All Posts by Renae Pitargue

Outstanding tax debts? ATO warns about disclosure to Credit Rating Agencies

The ATO has shifted its focus from providing assistance with tax through the pandemic to now re-establishing the culture of businesses paying their tax debts on time.

Beginning from July 2023, The ATO has issued notices of intent to disclose business tax debts of more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days, to credit rating agencies (CRAs).

Disclosure of business tax debts

The ATO may report your business tax debt if it meets the following criteria:

• you have an ABN and your business in not an excluded entity
• you have one or more tax debts and at least $100,000 is overdue by more than 90 days
• you are not engaging with the ATO to manage your tax debt
• you don't have an active complaint with the Inspector-General of Taxation Ombudsman (IGTO) about our intent to report your tax debt information.

The Commissioner has urged taxpayers, with outstanding debts, to engage with the ATO to not risk their business’s tax debts becoming visible in credit rating checks.

Intent to disclose notice – next steps

Section 255-15 of the Tax Administration Act 1953 empowers the Commissioner to enter into an arrangement with an entity which has, or which is expected to have, a tax-related liability, whereby the entity may pay the liability by instalments.

Businesses need to pay their debt or enter into an appropriate payment arrangement within 28 days of when the intent to disclose notice was issued to prevent disclosure.

In October 2023, more than 9,000 businesses are expected to have their debts disclosed and the ATO expects to issue 50,000 notices of intent to disclose by the end of 2023–24 financial year. A disclosed debt can impact your business’s ability to receive finance and your business may also lose suppliers.

Contact us

If you have received a notice of intent or have a tax debt of $100,000 or more that is overdue by more than 90 days, as your BAS Agent we can assist you in engaging/re-engaging with the ATO and help create an arrangement or payment plan that best suits your current and future financial position.

Should you have any other queries, please feel free to contact our office.

10 questions to ask yourself as a business owner

Running a busy and successful business means you often don’t have the time to step back and work ON the business. This can be a challenge if your aim is to grow and scale the company.

As experienced professional bookkeepers and business advisers, we know the value of taking the time to ask yourself some pertinent questions.

Holding yourself and the business to account is something we can help with. And there's never a bad time to pose a few questions and gauge where you're at with your planning, strategy, financial management and personal goals as an entrepreneur.

We've pulled together 10 questions to ask yourself as a business owner.

1. Can you explain why a customer should choose your brand over another?

Knowing your value to a customer is vital if you’re going to market your offering in the most effective way. Think about why your brand stands out in the marketplace, and what opportunities and threats exist. This is the fastest way to tailor your brand to meet customer expectations.

We can help you by running a SWOT-based analysis of your business.

2. How happy is your workforce?

Your people are such a vital asset, but they won’t work well if they’re dissatisfied and disengaged from your business values.

Ask yourself, are your employees motivated and engaged by your mission? Is there anything you can do to boost this engagement?

We can review your people strategy and the staff benefits you offer to your employees.

3. Are you meeting your cashflow goals?

Are there specific costs or inefficiencies that are holding you back from achieving a positive cashflow position?

Ask yourself if your financial management is up to scratch. Identify your failings and tighten up your cash process.

We can review your cash management and look for efficiencies and cost-saving opportunities.

4. What keeps you awake at night?

It’s a stressful role being the boss, and there’s likely to be a lot playing on your mind.

Consider whether there are any recurring business issues that are holding you back, or unexpected pitfalls that have appeared along the course of the business journey.

We can offer you seasoned advice whatever the issue, with resolutions to ease your worries.

5. Are you embracing everything that tech and AI has to offer?

Technology is moving fast with AI solutions and digital systems now an integral part of many business models. But are you doing enough to bring your business into the digital age?

Are there tasks could you automate, or processes you could streamline?

We can integrate a suite of apps such as Xero, Dext, Futurli, and other platforms to boost your business.

6. Is growth part of your business strategy?

Not all businesses are focused on growth, but outlining your key goals around growth is an essential part of your business strategy.

Ask yourself whether you want to scale at speed, or grow organically. Or whether you’re happy to be a boutique business that keeps things small.

We’ll help you define your growth goals and build a strategy that aims for success.

7. Do you have the numbers you need at your fingertips?

So much of what you do as a business is driven by data. But are you getting the overview you need of your important business metrics and key financial numbers?

Think about where you need detailed data and metrics, and how this could put you in better control of the company.

We can help you expand your reporting and management information, so you have a better eye on performance, spending, cashflow and sales targets etc.

8. Have you identified your ideal customer?

Identifying your ideal customer is something every business should do. But when was the last time you updated your ideal customer outline?

Think about who you’re selling to, how this audience has evolved and whether they are still the right customer to target.

We can run detailed customer profiles to help you pinpoint the best customers to target.

9. Have you thought about where your business will be in five years?

When the business is busy, the temptation is to focus on the now and to put your energy into fighting the most pressing fires. But without a forward-looking focus, you can lack direction.

Ask yourself where you want to be in five years and how you plan to achieve these goals.

We'll help you create a detailed five-year plan, to give your journey more impetus and direction.

10. Are you planning for your own financial future?

You obviously spend a lot of your time thinking about your business – but how much time have you spent considering your personal financial future?

Think about your life goals and how you plan to fund them, and where this money is likely to come from.

We can advise you on planning and the advantages of good all-year-round financial management.

Talk to us about running a health check for your business

Ideally, these 10 questions to ask yourself as a business owner will have got you thinking more strategically about your business. If you’d like to take this process further, we’d advise running a detailed health check for your business and personal finances.

Book a meeting with us to talk through your goals, aspirations, challenges and strategy, so we can help you take the next step in your journey to entrepreneurial success.

Get in touch to book a health check.

The ATO agent nomination process

To protect the security of your tax and super information, the ATO is introducing a new process to ensure that only your authorised tax agent, BAS agent or Payroll service provider can access your account and act on your behalf.

This process does not currently apply to individual taxpayers or sole traders. And only applies when you engage or change an agent or change the authorisations you give your existing agent.

What does the new process mean

The ATO Agent Nomination Process protects your business and means only your nominated registered agent will:

• have access to your information
• perform tasks on your behalf, such as lodging your tax return.

Nominating your official agent allows access to your account and to act on your behalf for matters relating to:

• companies including strata title bodies
• partnerships
• trusts
• not-for-profits
• joint ventures
• cooperatives
• self-managed super funds (SMSFs)
• APRA-regulated superannuation funds.

We can efficiently manage your tax affairs, providing you with expert guidance and support throughout the process.

We can help and guide you through the steps to nominate us as your official agent.

The following guide has easy steps to follow. (If you have not already set up access to Online Services for business, you’ll need to do this first).

We cannot do this on your behalf but we can assist you through the process if needed - or contact the ATO for technical help with your myGov account.

Client-Agent Linking Steps - The ATO Guide

If you have any questions or need assistance with the nomination process, or anything else, please get in touch. We are here to help and will ensure your affairs are handled with expertise and care.

How much should you pay yourself?

Being the boss means you get to make all the big decisions about your business – including how much to pay yourself in wages, salary or drawings.

As the owner, you might need to underpay yourself in the early stages of building your business, so you can reinvest the profits. But your time is valuable – and you need enough money to pay the bills.

So how can you find the right level of pay? It has to be enough to keep the mortgage paid, while also building a thriving business.

If you’re trying to decide how much to pay yourself, here are a few questions to ask yourself:

What can the business afford?

You need to leave enough cash in the business to keep it ticking along, pay your basic costs, and meet your tax obligations.

Once you’ve considered all those outgoings, how much does that leave you as a potential salary?

We can help you work out what that number is, so you can establish a sustainable rate of pay.

What’s the market rate for your role?

What would you have to pay someone to do the work you’re undertaking in this business?

Maybe you wouldn’t actually be able to find anyone to work the same long hours, but if you were hiring someone with your experience, to do the same sort of work for 40 hours a week, what would they expect to be paid?

That number is a good starting point for thinking about your own salary or drawings.

If you’re being underpaid, it’s time to think about ways to grow your profits. If you’re being overpaid, congratulations on building a highly profitable business.

Could reinvesting profits grow your income faster?

You can take all the profits out of your business, which should give you a strong and sustainable income.

Or, could you reinvest your profits and grow the business faster, leading to a higher income in the long-term? You might choose to spend some of your profits on advertising, a better website, or developing a new offering, for example.

Or you could pay for assistance in some area of the business. If the investment leads to higher growth, it might be well worthwhile.

We’ll help you run the numbers.

We can help you figure out how much your business can afford to pay you, analyse the potential gains of a business investment, or weigh up the pros and cons of hiring someone to help you.

Get in touch, we’d love to hear from you.

5 ways to tackle economic uncertainty

Economic uncertainty is an ongoing worry for any business owner.

While you can manage your finances, the broader macro-economy is beyond your direct control. And in the first few years of the 2020s, there have certainly been plenty of tricky ups and downs for your business to navigate.

Current economic uncertainty stems from a number of factors, including:

• Fluctuating markets
• Geopolitical tensions
• Pandemic recovery
• The impact of climate change.

This unpredictability poses significant challenges for sustained growth and stability – but there are simple steps you can take to tackle these challenges.

Simple strategies for tackling the challenges of economic uncertainty

Good financial management is the key to tackling any period of economic uncertainty. When sales, revenues, supplier prices and operational costs are all highly dynamic, it’s good to know that your business has cash in the bank and a solid financial strategy to stick to.

But how do you get tighter control over your business finances? And what are the main areas to focus on, track and manage as a business owner or financial director (FD)?

Here are five ways to tackle economic uncertainty:

Manage your cashflow effectively

Cashflow management is the process of tracking your cash inflows and outflows, identifying potential problems and being proactive about taking action. It’s helped by running regular cashflow forecasts and sticking to budgets.

Cashflow forecasting applications, such as Futrli, seamlessly connect with your Xero accounts. They provide a detailed perspective on how your cash will flow in and out in the upcoming months. This crucial information empowers you to make well-informed decisions.

Carry out spend management

Spend management involves tracking your expenses and identifying areas where you can cut costs. You do this by switching to more cost effective suppliers, cutting back unnecessary expenses and having tighter approval processes. Talk to us about implementing expense management apps into your business.

Negotiate better terms and prices with suppliers

Negotiation can help you save money on your raw materials, labour and other important costs. You can also negotiate better payment and credit terms by building trusted relationships with your suppliers.

Embrace AI automation to cut costs

Artificial intelligence (AI) tools are a great way to automate tasks, such as customer service, billing and inventory management. This frees up time for strategic activities and saves you money on labour costs.

Diversify into new products or markets

Diversification helps you reduce your dependence on a single product or market, making your business more resilient to economic downturns. It’s important to choose products or markets that are complementary to your existing business, and that have good growth potential.

Talk to us about strengthening your financial management. We'll look after your books so you can look after your business. 

With the world in such an unstable state, it’s always difficult to know exactly what lies around the corner for your business. But it’s safe to say that with a robust and agile financial strategy, you’re in a better position to flex your revenue streams and overcome any cashflow pitfalls.

As your bookkeeper, we can help you get tighter control over your cashflow, budgeting and financial forecasting.  

How automation streamlines your business

How can business automation streamline your business? Business automation uses technology to streamline and simplify all the repetitive manual tasks, processes and workflows that are part of the everyday running of your business.

Instead of spending hours of business time doing everything manually, automated systems can take on most of the heavy lifting.

You can automate the data-entry of your bookkeeping, the sending of recurring invoices or the coding of transactions when doing your bank reconciliation – basically, any task that’s repetitive, rule-based and taking up your time.

Automation makes your processes faster, more accurate and more efficient. This frees up your time to focus on other important strategic and customer-facing tasks. It also means you can get more work done in less time, making the business more productive and profitable.

How does business automation affect your business?

Smart use of automation can give your small business a major boost.

Instead of having to hire more people, you can grow the business and significantly reduce the admin workload for your existing human team. It’s the easiest way to set the foundations for scaling up the company.

By automating key areas of your operation, you can:

• Streamline your workflows – business automation optimises your processes by automating tasks like data entry, payment collection and approval workflows. This reduces the manual effort that’s involved and boosts your operational efficiency.
  
  Online bookkeeping applications, such as Xero, can take on the time-consuming task of data entry for your financial records. They allow for the seamless organisation and tracking of income, expenses, and other financial transactions.
• Improve your process accuracy – automation cuts down on human errors by applying rules consistently and precisely. This means your financial calculations are more accurate, data is of a higher quality and the company has better compliance standards.
• Save time and resources – all those tedious, repetitive manual tasks are now automated. This frees up valuable time for you and your team to focus on strategic activities, innovation and working more closely with your customers.
• Become more cost-efficient – automation cuts back the labour costs that usually go hand-in-hand with manual tasks. You’re more productive, your operational costs are reduced and you don’t need any additional staff to grow the business.
• Scale your business with ease – as your small business expands, automated systems are the special sauce that helps you scale up as quickly as possible. You can effortlessly meet the increased workload, grow your systems and stay agile and adaptable – two of the key skills for any ambitious business that’s looking for fast growth.

How can our firm help you with business automation?

Working automation into your business strategy is the fastest way to achieve your key goals.

With your main tasks and processes automated, you have a sleek, systemised business to drive your growth. And we’re always here to help you maximise this use of automation. We’ll help you review your operations to look for the automation opportunities – and can implement the most effective apps to add into your tech stack.

If you’d like to know more about the benefits of automation, we’ll be happy to explain.

Plain English guide to cashflow

Why is cashflow so central to good financial management? Here's our plain English guide.

What is cashflow?

Cashflow refers to the movement of money into and out of your business over a specific period.

In the most basic terms, cashflow is the process of cash moving out of the business (cash outflows), and cash coming into the business (cash inflows). The ideal scenario is to be in a ‘positive cashflow position’. This means that your inflows outweigh your outflows – i.e. that more cash is coming into the business than is going out.

When you’re cashflow positive, the main benefit is that you have the liquid cash available to fund your daily operations and debt payments etc.

On the flip side, if you’re in a negative cashflow position, this can be a red flag that the business is facing some financial challenges – and that some serious cost-cutting and/or revenue generation is needed.

How does cashflow affect your business?

Not having enough liquid cash is one of the biggest reasons for companies failing. So it’s absolutely vital that you keep on top of your company’s cashflow position.

Five key cashflow areas to focus on will include:

1. Monitoring your cash inflows and outflows – this means regularly tracking your cash inflows from sales, loans and investments, as well as managing your cash outflows from expenses, purchases and debt repayments.
2. Managing your account receivables and payables – efficiently managing your customer receipts and supplier payments helps smooth out your inflows and outflows – and delivers stable cashflow that’s easier to predict and manage.
3. Getting proactive with your budgeting and forecasting – creating realistic cashflow budgets and forecasts helps you predict your future cash position. By anticipating your future cash needs, you can actively plan for potential shortfalls or surpluses.
4. Being in control of your stock inventory – having excess stock in your warehouse ties up cash. So, it’s a good idea to optimise your inventory levels and to only manufacture/order the items you need on a day-to-day basis.
5. Investing in your cash reserves – with emergency cash reserves in the bank, you know you have the funds to handle unforeseen cashflow issues or sustain your operations during lean periods. This makes your whole cashflow position more stable.

How can our firm help you with cashflow management?

Positive cashflow is the beating heart of your business. Working with a good bookkeeper and adviser helps you keep that cashflow healthy, stable and driving your key goals as a company.

We’ll help you keep accurate records, track your inflows and outflows and deliver the best possible cashflow position for the business.

Get in touch to chat about improving your cashflow.

Have You Got a Plan for Growth in Your Business?

Growth doesn't have to be a daunting prospect. It can be a straightforward process if you approach it strategically and methodically.

Rather than seeing growth as synonymous with increased risk, longer hours, and more headaches, consider it as an opportunity to maximize your business's potential within your industry.

Let's explore some practical tips and insights on how to plan for growth, all while keeping it simple and straightforward.

1. Take a Look Back to Move Forward

Before you start charting the path for growth, it's crucial to understand where your business stands today. Begin by conducting a growth audit. This involves analysing all available data and information to gain insights into how your business has evolved.

By documenting your past growth patterns and identifying the factors that contributed to your current position, you can make more informed decisions for the future.

Embracing modern technology, such as cloud accounting software like Xero, can significantly streamline your business growth journey. Xero provides you with real-time access to your financial data, anytime, anywhere. This accessibility ensures you have up-to-date insights into your financial health, enabling you to make swift, data-driven decisions. Integrating cloud accounting software into your operations is not just a step towards modernisation, but also a strategic move towards informed business growth.

2. Create a One-Page Growth Plan

Once you have a clear understanding of your business's history and current standing, it's time to plan for future growth. This doesn't have to be a complex, multi-page document filled with jargon and buzzwords. Instead, aim for simplicity. Create a one-page growth plan that outlines your big objectives and the practical steps needed to achieve them.

Consider what specific tasks need to be accomplished and which team members will be responsible for them. By breaking down your growth objectives into manageable tasks, you can make progress more efficiently.

3. Monitor Key Performance Indicators (KPIs)

A successful plan for growth isn't just about setting goals; it's also about tracking your progress. Establish key performance indicators (KPIs) that align with your growth objectives. These KPIs could include metrics such as revenue growth, customer acquisition rates, or operational efficiency improvements.

Regularly review these KPIs to ensure you're staying on track. By monitoring your performance, you can make necessary adjustments and keep your momentum going in the right direction.

4. Gain Perspective by Taking a Step Back

As a business owner, it's easy to get caught up in the day-to-day operations of your company. However, taking time to step back and gain perspective is essential for effective growth planning.

Consider seeking expert assistance to help you build a comprehensive business plan. We can provide valuable insights and expertise to assist you in charting the path for growth. We can work with you to identify the necessary steps to achieve your growth objectives, offering a fresh perspective that goes beyond the daily grind.

Embrace Growth as an Opportunity

Planning for growth doesn't have to be complicated or overwhelming. By conducting a growth audit, creating a one-page growth plan, monitoring KPIs, and seeking expert advice, you can set your business on the path to sustainable and rewarding expansion.

At our First Class Accounts Ovens and Murray, we're here to help. Talk to us about understanding your numbers and assisting you in developing a clear and actionable growth plan.

Remember, growth is not about taking unnecessary risks or working longer hours—it's about making informed decisions and seizing opportunities. With the right approach, your business can achieve the growth you're aiming for.

Streamline Your Business with Online Timesheets

Messy, inflexible schedules, inaccurate timesheets, time-consuming data entry – paper-based time management is slowing your business down. We can help speed things up.

Thanks to the availability of affordable and accessible cloud-based options, like Xero Timesheets or Deputy, businesses can now bid farewell to archaic paper-based systems and unlock a world of efficiency and accuracy.

The Pitfalls of Paper

Paper-based time tracking and scheduling systems, while once the norm, have significant limitations that hinder business productivity. These limitations include inflexibility, time wastage, and vulnerability to time theft.

Inflexibility

Traditional paper schedules are rigid and static. They don't easily accommodate changes in work shifts or time-off requests, leading to frustration among employees and administrative headaches for businesses.

Time Wastage

Creating and managing paper schedules consumes valuable employee time that could be better spent on more productive tasks. Additionally, the manual nature of paper-based systems increases the likelihood of errors, leading to even more wasted time in rectifying mistakes.

Vulnerability to Time Theft

Perhaps one of the most significant drawbacks of paper-based systems is their susceptibility to time theft. Misreporting working hours, whether intentional or accidental, can result in inaccurate payroll calculations and disputes, creating a strain on both finances and employee trust.

Embracing the Benefits of Online Tools

Online timesheets and rostering tools offer a modern and efficient solution to the shortcomings of paper-based systems. Let's delve into the numerous advantages they bring to the table.

Practical, Flexible Scheduling

Online scheduling empowers employees to take control of their work schedules. Through user-friendly mobile applications, they can access their upcoming shifts, request time off, and even pick up additional shifts on the go. This flexibility not only enhances employee satisfaction but also streamlines the scheduling process for managers.

Up-to-the-Minute Time Tracking

With online timesheets, time tracking becomes precise and effortless. Employees can clock in and out with their mobile devices, eliminating the need for time-consuming paperwork. This real-time tracking ensures that working hours are recorded down to the minute, preventing any rounding-up discrepancies.

Seamless Communication

Effective communication is at the heart of any successful business operation. Online systems come equipped with features that simplify communication. Managers can send out notifications about schedule changes, set up instant overtime alerts, and notify staff about open shifts with ease.

Enhanced Visibility

Time equals money. Efficient time tracking provides businesses with invaluable insights into how their resources are being allocated. Employees can track their time against specific jobs or projects, enabling businesses to itemise bills, quote accurately, and justify invoices with precision.

Integration for Efficiency

Integration capabilities are a game-changer when it comes to online timesheets. By seamlessly connecting time tracking and scheduling software with other management systems, businesses can streamline their operations further. For example, linking tracking software with your payroll system eliminates the need for manual data entry and simplifies tax calculations for each team member.

Making life easier

When in comes to implementing the 

The shift from traditional paper-based time tracking and scheduling to online systems is a step towards enhanced accessibility, accuracy, and efficiency. It's about making life easier for both businesses and their employees.

Are you ready to embrace the advantages of online timesheets? Reach out to us for support in implementing the appropriate apps for your business.