Financial Management
Big Gains in Your Loss – Don’t let it happen
David Balwin
FCPA | Accountant
Business Advisor
Just recently I had the experience of having to go to my bank and have my credit card changed due to a number of small suspect transactions showing up on a regular basis. First it started with one or two $2 to $3 dollar transactions a week or so apart, then a couple of days apart and then the amount increased to around $10 per transaction.
A little bit of detective work confirmed my initial fears. I simply copied the wording from my credit card statement for a suspect payment and search on the internet. And yes surprise, surprise one of the transactions showed up a common suspect transaction. With this ammunition I headed off to my bank to have things checked out in more detail.
In reviewing my account some of these transactions went back close to 12 months.
Gone are the old days of gangs taking high risks and robbing banks for $’000s which the authorities took seriously. Today, the criminals are not seen and very hard to identify and steal small amounts from thousands of people. Why this is so appealing to them is that they can operate off-shore with little chance of detection let alone conviction and reap millions on an ongoing basis. Funnily enough they often don’t see themselves as criminals as they don’t believe the individual they are “stealing” from lose out as the bank refunds them the money.
They seem to conveniently forget if the bank has to take out insurance that cost is eventually borne by the customers of the bank or the shareholders of the insurance company. In reality there is no such thing as a victimless crime.
This type of crime is unlikely to go away as banks have heavily committed to the internet as a way of reducing costs by having customers do the work that tellers use to do. Also banks may be reluctant to be open about the cost of this type of crime as it would highlight potentially just how big the issue is and as a consequence lower customer confidence in the internet.
The lesson for small business is to ensure that you regularly check your accounts for unusual transactions and report them to your bank.
Remember the old saying “look after the pence (cents) and the pounds (dollars) look after themselves”.
Balanix Solutions – Accountant, Business Advisor, Bookkeeping.
Situated in Strathpine on Brisbane North, we partner with our clients to assist them in their accounting, business management and bookkeeping needs. Our clients vary in industries from professional services (such as law, vet and dentist) to the trades (mechanic, bricklaying, plasterer etc), hospitality and retail. Are clients are located in the Pine Rivers area (including Brendale, Lawnton, Albany Creek and Eatons Hill) through to Kallangur, Petrie, North Lakes and Caboolture, as well as Brisbane South, the Gold Coast and various other parts of Queensland.
Working From Home – Is it right for you?
Sally Balwin
Recruitment | HR | Business Development
Did you know that at least 18% of Australians work in their pyjamas when they work from home – more than any other nation.
So if you deal with a client who works from home make sure you give them a call before dropping in or be prepared to face the consequences!!
But on a more serious note, if you are considering the option of working from home be aware that it is not for all people. It sounds great, but unless you are very disciplined and well organised it can lead to disaster.
There can be many distractions that you think you can handle without too much hassle, but in reality it is not that simple.
Working from home maybe one of those things that you want to try before jumping in the deep end. It can work and be very enjoyable, but you need to look at it from all angles.
- If you have or need clients to come to your workplace how do they feel about it?
- Can you separate home from work hours; that is instead of giving you a more balanced lifestyle would it in fact take the balance away.
- Do your clients understand that simply because you work from home does not mean you are available 24 hours a day seven days a week?
- How do you feel about the isolation of working from home?
- Are you the kind of person who is energised by the interaction with colleagues and the social aspects offices provide?
The other key areas to consider, when considering working from home, are the taxation, other legal/regulatory requirements and insurance/workplace health and safety implications. I hear many comments from people who work from home about what they think they can claim in tax, relying on home insurance coverage even though they are operating a commercial business, not realising some local councils have strict rules on home base businesses etc etc. It is imperative professional advice is sought, before setting up a home base business, from an accountant, lawyer, the local council and insurance broker (to name a few) to get the facts and make sure all the right things are in place and no nasty surprises arise down the track.
If you are considering working from home, take the time to talk to a number of people who have done it or are currently doing it and ask them for honest feedback as to what the benefits and downsides are for them so your decision can be well informed.
8 Bad Money Habits to Kick – Final 2
David Balwin
CPA | Accountant | Business Advisor
Welcome to the final blog in which we look at 8 money habits business owners should make sure are NOT occurring in their business.
Funding Tax liabilities at the last moment.
All business owners are certain of two things …. Cashflow will have ebbs and flows and there is always a tax liability in some shape or form.
Depending on the nature and size of the business various tax obligations and liabilities may apply. There is company tax, goods and services tax (GST), payroll tax to name but a few.
Unfortunately, some business do not plan for these liabilities and find themselves stressed and unsure where to find the money when the taxman comes knocking.
Like all good business practices, plan the business’s tax obligations and set up a process of putting the money away on an ongoing basis so it is there when payment is due. If need be, set up specific bank accounts for GST and long term liabilities so the money goes out of sight thereby reducing risk of spending by accident.
Saving what’s left after paying everyone else.
Debts have to be paid. Businesses need to establish good credit profiles in order to maintain good suppliers and financial arrangements. With cashflow in and required cashflow out not always dancing in harmony, business owners need to save along the way to ensure adequate funds when needed. Set a percentage of income to be saved on a regular basis and don’t rely on scraps if and when there maybe some. Also, manage the payment of bills ensuring they are paid on time but not necessarily the minute they come through the door. Budgeting and forecasting is another tool to stay on top of cashflow and the financial health of the business.
Need help – Call me today – 07 3264 4783
8 Bad Money Habits to Kick – Part 3
David Balwin
CPA | Accountant | Business Advisor
Welcome to Part Three of four Blogs in which we will look at 8 money habits business owners should make sure are NOT occurring in their business.
Not seeing how the little things add up
“While I’m here I’ll just grab some of this and some of that – I’m sure we need it or it will be useful somehow in the business.” or “I know there is a fee if I withdraw from this ATM, however, my Bank’s ATM is outside and round the corner, and the time it would take me ….”
Sound familiar? It’s the little purchases and expenditures that start to add up and can significantly affect cashflow and health of the finances. Make sure you monitor what office supplies and purchases are needed and when .. and only spend to the plan! If you need to withdraw money, either keep a petty cash float or go the extra mile to your bank- those charges can really add up.
Generally think … do I need to spend that money … am I maximising the money I am spending … so there are no nasty surprises at month end.
Not planning for retirement.
Of course we’re planning for retirement … the retirement funding plan is established and superannuation is set up – usual questions such as, is there enough contribution and is the fund performing well, are being asked and monitored.
But what about the business at retirement time?
Plans need to be developed to migrate the business when it is time to enjoy the fruits of your labour. Is it intended to sell the business? If so, what lead time would need to be considered? Will the business be wound down? If so, how will this occur?
As with start up, at business end we need to plan, plan, plan.
Call me today if you need help managing your business’s wealth – (07) 3264 4783
8 Bad Money Habits to Kick – Part 2
David Balwin
CPA | Accountant | Business Advisor
Welcome to Part Two of four blogs in which we are looking at 8 money habits business owners should make sure are NOT occurring in their business.
So far we have looked at:
- Spending without a Budget
- Carrying a Balance on Credit Cards
Read on for this blog’s money habits not to have.
Not Monitoring Interest Rates
Whether it is your investment rate or what you could get on a borrowing refinancing it pays to continuously monitor borrowing and investing prices. No one wants to lose money if they could have got a better investment rate – and no one wants to pay more than they have to for debt. With profit margins reducing and costs of running businesses rising it is good management to stay on top of interest rates and trends which impact both your business and personal finances.
Not properly insuring for income protection and disability
Anyone who runs their own business and supporting themselves needs to consciously assess the risks of not properly insuring for loss of income due to injury or illness. If something prevents you from working for a few weeks or more, proper insurance could be the difference between tightening the businesses expenditure for a while until you are back on your feet and closing the doors. Business insurance coverage can be expensive with defined conditions. Do your homework and shop around for the best value for money for your price range. Remember, with the benefits of being your own boss comes the responsibility to ensure proper business coverage.
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