is one of the smartest things managers can do to make the annual review process smoother and more productive. If the company you work for has not already established clear goals for your department, a talk with your own supervisor may be in order. Using that discussion to provide more concrete goals for your workers can help everyone and allow you to get more out of the annual review process.

More Than a Once a Year Discussion

Another problem with the annual review process is it takes place just once a year. Just think about how difficult it would be to manage your employees if you only had one discussion a year, and you will quickly grasp the inherent limitations of the annual review process.

If you want to make the most of the annual review process, you can use the goals identified at the last review to guide frequent discussions with each of your workers. These sessions do not have to be extensive, or even formal. They can consist of something as simple as a quick chat over lunch about an ongoing project, or a post-meeting discussion about an important goal for the company.

No matter what form these discussions take, they can be incorporated into the annual review process to make it more useful. The more you know about where each of your workers stands regarding previously identified goals, the more effective the annual review period will be when it finally arrives.

21/05/2020
Paying down debt

Debt can be a crippling problem for small businesses wanting to grow or just break even during difficult times. By reducing debt you’ll improve the value of your business, its financial situation, and its ability to continue operating into the future.

Assess your debt situation

Take a detailed look at all of your debts – both current and long-term. Evaluate which ones are more urgent and which can be parked until some progress is made.

The key determining factor should be the interest you’re paying on your debts. For example, those with the highest levels of interest should be paid first.

Also, list your debts from smallest to largest. Maybe some of those smaller debts can be paid off quickly without much hassle to enable you to focus on the larger ones. Consider consolidating all your loans into one payment if possible.

Cut costs and free up cash

Try to cut any unnecessary costs and free up some cash in the process. Think about how much you spend on each of your daily expenses – is there room to cut some of those costs?

For example, a building firm may shout takeaway coffees for its workers a few times a week. Maybe a cheaper way can be found to continue providing coffee, such as instant coffee on-site with hot water from a thermos, rather than expensive takeaways.

Have a look at how long it’s taking your debtors to pay you. If your customers aren’t paying on time, come up with some solutions for encouraging them to pay quicker.

Early payment discounts could work well but make it clear on each customer’s invoice. Alternatively, tighten up invoice periods so there are fewer days for your debtors to pay before penalties. Make sure you let them know about any changes and the reasons for those changes.

Reassess funding

Have a look at how you’re using funds to pay off your business’s debt. Do you have funds available that could be better used to reduce debt further? Perhaps you have money in a current account that isn’t being used optimally – lowering debt and hence future payable interest could be a wiser choice.

Examine your cash cycle, when payments come in and when they go out to pay your creditors. Where does the incoming cash go before it gets allocated? Is there any you can reassign to debt payments?

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Sell your assets

Another option for freeing up funds to reduce your business’s debt might be to sell some assets. What do you have money tied up in, but don’t use often enough to justify?

Any equipment that’s not being used could be sold off. One example could be a builder who has an oversupply of power tools – making a detailed list of all their tools and how frequently they’re used might reveal some surplus assets.

Make sure you’ve calculated depreciation correctly

Have you depreciated all the assets in your business that need to be depreciated? It’s important to get these figures correct including the ratio of personal to business use if you use an asset for both.

For example, a company vehicle will need to be accurately depreciated in relation to its usage over time. We can help you calculate depreciation correctly and also check whether you’re entitled to any tax rebates.

If you need assistance with paying off your debt, please feel free to contact S & H Tax Accountants. Our Accountants are able to guide you through your debt and advise which strategy would be suitable for you, whether it would be cutting costs or calculating your depreciation. Book a consultation today, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

21/05/2020
Planning the year ahead

The turn of the year usually prompts most people to think about some business planning for the year ahead. 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), and others who can contribute meaningfully to the planning, such as an IT expert if you envisage a major website overhaul.

Ask people to bring their ideas to the planning meeting and try to hold the meeting away from the business to avoid getting caught up in daily activities.

Review your business

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

What’s working well for us at the moment that we should continue doing?

What’s not − what should we drop or do less of?

What has the most business potential for the future?

Decide on changes

Your combined thinking may produce some required changes. For example, you may need to adapt your existing products and services, seek new markets or distribution channels, or change your business model entirely.

These changes are more likely to occur if there is consensus. Bear in mind that resistance often comes when people feel their comfort zones or their jobs are 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 other changes incapacity.

Get help from your accountant to complete a return on investment (ROI) analysis if you need new equipment or even new staff. You need to know how much extra business needs to be generated for a reasonable payback and also how the business can access the funds for growth. For example, will you need a larger credit line or new capital?

Get everyone on board

Once you’ve established where you want to take the business, concentrate on the next 12 months. Set some end-of-year goals, and then work backward 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, and this quarter.

Follow up

A major challenge with all business planning is that it is often done at the beginning of the year when optimism and motivation are high. However, these emotions can quickly fade as people get caught up in their daily activities and new projects.

Business goals won’t be taken seriously unless you set regular dates to review progress – such as every 90 days. Once people know that you will be calling them to account at these progress meetings, they will be more motivated to keep your planning on track.

14/05/2020