MCA Business Newsletter - February 2012

In this edition the following is covered:

1. Superannuation changes
2. Various changes announced in Mid-Year Economic and Fiscal Outlook 2011-12
3. Changes to the taxation treatment of the living away from home allowance
4. Changes to the income tax law affecting consolidated groups
5. Trust reform
6. Changes to the tax treatment of lossess
7. GST refunds

MCA Business News - February 2012.pdf (159.79 kb)

What would happen if you had to stop work tomorrow? How would you survive? Being ill or injured is difficult enough without the financial pressure of not being able to earn an income.

Have you considered how would you pay your monthly bills if your income is not supported?

Income Protection can help by replacing upto 75% of your income if you are unable to work due to sickness or injury. Income protection can help you replace lost income, meet ongoing living costs and generate savings to meet future financial goals.

Income protection eases the financial stress during traumatic times in your life allowing you to focus on more important things, likey your recovery.

Fortunately, the annual premiums for Income Protection insurance may be tax deductible for you.

We have our financial planner Loni Karebesinis of Marbella Financial Services who can help you find the right insurance solution for you so you can be financially prepared for the unexpected. If you would like to arrange an appointment with a risk specialist please call Loni on 02 96 999 171.

Please read our quarterly business newsletter - some interesting points covering areas such as:

ATOs compliance program for 2012 and its focus areas such as -  

• Employees Vs Contractors
• Personal Services Income
• Government Payments
• Cash Economy
• Internet Trading
• Work Related Expenses
• Overseas Incmoe
• Split Loans
• Refund Fraud
• Executives, directors and other highly paid individuals
• Division 7a
• Fringe Benefits Tax
• Small Business Benchmarks
• Managing Tax Debts
• Car Fringe Benefits Rules Changed
• Excess Super Contributions Tax
• ATOs new CGT Small Business Concession Tool

Its really worth a read, if you have any questions please feel free to contact Make Cents Accounting on 02 96 999 171

MCA Business News - September 2011.pdf (154.97 kb)

Have you checked to see if your numbers are in line with the ATOs benchmarks? Did you know the ATO is comparing your figures to other business in your industry?

Benchmarks are key financial ratios that can help you compare your business performance against similar businesses in your industry – some key performance benchmark ratios the ATO are focussing on are:

1.        Cost of goods sold to turnover

2.        Cost of materials to turnover

3.        Labour to turnover

4.        Rent to turnover

5.        Motor vehicle expenses to turnover

If you need help or would like to know how your business is travelling in relation to these benchmarks then call us on 02 96 999 171 and check out the link from the ATOs website

Don't forget to update your payroll systems and records to reflect the new PAYG withholding amounts for your employees.

Click here to link to the ATO's webiste

Tip: make sure to use the right tax tables - e.g: "Weekly / Fortnightly / Monthly / Tax Table for commission payments"

If you need further assistance feel free to contact us on 02 96 999 171

I saw this photo (above) and I thought to myself, look at that team: look at how it operates, look at how each person plays their part ... look at their commitment to being number one.

This got me thinking. These guys are in business, too. So what makes their attitude, behaviour and drive for success different to mine? How does the success of a sporting team differ from the success of a business?

I suggested to a few of my clients that they look at their business as if it were an F1 (formula one) team, to challenge the current perspective of their day-to-day business. What lessons could they take, in a sentence, from pit lane to Pitt Street?

The attitude, structure, form, preparation and practice that an F1 team goes through each year to win is extraordinary. By choosing to emulate that team mindset in their operation, I think there is a lot of scope to impact the efficiency and responsiveness of the business.

The message is simple. Be open to challenge your view on your business every day.

I am interested to see if anyone else is willing to view their business through a different lens. Please let me know in the comments what tools you employ to gain a different perspective on your operation.

Have you got great profit and no cash in the bank? Are you finding it hard to pay all your liabilities on time? Or are you sacrificing your take-home pay because there is not enough left in the bank each week?

Have you ever wondered why?

If any of these scenarios sound familiar, your cashflow needs some attention to get it back on track.

Here are our top 10 questions to ask yourself, regarding cashflow in your business.

1. Is your price right? Do you need to put your price up?
   Have you considered what would happen if you increased your price by 1%? Do you know what the effect would be if you did this?
   
   
2. Is your Gross Profit too low?
   Are you paying the right amount to your suppliers, and are you producing your product efficiently?
   
   
3. Are your other costs 'blowing out'? Or are you not really sure what you're spending your money on?
   Check your budgets and see where the discrepancies are. If you don’t have budgets, consider putting some in place – they can guide you on how much you should be spending in certain areas of your business.
   
   
4. Are your customers paying you on time?
   Have you implemented a debtors policy for your business? How do you issue invoices, and what strategy do you use to collect your customer payments on time? 
   
   
5. Are you carrying too much stock, or not moving it quick on enough?
   Do you monitor your inventory (stock) often, and do you have obselete stock sitting your floor? Do you know what this is costing you, and what impact it has on your cashflow? 
   
   
6. Are you paying your bills when you are supposed to? Are you paying the right amount?
   Are you checking what's being paid; how much and when? Do you have procedures in place to make sure your staff are paying the right amount out, and not paying suppliers before their normal credit terms?
   
   
7. Are you utilising the business assets effectively?
   Are the assets held by you and your business being used effectively? If not, should some of them be dumped? Do you need advice on what assets to sell or what assets to buy?
   
   
8. Can you pay your tax bills on time?
   Are you minimising your tax bill – legally and effectively? Are you spending your tax liabilities to fund cashflow in your business, then finding it hard to pay these when you are suppose to?
   
   
9. Are the owners taking out the correct amount for themselves?
   How much should you be getting paid without it affecting your businesses health?
   
   
10. Have you got a 12-24 month forecast?
    Do you know what income is coming in – and going out – over the next 12-24 months? If not, why not?

A good accountant is there to assist in managing and growing your cash flow, so you can focus on other areas of your business. If you're unsure of the answer to any of these questions, give us a call.

Have you ever considered why you need a good accountant to help you with your business? What can they really do, aside from help with your tax?

A good accountant acts as a trusted advisor to you and your business. They will help you with growth opportunities, implement revenue strategies, increase your profit, give you a better understanding of your cashflow, help protect your assets, make sure you have an effective tax strategy in place, shape your business to be a saleable asset and set you up for retirement. Such guidance is useful when you are starting up a business, of course, but it's also important when you are in the middle, or end of your business life-cycle – especially if your business finances are closely tied to your personal finances. You need sound advice to help you get your business formula correct.

Here at Make Cents Accounting, we help you implement your cashflow strategies and structure your finances correctly, so that you can obtain the finance you require, say, to purchase that property you want – or the funding you require for business growth. We can help you take a correct stock inventory count, and give you a better understanding of what numbers really drive your business to success. Of course, we also make sure your tax returns are lodged correctly and on time!

If you have ever had these things run through your mind and you would like to get a grip on them, give us a call. We're always happy to chat.