27 Grange Road, Cheltenham, Victoria, Australia, 3192

Assisting Clients to Prosper
 

Our Blog

    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.


Successful people get comfortable with being uncomfortable 

I watched a Melbourne TED talk recently with speaker Bernadette
Schwerdt. Essentially, she spoke about how successful people she
interviewed for her book seemed to bumble their way on their
journey to success, and had the ability to "get comfortable with
being uncomfortable".

I have observed that every successful business person has had to make decisions that took a lot of courage with some risk involved, and were uncomfortable in the process.

Their initial journey into being uncomfortable was often taking the first leap into starting the business.  That may have included quitting
a job, leasing an office space or purchasing a business etc.

Sometimes the risk comes later when the business has some momentum and there is a need to take the big step in uncomfortableness.

Thinking about your business, what is the thing that your business requires now to give it the transformation that it really needs? Is it a new sales person to bring in the extra work that you really need? Is it the marketing person that you really need to give you more control over demand for your product or service? Or is it even help in financial management?

What is it that is really stopping you from making the decision to recruit that vital resource? Is it fear (getting uncomfortable) that you will incur additional overheads for no additional revenue? That is a valid fear, however what is it costing the longer viability of your business, not to make that decision? Consider the consequence of the Return on Investment (ROI).

Don't let fear prevent you from moving your business forward.  If you are not confident in the decisions you need to make to move forward it may be worth engaging a professional mentor or trusted advisor to give you the support and processes you need.

 


     "With any new medium, the full power is only unearthed
      with experimentation"
     ~Sebastian Thrun~

     Successful business owners have experimented vigorously to discover
     what works for their business.

     The problem with many established businesses is they often stop
     experimenting particular if they have experienced success in the past.
     They may be experiencing a downturn in their business so they just keep
     doing more of what they are doing rather than experimenting with new
     ideas i.e. new processes, marketing, products or services etc.

When we stop experimenting in business, the business stops growing and as businesses cannot stand still, the decline phase begins.
Often the point where we stop experimenting in business comes about when we stop experimenting in life.

Ever noticed that often when businesses enter the decline phase is when the business owner has failed to pursue personal goals and
hence there is no drive or real reason to pursue change in their business?

If you feel stuck and need or explore ideas to grow your business talk to a trusted advisor be it a good business accountant or business
coach to help you explore new avenues an opportunities.

 

 

Why is Succession Planning so important for SME's?

If you don't want to leave a huge headache for your family you need a succession plan.

It's never too early to start a planning.  You never know when there will be an unexpected event such as an illness or death.  If you don't have a plan for the future your business can be at stake.  Planning early can insure that you maximise the value of your business.  Ironically the earlier you start your succession plan, generally, the more successful the business will be on the journey. The results are more profits as you move towards exiting your business.

Perhaps, the time is approaching to leave your business; maybe you have decided to sell, retire or do something else. Regardless of the reason, having a succession (or exit) plan in place will help you to smoothly transition out of your business.

It's a good idea to talk to an experienced business accountant about your succession plan and your estate.  They should be able to guide you on what you need to document, what processes and provisions you need to action and account for.

We know it is often hard for small business owners to find the time but this is a 'working on the business' activity that you should consider a priority.

I have seen so many business owners miss the best time to sell their business.  If they had a succession plan in place they would have had a better idea of when to sell their business for maximum return.

Developing a Plan

  • The successor; family member, business partner, other
  • Succession type; partial or full succession
  • Time-frame
  • Key personnel changes and skill retention strategies
  • Restrictions
  • Legal considerations; buy-sell agreement, reference to a will
  • Risk management
  • Communication strategy
  • Financial considerations; retirement income, sale price, tax implications.

Do you need to talk to us?

To find out more simply call Ross Wadeson Accountants on 03 9580986

New entrepreneurs, are you at risk?

   Starting a new Business?

   I have meet a number of business owners over the years who find themselves in a
   critical situation where their assets are at risk due to poor business structures.
   Some are established business owners who unfortunately never took the action to
   properly protect themselves. 

   I suggest to budding Entrepreneurs to consider getting it right from the start.

   Before you go too far and sign anything, make sure you consider the best Business
   Structure to meet your personal needs, tax plans and business risk management
   considerations.


   Other things to consider:

  • The Trading entity and who is at risk if things go wrong and to what extent
  • How to handle all the profits and the tax implications of GST, PAYG and Income tax
  • A means of regulating the relationship between various parties and who those parties should be
  • Protecting capital assets from loss
  • A flexible structure for future change
  • Separating ownership elements and tax for different family groups involved
  • Providing flexibility for best tax advantage
  • Protecting the family home and other investments
  • A suitable base for Superannuation considerations and tax advantages

If you need help with creating the right structure for your business, make sure you give us a call

Cheers

Ross (03) 9580 9866

Management works in the system; leadership works on the system.... Stephen Covey 

Great businesses usually start with great operations.  

That is, the person starting the business generally has great skills "in the business of the business". 

As the business grows and acquires more business then the owner tends to get busier
and busier. This is where the business demands more of the owner than mere operations
expertise.

The business must grow and to continue to grow it needs systems to be designed so that
growth can continue. Great business owners recognise that it is their responsibility to free
themselves from day to day operations (gradually as the business grows and can support a
level of overhead) and implement real leadership in designing and refining the business
systems and ensuring they are scaled for growth. This is the point where successful
Entrepreneurs emerge and the business moves from a good business to a great business.

The contrary perspective is the business owner who ensures the business does not grow beyond his or her capacity due to minutely controlling everything and therefore never achieving real wealth and success. What they do achieve however is a heightened sense of "busyness" often at the expense of family, relationships and a balance and fulfilled life.

 

Related Pages:

Business

READ MORE

Taxation

READ MORE

Superannuation

READ MORE

Ross Wadeson Accountants Blog

View all blog posts

Comments from our clients

  • "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."
    - Jill Miglietti, Bervic Engineering Co Pty Ltd
  • "Thanks for the business valuation I am very happy as was my Solicitor with this, the valuation was quite detailed and you went into great detail showing the different methods used in calculating the value also supplying figures to substantiate your calculations. Great work thanks."
    - Jon Everitt, Signarama Moorabbin
  • "It is refreshing to see that your understanding of property transactions and your proactive approach goes much further in depth compared to an average accountancy practice. My recommendation to our clients to seek your expert advice would be without hesitation and encouraged!"
    - Michael Libman, Director (Licensed Estate Agent) Property Choice Pty Ltd
  • "The Planning Session: The process was very good in assisting us to clarify our personal and business goals and objectives. In our case, with each of us running separate businesses, it was particularly helpful in highlighting the directions we were both heading, and where simplification could be applied to create more efficient management..."
    - Kevin Ezard Aquarian Developments (Aust) Pty Ltd - Marketing and Consulting
  • "Many thanks for your work this year. A friendly and efficient company. Our contact with you over the many years of our association has been a pleasure and we look forward to continuing this in the future."
    - Linda and Ray Eades - Carpentry Business and Super Fund
  • "Thank you very much for your help to me and Damian recently. The matter discussed has now been concluded. We feel very fortunate to have you not only as our account but also as our trusted friend."
    - Veronique Moloney – Long standing client

View all testimonials

Contact / Connect