All Posts by Renae Pitargue

A business budget will help with your financial decision making

Budgeting is about estimating your revenues, projecting your expenses and detailing the allocation of funds, so you stick to (and don’t overrun) your agreed budget ceiling.

How does budgeting affect your business?

Having a clear, agreed budget gives you a structured framework for your financial decision-making. It’s a practical way to control your costs, monitor performance and adapt your strategic and financial decisions to meet changing economic conditions.

Using budgeting helps your business in a number of ways:

Better control over your finances

Budgeting gives you a clear roadmap for managing your company’s finances. Sticking to that budget helps you maintain control over expenses, reduce wastage and make the very best of your resources.

Achieving your financial and strategic goals

Your budget helps you to set and track financial goals, making it easier to align your business strategies with your desired goals and outcomes. It’s a great way to boost growth, profitability and debt reduction.

Improved control over your cashflow

Effective budgeting helps you anticipate any cashflow fluctuations. That’s a bonus that helps you plan for both lean and prosperous periods, making sure you have the funds to cover expenses and seize opportunities.

Allocating your resources

Budgets are useful for guiding how and where you allocate your resources. From your one pot of cash, you can decide whether to prioritize investments, marketing efforts, operational improvements or business growth.

Keep track of your performance

Comparing your actual financial results to your budgeted results helps you quickly assess your performance as a business. You can look for variances, make timely adjustments to stay on track toward your goals.

How can Busy01 Consulting and First Class Accounts Ovens & Murray help you with budgeting?

Being in control of your expenses, spending and predicted revenues sits at the heart of your financial management, giving you a framework and set budgetary goals to aim for, track against and (hopefully) achieve.

As your bookkeeper, we’ll help you set up budgets for your strategic business plans, with clear tracking and reporting to keep you on the ball and meeting those targets.

Get in touch to chat about budgeting.

Is there such a thing as over-automation? 

The need for a human touch

Automating your key systems is the way to turn your enterprise into a 21st century, digital business. But are we getting carried away with automation? And could we be systemising areas which could benefit from a more personalised, human touch?

Personalisation of the customer experience is vital. Automation can play a big part in creating targeted, data-based personalisation for each customer. But not everyone loves automation.

36% of customers in a recent survey would rather wait on hold to speak to a human agent when they have an issue, rather than interacting with an AI-powered virtual assistant to self-serve.

So, how do you get the balance right between automation and a genuine human touch?

A big part of offering a top-notch customer experience (CX) is having direct, personal human interactions with your customers. So, which tasks should you be automating? And which should you leave for your human team to deal with?

Here are a few ways to get the automation/human balance right:

Automate your basic admin tasks

Most of us hate the tedious, time-consuming admin tasks. With smart use of software tools and customised AI assistants you can quickly automate things like onboarding new customers, answering basic FAQs or sending out reminders and notifications to your customers.

Automate your key finance tasks

Many of the current crop of cloud accounting platforms have automation and artificial intelligence tools built in as standard. These tools help you automate your invoicing process, the collection of customer payments and the matching of transactions for your bank reconciliation process. This makes your bookkeeping and cashflow more effective and delivers real-time financial data.

Don't automate the whole customer journey

Customers want efficiency but not impersonal automation throughout their entire customer journey. 77% of customers say they’re more loyal to businesses that offer top-notch service – and being able to speak to a human agent can be a big part of personalising and humanising these interactions.

Make your people integral to your brand

The personality and experience of your people is vital to your brand identity and your CX. Have as many human interactions with customers as possible and tailor your interactions in the most personalised way.

Don't put efficiency over and above having a human face

People buy from other people. Because of this, having a human touch is vital for delivering a top-class CX to your customers. You can have a slick, automated buying experience when it adds convenience, but don't remove people entirely from your offering. Without humans, you have a software process, not a real, living, breathing business.

Talk to us about keeping the humanity in your automation.

There’s no denying that automation and smart use of AI will be vital for creating an efficient and productive digital business. But it’s important to never discount the importance of people, human interactions and real customer relationships when building and growing your business.

Holiday cashflow for your business

Whether you’re heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it’s important to keep your cashflow under control. This means pre-planning and being proactive.

When you’re not in the office, there are still overheads and salaries that need to be sorted. If taking time off means that less cash will be coming in, it’s essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.

If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.

Tips to minimise the stress of cash-flow over the holiday period

Invoice early

Sending out invoices promptly is your first line of defense. Consider going a step further by offering early payment incentives or exploring retainer agreements with regular clients. This ensures a steady inflow of cash before the holiday rush begins.

Chase payment

Building strong relationships with clients is paramount. Take advantage of this season to initiate open conversations about outstanding payments. A friendly reminder can make a significant difference, fostering goodwill and ensuring your business is on solid financial ground.

Talk to suppliers

A transparent relationship with suppliers is invaluable. Engage in open discussions about your cash-flow concerns and explore the possibility of extending credit terms. Most suppliers appreciate honesty and may be willing to accommodate your needs to maintain a long-term partnership.

Review your costs

Business costs have a tendency to accumulate gradually. Regularly reviewing expenses is a prudent practice irrespective of the holiday season. Take a comprehensive look at subscriptions, regular payments, and upcoming expenses. Identifying areas where costs can be optimised ensures financial stability throughout the year.

Explore alternative approaches

This is an opportune time to reassess your approach to travel, functions, and purchases. Are there cost-effective alternatives or adjustments that can be made without compromising quality? Being flexible and creative in your spending can contribute significantly to maintaining a healthy cash flow.

Talk to the bank or tax department

In times of tight cash flow, initiating early conversations with your bank or tax department is crucial. Discussing potential challenges in advance allows you to explore options, meaning you will have the necessary support to navigate any financial hurdles during the holiday season.

Preparation is key

All businesses need a holistic approach to tackle cash-flow challenges. Develop a comprehensive plan that encompasses all aspects of your financial landscape, from client interactions to supplier relationships and internal cost management.

This time of year can be hard on businesses. By implementing these strategies and staying proactive, you can not only minimise cash-flow challenges but also position your business for success in the coming year.

Do you know the rules and entitlements during the end-of-year holiday season?

As we head into the summer holiday period, is your business up to speed with your rights and obligations?

If you don't outsource your payroll, it can be confusing to employers and employees alike – public holidays worked or taken as annual leave, business shutdowns, annual leave provisions… there are many rules employers need to understand.

Employees are entitled to annual leave and public holidays under the National Employment Standards minimum entitlements.

Employers can ask employees to work on public holidays within reason. For example, if the business is open every day of the year, and the employment agreement states that public holidays may be required, the employer can reasonably ask an employee to work a public holiday.

An employee can refuse to work on a public holiday if the request is unreasonable or there are reasonable personal grounds for refusing.

Christmas and New Year Public Holidays 2023-24

The following link has the Christmas and New Year Public Holidays that apply to employers in all states for the Christmas period and beyond - 2023 Public Holidays

Public holidays are paid at ordinary rates for employees who take the day off. Employees who work on a public holiday must either be paid penalty rates according to the relevant award or be given an extra day off in lieu of the public holiday. Some awards have specific provisions or additional benefits for public holidays, so it's important to check.

If an employee has booked annual leave for the Christmas and New Year periods, the public holidays are not counted as annual leave.

Some other key points to remember

• Public holidays are counted as service, so annual and personal leave continues to accrue as usual.
• Overtime worked on a public holiday may be paid at a different rate than regular overtime – check the relevant award or agreement.
• Check the award or agreement for shutdown provisions. Most awards have guidance for directing employees to take leave during annual shutdowns.
• If employees don’t have enough annual leave, employers can agree to pay them in advance for leave not yet accrued, or the employee can take unpaid leave.

The FWO has further advice on rules and entitlements during the end-of-year holiday season.

You might also need to think about cash flow planning for the holiday period, particularly if the business shuts down but still has obligations for payroll and other expenses.

We can advise you about your employer responsibilities and help plan holiday period payments so you can make the most of your summer holiday! Better still, talk to us about outsourcing your payroll.

Preparing your business for a sale

Selling your business is a big move for any owner. You’ve built this company up, scaled it and put years of hard work into making the business a success story. So, when the time comes to sell, you’ll want to know that you’re getting the best price, and the best future for your legacy.

We’ve outlined five ways to maximise the value of your business, with practical steps for making your company the most attractive prospect on the market.

5 steps to prepare you for a sale

The first thing to underline is that selling a business is rarely a fast process. Most owners will begin planning their sale years in advance, working to an exit strategy that sets out all the key milestones. Your aim is to leave the business in great shape, with stable finances, a solid team and a customer base that will continue to provide solid revenues for years to come.

So, how do you achieve these goals?

1. Assess your reasons for selling and your desired timeline

What’s the key motivation for selling your business? Are you retiring, looking to move on to other opportunities or hoping to unlock your equity? Once you know your reasons, you can decide on some core goals for the sale, and set a realistic timeline for the sale.

2. Get your financial house in order

'Doing your financial housekeeping’ will mean preparing financial statements, submitting outstanding tax returns and making sure you have access to any other documentation that potential buyers will want to see. You may also want to work with an M&A expert to discover the company’s true market value.

3. Make your business attractive to buyers

Any buyer wants to know they’re taking on an attractive business proposition. Making the business feel more attractive means improving your marketing and sales strategies, beefing up your operations and ensuring you have a positive cashflow position. You should also think about creating a transition plan for the buyer, so the handover is as smooth as possible .

4. Find the right buyer

It’s important to feel like you’re handing your legacy over to the right owner – and getting the price you need. This may involve working with a business broker or marketing your business yourself. Make sure you vet potential buyers carefully to ensure that they are a good fit for your business and your existing team.

5. Negotiate the sale terms

Achieving your desired price could involve a fair amount of negotiation. You’ll need to sit down with your buyer to discuss purchase price, payment terms and other conditions of the sale. Be prepared to compromise and be willing to walk away from a deal if the terms are not right for you.

Talk to us about getting your business ready for a sale

If you’re intending to sell your business in the next five years, it’s important to start planning now.

Coming up with a sale plan and a robust exit strategy takes time. As does sorting out the business housekeeping and finding the best possible buyer for the company.

As experienced bookkeepers, we’ll help you:

• Get organised, locate the relevant documents and improve your record-keeping
• Clean up your business to identify any financial issues
• Expand your business network, to help find the best buyer for the company

Following these steps will greatly increase the market value and price of your business.

Get in touch to talk about your sale plan.

Christmas gifts for your customers and team

As the festive season approaches, it’s a great time to let your customers and team members know how much you appreciate them. 

In a year that has presented its challenges, when it comes to deciding on Christmas gifts for your customers and team, finding the right balance between generosity and sensitivity is important. It’s not easy to know how much to spend or whether it’s appropriate to throw a party.

Let's explore some Christmas gift ideas that go beyond the traditional, and are appropriate for both your clients and team.

The traditional route: gifts, cards and donations

The traditional approach often involves food-related gifts like hams, hampers, or bottles of wine or spirits. While these can be easily ordered online and delivered, it's essential to consider potential delays and the possibility that recipients might be working remotely. To navigate these challenges, opt for non-perishable items or those with extended shelf life.

For clients who you have a close relationship with, consider personalised gifts that align with their personal interests.  This more personal approach demonstrates your attentiveness and can strengthen your professional relationship. Additionally, a handwritten card adds a personal and cost-effective touch that resonates well during the holiday season.

Another option is a making a donation on behalf of your clients or team members. This adds a meaningful element to your gift-giving as many people really appreciate an email or card that lets them know you’ve donated money to a charity on their behalf. For that extra touch you can include details like, “The local foodbank will use this donation to feed families on Christmas Day.”

Building Stronger Connections: Coffee, Lunch, and Face-to-Face Interaction

Treating high-value clients to a coffee or lunch can be a powerful gesture. This not only allows for a more personal connection but also creates lasting memories. While this approach may involve a higher cost, the impact on client relationships can far exceed that of a traditional gift.

Consider the preferences of your team when deciding on gifts for them. While hampers are a classic choice, it may not be universally preferred. A Christmas bonus is appreciated, but it's essential to consider the tax implications. A supermarket voucher, on the other hand, retains its full value, providing a practical and tax-efficient alternative. Engage with your team to understand their preferences; some may value a paid day off more than a physical gift.

Budgeting for Generosity: Tailoring Gifts Based on Relationships

Working out how much to spend on each client can be challenging. One approach is to categorise clients based on their spending with your business and their overall value to your business.

Consider giving high-value clients more substantial gifts, while smaller clients may receive more modest yet thoughtful tokens of appreciation.

Need help with Christmas budgeting?

If you find yourself wondering how much each client has spent or are unsure about your Christmas gift budget, we're here to assist.

Get in touch with us, and we'll analyse the numbers to provide insights tailored to your business. We'll help make sure your generosity aligns with your financial capabilities, making this festive season memorable for both you and your clients.

Get in touch and we’ll run the numbers to give you the insights you need.

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.