Remote work is on the rise - support your virtual team

Remote working has become more and more common as lockdowns have changed our working life and developments in technology have allowed us to communicate and collaborate no matter where we are.

Remote work is on the rise, and offering flexibility to your staff can be an essential tool to both attract new talent and retain your existing team. When you’re recruiting, the ability to offer an entirely remote position can mean that you’re suddenly able to consider candidates from across the country, rather than limiting yourself to one area, or to people who are in the position to be able to relocate.

So what do you consider before introducing remote working?

When you’re working with a distributed team, communication is key, and as the employer, it’s your job to provide the resources and systems to make this happen. Typically, these might include:

  • Laptops and other tech as required
  • Compensation if an employee is using their home internet connection
  • A way to stay in touch with the team, beyond email. Platforms like Slack are great for team communication
  • Guidelines around how often and in what way the entire team will catch up
  • Project management tools that are accessible for every worker

With these essentials in place, the biggest factor in making remote work a success is workplace culture. Consider upskilling your management team to make sure they are ready to support your remote staff or even to give them the skills to allow them to do their roles remotely.

Remote working can be isolating for an individual and sometimes the meaning in email and text can be lost so it is important to factor in a regular face-to-face meeting or video conference to bring coworkers together, enable mutual understanding and to build the team culture.

If you’re planning to offer remote work to your team, make sure you have strong communication channels, and robust systems to support your flexible workers.


Guide for your business exit strategy

What is a business exit strategy?

An exit strategy is a plan for wrapping up your involvement in a business. For most people, that means readying the business for a change of owner. Executing a well thought-out exit strategy can increase your sale price, while ensuring the business continues to thrive after you’ve left. This can also be called succession planning. What does it involve?

Succession planning definition and goals

The aim is to leave your business in the best possible shape for a new owner. That means it should be operating at peak profitability, the books should be spick and span, and all your processes will be written down so a stranger can come in and run the place. Oh, and the business won’t need you anymore – no matter how important you once were.

It takes years to do all this. That’s why it’s never too soon to start on your succession plan, or exit strategy.

How to sell a business

Business advisors and brokers recommend these nine steps to help get a succession plan in place.

1. Pick a target buyer

There will be different priorities depending on who you’re selling to. If it’s family, take pains to make everything transparent and fair. You don’t want the transaction to cause tension or conflict between children. If you’re selling to staff, be prepared for staggered payments. They’ll probably start with a deposit and pay you the rest from business income. If you sell to the highest bidder, then get all your records in order as otherwise they won’t have any idea how you operate, or what sort of money you make.

2. Decide how fast you’ll want out

Some buyers, such as family or staff, won’t have the cash to buy you out straight away. You might have to keep an interest in the business and stay involved to protect your investment. If that’s the case, you’ll need to negotiate consulting fees. If you want a clean break, you’ll probably be better off selling on the open market.

3. Get your accounting sorted

Smart buyers will ask to see at least two years worth of clean and dependable financial records. If your bookkeeping isn’t all it could be, get it fixed now. And if there’s something you can do to improve profitability, do it as soon as possible. You want that upswing to show in your accounts as a sustainable trend rather than as a recent spike. Use our balance sheet template to help get things in order.

4. Make yourself redundant

No one’s going to buy your business if it can’t survive without you. If you have staff, give them the training and authority they need to succeed. Scale back your involvement. Be less available to customers and clients. Delegate big decisions. Go into work less often.

5. Ensure your business is a well-oiled machine

Ensure you have formal (and efficient) processes for getting work done. Who does what, when, and how? Make sure there are protocols to guide all this. Potential buyers will be impressed if some things in your business happen automatically.

6. Write down how everything happens in your business

Write a “how to” manual for your business, so that a stranger could pick up the reins and run everything tomorrow. Record every process, including admin. Make a note of the steps you follow for each of these tasks. While you’re at it, write formal job descriptions for employees. And create templates for tasks that are repeated in your business.

7. Figure out how to drive up the valuation of your small business

What are the things that make your business great? Do you have a really outstanding product? Loyal customers? Amazing intellectual property? Find the strengths in your business and grow them, so that they become even more valuable. Similarly, figure out the biggest holdbacks and fix them. You’ll need someone from outside the business to provide this assessment. Get your accountant involved. If they don’t have the particular skills you need, they may be able to recommend someone who does.

8. Get a guideline business valuation

You won’t know what you’ll get for your business until the day it’s sold, but you can get a rough estimate. Ask for a professional opinion. Your accountant should be able to introduce you to someone, or you could search for a local business broker. A guideline valuation will help satisfy your curiosity and set realistic expectations. If they predict a lower price than you’d hoped, you might delay your exit, and spend some time building value in the business.

9. Work on a sales pitch

Buyers need to be excited by your business, so come up with an elevator pitch that captures the essentials. Craft a story that explains why you got started, how you’ve grown, and what you’ve achieved. Paint a positive picture of the future, too, but keep it real. Incorporate stats and facts to support what you’re saying.

Exits happen

Exiting your business is inevitable. It will happen whether you’re in control of it or not. So make a plan now and start getting your business ready for the next owner. It’ll help you command a better price, and increase the chance that your business survives.

And remember that anything you do to benefit your future buyer, will also benefit you. You’ll have a more efficient, profitable and easier to manage business.

It’s never too soon to build a business exit strategy.


Closing Your Business

If you are planning to close your business, there are a few important things to take care of.

When you’ve put a lot of time and hard work into building a business, sometimes it’s hard to know what to do in difficult times. We can discuss whether alternatives might be appropriate, such as changing operations or structure or pausing the business.

If you have all your financial reports, you could also check the ATO Business viability assessment tool. The online tool asks for basic financial performance and business management information and provides a viability result.

Before closing, you’ll need to manage the process leading up to the closure.

  • Decide on the date of closure.
  • Sell assets such as equipment, furniture, business vehicles and stock.
  • Pay all outstanding bills or talk to us if you’re unable to pay everyone.
  • Notify employees, contractors, customers and suppliers.
  • Cancel licenses, permits, insurance policies and industry memberships.
  • Terminate employees and pay final wages and superannuation.
  • Lodge and pay the final business activity statement, tax return and any other forms required. You’ll need to do this before cancelling any registrations or deregistering the company.
  • Give notice to commercial premises, disconnect utility services and redirect mail.
  • Update or delete the website and cancel social media business accounts.
  • Close business bank accounts, online payment gateway accounts and credit cards.
  • Disconnect any business services no longer required in your myGovID account.
  • Cancel ATO registrations such as PAYGW and GST.
  • Cancel your Australian Business Number (ABN).
  • Cancel your business name and deregister your company.

Remember, you’ll still need to keep all business records for at least five years.

If you’re not sure about your business’s viability, talk to us for an objective assessment and analysis of options.

If you’re ready to close the business, we’re here to help minimise stress by taking over administrative tasks involved in closing down.


Does your business have a disaster recovery plan?

With extreme weather events on the rise and climate change becoming an increasing threat, it’s never been more important for your business to have a disaster recovery plan in place.

Weather is becoming more severe, more unpredictable and more destructive over time. With shops and offices in some locations getting flooded out, shaken by earthquakes or threatened by wildfires, you need to know that your company can:

  1. Survive an extreme weather threat
  2. Set up the business in a secondary location, if the need arises

Your disaster recovery plan (DRP) is your detailed plan for how to achieve this, and is an important element of your company’s wider business continuity strategy.

The increased threat of extreme weather conditions

When you’ve invested considerable time, effort and money in setting up a business, the last thing you want is an unpredictable threat wiping out this investment.

However, if your company runs from bricks-and-mortar premises, there’s always the potential for extreme weather to have an impact on your operational capabilities. The recent severe flooding in Europe has wreaked havoc in many small towns, wiping out high streets and dumping tonnes of filthy river water into business premises, shops and homes alike.

As a business owner, the question you have to ask yourself is ‘What would I do if this happened to my business?’

Getting your business back up and running

When you sit down to complete a standard SWOT (strengths, weaknesses, opportunities and threats) analysis, it’s unlikely that you’ll previously have included extreme weather as a major element in your list of threats. But the times are changing, and the potential for disaster has to move up your agenda as a matter of urgency.

To keep your business prepared and ready, you should ask yourself a few specific questions.

These will include:

  • Do you have a disaster recovery plan? – Does the business have any kind of disaster recovery plan (DRP) in place at present? You may well have a business continuity strategy of some sort, but do you have a specific plan if fire, flood, earthquakes or other natural forces directly threaten your business premises? If not, you need to create one.
  • How does your plan align with your business continuity strategy? – business continuity is all about ensuring that your company can remain operational and trading. So your DRP should be a significant part of this continuity strategy. Being wiped out by a flood may have once seemed like a Hollywood disaster movie scenario. Now it’s an event that’s all too possible – and something you need to have prepared fdor
  • Is anyone in charge in the event of a disaster? – leadership and clear advice during a time of disaster are essential. So, in the event of an extreme weather event affecting your premises, who will be in charge? Is this the CEO or MDs job? The COO? Or maybe this will be a secondary role for another employee, who has been trained up and knows how to lead the response. Make sure you know who to contact and their role.
  • Are your systems and databases in the cloud? – In today’s digital world, many companies will have based their IT and communications infrastructure around cloud technology. Being a cloud-based business is incredibly valuable in the event of a disaster, allowing you to engage a ‘disaster recovery as a service’ (DraaS) process that gets all your business systems up and running from cloud backups and off-site servers.
  • Can you team work remotely? – another benefit of being cloud-based is that employees can work remotely from any location. So, if your office is flooded out, your team can log in from home and can continue to work. If you’re still relying on desktop applications via an office-based server and network, this just isn’t possible. Offering remote working isn’t just good for your staff, it could be a business critical decision.
  • Do you have access to any alternative workspaces? – depending on the business property you own, you may have access to alternative offices or workspaces. When one location is affected by extreme weather, would an alternative location be able to take on your displaced staff and continue working? Look at how feasible it is to have a plan for moving teams to alternative locations. And, if possible, making as much use of remote working as possible.

No-one believes they will be the victim of a disaster…until it happens to them. No-one can fully predict how extreme weather and natural disasters will come to affect the planet over the coming years and decades. But the risk of a freak event impacting your business is growing.

It’s worth putting some time aside now to think about the practicalities of setting up a disaster recovery plan.


What is Personal Services Income?

Personal services income (PSI) is income received as payment for individual personal efforts and skills. It applies to many contractors who provide services as their means of earning an income. PSI rules can apply to individual sole traders and other types of business entities, but not employees. If PSI rules apply, the entity is called a personal services entity (PSE).

The PSI rules ensure the income is attributed to the individual who performed the services and not apportioned across other entities.

There are several tests to work out if your income is PSI or if you are instead conducting a personal services business (PSB), which means the PSI rules don’t apply. If a personal services entity qualifies as a PSB, the ordinary tax rules apply for that financial year.

At least one of these four tests must be satisfied for an entity to be classified as a PSB.

  • Results test: the individual must be paid to produce a result, is required to supply their own equipment and tools to produce that result and is liable for the cost of rectifying defects in the work.
  • Unrelated clients test: the sole trader or entity must be engaged by unrelated clients, and services must be advertised to the public.
  • Employment test: in general, a sole trader or other entity must engage one or more entities to perform at least 20% of the sole trader’s principal work. Entities other than individuals must not be associated with the sole trader.
  • Business premises test: the entity must maintain and use business premises to conduct personal services. The business premises must be exclusively used by the PSE and physically separate from private premises and customers.

If more than 80% of income in a financial year is derived from one customer, the PSE must satisfy the results test to be classified as a PSB.

If none of the four tests are met, the income is classified as personal services income, and the PSI taxation rules apply. PSI rules restrict the type of allowable tax deductions made in relation to personal services income-earning activities.

If you’d like to know more about PSI, talk to us to see if the services you provide meet the tests for conducting a personal services business. We’ll make sure you are claiming the maximum allowable deductions and being taxed correctly.


Review your expenses – and save yourself money

Running a business will always mean incurring certain expenses, or ‘spend’.

There are always 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?

Getting 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.

So, 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 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. Expenses cards – such as Webexpenses, Soldo or Pleo – allow 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 – you might assume that 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 benefit from. For example, research and development (R&D) tax credits that help cut your corporation tax expenses if you can demonstrate that you’re involved in innovation and groundbreaking R&D within your industry or specialism.

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 will highlight the key areas where expenses can be cut. Then we’ll help you formulate a proactive spend management programme, to reduce your unnecessary spending.


What value can automation bring to your business?

Automation has the capacity to revolutionise your efficiency and productivity. But how many of the automation features that are available to you are actually being used? And could you be getting more value by building automated processes into your operational framework?

Removing the manual workload to streamline your processes

There’s a very simple mantra when it comes to making the most of automation: if there’s a manual task in your business that’s taking up time, automate it now!

The more time you and your team spend on low-level administration, data-entry and form-filling, the less time you have available for actually running the business. With your software tools maximised, your automated processes can be chugging along in the background, doing the heavy lifting and freeing up your time to focus on client service, sales and strategy etc.

So, which elements of your everyday operations could you be automating? And which apps and software solutions can help you to achieve your automation goals?

Here are some areas where automation and smart systems can really help to add value:

  • Automated bookkeeping and digitisation of paperwork – apps like Dext and Auto Entry offer you the opportunity to automate your bookkeeping and record-keeping. These solutions let you snap a photo of a receipt or invoice, digitise the contents and then automatically create an expense claim or bill in your accounting system. There’s no keying in and the whole process is synced with your choice of cloud accounting platform.
  • Automated employee expenses – apps like DiviPay, Soldo and Pleo give you automated control over your employee expenses. Using either virtual or physical credit cards, your staff can pay for expenses and payments are then automatically synced with your main accounting platform. That means no late expenses claims, no need for petty cash and no wasted time keying in the receipts. All employee expenses can be tracked, measured and paid, with the whole expenses process automated from start to finish.
  • Automated payment collection from your customers – with payment gateways like PayPal, Stripe and GoCardless you can automate your cash collection. By using a modern payment gateway, you make it easier for clients to pay their bills. But you also automate the actual cash collection and bank reconciliation process too. Money can be instantly paid to your main business account and all the transactional data pulled across to your accounting platform. That means less admin, and faster payments too.
  • Automated POS, stock management and inventory – running a retail or hospitality outlet comes with a lot of operational admin. Apps like Vend or Shopify POS give you an all-in-one point-of-sale (POS), stock and inventory management system, automating your till sales and syncin g everything with your choice of accounting platform. The inventory system will also be automatically updated when an item is sold, keeping your records and stock listings completely up to date.
  • Automated marketing and social media posts – digital marketing is key to finding customers and growing your business. With tools like Hubspot Marketing Automation or ActiveCampaign you can automate a large chunk of your marketing work. These solutions let you create automated email cadences, target specific customer audiences and track your return on investment (ROI) in forensic detail.

The team at Solve Accounting can help you implement and automate mundane processes to help your business run seamlessly. Reach out to us today to see how we can assist.


Wellbeing in the Workplace

Supporting and promoting health and wellbeing in the workplace is important for staff and business owners alike. Providing a physically and mentally healthy workplace is beneficial for all who work there, as it reduces staff absenteeism, increases productivity and makes the workplace more enjoyable.

If you are an employer, workplace health and safety laws require you to look after your workers’ mental health just as you would physical health.

This includes minimising risks to workers’ mental health, preventing discrimination based on mental health, protecting privacy and not taking unfair action against workers because of a mental health condition.

Workplace Mental Health and Wellbeing Resources

There are many excellent apps available, both free and paid, to assist with all aspects of physical and mental wellbeing in the workplace that you can offer to staff – or use yourself as a business owner.

Creating a Healthy Workplace

Creating wellbeing in the workplace doesn’t have to take a lot of time and resources. Small activities carried out regularly accumulate over time into good habits and everyday practice.

Encourage conversations about health and wellbeing, check in with staff about stress they may be experiencing, offer team activities that promote wellbeing, and provide access to tools like the apps listed above to assist employees in managing their mental health and wellbeing.

Many other apps provide education about mental health and practical tools to change mental and emotional states. Consider offering your employees paid subscriptions to an app of their choice to foster wellbeing. Check out Unwinding Anxiety, Headspace, Waking Up, Calm, Ten Percent Happier and Productive for starters.

HeadsUp has a great guide to promoting health and wellbeing in your business. Find out more about workplace stress, rights and responsibilities, risk factors and how to develop an action plan.


The perfect time for planning?

Being in lockdown is frustrating. There’s so much you can’t do.

But is it the perfect time to do some business planning?

Business planning constantly gets bumped to the bottom of the to-do list. It never feels urgent, especially when sales are strong and you’re dealing with challenges like finding new staff, or product shortages.

However, a business plan can really pay dividends in the long run. It can not only be a fantastic decision-making tool, but it can also help you get your priorities in order. What do you really want from your business in the long run, and how can you achieve that?

Setting goals takes a lot of thinking

Pared back to its essentials, a business plan identifies:

  1. Your goals – what you want and when you want it by
  2. How you plan to achieve those goals

Don’t be fooled by how simple this looks.

It can be pretty soul-searching to work out what your goals are as a business owner, because they’re not simply related to growth and market share. They’re also about your personal goals – do you want more money, or more time? Do you want to step up, or step back? From a business perspective, you need to think about whether to expand your products or services, or become more profitable within your existing specialty area?

If you don’t manage to do any other business planning, simply thinking about your goals and jotting down a few on paper can crystallise your ideas – giving you valuable insights into which direction to take next.

A plan for achievement

Once you have goals in place, figuring out how to achieve these usually requires a multi-faceted approach. It will include some or all of the following:

  • Reviewing current and potential products and services.
  • Pricing, target market and competitor comparisons.
  • Sales and marketing.
  • Assets and equipment.
  • Systems, automation and outsourcing.
  • Financial forecasts.
  • Cash flow forecasts.
  • Possible funding for investment.
  • Your team.

Give us a call

We love talking to business owners about how to achieve their goals – seeing our clients succeed is one of the most rewarding parts of this job. We can run the numbers on various scenarios, do cost-benefit analysis, cashflow forecasts, and ideas for growth.

Give us a call, we can help.


Employing Casuals? Here’s What You Need to Know About the New Rules

Casual Employment New Rules from March 2021

The Fair Work Act 2009 has been amended to enforce several new rules for employing casual workers.

The Act includes a statutory definition of casual employment, a pathway for casual employees to become permanent, and a Casual Employment Information Statement (CEIS).

Definition of Casual Employee

A casual worker does not have an agreed pattern of work or an advance commitment to ongoing work from the employer. Therefore, there is no consistent or guaranteed work schedule, and the employee is paid an hourly rate plus casual loading according to the relevant modern award. If you require employees to agree to a regular roster well in advance of scheduled work and rely on them as an integral member of your team, talk to us about whether the employee should be considered a permanent employee. True casuals can choose whether or not to work when you offer them shifts.

Permanent part-time and full-time employees have a set roster of work and a commitment from the employer to ongoing work. For full details of casual employees, visit the Fair Work Ombudsman Casual Employees webpage.

Casual Conversion Pathway to Permanent Employment

Employers of casuals are now obliged to offer casual workers the option to convert to permanent employment after 12 months of employment if the pattern of work has been regular and systematic during the last six months.

Some modern awards already have clauses that allow employees to request permanent work. The Act overrides individual award provisions and means that employers must now actively offer conversion to casual workers who meet the criteria for converting to a permanent position.

If there are reasonable business grounds for not making an offer of permanent employment, the employer must notify casual employees.

Casual Employment Information Statement

Employers must now provide the CEIS to all casual workers upon starting work. You must also continue to provide the National Employment Standards and Fair Work Information Statement. Visit the FWO Casual Employment Information Statement webpage for details and to download the form for your employees.

The CEIS outlines the rights of casual workers to become permanent employees in certain circumstances.

Review Your Casual Workforce

The rules around reasonable business grounds, when employees can refuse an offer, time constraints, and transitional provisions are complex.

  • First, check your employment contracts to make sure they meet the new definition of casual employment.
  • Then, put in place a process for assessing casual roles at the 12 month anniversary of the employee start date.
  • You’ll need to keep detailed records for casual employees to ensure you are complying with the changes.

Talk to us if you’d like assistance with managing your casual workforce, we’re here to help!