In the ever-changing digital world in which we live and work, it’s so important for SMES to understand their privacy obligations.
A recent study from an Australian law firm – LegalVision, showed that 68% of small businesses are unaware of the Australian Privacy Principles, which raises the need for greater awareness on privacy to ensure that both intellectual property and customer and employee information remains secure.
The same study also highlights some interesting trends across the SME sector, as well as some common gaps in privacy and legal obligations that business owners may not be aware of, including:
Further to the rapid growth in online enterprises, business owners now have greater access to resources to help launch a new business or improve existing products and services. In turn, these resources also work to raise awareness on a few key measures that SME owners can use to safeguard their business and meet their privacy and legal obligations.
At SWAG, we recommend that SME owners take a look at the Australian Government’s Small Business Guide to stay smart online, which also provides some handy hints on keeping information secure.
In case you haven’t heard, you need to be paying and reporting super using SuperStream by 28 October 2016.
If you’ve been using cheque or direct deposit to pay super, you will need to start using SuperStream now. Also, if you’re making payments directly to the super fund by EFT or BPAY, you might need to review your reporting methods to ensure you’re being compliant with the Australian Tax Office (ATO).
Once you’ve gathered all the information you need to process your employees’ super, including:
You’ll also need to pay close attention to any new information that SuperStream may require. Here are a few points that you’ll need to cover to make an easy transition to SuperStream:
Ensure that your payroll system is SuperStream ready and make note if your system covers both data and payments. If your system provides data only, you will need to transfer payments to each super fund separately.
Larger super funds have online systems that you can use to make your payments. Make sure you check with your fund on what payment facilities they have available.
A clearing house will transfer payments to your employees’ super funds on your behalf. All you need to do is send a single electronic payment to the clearing house, along with the contribution data for every employee and the clearing house will look after the rest. Speak to your super fund about what clearing house services they have available.
Do you need a hand with SuperStream? The SWAG team can help – get in touch with us today.
They say what goes around come around — and if business owners aren’t reimbursing their employees in a timely manner, they can expect low staff morale and increased staff turnover.
A recent survey from Concur shows 54% of respondents have to wait more than a week for their reimbursements and 11% reportedly have to wait up to one month. There are a number of reasons why reimbursements might take longer than they should, a key reason being that business owners are using outdated expense management processes and leaving staff feeling frustrated and anxious about meeting personal expenses.
So with that being said, how can business owners reimburse their employees more effectively?
First and foremost, look at improving efficiency by replacing outdated or paper-based systems with mobile and cloud-based tools like Concur or Xero, which allow expenses to be managed on-the-go.
Once you’ve got the right system in place, set a time frame for when you will reimburse your employees and stick to it. In turn, you’ll also build trust with your employees, as they know when they can expect to be reimbursed to meet their personal expenses.
Lastly, automation is everything. A system that helps business owners or their finance team to quickly calculate profit and cash flow will also provide better oversight on outgoings. Consequently, this will also help business owners and managers make smarter decisions.
If your business is stuck in a reimbursement rut, get in touch with the team at SWAG Bookkeeping.
Attention SMEs: The Australian Tax Office (ATO) October deadlines for tax tables and SuperStream are fast approaching.
The first deadline to put in the diary is 1 October. SMEs will be required to update their withholding tax tables by this date. Take note that any changes will not be back dated, meaning that any tax deductions made from 1 July will be reconciled in individual tax returns.
As far as SuperStream is concerned, the ATO has provided SMEs with more time to get SuperStream ready if they operate a business with 19 or fewer employees. This new deadline extension falls on 28 October. SMEs must complete their submissions by then, as the ATO will chase up any non-complying SMEs from 1 November.
We know that these looming deadlines can cause a fair amount of stress for a lot of SMEs, especially when there are so many other things to take care of — but there are some simple tools that SMEs can use to be better prepared at this time of year.
We recommend SMEs consider using a payroll system like MYOB or Xero, as both of these systems require virtually the same employee information as the ATO, which in turn will save you duplicating information — and save time — later on.
If you still find yourself getting overwhelmed with meeting these deadlines, contact the SWAG team who can give you a helping hand.
Cash flow can be a tricky thing for many business owners to manage. Once you’ve set up the books, you need to ensure your customers and suppliers work within your terms to keep your cash afloat. From time to time, business owners can find themselves in awkward situations that might challenge their relationship with their customers or suppliers. So what can you do in these situations to get your cash flow back on track?
Ask your customers to pay upfront
If your business can turn things around quickly, you should consider asking your customers to pay upfront or at least put down a deposit for your services. Depending on the type of business, you’ll find that customers generally won’t have a problem with this, as we all pay for the things we need in our day-to-day upfront anyway. By asking for upfront payment, you are also showing your commitment to get the job done.
Review your billing statements
If you find you are short on cash, review your billing statements to see where your money is going. Take note of any subscription services you are no longer using and cancel these if they don’t serve any purpose. By streamlining your spend, you will also find you will have better oversight on your outgoings and will reduce the amount of times you ask yourself, “What was this for?”
Look for discounts
Are you using the same supplier or service for more than one thing? Or have you been a loyal partner for a number of years? Either way, you’re entitled to ask for a discount — it never hurts to ask. Many suppliers are willing to negotiate on pricing if it means you will keep coming back to them.
If you need a hand to get your cash flow back on track, get in touch with the SWAG Bookkeeping team.
Did you know that you might be losing up to ten hours of productivity every week? A recent survey found business owners are spending too much time on simple tasks like email and administration, instead of dedicating time to grow their business using productivity apps.
At SWAG, we’ve seen first-hand how productivity apps can save time, streamline team conversations and improve workflow. Here’s a list of some of the best productivity apps we’ve seen so far:
Slack is a tool dedicated to improving team productivity. Conversations on particular projects or topics can be hosted in the app, multiple types of files can be stored and shared and Slack even receives notifications from other apps like Facebook, Twitter or Dropbox, making it much easier to stay up to date with everything.
DocuSign allows business owners to review and sign documents on any device, which saves a lot of time spent on the mundane printing, signing, scanning and sending process.
Google Drive reads and saves MS Word, Excel and Powerpoint files in a virtual drive, so they can be opened and shared on the go, which works really well if you’re constantly between meetings and need to have important documents on hand.
Xero is a cloud-based accounting piece of software that provides a real-time view of your cash flow, which you can access across multiple devices. Xero’s mobile app allows you to reconcile funds, send invoices and manage expense claims from the palm of your hand. As certified Xero advisors, the SWAG team are able to work with our clients from one set of accounts and ensure that up-to-date information is available as needed. Xero also allows our clients to take a look at what’s happening every now and then, leaving the rest up to us.
A recent study found that nine out of 10 SMEs in Australia still use paper receipts to manage their expenses.
Whilst a paper receipt can appear to be a simple, tactile way of managing expenses, they can actually cause many headaches for business owners when they go to claim expenses or lodge their tax returns. Apart from the obvious fact that paper receipts take time to lodge, there is no automated system involved, which increases the likelihood of duplicating claims or losing receipts.
According to Concur’s 2016 Omnibus Study, a staggering 91% of working Australians are still submitting paper receipts to claim their expenses and only 23% of working Australians are using online tools to submit their expenses.
Apart from saving paper and avoiding archaic filing systems to store receipts, there is another big reason why Australian SMEs should upgrade to an online expense management system. Concur recently discovered that on average, a considerable $44,000 could be saved per year, just by reducing the number of duplicate claims made by manual data entry.
Our bookkeepers know that from experience, online expense management systems are a reliable way to keep your employee’s expenses on track. A single interface that is used by all employees can also increase productivity and provide the employer with a single source of truth for reporting.
Some online tools can also integrate with a customer relationship management (CRM) system and provide a real-time view of a project budgets and associated travel expenses.
If you need another reason on why Australian SMEs should use online expense management systems and be rid of paper receipts for good, please contact us.
Whether you need a kick-start to your cash flow or a loan to get out of the trouble zone, there are many reasons why business owners need a helping hand with their finances. There are two key questions that business owners should ask themselves before they step into their lender’s office or put pen to paper on any application form:
The answer to this will depend on how you intend to use the money. If you’re considering investing in property, you will need long-term finance like a mortgage. If you’re dealing with fluctuations in your working capital, then you’ll most likely need a responsive loan provider like a business credit card or an overdraft. The key to any loan is to determine your finance needs against an appropriate timeline so you don’t pay more than absolutely necessary.
The majority of business owners turn to the big banks. Why? Generally speaking, the big banks offer competitive interest rates and are governed by strict terms and conditions to protect the consumer from any unreasonable conduct.
On the other hand, some business owners, particularly start-ups find that the big banks aren’t willing to accommodate them because they don’t have an extensive trading history, which leaves smaller lenders as a more viable option. Big banks also tend to be risk-adverse and only lend to established businesses that have a long list of credentials and collateral. Smaller lenders are generally more flexible with their lending criteria however business owners should expect to pay more in rates and fees, especially for any unsecured finance plans.
Once you’ve determined a course of action, take the time to research relevant products on offer and compare terms, conditions and rates. There are a number of great financial comparison tools that anyone can use to understand more about a potential loan. When you’re ready to apply for a loan, you’ll need to compile all of your supporting documents – which can range from bank statements to full business financials, forecasts or detailed business plans. If you need a hand to prepare for a business loan application, get in touch with the SWAG team.
As a business owner, you are under obligation to check the validity of your suppliers. It can be easy to let this slip as the invoices pile up from your stockists or tradespeople and you work to keep the business running, but we’ve got a few reasons why it’s worth doing a quick lookup on your suppliers.
The Australian Tax Office (ATO) have been made aware of a number of suppliers that are not using a valid Australian Business Number (ABN) or are not registered for GST — but they have factored GST into their charges. Business owners have then made the mistake of paying the full amount back to the supplier, including the additional ‘GST’ amount. The law applied by the ATO states that the business owner cannot claim this GST amount back, even if the business owner wasn’t privy to their supplier’s lack of ABN registration.
To ensure you are dealing with registered suppliers – and remain in the ATO’s good books, there are five simple things that a business owner must do:
To check a supplier’s ABN, the ATO has assured business owners that their ABN Lookup Tool will provide accurate information on the supplier to enable the business owner to make an executive decision on whether they choose to deal with them.
If you’re still looking for a hand to verify your supplier’s ABN credentials, SWAG Bookkeeping offer a number of solutions to help our clients determine which suppliers they should deal with – and the ones to avoid. Please contact us to find out more.
Many business owners often find themselves stumped when it comes to knowing the definition between different financial terms and how they apply to their business. We’ve broken down some key financial terms to reference next time you’re asked to recall something many of us were taught years ago or trust Google to know the answer when you’re put on the spot.
Break-even analysis
The formula used to determine at what point which your business will start making a profit. By applying a break-even point analysis in your financial plan, you will be able to clearly define sales goals and manage your stock. The formula will tell you the total amount of sales you need to make in order to break-even.
Margin and mark up
These terms are often confused with one another so it’s important to know where each term should be applied. Should you confuse your margin and mark up figures, you may undervalue your services or products and risk not meeting your running costs. An easy way to identify your margin and mark up is to put both figures side by side – the mark up percentage will always be higher than the margin.
Gross profit and net profit ratios
The gross profit margin ratio compares your profit against each sales dollar before your expenses have been paid. Generally speaking, the higher the margin the better but this can differ between each industry. The net profit margin ratio shows your profit for each sales dollar made after expenses have been paid. The difference between each can be seen on your profit and loss statement. It’s worth noting that net profit can be a better representation of your profit, as it includes both the cost of goods sold and your operating expenses.
Working capital ratio
This ratio is a key indicator of the financial strength of your business. It shows your business’ liquidity – how quickly your business converts goods or services into profit for the purpose of paying your operating expenses. Your lenders and brokers will be particularly interested in your working capital ratio as it shows how quickly you can repay a loan.
If you’re still unsure about what these terms mean in order to understand more about the financial health of your business, you can use our free Financial Health Check Tool. To learn more about how SWAG can help to diagnose your financial health and get your business on track, please contact us.