All Posts by Renae Pitargue

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.

What to consider when buying a business

Purchasing an existing company is a great way to expand your business empire. You can buy out a close competitor, or dip a toe into a new industry and expand your reach as a business group. But whatever the reason for the acquisition, you need to ensure you’re not buying a lemon!

Doing your research is a crucial part of the purchase process. As is asking some probing and insightful questions to help you determine if this acquisition is a good (or bad) idea.

Questions to ask before you make an offer

Buying another company is a major business decision. It’s a large outlay of capital and a big responsibility to take on. If you’re going to take the leap, it’s important to make sure the company in question is stable, well-managed and has a good future ahead of it.

So, how do you know what to consider when buying a business?

Here are five vital questions to ask before entering into a purchase:

Why is the business for sale? 

There are many reasons why an owner might want to offload a company, not all of them good. Their sales may be dropping, they may have rising debts, there may be internal problems with staff or the market for their product/services may be coming to an end. Find out why, so you don't buy a clanger.

Is this a good industry to step into? 

Do your research on the industry, competitors, and marketplace that the business currently trades in. It's important that you step into an industry sector that has potential for sales, growth, stable revenues and potential profits. With volatile markets post-pandemic, looking at predictions and forecasts for your chosen industry niche makes good sense and helps you make an informed decision.

Have you done your due diligence into the business? 

Do your due diligence to make sure there are no financial, legal or HR skeletons in the cupboard that may jump out to surprise you. Is there an unpaid tax bill? Are there loans that are being defaulted on? Are there any legal cases being brought against the company? Has the business filed all its returns and accounts? As the new owner, any of these issues become your responsibility, so you want to check out the company’s records and history in as much detail as possible. This will prevent some major headaches further down the line.

Does it have an existing business plan? 

You'll need a business plan that takes the company forwards and gives you a pathway for your next steps as the owner. Is there a business plan you can use? When was the plan last updated? How well are they tracking against the milestones in that original plan? No business plan is written in stone, so you’ll almost certainly need to review, update and refine this strategy post-acquisition.

Are your management team and staff up to scratch? 

When you buy the business, you'll usually also be inheriting the team behind that company. Do you have a management team with the skills, experience and motivation that's needed? Are your employees engaged and do you have a big enough team to meet your own goals for the business? This team will be vital to your future success, so you want the best possible people and talent behind you as you steer a new course for the company.

These questions are not the only thing you need to consider when buying a business. It's vitally important to have a detailed understanding of the financial situation of the business you are looking to purchase. 

Assessing the Financial Situation of the Business

Understanding the financial situation of the business is a critical step in your due diligence process. Here are some specific questions to ask and aspects to consider when assessing the financial stability of the company:

Review Financial Statements

Request access to the company's financial statements, including balance sheets, income statements, and cash flow statements for the past few years. Analyse these documents to assess the company's revenue trends, profitability, and overall financial performance. Look for any red flags such as declining revenues or consistent losses.

Verify Assets and Liabilities

Examine the company's assets and liabilities. Are there any outstanding loans or debts that will become your responsibility as the new owner? Ensure that all assets, including equipment, inventory, and real estate, are accurately represented and in good condition.

Check Cash Flow

Cash flow is the lifeblood of any business. Review the company's cash flow history to determine if it has consistently generated positive cash flow. Negative cash flow or irregularities can indicate potential financial challenges.

Assess Accounts Receivable and Payable

Examine the accounts receivable to see if there are unpaid invoices from customers. On the flip side, analyse the accounts payable to ensure there are no outstanding bills that could create financial strain upon acquisition.

Tax Compliance

Verify that the business is up-to-date with its tax obligations. Unresolved tax issues can lead to legal and financial complications for the new owner.

Employee Compensation and Benefits

Understand the company's obligations regarding employee compensation, benefits, and retirement plans. Ensure that all contracts and agreements are in compliance with labour laws and industry standards.

Profit Margins

Calculate the company's profit margins to gauge its profitability. Are the margins healthy, or is there room for improvement? This information can help you plan for future growth and profitability.

Sales and Revenue Sources

Investigate the company's customer base and revenue sources. Are there any over-reliances on a single customer or a specific product or service? Diversification can reduce risk.

Future Projections

Request a detailed business plan or financial projections from the current owner. Assess the validity and achievability of these projections, keeping in mind that post-acquisition adjustments may be necessary.

Industry Comparisons

Compare the company's financial performance to industry benchmarks. This will help you determine if it is performing above or below industry standards.

Asking these financial questions and conducting a thorough financial analysis will provide you with valuable insights into the financial stability of the business you're considering acquiring.

At First Class Accounts Ovens & Murray and Busy01 Consulting, we understand the significance of a comprehensive financial assessment when acquiring a company. We can assist you in what to consider when buying a business, including conducting a thorough financial due diligence process, analysing financial statements, and creating a strategic plan for your future ownership.

Contact us today to discuss your acquisition plans.

10 steps to Business Continuity Planning

Digital communication and cloud technology have given us the ability to access company information, applications and communication channels. For many businesses this will allow you to keep at least some of your usual day-to-day operations ticking over.

However, there are a host of important business areas that you need to consider when developing your company strategy to deal with an emergency situation.

Here are 10 steps to business continuity planning

1. Location and workspace

Does everyone in the business have a good internet connection for remote working? Make sure you agree on the guidelines for maintaining workflow. Schedule regular online catch ups to check in and agree on the priorities.

2. Key products or services

Which products and/or services will you be able to offer? For the business to continue trading, you need to identify a core set of products/services. Review which product/services will bring in the required revenue and cashflow, and which activities in the business should therefore be classed as essential.

3. Key staff and resources

Who are the core people you need for the company to operate? Based on your decisions regarding essential activities, identify who your key management and staff members are. Think about how much resource is needed to trade, how you’ll get approvals and sign-off and what critical knowledge needs to be shared within the team.

4. Key contacts and connections

Who are your main stakeholders outside the business? And which of these are vital to the running of your business? Make a list of your key suppliers, service providers, property contacts and customers and ensure you can have open communication with all these connections. Also, look at alternative suppliers so you can minimise any disruption to your operations.

5. IT equipment, data and infrastructure

What equipment, tools and software do you need to continue working? Essential hardware and software will include laptops, tablets or smartphones for your staff, paired with cloud services, video conferencing, communication apps and effective, secure access to your customer and business data.

6. Plant and manufacturing equipment for essential businesses

If you’re a bricks and mortar business, or a product-based manufacturing business, what equipment do you need to carry on your operations? This will include any machinery, hardware equipment and vehicles needed to manage the essential operations you’ve identified for the business.

7. Financial management

How will you access your key financial numbers during any outage? It’s sensible to move to a cloud-based accounting system NOW, so you have continuous, uninterrupted access to your financials. A platform like Xero online accounting allows you and your advisers to see those all-important figures.

8. Cashflow management

How are you going to ensure you maintain a positive cashflow position? We can help put a process in place to run regular cashflow statements. Use forecasting to project your cashflow position forward in time – so you can take proactive action to avoid any cash gaps in the near future.

9. Insurance

Does your current business insurance policy cover you for all emergency situations? Review all your existing insurance policies so you understand what your policy covers. Securing the business in all scenarios should be your focus here.

10. Leadership 

Who could take over if you (the owner/MD/CEO), is left unable to run the business? Having a nominated deputy, with a clearly defined chain of command, means you can be confident that the company will be in safe hands, even if you’re indisposed.

In times of crisis, maintaining business continuity becomes paramount. While digital communication and cloud technology can enable remote work for many aspects of your operations, certain critical functions require specialized attention. This is where outsourcing services, such as bookkeeping and payroll, can play a pivotal role in ensuring your business stays afloat, especially during times of crises.

Benefits of outsourcing

Expertise

Professional bookkeeping and payroll service providers, like First Class Accounts Ovens & Murray, bring specialised knowledge and expertise to the table. We can efficiently handle complex financial transactions, ensuring compliance.

Time Savings

Outsourcing allows you to focus on core business activities. You can redirect your time and energy toward dealing with the emergency situation at hand, knowing that your financial and payroll processes are in capable hands.

Cost-Efficiency

Business Continuity

Go walking: keep you and your business healthy

Being able to run a business from a laptop is an amazing thing. But it does mean that you spend a LOT of time sitting in front of a screen not being very active.

Research shows that office workers spend 75% of their waking hours sitting down – and that’s not great for your health.

A good walk may well be the answer to this issue, with walking being a great way to get yourself fit and to add some energy to your business thinking too.

Get active and become a more effective leader

Sitting down for long periods is not healthy. That’s the undeniable truth of being a sedentary entrepreneur that spends hours each day looking at a computer screen or mobile device. Sitting down slows your metabolism, burns no calories and leaves our muscles to waste.

To make your working day more healthy:

Go for a walk every day

Whether it’s walking to your office space, or scheduling a lunchtime walk around the block, it’s important to be active. A 30-minute walk ups your step count, raises your heart rate and can burn off between 100 to 300 calories – all good things to include as part of a healthy lifestyle for the modern entrepreneur.

Arrange 'walking meetings' with staff and clients

Meetings and 1-2-1s don’t have to happen sitting on a chair. Instead, take a stroll and chat with your clients, employees or suppliers as you walk. It helps keep the conversation flowing and gets you and your attendees breathing in some fresh air and interesting scenery.

Take time to walk and think

The best ideas can appear during a walk, without the pressures of a formal office setting. Sometimes a change of location can work wonders for your thought process, especially if you turn off your devices and don’t have the distractions of the office.

Walk between meetings

Taking your car to meetings may be quicker, but why not walk between your client meetings and get yourself fitter. By walking, you're more sustainable, healthier and don't waste so much money on fuel or transport costs.

The benefits of being an active entrepreneur

Time spent walking isn’t wasted. It’s a way to keep active, to refresh your business ideas and to place a better focus on your health, wellbeing and stress levels.

If you fancy having a ‘walking meeting’ for your next catchup, we’d be delighted to stroll with you while we talk through your plans for the business. Fresh air and business advice could well be the best way to get the support and strategic tips you need.

Get in touch to book a walking meeting.

Proving your ongoing business viability through 5 financial reports

Whether you’re applying for government subsidies, taking out a business loan or seeking investor support, you need to be able to demonstrate your ongoing viability as a business.

To prove this viability, it’s important to have the right financial information at your fingertips. This information is also just as important for your own internal planning and decision-making.

So, where do you start and what are the reports that you’ll need?

The numbers that prove you’re a business with a future

Any lender or government body wants to know that your business has a future.

As the owner, you may believe in the destiny of your company, but you also need the numbers to reinforce this argument. Banks, lenders and investors are taking a risk in backing you. Because of this, they want to know that you’re capable of making the agreed repayments, and that the business is in a financial position to deliver profits and payouts for investors.

Before investing in your business, organisations will want to see:

• Evidence of a healthy sales pipeline and sales revenue
• Manageable debt that’s not eating into your capital
• A positive cashflow position that covers your main costs
• Forecasts that show stability or growth in your revenues
• A meaningful business strategy for the next two to five years of growth

The data you need to plan your future

You can’t run a business on a wing and a prayer. With so many different ways to track and record your business data, there’s no excuse for not being up to speed with your performance, your targets and your forecasted sales, cashflow, debt and profits.

This information isn’t just useful when approaching investors and lenders. It’s also vital for your own strategic thinking, your business planning and your internal decision-making

Crucial management information to know will include:

• Your targets and budgets for the upcoming period
• Your sales and financial performance against these targets
• Your basic financial position and health
• Your forecasts for future sales, cashflow and end profits

The 5 key reports that define your company’s growth

Today’s cloud accounting software makes it a breeze to produce detailed and informative financial statements. These are the main statements and reports to focus on:

Business plan

Your business plan is a written document that outlines the company's goals, strategies and financial projections for future success. It’s your route map for the business journey that lies ahead, and a crucial document when approaching investors.

Sales reports and forecasts

Sales reports give a historic summary of your past sales data, so you can track how you’re performing. Sales forecasts project this data forward in time to show future sales trends and potential sales growth you may achieve.

Revenue forecasts

A revenue forecast is a projection of your expected income or revenue for a specific period. Being able to track and forecast your revenue position is vital information when carrying out financial planning and decision-making.

Cashflow forecast 

A cashflow forecast is an estimate of your expected inflows and outflows of cash over a specific period. By forecasting these cash inflows/outflows you can aim to keep the business in a ‘positive cashflow position (more cash coming in than cash going out).

Financial statements

The main financial statements to keep your eye on will be your:

• Cashflow statement – shows your current cashflow position, so you can make the most informed decisions about spending and cost management.
• Balance sheet – shows your present assets, liabilities, and equity. It’s a snapshot that reflects the company’s financial position at a specific point in time
• Profit and loss statement (P&L) – a breakdown of the income coming into the business, and the expenditure going out. Crucial for managing your profitability.
• Aged debts – categorises and analyses your outstanding customer invoices, based on when they should have been paid. Keeping on top of this helps to speed up payment and improve your cashflow position.

Talk to us about proving your business viability

Having the data and evidence to prove you’re a viable and stable enterprise is crucial. It’s these numbers that will help you plan your growth and access the investment you need to scale.

We’ll help you create a detailed business plan, revise your strategy and produce all the financial and non-financial statements you’ll need to make informed business decisions.

Get in touch to talk about your financial reporting.

Providing Accurate Source Documents to Your Bookkeeper

Did you know that the accuracy of your bookkeeping is only as good as the accuracy of the source documents?

Source documents are any documents that provide evidence of a financial transaction. This could include:

•  Invoices
• Receipts
• Bank statements
• Credit card statements
• Payroll records
• and more. 

Providing accurate and original source documents means that your financial records are more likely to be accurate and compliant.

Benefits of having accurate source documents

There are several benefits to making sure you are providing accurate source documents to your bookkeeper.

Accuracy

Making sure you are providing the correct source documents means that your financial records are more accurate. 

And this is important for a number of reasons:

• Making sure that you are paying the correct amount of taxes
• Avoiding financial penalties
• Getting accurate financial reports
• Making informed business decisions

Compliance

Accurate source documents help keep your business compliant with all applicable laws and regulations. 

This is important because non-compliance can lead to fines, penalties, and in the worse-case scenario, legal action.

Time & financial savings

When you provide accurate source documents to your bookkeeper, they can save time by not having to track down missing or incomplete information. And this can save you money in the long run.

Managing your source documents

There are a number of platforms that can help you to manage your source documents and make it easier to provide them to your bookkeeper. 

Platforms that we recommend include Dext, Xero, Hubdoc, and Lightyear.

Dext is a cloud-based document management system that allows you to scan, store, and organise your source documents. Dext also has integrations with a number of accounting software platforms, like Xero, making it easy to reconcile your accounts.

Xero is an online accounting software platform that allows you to track your finances, invoice your customers, and pay your bills. Xero also has a document management system that allows you to upload and store your source documents.

At the end of the day, using a digital platform to manage your source documents helps improve the accuracy and efficiency of your bookkeeping and helps keep your financial records accurate, compliant, and up-to-date.

Here are some additional tips for providing accurate source documents to your bookkeeper:

• Scan or photo your source documents and upload them to Dext or Xero as soon as possible after the transaction occurs. This will help to prevent them from being lost or damaged.
• If taking a photo - always photograph the original source document. Don’t take a photo of a photo or a screenshot of a document or receipt. 
• Make sure that the scan or photo’s of your source documents are clear and legible.
• Label each document with the date, amount, and description of the transaction.
• Keep your source documents in a safe and organised place. This is where using platforms such as Dext or Xero is highly beneficial.
• Provide your bookkeeper with access to your digital document management system.

By following these tips, you can help to ensure that as your bookkeeper, we have the information we need to keep your financial records accurate and compliant.

Avoid ATO’S increased tax penalties

As the ATO directs its attention towards taxpayers grappling with unresolved tax lodgements and debts, it's crucial to understand how to steer clear of facing heightened penalty rates in the upcoming fiscal year of 2023–24. 

In this article, we explore strategies to help you manage your financial compliance and minimise the impact of these changes on your obligations.

Increased Scrutiny on High-Value Outstanding Debts

The ATO (Australian Taxation Office) has received increased funding to intensify its scrutiny on taxpayers with high-value outstanding debts and aged debts. If you're among the following categories, it's time to take note:

• Public and multinational groups with an aggregate turnover surpassing $10 million.
• Privately owned groups or individuals controlling a net wealth exceeding $5 million.

The goal is to ensure that outstanding debts over $100,000 and aged debts older than two years are properly addressed. 

Rising Penalty Rates: What You Need to Know

As of 1 July 2023, the Commonwealth penalty unit rate has seen another increase, now resting at $313 per unit. This change follows a previous increase in January 2023 from $222 to $275.

What does this mean for you? 

If you fall behind on your tax lodgements, expect more substantial financial penalties.

These penalties may apply to late lodgements of various returns and reports, including but not limited to:

• activity statements
• income tax returns
• FBT returns
• PAYG withholding annual reports
• single touch payroll reports
• annual GST returns and information reports
• taxable payment annual reports.

For small businesses, these penalty rates translate to base penalties ranging from $313 (1 penalty unit) to $1,565 (5 penalty units) for every 28 days a lodgement is overdue.

Lodgement Penalty Amnesty for Small Businesses

There is some good news for small businesses facing overdue income tax returns, fringe benefits tax returns, or business activity statements. 

The ATO is extending a helping hand through a lodgement amnesty, valid until 31 December 2023.

Announced as part of the 2023–24 Budget, this amnesty covers tax obligations originally due between 1 December 2019 and 28 February 2022. 

Eligibility is granted to small businesses with an aggregated turnover of less than $10 million at the time the original lodgement was due.

Navigating the Changes: Your Next Steps

To avoid the pitfalls of revised, higher penalty rates, it's crucial to ensure you provide us with all necessary information well before the lodgement due date. This will ensure your lodgements are completed on time, safeguarding you from unnecessary penalties.

Should you anticipate any delays, we recommend engaging with the ATO and communicating your situation. We're here to assist you in requesting lodgement due date extensions, applying for remissions, or even establishing payment plans to manage your tax debts effectively.

Small businesses have the opportunity to benefit from the lodgement penalty amnesty, allowing you to submit eligible overdue forms before 31 December 2023. The ATO will automatically remit any associated failure-to-lodge penalties.

At First Class Accounts Ovens and Murray, we're here to guide you through these changes.  Should you have any questions please contact us.

The cost of a new employee

When you’re calculating pay rises, it’s important to think about more than just how much you can afford. You also need to consider the true cost of replacing that employee.

Low pay rises can be unexpectedly expensive

It’s surprisingly common for businesses to offer low pay rises, only for workers to feel undervalued and resign. The employer is left with all the upfront costs of replacing them, plus paying the salary, plus training the new employee and lost productivity as they learn the ropes.

Some estimates put the cost of a new employee at around 40% of their salary and a 2021 Australasian survey put the price at an average of $23,860 per worker.

Overall, that low pay rise could cost your business a lot more than you bargained for.

Not paying enough might just cost you an employee

If you run the numbers you’ll see the impact that an insufficient pay rise can have.

Let’s say you employ Ashley, an office manager who is paid $60,000. You offer Ashley a 4% pay rise, which will cost you around $2,400 more each year. With inflation running at over 7%, Ashley feels this isn’t enough and finds a job paying $68,000 almost immediately.

If you had provided Ashley with a 10% pay rise, it would have cost you around $6,000 more each year and you would still have your employee. Finding a new employee could cost you $20,000 or more.

Running the numbers

Make sure you understand salaries in your industry, and think about inflation, when you calculate pay rises.

Also consider how easy it would be to replace the person and how much value they bring to your business.

And think about extra benefits you could offer a valuable team member: do they want more flexibility or a four-day week?

We can run the numbers for you before your remuneration reviews or if you are looking to hire. 

If you have any questions about pay rises or hiring this year, get in touch – we’d love to hear from you.