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.

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!

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!

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

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.

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.

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.

With the increased availability of share trading apps, making it cheaper and easier to buy and sell shares, more people are entering into share trading for the first time.

You must declare all income from investments in your tax return, including dividend payments from shares, whether you have traded through a broker, an online platform or a phone app.

Dividend income could be received as bonus shares instead of cash payment, and some dividends have franking credits attached, which may reduce your tax liability.

All payments and credits for dividends and non-cash dividend payments need to be reported. The ATO matches shares data from your tax return to the shares trading details held by the Australian Securities and Investment Commission.

Records for Your Tax Return

You need to include details of all purchases and sales of shares this financial year – not just payments received.

Each company you buy shares from will issue dividend or distribution statements that provide details of the amount and nature of the payment and whether franking credits apply. If you have not supplied your tax file number to the company, the statement will also show the amount of withholding tax.

Always keep all documents provided by the companies you hold shares with. And remember to keep your shares records for at least five years after you have completed your tax return.

Need Help?

Once you enter the share market, your tax return can become more complex. For example, some shares transactions will result in capital gains tax or a capital loss, affecting your tax return. In addition, certain expenses incurred in earning your dividend income are claimable – but different rules apply to different types of payments and credits.

We’d love to help you streamline your shares information and make sure you are claiming the offsets and expenses you are allowed to claim, to maximise your tax return.

Having a self-managed superannuation fund (SMSF) gives you control and flexibility over how you make investments and prepare for retirement.

It’s important to get your deductions and record keeping correct for the SMSF audit process and the tax return, as there are strict laws governing SMSFs.

An SMSF must be set up as a trust and must also have a legal document called a trust deed. A super fund trust is set up for the sole purpose of providing retirement benefits to its beneficiaries. The trust deed governs how the fund is set up and how it will operate and must be used in conjunction with the superannuation laws.

There are many different investment strategies for SMSFs according to the fund’s trust deed and operations.

Common Tax Deductions

Deductible expenses for SMSFs vary according to the nature of investments and the trust deed, however there are some general expenses that apply to most funds.

• Operating expenses, such as management and administration fees, audit fees and ASIC annual fees.
• Investment-related expenses, such as interest, investment advice fees, costs of servicing and managing investments, property fees and brokerage fees.
• Tax-related expenses, such as preparing the SMSF annual return.
• Legal expenses including amending trust deeds.
• SMSF statutory fees and levies.
• Insurance premiums for death, total and permanent disability, terminal illness and income protection.

The rules for tax deductibility for SMSFs are different to those for individuals and business. Many people are used to claiming deductions for certain things in business or property investment and find they don’t apply to SMSF tax returns. We can help clarify what’s deductible and what’s not.

Expenses must relate to the sole purpose of the super fund being to provide retirement benefits to its members. There may be some items you want to query with us for the audit and tax return to see if they meet the sole purpose test, such as investment training courses, collectibles and artwork, travel expenses or personal computers.

SMSF Annual Return and Records

Once the formal audit of the SMSF has been completed, the annual return must be lodged with the ATO. The annual return is not only a tax return but also reports regulatory information and member contributions. You must keep all records relevant to the annual return.

• Keep all transaction, tax, accounting and financial reporting records for at least five years.
• Keep all records relating to trustee meetings, minutes, investment strategies and appointments or changes of trustees for at least ten years.

Make Your SMSF Management Easy

SMSF management can be time consuming. We can help with researching and managing investments, checking trust deed compliance, setting investment strategies, keeping records and conducting the audit.

Talk to us now and get ahead for your next annual SMSF return.