RA Business Advisors

Small Business

Security – The Endless Dilemma

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Internet security

 

In this day and age, nothing takes precedence more than security. When I say security, I’m not talking about locking your front door or installing a home security system. I mean keeping your account and business information secure and encrypted.

Attention-grabbing headlines relating to online scams, hacks, or viruses are endless, we are constantly trapped worrying that our secure data is being uploaded to someone halfway around the world. Despite these endless stories, the internet is still safe for businesses – provided you take necessary precautions.


Information Matters

No matter what hard drive you use, IT guy you’ve got on speed dial, or how locked tight you keep passwords; your valuable information is NOT safe. From accidentally spilling your morning coffee, to a virus infecting your system and stealing all your valuable information.

Viruses have been plaguing computers well before illegal downloads occurred. In fact, computer viruses (or worms) first began in 1971 with ‘The Creeper Virus’. The first worm was simply an experimental program that became self-replicating, and an anti-virus program was created to remove it. Whilst virus and anti-virus are considered quite yin and yang, security packages just won’t cut it when a hacker wants your information.

To defend against these notorious criminals you don’t need to hire a professional anti-hacker for combating worms, you simply need to move your accounting to the cloud. The cloud replicates your data in different locations to make sure it’s both secure and available when you need it. Not even a natural disaster can affect your accounting data.

Your decision

If you’re thinking about moving your accounting the cloud, look no further than Xero. Security is the top priority and Xero takes every measure to ensure your information stays safe. You won’t need to research what cloud company to join, as Xero has done their due diligence and already utilize a secure and reliable company.

Beginners Guide to Surviving Tax Season

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1. Bookkeeping

Whether business or personal, everyone should be doing this in some capacity. Tracking your income and expenses makes tax preparation and filing so much easier for you and your accountant. To file your taxes, your accountant needs an up-to-date balance sheet (businesses), an income statement, and a record of capital-asset activities for the year (buying, or selling of assets).

2. Receipts and records

Record keeping is the number one priority anyone should have regarding expenses. It doesn’t matter if you keep your receipts organised in a shoebox or online, your accountant will thank you.

Protip: Reduce the clutter by choosing software that allows you to upload and store your receipts.

3. More than just receipts

Sometimes a receipt just isn’t enough. I know, it hurts to hear but it’s the truth! Providing fuel receipts for the use of your personal car won’t cut it. You need more information to back your deduction. The most effective way is to create a log. Track your km’s based on business vs. personal. The ATO won’t accept deductions for personal use, so make sure you make it clear how far you drove for business reasons.

Protip: Driving to and from work is NOT deductible

4. Deductions

Business expenses must be ordinary (accepted within your trade) and necessary. It’s also important to separate personal and business expenses, capital expenses, and any expenses related to the selling of goods (cost of goods sold).

5. Tax strategy

Tax-deductible business expenses are a great way for small businesses to reduce their tax liability. This is especially helpful for companies that are aggressively spending in order to expand. These reasons (and many more) are why tax strategies are so paramount for your business. This is why you need to choose a trustworthy and effective business advisor.

Whether you’re clambering to make your 2017 tax deadline or you’re just not sure what expenses you can deduct, you’ll need an accountant that understands your business and its year-long activities.

To speak to someone who will happily get to know you and your business, call RA Business Advisors on 07 3367 0852 and speak about your tax woes today!

 

Small Business Owners: Why they can’t sleep

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Can't sleep

Why Small Business Owners can’t get any sleep

Time management and cash flow concerns are keeping Small Business Owners (SBOs) awake at night. They are constantly fretting over slow paying debtors and an endless lack of time. I’m not going to bore you with statistics but if you’re interested, check out the graph below:

Reasons why Small Business Owners can’t sleep

Slow paying debtors

Small businesses always seem to find themselves at the mercy of slow paying debtors. Picture your business as a scale, on one end you’ve got creditors and on the other end, you’ve got debtors. Unfortunately, big businesses don’t give you much time to pay (that phone bill is due ASAP), whilst debtors use small businesses as a source of working capital. According to the Australian Competition and Consumer Commission, three out of every four businesses are paid late (link). Thinking back to that scale, if your debtor pays on time the scale tips in your favour (providing cash flow), if that debtor pays late, the scale tips towards creditors – meaning debt.

Where does the time go?

Many SBOs complain they don’t have enough hours in the day to do everything that is required for their business. The majority work a minimum 50 hours per week (that’s roughly 10 hours a day for a five day week), yet state they still can’t get everything done. As much as they would like to explore alternative ways of improving their cash flow, they never have the time!

Unfortunately, technology hasn’t been as advantageous as we previously thought.

See: Make Technology work for you

Reduce the risk

  1. Set a maximum figure for outstanding total invoices – if a customer has not settled their outstanding account, bar them from receiving more products or services until the account is settled
  2. Upfront pre-payment – Opt for upfront pre-payments with as many customers/clients as possible (i.e. service plans, fixed monthly plans, etc)
  3. Obtain part payments (milestone) for larger projects
  4. Pay your bills manually – opt for manual payments, rather than direct debit. This can help greatly with cash flow timing issues

Often cash flow problems are caused by out of date bookkeeping and slack financial management.

We can help

At RA Business Advisors, we can assist our clients with a whole range of services, including cash flow analysis. We can identify what’s blocking your incoming cash flow, and help you with strategies to overcome it. Sit down with one of our friendly advisors for a coffee and a chat.

To chat with one of our advisors call 07 3367 0852 or email mail@raaccountants.com.au

 

7 Resolutions to a Better Business Year Ahead

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REPEAT AFTER ME…

I will manage my cash flow more effectively.

Before even attempting these resolutions having a steady cash flow is vital! A prominent study from the financial services company U.S. Bank found that 82% of start-ups and small businesses fail due to poor cash-flow management. Read on if you want to be an exception!

I will improve my digital presence.

Don’t let valuable customers slip through the cracks of a poor web presence. Even if your website and email marketing list is up to date, when was the last time you checked if you’re web-presence was mobile friendly? Have you tried your hand at social media? Now is the time!

I will invest in much needed technology/equipment.

Nothing stunts productivity, and frustrates employees more than being stuck in the dark ages when it comes to fast advancing technology. Slow internet speeds, clunky operating systems and inadequate tools can eat up valuable time. While it may feel like a big investment it’ll pay for itself in future time saving.

I will learn something new.

If the end of the year is quiet for you, build in reading time and supplementary training to refresh the skills of both you and your employees! Industry blogs, books, magazines, demo videos are just a few in the long list of resources at hand that will enable you to be on top of the trends in your industry.

I will strategise weekly.

It is easy to steer off track when you forget where the track is leading. Each week you should remind your team of their individual and collective goals for the week.

I will build a promotions Calendar.

Holidays such as Easter and Valentine’s Day may seem unnecessary but they are designed to be vital marketing opportunities for any business. So get your calendar out and use the appeal of these festivities to your advantage.

I will consider my Hiring needs.

Of course none of the above can be done without the commitment and dedication of loyal employees. While running on skeleton staff may seem cost effective short term, make sure you don’t take it too far leaving unnecessary strain on your current staff. Consider hiring casuals to alleviate some of the excess pressure at peak times.

Small Business Booming in the Burbs’

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Small Business Insights

Xero has recently launched Small Business Insights, which provides a monthly snapshot of Australia’s small business sector – courtesy of data aggregated from Xero’s hundreds of thousands of subscribers. Xero has decided to provide these insights with the aim to “help policymakers and large enterprises make more informed decisions that benefit the small business economy” (Xero SBI). On top of metrics that give insights to the small business environment in Australia; KPMG, small business owners, business journalists provide commentary on the small business sector.

small bus

A New Trend

One interesting trend that has been observed by Xero is the increase of small business employment in more suburban locations in major Australian cities. Bernard Salt of KPMG has reported this pattern being evident in Brisbane, as small business employment increased in the period of January – September this year. Nearby CBD suburbs Red Hill (woo!) and Clayfield experienced a 17% increase in small business employment. More suburban areas such as Camp Hill and Bridgeman Downs also had an increase of small business employment, going up 23% & 18% respectively.

This suburban small business employment trend is also replicated in other large Australian cities such as Sydney, Melbourne and Perth. It seems that middle suburbia in Australia is acting as an incubator to nurture new small businesses, says Bernard Salt. It is important to note that whether our economy is performing well or poorly, middle suburbs in our large cities still flourish and experience growth in employment. These small business employment patterns that have been uncovered by Xero’s Small Business Insights give a new perspective on Australia’s modern economy. This pattern provides evidence that small business is as vital as ever to Australia’s economy.

We as small business advisors are excited about these findings, as it displays Australia’s evolving economy – and more importantly outlines the importance of small business to our evolving economy. All information was gathered from the “Small business beats in the heartland” article by Bernard Salt – read the full article here.

small business booming in the burbs

Post Contributor:
Andrés Pascoe

The New Payments Platform…Finally!

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The Current Problem

You go out to dinner with friends, you’re having a great night & what could possibly go wrong? Then the end of the night comes, and the waiter utters that dreaded sentence…

“Unfortunately we don’t do split bills…”

This is a hassle that we have all experienced as with the high dispersion of banking providers among consumers, there is bound to be at least one of your friends that uses a different provider to you. As we all know, it can take up to 3 business days for payments to be transferred between different banks – which is extremely frustrating.

Although this delay can be a pain for consumers, perhaps the biggest sufferer of delayed inter-bank payments in Australia is small business. Late payments have been described as the “silent killer” of Australian small businesses. Another major problem for small businesses in Australia is poor cash flow – research has found that small business owners spend an average of 12 days in a year chasing unpaid invoices. This forces small businesses to focus on surviving rather than thriving, due to the stress that arises from chasing these payments.

Australia is a front runner in embracing electronic payments, however Australia’s existing infrastructure does not have the capability to support the evolving needs of a 24/7 digital economy. The RBA has now come up with the answer: The New Payments Platform. The New Payments Platform or NPP is a platform that: “Can empower businesses to become more efficient, reduce costs and improve their customer service.” A big win for Aussie small business!

Happy

The Way it Works

Basic Infrastructure

Users will be able to transfer money between bank accounts in real time, through an identifier such as an email address, phone number or ABN number. This provides unprecedented efficiency and convenience with transferring money (no more sharing of lengthy BSB and account number details). Users will also be able to include richer data with each payment – 280 characters will be allowed to be added to each payment rather than the 18 characters currently allowed by banks, which will facilitate e-invoicing and instant processing.

Fast Settlement Service

The Reserve Bank of Australia will provide the Fast Settlement Service (FSS), which enables all payments made on the NPP to be settled in real-time central bank funds, across each financial institution’s Exchange Settlement Account (ESA).

Overlay Services

Overlay services are payment related products or services that can adopt the benefits of the basic infrastructure. This provides a platform for competition and innovation, with each product and service having the possibility of offering differing or similar experiences. The first Overlay Service to go live on the NPP will be Osko by BPAY.

This new platform represents a great opportunity for small business in Australia, as a more efficient, accountable payment system is a welcome change to increase productivity within small businesses. Small business is continually proving to be a crucial contributor for Australia’s economy, and is a sector that can benefit greatly from the New Payments Platform. We can’t wait for this system to kick in, as we are looking forward to seeing our clients experience the benefits of this new system!

Post Contributor:
Andrés Pascoe

Our Wellness Centre Experience

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We have recently been collaborating with a growing local business called City Cave, doing some strategic planning and cash flow forecasting work. We like to get a good understanding of how our clients operate, this lead to our owner and director Patrick having a fairly unique experience last week.

City Cave are a small but expanding local business. They run wellness centres, with their main point of difference being their float tanks. These tanks, or small pools have 45kg of Epsom salts dissolved in them, so a little bit like the red sea, you really do float. The reported benefits of floating in these special tanks include aiding in circulatory, respiratory, digestive, muscular skeletal, and hormonal balance. There is also the ability to turn off the lights and float in complete silence with this sensory deprivation believed to help with stress levels and have other neurological benefits.

City cave

Here is what Patrick had to say about his float tank experience!

So I booked in for a float last week, which came as a big surprise to those who know me well. With a big family and busy business, doing absolutely nothing for a whole hour is something I am not at all used to, and visiting a wellness centre is a little different to my usual places to frequent. So I made my booking online and quickly received a confirmation email. I then turned up at the designated time and a young lady took me through to the float room and explained how it all worked. I really wanted to be open to the whole experience so after settling in and checking how everything worked I lay back and tried to empty my mind and enjoy the experience. After laying there and being very relaxed for what I thought must be close to an hour I just had to get up and check my watch – it had been 20 minutes. My second attempt at trying to chill out was more successful and I made it to the 1-hour mark. As I left I really did feel very refreshed and had a bit more spring in my step, I am glad I gave it a go and I would do it again.

Check out City Cave’s website www.citycave.com.au and if you are looking for a unique relaxation experience why not give it a try!

Post Contributor:
Andrés Pascoe

Start Your Business The Right Way

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Starting your business the right wayThe decision to start a business is usually pretty exciting. It’s often someone’s dream finally coming to life. In these early stages it is quite easy to gloss over some aspects that aren’t particularly fun or money making in order to get things up and running.  However, whilst they aren’t money making they could very well be costly and as accountants, we hate to tell our clients that there could have been a better outcome if a few things were different.

The first big financial decision is the structure of the business. Quite often in the very beginning a Sole Trader is the preferred way to operate as setup costs are limited – quite often a popular set up for trades people or the like. However there are some advantages to structuring your business differently.

A big advantage of having a trust or company is the limited liability. This simply means that owners are not necessarily financially responsible for faults or accidents, as the business is a separate legal entity. In extreme cases of financial debt, there will be no access to the personal property or assets of the business owners if the business is carried out through a trust or company. Unlike a sole trader, who is personally liable for financial debts and damage claims made by customers.

Another advantage of operating under a trust or company is the ability to distribute profits amongst other beneficiaries or shareholders under certain circumstances. This is unlike operating as a sole trader, profit can only be income for the individual business owner.

So whilst there are important decisions to make, branding, business location, menus, pricing, staff etc, all the things that will attract your customers or clients, don’t forget about the things they won’t see. Those financial set up decisions will have a bearing on your bottom line and after all, why do the hard yards if you’re not getting the best financial outcome available. We may be tax accountants, but we love to see your business thriving and being proactively involved to help you grow.