Cashflow
4 Things to do NOW for your Business
David Balwin
CPA | Accountant | Business Advisor
With 30 June fast approaching, now is the time for Business Owners to prepare for the next financial year. Here are the four main activities you need to be doing right now to position your business for another successful year.
1. Tax Planning
Make an appointment TODAY with your Accountant for Tax Planning. Tax Planning looks at a financial situation or plan from a tax perspective with the aim to align financial goals with tax efficiency planning. Basically, tax planning looks to discover how to accomplish all of the other elements of a financial plan in the most tax-efficient manner possible. However, a word of caution – while tax planning is an important element in any financial plan, it is important not to let the “tax” tail wag the financial “dog.” As most financial actions have some tax implications, decisions on financial actions need to be made having regard for all matters and should not be avoided solely on the basis of tax.
Undertaking tax planning now can look at any actions to be undertaken before 30 June as well as actions for the next financial year. As planning can be a bit involved depending on individual circumstances, give your Accountant a bit of time to do the best job and don’t leave it to the last minute.
2. Setting Next Year’s Goals and Targets
Now is the time to start reviewing your business plan. If it is sitting in a draw (or on the computer) and hasn’t seen light of day for awhile, get it out, dust it off and have a look at what was planned for the business this financial year and what was achieved. Did things happen as planned? Were goals and targets met (or exceeded)? Did projected costs occurred or did they blow-out or result in savings?
Looking at this information, it is now time to update the business plan for the next 12 months. What goals and targets need to be set? What timeframes need to be identified for actions to achieve goals? What research and reviews need to be undertaken in relation to improvement of costs (eg, can you get a better deal on telephone accounts or stationery/office supplies)?
Planning is a vital exercise for all businesses. It underpins decisions and behaviours as a road map to achieve what you have set out to achieve.
3. Setting Next Year’s Budget and Cashflow Projections
CASH IS KING – the mantra for all business owners. If the business is not making money then it shouldn’t be in business. But more than that, the business needs to make enough money at the right time to cover expenses. Now is the time to use the information at hand to set the business’s budget for the next financial year and look at cashflow projections so you know how much money needs to be in the bank and when to pay the bills.
4. Ensuring Pricing of Goods and Services is Right
This is also the perfect time to review the revenue side of the business. Look at the pricing of your goods or services and see if any changes need to be made over the next financial year. Are you competitive with your prices compared to your competitors? Does CPI increases need to be factored in? Are your prices positioning you in the market where you want to be?
No matter how hard a business tries, if it has increasing costs and is not able to increase price, then no amount of increased sales will lead to increase profitability – in fact, the business maybe simply increasing its loss. For more information on this topic, refer my previous Blog – Increase Price –v- Increase Sales – what to think about.
Call the Balanix Team (3264 4783) today – we can help!
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.
If you wish to find out more, follow our Blogs or contact Balanix Solutions for a free one hour consultation.
Stay safe – is your BAS agent registered
David Balwin
CPA | Accountant | Business Advisor
The Australian Taxation Office advises that if you use someone to prepare or lodge your business activity statement (BAS), you need to make sure they are registered with the Tax Practitioners Board (TPB). If they are not registered, there are significant risks to you and your business because they:
- are acting illegally
- may not have the qualifications and experience required of a registered BAS agent
- may not have professional indemnity insurance cover
- disqualify you from the protection available under the penalty safe harbour provisions which we administer.
The transitional registration option is only available until 28 February 2013.
Don’t take their word for it … ask to see their registration certificate or check the Register of registered and deregistered tax agents and BAS agents on the TPB website.
You will find Balanix Solutions on the register! Need a professional bookkeeper on Brisbane North (Strathpine) – Call us – we can help!
(Source: ATO SME Communicator December 2012)
