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Taking time out can help grow your business

     The challenge for business owners is to know when it's time to take a break and
     spend time with the family, catch up with friends,have a game of golf etc.

     Christmas time is often a time when the business owner is forced to close the
     business and take a well deserved rest.  

     It gives them time to spend with loved ones and have some rest and relaxation.
     It is also a good time too quietly reflect on recent business results without any
     day to day distractions.  

     The challenge here it to not stress out or feel discouraged if things didn't quite work
     out to plan and you did not achieve what you set out to over the past 12 months.

Is failure always a bad thing? What if you viewed it as a learning experience? Failure is usually only temporary unless you do not learn from it.

What really is failure? Could it be a learning experience that helps you achieve success?

"Without failure you never really achieve any innovation and/or long-lasting change?"

What if you never experienced any level of failure? Is it possible that without failure you never really achieve any innovation and/or long-lasting change? Remember the legend Thomas Edison? He failed 10,000 times prior to his amazing success in inventing the light bulb. What if Edison had had given up after the first 10, 20 or even 100 times?

Often failure is just the elimination of the options that did not work. Focus on eliminating the options that do not work and accelerate your achievement of success.

" Failure is just the elimination of the options that did not work"

So, keep dreaming and coming up with new ideas for the coming 12 months.  How else will your business grow.

If you need to grow your business or review your financial processes and structures give us a Call

Ross Wadeson Accountants 03 9580 9866

 

The Truth About Surviving a Tax Audit

 

     Yet another Small Business Audit by the Australian Tax Office (ATO).

     Yet another successful outcome for our Client.


     However, it still disrupted their daily business routine,
required going through
     boxes of receipts and information,
several discussions and reviews with us and
     meetings with the ATO
Successful in that the ATO decided there was nothing
     wrong or requiring further investigation.

 


"Firstly, consider the merits of Tax Audit Insurance"

This went well for the Client and confirmed their records can stand the test, although there was still a cost in time and anxiety.  Fortunately, they also had Audit Insurance so our fees were not a cost to them.

An audit is never easy, but having the appropriate systems in place, keeping things organised and communicating well with us (your accountants) can help you through the process with a bit more confidence.

"The ATO start audits based on a range of different triggers"

The ATO start audits based on a range of different triggers.  One of the most common is the Business Owner was 'dobbed in' by a disgruntled, usually ex-partner (business or personal); also, possibly disgruntled employees, neighbours and the like.  Another growing and common trigger is that your financials have, rightly or wrongly, statistically deviated from the norm for your industry.  The ATO computers are now getting more and more accurate in predicting what sort of Income you should have declared!

 So – what should you do to minimise the impact:

1.  Firstly, consider the merits of Tax Audit Insurance; more relevant to some.

2. Secondly, see that the bookkeeping and accounting records are kept up to date and are accurate, including whether you:

·         are declaring all the income you received

·         Are entitled to deductions, credits or tax offsets you claim

·         Correctly withheld and reported PAYG(W) amounts


3. Correctly calculated and reported other tax-related obligations

You can minimise your worry about a tax audit if you follow a few simple tips beforehand:

 

Keep accurate, up-to-date records

Poor record keeping is a common problem amongst  small business owners. It's a good idea to get your hands on some simple bookkeeping software to take care of your records. The program should be up to date with all tax regulations to ensure your compliance.  All you need to do is enter your information regularly.  It is helpful to speak with your accountant often. Keep in mind that you are responsible for any mistakes or omissions, so it really does pay to be up to date.

 

Always double check before signing your tax return

Always look over your figures again, to ensure there are no discrepancies before you send them off.  Look to see they make sense to you as nobody knows your business like you do.

 

Keep documents for at least 5 years

Most audits are conducted on the previous year's tax return, but auditors can go back to previous tax returns if they believe you have largely understated your taxable income.  By keeping all your documentation from the last five years you are able to back up any claims you have made.  If you have a scanner, you may choose to scan them.

 

If you notice an error correct it straight away

If you realise there is a mistake, come clean about it and talk to your accountants (us) about it. If you do state you have made errors at the start of the audit, the ATO will reduce any penalties you may incur.

 

What to do if you are audited

If you have received word that you are going to be audited here are a few hints that will help you through the process:

1.  If you are going to be audited you will receive a letter from the ATO outlining the scope of the audit. Don't do anything until you have spoken with us as your Accountants.

2.  We will be able to explain clearly what the ATO is asking for and what they want to look at.

3.  Specify one person only to be the contact point with the ATO. This should probably be your accountant.

4.  Take notes at every meeting.  Obtain a copy of any ATO recording if one is made.

5.  Watch what you say.  Be courteous and respectful when you are dealing with auditors.  It's also best to limit what you say instead of engaging in too much idle chit chat.

 

The computer systems the ATO have been investing in can reveal irregularities and unusual transactions very easily. The ATO is trying to make the message clear – if you are not paying the right amount of tax, there is a high probability you are going to be caught.

 

If you have any questions; talk to Ross Wadeson Accountants  - 03 9580 9866


 

Marketing in the past 5 to 10 years has changed dramatically.  

In the good old days, we put an advertisement in the paper 

or journal and waited for the phone to start ringing.  

I recently read an interesting paper base on results of Lead Response Management research conducted by James Oldroyd, PHD, Ohio State
University & Dave Eltkington, CEO insidesales.com.  

It confirmed my belief, that businesses still need to incorporate good old-fashioned lead generation (telephoning prospects) with modern marketing activities. If you want to grow your business, you still need to pick up the
phone and personally engage with your prospects.  We have been doing just
that at RWA for the past 2 years.  

" For a baby boomer like myself it all seemed to hard"

Nowadays it's all about your digital profile, marketing via email campaigns, social media. Linkedin, Instagram, Facebook, SEO, Twitter and Ad Words.

It has been a challenge for many of us to get our heads around the new marketing applications. For a baby boomer like myself it all seemed too hard until a young undergraduate came on board to teach me the ropes. 

I now combine the new technologies with good old-fashioned lead generation to improve conversion from a lead into a sale. Picking up the phone and having a conversation with prospects is a proven key to closing more sales.

How Much Time Before Web- Generated Leads Go Cold?

Here are a couple of  key points from the research paper you may find interesting.

  •  77.17% of all leads submitted never received a phone call even though calling results in 70% better chance of conversion.

  •  The optimum time to respond to a lead generation though digital marketing is 5 to 12 attempts and the average is only 4.47.

So the bottom line is, make sure that you have a sales system in place to quickly respond to leads generated through marketing activities and ensure you make sufficient attempts to get hold of the prospect.

If you need assistance with your sales strategy and lead generation Kris and her team may be able to help.

To speak to Kris about improving your sales conversation call her on 0481 344 557

    Did you know? 

    Fact – 74% of Australians say their number 1 financial goal 

is to own
    their own home – Debt Free

    Fact – 60% of Australians are set to retire WITH a Mortgage…

In today's
    cashless society, it is becoming increasingly 

difficult to keep track of
    what we are spending our money on.

    When we use cash, we can physically see how much we hand over,
    what we get back and how much we have left. When we use a card,
    we don't keep track of how much we spend or where it goes, and it
    is very easy to blow a big hole in our budget.

Even those who are meticulously organised can easily lose track. We have multiple bank accounts, and we don't keep track of
what comes in versus what goes out. At the end of each month, we hope that we have something left over for our goals and
ourselves.

We need to stop this and start putting ourselves first.  The most important thing is our happiness, and happiness comes from
security - security in our relationships and certainty in our ability to keep a roof over our head, keep the power on, have a bit
of fun, and still work towards financial freedom so that at some point we can stop working and retire.We need to save first
and spend second.

The first step to making this happen is to get organised. Decide what your monthly budget is, decide to save money for your
future before you spend money for today, put a plan in place to make this happen, and then track your efforts.

Wadeson Money Management will help you with this and track your progress, so you can reap the benefits without
having to put in all the hard work.

If you would like to:

•        Pay your home off FAST?

•         Manufacture Equity?

•         Create a secure financial future for your family?

•         Beat the banks at their own game?

•         Learn the formula for financial success?

•         Save money on your home loan – guaranteed?

Then we suggest you engage with Wadeson's trusted Money and Finance specialists.

For more information or to receive a case study contact Ross Wadeson Accountants on 9580 9866 or email us.

"Wherever you see a successful business,
                                     someone once made a courageous decision"
                                                                                Peter F Drucker

Courage can be defined as "the quality of mind or spirit that enables
a person to face difficulty, danger, pain, etc., without fear;" 
 

Well… maybe just a little trepidation…

I recently spoke to a new client who has just commenced a new business
venture. She mentioned to me that every day she is out of her comfort
zone as she confronts and learns how to run a successful business i.e. deal
with technology, debtors, marketing, staff management etc.


"Many business owners, while being comfortable with being uncomfortable, when
they first started their business are now firmly stuck in their own warm cosy comfort zone"

This got me thinking. Many business owners, while being comfortable with being uncomfortable, when they first started their business are now firmly stuck in their own warm cosy comfort zone.

What is the thing your business requires to give it the transformation that it really needs? Is it a new sales person to bring in the extra work?  Is it the marketing person that you really need to give you more support for your product or service?  What is it that is really stopping you from making the decision to obtain that vital resource?  Is it fear that you will incur additional overheads for no additional revenue?  That is a valid fear, however what is it costing the longer viability to your business by not making that decision?

"Often fear or doubt paralyses the decision making process because the business owner lacks the skills or confidence"

To push past this fear, how about you identify someone with the knowledge you require and work through your fear?  Give your business the resources it desperately needs?  The knowledge can be gained from professionals directly or sourced via a book or a workshop, or from a knowledgeable person within your network.  The key thing is that as the leader of your business, it is your job to gather the required knowledge and resources to make timely decisions in spite of fear; to demonstrate courage!  You should command performance from all areas of your business, including yourself as the leader.

If you would like to chat about any area of your business that needs consideration, reworking or if you would like a sounding board please don't hesitate to give me a call.  We have access to a lot of resources that may help.

Hooroo for now.

Ross Wadeson CPA

0411 400 356

 

    From 1 July, 2018, buyers of new residential premises or "potential residential

    land" will be required to withhold an amount from the contract price for GST

    and remit this directly to the ATO on or before settlement.  

    This might also apply to property by way of a long-term leases.

    Generally the amounts to be withheld will be one-eleventh of the unadjusted

    GST-inclusive contract price, however this amount can be 7% if a margin scheme

    applies.

Why the change?

This change is attempting to fix tax evasion and non-reporting of GST revenue from some property transactions. Some developers/sellers, having collected GST from the buyers and were not forwarding this GST revenue on to the ATO. 

The new rules do not apply to contracts entered into before 1 July 2018, as long as the transaction settles before 1 July 2020.  This is not an additional payment on top of the contract price though. The GST withholding amount is taken from the purchase price in the contract.  Practically, we expect your Conveyancers will arrange this as part of the settlement process.

Some exclusions
Some property transactions are excluded from the new measure, such as:

  • previously owned residential accommodation
  • new residential premises created by "substantial renovations" (careful here)
  • potential residential land included in a property subdivision plan that contains a building that is currently in use for a commercial purpose – for example, a factory or shop being operated in an area where local zoning permits mixed use
  • commercial residential premises such as hotels, motels and boarding houses (probably not Airbnb)
  • taxable supplies of potential residential land between GST registered businesses where the purchaser acquires the property for a creditable purpose.

Other types of property transactions are not included in the new measure as the ATO considers these to not be new residential premises or potential residential land. For example:

  • sales of commercial premises, for example office units, factories and retail shops where land is zoned commercial use only
  • industrial land or farm land where zoning prevents residential development
  • hospitals.

Managing cash flow can be a challenge, especially in the early years.

Our Firm has had the unfortunate experience of seeing a very
profitable business be liquidated because their cashflow was
severely disrupted
for three months and they could not pay rent
or wages.

Often said: Cash is King. You need to pay attention to your business cashflow.
This is not your budget.
If you apply a time frame to a budget it will give a
cashflow projection. Looking at your bank account will tell you if it is working.


Other things you should consider include:
  • Control costs. Although you won't have much flexibility with the cost of goods sold, you should continually review this. You can
    manage some of the overhead costs associated with advertising, 
    sales and administration.
  • Don't spend too much on growing the business too quickly. Many small businesses fail not because business is bad, but because
    they try to grow too fast. This can cause finance issues for stock, debtors and creditors.
  • Consider invoice factoring. Receivables financing is a viable way to deal with slow collections and generate cash. This is not for
    long term finance but may get you over a hump.
  • Review your credit terms. If you're not getting a good deal, then shop around. You can generally get concessions on terms if you're
    doing a lot of business.
  • Set your Terms to encourage your customers to pay early. Get as much deposit upfront as possible and may be provide incentives
    to customers who are willing to pay in cash. Be wary about offering discounts on early payments as these directly reduce your
    profit and consequent cashflows.
  • Do not allow owners to drain the bank for private use. Wages and drawings must be proportional to the profits generated at the
    time.

Managing cash flow should be a small business owner's highest priority. Keep in mind that more cash is always better. It is hard to
manage though without a budget.

Small overdrafts and short term finance are also tools in managing cashflows. However be careful these don't become money pits,
continually getting bigger and sucking more cash in repayments and interest. Whether you're repaying a line of credit, credit card
or any other debt, it's best to pay it down to zero at the end of each billing cycle.

If you have this problem – you probably need to talk to us.  Call 03 9580 9866!


    "One has to move from one's comfort zone to challenge oneself "

                                      Dulquer Salmaan

   
   
Maybe you have a creative dream for the   future? You want things
    to be different but haven't even got around to writing a business plan
    or haven't written one for years. After all, most business owners are
    fully aware they should.
So why is that we resist producing and
    documenting our plan?

    Often if we do take the time to produce our business plan it consists
    of all the things we already know and intend to implement whether we
    have the plan or not. Could this be the real reason we do not allocate
    the time to prepare the document that everyone tells us we should? 

 

"It seems the challenge is that if we wish to realise our vision for our business we must be prepared to do some
things that are unfamiliar and unknown. These are the things we are uncomfortable with"

 

What if the production of our plan (the one that really stands a chance of progressing us towards our real vision for our future life)
involved us actually undertaking a period of study and learning in the area which is unfamiliar? Imagine if we were uncomfortable
with sales and marketing so  prior to attempting to write our plan we decide to read (or listen) to 5 or 10 books or perhaps attend
a few seminars on the subject. How easy would it  now become to write a plan around those subjects? To be really useful and serve
to transform our businesses, plans must incorporate strategies and tactics focused around the unfamiliar. This is when real and
sustainable results begin to emerge.

 

It is worthwhile seeking out a trusted advisor be it your business accountant and or a business mentor to ensure that your plans are
challenging, achievable, financially robust, sustainable and that you have regular support and encouragement to see it come to fruition.

 

Tips on managing your Self Managed Superannuation Fund

Making sure your Self Managed Superannuation Fund (SMSF) is running
correctly is incredibly important so we have come up with a few points
you must consider on an annual basis:

  • Check you have kept appropriate records to explain every transactions
    of your SMSF
  • Ensure your investment strategy is up-to-date, don't set and forget
  • Ensure your fund complies with the investment restrictions
  • Check all investment opportunities with independent sources - beware
    of scams
  • Review your funds' trust deed, if there have been legislative changes over the past 12 months they may need to be reflected
  • Remember to act in the best interest of all members at all times, even those who you might currently have personal disagreements with
  • Be careful when paying out retirement benefits, ensure that you report and withhold tax if required
  • Don't mix your personal assets with those of the SMSF
  • Organise lodgement and audit (by an approved auditor) of your SMSF - now is the time to avoid late lodgement of your SMSF annual return

Running a SMSF is a serious responsibility which requires some care and attention. At Ross Wadeson Accountants we can answer any questions or concerns you may have regarding your SMSF.

Cheers
Jenny Smith

Head of Superannuation & Senior Accountant CPA 

The key to winning in business

      "Never letting the competition define you. Instead, you have to
      define yourself based on a point of view you care deeply about."

      ~Tom Chappel~
 
  

       As a business owner, you need to have a strong vision for your business,
     
but also focus on developing a unique selling proposition (USP) and
      ensuring that you are communicating that message effectively. When
      you are making great profits you generate good cashflow, which is the
      oxygen that keeps your business alive.

        "Its only exceptional value that delivers strong margins"


Make sure you fully understand the drivers that make that happen. Be the business that delivers exceptional value!  It's only exceptional
value that delivers strong margins and hence the cash flow that the business needs  to not only survive but to thrive. Competing on price
generally means that you cannot convey the
exceptional, or 'USP' to your target customers.

                                                                "Be the business that delivers exceptional value"

If you are not clear and passionate about your USP, and what causes you to stand apart from your competitors then it's extremely difficult
for your customers to be clear and excited about what you are offering.

                                                         "What causes you to stand apart from your competitors''

There are examples of companies in very competitive industries that have a very clear USP (to their target customers) who command
premium pricing; think of Apple which has no price competition although their competitors clearly compete on price!

If you need help with increasing cash flows or working on your USP you can speak to us, as established business accountants or consider
a business coach to assist you to develop your USP.


Related Pages:

Business

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Taxation

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Superannuation

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  • "Hi Ross, I just thought that I should tell you that Monty has been helping me with a problem I had with Gracott over the past few months. In this time, his help has been well above what would normally be considered normal for an accountant's role. I have been very grateful for his assistance. …… I thought I should pass this on to you personally."
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