Are you struggling with seasonal dips and poor cashflow? We can help you identify the timing of your seasonal downtime and create a strategy for stabilising your income across the year. Seasonal dips in income can be highly challenging when you’re a small business. But there are proactive ways to predict, plan for and overcome these dips in revenue. The key to dealing with seasonal dips is to know when they’re most likely to occur, and to have measures in place to spread your income and revenue pipeline over the course of the year. Understanding seasonality in your sector If your business is seasonal such as pool supplies, or a ski gear specialist, you’ll be used to the peaks and troughs, but many 'non-seasonal' businesses experience times during the financial year where sales and revenue peak – and, on the flipside, where sales and revenue experience a pronounced downturn. When income is low at certain times of the year, it makes for challenging times. So, what are the key ways to plan for this kind of seasonality? - Forecast your seasonality – it’s vital to know WHEN you’re most likely to experience any seasonal dips. Looking at benchmarking reports for your industry is one way to predict the seasonality in your niche or sector. But you can also use your own accounting data to great effect. Look back through your profit & loss reports and spot where the peaks and troughs have occurred over preceding years. - Charge a premium in peak time – one straightforward approach is to apply premium pricing for your products/services during the busy season. By increasing your pricing, you boost your overall revenue, giving you more working capital to see you through the leaner months when sales and income are at their lowest. - Offer additional peak-time services – offering added extras and other additional service lines during peak time is another way to maximise the season. In the months where customers are most engaged, look to upsell these premium services and offer more value. Satisfied clients will be more inclined to pay for added extras, giving you an increased revenue stream from the same number of customers. - Target other markets – exploring other related markets is another useful tactic. When you’re experiencing downtime, look for other ways to monetise your existing assets, products or services. For example, if your business is a hotel where sales peak in summertime, offer discounted conference and meeting spaces in the winter months to boost revenue. - Diversify your products/services – if one product/service has a known seasonal dip, look at adding an additional product or service to offset this downtime. For example, a ski resort could promote bike-riding or hiking breaks during the warmer summer months to keep revenue constant. Likewise a pool maintenance firm could establish an outdoor fireplace business for the colder months. - Have a regional e-commerce strategy – If you are dependent on a small local market, broadening your marketing and e-commerce strategies can help to attract a wider customer base – and bolster sales. Paid advertising through Facebook, LinkedIn or X/Twitter can easily target new geographical markets, bringing in new customers and giving your revenue a much-needed uplift during seasonal troughs. If your business is struggling with seasonal dips, and the resulting impact on cashflow, come and talk to us. We’ll help you identify the timing of your seasonal downtime, and come up with a clear strategy for stabilising your income across the year. We live in uncertain economic times, with operating costs still on the rise, but by focusing on cost-reduction and revenue-generation, you can protect your business from the worst effects. A recent survey showed that 32 per cent of Australian businesses list increased operating costs among their top three concerns. And rising costs can have a significant impact on your cashflow and bottom line. So, what can you do to minimise the impact of sky-rocketing costs in your business? When costs are rising and profit margins are falling, that’s bad news for the financial health of your business. But there are ways to combat this scenario. In short, you have two main tactics to kick into gear. You can either look at cost-cutting across all your operating expenses, or you can find ways to sympathetically boost your revenue. Strategies for cost reduction
Streamline your operations Look for any inefficiencies and find ways to streamline your processes and reduce the underlying costs. You can also use technology to automate key functions to add efficiency. Negotiate with suppliers Revisit your existing contracts with suppliers and see if there is the possibility to negotiate better terms, while also being mindful of the suppliers own cashflow pressures. Looking for alternative suppliers or finding cost efficiencies by purchasing in bulk can also be of great assistance. Reduce your energy consumption Putting energy-saving measures in place, like LED lighting and energy-efficient equipment, is a move towards good sustainability, but can also help you save money. Consider renewable energy options. Manage inventory effectively Keeping your inventory lean is a good way to optimise inventory levels and minimise your holding costs. Implementing a just-in-time inventory management process can cut costs while keeping you ready to service customer needs. Strategies for increasing revenue Expand your customer base A broader customer base helps to bring in more sales and revenue. Explore the potential for entering new markets or customer segments, and boost ecommerce and digital marketing to sell more online. Raise your prices strategically Think about the demand for your products/services in the market and revise your pricing to keep it competitive. Be sure to communicate any price increases sympathetically to customers, so you don’t damage customer loyalty. Introduce new products or services If your current products/services are not selling, it could be time to diversify your offering to meet changing customer needs. Make the most of your existing resources and expertise to bring new products to market. Have you checked out your competitors lately? Consider what they are offering and if they are doing things differently. There’s no magic wand that can make the current economic pressures go away, but by being proactive about your cost-reduction and revenue-generation, you can do your best to protect your business from the worst elements of increasing costs and an uncertain market. We can help you review your current financial and business strategies to look for the best possible opportunities, whether it’s better cashflow management, cost-cutting or revenue generation. Simply get in touch with us on (08) 9367 4199 to book an appointment to discuss this. Deciding whether to buy or lease your new equipment can be a tough choice. Let’s break it down to help you make the best decision for your business. Why This Decision Matters Certain equipment, machinery, and hardware are essential for your business operations. Whether it’s a delivery van for your food service or a high-end printer for your print shop, these assets are crucial. But should you buy them outright or lease them and pay in monthly instalments? Buying vs. Leasing: The Big Question Buying new business equipment can be a significant investment. Depending on your financial situation, it’s important to weigh the pros and cons of buying versus leasing. Buying: pros and consPros:
Leasing: pros and consPros:
Making the Right Choice
One of the biggest considerations is the cost of finance. There is likely not point borrowing money at say 15% interest if you have the cash in the bank and do not need it to fund the business. For us to support you we will ask you things like the cost of the quote you have for leasing, or payment amount for a commercial loan and the associated interest rate. You need to also consider your current financing arrangements, do you pay credit card interest, do you own money to the tax office or for payroll tax. Do you have personal debts that you could be using your cash to help you pay off. It is important to consider your whole financial position, cash flow, and the asset cost to decide whether buying or leasing is the best option for your business. Each choice has its benefits and drawbacks, so it’s important to choose the one that aligns with your business goals and financial situation. Need help deciding? We can review your financial position and help you make the best choice for your business. Call us on (08) 9367 4199 to make an appointment. As part of our ongoing commitment to ensuring that your business remains compliant with Australian Taxation Office (ATO) regulations, we would like to remind you of the importance of lodging your Fringe Benefits Tax (FBT) returns, particularly concerning motor vehicles owned by your business. Other examples of fringe benefits can include discounted loans, gym memberships, entertainment such as cinema tickets, and accommodation. Brief history of FBT
The Fringe Benefits Tax was introduced in Australia in 1986 as part of tax reform efforts to capture the tax value of benefits received by employees from their employers that are not in the form of cash salary or wages. This tax ensures that such benefits are subject to taxation, maintaining fairness in the tax system. The most common benefit provided is access to a company owned vehicle. The fringe benefits tax year is from the 1st of April to the 31st of March. FBT and associates It is crucial to understand that owners, directors, and their family members are considered associates under FBT regulations. Therefore, providing vehicles to yourself, your spouse, or your children is still subject to FBT. Compliance for motor vehicles When motor vehicles are owned by a business, it is crucial to report these annually to the ATO. At Preston Corporate, we employ the Employee Contribution Method (ECM) to compensate for personal usage of these vehicles as calculated by the ATO. This includes: - Personal usage vehicles where the statutory rate is treated as additional income for the business; - Operating cost or logbook method for vehicles with high business usage (e.g. sales roles); - Exempt vehicles such as dual cab utes, provided their use is limited to minor and infrequent personal trips. It is vital to note that exempt vehicle usage should be less than either 200km per trip or 700km annually. Minor deviations such as picking up children from school or occasional trips to the store are permissible. The major benefit is that to/from work trips in exempt vehicles are still counted as work related. Special exemptions for electric vehicles 100% personal usage electric vehicles are currently exempt from FBT, marking a significant shift in tax policy. Additionally, Petrol Hybrid Electric Vehicles purchased under a lease agreement before March 31, 2025, are also exempt from FBT for the term of the lease. This unprecedented opportunity allows for considerable savings on vehicle costs—buying a $60,000 electric vehicle may effectively cost you only $32,000 after considering FBT exemptions and tax and GST claims. Please note that the vehicle must be under the Luxury Car Tax Limit to qualify for these exemptions – so the Porsche Taycan is off limits! Electric vehicles and reporting The rising adoption of electric cars brings a new consideration into FBT compliance. Exempt electric vehicles must still be reported to the ATO on the FBT return, and the exempt value is included in the Single Touch Payroll (STP) finalisation at the end of the financial year. This is because electric cars affect the Adjusted Taxable Income of employees (used for Centrelink and Medicare Levy Surcharge). What is exempt from FBT? Items that are unlikely to attract Fringe Benefits Tax include: mobiles, laptops, PPE, or infrequent benefits that are $299 or less in value. ATO compliance and data matching The ATO uses sophisticated data matching techniques with state vehicle registries and analyses various tax return labels to identify discrepancies. Noteworthy is the ATO’s practice of verifying the use of vehicles claimed as business expenses through various means, including physical checks (such as attending football games and taking registration plates of utes to verify and review), social media investigations (e.g. photos of dual cab 4WD utes on Frazer Island holidays) and information requests (from e-tag companies and service records to verify log books). These measures underscore the importance of accurate logbooks and usage records. Failure to accurately complete a logbook or relevant employee declaration can result in significant employer tax liabilities: remember that it is the employer’s responsibility to ensure the vehicles are being used within the law, not the employee – examples might include a current or former employee using a company car outside company policy; but only the employer is still liable for FBT to the ATO. Why lodging FBT is crucial Lodging your FBT return is not just a regulatory requirement; it also provides legal protection. Timely FBT submission limits ATO reviews of these benefits to two years. In contrast, failure to lodge can allow the ATO to initiate reviews up to five years later. The FBT rate at 47% is significantly higher than the corporate tax rate, emphasizing the importance of compliance to avoid hefty penalties. We urge all our clients to maintain diligent records and ensure timely lodgement of their FBT returns. Doing so not only complies with the ATO regulations but also protects your business from potential future complications and financial liabilities. Even if you legally do not need to lodge an FBT return, if you provide benefits to employees, we strongly suggest that you do. This ensures that any potential FBT has been calculated and checked, and if lodged in a timely manner, reduces the audit window of the ATO. Lodgement and payment of FBT returns is due on the 25th June each year. Find out more about FBT from the ATO here. Should you have any questions or require assistance with your FBT return, please do not hesitate to contact us. Our team is here to support you in navigating these requirements smoothly, and we look forward to supporting your ongoing success. Bank reconciliations ensure the accuracy of your organisation's financial statements and helps maintain financial integrity. Get into the habit of doing it often. Putting it off can mean lost records or not remembering what transactions were for, or not noticing fraudulent transactions in time to rectify them, as well as your in-software reports not generating accurately. A bank reconciliation involves a comparison of your income and expense records against the actual bank statement records your bank has. It is a critical financial process to identify and rectify any discrepancies or errors between your internal financial records, with the transactions in the bank accounts. Bank reconciliations keep your bookkeeping accurate and can help lower your tax, alert you to fraud, and allow you to track costs. They are essential for several reasons.
Check out the below links to get a better understanding of how to reconcile your bank account transactions in Xero, MYOB (desktop or browser) and Quickbooks Online. We also offer a bookkeeping service which can be incredibly helpful to maintaining your file and preparing monthly and/or quarterly lodgements with the ATO. Get in touch with us for more information about this.
With all of the complexities of Australian payroll, ensuring compliance with the Superannuation Guarantee (SG) obligations is a very important task. Legislation surrounding superannuation contributions requires vigilant attention and a proactive approach from businesses to avoid missing legal updates and the pitfalls of non-compliance. Read on for tips to maintain your compliance as an employer. Compliance and why it is important
A major part of payroll operations is the responsibility to ensure that employees’ superannuation contributions are calculated accurately and paid efficiently to ensure no penalties are incurred. The ATO enforces strict guidelines around this, which can open you up to significant penalties if not adhered to. When not paid correctly and on time, you are also undermining your employee’s retirement savings efforts. Another point to consider is that making payment of super for the 4th quarter of the financial year after June 30th, means you won't be able to claim that as a deduction in your tax return until the next year when it is paid. Tips to maintain super compliance
A great way to do so, is to subscribe to the ATO newsletters (simply select the topics you’re interested in). 2. Regularly review your payroll Undertaking audits of your payroll register is imperative to ensuring no errors have been made, and allows you to rectify errors as soon as they are discovered. An external consultant can be engaged to perform these services. 3. Embrace technology Utilising payroll software that is up to date with the latest legislation and requirements will help to reduce the risk of errors occurring. Automation can help with timing to ensure you are not late in processing payment of your employee’s super guarantee. 4. Record keeping Detailed record keeping is imperative for payroll operations. Ensuring compliance, and making things much easier if you are ever audited by the ATO. Always remember, even if you own the business and are the employee, you are still required to stick to the rules and pay your super correctly, as you would for any other employee. Your commitment to this issue reflects your integrity towards yourself, your business, and employees. Find out the current and historical superannuation rates here. If you are not sure you are 100% doing things correctly, or need assistance relating to payroll and bookkeeping, give our team a call on (08) 9367 4199. Need to rein in your expenses? We can help you review your current costs, find the expenses that could be cut, and keep you on top of managing your future spend. Running a business will always mean incurring certain expenses, or ‘spend’ Whether you’re a large family business or a small fledgling startup, there will be costs, overheads and supplier bills that mount up – and these expenses will gradually chip away at your cash position, making it more difficult to grow and make a profit. So, what can you do to reduce your spend levels? And what impact will this have on your overall margins, profits and ability to fund the next stage in your business journey? Get proactive with your spend management
Spend management is all about getting in control of your expenses – and, where possible, aiming to reduce the level of costs and overheads that you incur as a company. Why does this matter? Well, excessive spending eats into your cashflow, reduces your profit margins and stops you from achieving the profits that you’re capable of as a business. So if you can get proactive with your spend management, you can actually make your company a far more financially productive enterprise – and that’s great for your overall business health. What can you do to reduce spend and slim down your company expenses? Here are some key ways to reduce expenses: - Reduce your overheads – Your overheads are the unavoidable costs of running your business, producing your products or supplying your services. If you have a bricks and mortar premises, these overheads will include rental payments, utility bills and even the cost of paying your staff. Drill down into the numbers and see where there are opportunities to reduce these overhead costs. That could mean moving to smaller premises, or reducing the size of your workforce, to reduce payroll expenditure. - Put limits on staff expenses – If your employees can claim expenses, or buy raw materials and equipment with the company’s money, these costs can soon start to rack up. It’s a good idea to put a spending limit in place, so each staff member can only spend up to an agreed amount. Having a clear expenses policy helps, as will training up your staff in good spend management techniques. Specialist expenses card software allows you to quickly set spend limits, track expenses and pull your expenses data through to your cloud accounting platform for processing. - Look for cheaper suppliers – If you can reduce your supplier costs, this will go a long way to bringing down your overall spend. If you’ve been with certain key suppliers for years, look around for new quotes, look at current market prices and see if you can negotiate better deals. And if your old suppliers aren’t flexible enough, try swapping to newer, more eager suppliers who will be willing to meet you in the middle on price. - Make your operations leaner – the bigger your operational costs are, the less margin you’ll make on your end products and services. One way to resolve this is to aim for a ‘lean approach’, paring back your staff, resources and operational complexity to the bare minimum. By making the business as lean as possible, whilst still delivering the same output, you keep your revenue stable, but reduce the spend level that’s eating into your cost of goods sold (COGS). The smaller your COGS, the more profit you make on each unit or sale – and that means better cashflow, more working capital and bigger profits. - Explore tax reliefs – Tax costs are an unavoidable expense when running your business, but it’s worth exploring which tax reliefs, grants or other business benefits you may be eligible for. For example, research and development (R&D) tax credits may be available in your field to help cut your corporations tax expenses. Talk to us about improving your spend management If you’d like to get in control of your expenses, we’d love to chat. We’ll review your current costs and highlight the key areas where expenses can be cut. Get in touch to start reducing your spend. As a new year begins, we often make new year resolutions for our personal goals, however, planning for the new year in your business is also very important. What business goals do you want to accomplish in 2023? You may be looking to expand your business or create more time for yourself. Have you backed up your resolutions with measurable tracking and accountability to ensure their success? Our key tips
Envision your future: Reflect on what you truly want from your life and how your business can help you achieve those aspirations. Consider where you want your business to be in the next five or ten years. Having a clear endpoint in mind will make it easier to set goals that align with your vision. Set measurable goals: Vague goals can be challenging to track and evaluate. Instead, focus on setting goals that are measurable. Think about the key metrics you already monitor in your business and how you would like to see them improve. For example, aim for a 3% increase in net profit year-on-year, a 2% reduction in expenses, or acquiring two new customers per month or grow your prospect database by 50%. If you set specific targets, you can easily track your progress and make adjustments as needed. Develop a plan for each goal: Once you have identified your goals, it's crucial to create a plan of action to achieve them. This can be as simple as jotting down your ideas or engaging in a brainstorming session with your team or advisors. Having a well-defined plan in place will help you stay focused and motivated to follow through. Monitor your progress regularly: It's essential to regularly check in on your progress towards your goals. Set reminders on your calendar or align your monitoring process with your invoicing cycle. By consistently evaluating your progress, you can identify any areas that need improvement or come up with fresh ideas to help you reach your targets. Celebrate your achievements: Celebrating milestones along the way is crucial for maintaining motivation and momentum. Plan a reward for yourself when you achieve a significant goal. It could be treating the team to a morning tea, having a day out of the office together or planning an event for the end of the year. Choose something that brings you joy without breaking the bank. We can help you with the strategy and identifying the information you’ll need to track, so you can monitor your progress. There are many different metrics you can use to do this, and we can help you in setting up your Key Performance Indicators (KPI). Contact our Business Advisor, Michele Rawlins, to discuss the future of your business. Christmas Cheer Cheesecake INGREDIENTS 200g pack of digestive biscuits - 85g unsalted butter, melted - 500g cream cheese - 100ml thickened cream - 3 eggs - 250g caster sugar - 1 tspn vanilla essence - 300g sour cream - 150g natural yoghurt - 300g frozen cranberries - 2 tbspn port - 1 tbspn lemon juice - 1 tspn ground ginger - 8 small rosemary sprigs dusted with icing sugar - METHOD
Putting important company policies in place, and keeping key rules and guidelines official, helps your workplace be productive and safe and gives employees and customers confidence. You can also address the behaviour you hope to see from your staff at social events in a policy. Here are 3 policies every company should have. Putting important company policies in writing makes good business sense. It compels you to think about how you want your workplace to run and the things you want to emphasise, and it makes these rules and guidelines official so that your employees know what you expect from them. It is also a good reflection of the values you want to instill in your business which can be helpful for employees and customers alike.
While you don’t need a policy on absolutely every aspect of the company’s workings, there are some key policies you should have to provide information on responsibilities and rights in crucial areas. The aim is for everyone to understand and adopt them, so keep them as simple as possible. Below are the 3 policies every company should have written down and easily accessible. Work health and safety Having a work health & safety (WHS) policy is all part of meeting your obligations to manage workplace risks and ensuring your workers’ health & safety. The policy should clearly describe how your workplace will be kept out of harm's way and healthy, the procedures necessary to achieve this, and what all your team members need to do. You may need separate policies for different departments; eg. Factory and office. WHS information must be shared with workers, which helps ensure they are engaged in WHS matters. It also helps reduce absenteeism, increases productivity, and gives your employees confidence in their place of work and management. Bullying and harassment Part of your obligation to keep workers safe and healthy is making sure your workplace is free from bullying, harassment, and discrimination. A bullying and harassment policy should define and document how issues are reported, and how the business will respond and seek to resolve them (by law, you must investigate and support the person affected). Having an official policy sets the best example of what is acceptable and clarifies the rights and obligations of both employees and their managers. Code of conduct & social event expectations Once you’ve covered the essential policies, you can develop a code of conduct that covers a range of general expectations for everyone in the business. The scope of the code will be determined by the particulars of your business and doesn't have to be complex, but should articulate the company’s values and align standards of professional behaviour with its principles and mission. It should also cover key areas like the use of company assets, protecting confidential information, avoiding conflicts of interest, and complying with laws and regulations. This is also where you can cover the expected behaviour of your staff at the company Christmas party and other social events. While Christmas parties don’t have to be either a massive bash or a boring, box-ticking exercise, we’ve got some tips to ensure it’s fun as well as being healthy and respectful. Company Christmas parties are things of legend. Everyone knows the stories about employees that took the opportunity to let their hair down just a little too far. These days, most businesses understand that letting staff cut loose at the Xmas bash poses potential health & safety and even legal risks. So, here are a few important things to keep in mind when you're planning and attending this year's annual party:
Remember, if you plan and communicate well, the Christmas party will be a time for you and your team to celebrate together in a relaxed setting with smiles all round. There are many policy and procedure templates available online to download, but be sure you are using a source that is right for you. Have they been prepared with Australia (or your location) and related laws in mind? Be sure to go through the templates with a fine-tooth comb before setting these in stone. |
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