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Leased properties were still 'new residential premises'

Monday, January 30, 2017

The AAT has held that GST applied to the disposal of four properties that had been built, leased and then sold. GST does not ordinarily apply to sale of residential premises unless they are 'new residential premises'. However, there is a special rule in the GST law that states that a newly constructed property will not be 'new residential premises' if it has been applied only to receive residential rent (i.e., leased out) for at least a five year period. Read More

Monday, January 30, 2017 -

GST on the import of low value goods

Monday, January 30, 2017

Arguably this places Australian retailers / suppliers at a competitive disadvantage compared with foreign suppliers that are not required to be registered for GST and creates a risk to the integrity of the GST system. In the 2016/17 Federal Budget the Government announced plans to remove the $1,000 exemption for certain supplies of low value goods to Australian consumers.  Read More

Monday, January 30, 2017 -

Superannuation Changes

Monday, January 30, 2017

As most of you would be aware, key pieces of legislation over the last few weeks have now received Royal Assent, with most changes to take effect from 1 July 2017, with only one delayed by 12 months, being the catch up of concessional contributions measure, starting from 1 July 2018. The main measure, being the $1.6m transfer balance cap, has some complexities around how this will operate and transitional Capital Gains Tax relief for funds. Currently, there are Law Companion Guidelines supporting the legislation which are in draft form, being LCG 2016/D8 and LCG 2016/D9. Read More

Monday, January 30, 2017 -

Personal income tax cuts are law

Monday, January 30, 2017

Monday, January 30, 2017 -

Crucial issue to consider when buying a company

Wednesday, November 30, 2016

Where a buyer commences to hold all of the shares in a company (including a company acting as trustee of a trust), they are highly likely to be appointed as a director of that company. Read More

Wednesday, November 30, 2016 -

Seven ways a deduction will not work

Wednesday, November 30, 2016

The ATO has been paying extra attention to people claiming higher than expected deductions during tax time this year. Read More

Wednesday, November 30, 2016 -

Parental leave. Where are we up to?

Wednesday, November 30, 2016

How did paid parental leave get to be so contentious?  The current debate is not about parental leave in general; the entitlement to 12 months with a potential for 24 months of unpaid leave with your job guaranteed (or an equivalent position) remains.  It’s about who pays for paid leave.  Read More

Wednesday, November 30, 2016 -

Living overseas but still taxable here

Wednesday, November 30, 2016

In a recent case, the AAT confirmed that a taxpayer was a resident of Australia for taxation purposes while he was living in Oman. Read More

Wednesday, November 30, 2016 -

Renting out a room is rental income

Wednesday, November 30, 2016

The ATO has issued an information sheet to let taxpayers know that money earned from renting out a room in a house is rental income.  Read More

Wednesday, November 30, 2016 -

Simplified approach for car fringe benefits

Wednesday, November 30, 2016

The ATO have collaborated with industry representatives to develop a safe harbour for car fringe benefits. A safe harbour is a guideline that allows your clients to make use of an efficient way to calculate their tax where certain conditions are met. Read More

Wednesday, November 30, 2016 -

Survey for SMSFs using LRBAs

Tuesday, November 29, 2016

The ATO has announced that it will be contacting some SMSF trustees to participate in a survey about the use of 'limited recourse borrowing arrangements' ('LRBAs') to acquire assets for their SMSF. Read More

Tuesday, November 29, 2016 -

Backpacker tax rate cut

Thursday, October 27, 2016

The Government has announced that the tax rate applying to working holiday maker visa holders will be 19% on earnings up to $37,000 (instead of 32.5% announced in the 2015-16 Federal Budget) from 1 January 2017. Ordinary marginal tax rates will apply to income in excess of that amount. The Government will also reduce the application fee for a working holiday maker visa and introduce more flexible arrangements to benefit working holiday makers and industries that use these workers. Employers of working holiday maker visas will be required to register with the ATO, which will provide data on the employment of working holiday makers working holiday maker visa holders. Read More

Thursday, October 27, 2016 -

PAYG (W) Changes

Thursday, October 27, 2016

PAYG (W) changes from 1 October 2016. As the Government has increased the 32.5% tax band from $37,001 to $80,000 to $37,001 to $87,000, the ATO has updated the PAYGW tax tables for employers to update the tax withholding for employees earning over $80,000 which apply from 1 October 2016. Employers are not required to make any adjustments, and the ATO will refund any excess tax withheld to the employees when their 2016/17 tax returns are processed. Read More

Thursday, October 27, 2016 -

Home office expense claims

Thursday, October 27, 2016

The deductible expenses that crop up from working at home are generally classified as being: Read More

Thursday, October 27, 2016 -

Small Business Entity (SBE) Threshold Changes

Thursday, October 27, 2016

The Bill containing measures to increase to $10m the entity turnover test and the company tax reduction Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 have now been introduced to Parliament. This Bill contains amendments introducing a series of 2016 Budget measures including those that will increase the SBE turnover threshold, increase the unincorporated small business tax discount, increase the SBE turnover threshold to qualify for the lower company tax rate to reflect the ongoing reduction in the company tax rate over 11 years to 25% in 2026-27. Read More

Thursday, October 27, 2016 -

Can you claim a tax deduction for insurance premiums?

Thursday, October 27, 2016

As a general guideline, the ATO will allow a deduction for insurance premiums if it can be shown that the insurance cover relates to earning assessable income. Income protection insurance is one example of the kind of cover that may provide an allowable tax deduction for premiums – such claims have been allowed by the ATO in certain circumstances, even though having the insurance policy does not of itself “earn” income for the taxpayer. Read More

Thursday, October 27, 2016 -

GST on low-value imports

Monday, October 03, 2016

Goods imported into Australia – often by consumers using the internet – which cost less than $1,000 are currently GST-free. Read More

Monday, October 03, 2016 -

Making sense of the super reforms

Monday, October 03, 2016

The reforms will represent the single biggest change to superannuation since its inception. While there has been a softening of the original Budget announcements, there are still some very big changes coming your way. Read More

Monday, October 03, 2016 -

Record keeping is always key to taking on the ATO

Monday, October 03, 2016

In a recent case before the Administrative Appeals Tribunal (AAT), amended assessments issued to a taxpayer by the ATO, which were based on the amounts of unexplained deposits to the taxpayer's bank accounts (in some years, in the hundreds of thousands of dollars, in others, millions), have been largely upheld. Read More

Monday, October 03, 2016 -

Fallout from 'Panama Papers' spreads

Monday, October 03, 2016

It has been reported that an unknown source has leaked 11.5 million documents from the Panamanian law firm of Mossack Fonseca – these are now referred to as the 'Panama Papers'. Read More

Monday, October 03, 2016 -

Latest ATO benchmarks released

Tuesday, August 30, 2016

The ATO has released the latest benchmarks for small business based on the data from 2014 income tax returns and business activity statements, covering over 1.3 million small businesses. Read More

Tuesday, August 30, 2016 -

Tax time is prime time for scams

Tuesday, August 30, 2016

The ATO is reminding Australians to be on the lookout for tax-related scams during tax time, as scammers are particularly active because of the large number of people lodging their tax returns. Read More

Tuesday, August 30, 2016 -

ATO focuses on rental property owners

Thursday, July 28, 2016

With Tax Time 2016 just around the corner, the ATO has stated it will be paying close attention to excessive interest expense claims, and incorrect apportionment of rental income and expenses between owners.  Read More

Thursday, July 28, 2016 -

Car depreciation limit for 2016/17

Thursday, July 28, 2016

The car limit is $57,581 for the 2016/17 (up from $57,466 for the previous year). This amount provides a limit on depreciation and GST input tax credit claims.  Read More

Thursday, July 28, 2016 -

Goods taken from stock for private use: 2015/16

Thursday, July 28, 2016

The ATO has provided an update of the amounts it will accept for 2015/16 as estimates of the value of goods taken from trading stock for private use by taxpayers in certain specified industries. Read More

Thursday, July 28, 2016 -

ATO's deadline for non-arm's length LRBAs extended

Thursday, July 28, 2016

The ATO is allowing SMSF trustees additional time until 31 January 2017 to ensure that any limited recourse borrowing arrangements (LRBAs) that their fund has are on terms consistent with an arm’s length dealing, or alternatively are brought to an end. Read More

Thursday, July 28, 2016 -

SuperStream deadline extended!

Thursday, July 28, 2016

With only days to go until the 30 June SuperStream deadline, the ATO noted that, while many small businesses had implemented the required changes, "some small businesses may need extra time and help to become SuperStream compliant"Read More

Thursday, July 28, 2016 -

What Budget announcements will become reality?

Thursday, July 28, 2016

The Coalition has formed Government but what happens now to all those Budget announcements?  We take a look at what announcements are likely to pass Parliament and why. Read More

Thursday, July 28, 2016 -

Explore our end of financial year updates for 2016

Friday, June 24, 2016

We've created this comprehensive guide so you can discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider. Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Trusts - Turnover less than $2m

Friday, June 24, 2016

Explore our end of financial year summary for Trusts turning over less than $2m and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Self Managed Super Funds

Friday, June 24, 2016

Explore our end of financial year summary for Self Managed Super Funds, and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Partnerships - Turnover less than $2m

Friday, June 24, 2016

Explore our end of financial year summary for Partnerships turning over less than $2m, and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Partnerships - Turnover greater than $2m

Friday, June 24, 2016

SExplore our end of financial year summary for Partnerships turning over more than $2m, and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Individuals

Friday, June 24, 2016

Explore our end of financial year summary for Individuals, and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Individual Sole Traders

Friday, June 24, 2016

Explore our end of financial year summary for Individual Sole Traders, and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

Year End Tax Summary 2016 - For Companies - Turnover greater than $2m

Friday, June 24, 2016

Explore our end of financial year summary for Companies turning over more than $2m and you’ll discover what's new in the coming financial year, what the budget announcements may mean for you, how to reduce and minimise your tax plus other financial housekeeping you should consider.  Read More

Friday, June 24, 2016 -

The June 2016 Tax Round Up

Thursday, June 09, 2016

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for June, 2016. Read More

Thursday, June 09, 2016 -

ATO focusing on repairs vs. improvements

Monday, May 30, 2016

The Australian Taxation Office is paying particular attention to claims that investment property owners make for repairs to rental properties. All clients should note repairs are deductible, improvements are not. Though improvements may add to the cost base. Read More

Monday, May 30, 2016 -

Lifestyle assets and CGT

Monday, May 30, 2016

The ATO has advised that it has identified some instances where lifestyle assets, such as artworks and collectables, are not being properly accounted for. Read More

Monday, May 30, 2016 -

Small businesses may be eligible for temporary instant asset write offs

Monday, May 30, 2016

With the $20,000 temporary instant asset write-off possibly being extended to businesses with an aggregated annual turnover of less than $10 million following the announcement on Budget night, it’s a good opportunity for eligible small businesses to review their capital expenditure budgets. Read More

Monday, May 30, 2016 -

Superstream | What you need to know

Friday, May 27, 2016

Under the new SuperStream system, employers must make superannuation contributions for their employees electronically.

If you're confused about what SuperStream means for you as an employer, or want more information on the processes of making super payments for your employees, we've compiled a detailed guide to help you through the process. Read More

Friday, May 27, 2016 -

The May 2016 Tax Round Up

Monday, May 09, 2016

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for May, 2016. Read More

Monday, May 09, 2016 -

Insurance Policies - Tax-free bonuses

Friday, April 29, 2016

When a life insurance policy has been held by the taxpayer for 10 years or longer, reversionary bonuses received on that policy are tax-free. Read More

Friday, April 29, 2016 -

ATO sounds warning to super funds with 'collectables'

Friday, April 29, 2016

The ATO is warning trustees of SMSFs who hold investments in collectables* or personal-use assets, acquired before 1 July 2011, that time is running out for those items to be transferred out of the fund under the old rules. Read More

Friday, April 29, 2016 -

Client Information sessions now available

Thursday, April 14, 2016

Rogerson Kenny Business Accountants and Future Planners Financial Services are launching an exclusive series of information sessions designed to provide attendees with the latest insights and updates from our collective professions and practices. Read More

Thursday, April 14, 2016 -

The April 2016 Tax Round Up

Thursday, April 07, 2016

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for April, 2016. Read More

Thursday, April 07, 2016 -

The FBT Year Finished Yesterday

Friday, April 01, 2016

The Fringe Benefit Tax year ended on 31st March. There has been an email sent accompanied by an FBT questionnaire to clients who may incur FBT obligations. If you have not received this email and believe that you may have FBT obligations, please contact our office so we can ensure that you receive the email with all the information needed. Read More

Friday, April 01, 2016 -

Inactive Trusts – ABNs to be cancelled

Tuesday, March 29, 2016

The ATO has advised that they will begin cancelling the ABNs of approximately 220,000 trusts, where there is evidence those trusts are no longer carrying on an enterprise. Read More

Tuesday, March 29, 2016 -

Backpacker Tax to be Reviewed

Tuesday, March 29, 2016

The "backpacker tax", which would have scrapped the tax free threshold for 417 and 462 working holiday visa holders, is to be "reviewed" ahead of its planned introduction from July 1 this year. Read More

Tuesday, March 29, 2016 -

Buyers to withhold tax for ATO when buying certain properties

Tuesday, March 29, 2016

Parliament recently passed amendments to laws which now impose a 10% withholding obligation on purchasers of 'Taxable Australian Real Property' (generally, this means an interest in Australian land) from certain foreign residents, as well as certain 'indirect Australian real property interests' (such as shares in companies that own a lot of land) and options to acquire such assets. Read More

Tuesday, March 29, 2016 -

The March 2016 Tax Round Up

Wednesday, March 09, 2016

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for March, 2016. Read More

Wednesday, March 09, 2016 -

March quarter GIC and SIC rates

Monday, February 29, 2016

The ATO has published the 2016 March quarter rates for the General Interest Charge (GIC) and the Shortfall Interest Charge (SIC): Read More

Monday, February 29, 2016 -

Tax help for people affected by recent bushfires

Monday, February 29, 2016

The ATO has advised that, for people affected by the recent Victorian and Western Australian bushfires, refunds will be fast-tracked and they will have additional time to lodge income tax returns and activity statements. Read More

Monday, February 29, 2016 -

Taxpayer misses out on small business capital gains tax (CGT) concession

Monday, February 29, 2016

One of the requirements that must be met before a taxpayer is able to access the Small Business CGT Concessions is satisfying the "maximum net asset value test" (MNAVT), whereby the net value of CGT assets of a taxpayer (and their connected entities and affiliates) must not exceed $6 million, or the taxpayer is a small business with an annual turnover of less than $2 million. Read More

Monday, February 29, 2016 -

ATO announces two important data matching protocols

Monday, February 29, 2016

The ATO has just announced that it is starting a new "asset" data matching protocol, and extending another CGT and rental protocol that has been running successfully for the last ten years. Read More

Monday, February 29, 2016 -

The February 2016 Tax Round Up

Monday, February 08, 2016

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for February, 2016. Read More

Monday, February 08, 2016 -

ATO's Visa Data Matching Program

Thursday, January 28, 2016

The Department of Immigration and Border Protection will provide the ATO with the following details of visa holders, their sponsors and migration agents for the 2013/14 to 2016/17 financial years: Read More

Thursday, January 28, 2016 -

Guidance regarding the payment of death benefits

Thursday, January 28, 2016

The Superannuation Complaints Tribunal, which can resolve disputes between large superannuation funds and their members, recently provided some guidance regarding the payment of death benefits from superannuation funds, possibly because the largest category of complaints the Tribunal determined at review last year (44.8%) was death complaints. Read More

Thursday, January 28, 2016 -

ATO reviewing taxable payments annual reports

Thursday, January 28, 2016

The ATO has advised that it is contacting businesses in the building and construction industry about information provided on their Taxable payments annual report, where the businesses have: Read More

Thursday, January 28, 2016 -

The December 2015 Tax Round Up

Wednesday, December 09, 2015

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for November, 2015. Read More

Wednesday, December 09, 2015 -

Naughty or nice? Your Xmas tax checklist

Monday, November 30, 2015

It’s that time of year again. It's time to start planning the Christmas party for the team, to determine what gifts to send your customers, and organise gifts of appreciation for your favourite accountant (just kidding).

Here are our top tips for a generous and tax effective Christmas season: Read More

Monday, November 30, 2015 -

ATO moves on cafés and restaurants

Monday, November 30, 2015

The ATO has advised that it will be visiting restaurants, cafés and take-aways in Box Hill (Melbourne) over the coming months as part of its ongoing Australia-wide program involving the café and restaurant industry. Read More

Monday, November 30, 2015 -

Data matching program – on eBay online sales

Monday, November 30, 2015

The ATO has announced that it will acquire online selling data relating to between 15,000 and 25,000 individuals who sold goods and services of $10,000 or more on eBay between 1 July 2014 to 30 June 2015. Read More

Monday, November 30, 2015 -

Immediate deductibility of capital start-up expenses

Monday, November 30, 2015

From 1 July this year, new provisions apply to allow certain small businesses, or an entity that is not in business, to immediately claim some start-up costs, including business costs associated with raising capital.  Read More

Monday, November 30, 2015 -

600 targeted in random ATO audits

Monday, November 30, 2015

Back in June, the Australian Tax Office told a Parliamentary standing committee on tax and revenue that it was "considering" reintroducing random audits. Now the ATO has confirmed random audits will commence in 2016. The compliance program targeting 600 individuals and small businesses will focus on tax evasion and underreporting. Read More

Monday, November 30, 2015 -

The November 2015 Tax Round Up

Monday, November 09, 2015

Each month we supply our clients with a Tax Round Up, giving them all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for November, 2015. Read More

Monday, November 09, 2015 -

China: Opportunities, investment & appetite

Monday, November 02, 2015

There has been a lot of discussion about China lately - Free Trade Agreements, financial stability and growth and the impact on the Australian economy, and Chinese investment in Australia. With the help of our international contacts, we explore the impact of China on Australia and give some context to the debate. Read More

Monday, November 02, 2015 -

Why do I want an SMSF?

Wednesday, September 30, 2015

Why do I want an SMSF? The ATO have the answer. Watch the video or read the transcription below: Read More

Wednesday, September 30, 2015 -

Bad Deeds: Is your SMSF at risk?

Wednesday, September 30, 2015

Your SMSF's trust deed is its rulebook. If the deed does not allow or recognise something then the trustees can't do it. Despite this, a lot of trustees are unaware of what their trust deed says - it was just something that was required when the fund was established. The problem with any document is that unless you amend it, it is only current for the circumstances that existed at that time. However, the law changes regularly and so do individual circumstances.  Read More

Wednesday, September 30, 2015 -

Capital gains & property: The top questions & answers

Wednesday, September 30, 2015

The thought of the Australian Tax Office (ATO) sharing up to 50% of any gain you make on an investment decision is enough to strike fear into the hearts of most people. Given Australia’s love affair with property, it is little wonder that we are often asked about the impact of capital gains tax (CGT) on property. This month, we explore the most frequently asked questions. Read More

Wednesday, September 30, 2015 -

Treasurer raises ‘idea’ of personal tax cuts

Friday, August 28, 2015

Who doesn’t like a tax cut when they personally benefit from it? In a recent speech, the Treasurer said that personal tax cuts were required to prevent ‘bracket creep’ – that’s jargon for what happens when the tax rate thresholds don’t keep pace with inflation and more people are pushed into a higher tax bracket (they get taxed more and potentially lose access to benefits but are economically standing still). Read More

Friday, August 28, 2015 -

Should your SMSF buy property in the United States?

Friday, August 28, 2015

One of the most common questions from clients with a Self Managed Superannuation Fund (SMSF) is, can I buy property? Followed by the second question, can I buy property in the United States? Read More

Friday, August 28, 2015 -

What now for the GST?

Friday, August 28, 2015

Fifteen years after the introduction of the GST in Australia debate still rages over what should be taxed and whether the GST rate should increase. Read More

Friday, August 28, 2015 -

The August 2015 Tax Round Up from Knowledge Shop [VIDEO]

Wednesday, August 05, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for August, 2015. Read More

Wednesday, August 05, 2015 -

Your Knowledge - August 2015

Tuesday, July 28, 2015

Read the latest news and views on business and tax accounting in this month's issue of Your Knowledge. Read More

Tuesday, July 28, 2015 -

The July 2015 Tax Round Up from Knowledge Shop [VIDEO]

Tuesday, July 07, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for July, 2015. Read More

Tuesday, July 07, 2015 -

Xero asks - What is cloud computing?

Wednesday, July 01, 2015

Xero recently took to the streets to answer one simple question - what is cloud computing? Passers-by across London, San Francisco, Wellington and Melbourne were asked to explain cloud computing. Some were confident in their response, while others had some questionable ideas. Take a look at the video below: Read More

Wednesday, July 01, 2015 -

Mark and Brett Talk Superannuation

Tuesday, June 30, 2015

In this Q&A, Mark Rogerson and Brett Kenny from Rogerson Kenny Business Accountants discuss some of the questions and concerns they receive about superannuation. Watch the video or read the transcription below. Read More

Tuesday, June 30, 2015 -

Your Knowledge - July 2015

Tuesday, June 30, 2015

Read the latest news and views on business and tax accounting in this month's issue of Your Knowledge. Read More

Tuesday, June 30, 2015 -

The June 2015 Tax Round Up from Knowledge Shop [VIDEO]

Thursday, June 04, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for June, 2015. Read More

Thursday, June 04, 2015 -

Your Knowledge - June 2015

Monday, June 01, 2015

Read the latest news and views on business and tax accounting in this month's issue of Your Knowledge. Read More

Monday, June 01, 2015 -

What is SuperStream?

Friday, May 15, 2015

On 1 July 2011, the Government commenced the implementation of SuperStream which is a Government reform aimed at improving the efficiency of the superannuation system. Read More

Friday, May 15, 2015 -

Budget 2015 Rundown: The ‘have a go’ Budget

Tuesday, May 12, 2015

At Rogerson Kenny Business Accountants, we have put together a 25 page report on the 2015 Budget. In this article, you can our highlights or download the full 25 page report. Read More

Tuesday, May 12, 2015 -

Your Knowledge - May 2015

Tuesday, May 05, 2015

Read the latest news and views on business and tax accounting in this month's issue of Your Knowledge.  Read More

Tuesday, May 05, 2015 -

The May 2015 Tax Round Up from Knowledge Shop [VIDEO]

Monday, May 04, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for May, 2015. Read More

Monday, May 04, 2015 -

Business Finance 101: Claiming GST Credit

Wednesday, April 22, 2015

At Rogerson Kenny Business Accountants, we've put together a slideshow to explain the regulations surrounding tax invoice compliance for businesses. You can click through the slideshare, or scroll down to read a transcription below. Read More

Wednesday, April 22, 2015 -

5 reasons to adopt cloud technology for your accounting

Tuesday, April 07, 2015

Are you yet to embrace cloud accounting for your business? At Rogerson Kenny we’ve seen, time and time again, how cloud accounting has improved our clients’ business practices. Today we share our top five reasons why you should move your accounting to the cloud. Read More

Tuesday, April 07, 2015 -

Mark and Brett Talk Business Reporting [VIDEO]

Monday, March 30, 2015

In this video, Mark and Brett sit down to talk about all matters of business accounting - from business reporting to choosing the right business structure. You can watch the video below, or scroll down to read a transcription. Read More

Monday, March 30, 2015 -

Business Finanace 101: Tax Invoice Compliance

Tuesday, March 24, 2015

At Rogerson Kenny Business Accountants, we've put together a slideshow to explain the regulations surrounding tax invoice compliance for businesses. You can click through the slideshare, or scroll down to read a transcription below. Read More

Tuesday, March 24, 2015 -

The March 2015 Tax Round Up from Knowledge Shop [VIDEO]

Tuesday, March 17, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for March, 2015. Read More

Tuesday, March 17, 2015 -

GST treatment of luxury cars in your business

Friday, March 13, 2015

Many of our clients purchase a motor vehicle through their business. Understanding how the GST process works, will ensure you make the correct decision and understand how this purchase will affect your business when tax time rolls around. Read More

Friday, March 13, 2015 -

Single Touch Payroll for simplified tax and super reporting

Friday, February 27, 2015

Employers may be pleased to hear that the ATO has recently made moves to introduce a digital by default strategy for managing employer tax and superannuation reporting obligations. Known as 'single touch payroll', this strategy will be available from July 2016 and has been developed as a measure to reduce red tape while simplifying tax and super reporting for employers. Read More

Friday, February 27, 2015 -

Cloud accounting: is Xero right for you?

Wednesday, February 11, 2015

An article in The Age recently compared Xero with MYOB citing innovation as the main competitor driver. With many of our own clients using the Xero platform I couldn’t help but think MYOB will have a long way to go to catch up with the inbuilt functionality and usability of Xero. We believe Xero is a genuine disruptor – they have a comprehensive understanding of their market and what a cloud accounting solution should offer. Read More

Wednesday, February 11, 2015 -

The 2015 Tax Round Up from Knowledge Shop [VIDEO]

Tuesday, February 03, 2015

Each month, Knowledge Shop publishes a Tax Round Up, giving accountants all the information they need to be up-to-date and informed on the latest news on tax legislation and software. Below is the most recent Tax Round Up for February, 2015. Read More

Tuesday, February 03, 2015 -

Company Profile: Get a glimpse of the real Rogerson Kenny

Monday, October 20, 2014

In our latest video, our directors - Peter, Brett, Mark and Rob - talk about their history in the business and how they've shaped Rogerson Kenny Business Accountants to the company it is today. With their cool, calm and collected attitudes, the guys at Rogerson Kenny know how to have some fun, all the while keeping your finances on track and your future prepared for. Watch the video below, or scroll down to read a transcription of the video below.

 Read More

Monday, October 20, 2014 -

Checklists and Hints for Purchasing a Business

Monday, September 22, 2014

checklists for buying a businessMaking the decision to purchase a business is a big one, and making sure you purchase the right business for you is absolutely crucial. There are a number of questions you need to ask, and decisions you need to make to ensure that you know everything about the business you're buying before you make the purchase.

At Rogerson Kenny, we've made a comprehensive list of all the things you should be checking and considering before purchasing a business:  Read More

Monday, September 22, 2014 -

Tax Facts - Excise

Tuesday, September 09, 2014

Excise duty is a tax on certain types of goods that are made in Australia including alcohol, tobacco, fuel and petroleum products.  Read More

Tuesday, September 09, 2014 -

The Importance of Having the Right Business Structure

Thursday, September 04, 2014

What type of business structure will you use? Will you be a sole trader, in a partnership, a company or a trust? There are advantages and disadvantages to consider for each. Choosing your business structure is an important decision, so you need to investigate each option carefully.  Read More

Thursday, September 04, 2014 -

Tax Facts - Paid parental leave

Wednesday, September 03, 2014

The government-funded Paid Parental Leave scheme provides financial support for parents to take up to 18 weeks off work following the birth or adoption of a child, with pay at the National Minimum Wage. From 1 January 2013 the scheme was expanded to include Dad and Partner Pay, which provides eligible working dads or partners with up to two weeks of pay at the National Minimum Wage.  Read More

Wednesday, September 03, 2014 -

Running a Self Managed Super Fund

Friday, August 29, 2014

Self Managed Super Funds have the same role as any other super funds; the difference is, generally, that the members of Self Managed Super Funds are also the trustees. They control the investment of their contributions and the payment of their benefits.  Read More

Friday, August 29, 2014 -

Legal Issues to Consider When Starting or Purchasing a Business

Tuesday, August 19, 2014

There are a number of key areas where a solicitor can assist you, such as contracts and agreements, negotiating the lease, insurance claims and representing your interests in dispute resolutions with authorities or other businesses. If you require a solicitor, please contact our office for a referral.  Read More

Tuesday, August 19, 2014 -

Keeping Business Records and Accounting Software

Thursday, August 14, 2014

Keeping Business Records and Accounting Software

BankLink is one of the accounting software packages that the clients of Rogerson Kenny Business Accountants Melbourne use. BankLink is a very quick record keeping tool for businesses. Please view the link to learn about this free service Rogerson Kenny Business Accountants offer – BankLink.

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Thursday, August 14, 2014 -

Tax Facts - Fringe Benefits Tax

Wednesday, August 13, 2014

Fringe Benefits Tax (FBT) is paid on particular benefits employers provide to their employees or their employees' associates instead of salary or wages. Benefits can be provided by an employer, an associate of an employer, or a third party by arrangement with an employer. An employee can be a former, current, or future employee. Read More

Wednesday, August 13, 2014 -

Tax Facts - Rates and Calculators

Tuesday, August 12, 2014

  • Capital gains tax
  • Fringe benefits tax
  • Fuel tax credits
  • Goods and services tax
  • Income tax
  • PAYG withholding
  • Superannuation
  •  Read More

Tuesday, August 12, 2014 -

Pricing Your Business for Sale

Tuesday, August 12, 2014

Pricing Your Business for Sale

Setting the price

Setting the price for your business is one of the hardest tasks a business seller can do. Too high and it won't sell, too low and you throw away all that hard work undertaken over the years to build the business up. You need to talk with as many parties as possible when setting the price; business brokers, your accountant, industry experts, valuer etc. Get as many opinions as you can. It's a hard task. As a seller you want reward for all the hard work and the buyer wants a steal. Find that middle ground and ask what is a fair price. Both the seller and buyer need to be happy!

Pricing methods

You can determine the selling price of your business in a number of ways...

  • Set the price at the same level as similar type businesses.
  • Employ the services of an independent business valuer or broker to help determine the price.
  • Use industry formulas that apply to working out the price (e.g. for a caravan park, we would work out an adjusted net profit figure, which is done by adding back interest, depreciation, owners super & wages and any excess expenses like repairs and maintenance etc. From this figure, it is usually 3.5 to 5 times. So if adjusted Net profit were $250,000, you would be looking at a business worth $875,000 to $1,000,000).
  • Simply set a figure you would like to achieve and see if there is anyone willing to pay for it.
  • Test the water.

Remember - the business is only worth what someone is willing to pay. It doesn't matter how much time you have put into it or what you have done. The value is always in the buyer’s eyes!

Value of Tangible and Intangible Business Assets

Tangible assets are materials like equipment or furniture - assets that you can more or less touch. If they are of reasonable shape, you may be able to sell these or put a value on them to help build your selling price. Intangible assets are things like your business name, copyrights, trademarks, employees, customers, supplier contracts, and customer contracts. These are harder to value, and unless there is hard evidence like contracts, trademarks etc., communicating the value to potential buyers will be difficult.

Buyer and Seller Perspectives

To make a successful sale, vendors should try to view the process from the buyer's position, and try to anticipate the questions that may be likely to come your way. If you can anticipate the questions with great answers, you will make the potential buyers feel at ease right away. After all, they are asking the questions to try an uncover why your selling, find out what's wrong with the business etc.

From the Seller's Perspective

  • How will I get the best price for my business?
  • How will I let the market place know my business is for sale?
  • How much information should I disclose to prospective buyers?
  • What is my business worth?
  • What is my minimum price I will consider?
  • What is it I want from this sale?

From the Purchaser's Perspective

  • What type of business do I want to buy?
  • How will I find the right business for me?
  • Should I buy this business?
  • Is it too risky?
  • Is everything being disclosed?
  • Do I feel comfortable about what I am hearing? Are the claims true?
  • How much information about the business can I get? (The more the better - at least 3 years of proper financials, talk to suppliers, customers, staff)
  • What is the business worth?
  • What is the maximum price I should offer?

Know your Buyers

Buyers buy businesses for different reasons, from all walks of life. Typically a buyer wants the ability to earn a decent living, along with the freedom that can be associated with owning a business.

Alternatively, a buyer could be an investor, so some key financial indicators may be all they are looking at - as they want a particular return on their investment from day 1.

A buyer may also be a competitor looking to expand their market share within your industry. You may actually approach a competitor who you feel would be a good fit with your business to see if there is any interest in expending. If you have a few competitors who see your business as the next step in their expending operation, the competition for your business may actually drive up your price.

Knowing who is likely to buy your business will help your position your business for sale. Good Luck! Please take advantage of our free initial consultation to discuss any matter you wish.

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Tuesday, August 12, 2014 -

Tax Facts - Wine Equalisation Tax

Monday, August 11, 2014

Wine Equalisation Tax (WET) is a tax on wine levied at 29% of the taxable value of wine. The taxing point is the last wholesale sale, or a retail sale or application for own use (e.g. tastings) when there is no wholesale sale. The taxable value is the actual sale price (excluding WET and GST) for wholesale sales, or a notional equivalent value in the other situations.  Read More

Monday, August 11, 2014 -

Increasing Sales for Your Business

Friday, August 08, 2014

Increasing Sales for Your Business

To Increase Sales or to Increase Price?

How to increase sales? This is the age-old question people in business ask themselves. However, there is one key consideration to think about first. Do you want to increase sales or do you want to increase profit? Increasing sales can be a business breaking exercise, often for little reward.

If you increase the volume of sales, you may also need to increase:

  • Inventory
  • Staff (sales, admin, factory)
  • Storage space
  • Bank overdraft
  • Debtors may blow out due to better terms from you

However, by simply raising your price by a few percent, you can dodge all of the associated costs of increasing sales. A 10% sales increase can often have the same results as a 1% price rise. Think about it. If you try and grow too quickly, your cash flow will be impacted so severely your business may not recover. This is a fine balancing act.

Growing Your Sales

After considering a price rise (which should be done every year). Logically, the business still has to grow and thus sales do have to increase. The next question you must ask yourself is ‘where will my growth come from?’.

Your growth will come from 2 sources: existing customers and new customers. Too often business people think about growing sales with new customers. The effort and hassle you need to go through to make this happen is costly and time consuming. Your best option is to increase your sales with your existing customers.

Existing Customers – Ideas for Increasing Sales and Retaining Them

Growing with existing customers is by far the easiest way to obtain sales growth. You must ask the question of every customer…what else can I sell them? What are your competitors offering? Are there new products or add on sales you can sell them? Have you ever been asked ‘Would you like fries with that?’ - You need to have that mentality with your customers. Find out what else they may need, spend time with your key customers, look for opportunities to deliver a solution that includes you and the selling of more or higher margin products. It’s far better to sell fewer products and make more money, than to sell more products and make less money!

Here are some ways you can increase sales and retain existing customers:

  • Before you deal with a client problem or query think… what is the lifetime value of this customer – then act.
  • Always ask for an order.
  • Be proactive with problems – hop on the phone and call!
  • Give them offers.
  • See the opportunity in their business, understand their business – what do they need? Be a problem solver for them.
  • Have someone visit them, face to face selling.
  • If presenting a new product or service, give them pricing and value options. As the value goes up, so does the price. i.e., think of a Holden, BMW and Aston Martin. As the value goes up, so does price. If the customer thinks the Aston Martin or BMW are too expensive, tell them that is why we can offer you a Holden! Don’t discount your price if you can help it – discount the value first.
  • Follow up on everything and deliver on your promises – build that trust.
  • Educate them on better products. Take the time to show them the benefit in using a more expensive product (that you make better money on).
  • Think of the fourth sale first – don’t see the exercise as a waste of time.
  • Maintain the relationship – they need to be loved and feel like they are getting value / exceptional service to stay loyal with your business.
  • Support programs – web based, email, phone.
  • Hand written cards for birthdays, Christmas, etc. - always have a meaningful note with it.
  • Testimonials – keep them thinking that they are doing the right thing buying products / services from you.
  • Product training (if a re seller) support your customers staff – make it easy for them to sell your product over someone else’s. A sales person will sell something that they believe in and are knowledgeable in. Give them the tools they need to sell your products with confidence (this is a customers sales people).
  • Conduct feedback surveys to find areas in need of improvement.
  • Complaint handling – do it with a smile. Think of the lifetime value of the customer when you are dealing with a complaint.
  • Create a loyalty program, which allows return customers to benefit from their ongoing sales.
  • Have fun with your customers.

New Customers – How to find them and sell them products / services

New customers are the most expensive to attract and even harder to retain. They already have a relationship with one of your competitors and if you are cold calling them, they are likely to be happy with their current supplier.

What you need to do with them is a needs analysis. Find a gap in the business that you can satisfy. Here are some useful questions you can ask a potential customer about their business. From here, you can lead the conversation and find an opportunity:

  • How is business? (This can lead anywhere – but often that anywhere is an opportunity)
  • What do you expect in a supplier? What do you like / dislike? What is important to you?
  • What do you like / dislike about your current supplier?
  • Are you happy with the product(s) you are using, in terms of price, quality, delivery time, and support? (You are fishing here for an opening)
  • If there was one thing about your products / services you receive that you could improve, what would it be?

From here, you will have to question your potential customer and take the conversation wherever it may go. Basically, you want to find out what they are not happy with, what they would like, what they expect from a supplier in terms of price, quality, payment terms, delivery etc.

Your opening to turn the lead into a relationship is to say, based on the answers from the questions above: “If I could provide you with a product that lasted longer than what you are using by 10%, but was only marginally more expensive, with same day delivery and 30 day credit terms, would you be interested? From here, away you go. You just match what they said to what you can offer.

Please click here for our marketing page, which will show you how to generate leads for potential new customers.

Below are some ideas on how to convert that lead into a new customer

  • Ask for an order.
  • Always follow up.
  • Deliver on your promises.
  • Keep calling – it often takes 7 calls (visits) to turn a potential customer into a customer.
  • Don’t pressure them to take over their whole business. There is nothing wrong with small steps. This way, you can test them just as much as they test you. Test if they pay on time, order consistently, dispute invoices etc.
  • Give them a written 2-page proposal with value and pricing options.
  • Win-win negotiating.
  • Educate them.
  • Testimonials.
  • Find solutions for their business (with your products).
  • See the gaps and opportunities. Try and save them money with better products and processes.

Remember to think of the lifetime value of a customer. From here, when dealing with a customer on a day-to-day issue, things will seem so much clearer.

Existing Customers x Retention rate = Retained customers

Number of Leads / Enquiries x Conversion rate = New customers

Retained Customers x New Customers = Total number of customers

If you would like to know more about a Business Focus Session, contact us at Rogerson Kenny Business Accountants. 

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Friday, August 08, 2014 -

Insuring Your Business

Friday, July 25, 2014

Insuring Your Business

Insuring your business premises and your business assets is a critical part of establishing a business. For people new to business, insurance can seem like the last thing you want to do in addition to an already long list of expenses. However, if your business is not insured, you may not cover financially from disaster, fire, storm, burglary or vandalism.

Before you start out in business, it is important to talk with Rogerson Kenny Business Accountants, about your specific insurance needs. The size and nature of your business will typically determine the type of coverage you need. As your business grows and diversifies, it is important to keep your insurance relevant, with periodic reviews of your policies to make sure your business is properly covered.

Your insurance premiums will depend on such factors as the location of your business and the goods and services you handle. Rogerson Kenny Business Accountants can recommend an experienced insurance broker who can match your business needs with the range of insurances available.

As well as insuring your business premises and assets, some of these additional insurances could be required depending on your circumstances:

  • Public liability to cover clients, customers and visitors.
  • Cover for contents, equipment, stock, furnishings and fixtures.
  • Professional indemnity insurance if you business is in a service industry.
  • Motor vehicle insurance if your business is used for business purposes.
  • Personal Injury and or income protection, particularly if work cover is not applicable to your business (click here for more on 'Work Cover Insurance' in the Employing Staff section and ongoing employer obligations).

While business insurance varies greatly, below is a guide to the most common types.

Personal Injury - Income Protection Insurance

Income Protection Insurance provides a replacement income if you are unable to work at full capacity, or at all, due to sickness or injury. Personal Injury and Income Protection Insurance is often appropriate for sole traders and partners and is a vital link in providing you and your family a regular income stream during times of illness or injury. The maximum amount anyone will pay is 75% of your monthly gross income (i.e. before tax). The benefit periods you can receive for this varies. It could be 2, 5 or until your reach 65 years of age. The longer the period, the higher the premium. There is also a waiting period you can select for when your payments would commence. This could be two weeks, two months, 1 year etc. The shorter the waiting period, the higher the premium.

Other factors that may affect the cost of Income Protection Insurance include the type of work you do; if you are male or female; your age; if you are a smoker; and any pre existing medical conditions will all affect the premium paid.

Life Insurance

Life Insurance cover protects those who depend on your income, such as your spouse or children. When considering life insurance, you must ask yourself, how would those left behind cope without my financial support? Some think that simply having life insurance as a part of their superannuation is adequate. However, circumstances change and your cover needs to be enough to provide for that extra mortgage taken out for an investment property or the new business overdraft facility.

Most people have financial commitments no matter what stage of life and there are several types of policies:

  • Death cover pays a lump sum to your dependents if you die unexpectedly (cover often ceases once you turn 65).
  • Total & Permanent Disablement pays a lump sum if you suffer an illness or injury that permanently prevents you from working.
  • Trauma covers pays a lump sum if you suffer any range of specified illness such as a heart attack, stroke or cancer.

Key Person Insurance

What would happen to your business if a key member of that team (partner or principal) was permanently disabled or died? The likely scenario may be:

  • A profitability decline due to the loss of key sales or production staff.
  • Money would need to be outlaid to find a suitable replacement.
  • Credit may be affected if the bank becomes aware of the impact on the business.
  • Remaining employees may feel their future is insecure.

Insurance arranged on the life of your key employees is owned by the business and would provide a cash injection in the event of death or disablement of the specified employees.

Business Insurance Life Plan

A life insurance plan will provide the cash required to repay a business loan on the death or disablement of a principal. Cash provided by life insurance will discharge the business' liability, protecting the business’ assets and the estate’s guarantors.

Product Liability

Product liability covers damage or injury caused to another business and / or person by the failure of your product or a product you are selling. You may also be held responsible for products that are either modified by you, form part of another product or are imported by you. Seek advice about this Insurance policy, as you may be able to have your public liability policy endorsed to also cover your product liability.

Professional Indemnity

This protects you from legal action taken as a result of breach of professional duty through negligence, error or omission. This type of insurance is critical for people who provide professional advice.

Material Damage

This covers assets of your business such as buildings, stock, plant & equipment against physical loss, destruction or damage. When arranging insurance, you may cover buildings and plant for their full replacement cost and allow for seasonal increases in stock values.

Burglary

Covers loss of or damage to stock, plant & equipment and other contents caused by burglars. You typically select the amount of protection required which can allow for seasonal increases in stock value. In addition, the policy automatically provides cover for damage to premises sustained in a burglary, costs of temporary security following a break in, and replacement of locks should keys be stolen.

Glass Breakage

This enables you to insure against breakage of fixed external and internal glass and other nominated breakable objects such as signs. The policy automatically covers damage to frames, replacing sign writing and ornamentation, damage to stock, and costs of temporary shutting.

Money

This provides protection for money while in transit, on your business premises during and outside normal business hours, while in a locked safe, and while in the private residences of authorised persons. Damage to safes and strong rooms may also be covered as seasonal increases in money held may also be allowed for.

Electrical Mechanical Breakdown

This allows you to insure nominated items of electrical and mechanical plant against sudden and unforeseen physical damage. In addition, refrigerated stock may be covered against deterioration following damage to insured refrigeration equipment.

Computer and Electronic Equipment

This insures nominated computers and electronic equipment against sudden and unforeseen damage. Cover may also be arranged to meet data media restoration costs following loss of information and the increased costs of maintaining a substitute data processing system after an insured equipment breakdown.

Special Risks - General Property

Covers specified property anywhere in Australia against accidental physical loss, destruction or damage. Valuable plant & equipment items taken away from your business location should be insured under this section.

Motor Vehicle

Covers specified motor vehicles against accidental damage and theft plus your legal liability for damage insured vehicles might cause to the property of others.

Goods in Transit

This gives you a choice of insuring nominated property while in transit by land or air against either:

  • Accidental damage; or
  • The more limited risks of fire, flood, collision, or overturning of the conveying vehicle.

Work Cover Insurance

Click here to view more in the section "Employing staff and ongoing employer obligations"

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Friday, July 25, 2014 -

Employment Termination Payments - What You Need to Know

Tuesday, July 22, 2014

I have recently assisted one of our clients with the treatment of an employee's termination payment, which required understanding the key aspects of termination payments and how they are classified. The following are some of the key issues I discovered regarding Employment Termination Payments (ETPs). Read More

Tuesday, July 22, 2014 -

A Brief Look at Contributions to Super

Tuesday, July 22, 2014

Contributing to super with Rogerson Kenny Business AccountantsWatch the video or read the transcript below to hear Mark's take on concessional and non-concessional contributions and the changes to caps for the next financial year.




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Tuesday, July 22, 2014 -

Tax Facts - Goods and Services Tax

Monday, July 21, 2014

Goods and services tax (GST) is a tax of 10% on most goods, services, and other items sold or consumed in Australia. The general principle is that only the end consumer bears the economic cost of GST. Registered entities bear the liability of collecting GST in the price of sales to their customers, but can offset credits for GST included in the price of business purchases.  Read More

Monday, July 21, 2014 -

A Quick Guide to Buying Caravan Parks

Monday, July 21, 2014

A quick guide to buying Caravan parks with Caravan Park Accountants and Rogerson Kenny Business AccountantsIn this video, Rob Deayton provides an overall assessment of the considerations of purchasing a caravan park - from selecting a caravan park to buy, to the financial process that follows that. Watch the video or read the transcription below.



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Monday, July 21, 2014 -

Buyer and Seller Perspectives When Selling A Business

Tuesday, June 24, 2014

To make a successful sale, vendors should try to view the process from the buyer's position, and try to anticipate the questions that may be likely to come your way. If you can anticipate the questions with great answers, you will make the potential buyers feel at ease right away. After all, they are asking the questions to try an uncover why your selling, find out what's wrong with the business etc.  Read More

Tuesday, June 24, 2014 -

Planning the Sale of a Business

Thursday, June 19, 2014

Planning the Sale of a Business

Before deciding to sell your business, you should ask yourself a few questions:

Am I ready to sell?

  • Have I considered options other than selling (such as becoming a silent partner, bringing in outside management?)
  • Will family members support me decision to sell?
  • Do I want freedom, away from the responsibility of running my business? (eg. to pursue other business interests, spend time with family?)
  • Is the timing right? (eg. could the market and sale price be better if I waited?)
  • Will the sale benefit me financially?
  • Will the sale leave me free to earn my living, or will I be restrained from trading as, for example, a condition of the sale contract?

If your answer to any of these questions is 'no' then it could be a wise move to reassess your intention to sell. If your answers are a 'yes' then its time to start planning the sale!

Why are you selling?

This will be a frequently asked question. You will need to convince the prospective buyer that your reasons are genuine and consistent. Businesses are bought and sold every day. Some likely reasons are:

  • I've decided it's time to move onto the next phase of my life
  • I want to do something different
  • I'm planning to retire
  • I'm going to spend more time with my family
  • I have health issues I need to deal with
  • I've worked it as hard s I can, it's time for fresh blood

What is being sold?

You need to be specific about what is being sold. Selling a business differs from selling the shares in a company. If you have run the business under a company structure, buyers will mainly be interested in your business assets and operations, not the company itself. Selling a company does not just mean selling the business. It will also involve disposing of all its debts and liabilities, like outstanding loans, overdrafts, taxation, trade creditors, current orders etc. etc.

Equipment and Goods that are part of the sale

Make sure you clearly itemise the assets owned by the business that will form part of the sale.

Will the property be part of the sale?

If you are the owner of the business and the property (often referred to as 'freehold'), the question is, do you include the property in the sale? If the property is not included the selling price will be more affordable and thus attract more buyers. If you hold the property you will be provided with rental income and a growing asset. However, a buyer may only be keen on the business if the property is included - do think carefully about what you want to do. There is no harm in being flexible to both situations.

Family or Employees are potential buyers

Businesses are frequently handed over to family members. Some family members may expect to be given first right of refusal for purchase of the business. Employees of the business are also potential buyers. Deciding if the business will be offered to management, staff or family is important before engaging a business broker or placing advertisements in the general media. Be careful telling staff of your intentions to sell, as they can often become demotivated, wonder about their jobs and not be focused on the job at hand. Your business could take a while to sell if you are holding out for the right circumstances and buyers - so be careful whom you disclose your intentions to. A key competitor would love to tell your customers about your business being for sale!

Timing

Timing is important when selling a business. As a general rule, the best time to sell is when the business and your customers / clients are peaking and the industry you are in has no dark clouds hanging over it. Make sure that any key contracts you have are not too close to expiry. i.e. Lease agreements, supply contracts, customer contracts etc.

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Thursday, June 19, 2014 -

Understand the Risks and Laws of Self Managed Super Funds

Tuesday, June 17, 2014

All financial decisions carry risk, so it's important to think carefully about how you choose your investment options to balance the level of risk against the level of financial return. You also need to be sure your super investments are legal.  Read More

Tuesday, June 17, 2014 -

Tax Facts - Income Tax

Monday, June 16, 2014

Income tax is levied on taxable income, which is calculated as assessable income less allowable deductions. Gross tax on taxable income is reduced by tax offsets, to arrive at net tax payable or refundable.  Read More

Monday, June 16, 2014 -

Tax Facts - Fuel Schemes

Friday, June 13, 2014

Fuel schemes provide credits and grants to reduce the costs of some fuels or provide a benefit to encourage recycling of waste oils. There are various types of schemes:  Read More

Friday, June 13, 2014 -

Explanation of Concessional Contribution Cap Increase

Thursday, June 12, 2014

Mark Rogerson discusses the increase in the Concessional Contribution Cap from 1 July 2014 to $30,000 in the below recording. Further, Mark discusses the temporary increase to $35,000 for those of particular ages and the impact the rise in the Concessional Cap has on the level of Non Concessional Contributions. Read More

Thursday, June 12, 2014 -

Capital Gains Tax (CGT) Concessions for Small Business

Wednesday, June 04, 2014

Capital Gains Tax (CGT) Concessions for Selling a Small Business

Overview

The information below provides an overview of the Capital Gains Tax (CGT) concessions available for small business and the basic conditions you must satisfy to access these concessions. The concessions reduce the capital gain on business assets that you must include in your assessable income.

Your must first satisfy the basic conditions that apply to all the CGT concessions for small business. You must then satisfy any additional conditions that apply specifically to the individual concessions.

You can apply as many concessions as you are entitled to, until the capital gain is reduced to nil. This choice allows you to achieve the best tax results for your circumstances. There are rules about the order you apply the CGT small business concessions, any current year or prior year capital losses and the CGT discount.

What are the CGT concessions?

There are four small business CGT concessions.

Small business 15-year exemption

If your business has owned an asset for 15 years and you are aged 55 years or over and are retiring, or if you are permanently incapacitated, you won’t have an assessable capital gain when you sell the asset. Click here for more information

Small business 50% active asset reduction

You can reduce the capital gain on a business (active) asset by 50%. Click here for more information

Small business retirement exemption

A capital gain from the sale of a business asset will be exempt up to a lifetime limit of $500,000. If you are under 55 years of age, the exempt amount must be paid into a complying superannuation fund or a retirement savings account to obtain the exemption. Click here for more information

Small business rollover

If you sell a small business asset, you can defer your capital gain until a later year. This means you don’t include the gain in your income until a change in circumstances causes a CGT event to happen that crystallises the gain. For example, you don’t acquire a replacement asset within the required period, or you later sell that replacement asset or stop using it in your business. When a CGT event crystallises the gain you have previously deferred, all or part of the gain that you deferred becomes assessable. Click here for more information

Basic Conditions to be satisfied

To qualify for any of the small business CGT concessions, there are certain basic conditions that must be satisfied. Follow the steps below to determine whether you satisfy the basic conditions.

Step 1

You must first satisfy at least one of the following conditions:

  • You are a small business entity.
  • You satisfy the maximum net asset value test; or
  • You are either partner in a partnership that is a small business entity, and the CGT asset is an asset of the partnership.

Step 2

In addition to satisfying one of the conditions outlined in step 1, the asset must satisfy the active asset test.

Step 3

This step only applies if the CGT asset is a share in a company or an interest in a trust. Where this is the case, one of these additional basic conditions must be satisfied just before the CGT event:

  • You must be a CGT concession stakeholder in the company or trust; or
  • The entity that owns the share or interest must satisfy the 90% test.

Please consult with Rogerson Kenny Business Accountants on any small business Capital Gains Tax matter. You can contact us via our website, or call us on (03) 9802 2533.

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Wednesday, June 04, 2014 -

Preparing to set up your Self Managed Super Fund

Monday, June 02, 2014

You'll need to choose the best way to structure your fund so it complies with the law and suits you and the other members' circumstances.
Once you've decided to set up an Self Managed Super Fund you need to: Read More

Monday, June 02, 2014 -

Tax Facts - General Value Shifting

Friday, May 30, 2014

The General value shifting regime (GVSR) applies to arrangements that shift value between assets, causing discrepancies between the market values and tax values of the assets. Most value shifts happen when parties don't deal at the market value, causing one asset to decrease while the other increases.  Read More

Friday, May 30, 2014 -

Employing Staff - Ongoing Employer Obligations

Friday, May 23, 2014

Employing Staff - Ongoing Employer Obligations

You and your employees have certain obligations to each other under common law. You also have obligations under Federal and State & Territory laws, industrial awards and agreements, tribunal decisions and employment contracts.

Do You Need to Register for PAYG Withholding?

If you have employees you must register for PAYG Withholding and withhold amounts including:

  • Income Tax for employees (including working Directors of a Company).
  • Withhold 46.5% from payments to suppliers who cannot quote an ABN.

Before you withhold any payments, you need to register for PAYG Withholding. Like your GST registration, this can be completed at the same time and means that you will have either quarterly or monthly reporting requirements.

If you are a Sole Trader or Partner, the Tax Office do not regard you as your own employee. You 'draw' money from the business to live on but this is not technically seen as normal 'salary and wages'. As such, there is no need to register for PAYG Withholding and withhold amount from your drawings unless the above examples apply.

Do You Have to Pay Superannuation for Employees?

The Superannuation Guarantee Scheme, administered by the Taxation Office, requires all employers to provide a prescribed minimum level of superannuation support for each employee, subject to limited exemptions including:

  • You paid a salary or wage of less than $450 in a month; or
  • The employee is under 18 years of age and worked less than 30 hours a week; or
  • The employee is aged 70 years or over.

Employers must make the superannuation contributions on at least a quarterly basis. Payments must be made within 28 days of the end of each quarter.

1 Jul - 30 Sep due by 28 October
1 Oct - 31 Dec due by 28 January
1 Jan - 31 Mar due by 28 April
1 Apr - 30 Jun due by 28 July

If you fail to pay the minimum level of support (9%*) by the prescribed deadline you are liable for the superannuation guarantee charge which is equivalent to the amount of the shortfall, plus an interest component and an administrative charge.
* for superannuation purposes, the definition of an employee is broad and in some instances you may have to pay superannuation on contractors.

Choice of Superannuation Fund

Since 1 July 2005, employees can choose which superannuation fund their employer superannuation contributions are to be paid into. As an employer there are three steps you need to follow in order to meet your obligations:

1: Identify your eligible employees

Your employees can generally choose their super fund if they are:

  • Employed under a federal award.
  • Employed under a former state award, now known as a 'notional agreement preserving state award'.
  • Employed under another award or agreement that doesn't require superannuation support.
  • Not employed under any state award or industrial agreement (including contractors paid principally for their labour).

Step 2: Provide a Standard Choice Form to new employees who are eligible to choose a superannuation fund

You need to provide your employees with a Standard Choice Form (NAT 13080) which can be downloaded from the ATO website. This needs to be done within 28 days from the day they start work. They are not required to complete the form if they don't want to nominate a fund, but you do have to give them the choice if they are eligible.

If an employee does not choose a fund you must pay the superannuation contributions for that employee into the fund you have identified as your employer nominated (default) fund. You need to make sure that the Standard Choice Form includes your employee's tax file number, so that any contributions you pay are not returned to you by the super fund.

Step 3: Act on your employee's choice

Once your employee chooses a fund, you have 2 months to arrange to pay contributions into that fund. You need to start paying superannuation contributions to an employer nominated fund if:

  • An employee does not choose a fund after 28 days.
  • You have not accepted their choice of fund because they have not yet provided all the information you need.

What is an employer nominated fund?

Your employer nominated (default) fund is the fund you pay an employee's superannuation guarantee contributions to if they do not choose a fund. The superannuation fund you choose must be a complying fund and from 1 July 2008, it must also offer a minimum level of life insurance. The insurance cover must comply with the following requirements:

  • A premium of at least $0.50 per week for those under 56 years of age
  • The level of insurance cover must equal or exceed that shown in the table below; or
  • If the contributions are made to a defined benefit fund on behalf of a defined benefit member the cover must equal or exceed that detailed in the table below.
Age Range Minimum Level of Insurance Cover
0-19 Nil
20-34 $50,000
35-39 $35,000
40-44 $20,000
45-49 $14,000
50-55 $7,000
55+ Nil

It is illegal for a superannuation fund to provide benefits to you as an incentive to use their fund as your default fund.

Keeping Records

You must keep records that show you have met your obligations including:
  • Records that show that a Standard Choice Form has been provided to all eligible employees.
  • Details of employees who do not have to be offered a choice of super fund.
  • Receipts or other documents issued by the super fund showing you have made superannuation contributions to an employee's chosen fund.
  • Records confirming your employer nominated fund is a complying fund and meets the life insurance requirements.

WorkCover Insurance

As well as your business insurances, you are also legally required to have workplace injury (WorkCover) insurance if your business falls into one or both of the following two categories:

  • You pay or expect to pay more than $7,500* in wages, benefits and superannuation for employees.
  • You employ apprentices or trainees.

If neither of these categories apply to your business, a workplace injury insurance policy is not a legal requirement. However, you should be aware that WorkCover has different classifications for 'employee' and 'contractor' and this can determine whether you need a policy or not. A quick visit to the Victorian WorkCover website should clarify this issue. Type 'workplace injury insurance' in to the homepage and do a search. We can assist you in registering for WorkCover and have a preferred insurer.
* Current rates as at the date of publication

Workers Compensation

If an injured worker applies for compensation, you must complete your section of the Compensation Claim Form and return it within 10 days of:

  • Knowing about the injury; or
  • Having the injury reported to you; or
  • The relevant authority requesting this information from you.

You must take all reasonable steps to help with rehabilitation and suitable duties while a worker is receiving compensation.

Workplace Health & Safety

Each state has legislation regarding workplace health and safety. This legislation places an obligation on every employer to ensure workplace health and safety of their workers and any other person at a workplace. This includes people like visitors, salespeople, and passing pedestrians.

Documents Relevant to Recruitment

Documents that are related to the recruitment process may in fact be crucial to the operation and enforcement of laws relating to recruitment. Some of the numerous documents relevant to the recruitment process and the legal issues related with these documents include:

  • Advertisements - employers must be careful not to breach equal opportunity laws.
  • Instructions to Employment Agencies - employers should put their instructions in writing to avoid confusion over what is required and the authority of the agent.
  • Application Forms - equal opportunity laws should not be breached and certain personal information should be carefully handled.
  • Employment offers should be carefully worded - Once the offer is made and accepted, then a contract is formed and certain rights and obligations arise.
  • References - written references require careful handling. Defamation of an individual is possible if these documents are not properly handled.

Records you need to keep

  • Records relating to payments to Employees
  • Tax File Number declarations and withholding declarations
  • Withholding variation notices
  • Worker payment records
  • PAYG payment summaries
  • Annual reports
  • Superannuation records, and
  • Records of any Fringe Benefits provided.
 Read More

Friday, May 23, 2014 -

Business and Tax Office Registrations

Friday, May 23, 2014

Business and Tax Office Registrations

Below you will find out about registering your business or company name, how to protect your business or company name and web address and tax registrations for new business owners. Remember, Rogerson Kenny Business Accountants can assist you with all of the below points!

Registering a Business Name

Why do I need to register my business name?

The Business Names Act 1962 requires that all businesses trading in Victoria do so under a registered business name.

The exceptions to The Business Names Act 1962 are:

  • Businesses that operate under a company name.
  • Businesses that operate under a personal name.

A business name is not a legal entity like an individual or corporation and cannot sue, be sued or hold property. It merely registers the name in the public registry - available to the public for a fee - held by Consumer Affairs Victoria (CAV). Any disputes over the naming rights are dealt with by legislation or through the legal system, so you should contact your solicitor if you require assistance in such matters.

What if my business is a company?

If your business is a company, it falls under Corporations Law and, unlike other businesses, the company name is not lodged with Consumer Affairs Victoria, but with Australian Securities and Investment Commission. To determine whether your business is a company or not, visit the business structures page.

If your company carries on a business in a name that is different to its company name, you must register that business name with CAV. This is sometimes referred to as 'trading as' or operating under a 'trading name'.

How do I choose and register a business name?

After you have determined that your business is the type that needs to register a business name, there are several steps towards choosing and registering one that is right for you and your business.

Choosing Your Business Name

Decide carefully

Your business name is important, not just at the onset of a new business, but as the business develops or diversifies. Often the first impression of your business is made from its business name; it's a key factor contribution to your identity and image.

A business name is an individual decision and one that you should consider carefully. The name you choose should:

  • Be memorable.
  • Be easy to pronounce and spell.
  • Be original and not too similar to existing business names, company names or trademarks.
  • Be appropriate, professional and not offensive.
  • Say what you want it to say about your business, products and services.

Be aware of rules and restrictions

There are a number of rules and restrictions that affect what you can and can't call your business. Check the Restrictions on Business Names or Branding and Intellectual Property pages for further information, or use the Step-by-Step: How to Register Your Business guide.

Create a short list

By providing a number of choices you can save time in the checking and registration process, in the event that you don't get your first choice. Firstly, choose a list of potential business names and put these in order of preference on your application. If your first choice is ineligible for registration, your second choice is checked, and so on, until an available and eligible name is found.

Finding an Existing Business Name

The Victorian Names Register lists all business names, associations, cooperatives and limited partnerships registered in Victoria. You can search the Department of Justice online register for free.

Use the register to:

  • Check whether the proposed name for your new business is the same as or similar to an existing business name.
  • Check that the association, cooperative or limited partnership that you are dealing with is registered.
  • Find out more details about a business that is registered in Victoria.

Always check the availability of a name before submitting your business name application to Consumer Affairs Victoria (CAV). Rogerson Kenny Business Accountants can carry out the registration process for you, contact us to find out more about this service.

Choosing Your Company Name

You should follow the same guideline as choosing a business name. In other words, it should be unique and stand out from your competitors. In addition, a company name must indicate the:

  • Legal status of the Company - 'Proprietary' simply means a company, which is not listed on the stock exchange as a public company. A proprietary company name must include the word 'Proprietary' or it's abbreviation 'PTY'.
  • Liability of Company members - Liability is usually limited so the name must include the work 'Limited' or it's abbreviation 'Ltd'.

You cannot use a name that is already registered as a Company, so you need to check the availability of your name with the following separate authorities:

  • ASIC - Australian Securities and Investments Commission
  • IP Australia
  • CAV - Consumer Affairs Victoria

Rogerson Kenny Business Accountants can carry out the registration process for you, contact us to find out more about this service.

Protecting your Business or Company Name & Web Address

When you start a new business, register a new name or develop a new product you should give consideration to protecting your Intellectual Property (IP). Even though a new business name has been registered with Consumer Affairs Victoria, if it is not protected, a competitor can still legally register:

  • A similar company name with ASIC
  • A similar Trademark with IP Australia
  • The same business name in another state or territory
  • A similar Domain Name

The three main ways of providing Australia wide protection are:

Trademark Protection

Registering your business or company name as a trademark gives you legal ownership rights to the name across Australia and prevents others from trading under it. A trademark can be a letter, word, phrase, number, sound, scent, logo or image. It can be an effective marketing tool, making a business stand out from the competition. To find out about the trademark application process, go to 'Trademarks' on the IP Australia website, contact Rogerson Kenny Business Accountants, or your solicitor for more help.

Domain Name Protection

The domain is the main part of a web address (URL) and follows 'www' and is used to identify the location of the website. Note that just because you have registered a business name, company name or trademark does not mean you can automatically use it as a domain name. You may also not be able to stop someone using a domain name that is the same as your business name, company name or trade mark. For more information and guidance through the domain name registration process visit the Australian Domain Name Administrator website (www.auda.org.au).

Interstate Protection

To give your business name interstate protection, you need to register the name in each relevant state or territory where you intend to operate. Your first step is to check the register of business names in each relevant state or territory. Your business name will not be accepted if it is too similar to an already existing business name. A full list of business name registers and their contact details are available on the Business Victoria website. Type 'Interstate Business Name Registration' into the homepage search.

 Read More

Friday, May 23, 2014 -

Critical Requirement for Claiming Motor Vehicle Expense

Tuesday, May 20, 2014

As part of our continuing professional education one of our managers, Helen Hartnell, recently attended an information session at which a senior Australian Taxation Officer discussed some of their current audit and investigation activity. Read More

Tuesday, May 20, 2014 -

Tax Facts - Activity Statement

Monday, May 19, 2014

Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business individuals who need to pay quarterly PAYG instalments also use activity statements.  Read More

Monday, May 19, 2014 -

Positioning the Business for Sale

Thursday, May 08, 2014

Positioning the Business for Sale

Firstly, you need to know your buyers. Once you know this, you can then position the business in a way that appeals to them. You need to make certain aspects of your business stand out to the different classes of buyers - remember, different types of buyers will like different things! This is the marketing exercise you do to make your business stand out to a potential purchaser.

This positioning exercise can start by promoting unique aspects of the business, or special conditions. One of your position techniques to buyers who have no experience, is that you will stay on with them for a period of time to ensure a smooth transition for the new owners and customers.

Make use of the relevant professionals when selling your business. This will improve your prospects and price. A good accountant (like Rogerson Kenny Business Accountants) will have your finances in top condition for prospective buyers and their accountants - this adds creditability to your business. Like wise, have a lawyer check all your relevant contracts and leases are in place and there are no other legal issues.

 Read More

Thursday, May 08, 2014 -

Tax Facts - Imputation

Wednesday, April 30, 2014

The imputation system provides a way for Australian and New Zealand corporate tax entities that pay Australian tax, to pass on to their members a credit for Australian income tax they have paid. This prevents the same income from being taxed twice - once when the income is earned by the entity, and again when the income is distributed to members.  Read More

Wednesday, April 30, 2014 -

Tax Facts - Capital Gains Tax

Thursday, April 24, 2014

Capital gains tax (CGT) generally applies to CGT events that happen to CGT assets acquired after 19 September 1985. CGT is not a separate tax, it forms part of income tax.  Read More

Thursday, April 24, 2014 -

Winding up Your Self Managed Super Fund

Tuesday, April 22, 2014

Winding up an Self Managed Super Fund involves dealing with all of the assets of the fund so that the fund has no assets left, and completing all the reporting and other administrative obligations as a trustee.  Read More

Tuesday, April 22, 2014 -

How to Develop a Sales Kit for Selling Your Business

Tuesday, April 22, 2014

How to Develop a Sales Kit for Selling Your Business

Developing a sales kit for your business to give to potential buyers creates a positive image of your business and allows them to go away with something tangible and something to review. The more professional your sales kit, the better you look as an operator and the more potential buyers will believe your claims about your business.

An effective sale kit for selling your business will contain:

  • Products or services sold
  • Customers and key contracts
  • Business history - include your story - when you took over / started it, initial challenges, how you grew the business etc.
  • Reason for selling the business
  • Terms of the sale
  • Assets
  • Financial statements - make sure these have been prepared by your accountant (contact Rogerson Kenny Business Accountants for assistance in financial statements).
  • Photos of as many parts of the business as possible. Give the buyers something to look at when they are reviewing. Try and bring some emotion into the purchase for the buyer.

You need to include what is relevant and convincing for your potential buyers. Keep in mind some of the above suggestions may not be appropriate for confidentiality reasons. An example is you wouldn't want to be giving away a customer list and details of key customer contracts to competitors. Work with your lawyer on this, they will advise you on what and when you can give over different information and what should be required from the potential buyer to allow you to do this.

If your business is doing poorly, full disclosure should be given. Revealing that the business is past it's glory days may not be as negative as you may think. Many people will look at your business as an opportunity to quickly improve or turnaround the performance of the business. There are entrepreneurs out there who will only look at under performing businesses - so keep and open mind. Keep in mind that a good accountant will always uncover a business that is performing badly and advise their clients on the risks - so be upfront.

 Read More

Tuesday, April 22, 2014 -

Finding Potential Buyers for Your Business

Monday, April 14, 2014

Finding Potential Buyers for Your Business

When selling your business, you need to find potential buyers. Simply put, there are different ways you can find these people. The more ways or avenues you explore to sell your business, the greater the chance you sell your business for what it is worth and the buyer is the right one.

You can find potential buyers through:

  • Existing networks
  • Business marketplace
  • Creating awareness
  • Develop a sales kit

Existing Networks

Look close to home here. You may find your buyer within your family, friends and staff. Before going to the world with your business being for sale, give family first right of refusal and move through friends and staff. This type of sale will be far easier than selling to an unknown buyer.

Business Marketplace

Potential purchasers may also come from:

  • Competitors - looking to expand / reduce the number of players in their industry
  • Suppliers / Contractors wishing to expend their range of products and services
  • Individuals looking to buy a job
  • Individuals looking for a lifestyle change
  • Individuals coming to Australia under a business migration program

Creating Awareness

This is all about standing on top of the largest building and letting as many people know about your business being for sale as possible.

Business Brokers

A business broker is like a real estate agent. They will work with you by finding buyers and assisting with the preliminary negotiation involved in selling a business. The business broker will draft press ads, contact likely buyers, screen potential buyers and bring both parties to the negotiation table. If you appoint a business broker, look for one who is a specialist within your industry and make sure they are fully briefed on your business. A broker with specialist industry knowledge will likely find the most serious buyers for you and give you a good indication on the value of your business.

Word of Mouth

Spread the word and someone may come knocking on your door. Look at your marketplace and spread the word to the various parties - competitors, suppliers etc. Think your strategy carefully though, as a drawn out sale of a business could harm its image. Think long and hard before telling the marketplace about your plans to sell (competitors, suppliers, customers).

Advertising

Typically this involves a discreet ad in a newspaper, giving limited details and trying to direct interested parties to call and make initial enquiries. A good process to reach a mass market, but it will be time costly on you with all of the tyre kickers you will receive.

Trade Sources

This is aimed at targeting people who run a similar type of business. It could be talking with key people in the industry, who may know someone looking. It would also involve advertising in a more targeted way with trade association journals or newsletters.

 Read More

Monday, April 14, 2014 -

Advantages and Disadvantages of Starting Up A Business

Thursday, April 10, 2014

Advantages and Disadvantages of Starting Up A Business

Advantages of Starting up a Business

Advantages of starting your own small or medium business can include:

  • Being your own boss - You can make your own decisions, keep your own time and not have to answer to "The Boss".
  • Hard work & know how - If you are a hard worker and / or have immense industry know how, you may want to benefit from the long hours you do or the knowledge that you have acquired over time.
  • Financial independence - One day, you may realise your dream of financial independence.
  • Creative freedom - No more restrictions, you can do what you like and have the freedom to work, design, create, build what you think is best - your way!
  • Goodwill - You don't have to pay for it (as you would if you were buying a business) - you get to build it.
  • Location, premises, building fit-out - You get to choose it all.
  • Staff – You’re not lumped with staff you don't want. You hire and train from scratch - your way.
  • No bad name - A fresh business, a fresh start. Your name has no bad history with suppliers or customers. If you buy a business, you may find some people just won't deal with the business because of past dealings.
  • Business image - You create the business image you want. Your way.

Disadvantages of Starting up a Business

Disadvantages of starting your own small or medium business can include:

  • Cash flow - Your business may not have a positive cash flow for two years - how are you going to cover that?
  • Competitors - You may invest all this time, money and effort into your business and a large competitor targets your customers and offers them a similar product / service at below your cost - until your business has failed. While this may be anti - competitive and contravene sections of The Trade Practices Act 1974, it may be too late for your business.
  • Homework - Have you done it? You may do it all and then find when you are all set up, that something from left field becomes apparent and significantly alters the outlook of your business.
  • History - If you buy a business, you are buying something. You are buying history of the business trading; You have staff in place, equipment and premises in place, customers ringing in with orders on your first Monday morning. If you start a business, you have no history. Everything must be generated from scratch.
  • Married to the business - This is a common phrase from small business owners. It basically means, your hours of work and level of commitment is such that you cannot take a holiday, your business is always with you (day, nights & weekends) and basically your neck is on the line. You can't just throw the keys back and give it all away if it gets too hard!
  • Suppliers - Suppliers may not extend you credit as your business has no history, so you may have to pay upfront for your goods, and you may not collect money from your customers for those goods for 90 - 120 days. This is very detrimental to cash flow. Can you sustain this? Have you factored it into your budget?
  • Family - Is your family situation such that you can undertake this huge venture of starting a small business from scratch? Think carefully about starting a business from scratch. It often means a huge sacrifice with no guarantee of reward. Your current employed situation may actually be a better position than starting a small business.

Good luck, in whatever you may decide. Please think about the advantages and disadvantages of starting a small business. Our list above is only a starting point and each situation will be different.

If you are seriously considering starting a small business, Rogerson Kenny Business Accountants offer a free initial consultation, so you can discuss your ideas with us. Contact us or call us on (03) 9802 2533 to find out more.

 Read More

Thursday, April 10, 2014 -

Advantages and Disadvantages of Purchasing a Business

Tuesday, April 08, 2014

Advantages & Disadvantages of Purchasing a Business

Advantages of Purchasing a Business

Advantages of purchasing a small or medium business can include:

  • An existing customer base and existing contracts
  • A good business history increases the likelihood of success and profitability
  • An immediate income is generate as the business remains operational
  • Existing suppliers and existing credit terms
  • Existing staff, management and systems
  • Existing plant, equipment, stock and materials
  • Knowledge of the business from the current owner
  • Established premises with phone numbers, website and email addresses (on the first day you take over, the phone will ring, orders will come in as per normal)
  • Goodwill associated with the name and location of the business
  • Financiers will be more readily to lend to an existing business with a trading history (ie. they have something to lend on)

Disadvantages of Purchasing a Business

Disadvantages of purchasing a small or medium business can include:

  • Customers may associate the goodwill of the business to the previous owner
  • Staffing issues:
    • Some staff may leave when a new owner takes over
    • Some staff may be unsuitable for the job they are doing
    • Some staff may resent the change in ownership
    • You may inherit staff entitlements, such as impending long-service leave payments
  • Plant & equipment may be obsolete or faulty
  • The business may have a poor image which may be difficult to change
  • The cost of acquiring the business and goodwill may be overpriced
  • The outgoing owner may have been the key to the business success. They may have had significant relationships with key suppliers / customers which may break on a new owner entering the business

A successful due diligence program should be able to overcome or at least make you aware of the above disadvantages. Any unresolvable disadvantages should be built into the end purchase price. Please click here to visit "Checklists and Hints on Buying a Business"

 Read More

Tuesday, April 08, 2014 -

Financing Property, Plant & Equipment

Friday, April 04, 2014

Financing Property, Plant & Equipment

Financing Cars & Equipment

When starting a business you may need to finance a car, light commercial vehicle, truck or piece of equipment or machinery. You might even need to fit out a shop or office. The obvious advantage of financing the item is that you don't have to pay for the item upfront from your savings or capital. By financing the item you only need to fund the monthly repayments, which can help preserve your capital.

There are a number of different ways to finance vehicles and equipment for your business including leasing and chattel mortgage. Each of these finance options potentially has different taxation, GST and FBT implications. They can also have a varying impact on your profit and cash flow.

As your accountants, we are committed to saving you money and giving you the most tax effective advice including claiming back any upfront GST with your next Business Activity Statement (BAS). When you decide to finance a motor vehicle, truck or piece of equipment for your business or farm simply call us on (03) 9802 2533 as we have access to a vehicle and equipment service that provides up to 6 quotes from a panel of major lenders who provide wholesale rates of finance. It is a relatively simple application process because we already know your financial position. The chart below provides a brief summary of the various finance options.

Question Hire Purchase Chattel Mortgage Lease Novated Lease
Can trade in or cash deposit be used to reduce the amount financed? Yes Yes No No
How is GST applied to the finance? GST Inclusive price financed.
No GST on repayments.
GST Exclusive price financed.
GST applicable on rentals.
GST Inclusive price financed.
No GST on repayments.
GST Exclusive price financed.
GST applicable on rentals.
Can client claim full GST on next BAS? If client is on cash for GST, claimed over terms of contract. If on accruals for GST, can be claimed on next BAS. Yes GST on monthly rental is claimable. GST on monthly rental is claimable.
Documentation Fee? Yes Yes Yes Yes
Registration Fee? No ASIC Registration fee payable if a company. Does not apply to individuals. No No
Balloon/Residual value at the end of the term? Usually to maximum value allowable under ATO Guidelines for Lease. Usually to maximum value allowable under ATO Guidelines for Lease. Based on ATO Guidelines.
GST payable on residual.
Based on ATO Guidelines.
GST payable on residual.
Fix Interest Rate? Yes Yes Yes Yes
Fixed Payments/Rentals? Yes Yes Yes Yes
Client Tax Deduction for Depreciation & Interest? Yes Yes No No
Client Tax Deductions for Rentals? No No Yes (Fixed deduction each month) Yes (Employer claims)

Disclaimer: The above table is produced for information purposes only. We do not provide, and the above table does not constitute, financial, accounting or taxation advice. We recommend that you and/or your client review the relevant documentation and form your own opinion or seek independent advice.

Fleet Discounts

Through our association with a major discount car buying service we can save you hundreds (if not thousands) of dollars when buying a new car or light commercial vehicle. Discounts are available from over 20 different manufacturers and all you need to do is provide the precise specifications of the car you intend buying (including any non-standard extras) and we can get you an on-road price for the car.

Claiming Motor Vehicle Expenses

With Motor Vehicle Expenses we urge you to contact us for professional advice tailored to your individual circumstances. This summary is provided only as a guide because there are a number of other issues to consider including:

  • The guidelines do not apply to vehicles other than cars - for example, utility trucks or panel vans with a carrying capacity of 9 or more passengers or motorcycles.
  • If you operate your business through a Company or Trust structure you might be able to claim all your motor vehicle costs but private usage might be subject to Fringe Benefits Tax (FBT).

If you use your car for income producing purposes, you could be entitled to claim a tax deduction for motor vehicle expenses. Examples of tax-deductible motor vehicle usage include the following:

  • You carry work tools or equipment that could not be left at the workplace.
  • If your home is your employment base, travel to a secondary workplace.
  • You have various places of employment and you regularly work at more than one site each day before returning home.
  • You use your car to travel directly between two separate places of employment (e.g., you have a second job).
  • You travel from your normal workplace to an alternative workplace, such as a client’s premises.

Once you have established your entitlement to claim your motor vehicle expenses, you can then select one of the four methods below and apply the one that provides the highest possible tax deduction.

Method 1 - Cents Per Kilometre - Your claim is based on a set rate for each business kilometre depending on your vehicle's engine capacity. Based on a reasonable estimate of travel you can only claim a maximum of 5,000 business kilometres and you do not need any written evidence to substantiate your claim.

Method 2 - 12% of Original Value - Your claim is calculated at 12% of the original value of your car (subject to Luxury Car Price Limits). Your car must have travelled (or would have travelled) more than 5,000 business kilometres in the income year and you do not need any written evidence to substantiate your claim.

Method 3 - One Third of Actual Expenses - Your claim is based on one third of your car's actual expenses. Your car must have (or would have) travelled more than 5,000 business kilometres in the income year and you need written evidence or odometer readings for fuel and oil costs. For all other car expenses you need written evidence.

Method 4 - Logbook - Your claim is based on the actual business use of your motor vehicle. You need to keep a vehicle logbook for 12 continuous weeks that documents your odometer readings for the start and end of each business trip. You can claim fuel and oil costs based on odometer records but you will need written evidence for all other car expenses.

Financing

A wide range of financing options exists, each with their pros and cons. At Rogerson Kenny Business Accountants we know the financial market and have the experience to assist you in securing the best financing option for your personal and business goals. Our experience in the market means we can also structure debt upon acquisition to maximise tax advantages.

Contact us and let our experienced team explore the best financing options with you to get your business closer to its goals!

 Read More

Friday, April 04, 2014 -

How Much Money Will I Need to Retire?

Friday, March 28, 2014

This section of how much money will I need to retire focuses on your Superannuation and the most common type of fund, an accumulation fund. The how much money will I need to retire calculator lets you see the long term effects of:  Read More

Friday, March 28, 2014 -

Tax Facts - Medicare Levy

Thursday, March 27, 2014

The Medicare Levy is a tax Australian residents pay to cover health care charges. It is payable on taxable income, in addition to income tax. Individuals and families on higher incomes who do not have an appropriate level of private hospital cover may have to pay the Medicare levy surcharge.  Read More

Thursday, March 27, 2014 -

Tax Facts - First Home Saver Accounts

Tuesday, March 25, 2014

A first home saver account (FHSA) is a special purpose account designed to help people save for their first home. Once a year, the government will make a lump-sum contribution to the FHSA, based on the amount deposited into the account during that year.  Read More

Tuesday, March 25, 2014 -

Running Your Business From Home

Friday, March 21, 2014

Running Your Business From Home

Research suggests that there are nearly 1,000,000 home-based business owners in Australia.

Your first step is to contact your local council's planning department to get a copy of their specific guidelines for home-based businesses. To contact your local council, use the "Find Your Local Council" search at the Department for Victorian Communities website.

Generally speaking, you can run a home-based business if:

  • The home is your main place of residence.
  • You employ no more than one person who does not live there
  • The total floor area used in the business is not more than 50 square metres, or one third of the total floor area of the home.
  • The business does not use more electricity, gas, or water than normal domestic usage and it does not decrease the attractiveness or value of the neighbourhood (e.g. by creating an excessive amount of noise).
  • Nothing is offered for sale, except goods made or repaired on the site.
  • No vehicle is fuelled, serviced or repaired on the property.
  • Only one commercial vehicle, not exceeding two tonnes capacity and registered to a resident, is present at any time.

Tax Deductibility

As a general rule, expenses associated with your home are private and you can't claim them as a tax deduction. However, in circumstances where you run your business from home you may be able to claim deductions for some of the expenses relating to the area you're using for business purposes. The expenses cover two broad categories - Occupancy Expenses and Running Expenses.

  • Occupancy Expenses are related to the ownership or rental of the home and are not affected by income earning activities. These expenses are incurred regardless of whether or not you are carrying on a home-based business. Occupancy expenses include rent, mortgage interest, rates and house insurance.
  • Running Expenses relate to the use of facilities within the home including electricity, cleaning, depreciation and repairs to furniture and equipment in the office. These expenses would be less if you didn't run the business from home.

What is Required?

Where you have an area set aside exclusively for business activities is must have the character of a 'place of business', including being:

  • Clearly identifiable as a place of business (e.g., a sign at the front of the home)
  • Unsuitable to be used for private purposes in association with the home (e.g., not suitable for someone to sleep in)
  • Used almost exclusively for carrying on a business; or
  • Regularly visited by clients

Common examples are:

  • A small business operator's main office
  • A tradesperson's home workshop
  • A Doctor or Dentist's surgery or consulting rooms

How Much Can You Claim?

Generally, you can claim the percentage of occupancy expenses (rent, interest, rates, insurance) that relate to the area you use for the business. Commonly the claim is based on the floor area used for business, as a percentage of the total floor area of the home. Utility expenses must also be apportioned. If the apportionment is not based on floor area you will need to clearly document the basis of calculation.

telephone used exclusively for business can be claimed (i.e., rental and calls) but not the installation costs. If this phone is used for business and private use then the business portion is deductible, based on an itemised account. If an itemised account were not available, you would need to keep a record for a 'representative' four-week period to establish a pattern of use for the whole year.

Travel Expenses

Generally, travel between your home and place of work is considered a private expense. If your home is your principal place of business then you can claim the costs of trips between home and other places as a cost of running your business.

Capital Gains Tax Consequences

Generally you don't pay Capital Gains Tax (CGT) on the sale of your principal place of residence. However, if you use your home as a place of business and claim a tax deduction for some of your mortgage interest then you will have to pay CGT if you make a capital gain on the sale of your home. The exposure to CGT will be based on the proportion of your home that is used for business purposes.

Insurance for Home-Based Business

As a home-based business you need to make sure you have the correct type and level of insurance to protect you and your assets. It is an alarmingly common misconception among home-based business operators that their business is adequately covered by a standard home and contents insurance policy. It's important to also note that many policies don't cover tools of trade, office furniture or computer equipment used for your business unless you have specifically advised your insurer.

For home-based business owners there are several types of insurance to consider:

  • Public liability cover, for persons visiting your business at home (e.g., customers and suppliers).
  • Workers compensation for any employees working from your home.
  • Fire, storm and theft cover for loss of any stock and equipment.
  • Professional indemnity insurance (especially the service industry or contracting to Government).
  • Personal income protection insurance.
  • Costs arising from interruption to your business.

Public Liability

If your business requires your customers or the general public to visit your home, you should consider taking out a separate public liability insurance policy.

There is no legal requirement to have public liability insurance, however, one claim could put you out of business. You may also find that, depending on the type of work you do, some clients insist that you have public liability insurance as a term of your contract.

You can obtain public liability insurance via your insurance broker. It is very important that you discuss with your broker all the risks arising from your work activities so that a policy covering the main issues can be obtained. For example, if your business involves maintenance or modification to your clients' premises you will need cover for any damage caused, which may not be a standard part of all public liability policies.

Burglary Insurance policies cover theft of property and damage by burglars, following forcible entry to your premises. Under some policies you can also claim for business interruption. This type of policy does not cover theft by a shoplifter or staff.

Business Interruption of Loss of Profits insurance provides cover if your business is interrupted through damage to property by fire or other insured perils. It ensures that your anticipated net profit is maintained and pays your employee's wages, ongoing costs and additional working costs if alternate facilities are necessary. Normally, payment of a claim under this policy is conditional on your business being re-established.

 Read More

Friday, March 21, 2014 -

Business Succession Planning

Tuesday, March 18, 2014

Business Succession Planning

To ensure the long-term success of your business, it is critical to establish a well-designed business succession plan. An effective business succession plan should coordinate the transition of your business to your successors smoothly. This is one of the most critical issues in small & medium business and something for all business owners to consider.

What would happen to your business right now if:

  • You were unable to perform your normal duties?
  • You fell ill and were left unable to work for a substantial period of time?

If the above occurred who would:

  • Take over the business?
  • Know the secrets of your business - the formulas, recipes, deals etc. (the 11 herbs and spices)?
  • Pay the bills and manage the business’ finances?

Some key questions that need to be answered include:

  • What would the bank do with the loan? Would they call it in?
  • Has the principal written out a set of instructions on what should happen to the business if something should happen to him/her?
  • Has this lift been given to a Solicitor or placed somewhere safe where it will be found if something happens to the principal?
  • Has adequate insurance been effected on the life of the principal and on the life of any partners in the business?
  • If a Partnership or a Company with outside shareholders, has a formal "Buy/Sell Agreement" been entered into?

Business succession planning must occur now to be effective. Rogerson Kenny Business Accountants urges you to act on this matter.

To ensure the long-term success of your business, it is critical to establish a well-designed succession plan. Coordinating the transition of your business to your successors can be an arduous process. However, with our years of experience we can address the complex issues of business continuation, removing the stress from your shoulders.

Contact us for more information on forming a plan that facilitates a hassle-free continuation of your business!

 Read More

Tuesday, March 18, 2014 -

Superannuation

Monday, March 17, 2014

Superannuation

As the Government encourages Australians to take responsibility for, and reach their financial retirement goals, citizens are repeatedly required to deal with superannuation funds. Self-managed superannuation is a means of saving for retirement. It enables you to control your investment strategy, reduce tax while obtaining tax benefits, and control administration costs.

Superannuation law is a delicate area and personalised planning is required for each individual. The team at Rogerson Kenny Business Accountants Melbourne are superannuation experts who can assist in establishing a superannuation fund that will effectively enable you to reach your financial retirement goals. Contact us via our website or call us on (03) 9802 2355.

Services we offer include:

  • Establishing self-managed superannuation funds
  • Completing information for the Insurance and Superannuation Commissions
  • Superannuation audits
  • Advice on compliance matters
  • Advice on taxation benefits
  • Advice on employer obligations
 Read More

Monday, March 17, 2014 -

Tax Facts - Small Business Entity Concessions

Monday, March 10, 2014

Small businesses with an annual turnover of less than $2 million may qualify for a range of tax concessions. If your business is eligible you can use the concessions that suit you. You may have to satisfy additional conditions and will need to check whether you qualify for the concessions each tax year.  Read More

Monday, March 10, 2014 -

Preparing a Business Plan

Friday, February 28, 2014

Preparing a Business Plan

Too many businesses don't plan for their business to succeed. A business plan is a great way to put everything down onto paper, specific to what you want to achieve, how you will achieve it and when you will achieve it by. It is a document that should have the input of your trusted advisers (Accountant, Lawyer, Bank Manager, etc.).

If you would like Rogerson Kenny Business Accountants Melbourne to assist you in preparing a business plan, or with any other aspect of starting up a business, please click here to contact us, or call us on (03) 9802 2533.

The Mechanics of the Preparation of a Business Plan

This is the "How" of a business plan coming together, which includes:

  • Why are we planning
  • Business Review Meetings with your accountant
  • Complete a detailed Business Plan Questionnaire
  • What If analysis
  • SWOT Analysis
  • Research on:
    • Customers
    • Markets
    • Financial Analysis
    • Benchmarking / Inter Firm comparisons
    • Australian Bureau of Statistics
    • State Government Departments
    • Universities
    • Austrade
  • Preparation of Budgets and Cash Flow Forecasts (possibly one of the most important parts to any businesses success / survival)
  • Preparation of Sensitivity analysis (best and worst case projections)
  • Preparation of Draft Business Plan
  • Review / Amendments to Draft Business Plan at a Business Review Meeting with your Accountant
  • Review & modifications
  • Final Document

Key Components of the Final Document

  • Executive Summary
  • Key Performance Indicators
  • Action Plan
  • SWOT Analysis
  • History of the Business
  • Mission statement
  • Implementation
  • Budgets and Cash Flow Forecasts
  • Review Strategy (i.e. Monthly directors meetings, meetings with Accountant etc.)

Sections of the Business Plan

  • Index
  • Executive Summary
  • Action Plan
  • Key Performance Indicators
  • Business Review
  • SWOT Analysis
  • Mission Statement
  • Services
  • Market
  • Intellectual Property
  • Customers
  • Competition
  • Resources
  • Staff
  • Marketing
  • Staff Training and Development
  • Quality Assurance
  • Accountancy System
  • Debtors
  • Stock / Work In Progress
  • Legal
  • Insurance
  • Banks
  • Management team
  • Investments
  • Capital Expenditure
  • Directors
  • Stakeholder
  • Benchmarking
  • Risk Analysis and Contingency Plan
  • Budgets and Cash Flow Forecasts
  • Review of Business Plan

Preparing a Business Plan - to Raise Capital

If you are starting a business from scratch, having no track record is going to make it hard to raise capital. A business plan is the first step in doing this. Typically a financial institution will not even consider your request for capital without a detailed business plan. Basically, the more detail you can provide, the more chance you have of obtaining finance.

We, at Rogerson Kenny Business Accountants, offer help with some of the specific components related to the business plan. Feel free to contact us with any queries in regards to this.

 Read More

Friday, February 28, 2014 -

Tax Facts - Tax Payer Penalties

Wednesday, February 19, 2014

Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid these charges, ensure you pay the full amount of tax you owe by the due date.  Read More

Wednesday, February 19, 2014 -

Borrowing in a Self Managed Super Fund

Wednesday, February 12, 2014

Self Managed Super Funds can now borrow to invest in an asset. The borrowing is typically referred to as an Instalment Warrant, but for all intents and purposes it is similar to borrowing money to buy a house in your own name.  Read More

Wednesday, February 12, 2014 -

Tax Facts - Medicare Levy

Friday, February 07, 2014

The Medicare Levy is a tax Australian residents pay to cover health care charges. It is payable on taxable income, in addition to income tax. Individuals and families on higher incomes who do not have an appropriate level of private hospital cover may have to pay the Medicare levy surcharge.  Read More

Friday, February 07, 2014 -

Checklists and Hints for Starting a Business

Thursday, February 06, 2014

Checklists and Hints for Starting a Business

People wanting to be their own boss often move into small business with many unreal aspirations.

You often hear of a person committing themselves to the absolute hilt to buy a business, although they know little about management, bookkeeping or accountancy and even less about the trade or business in question. To obtain the necessary capital they draw their savings out of a bank or take out a personal loan from a finance company secured by a second mortgage against their house.

They often do this without seeking any advice from a Professional Accountant, Solicitor or Bank Manager.

By doing this they start out on a difficult and competitive task with inadequate security, or advice, lack of forward planning and a very high probability that they will become one of the small business failure statistics.

You also hear the stories of people who started out with very little and are now operating multi-million dollar businesses. These people are winners in the true sense of the word. However for every winner, there are unfortunately lots of losers.

Challenges, hard work, anxiety, mistakes, problems, long hours and more problems are much more likely to be the story of the average small businessperson than a lightning path to fame and fortune.

This is not to say that you will not end up a multi-millionaire from starting out in your own small business. It is up to you how you manage the "business of the business".

The following is a summary of items to be considered when setting up a business or buying a business.

1. Setting Up

Determine the return (reasonable salary and profit) that you want from the business, bearing in mind:

  • The time you have to give.
  • The investment you will make.
  • The expertise you will provide.

Be realistic when determining the required return. You can then determine whether the business is likely to give you the financial rewards you are seeking.

This should be based on the market rate for an equivalent outside employee to perform the work that the owners are going to do PLUS a percentage return on the capital to be invested in the business, taking into account the risks associated with running such a business.

Survey the market you plan to serve to ascertain if the necessary sales figures required to produce the gross profit you have determined are available. Will this gross profit pay the overheads, including your salary, and earn a net profit?

If you have not already worked in this type of business, make arrangements to work for a reasonable period on either a paid or non-paid basis.

Ascertain whether the business suits your life-style and your family’s life-style.

You are more likely to be successful if the business matches your skills, knowledge, experience and interests. The business should build on your talents and be one in which you will remain enthusiastic when things look discouraging.

Prepare a list of assets that you will have to obtain including details of cost.

Ascertain if there are any businesses for sale - what is the cost - would it be cheaper for you to establish your own business rather than buy one?

2. Consultation With Professional Accountant

Consult an experienced Professional Accountant (who is interested in small business), on the type of business that you envisage and whether you intend to purchase an existing business or to commence a new business. If you would like that accountant to be Rogerson Kenny Business Accountants, click here to contacts us or call us on (03) 9802 2533.

Discuss with your Professional Accountant:

1. Type of entity to be used for the particular business.
2. Documentation required:

  • If a Partnership: Partnership Agreement
  • If a Company: Constitution
  • If a Trust: Trust Deed

3. Seek an explanation of the entity’s method of operation and legal obligations for the entity chosen.
4. A Feasibility Study should be prepared including:-

  • Estimate of sales - dissected into months so as to account for monthly variations (seasonal conditions)
  • Estimate of overhead expenses
  • Estimate of wages
  • Estimate of business acquisition set -up costs
  • Budget for next twelve months, in monthly detail, with a further forecast for the next two years (in total)
  • Break-even level of operations
  • Best and worse position budgets i.e. a Sensitivity Analysis
  • Cash flow Forecasts
  • Based on profitability estimates - an estimate of the Pay As You Go tax payable and when tax is due for payment
  • Review of available statistics and inter-firm comparison benchmarks for the type of business being considered

5. If you are going to borrow money, prepare a finance application including a Statement of Net Worth.
6. Preparation of Projected Balance Sheet for twelve months’ time.
7. Reach agreement on the ongoing role to be undertaken by the Professional Accountant in relation to the preparation of periodic financial accounts etc.
8. Seek a referral to a competent Commercial Solicitor.
9. Seek a referral to a Banker interested in small business.

3. You Can Improve Your Chances Of Success

You have got more likelihood of achieving success if you have:

  • Been adequately advised from the start.
  • Recognised your management deficiencies.
  • Prepared a business plan.

A highly successful entrepreneur is very rare. When they do achieve fame we hear about them because they are used as a model of what that success can achieve. However it is not necessary or even desirable that every person who sets out in small business will become a multi-millionaire. In the perfect world every person who sets-up in business should be able to:

  • Adequately manage their business.
  • Earn a reasonable salary for the time spent in operating the business.
  • Earn a reasonable rate of return for the risk associated with the investment of money in the business.
  • Ultimately be able to retire with dignity.

However, in many cases the industrious operator working 60 hours plus a week for little more than would be gained from paid employment, for 37.5 hours per week, perhaps even less, is the usual result.

The first essential group of requirements for going into business include:

  • Adequate resources of capital.
  • Some reserves in hand.
  • Some pre-planning.
  • Professional advice before starting a business or signing a contract.

Many people will start out in business, survive hand-to-mouth for two or three years, using up their savings and sell out at a loss in a state of exhaustion and disillusion. At worst, they go bankrupt and in so doing do not pay their creditors, have to sack their employees and become another failure statistic.

4. Major Reasons For Failure

The major reasons for small business failures are lack of:
  • Management skills
  • Bookkeeping knowledge
  • Accounting knowledge
  • Adequate capitalisation
  • Cash Flow Management (Debtors, Stock, Taxation Payments, Work in Progress Control, GST Control and Payments)
  • Business Plans
  • Marketing knowledge
  • The appreciation of the need to have empathy with customers

5. Successful Business Is Based On...

  • Management skills - particularly in planning the operations of the business.
  • Prompt and regular financial reports.
  • Monitoring of stock, work in progress and debtors.
  • Staff supervision, training, motivation and leadership.
  • The productive employment of capital.
  • Having some basis on which to make decisions.
  • Understanding basic principles of bookkeeping.
  • Know something about the trade or business.
  • Have received training in or taken detailed advice on the likely business problems to be encountered in that type of business.
  • Have an aptitude to succeed through business flair.
  • It is desirable for any person contemplating going into a business that they have previous knowledge of that industry or if not, that they should seek paid or unpaid employment in the industry for a reasonable period prior to purchasing into that type of industry so that they can convince themselves that the industry/business and attendant lifestyle is to their liking and also suits their family environment.
  • Being able to write a detailed Systems Manual on how the business operates and then implement daily, weekly, monthly, 3 monthly, 6 monthly, and annual procedures to carry out the strategies outlined in the Systems Manual.

6. Professional Advice Is Important

The high failure rate of small business is a sad loss of human potential and capital. It cannot be over-stressed that a move into self-employment demands careful planning and competent advice. No one should contemplate going into small business or purchasing a business without first seeking advice from a professional accountant, banker and solicitor. This advice should be sought before signing a business contract, business lease or resigning from your present employment

It is desirable to seek the advice from someone who can demonstrate that they have experience gained over many years in business. Unfortunately not all accountants are competent or interested in giving small business advice, as some have concentrated on tax return preparation and audit matters, whilst some solicitors are only interested in litigation and conveyance. It is therefore necessary to ensure you receive advice from a competent commercial solicitor. You should be dealing with a bank which has an interest in small business, or more particularly, at a branch of a bank where the manager has an interest in small business.

7. You Have To Be Realistic About:

  • The hours you have to work in the business.
  • The amount of capital you have to invest.
  • The need to seek continual ongoing help from external advisers especially your professional accountant.
  • The need for an adequate bookkeeping, management and accounting system to be implemented so as to ensure that regular management and accounting reports are available, which will assist you in managing the business.
  • The need to engage a professional accountant interested in small business management and to utilise those services on an ongoing basis throughout the year.

8. To Avoid The Pitfalls:

Do not go into business unless you have sufficient capital to fund the initial requirements adequately, without borrowing heavily and incurring heavy repayment strains.

Treat any amount sought as "goodwill" with the utmost suspicion. Seek to establish the extent to which this amount is justified in terms of the on-going potential of the business to underwrite this sum and allow it to be recovered later should you sell the business.

Look for an area of business where you have some ability and understanding of the techniques, or in which you have developed contacts and special skills, or in which you have worked for some time either on a paid or unpaid basis.

Check and cross check all figures presented for an on-going business and establish as far as possible beyond doubt that you can not only retain this level of trading but also improve on it.

Try to be realistic when making estimates and plans and do not get carried away.

Satisfy yourself that the business is run in such a way that you can establish and maintain strict control of overhead costs, stock purchasing and wages.

Think about and plan for "off season" trading.

Inquire about approvals given for new competitors, any proposed new shopping centres, road changes etc. In other words, have a good look at the total business environment - not just the particular business that you are reviewing or planning to create.

Seek to establish the overall market potential for your products, services or trade and discover whether there is room for another operator in the field you propose to enter.

What special skills do you need to adequately service your customers - e.g. should you be able to speak a foreign language?

Seek competent accounting and legal advice before signing a contract and before setting up a new small business.

Try to think ahead and decide whether or not you will enjoy operating this particular business - whether it will suit your life-style and suit your family environment.

Discuss with your family your working hours and what their commitments to the business might be.

And Last But Not Least

If you implement these strategies you are giving yourself a reasonable chance of avoiding the pitfalls of starting a business. Good Luck!

Remember - accountancy firms are there to assist you. Contact Rogerson Kenny Business Accountants to find out how we can help you. 

 Read More

Thursday, February 06, 2014 -

Tax Facts - PAYG Instalments

Wednesday, January 29, 2014

Pay As You Go (PAYG) Instalments is a system for paying instalments during the income year towards an entity's or individual's expected tax liability on business and investment income. The actual tax liability is worked out at the end of the income year when the annual income tax return is assessed. PAYG instalments paid during the year are credited against the assessment to determine whether the entity or individual owes more tax, or is owed a refund.  Read More

Wednesday, January 29, 2014 -

Setting up a Self Managed Super Fund

Friday, January 17, 2014

You'll need to choose the best way to structure your fund so it complies with the law and suits you and the other members' circumstances.  Read More

Friday, January 17, 2014 -

Managing your Self Managed Super Fund's Investments

Wednesday, January 15, 2014

One of your key areas of responsibility is to manage your fund's investments. You have certain duties and responsibilities when making investment decisions. They are designed to protect and increase your members' benefits for retirement.  Read More

Wednesday, January 15, 2014 -

Rogerson Kenny adds new websites

Thursday, December 19, 2013

We've been busy here at Rogerson Kenny Business Accountants and are excited to launch a two new sites that we believe better explain a couple of our specialty industry accounting services. Read More

Thursday, December 19, 2013 -

Tax Facts - Superannuation Guarantee

Wednesday, December 18, 2013

In addition to employees' salaries and wages, employers are required to pay superannuation contributions on behalf of all eligible employees. This compulsory contribution is called the superannuation guarantee. The definition of employee for this purpose includes certain contractors. The minimum contribution from 1 July 2014 is 9.5% of each eligible employee's earnings base (usually their ordinary time earnings) and must be paid within 28 days after the end of each calendar quarter. Employers must also provide employees with a choice of superannuation fund.  Read More

Wednesday, December 18, 2013 -

Paying Benefits to Members with a Self Managed Super Fund

Friday, December 13, 2013

The payment standards contained in the super laws, the sole purpose test and the preservation rules, ensure money in your Self Managed Super Fund is paid to members only when they are legally allowed to have it. Penalties apply in circumstances where these requirements are not met.  Read More

Friday, December 13, 2013 -

Marketing Your Business

Wednesday, December 04, 2013

Marketing Your Business

Marketing

Marketing is one of the most under-utilised resources for generating new business.

Marketing can take so many different forms and mean so many different things to different people.

Marketing is everything you do. Every bit of contact you have with your clients either enhances or harms your image.

By image, think of how a client views your business. Is it a cheap and nasty experience or an expensive, satisfying happy experience? Do they call up and get attitude or do they get a can-do attitude and have their expectations exceeded at the same time?

Before you market to clients and potential clients, think about how you want your business and products to be positioned. How are you going to be viewed in the market place?

Below are some examples of how your products may be positioned in the market:

  • Quality products
  • Quick service / delivery
  • Premium pricing (usually indicates premium product)
  • Cheap pricing (usually indicates poor value product)
  • Uniqueness
  • Long warranties
  • Value for money (usually means quality products for a discount price)
  • Poor quality products (usually very cheap price)
  • Great customer service – all requests handled with a smile

There are many combinations of the above and it is likely that each of your products / services you supply to your customers, that the mix will be different. Depending on what products / services a customer buys from you, will impact on how they view your business.

A common issue that small and medium businesses encounter with positioning their products and business is: you have a product that is top of the line quality, yet it doesn’t have a brand name. The result of this unknown brand is that you need to discount it to sell it. In turn, you don’t make as much money as you should and your customers position the product and business as an average quality, value for money business.

Often, your current customers buy from you because the product seems ok (even though they haven’t heard the brand before) and they are more interested in the cheap price and next day delivery and personalised service – this is great!

However, you are frustrated, as your product is being seen as a cheaper, average-quality product – you’re not making the money you should. What can you do about it? What actions can you take to lift the price and perception of quality on your product?

Fitting your product in to the market

This is the second part of positioning, and it is the “how” of what you need to do to position your product where you want it to fit into the market. See below for examples of ‘how’ you can position your product to be top of line quality, and make your business renowned for quick personalised service, with quality products that are worth the money.

Testimonials

Possibly the biggest influencing factor; If you have the right client giving you / your business / your product a great testimonial, about what you want to change about you, your business, your product, this is a great driver. In relation to the example above, work as hard as you can to get your product into a large, well respected client within your industry. Sell them purely on the quality. Have them write a testimonial about the quality and quality only of your product – share this with as many clients and potential clients as you can – put it on your website!

Educate your clients / potential clients about the quality of the product. Tell them, prove it to them and take any challenge you have to, so they can see the product is the same or better than what they are using.

Have strong values

Stop discount the product, and if you’re already doing so - stop. Price is one of the most important factors for your clients / potential clients believing it is a quality product. Once again, educate them why the price is different i.e. The price is higher, however you get x amount more units produced during a day, which actually makes you so much more money than what this product costs.

Pricing

Following on from the point above. A high price infers a quality, superior product. A cheap price infers an inferior product. Even a quality product that is cheap – people will ask the question “why is it so cheap? Is there something wrong with it?” Even if it’s a quality product at a cheap price, people’s perception will be that it is a cheap product.

Branding

This is quite a costly exercise for the small business operator. However, develop a brand that conveys what you are about and grow it, promote it and live it. Empower your staff about the brands values, image and goals.

Get yourself Published

Become somewhat of an industry expert and get yourself published. People enjoy reading something they are interested in, and further to this, people will believe what they read if they believe it is coming from a credible source. By publishing work, you will reaffirm your authority in your industry, and you will grow your brand. Next time you see a client (or potential client, for that matter) if they have seen you published, what you say will carry that little bit more weight.

Have a quality website

You need to update your website to reflect how you want to be seen in the market. Customers and potential customers will visit this site. Don’t have it looking outdated, cheap and nasty. Let it project quality, professionalism and know how! Give people who visit your site value, don’t just make it a billboard – that’s what the yellow pages are for. Your website must be interactive and should be of interest to people in your industry.

How to communicate with your clients

So we have now worked out how you want the business / products you sell to be positioned and how you are going to do it, now the next step of marketing is the lead generation. Make no mistake, this is not sales, as we haven’t converted the lead yet, it is just all about how to generate leads. Lets get the phone ringing!:

Direct mail

Direct mail is one of the oldest lead generation mediums on offer. You can now segment your target audience quite well, there are a number of companies you can buy a mailing list from and make it specific to an industry, a location, and have the owner’s/managers/buyers name. Another way to send mail out is with Australia post. You can target a certain area and only hit businesses. This is ok, but a bit of a scatter gun approach.

Fax broadcast

It can be very hard to get the buyer or the person who you want to contact. Too often, a generic fax would be handled at administration level and never see your intended person.

Email broadcast

Email is a very effective way of communicating with your clients and potential clients. There are a number of on line email managers, where you can up load your client data base and segment them and send them offers, new information, special offers, new products etc. It is very cheap and effective way of communicating. Tip: Make sure you offer something of value to the client.

Referrals

Ask your customers for a referral. They must have someone who you can contact, just ask! Do you ask your customers for someone else they may know who could benefit from your services? When was the last time you asked a customer for a referral?

Passing Trade

This depends on how you want to position your business. If it is a retail store and relies on passing trade, the phrase ‘location, location, location’ is relevant.

Signage

If you are a retail outlet that relies upon passing trade, signage is one of your most important communicators. Signage is very, very simple. Less is more. Big, bright, clean, clear, eye-catching signage with one message is what will driver business through your door.

If your audience is in a car, driving past at 60 km/h, you have one chance. You have a second to catch the eye of passing traffic. There are so many signs out there, that are small, cluttered and can only be read by standing 2-3 metres away. Make it a cut through sign that tells them exactly what you do. A clear, clean sign will position your business as a quality one. How often are the ratty corner shops covered in little A4 signs, that are old and peeling off? I drive right past those ones!

Sponsorship

Through the sponsorship of local sporting clubs, etc. you can often target potential clients well by use of a particular sport of activity. Clubs are hungry for sponsors’ money, and will welcome you with open arms. TIP: Don’t settle for your business name of the jumper and sign on the fence, ask for speaking opportunities, to be introduced to people who may need / use your services, ask for the clubs mailing list so you can introduce yourself and your business to supporters / members / players and throughout the year, mail / email to the list special offers, new products etc.

Telemarketing

This is a touchy one. Often costly and will irritate people if not done incorrectly. Depending on your business, it may be an effective way to pick up extra sales from existing clients. I wouldn’t recommend using this as a cold calling lead generation source. I think you need a relationship with the client before you call them to hard sell.

Trade shows

This is a fantastic way to market to potential clients. You have an audience there that has interest in your industry. Talk to people, educate them, give them value and special trade show pricing – people are looking for deals. You may get some of your biggest customers doing this – a very successful way to display your products and business to customers and potential customers

Advertising - TV, Press & Internet

This is often very costly and quite hard to target a specific audience, as the two mediums cover such an array of people. Typically, your business needs to be of a reasonable size to warrant this type of activity. It can bring in lots of leads, but you need to be prepared to deal with the enquiries by having all your systems in place and be ready for the enquiries. The internet is a great way to advertise. It is an effective, low-cost, flexible tool to attract new customers and serve existing customers, no matter the size of your business.

We use Google Adwords to help attract potential clients to our site. It’s costly, yet you can have your business show up whenever specific keywords are typed in. You only pay when someone clicks through to your website, so you know that the lead is at least looking for what you can offer. You must provide value for people visiting your website. It’s not an advertising page, it’s a place when clients / prospective clients can gain value out of you and keep coming back for more – until they buy or contact you.

Sales person

The sales person takes many different forms these days: Business Development Manager; area manager; territory manager; sales rep; etc. Whatever you call these people, they are the face of your business. You need to employ people that will represent your business as you want it to be represented.

Sales people are very expensive but are often a necessity in a market. Sales people need training, training, training and monitoring. Don’t leave them to their own devices. Reward them when they succeed, educate and manage them when they don’t. A great trait of a sales person is someone who will do the calls, day in day out and follow up on promises.

Seminars, Teleseminars and Webinars

If you don’t know what a teleseminar or a webinar is, its time you found out. This is a great way to educate customers and potential customers about your services.

TIP: You have to offer something of value to have people attend / listen in to a seminar, teleseminar or webinar.

Website

This is a must. You must have an effective website, that is more than a yellow pages ad. It must offer value, be a representation of how you want your business positioned and be good at collecting email addresses, so you can further communicate with potential clients via an email broadcast. Don’t be fooled, every customer and potential customer will visit your website. You must spend the time and money needed to get it right!

The 4 P's Of Marketing

Put more simply - this means providing the right PRODUCT at the right PRICE in the right PLACE with the right PROMOTION. This is often referred to as the 4 Ps of Marketing or your Marketing mix. Questions to ask yourself here are: What is your product? How do you determine its price? Where and how do you sell? What do you do to promote your product to your customers?

Product

Your product refers to the total package of goods and services you provide.

Your product is everything your customer experiences whilst dealing with your business. Not just your core product.

It includes the original product, plus prompt and efficient service and the associated benefits to customers.

A professional service provider’s product includes the quality of documents prepared, the comfort of the service provider’s office and the way the client is billed for the advice/service given.

For further information, refer to Paper 21.08 - Products/Services.

Price

Price is everything that your Customer pays to purchase your Product.

It may reflect a cost plus profit approach; a percentage markup on wholesale prices; what your competitors are charging or what you think customers are willing to pay.

Place

Place is how you distribute your products to your Customers.

Where are your sales outlets located?

Do you manufacture or retail?

Do you purchase wholesale?

How many different businesses are involved?

Promotion

Promotion includes everything you do to get attention for your business and what you are selling.

Promotion can include:

  • Advertising
  • Direct Marketing
  • Trade Promotions
  • Public Relations
  • Publicity
  • Personal Selling
  • Sponsorship of Sporting Teams or Cultural Events

Your Promotional activities should focus on telling your customers about all the benefits they will receive when they deal with you.

Once you have thought about and implemented some of the above, the leads will start coming in. Please see our sales section for ideas of how you can convert these leads to sales.

 Read More

Wednesday, December 04, 2013 -


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