S & H Tax Accountants

Category: Firm News

  • Managing Debt and Creating a Debt Repayment System

    Managing Debt and Creating a Debt Repayment System

    Debt can be a significant burden on one’s financial life. It can cause stress, anxiety, and make it difficult to achieve financial goals. However, with a little planning and dedication, anyone can create a debt repayment system and get on the path to financial freedom.

    Here are some tips for managing debt and creating a debt repayment system:

    Take Stock of Your Debt

    The first step in managing debt is to understand the extent of the problem. Make a list of all the debts you have, including the balance owed, interest rate, and monthly payment. This will help you determine which debts to tackle first and give you a clear picture of your overall debt situation.

    Focus on High-Interest Debt

    High-interest debt, such as credit cards or personal loans, should be your top priority. These debts often have interest rates of 15% or higher, making them the most expensive debts to carry. By paying off high-interest debt first, you can save money on interest charges and free up more money to pay off other debts.

    Create a Budget

    To pay off debt, you need to free up money in your budget. A budget can help you track your expenses, identify areas where you can cut back, and allocate more money towards debt repayment. Be sure to include debt payments as a fixed expense in your budget, so you don’t fall behind on payments.

    Consider Consolidating Debt

    If you have multiple high-interest debts, consolidating them into one loan can make it easier to manage and potentially lower your interest rate. You can consolidate debt by taking out a personal loan or using a balance transfer credit card. Just be sure to compare interest rates and fees to ensure you’re getting a good deal.

    Make Extra Payments

    Making extra payments towards your debt can help you pay it off faster and save money on interest charges. Even small extra payments can make a big difference over time. Consider using any extra money you receive, such as a tax refund or bonus, towards debt repayment.

    Automate Payments

    Setting up automatic payments for your debt can help you stay on track and avoid late fees. Many lenders and credit card companies offer automatic payments, so you don’t have to worry about remembering to make a payment each month.

    Stay Motivated

    Paying off debt can be a long and challenging process, but staying motivated can help you stick to your debt repayment plan. Set small goals along the way, such as paying off a credit card or reaching a certain milestone, to help you stay on track.

    In conclusion, managing debt and creating a debt repayment system requires discipline, dedication, and a plan. By taking stock of your debt, starting with high-interest debt, creating a budget, considering consolidating debt, making extra payments, automating payments, and staying motivated, you can pay off debt and achieve financial freedom. Remember, it’s never too late to start, and every small step towards debt repayment counts.

     

    We understand that managing your debt can be difficult and tiring. To relief your stress, contact S & H Tax Accountants. We are a local accounting firm that is known as one the best firms in Cranbourne. We have excellent staff, that can help make a debt repayment system, as our accountants are well-qualified and experienced. Make a booking today at S & H Tax Accountants, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Essential steps to managing your family’s finances

    Essential steps to managing your family’s finances

    Managing family finances can be a daunting task, but with the right tools and mindset, it can be a smooth and effective experience. Here are some essential steps for managing your family’s finances, including budgeting, saving, and planning for the future.

    Budgeting

    Budgeting is the cornerstone of managing family finances. It involves creating a spending plan that outlines your family’s income and expenses. A budget helps you to keep track of your finances, avoid overspending, and save for the future. Here are some steps to follow when creating a budget:

    Calculate your monthly income: This includes your salary, any rental or investment income, and any other sources of income.

    List your monthly expenses: This includes your rent or mortgage payment, utility bills, groceries, transportation, entertainment, and any other expenses.

    Determine your discretionary income: This is the amount of money you have left after deducting your expenses from your income.

    Decide which expenses are most important: Allocate your discretionary income to your most important expenses first, such as savings, debt repayment, and emergencies. Any money left over after that can go to non-essential expenses.

    Track your spending: Keep track of your expenses to ensure you stick to your budget. If you’re not sticking to your budget, identify areas where you could make adjustments. It’s possible you need to spend less, or maybe you can take on a side hustle for a while.

    Saving

    Saving is an essential part of managing family finances. It involves setting aside money for emergencies, retirement, education, and other long-term goals. Here are some tips to help you save more:

    Start small: Even if you can only save a small amount each month, it will add up over time. Even $10 a month to start adds up if you keep doing it. Once you’re used to setting aside $10 a month, see if you can put aside $20 a month.

    Make saving a priority: Set up automatic transfers from your checking account to your savings account each month. This way, you don’t have to think about it.

    Cut back on expenses: Look for ways to reduce your expenses, such as eating out less or unsubscribing from services you don’t use.

    Use savings apps: There are several savings apps that can help you save money effortlessly. Research which will work best for you.

    Set savings goals: Setting specific savings goals can help motivate you to save more. As with above, you don’t have to start out with a huge goal. Start with a smaller goal that you can attain and build from there.

    Planning for the future

    Planning for the future is an essential part of managing family finances. It involves setting long-term goals and creating a plan to achieve them. Here are some steps to follow when planning for the future:

    Set financial goals: Determine what you want to achieve financially, such as paying off debt, saving for retirement, or buying a home.

    Create a financial plan: Develop a plan that outlines how you will achieve your financial goals, including how much money you need to save each month and how you will invest your money.

    Invest wisely: Make sure you invest your money in a way that aligns with your financial goals and risk tolerance.

    Review your plan regularly: Review your financial plan regularly to ensure you are on track to achieve your goals.

    Seek professional advice: If you are unsure about how to create a financial plan, consider seeking the advice of a financial planner. They can help you determine which goals are a priority, how to best allocate your money, and strategies for investing for your future.

    In conclusion, managing family finances involves budgeting, saving, and planning for the future. By following these essential steps, you can ensure that your family’s financial future is secure. Remember, it’s never too late to start managing your family’s finances, so start today!

     

    At S & H Tax Accountants, we are aware that managing family finances can be extremely tiring and daunting. At S & H Tax Accountants, we provide you with best possible service, as we have well-qualified and experienced accountants. They can help you create a financial plan and guide you in making a budget. BOOK TODAY at S & H Tax Accountants, call us on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Unlocking the secrets of small business cash flow

    Unlocking the secrets of small business cash flow

    When it comes to running a small business, maintaining a healthy cash flow is essential for sustainability and growth. Your business can be incredibly profitable but still ultimately fail because of improper cash flow management.

    To prevent that from happening, here are some best practices that can help you better manage your cash flow and maintain the financial health of your small business. Remember, the key to success is to be proactive and vigilant about your finances.

    Let’s dive in!

    1. Understand Your Cash Flow Cycle

    Before you can manage your cash flow, you have to understand your cash flow cycle. This involves tracking when money comes into your business and when it goes out. By examining the timing and sources of your cash inflows and outflows, you can identify patterns and potential issues. For example, you’ll notice periods where you have higher expenses and lower profits, or the reverse.

    This information helps you make informed decisions on how to maintain a positive cash flow. For example, you might choose to offer more sales during your slow periods, or find ways to cut costs.

    2. Develop Accurate Financial Forecasts

    Financial forecasting is a crucial aspect of cash flow management as it allows you to anticipate your cash flow cycles. Regularly create and update cash flow projections, taking into account expected sales, expenses, and other relevant factors. Accurate financial forecasts will help you identify potential cash shortages or surpluses and make informed decisions on how to allocate resources effectively.

    For example, you might hold off buying new equipment this month because the next two months are expected to be slower financially, then make the purchases when you have more cash coming in.

    3. Monitor Your Cash Flow Regularly

    Just like a doctor checks a patient’s vital signs, you should monitor your cash flow regularly to maintain your business’s financial health. This means reviewing your cash flow statements, balance sheets, and income statements on a regular basis. By doing this, you can spot issues early on, such as late payments or unexpected expenses, and take corrective action before they become major problems.

    4. Maintain an Emergency Fund

    Unexpected expenses are a fact of life for any business. To mitigate their impact on your cash flow, establish an emergency fund. This reserve can be used to cover unexpected costs or to tide you over during periods of slow cash inflow.

    Ideally, your emergency fund should be able to cover at least three months’ worth of operating expenses. Not only will this help your finances, it will give you peace of mind because you know you’ll have breathing room in case of an emergency.

    5. Invoice Promptly and Efficiently

    Although invoicing is vital to your cash flow, many small business owners put off invoicing and following up on unpaid invoices.

    It’s essential to invoice your clients promptly and efficiently, to maintain your cash flow. This means using accurate invoicing software, setting clear payment terms, and providing convenient payment options for your customers. If you have clients with accounts payable processes, make sure you understand the process and their payment cycles so you don’t wind up waiting months for payment.

    Additionally, follow up on overdue invoices in a timely manner. The sooner you invoice and follow up, the sooner you’ll get paid.

    6. Encourage Early Payments

    Offer incentives for customers to pay early, such as discounts or other perks. This can help increase cash coming in and provide a buffer for cash flow management. Additionally, consider implementing payment milestones for large projects, where customers pay a portion of the invoice at specific intervals throughout the project.

    7. Keep Your Expenses in Check

    To maintain a positive cash flow, it’s essential to keep your expenses under control. Regularly review your expenses, identify areas where you can cut costs, and negotiate better terms with suppliers. Remember also to check your ongoing subscriptions and automatic payments. You may be paying a lot of money for products you don’t use.

    8. Use Technology

    Embrace technology to streamline your cash flow management. There are many tools available that can help you track expenses, create financial forecasts, and automate invoicing. By leveraging technology, you can save time and effort, allowing you to focus on growing your business. Chat to us to get our recommendations for your business.

    9. Seek Professional Guidance
    Financial professionals provide valuable guidance and insights on managing your cash flow. They will identify potential issues and develop strategies to maintain a healthy cash flow.

    Working with a specialist can help you avoid costly mistakes and make well-informed financial decisions, well worth it in the long run.

    The bottom line

    Effectively managing your cash flow is crucial for the success and growth of your small business. By understanding your cash flow cycle, developing accurate financial forecasts, monitoring your cash flow regularly, and implementing the best practices discussed in this blog post, you can maintain a healthy financial position and pave the way for sustainable growth.

    Of course, you can always reach out to us for guidance on managing your small business cash flow. Don’t leave your business’s financial success to chance, contact us today for a consultation, and let’s work together to ensure your business thrives!

     

    If you need assistance with your cash flow and need some professional guidance, then please contact S & H Tax Accountants. Our Accountants can help you with managing your cash flow, and provide you with some guidance on how you can have a positive cash flow. Make a booking today at S & H Tax Accountants, call us on 03 8759 5532 or email us at info@sahtax.com.au

  • Using financial reconciliation to keep your business on track

    Using financial reconciliation to keep your business on track

    As a small business owner, you’re likely already aware of the importance of keeping your finances in order. Financial management goes deeper than paying your bills on time and collecting on invoices (although those are also important). It involves regularly checking up on your financial situation to make sure your accounts are in order, your records are up-to-date, and you’re spending within your budget.

    Among those activities, financial reconciliation plays a vital role in keeping your finances–and your business–on track.

    Here’s what you should know about financial reconciliation and how it can help your business.

    What is financial reconciliation?

    Financial reconciliation is a process of ensuring your financial records are consistent and accurate. Basically, when you conduct a financial reconciliation, you review financial statements and compare them with your bank statements, credit card statements, vendor statements, and other relevant financial records, such as invoices.

    As you do this, you’ll look for any errors or discrepancies–for example if a payment appears on your bank statement but not your accounting records, or if the payments show as being for different amounts on different records. When you conduct a financial reconciliation, you want to make sure that the money in your bank account matches the money your financial documents show you should have.

    Discrepancies need to be addressed or you’ll wind up with financial information that isn’t accurate, which affects your cash flow and your ability to make financial decisions. If the discrepancy involves an ongoing payment–to you or to a vendor–catching it early could save you a lot of money.

    The goal of financial reconciliation is to ensure all financial transactions are recorded accurately and thoroughly in your accounting system. That way, you know exactly how much money you have and how much is moving into and out of your business, and you can make informed financial decisions.

    Types of financial reconciliation

    Every business has different reconciliation needs, depending on how big it is and how many and what types of transactions it has.

    Bank reconciliation involves your business’s bank statement to your accounting records to ensure that all transactions have been recorded correctly. You’re looking here to make sure that the bottom line of your bank statement matches your bank account balance. If not, you’ll want to determine why. Is there an automatic withdrawal that hasn’t yet been posted to your account? If so, you need to be aware of it to prevent yourself from over-drawing on your account.

    Credit card reconciliation involves reconciling your business’s credit card statements with your accounting records to ensure that all charges have been recorded accurately. This is similar to a bank reconciliation in that you need to know exactly how much you’ve spent on your credit card–including pending transactions–so you know how much you have available to you.

    You can also conduct vendor statement reconciliation, where you examine your vendor statements against your accounting records to ensure all invoices have been paid and recorded accurately. This can prevent any errors in paying your vendors.

    If you have two units of business or more–such as divisions, subsidiaries, or franchises, you’ll need to conduct intercompany reconciliation. This is where you compare financial records between two or more companies to ensure transactions are recorded accurately and consistently.

    Why you need financial reconciliation

    Financial reconciliation is a vital tool that helps you manage your business more effectively. It ensures your financial records are accurate, complete, and up-to-date. This prevents errors or discrepancies that could lead to financial losses, or legal or compliance issues.

    It can also help identify any fraudulent activity or transactions you did not approve, protecting you against fraud and lessening the risk of financial losses. If you have numerous transactions that are difficult to keep track of, regular financial reconciliation prevents accidental overspending or missed payments that could ultimately affect your relationships with vendors.

    As mentioned above, many businesses are required to comply with financial regulations and reporting requirements. Financial reconciliation helps ensure that your business is in compliance with these requirements. If you’re not compliant, you can take measures to address the issue quickly, before it gets out of control.

    How to conduct financial reconciliation

    If you’re looking to establish a solid, repeatable process, these are a few steps you can take:

    Step 1: Identify what types of financial reconciliation you need to perform.

    Step 2: Establish roles and responsibilities for each team member involved in the process. Make sure everyone knows and understands what they are responsible for and when.

    Step 3: Create a schedule for conducting financial reconciliation on a regular basis. This may vary depending on the size of your business, and you may conduct different types of reconciliation on different schedules, depending on your unique business needs.

    Step 4: Ensure all financial data is easily accessible to those who need it. Each time you conduct a financial reconciliation, make sure you have all relevant documentation and data needed. Cloud accounting software can help you manage your reconciliation.

    Step 5: Conduct the reconciliation: Compare your financial statements to your accounting records to identify discrepancies or errors.

    Step 6: Investigate and resolve discrepancies: If you find errors or inconsistencies, look into them and do what you can to resolve them. You may have to hunt down additional paperwork, contact vendors to discuss payments, or reach out to your bank or credit card issuer.

    Final thoughts

    As a business owner, you’ll need to make vital decisions to move your business forward. Accurate financial records enable you to make those decisions based on your cash flow and current financial standing.

    If you have questions about financial reconciliation or other important financial aspects of your business, please reach out to us. We’re always happy to answer questions and show you how we can make your business management easier.

     

    Making sure that your financial records are accurate and consistent, can be a tough job, however our team at S & H Tax Accountants are able to do that for you. Our team consists of well qualified and experienced staff members that can guide you on how to conduct your financial reconciliation. S & H Tax Accountants would love to assist you in any questions that you might have. Book an appointment today at S & H Tax Accountants, call us at 03 8759 5532 or email us at info@sahtax.com.au.

  • Avoiding bankruptcy: Top reasons it happens and ways to prevent it

    Avoiding bankruptcy: Top reasons it happens and ways to prevent it

    Starting a business is not for the faint of heart. A certain level of stress comes with carrying the responsibility of ensuring your company’s success. If things go wrong, it all falls back on you. That said, the freedom and sense of accomplishment of running your own business make the challenges well worth it.

    With good planning and strong business practices, you can avoid the pitfalls and drive your business to financial success. Learn the top reasons why small businesses end up in bankruptcy and what you can do to prevent that from happening to you.

    Poor cash flow

    Not bringing enough money in is the main reason why businesses fail. You simply must have more money coming in than is going out, or you’re on the express train to bankruptcy. This might mean increasing your prices or decreasing your costs, or a combination of the two. There might also be different service models you can offer (such as subscription services) or ways to branch out your income.

    Work with an accountant or bookkeeper to help you identify issues with your cash flow as soon as you know there’s a problem–or to prevent one before it happens. The earlier you catch a cash flow problem, the better.

    Insufficient initial funding

    Don’t rely solely on credit to fund your business. If you start in a deficit, climbing out of debt and becoming cash positive will be much harder. It can also be challenging to break the habit of throwing capital investments on credit in an attempt to start making money.

    Explore all of your options for initial funding. Make sure you have more than enough funding to start your business off on the right foot.

    Difficult market conditions

    Economic recessions or depressions can negatively affect businesses, especially those relying heavily on consumer spending. Unfortunately, there’s not much anyone can do about a poor economic climate but try to budget for the ebbs and flows of the market so you have breathing room if times get tough.

    An emergency account with money set aside for unexpected situations will at least give you some cash to survive on if things take a downturn.

    Poor financial management

    Finances can get complicated, which is why you need to make sure you’re on top of things. Failing to keep accurate financial records, not managing expenses effectively, and not correctly forecasting future revenues and costs are all issues that could hurt you financially.

    Work with an accountant, bookkeeper or advisor if you’re having difficulty managing your finances. They can help you set a plan and show you how to ensure your money is best used.

    Lack of market research

    If you can’t compete with your rivals, your business may struggle to generate enough revenue to stay afloat. This problem typically comes back to a lack of market research.

    An entrepreneur jumps into a market they’re passionate about, only to discover that somebody else is already offering the same thing – and they’ve already got the market cornered. Or maybe there’s no need for that particular product or service at all.

    Do your market research before going into business, and before offering a new product or service. The results will tell you whether there’s a need for what you’re offering.

    Legal issues

    Lawsuits, fines, and penalties can be costly for businesses, draining their financial resources. The best way to avoid this is to ensure you’re familiar with the rules and regulations you must follow or get help from a professional advisor when necessary. An ounce of prevention is worth a pound of cure.

    How to avoid bankruptcy

    While the reasons businesses end up going bankrupt may seem numerous, there are some specific things you can do to make sure it doesn’t happen to you, such as:

    • Maintain accurate financial records and regularly review your business’s performance.
    • Develop a solid business plan that includes realistic revenue and expense projections.
    • Diversify your business’s revenue streams to reduce reliance on a single source of income.
    • Stay current on industry trends and market changes.
    • Reduce unnecessary expenses and manage costs effectively.
    • Seek professional advice from accountants, lawyers, and business consultants when necessary.
    • Build up an emergency fund to help your business weather tough times.
    • Avoid taking on too much debt and manage what you already have effectively.

    By taking these steps, you can reduce the risk of bankruptcy and increase the chances of long-term success.

    Final thoughts

    A business might end up in bankruptcy for many reasons, but a bit of planning goes a long way. Do your research, be honest when you need help, and work with a financial professional to help you stay profitable. [Contact us] to further discuss how you can protect your business and learn how we can help.

     

    If you are thinking of starting a new business but may have some concerns in mind such as financial success please contact S & H Tax Accountants. We are a local Accounting Firm, that has achieved great success with out clients. We have wonderful and experienced staff members who are able to assist you in issues regarding Cash Flow, Initial funding or even Financial Management. Please contact us on 03 8759 5532 or email us on info@sahtax.com.au.

  • Financially Savvy Women: 5 Strategies to Improve Your Financial Literacy

    Financially Savvy Women: 5 Strategies to Improve Your Financial Literacy

    It is well established that financial literacy is a key component of financial independence. The more you know and understand about finance, the better equipped you are to make important decisions. Historically, women have had lower financial literacy scores than men for many reasons, including social norms, a lack of access to resources, and needing to focus on other issues.

    That said, women are living longer than men and studies suggest they face systemic barriers that make it difficult for them to achieve the same level of economic security and financial literacy that men can obtain. This, in turn, makes it increasingly difficult to accumulate wealth, plan for retirement, and invest money, despite women’s increased involvement in higher education and in the workforce.

    In recognition of International Women’s Day, here are some steps women can take to increase their financial literacy so they can make informed financial decisions.

    What is financial literacy?

    Financial literacy is an understanding of the value of money, how money works, and how to make money work for you.

    Seek out information

    Unfortunately, due to a lack of access to educational resources, a lack of financial resources and ongoing stereotypes about women’s ability to manage finances, women have often been shut out of financial conversations.

    A great step in building your financial literacy is to start pursuing information and knowledge. There are many resources available online, including introductory personal finance courses, newsletters, podcasts, and websites that explain key concepts. Many of them are written for a general audience, so they’re designed for beginners to understand.

    Find them, subscribe to them, and learn from them. Ask us for specific recommendations for your situation.

    Find an advisor you trust

    Women tend to view financial risks and investments differently than men do, and they tend to feel less confident in financial conversations. Find an advisor who respects you and your goals, and understands your unique financial needs. Make sure it’s someone you feel comfortable talking with and asking questions of. Ask them to explain everything to you, so you understand all the important terms, phrases, and strategies.

    Don’t be tempted to think you’ll never understand finance. You can, and you will. You just need someone to explain it to you in a way that is meaningful to you. And you need someone who builds a strategy based on your financial responsibilities and pressures.

    Build an emergency fund

    Build an emergency fund of your own. Having an emergency savings account gives you some financial independence, in case of a crisis. Find a way to save up three to six months of expenses, so that if you lose your income or financial resources, you have some breathing space. The work you put into saving that money and managing the savings account will teach you about how money works.

    Check your credit score

    If you have any credit in your name, you have a credit score. Knowing it and understanding the role it plays in your finances is a massive step towards financial literacy. Your credit score affects your eligibility for loans, leases, credit cards, and mortgages. Utility companies might check your credit score when you open an account, and rental agencies take it into account when renting to you.

    If your credit score is low, look into ways to build it up. There are many resources available to teach you about improving your credit score.

    Continue educating yourself

    You don’t have to become an expert in finance to be financially literate, but having a basic understanding will help you make better financial decisions, and it will help you get on the path to financial independence.

    Commit yourself to continually learning about finances, or at least to always being involved in your financial decisions, so you have control over your future.

    Final thoughts

    Financial independence involves you having the money you need to live the lifestyle you want, but it also means being confident in making your own financial decisions. Financial literacy can give you some of the confidence you need to make important decisions.

    If you need assistance understanding your finances, making sure that your information is correct or even building an emergency fund, S & H Tax Accountants can always help. We have friendly and experienced staff who are always willing to help and guide you to have the ability to be financially independent. Book in today at S & H Tax Accountants, call us at on 03 8759 5532 or you can email us on info@sahtax.com.au.

  • Differences between active and passive investing and why they matter

    Differences between active and passive investing and why they matter

    When you invest your money, it’s a given that you’re willing to take on some amount of risk. There are strategies you can employ to ensure the risk you’re taking is minimal, but it still exists.

    If you’re comfortable with a lot of risk to enjoy a greater reward, it’s important to understand that you could lose everything you put in. Of course, most of us aren’t putting our money on the line like that. There is a spectrum of opportunities between taking the maximum possible risk and not investing at all.

    One of the ways you can do this is by choosing between active and passive investing. But what do these terms mean, and why does it matter? Read on to find out.

    Active Investing

    Active investing means remaining involved in the trading process by actively buying and selling your investments. The person managing your portfolio makes decisions concerning what you buy and sell, reacting to conditions in the market. They aim to get ahead of the market by making smart choices that will lead to bigger gains.

    That may mean you are doing this work yourself or employing a portfolio manager’s services. Either way, someone is watching, and you’re putting your faith in their ability to spot opportunities to make significant gains quickly and move your money accordingly.

    Passive Investing

    On the other hand, passive investing is a strategy that aims to make gradual gains with few buying and selling moves. It’s cheaper because nobody is managing your portfolio to make short-term gains. Instead, you pursue a buy-and-hold strategy to hold your investment in a broad market index with a long-term gain on the horizon.

    The goal isn’t to acquire gains through taking advantage of market fluctuations or hitting on lucky timing. Instead, you’re trying to match the market by creating a well-diversified portfolio that will perform well over time.

    Which one earns the most money?

    That depends on how long a time you’re looking at. Sometimes a portfolio manager may indeed spot a diamond in the rough and invest at the right time, and the investor will make remarkable gains quickly. Over time, however, passive investing tends to have larger gains.

    In this case, the extra fees you would pay your portfolio manager are well worth it. However, it’s not a commonplace occurrence to strike it rich in the stock market.

    Who is each type of investing for?

    There is no rule about who should invest in what. However, a mix of active and passive investments would be worthwhile if that’s financially feasible for you.

    Investors with a higher threshold for risk, such as those with extra funds, are typically more attracted to active investment because the potential gains are appealing and the additional fees associated with having a portfolio manager aren’t as significant for them.

    For most of us, however, passive investments are the way to go. Their track record is proven, they are low-maintenance and straightforward, and they come with less stress.

    Final Thoughts

    Active and passive investment strategies both have a place in a healthy portfolio and can be undertaken by anyone looking to enter the market. A passive investment strategy will be beneficial if you wish to do something low-risk with a good chance of a healthy return.

    Contact us to discuss which investment strategy is right for you.

    If you need assistance with choosing which investment method, please contact S & H Tax Accountants. Book a consultation with us today, as we have experienced staff members who are able to help you in choosing between Active Investing or Passive Investing. Call today on 03 8759 5532 or email us on info@sahtax.com.au

  • Return on investment vs cost: how to weigh them when making business purchases

    Return on investment vs cost: how to weigh them when making business purchases

    Deciding to purchase something to help your business is a big decision. It can be difficult to part with hard-earned money, especially in the early days. To understand the right time to invest by purchasing something for your business, you must calculate whether the Return on Investment (ROI) would be profitable.

    The cost is the amount of money you spend making the purchase, plus any indirect costs (such as training costs) related to the purchase. The ROI is calculation of financial gains or benefits that you obtain as a result of that cost.

    To determine ROI profitability, there is a simple formula you can use. If the purchase yields a positive return, it can be considered profitable.

    However, if the purchase does not earn back the amount of money it costs, it would be considered a negative return on investment. Read on to learn more about how to weigh a potential return on your investment versus the cost.

    Return on Investment Formula

    Using a formula to calculate the ROI only offers a rough initial estimate. Other factors might come into play, such as future work you will get because of the new asset or unforeseen expenses. The formula to determine ROI is:

    ROI = (Net Profit / Cost of Investment) x 100

    Let’s see an example

    Suppose you run an environmental surveying company. You have three employees who spend their time in the field gathering data and taking stock of how a proposed development project would affect the landscape. Vegetation, waterways, animals – everything is taken into consideration.

    You have one client who would like you to perform a survey of very rugged terrain. They would pay $2500 if you could complete this work, but covering the landscape would be difficult and take time.

    The only way to do it effectively would be to purchase a drone for $1000. The new equipment would make taking on this work possible and save many hours spent physically in the field. It would cost $200 to train each employee how to use the drone.

    Additionally, having a drone would mean you could offer your new aerial surveying services to other clients who are undertaking more large-scale or complex projects.

    Calculating the ROI of obtaining new equipment for this project

    You would first tally your total expenses and expected revenue to decide whether this purchase would be profitable.

    Expected Revenue = $2500

    Total Expenses = $1000 + ($200 x 3) = $1600

    You would then subtract the expenses from your expected revenue to determine the net profit.

    Net Profit = $2500 – $1600 = $900

    To calculate the expected return on investment, you would divide the net profit by the cost of the investment and multiply that number by 100.

    ROI = ($900 / $1600) x 100 = 56.25%

    Your return on investment would be 56.25%, which is a positive return. Not only that, but your new equipment may allow you to gain more work in the future, making your ROI even better.

    What happens when you don’t put your investment to work

    What if you purchase the drone but find the learning curve overwhelming, and it winds up collecting dust in a corner?

    In this case, your client may not hire you, or the hours required to do the work on foot may make taking on the project cost prohibitive. This would result in a negative return on investment, especially if you have already performed the employee training. Your ROI would be zero, plus you would be down $1600 from the initial expense and training.

    Final thoughts

    While the idea of making a large purchase to benefit your business can be daunting, there are often significant rewards that come with taking the plunge. Do your research, calculate if the investment is worth it, and then move ahead confidently. If you calculate correctly, you will find that your purchase takes your business to new heights.

    If you need any assistance calculating the return on your investment, you can always contact S & H Tax Accountants. We have experienced staff, who can help direct your business in the right direction. Book an appointment today at S & H Tax Accountants, you can call us on 03 8759 5532 or email us on info@sahtax.com.au

  • 6 tips to paying down your personal debt in 2023

    6 tips to paying down your personal debt in 2023

    2023 is expensive. The cost of living is higher than ever, interest rates keep rising, and it keeps getting harder to stay afloat, let alone get ahead. As a result, carrying debt has become commonplace. But, with the challenges of the past few years, many of us have more debt than we’re comfortable with.

    How do you get ahead while you’re still trying to catch up?

    Here are some tips on how to pay down your personal debt this year.

    1. Take stock of your debt

    There’s no way to fully understand your situation if you don’t take the time to identify everything you owe. Because looking at your monetary situation can be stressful, many people choose to ignore their financial statements and just keep a rough estimate of how much they think they owe.

    This is a mistake. Turning a blind eye to the numbers won’t change them, and neglecting to look at your debts regularly will make it easier to continue spending.

    2. Identify which debt is costing you the most

    Between a mortgage, outstanding loans, credit card debt, car payments, lines of credit, and many more forms of debt, some will cost you more than others to maintain. Once you have a clear picture of everything you owe, determine the interest rate on each debt.

    This way, you can plan to pay down the most expensive debt you have first. Doing so will save you as much interest as possible, meaning that you can pay down your debt faster as time goes on. So make your money work as hard as it can by paying down that higher interest debt.

    3. Consider consolidating your debt

    While working with a debt consolidator can temporarily hurt your credit score, it might be worth it in the long run. It can be extremely stressful to look at multiple sources of debt, and it’s easy to be overwhelmed by it all. This often leads to missed payments, which also hurts your credit score.

    By consolidating your debt, you end up with one regular payment, which is much easier to manage. The temporary credit score hit can be well worth it if you have a complex debt situation or simply feel overwhelmed.

    4. Set a budget and save

    Once you have figured out your repayment strategy, make a plan so you’re not working against yourself. Look at the actual cash you bring each month and allocate those funds. Set aside money for living expenses, entertainment, and your existing debt payments.

    If you have any leftover money, start putting that in a savings account. You should work towards setting aside 3-6 months of living expenses so that if something unexpected happens, you have the money to deal with it and don’t have to rely on credit to help yourself.

    5. Adjust your credit card habits

    Credit cards come with many perks, but they’re only worthwhile if you can pay the amount you’re spending on them. Doing so responsibly builds your credit score and allows you to take advantage of the benefits of being a cardholder.

    If you don’t have the actual money to pay your credit card off each month, tuck it away somewhere so you’re not tempted to use it. It’s
    easier than ever to tap your card, but without the funds to back it up, you’ll find yourself back in debt before you know it.

    6. Increase your income

    Nobody wants to hear that they have to work more, but if after looking at your financial situation, you find that there simply isn’t enough money coming in to pay for what you’ve already spent, you will likely need to find a side hustle. The only other option is to decrease your living expenses, which is tough to do in 2023.

    Final thoughts

    Paying down your personal debt isn’t anyone’s idea of a good time, but it’s essential. The debt isn’t going to go away on its own. Once you start seeing improvements, you will feel encouraged to continue until it’s eliminated. Call your personal accountant to devise a strategy to pay down your debt this year.

     

    If you need assistance managing your accounts or need to formulate a strategy to minimise your debt, please contact S&H  Tax Accountants. We are a local Accounting Service that provide all tax services as well as bookkeeping. We have experienced and friendly tax agents that will do their best to provide you with the best outcome. Book an appointment today at S & H Tax Accountants, you can call us on 03 8759 5532 or email us at info@sahtax.com.au

  • What is inflation and how does it affect my savings?

    You can’t get through the news these days without hearing about inflation and how rapidly it’s increasing. Rates were generally low for quite some time and we all got used to it. Suddenly, however, everyone is getting squeezed by inflationary pressure.

    But what exactly is inflation, and how does it affect the money you have in the bank? Read on to learn more about what it is and what it means for your savings.

    What is inflation?

    Inflation is an increase in prices. Everything from a can of soup to a home costs more to buy. Of course, not all goods get more expensive at the same rate, and there are many reasons why prices go up.

    Year after year, things are more expensive than they were before. You’ll see this in action if you look at an old advertisement from 100 years ago. Things that used to cost a bit of change now cost much more.

    This is purposeful to some degree. Economists generally agree that a target rate of 2% annually is desirable to keep balance in the economy and promote growth. This rate allows central banks to lower interest rates to stimulate the economy if necessary without putting too much of a burden on the consumer.

    What causes inflation?

    The factors that cause inflation are varied and somewhat complex. There are a few different types of inflation as well. Supply and demand, production costs, worker shortages, printing money, and rising wages – all of these factors and more contribute to inflation.

    When the entire picture is considered, you can see why understanding any given inflation situation becomes a matter of healthy debate. While it’s clear that we as individuals have little control over inflation, we all want to know what it means for our bank accounts.

    Buying Power

    Any time your savings grow slower than the inflation rate, you will effectively lose money. Put simply, the money in your savings account must earn a higher interest rate than the inflation rate to continue to hold the same value.

    Currently, the global inflation rate is a few percentage points higher than the average savings account pays in interest. So while you have the same dollar amount in your account, that money now buys less than it could when prices were lower.

    The “Rule of 72”

    One interesting way of estimating how the inflation rate will affect your money is known as the Rule of 72. While it’s only to be used as a general estimate, it can help you imagine what will happen to your money if rates continue at their current level.

    To determine how long your savings will take to double, take 72 and divide it by your annual interest rate. For example, if you hold $100 in a savings account with a 2.5% interest rate, it would take 28.8 years for that account to reach a balance of $200.

    You can also use the rule to calculate how quickly these new higher prices would halve the value of your savings. Take 72 and divide it by the annual rate of inflation. If it’s currently 6.5%, for example, it would take just over 11 years for your $100 to be worth $50.

    You can see why an inflation rate higher than the interest you’re earning is problematic. While your actual dollar amount will continue to rise, inflation will undercut those earnings by making each dollar worth less.

    Remember that this is only a general estimation and doesn’t consider many factors. For example, it’s unlikely that the inflation rate would remain the same for 11 years or anywhere close to that. The Rule of 72 is only meant to illustrate the pace at which your money changes – to help understand the gap between the two rates.

    Final thoughts

    It’s easy to get caught up in the talk about inflation and how it devalues your money, but try to remain calm. Remember that while prices may never go down to what they once were, periods of high inflation have happened before, and they will happen again. However, they don’t last forever, and by continuing to make educated choices about where to invest your money, you will successfully weather the storm.[gravity form id=”3″ title=”true” description=”false”]

    If you have concerns about the rising inflation and how this would effect you, you can always talk to an accountant at S & H Tax Accountants, we have experienced and friendly staff who would love to help you. Book an appointment today at S & H Tax Accountants, email us on info@sahtax.com.au or call us on 03 8759 5532

  • 7 tips to help your small business adjust for inflation

    7 tips to help your small business adjust for inflation

    Forex Trade Graph Chart Concept
    Forex Trade Graph Chart Concept

    Inflation has ballooned worldwide in recent months, and there’s no question that small businesses are feeling the pinch. Supplies cost more, employees are hard to find, and your profits are shrinking.

    It’s undoubtedly challenging, but you can weather the storm with the following tips.

    1. Study your data

    Your numbers are always helpful, but in times of rapid inflation, you’ll be especially thankful that you keep a nice, clean set of books. Analyze your data to learn what products and services make you the most money, which ones cost the most to offer, and to identify where you can save.

    2. Cut expenses

    Now that you’ve identified where you can save money, go ahead and cut what you can. It’s nice to be able to offer many products and services, but
    this is a time to tighten your belt.

    Focus on the items that keep your business as healthy as possible, and ditch the rest – at least for the time being. It’s okay to simplify, especially when times are tough.

    3. Adjust your prices

    Nobody likes to raise their prices, but the reality is you likely have no choice. Keeping prices the same would indeed be wonderful for your customers or clients. However, if you’re offering your products or services at the same prices as before inflation started to climb rapidly, you’re absorbing the cost.

    When you dig into your data, you may find that some things you offer actually cost you a lot of money. That’s not a sustainable business model – raise your prices to keep yourself afloat, or find items that cost less for you to sell.

    4. Simplify and automate

    If aspects of your business take a long time to complete, see if there’s anything you can do to reduce those hours. Switching to cloud accounting or inventory management software would be excellent examples, as doing so would allow you to use your valuable time elsewhere.

    Identify where you can simplify and automate, and then do it. Then, even when inflation comes back under control, you will undoubtedly find that the saved time helps.

    5. Focus on your customer

    Remember that your customers are keeping you in business and experiencing inflation in their lives too – both at home and in their own businesses.

    Keep the lines of communication clear and open, especially if you’re going to alter your offerings or raise your prices. It’s a lot easier to retain loyal customers than it is to gain new ones, so make sure they know how much you value them and communicate openly to maintain their trust and loyalty.

    6. Consider your employees

    Good help is hard to find. Those who work for you are feeling the pinch as well. While it’s essential to automate what you can, you must consider the consequences it will have on your staff. Identify how you can better use their talents if parts of their roles become automated.

    7. Remember, this will pass

    Inflation has happened before and will undoubtedly happen again after this. Historically, periods of inflation last anywhere from a few months to several years. One thing, however, must be remembered: all periods of inflation end.

    Final thoughts

    While inflation is difficult for small businesses, there are steps you can take to reduce its impact. Focus on what you can control and face what you can’t with confidence and creativity. With some planning, clear communication, and smart adjustments, you will come out of this inflationary period intact.

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  • 8 tips for staying in budget this holiday season

    8 tips for staying in budget this holiday season

    The holidays are officially upon us, and chances are you’re starting to feel a bit spendy. It’s only natural. We want to spread that feeling of good cheer around by buying presents for those we love.

    There’s nothing wrong with that, but keep your pocketbook in mind. Nothing kills the joy of the season like a giant credit card bill come January. Keep your spending in check by following these tips.

    1. Make a budget early

    This might seem obvious, but there’s no way to stick to a budget if you don’t make one.

    The very first thing you must do to keep spending in check is plan ahead. Make a list of who needs a gift. Then brainstorm what they might like and what’s realistic for you to get. Do it early so that you have a spending plan in place.

    2. Wait for sales

    Since you’ve done all that terrific planning ahead, you now have the luxury of waiting for a sale. Keep a lookout when shopping in person too, since you already know what the items should cost.

    3. Create a gift

    You’re probably imagining the handmade gems you created for loved ones as a child, but fear not. You don’t have to be crafty to DIY a gift. Search online for inspiration.

    A homemade gift could be something to eat, or a service. Offer to look after children so parents can get a night out, for example.

    The same advice you heard as a child rings true now: a handmade gift almost always means more. There are lots of great ideas out there that don’t cost you a thing, but would mean the world to the recipient.

    4. Thrift

    Consignment and thrift shops are full of wonders. It’s not unusual to find items that are still in their original packaging. Even better, you might stumble upon something that’s truly unique.

    Just be sure to check any items to make sure they’re in good condition and that they have all the pieces.

    5. Share giving

    If you know that the perfect gift for someone is a bigger ticket item, consider joining forces. Team up with a sibling or a friend to tackle the larger expense together. It will mean a lot to the recipient to get what they really wanted, and to know that you worked together to make it happen.

    6. You actually can regift

    This one is a touchy subject for some, but it truly is okay to regift. If you have something that you haven’t used and it’s still in its original packaging, feel free to pass it along. You free up space in your home, and they receive something they need or want. It also produces zero waste.

    Just make sure it’s in mint condition – and no matter what you do, don’t give it to the person who gave it to you!

    7. Bring cash

    When you do head out to the shops to pick up your gifts, bring the amount of cash left in your budget.

    Leaving the credit card at home will make it impossible to overspend. It’s also easier to stay in check when you’re parting with physical money instead of tapping away with your card.

    8. Remember the spirit of the holiday

    It’s an old saying, but it’s true. The reason we’re celebrating doesn’t have anything to do with material gifts. Ask anyone what they remember about a holiday and it rarely includes what they received. People remember who they spent the day with and the memorable events that happened.

    Final thoughts

    With a bit of planning ahead you can stick to a budget this holiday season and still delight your family and friends. Take it a step further – see if you can come in under budget. With the cost of living higher than ever, that would be a truly wonderful gift to yourself. If you have any questions then feel free to call S & H Tax Accountants Cranbourne. S & H tax Accountants offer services to small business as an accountants. We are experienced advisors in Cranbourne and Accountants in Malvern East area.

  • Employee vs contractor – what you need to know

    Employee vs contractor – what you need to know

    Depending on the nature of your business, you may have workers who are employees or contractors, or you may have both. Each has their merits, but it’s important to review which are which in order to meet your tax obligations.

    When you have an employee, you must withhold income tax as well as report on additional benefits. Contractors generally look after their own tax obligations.

    It’s against the law to treat an employee as a contractor. Significant penalties apply if you do, so it’s important to get it right.

    The simplest way to remember is:

    An employee works in your business and is part of your business.
    A contractor is running their own business.

    But how can you be sure that you’ve got an employee or a contractor on your hands, especially with remote work blurring the lines between employees and contractors?

    Does there come a point that you should actually be hiring a worker as an employee, when you thought they were a contractor?

    There are six factors to consider:

    1. Ability to subcontract or delegate

    An employee is not able to subcontract or delegate the work. They must perform the outlined tasks themselves. If they can’t do the work themselves for any reason, say a prolonged illness, and someone else does it, this is substitution. Your business would then pay the other person to carry out those activities.

    A contractor can delegate the work as long as they’re not obligated to do it themselves as per the contract. If your contractor can’t work, they would arrange for another qualified person to do it. You would pay your contractor as usual, who would then pay their subcontractor.

    2. Basis of payment

    An employee is paid a set amount per period of time. The most obvious example would be an annual salary or hourly wage.

    Some employees are paid piece-work rates. They receive an amount per successful sale, or per the number of pieces produced. A commission basis would be a price per item structure.

    A contractor, however, is paid an agreed-upon price in exchange for a predetermined result. Some contracts may specify the amount to be paid in increments as stages of the project are completed. But the key takeaway is that a contractor is paid when the agreed-upon result is achieved.

    3. Equipment, tools, and other assets

    If your business is responsible for providing the equipment, tools, and other assets required to perform the job, that’s characteristic of an employee.

    If the worker is providing these items, they are likely a contractor.

    4. Commercial risks

    Employees do not bear commercial risk and they are not liable for correcting any defects in the work at their own expense. Instead, your business takes this responsibility. The worker will be paid for the time required to perform the task to completion.

    A contractor assumes the commercial risk. They are responsible for fixing any mistakes on their own time. This extra work would fall under the umbrella of the terms set at the beginning of the project. Your business does not have to pay for any extra time taken or materials used, unless otherwise specified in the contract.

    5. Control over the work

    Employees have to complete the work the way the employer specifies. What work is done, where it’s done, how it’s done, and when it’s done are all up to the employer. The employee then completes the work as required.

    Contractors are not subject to the same rules. They decide when and how the work is done, so long as it meets the obligations laid out in the contract. For example, a contractor could choose to work three 10-hour days to complete a job, rather than working four 8-hour days.

    6. Independence

    An employee works within a business. They complete tasks as required until they leave the job.

    A contractor operates independently and may have any other number of contracts on the go with other companies. They can freely accept and refuse other work. Their obligation is complete when they deliver the specified outcome.

    Final thoughts

    It can be confusing to make the determination between an employee and contractor, but it’s important that you do so in order to meet your tax obligations and play by the rules. Contact us to learn more about your tax obligations for employees and contractors. If you have any questions then feel free to call S & H Tax Accountants Cranbourne. S & H tax Accountants offer services to small business as an accountants. We are experienced advisors in Cranbourne and Accountants in Malvern East area. Book an appointment with S & H Accountants today! Call us on 03 8759 5532 or you can email us on info@sahtax.com.au

  • Employee vs contractor – what you need to know in AU

    Employee vs contractor – what you need to know in AU

    Depending on the nature of your business, you may have workers who are employees or contractors, or you may have both. Each has their merits, but it’s important to review which are which in order to meet your tax and super obligations.

    When you have an employee, you must withhold PAYG tax, pay super, and report and pay fringe benefits. Contractors generally look after their own tax obligations. However, you may still have to pay super depending on the nature of their work.

    It’s against the law to treat an employee as a contractor. Significant penalties apply if you do, so it’s important to get it right.

    The simplest way to remember is:

    An employee works in your business and is part of your business.
    A contractor is running their own business.

    But how can you be sure that you’ve got an employee or a contractor on your hands?

    Does there come a point that you should actually be hiring a worker as an employee, when you thought they were a contractor?

    There are six factors to consider:

    1. Ability to subcontract or delegate

    An employee is not able to subcontract or delegate the work. They must perform the outlined tasks themselves. If they can’t do the work themselves for any reason, and someone else does it, this is substitution. Your business would then pay the other person.

    A contractor can delegate the work as long as they’re not obligated to do it themselves as per the contract. If your contractor can’t work, they would organise for another qualified person to do it. You would pay your contractor as usual, who would then pay their subcontractor.

    2. Basis of payment

    An employee is paid a set amount per period of time. The most obvious example would be an annual salary or hourly wage.

    Some employees are paid piece-work rates. They receive an amount per successful sale, or per the number of pieces produced. Commission basis would be a price per item structure.

    A contractor, however, is paid an agreed-upon price in exchange for a predetermined result. Some contracts may specify the amount to be paid in increments as stages of the project are completed. But the key takeaway is that a contractor is paid when the agreed-upon result is achieved.

    3. Equipment, tools, and other assets

    If your business is responsible for providing the equipment, tools, and other assets required to perform the job, that’s characteristic of an employee.

    If the worker is providing these items, they are likely a contractor.

    4. Commercial risks

    Employees do not bear commercial risk and they are not liable for correcting any defects in the work at their own expense. Instead, your business takes this responsibility. The worker will be paid for the time required to perform the task to completion.

    A contractor does assume the commercial risk. They are responsible for fixing any mistakes on their own time. This extra work would fall under the umbrella of the terms set at the beginning of the project. Your business does not have to pay for any extra time taken or materials used. You only pay once the work is completed.

    5. Control over the work

    Employees have to complete the work the way the employer specifies. What work is done, where it’s done, how it’s done, and when it’s done are all up to you. The employee then completes the work as required.

    Contractors are not subject to the same rules. They decide the way the work is done, so long as it meets the obligations laid out in the contract.

    6. Independence

    An employee works within a business. They complete tasks as required until they leave the job.

    A contractor operates independently and may have any other number of contracts on the go with other companies. They can freely accept and refuse other work. Their obligation is complete when they deliver the specified outcome.

    Final thoughts

    It can be confusing to make the determination between an employee and contractor, but it’s important that you do so in order to meet your tax obligations and play by the rules. The ATO has a great tool to help you determine the status of your workers. If you are also in need of understanding your tax obligations please contact S & H Tax Accountants, our team of accountants are well-qualified, vastly experienced and extremely professional. Book an appointment today with S & H Tax Accountants, call us on 03 8759 5532 or you can email us on info@sahtax.com.au

  • 5 signs you need to start outsourcing tasks

    5 signs you need to start outsourcing tasks

    When you start a small business, it’s usually only you behind the whole operation. You wear many hats, from CEO to clean-up crew. As you pour your heart and soul into your business and it begins to grow, the amount of work involved grows with it.

    Because a small business is so focused on survival, you pay a lot of attention to the bottom line. This makes a lot of sense, but it also leads to being seriously overworked.

    There will inevitably come a time when you have to consider letting go of some control and paying others to take some things off your plate. Here are five signs that it’s time for you to start outsourcing tasks:

    You’re overwhelmed and stressed

    This one’s a dead giveaway. If you find that there isn’t enough time in the day, you’re losing sleep, free time is a thing of the past, and you’re not your usual self — you’ve reached burnout. This is not a sustainable place to be, and you would be wise to start offloading some activities ASAP.

    You’re spending time doing things you hate

    Nobody goes into business hoping to spend their days completing tasks they despise. It starts with a dream, or an idea for how to make things better. Or even an idea for how to make more money. Whatever the reasons you had for starting your business, they likely did not include doing chores that are tedious or that you don’t enjoy.

    When you decide to outsource, start with functions that are eating up your time in an unenjoyable way. Once you let these go, you’ll find your purpose renewed because you can focus on what you loved about your business to begin with.

    Quality of work has gone down

    When you’re working hard and trying to manage all aspects of your business, it can be easy to miss this sign that you’re not juggling it all as well as you thought. Many times, the first signs come from a client complaint–often along the lines of delivering a lower-quality product or missing something in your services.

    When the quality of your work declines, it’s definitely time to hire some help. If you’re not satisfying your customers, your business will begin to suffer – and then you won’t need the extra help after all, because there won’t be a business to run.

    No time to grow

    If you want your business to grow, you need time to plan for it. If you’re just getting by and not able to plan your next steps, you need to outsource some tasks. When you find that you’re barely holding it together to get everything done and there’s not time for anything else, get help. No business gets to the next level by completing the bare minimum.

    No personal time

    When your work life is taking over your personal life, it’s time to enlist some help. It isn’t sustainable to work so hard that you have no time for family, friends, or enjoyable pursuits.

    You might be saving a bit of money, but you will also exacerbate your stress and miss out on the enjoyable parts of life. Did you get into business so you could work 16 hours a day seven days a week? Probably not, but you may find yourself doing that for weeks and even months at a time.

    If that’s the case, you’re going to burn out. It’s time to get some help.

    Final thoughts

    It’s a difficult mindset shift for an entrepreneur who has spent all their time so far trying to save and earn as much as possible. But needing to outsource your tasks is actually a sign of success. When you take the leap and hire someone to share the burden, you will be pleasantly surprised by the many ways that it pays off. Get in touch with S & H Tax Accountants Melbourne if you’d like to learn more about how we can help make outsourcing easy for your business. S & H Tax accountants Melbourne and small business Accountant Cranbourne offer outsourcing service to small businesses. Call your Accountant at 1300 724 829

  • Time Blocking vs Time Boxing, other techniques, and how it all fits together

    Time Blocking vs Time Boxing, other techniques, and how it all fits together

    In a world with endless distractions, it’s no wonder that we find it difficult to complete tasks. Focus is hard to come by these days.

    This is especially true when you’re working from home. Household tasks that would otherwise be out of sight and out of mind are suddenly in your workspace.

    With that said, there are some proven methods to help you get things done. Time blocking and Time boxing are the two main techniques, though there are some others as well. Read on to find out what might work best for you.

    Time Blocking

    You’re probably most familiar with time blocking. Schools and factories are designed with this technique in mind. We work on a specific task for a set amount of time, and then we move on to the next thing when that time is up. Perhaps that time is punctuated by a bell or an alert, just like in school.

    Enter Parkinson’s Law – the idea that work expands to take up the amount of time allowed. Have you ever noticed that if given three weeks for a project, it takes three weeks to do?

    It’s no coincidence. You’ve likely subconsciously worked at a pace that caused it to take that long. And succumbed to all sorts of procrastination, perfectionism, and other useless pursuits in the process.

    But it’s not all bad. Time blocking is an excellent way to get something started. Once you dedicate a bit of time to a project you’re stuck on, you’re going to identify sub-tasks that need completing. And those are useful for getting the most out of your time.

    Time Boxing

    Time Boxing flips time blocking on its head. It’s the preferred method of productivity for Bill Gates and Elon Musk. Instead of allocating an amount of time to work on a task, you allocate the amount of time it will take you to get it done.

    It’s a mind shift where you decide when you will get something done. You then plan your day into boxes that are as small as 15-minute increments. And then you do what’s required in that amount of time.

    If you find that you didn’t complete your task, you add more time to complete it the next time you’re time boxing.

    Another key element of time boxing is the concept of working without distraction. Because you’re working against the clock to complete your task, you’re less likely to respond to a distraction. Once your time is up, it’s up. You can check your distractions later during the time box allocated to them.

    Pomodoro

    You’ve likely heard of the Pomodoro technique – the one with the cute little tomato-shaped kitchen timer.

    It’s a type of time boxing where you allow 25 minutes for a task, and then take a 5 minute break. Repeat as necessary.

    Task Batching

    Here you allocate time to complete many low-value tasks at once, such as reading emails. It’s meant to keep your mind focused on activities that require similar thought patterns as opposed to jumping between tasks. Many people find it difficult to focus this way, because there’s not a ton of concentration required.

    Day Theming

    Some swear by keeping a theme to each day, such as “marketing” or “lead generation.” It’s another form of task batching, but with heavier tasks in mind. The idea is to keep everyone focused on the job at hand and to avoid having to switch gears.

    The 80/20 Rule

    This is the Pareto Principle – the idea that 80% of output comes about from only 20% of input. In other words, we should place a priority on the 20% of factors that will produce the greatest results.

    But beware – this doesn’t mean that we ignore the other 80% of tasks. It means that you should give the most attention to the things that will create the best return.

    Deep Work

    This is the practice of eliminating distractions and creating an almost cave-like environment to work in. This way, you can really tune everything out and get to it. Research suggests 90-minute increments are best for deep work.

    Final thoughts

    There’s no right way to be productive. It’s a personal subject that’s different for everyone. However, eliminating distractions to get things done is universal. Try any combination of the techniques mentioned above to find what works best for you and your workplace. Get in touch with S & H Tax Accountants Melbourne if you’d like to learn more about how we can help . S & H Payroll accountants Melbourne and Payroll Accountant Cranbourne offer outsourcing service to small businesses. Call your Accountant at 1300 724 829

  • 5 common payroll implementation errors you can easily avoid

    5 common payroll implementation errors you can easily avoid

    Upgrading or changing your payroll system comes with a ton of wonderful benefits. Saving time and money, making everyone’s lives easier, and better integration are all good reasons to consider a change.

    But if the switch is mishandled, the results can be catastrophic and lead to long-lasting problems. Read on for some tips on how to avoid a disastrous payroll system migration.

    1. Give the project the time it needs

    It’s true that people may enjoy coming to work. But for most people, earning money is the main reason they seek out employment. Our jobs make the world go round, and support us and our families so that we can afford everything else in life.

    Not getting paid, or getting paid incorrectly, is a massive problem for your employees. As a business owner, you want to make sure your employees are paid right and paid on time. This protects your business, but it also protects their happiness.

    Changing payroll systems is a huge undertaking. There are many moving parts and people who will be affected. Make sure to give this project the time and attention it deserves.

    Determine what will be necessary to make the transition, understand who it affects, and communicate with everyone involved. The planning process is critical. Treat it as the foundation to making the switch, and the rest will fall into place.

    2. Map out integrations

    All payroll software will do the basics, but that’s just the beginning of your new system. Learn about what other software will integrate with your new platform. Do your research for what add-ons you will need, and build accordingly.

    Your new system will be able to connect with HR software, advanced accounting functions, time tracking tools, and so much more. Envision what your complete system looks like and understand how to get it to all work together.

    When you have the full picture from the planning stage, it will make the transition a lot smoother.

    3. Adjust the platform to your needs

    The main motivation for implementing a new payroll system is to make things easier. Yet, many businesses overlook the ways that their new technology can help. It’s easy to lean on old methods for getting things done because they’re familiar, but that would be a mistake when switching to a new payroll system.

    Make sure you know about and understand the features of your new platform. This is where the real time, money, and energy savings will come in. Automate anything you can. When these tools prove their worth, your team will understand the reason for switching.

    4. Don’t bring over bad data

    When implementing or switching to a new system, take the opportunity to go over your incoming data. Yes, all of it. Get rid of what you don’t need, while keeping in mind what you have to keep on hand according to any relevant tax agencies.

    While payroll software is incredibly helpful, it can only do so much. If you put bad data in, it will spit bad data out. Go over the information you’re inputting with a fine toothed comb to get the best result.

    5. Test, test, test

    This phase is critical, and is often overlooked. Before you officially implement anything, make sure to test it out. There’s no quicker way to turn your staff off of something new than for it to work poorly or not at all right out of the gate. Take the time to test now and reap the benefits when you go live.

    Final thoughts

    Deciding to change your payroll system is a big undertaking. But with some planning and preparation, it can be a smooth and rewarding transition. Get in touch with S & H Tax Accountants Melbourne if you’d like to learn more about how we can help make payroll easier for you. S & H Payroll accountants Melbourne and Payroll Accountant Cranbourne offer outsourcing service to 20plus employee businesses. Call your Accountant at 1300 724 829

  • Important Things to Know about an Estate Plan

    Important Things to Know about an Estate Plan

    If putting together your estate plan isn’t at the top of your priority list, you’re not alone. It’s something that people typically don’t want to do–for a variety of reasons. It’s not fun to think about what happens after we’re gone, and we often believe we have a lot of time to get our affairs in order.

    No matter how large or small your estate is, you need a plan to ensure your wishes are carried out and your loved ones are taken care of in the way you see fit. A will is an important part of your estate plan, but your estate plan is bigger than your will.

    Here’s what you need to know about having an estate plan.

    It’s for everyone

    The term “estate plan” may make people think that it’s only for the incredibly wealthy, but an estate plan is for anyone who wants to ensure their assets–whatever those maybe–are available and accessible to their beneficiaries. Assets include bank accounts, investments, properties, vehicles, household furnishings, and anything else that you own or are owed.

    Beyond that, an estate plan lays out where your money should go, who should be in charge of your estate, and who will take guardianship of your minor children.

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    Your priorities might change

    Review your estate plan regularly, especially if you have a major shift in your circumstances. The will you wrote when you were 30 and newly married may no longer reflect your wishes now that you’re 55, and on your second marriage with three children, 2 step-children, and a grandchild.

    Perhaps you’ve purchased a second property, now have a retirement plan, or have collected valuable artworks. These are all items that can change how your estate is divided. Any change in your circumstances should trigger a review of your estate plan.

    This estate plan review should include who your beneficiaries are and if they’ve changed recently, how you want them to receive your assets, who you trust to make important medical or financial decisions if you become unable to, and how your bank and investment accounts are managed.

    It’s not just for after your life

    We associate estate planning with death, but it’s just as much about planning for disability or incapacitation. Your estate sets out who can access your money to ensure your medical needs are taken care of–and who will make important decisions on your behalf. Without an estate plan, someone in your family may have to petition the court to be allowed to make decisions for you, and you run the risk that the person granted that ability is someone you don’t trust.

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    If you don’t have a plan, decisions will be made for you

    With an estate plan, you dictate how your assets are distributed. Without a plan, your assets are distributed according to the law where you live. Simply living with your significant other might not be enough to ensure they receive your estate in regions that don’t validate common-law marriages. In those areas, your estate goes to your biological family, not your unmarried partner, unless you have a will.

    If you have a blended family, you may want your biological children to receive all of your estates or you may want it split with your current spouse and their children from a previous marriage. Without an estate plan, those wishes may not be carried out.

    Final thoughts

    An estate plan is a vital part of your financial planning. It sets out how you want your estate distributed, who you want to be in charge of, and who can make decisions for you if you’re not able to. If you’ve been putting off your estate planning, now is a great time to get started. Estate planning is important for you and your next generation. S & H Tax accountants cranbourne can help you in estate planning.

  • Understanding different types of insurance

    There are many types of insurance for individuals, and choosing the right ones for you can be overwhelming. These policies are distinct, yet they often overlap.

    It’s smart to review your personal insurance policies any time you have a significant life event. This ensures that you and your loved ones are cared for should you find yourself unable to work.

    Read on for a brief explanation of the different types of individual insurance.

    Life Insurance

    This is the main way to protect your family and dependents from financial hardship if you die. It is an agreement between you and an insurer, where you pay the insurer premiums and in exchange, they pay your estate a certain sum upon your death. The paid sum is called a death benefit.

    If you have named a beneficiary, the money goes to that person instead of to your estate. The sum received by your beneficiaries can be used for anything, from funeral costs to everyday bills to putting a child through college.

    There are a few different types of life insurance, so you’ll still have to do some research to determine which type makes the most sense for you.

    It works to your advantage to get a life insurance policy early. Your health and age will be evaluated to determine the coverage you’re eligible for and how much it will cost.

    There are some limitations to life insurance. For example, suicide within two years of purchasing the insurance is not covered. Often, death by extreme sports is also not covered.

    Income Protection

    Also known as disability insurance, income protection is a long-term policy designed to protect your income if you become unable to work. It lasts until you are either able to return to work or you retire.

    Income protection insurance typically covers 50%-65% of your regular income. It acts as a safety net so that you are able to pay your bills and mortgage when you can’t work. It would cover instances of illness or injury, either short or long-term. The payments are ongoing and regular.

    This insurance can be claimed as many times as necessary as long as the policy lasts. There is usually a deferred waiting period of several weeks before payments begin. It is distinctly different from illness or injury insurance, which instead pay out a lump sum.

    Illness insurance

    This insurance covers a critical illness, such as cancer, stroke, or heart attack, but exact coverage may vary depending on your policy.

    The benefit received is paid like that of life insurance, in that it is a lump sum and can be used in whatever way you see fit. Often this payment will go to something related to your care or income replacement, but it doesn’t have to.

    Injury insurance

    Injury or accident insurance covers you if you experience an accident that prevents you from working. What qualifies as an accident varies from policy to policy, so make sure to go over what’s included.

    These policies typically exclude injuries that occur while the covered person is intoxicated or committing an illegal act.

    Long-term care insurance

    The costs for long-term care can be enormous. Long-term care insurance would reduce that should you need care either in your home or in a facility.

    These policies provide ongoing cash payments, but read the details to find out exactly how your policy would work.
    Health insurance

    A health insurance policy varies widely based on your country of residence. Typically you pay a premium in exchange for coverage of a wide range of health care needs. How this is structured depends on where you call home.

    Imagining adversity that may come your way is not anyone’s idea of fun, but it’s responsible to take steps to protect yourself in case these things happen. Obtaining a set of personal insurance policies ensures your loved ones would be okay. The peace of mind is well worth the cost of the associated premiums.

  • When to raise your prices

    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.