Gift cards and vouchers now have three year expiry

Gift vouchers can be a great way to attract customers, maximise marketing campaigns and increase sales - so long as you don’t get caught out by the new rules.

Does your business offer gift cards or vouchers? If so, new laws came into effect on 1 November 2019, which you'll need to adopt. Gift cards and vouchers issued on or after 1 November 2019 must meet the new requirements of the Australian Consumer Law (ACL).

New Gift Card Laws

• Mandatory minimum expiry period of three years from the date of issue.
• The actual expiry date must be listed on the card; alternatively, the supply date and expiry period, for example, “Valid for 3 years from 11/02/2020”.
• Post-purchase fees are no longer allowed. Payment processing fees may be allowed, however activation, top-up, account keeping or balance enquiry fees are not.

There are some situations in which the new requirements don’t apply, for example if the card can be topped up, if it is part of a temporary marketing promotion or if it is donated free of charge for promotions. Visit ACL New Gift Card Laws webpage for full details.

If you have not met the new requirements on vouchers issued since 1 November, the new laws will still apply even if the actual voucher does not. Customers will be able to redeem the voucher within the three-year expiry regardless of what is stated on the voucher. Gift cards and vouchers issued before 1 November 2019 have the same expiry period and conditions of purchase as at the time of purchase.

What Next?

1. Review your gift voucher terms and conditions.
2. Update your printed and online vouchers and related marketing material.
3. Check the information published on your website and social media.
4. Make sure your internal processes and point-of-sale systems are brought up to date and remember to tell your staff of the changes.

We can help you.

​Talk to us about how the changes affect your business operations and cashflow, or how to implement gift cards in your business.

Modern award annualised salary changes

Recent changes made by the Fair Work Commission mean that you need to review employment agreements to ensure they are compliant with the award requirements.

The Fair Work Commission (FWC) late last year has varied a number of modern awards that include annualised salary provisions. The decision has also introduced the provision for annualised salaries into some other awards for the first time.

Whilst the actual specifics of the annualised salary provisions vary per award, there are some significant changes that affect all award terms in relation to annualised salaries. - We can help with the red tape.

What is an Annualised Salary?

Some awards permit employees to be paid an annual salary that covers all payments such as allowances, penalty rates and overtime. For many employers and employees, this has been a flexible and practical solution to avoid the need for timesheets and extra payroll administration.

The important changes

The changes may affect the ease and efficiency of your current payroll administration, as there are now extra records required for all employees paid an annual salary under an award provision. Note: this does not affect employees with a common law employment contract.

• The agreement or arrangement must document the specific provisions of the award that are addressed.
• The agreement must include reference to overtime or other penalty rates the employee would otherwise be paid, specified as an ‘outer limit’, or maximum number of such hours to be worked in each pay period. Outer limits must be specified separately for overtime and hours that would be subject to a penalty or loading.
• Records of hours worked (and unpaid breaks) must be kept for each pay period and signed by the employee.
• The employee must be paid for any extra hours that exceed the ‘outer limits’ as defined in the annual salary agreement.
• Check the relevant award to see if an employment agreement is required. In some awards the employer can implement an annual salary arrangement without an employee agreement.
• Document the calculation of the annual salary according to the requirements of the award. It is vital that the calculation shows that the employee is receiving at least as much as if they were paid according to the award hourly rates, including all wages, allowances, penalties, overtime and loadings. This will require breaking down the salary into its separate components.
• Employer and employee must complete an annual salary review on the anniversary of the agreement or arrangement.

What you need to do now

1. Make sure you are aware of the applicable modern award and check the annualised salary provisions.
2. Check that the current annualised salary arrangements meet the new requirements of the award.
3. Document the calculation as per the award conditions.
4. Update existing agreements or implement new ones as needed.

The new provisions came into effect on 1 March 2020. Employers need to review all existing agreements for annualised salaries as soon as possible.

You will also need to consider the impact of the new requirements on your payroll administration and software.

There are many payroll software add-ons that can help to make administration easier if your current software does not have the required record-keeping tools built in.

We can help you.

Contact us to arrange a time for a payroll compliance review.

Understanding your profit and loss statement

Your profit and loss statement (P&L) helps you understand your business performance and profitability over time. It’s sometimes called an Income statement and its main purpose is to list income and expenditure.

Whereas a balance sheet is a snapshot in time, the P&L shows transactions over a specific period of time. This can be a month, quarter, financial year or any other period, and it can be a stand-alone report or a comparative period report.

Together with the balance sheet, these two reports provide a comprehensive understanding of the financial position and performance of a business.

The profit and loss statement has two main sections: income and expenses.

These may be further subdivided depending on the complexity of the business and reporting requirements.

Income or Revenue

Income primarily includes main business activities such as sale of goods or services. Other income such as interest received, capital gains or income from secondary business activities is also reported.

Expenses

Expenses are usually divided into two sections: direct costs, or cost of goods sold, and expenses. Cost of goods are those that are directly linked to the provision of services or sale of goods. For example, if you buy widgets from a wholesaler and sell them at a marked-up value, the cost of the widgets is a direct cost, not an overhead expense.

Other types of direct costs might be importing and freight costs, contractor costs or certain equipment. Some direct costs are fixed, that is, they are the same from month to month, or they could be a fixed percentage of sales; others vary in value but are still related to the income producing activities.

Overhead expenses are all the other expenses required to run the business, regardless of the level of income: for example, rent, utilities, bank fees, bookkeeping fees, professional development costs, vehicle costs and staff costs. Many of these costs form the basis of working out your break-even point, or how much it costs just to open the doors for business.

There are some expenses which may be reported as a direct cost in one business but an indirect cost in another type of business, for example, merchant fees or contractor costs.

The Bottom Line

Total income minus total expenses results in the net profit (or loss), is often called ‘the bottom line’. Often business owners are just interested in looking at the bottom line, but a true financial picture requires an understanding of several reports and an ability to see the big picture that the reports are illustrating.

The P&L is a vital tool to analyse for trends over time

• What does your P&L tell you about relationships and ratios between sales and expenses, seasonal changes and annual trends?
• Have all your direct costs been allocated correctly?
• Have you recouped all billable expenses from customers?

Financial statements help you understand the big picture for your business. With deeper understanding of your business operations and performance you can make informed decisions about your business finances.

We can help you.

Are you confident in reading your profit and loss statement? Would you like to know more about the relationship between costs and revenue to make better business decisions? Contact us today to examine your financial reports with an experienced business advisor.

Contact us here.

Be, Do, Have

Our success in life depends largely on our mindset. Those who wait until conditions are perfect are unlikely to achieve their goals as they’re always waiting for the right time and never take that first step.

There are three small words whose order can heavily influence the outcomes we achieve: be, do, and have.

After deciding on your goals, the next step is to consider who you need to be in order to achieve your goals, rather than what you need to do.

Compare the following sentences:

“When I have a more profitable business, I’ll do great things with my family and be a great partner and parent… first I need to work a bit harder to sort out my business and finish these projects, then everything will fall into place.”

“In order to be a great partner and parent, I need to work smarter so I can have more time with my family.”

Now, if this resonates with you, how can you work smarter?

When you focus on who you need to be first, you’ll start to prioritise doing things in a way which is consistent with that role. The things you’ll have as a result become the bi-product of who you are. In contrast, if we wait to achieve what we think we must have in order to be a better person, we risk never changing our habits.

So, who do you really want to be?

Start being that person today. Think like that person, speak like that person, and act like that person.

Let the be drive what you do from now on. You’ll be amazed at how quickly you’ll get what you want (the have).

Do you need perspective on how you can work smarter? We can help!

“You’ve got to be before you can do, and do before you can have.” - Zig Ziglar

Contact us here.

Developing great leadership to scale your business

There are several aspects of successfully scaling up your business one being having comprehensive systems. Another being developing great leadership.

Have you heard the quote,

“What got you here won’t get you there”?

These are wise words (and the title of a book we encourage you to read!) are from Marshall Goldsmith.

When choosing to scale your business many leaders focus on their systems and teams, which is important. But you should also focus on scaling yourself.

Developing great leadership

Most reasons why businesses fail, directly and indirectly, point to leadership failure.

From poor planning to poor hiring, poor communication to poor process, poor capacity to poor execution - most things can be fixed with great leadership.

Scaling the business will make new demands on a leader’s time and attention. And it’s critical that these are both focused on the right things:

1. Planning

Setting a clear vision and relevant business goals. Having a regularly reviewing progress. And resetting goals to drive performance improvement.

2. Inspiring

Motivating others to achieve more than before. Showing them their potential to make an impact.

3. Empowering

Enabling your team to find their own solutions by guiding them with your support, trust and encouragement.

4. Culture

Demonstrating allegiance to your team and standing for the business’s core values.

5. Innovating

Continuous improvement in people, product, and process.

6. Personal growth

Developing and supporting your future leaders with mentoring and guidance.

Great leadership is about influencing others in the direction of a common goal.

While there can only be one leader of a business, there are different areas that need individual leaders. People can lead multiple areas initially. But, as the business grows, look to empower others. Delegate the leadership of some areas to ‘leaders in training’.

On a scale from 1 to 10, how well do you rate your performance on the above six categories?

Where can you scale your leadership?

If you need help? Get in touch.

“The function of leadership is to produce more leaders, not more followers.” - Ralph Nader