Cashflow management

Do You Have a 'Cash-Flow Conundrum'? If Yes, Remind Yourself That Cash Is King (and Queen).

Cashflow management can be a tricky challenge to master. And consequently, if managed poorly, can...read more

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Cashflow management

8 Steps to Avoid Cash Flow Problems at Your Small Business

Is your business experiencing cash flow problems? Here is an expert 8-step process to solving that...read more

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Budgeting and forecasting

This week in finance: Tech stocks get the wobbles, Fed to lift rates and jobs data out

This economy data has both positive and negative outlooks for businesses in the coming month, with...read more

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Budgeting and forecasting

Federal budget can’t fix 'dangerously dumb' housing prices

Any measures in the federal budget aimed at housing affordability will have little impact on...read more

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Budgeting and forecasting

Here's what to expect in the 2017 budget

The concept of home and all that it means will come into focus at this year’s federal...read more

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Questions

Housing affordability: Should we limit/scrap negative gearing?

Asked by:
SavvySME Official
SavvySME Official Official Account at SavvySME
Deborah Vella
Deborah VellaOwner at Support Legal
Negative gearing is one of the factors that feed into the property market. It can be aligned with lack of housing affordability, but so can a number or combination of other factors. Whether negative gearing should be scrapped or limited over time will depend on the plans for other factors affecting the property market. If the aim of limiting negative gearing is to reduce the tax deductions available for the individual wealthy taxpayers in favour or creating more equality with tax payers who don't own property, then it might be worthwhile to consider. However if the aim of limiting negative gearing is to completely eliminate the housing affordability problem, then more consideration will need to be given.
Yes, I think negative gearing should be scrapped... over time... I think a wind down period of 10 or even 20 years maybe, will have a positive effect, couple with making mortgage interest on your own home, principle place of residence, tax deductible, to encourage home ownership... I think it will also lead to higher quality and better considered and designed home building in this country.
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Questions

How will your business be affected by interest rate rises?

Almost every expert says the interest rates will go up within the next few years. How will your... read more

Asked by:
SavvySME Official
SavvySME Official Official Account at SavvySME
Helene Liatsos
Helene LiatsosOwner at Home Office Management Experts
If your business has loans or credit cards, the interest rate is highly important. This is money you pay out of pocket so the lower it is the better it is. What I try to do each month is pay more than the interest rate charges/minimum payment due....even a few dollars will help lower the principal on the account. If possible, look into getting a credit card with a lower interest rate or refinancing the loan. Another thing I try to do is to pay cash for items that I need so I am not constantly loading up the credit card. Best, Helene
Jef Lippiatt
Jef LippiattOwner at Startup Chucktown
This wouldn't currently impact me as I'm bootstrapping all my financing myself. However, I can see how if you were carrying significant inventory or trying to expand your business this could be a very negative impact.My suggestion is that if known interest rates will be going up but haven't yet, you need to fast track your plans and lock in the lowest possible rate you can while they exist. It may seem scary to speed up something like that, but the payoff could be great but non-existant if you wait... just something to think about.
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Questions

Should we legislate the time it takes to pay to protect SME’s cash flow?

Numerous surveys and report have showed again and again that overdue payments are detrimental to... read more

Asked by:
SavvySME Official
SavvySME Official Official Account at SavvySME
Scott O'Reilly
Interestingly, the construction industry in Victoria (and I believe mirrored in many other states) has a form of this called the Building and Construction Industry Security of Payment Act 2002 (VIC) - it is based on the premise that construction contractors already 'cashflow' projects for their clients by expending resources before receiving payment, so it sets a clear set of timeframes for payment or part payment. Failure to pay in accordance with this Act is easily enforceable at the Victorian Civil and Administrative Tribunal or the Magistrate's Court, on the basis that the legislative timelines are very clear and strict.A core tenet of this Act is 'pay now, argue later' - that is, a client can issue a 'payment schedule' outlining a different (reduced) amount or alternative payment terms but that at least provides protection to the contractor for the agreed amount, rather than putting the whole invoice on hold. If a client doesn't lodge a payment schedule, they are deemed to have accepted the invoice and it becomes very quickly enforceable.More info at:http://www.austlii.edu.au/au/legis/vic/consol_act/...http://www.constructionlawmadeeasy.com/SecurityofP...http://www.vba.vic.gov.au/practitioners/security-o...
I have to say I'm not a fan of legislating for good behaviour, especially not as it relates to business to business commerce. Besides that that I don't understand how a law like that could ever be enforceable.I think the biggest problem is with small business itself. Small business owners simply do not take the time to develop, implement and consistently apply realistic payment terms and collection systems.I have found that when thinking properly about how to set up your payment terms, how to ensure that clients understand them and how to ensure that payments are collected as per the terms, that 75% of the problem of overdue payments goes away. The final 25% never goes away and as a small business owner you must simply resolve to stop doing business with customers who don't pay on time.... Life's too short.A well thought out collections system that's applied and run like a well-oiled machine... relentlessly, and that includes as a final automatic step sending the bill off to a collections agent, whose fees are added to the outstanding debt, automatically, sends a message to recalcitrant payers that they m,ight as well pay up, because it's only going to cost them more money in the end and most recalcitrant payers are not of bad faith, but they simply have their own cash flow challenges and they pay the squeaky wheel first
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Questions

What “burdens” would you like to see scrapped as a small business?

Last year’s budget announced plans to reduce red tape for businesses. The GST reporting will be... read more

Asked by:
SavvySME Official
SavvySME Official Official Account at SavvySME
George Grimekis CPA
George Grimekis CPAAccountant at Alpha Omega Accounting & Business Solutions
I hope I live to see the day when Payroll Tax is abolished.I cannot understand why taxing businesses for employing people is still OK in this day and age.
Rebecca Carroll-Bell
I operate as a sole trader and for now that suits me. I find it very irritating when the politicians go on TV talking up how much they are helping "small business" when in fact, they are helping small companies. Many of the so called benefits and tax breaks are of no help to me because I am not a company and don't pay company tax. I'd like to see more support, breaks and benefits for the small business owners who are not incorporated; or at he very least, say what you mean and talk about small companies not small business. Bec
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Questions

Economic growth vs budget deficit?

As the government tries to reduce the budget deficit, what do you think is the best use of our... read more

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SavvySME Official
SavvySME Official Official Account at SavvySME
Jef Lippiatt
Jef LippiattOwner at Startup Chucktown
I think one thing that would be great for all small businesses is reduced redundancy (aka more intuitive processes).Many times there are multiple applications you have to log in to (everything from filing forms, requests, paperwork, taxes, etc.) Those should be streamlined into a single application (1 username 1 password).Make all deadlines publicly published and send out systematic, automated emails reminding business owners of the upcoming deadlines.Eliminating bureaucracy that stands in the way of getting a business officially started would be a great help for many.I would say one other option would be to provide Innovation Incentive Grants/Funding. If a business creates a service or product that leads to more jobs within that State/Coun.try (of a certain level) or has the potential to make a meaningful (positive) impact on the overall economy
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Questions

How to find a competitive advantage as an accountant?

Jevaillier Jefferson
Jevaillier JeffersonConsultant at Valuable Media Group
Hi, James. Here are three ways to set your brand apart from others. 1. Employ a customer-driven approach -- instead of a money-driven approach -- to all aspects of your business, including problem-solving. Understand that you're in business to enhance customers' lives in order for them to assist others. The money will come. 2. Know that an editorial team should intensify your product's visual appeal. Not worsen it.A product may have all the features that your prospective customers desire. But, misspellings, poor grammar and punctuation accompanying its packaging, advertisements, websites and social media pages may cause customers to question what your company values. Does the company spend equal time developing all of its products' components? If not, will the product last? 3. Ensure your teams understand how and why they link. Encourage them to guide each other.When I wrote for a syndicated radio show, a producer talked to me about a word I'd used in a script: abovementioned. My print media background had appeared at the wrong time.He reminded me that I was writing for the ear, not the eyes. His advice sharpened my writing and logic. He kept the show's brand identity intact. Abovementioned could have cost us listeners, radio stations and advertisers.James, we hope this helps.
Madeleine Davis
Madeleine DavisMom, Founder at The Parenting System
Hi James, you might consider positioning yourself as an expert in a particular niche. For example, you might specialize in accounting for divorced women, or children as they graduate college, or for self employed individuals. That would allow you to target to your ideal market as well. Your differentiation and competitive advantage would be your specialization. For example, I work with moms to help them create functional stress free homes. But my SPECIALTY could be that I work with entrepeneurial moms........mompreneurs. So my competitive advantage is entrepreneurial moms and my messaging speaks to my competitive advantage. I work with moms to help them create functional stress free homes so they can focus their time, energy and attention on building the business they love and making more money. I hope that's helpful.
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Questions

What sort of tax agent should I use for US and AU earnings?

I have business clients in both Australia and the United States, what kind of tax agent or... read more

George Grimekis CPA
George Grimekis CPAAccountant at Alpha Omega Accounting & Business Solutions
Hi Fred,Most tax agents/accountants should be able to help you out, however this is a complex area so maybe engage one that has experience with clients who operate overseas.Generally speaking, all overseas income is declared in Australia and you can claim a foreign tax offset, for any tax that you have paid i the overseas jurisdiction, to prevent double taxation.Depending on how you're structured, it may be a case of engaging 1 accountant in the U.S to look after your affairs there and 1 accountant in Australia.My first step would be to engage a local accountant, discuss your needs and concerns with them, and go from there.
HiThe criteria for selecting the appropriate Accountant or Tax Agent depends on the complexity of the business and the cost factor as well.In your case you have to comply with various tax obligations in the country where your business is registered and how you derive the income is important.Other factors include, the nature of the business, entity type, number of transactions and the currency of billing etc. For further assistance or discussions you may call me on 0424419130 for personal discussions.
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Questions

What are the best free accounting apps or tools?

I have a small handyman business and I am pretty hopeless when it comes up to preparing for tax... read more

Asked by:
Jef Lippiatt
Jef LippiattOwner at Startup Chucktown
well, I'm not sure if it is available in the Australian market, but Wave Apps has a great suite of free accounting and invoicing tools.Also, Manager.io is a free cross platform (works on Windows, Mac and Linux) software (for desktop or laptop) I don't think they have a mobile app version.
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Questions

Do I need a bookkeeper?

I am a sole trader with my own small business. Can I do my own books or will I need a bookkeeper or... read more

Asked by:
Marcus TjenOwner at Rugged Computing
If you are a sole trader, you do not have to have a book keeper or an accountant. You can keep track of your income and expenses in a spreadsheet and file your own personal tax return at the end of the financial year. No need to file a business tax return.If however you do a lot of small transactions (debit and credit) in your business, you might want to consider using a book keeper to help you keep track and save you time.If you also want to have a financial statements at the end of financial year (balance sheet, profit and loss and cash flow statement) then you need to get an accountant.
Understand from your query that you are a small business owner having a sole trader business model.If you have prior experience maintaining your books of accounts as well as dealing with ATO you may not need book keeper to start with In case if your business grows and do not find time and energy to do the book keeping as well as meeting GST compliance , you may need the assitance of the book keeper as well as Tax Accountant or Tax Agent . Many of the Tax Agents provide the services of Book keeping, Accounting & Tax Compliance services and the cost varies depending on the nature and number of transactions, For complex tax advisory matters the cost is fixed depending on the time spent by the Tax Agent or Advisor.You may please feel free to contact me at Taxfin Business services if you need further clarification or informartion in this regard. My name is Sathyanarayanan Srinivas and my contact number is 0424419130.Please visit www.taxfinservices.com.au for detailes on services provided.
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Questions

What do I need to include in a tax invoice?

Are there any important items or important information that I need to include on my tax invoice for... read more

Asked by:
Sarah Irwin
Sarah Irwin SME Community Director at SavvySME
George Grimekis CPA
George Grimekis CPAAccountant at Alpha Omega Accounting & Business Solutions
Hi Sarah Generally you need to include 7 items on tax invoices.For sales less than $1,000:1) Need to show document is intended to be a tax invoice (usually done by showing the words TAX INVOICE at the top)2) Your identity3) Your ABN4) The date you issued the invoice5) A description of items including quantity sold (if applicable) and the price6) The GST amount if any7) The extent to which each sale on the invoice includes GSTFor sales over $1000 you also need to include: 8) The buyers identity or ABNClicking on the below link also gives you A.T.O guidance on how to set out invoices.https://www.ato.gov.au/assets/0/104/694/815/1c91f2...
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Questions

Are there any government grants for female business owners?

Female business owners can apply for any Government Grant in Australia. Gender is not a determining factor for eligibility or awarding the grant.
Jef Lippiatt
Jef LippiattOwner at Startup Chucktown
Here in the United States we do have a variety of grants for related business owners.The categories for grants are typically:FemaleMinorityFemale & MinorityMilitary Veteran (male or female)Non-profit business sectors
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Questions

How do you cut costs in your business?

Without knowing more about your business, this is almost impossible to answer specifically. However, a couple of generic things to look at:What are your fixed verse variable costs? Fixed costs are the costs you incur everyday, regardless of how many goods you sell (i.e. an office lease). variable costs are cost you only incur when you produce or sell a good (i.e shipping, production costs, product insurance etc). All things being equal, a higher proportion of variable costs can be beneficial as you only incur the costs when you are selling goods and generating revenue. So think how you can switch your costs from fixed to variable. obviously the trick is then to reduce these variable costsDepending on your type of business, how much inventory to you have? yes you need to to meet your customer needs, but having excess inventory is a huge business cost! try and minimise your inventory holdings, while still meeting your customer needs Are you getting the best deal from suppliers? what is the relationship between your accounts payable and your accounts receivable? Are there lower cost suppliers or can you get better contract termsHave a good look at your key financial ratios. these will tell you where to look in your business to help reduce costs. How do these compare with similar companies in your industry (if you can find this out?)If this is a real issue for you, i would suggest you talk to someone who can help with this, as you will need to get a handle on this. While there are many companies who work in this space (yes we are one of them) make sure you get someone who can not only help you in the short term, but also teach you what to look for moving forward so you can continue to monitor your business as apposed to someone just trying to sell you something. We also offer free initial consultations if you would like to discuss more.
All the costs in my business are required.I hope I don't ever try to cut costs and look more into increasing the costs of my services instead.
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Questions

Do you have your bookkeeping and accounting done by the same company?

At present we have a bookkeeper and and accountant. The reason is mainly that I figure if one... read more

Steve Osborne
Steve OsborneOwner at Smarthinking
Like Steven, I see nothing intrinsically wrong with having one company handling both aspects; a case could easily be made for the advantages. A client of mine does exactly that–she runs the bookkeeping business and her partner the accounting business. The businesses are separate but linked. They would claim their clients enjoy: 1. faster processing times; 2. more knowledgeable consultancy; 3. greater contribution to business growth.For myself, I have two separate firms performing these functions. And I run Xero myself, doing basic data entry which the bookkeeper checks each quarter and prepares the BAS. The books are then handed to the accountant each EOFY.I suspect a majority of small businesses run this way. It's cost efficient, timely and accountable.
I would have two different people performing the jobs. Bookkeeprs are generally cheaper too. I do all my bookkeeping and hand it over the final figures to my accountant
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Questions

Where do I get a government grant to start a new business?

Steve Osborne
Steve OsborneOwner at Smarthinking
There are good answers to a similar question here:https://www.savvysme.com.au/question/56-how-do-i-o...And if you are a Job Seeker with an idea for a small business, you may qualify for this:https://www.employment.gov.au/self-employment-new-...
Last time I checked, there were no government grants in Australia to help start a business unless you align with one of these - A community based non-for-profit organisation - Focused on youth - Providing services for people with a disability - Based on supporting innovation You could try other forms of grants. Banks are giving out grants all the time but with similar conditions.
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Questions

How do I find the most appropriate insurance plan for my business?

Find an insurance broker. They will be able to help you find the best deal. Ask for references from people in the same industry as you. Brokers tend to specialise in certain industries.
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