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!


Pay and payroll mistakes that can cost your business

Getting pay or payroll wrong is a major financial and legal risk. Business owners and management are ultimately responsible for any pay mistakes and their consequences, which could be a hefty fine from a Fair Work Ombudsman Inspector, or the Australian Taxation Office, as well as any interest and legal fees.

Mishandling pay can also harm employees’ trust and confidence in the business, which can end up sapping morale and damaging your reputation.Unfortunately, pay errors aren’t rare. A 2018 study estimated 2.4 million Australian employees could be affected by payroll underpayments, at a cost of $3.6 billion.

The combination of good payroll and HR systems will help reduce mistakes and non-compliance, and will make it quicker to identify and resolve any issues.

Here are some common pay errors to watch out for:

  • Underpayment – It isn’t always easy to ensure employees receive all their entitlements, as payments for base salary, overtime, penalties, allowances, and superannuation can be complex and confusing. Employers can make incorrect deductions without knowing it, so don’t just accept that your payroll system is automatically accurate and payments meet current legislation and awards. Take time to review what payments are being included and excluded, and make sure the amounts are right.
  • Overpayment – Overpaying your workers can be just as costly and harmful to your business as underpaying. Nearly 70% of audits by the Australian Payroll Association in 2020 revealed overpayments, and some errors cost employers millions of dollars. Overpayments are also hard on employees who are unaware and not in a position to repay the money. In certain circumstances, the business might not be able to recover the money and the employee (or ex-employee) keeps it.
  • Minimum wage compliance – The national minimum wage is the lowest that a worker can be paid. You and your employees can agree to any wage rate above the minimum, but every employee must be paid at least the minimum for every hour they work. Making a serious failure to pay the minimum wage could lead to significant penalties. The Fair Work Commission reviews the minimum wage each year, so you need to make sure you’re up-to-date with the latest rates.
  • Unlawful deductions – Legally, you can’t deduct money from your employee’s wages unless it’s for a lawful purpose, is reasonable, and the employee has agreed to the deduction in writing.The law makes no distinction between not knowing what deductions are legal and deliberately breaching the Fair Work Act, so employers need to ensure any deduction is lawful and has been discussed with the person. If you are unsure, get legal advice before proceeding.

The team at Solve Accounting can manage your pay and payroll to avoid any major financial and legal risk. Speak to us today to see how we can help!


Are you paying too much tax?

Paying tax is an inevitable part of doing business.
The more your income grows, the more tax you’re liable to pay. You’re rewarded for your success with a bigger tax bill.

While we don’t want our clients to avoid paying tax or evade the tax department. We do want our clients to only pay the amount of tax they’re legally liable for.

Many business owners don’t understand the tax deductions and other benefits available to them.
We want to help you arrange your financial affairs to you can minimise your tax and pay only what you should. Tax legislation is constantly changing. Our team are up to date with any changes and understands how changes can affect our clients.

Changes to your personal circumstances can also affect how much tax you need to pay. There could be a better way to structure your affairs, so you pay less tax.

Some examples of areas where you could save tax include:

  • Vehicle ownership
  • Home office expenses
  • Entertainment
  • Employee benefits
  • Loan refinancing
  • Family income allocation

We can assess your tax situation.
We can review your financial reports and identifying potential tax saving opportunities in your business to determine the most appropriate tax structure for your circumstances. We can also advise on the financial implications of your current and planned arrangements.

We won’t just make recommendations; we’ll ensure you understand your tax obligations and give you peace of mind that you’re compliant with all tax legislation.

Knowing exactly how much tax you’ll have to pay means you can set aside the right amount of money on a regular basis, so you’re prepared for the bill and won’t incur penalties or interest.

“The only thing that hurts more than paying an income tax is not having to pay an income tax.” – Thomas Dewar


Upsizing or downsizing? We can help with the forecasting

The post-Covid, globalised economy has created a number of challenges for the average business. Depending on your business purpose and strategy, you may need to either upsize, or downsize, to secure the long-term future of your company.

But what are the implications of scaling up, or scaling down, your operations? And how do you refine your business so it’s fit for purpose and ready to take on your new aims and goals?

The answer is to look carefully at your forecasting and your future decision-making.

Looking at the ongoing needs of your business

Our experiences of the pandemic have demonstrated one very clear lesson – you never know exactly what lies around the corner for your business. But the more prepared you are, the better you can respond, as and when new threats and opportunities do appear.

With this in mind, forecasting and scenario-planning can be exceptionally important tools.

Rather than crossing your fingers and hoping for the best, you can plan for two, three or more different outcomes – with different strategies and tactics for each separate scenario. You can’t bullet-proof your business, but you CAN make sure that you at least have a Plan B (or C).

Scaling up, or scaling down?

By making constructive use of forecasting, you’ll be able to see the most viable path for your business. From here, you can make a decision on whether scaling up, or scaling down, is the most appropriate action for the long-term health of the company.

Some key questions to ask during your decision-making may include:

  • Do you have enough funding to grow, or do you need to downsize? – Knowing how much working capital you have available in the business is a vital piece of information. If you have a healthy balance sheet, a workable funding strategy and access to lenders, you’ll be able to fund your growth. If your cash reserves are depleted and access to finance is limited, now may be the time to shrink the business and consolidate things down – helping you to survive to fight another day, even if it is at a reduced scale.
  • Do you need more, or fewer, employees? – If your market share has dropped, you may need to downsize your team. And if you’ve hit a winning streak of sales, you may need to upsize your workforce to meet demand. Look at what resourcing you need and the types of skills, capabilities and long-term knowledge you need from your team in order to meet your new goals and targets.
  • Do you need to train your existing people? – If your business purpose has evolved, or you’re moving more into the online or digital arena, you may need to train up your staff. Upskilling your people helps to bring them more in line with modern digital business practices, software and online customer interactions, all of which helps to increase your operational capabilities and your customer service levels as a business.
  • Do you need the same number of branches/shops/offices? – If you’ve instigated remote working or hybrid working, you may not need so much office space for your people. And if you’ve moved a lot of your business to online selling, fewer bricks-and-mortar outlets will be required. Cutting building lease costs and/or commercial mortgage expenses can be a serious cost-saver for the business. Conversely, if you’re aiming to scale up, it’s likely that larger premises will be needed – resulting in higher property costs, but increased income from your scaled-up operations.
  • Do you need new equipment, machinery or vehicles? – Knowing what tangible assets you need in the business is an important part of your new business plan. If you’re expanding your operations, new equipment and/or vehicles will be needed to meet the new demand. This is likely to mean taking out third-party finance, or digging deep into your cash reserves. If you’re downsizing, there’s potential to sell-off existing equipment and assets and to free up this equity for other projects in the business.

Talk to us about scenario planning and decision-making

If you’re in the process of evolving or changing your business purpose, please come and chat to us. We can help you review your existing business plan, run scenarios and forecasts, and look at the long-term future path of your business.


5 ways to improve your cashflow

Cash is the lifeblood of any business – once the cash dries up, problems quickly begin to multiply. Keep the cash running freely and you can continue to grow your business.

Here are five tips for improving your cashflow:

Have a system to manage your debtors – Come up with a clear, step-by-step way to handle outstanding accounts. It might include:

  • automated reminders on unpaid emails
  • a phone call or email when the amount has been outstanding for a certain period of time
  • a stop credit on the client when they exceed an acceptable payment time.

Be prepared for tax time – One of the fastest ways to run out of cash is to find yourself short at tax time. We can help with this – together we can come up with a system to help you put enough aside each month so you’re never caught short. You can also use tax pooling or other options to smooth out your cashflow.

Try not to dip into business funds for personal spending – It’s always tempting to tap your business account for personal spending. Instead, try to keep them separate. If you’ve oversaved at the end of the tax year, you can draw down a nice bonus – that’s much better than being caught short.

Sell old stock – Too much stock? Consider old stock, old furniture, machinery or even stationery: they can all be sold to free up space and provide a small cash injection.

Forecast your cashflow – Create a cashflow forecast (we can do this with you) and that will help you monitor and measure the flow of cash in and out of the business.

Need help with forecasting, tax saving or cashflow management? We’re here for you – just drop us a note or give us a call.


Tax Tips for Property Investors

Are you making the most out of your investment property? Getting the income and allowable tax deductions right can be complex. Talk to us today to review your 2021 tax return and family group structure.

If you have income from investment properties, now is the time to start gathering your records and reviewing your expenses for the 2021 financial year.

Income to Declare

All income earned from each property must be declared. If you have multiple properties, keep the records for each property separate to make the tax return more efficient.

  • Rent received, whether paid directly to you or through an agent or through an online management platform. Rent includes recurring regular amounts as well as any lump sum amounts paid in advance.
  • Rental bonds returned for example if the tenant caused damage or defaulted on rent payment.
  • Insurance payouts received as compensation.
  • Expenses reimbursed by the tenant, for example if they have caused damage and you have paid for the cost of fixing the damages, or if they have reimbursed you for water.
  • Extra fees received, for example letting or booking fees.
  • Government rebates, for example for installation of solar utilities.

You will need statements or recipient created tax invoices from agents or management platforms and documents for all other payments received.

Tax Deductions

Deductible expenses for property are different for residential and commercial properties. Not all expenses related to owning a property are allowed as deductions, so it’s important to check what you can claim.

  • Expenses You May be Able to Claim This Year
  • Advertising for tenants
  • Body corporate fees
  • Council rates
  • Water supply charges
  • Land tax
  • Cleaning, gardening, pest control and property maintenance
  • Insurance
  • Agent fees
  • Repairs and maintenance
  • Some legal expenses
  • Loan interest

Other Expenses

There are some expenses which need to be claimed over a longer period such as several years or decades. These can include borrowing expenses, capital expenditure, depreciation, initial repairs and capital works.

Some expenses cannot be claimed for income tax purposes. These include stamp duty, loans and repayments, some legal expenses and some insurance premiums.

Get Help to Simplify Your Property Records

Tax matters for property investors can be complex. The ATO keeps a close eye on tax returns that involve property investment, as it’s easy to make mistakes. There are other matters to consider such as the period of rental availability, private use of the property, capital gains tax, legal contracts and positive or negative gearing.

We’d love to help ensure you are claiming the right deductions to make the most out of your investment property this year and beyond. Book a time now for your 2021 tax return and review of your family group structure.