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.
The Australian Tax Office (ATO) recently announced that they are allowing more time for small businesses to get ready for SuperStream.
The new deadline for SuperStream submissions or changes is 28 October 2016.
The ATO recognised that it can take some time for small businesses with 19 employees or less to get organised for SuperStream. It’s also worth noting that this new deadline will allow extra time for small businesses to ensure that information that has already been submitted is correct and complete. If any submissions do not meet criteria set out by the ATO or are incomplete, the super payment may be rejected.
If you’re yet to get started on your SuperStream submission, you’ll need to choose an online system to make super contributions electronically. These can be:
An experienced accountant or bookkeeper can help you choose a system that is SuperStream ready and ensure you are prepared for the new deadline.
If you want to know more about how SuperStream works or how we can help, please contact us.
Cash flow management is the Bermuda Triangle for many businesses. The mystery behind managing your cash flow is to keep it central to everything you do. This sounds pretty obvious, but once business owners set up shop, they tend to want to run everything themselves – from day-to-day operations, marketing, people management, product development and accounts. To survive in business, especially if you’re in a competitive market, you need to understand how to manage cash flow. Read on for some of our best tips:
Firstly, put a yearly budget together which shows your actual outgoings. This will ensure you have your yearly spend clearly outlined and will know when certain items need to be paid, including insurances, labor, rent and equipment. Once you’ve locked down your 12-month budget, put it into a monthly view and mark payments that will need to be made at least six weeks ahead of their due date. Factor in interest that will be owed, commissions and any other incremental costs.
Business owners like to think the best of their customers and service providers and expect that they will pay on time. Sometimes, this isn’t the case and so extra steps need to be taken to ensure you can address late payments and meet your running costs. You can get your customers to work to your conditions by invoicing immediately and setting clear 14 or 21-day payment terms. Also be careful with discounting, as you will need to factor in the amount or percentage of the invoice that you are giving away in your overall budget.
It may seem like a good idea to make your payments to creditors before the due date. What many don’t realise is that actually paying your bill on the due date, not before allows you to earn more credit interest as the money is sitting in your account. That being said, make sure you do pay your bills on your due date otherwise the creditors overdue fee will outweigh any benefit received by keeping the cash in your account.
Want to know more about managing cash flow? Contact us for advice from our team of certified professionals.
Many Australian small business owners are turning to the sharing economy phenomenon to supplement their income. Otherwise known as ‘collaborative consumption’, the sharing economy allows buyers, sellers and skilled or trade service providers to connect through an online platform, usually a mobile app or a website. A typical business transaction under this model allows customers to access unused items or services through a digital platform – meaning there’s little to no effort involved to gain a reasonable return for the service provider.
Small business owners claim to have ‘struck gold’ with the sharing economy craze alongside social sharing giants Uber, Airbnb and Airtasker, however there are some regulations that small business owners need to be wary of. Graham Whyte, the ATO’s assistant commissioner says, “If you earn a fee from task sharing for odd jobs or providing a service and it counts as assessable income you just need to include the income in your individual tax return.’’
Depending on what service you intend to provide under the sharing economy, there are different obligations set out by the ATO to abide by: