Meeting your goals during a global slowdown

Optimism among business owners was high coming into 2022. But a number of factors are now making things a lot more challenging:

• Global events are pushing up energy prices to astronomical levels.
• Ongoing supply-chain issues are making it difficult to source raw materials.
• A scarcity of talent is causing problems when it comes to staffing and hiring.
• Covid is still around and making trading more complex and difficult.

Faced with these hurdles, you might feel that your goals are no longer attainable. But is this true? Growth is likely to be a challenge, but not impossible.

5 steps for meeting your goals during a slowdown

Moving forward during a period of economic recession is certainly more of a challenge. But what's needed is an updated plan with awareness of the major external threats.

Here are five steps to set you on the right path:

1. Revisit your goals and see how realistic they are

Look at the numbers and make a call on whether they still make sense in the current business market. If necessary, update your goals and make them challenging. But, importantly, make any goals attainable during a time when cash and resources are in short supply.

2. Get the best possible understanding of your financial position

Take a deep-dive into your finances and see how you’re tracking against your budgets and targets. How is your cashflow looking? Do you have enough working capital to fund your growth? If additional funding is needed, where could it come from?

3. Decide if you have the right team for the job

Whatever your key goals, you need talented people on board who share your core aims for the business. Think about whether you have the team you need, or if there’s a pressing need to hire new people. And consider if artificial intelligence (AI) and automation could fill some of the resourcing gaps and help you scale up.

4. Assess the current situation in your sector

You can’t change the big external threats in your industry. But you can do your homework and find out what the immediate threats will be. Are there supply chain issues? Are prices going sky high? Get up to speed and look for ways to minimise the impact and rise to the top of the crop.

5. Update your plan

Once you’ve looked over your numbers, goals and strategy, you’re likely to need an updated business plan. Factor in the threats, set meaningful goals, but give your company a target that’s realistic during a global slowdown. Successful small steps towards a goal are better than one giant leap; a leap where you may land flat on your face.

Getting prepared

The sooner you start revisiting your goals and business plan, the better prepared your company will be for the ups and downs of a recession.

Come and talk to us about your financial position, your core strategy and your concerns about the next six to twelve months. We’ll help you set practical, attainable goals that will push your business forward.

Key numbers to focus on in your business now

As a business owner, it’s always been helpful to have an understanding of accounting – but in the world today, it’s never been more important to have a good grasp on your finances.

With the business world irreparably changed by the impact of coronavirus, the war on Ukraine, and rising inflation, your business is facing a ‘new normal’. Priorities have changed, customer behaviours have mutated and revenue streams have had to evolve and pivot in order to create a viable post-lockdown business model.

To track, monitor and drive your financial performance in this new business world, it’s increasingly important to have a handle on your key financial reports and metrics.

Getting to grips with your financial reports

Whereas in the past, extra cash in the business may have been seen as a surplus that needed to be spent on something, the past three years have shown us that having these reserves is vitally important for the survival and long-term health of businesses.

To truly be in control of this cash, it’s vital that you can dip into your accounts, financial reports and dashboards and ‘see the genuine story’ behind your financial position.

So, what are the key reports to focus on? Let’s take a look:

Budget 

Your budget is the financial plan that's tied in with your strategic plan. In essence, the budget is your approximation of the money it will take to attain your key strategic goals, and the revenue (income) and profits you hope to make during this period. It’s a benchmark you can use to measure your actuals (historic numbers) against, allowing you to see the variances, gaps and missed targets over a given period.

Cashflow Statement 

A cashflow statement shows the flow of money into and out of your business.

Understanding these cash inflows and outflows in detail allows you to manage this ongoing process, allowing you to aim for a ‘positive cashflow position’ – where inflows outweigh outflows.

In your ideal positive scenario, you have enough liquid cash in the business to cover your costs, fund your operations and generate a profit.

Cashflow Forecast

Forecasting allows you to take your historic cash numbers and project them forward in time.

As such, you can see where the cashflow holes may appear weeks, or even months, in advance. This gives you time to take action, whether it’s increasing your income stream, reducing your underlying costs, chasing up unpaid invoices (aged debt) or going to lenders for additional funding.

Balance Sheet 

Your balance sheet shows you your company’s assets, liabilities and equity at a given point in time.

In a nutshell, it’s a snapshot of what your business owns (your assets), what you owe to other people (your liabilities) and what money and profits you currently have invested in the company (your equity).

Your balance sheet is useful for seeing what stock and equipment your business owns, how much debt (liabilities) you’ve worked up and what your company is actually worth. This is all incredibly useful information to have at your fingertips when making big business decisions.

Profit & Loss

Your profit and loss report - often referred to as your P&L. Your P&L gives you an overview of the company’s revenues, costs and expenses over a given historic period of time.

Whereas the balance sheet is a snapshot, your P&L is more like a moving video. It shows you how your finances are progressing by demonstrating how revenue is coming in and costs/expenses are going out (rather than cash coming in and going out, as you see in your cashflow statement and cashflow forecasts).

There is a range of software and apps that you can use to generate the above reports. For example Xero. 

Talk to us about software and apps to help you with the financial reporting and forecasting for your business

Is your business attracting the right talent?

We all know that business owners are finding it challenging to find good people to join your team.

Have you considered what your employer brand says about your business?

Your employer brand is like the tone of voice for your business. It should reflect you and what makes it unique, while also attracting people who want to work there too!

The right employees are a business’ most valuable resource. With the changing needs of industry, it's important to have an attractive brand that will attract those with skills relevant for your company - and keep them around longer than before!

So how are you attracting great talent to your business?

Start with sharing the full picture

To get good people, you need to tell them what your company is like.

This includes talking about the work environment and company culture. You can do this by describing your work environment in job descriptions. Including that on your website or social media.

Also make sure your careers page has more information about your company, the culture, and the roles available.

And it helps if you can also provide some insight into company life and why your people currently work for you.

Know your Employer Value Proposition

Your Employer Value Proposition (EVP) is what makes your company different from others and attractive to potential employees.

Your EVP includes things like your company's values, offerings, and associations.

Having a strong EVP makes it more likely that people will want to work for you, and it can also help reduce turnover if current employees feel aligned with your company culture.

Attracting the right talent

When it comes to attracting the right talent, you need to first understand who your ideal candidate is. Build a profile of your ideal candidate by thinking about their:

• Work experience
• Aspirations and goals
• Values
• Education
• Personal activities
• Personal life and family situation.

Then, create questions to ask potential employees to see if they fit your ideal person. You can also tailor your advertising based on the profile you develop to attract the right candidates.

Plan for the future

What positions do you need to fill in the next 6-12 months, and what skills are required for each?

Build relationships with potential candidates now. This will take time, but it will be worth it.

Make your company an attractive place to work by investing in your employer brand. This includes things like culture, environment, values, and strategic vision.

Doing this will help you save money on recruiting costs and reduce the number of employees who quit.

Knowing what your customer wants

Knowing what your customers want helps you meet your growth targets. We’ve outlined a couple of ways to improve your understanding of your customers, through better data, analysis and feedback.

The increase in digital business systems has opened up forensic ways of understanding your customer base. That's a huge bonus when you're aiming to build better connections, relationships and experiences with your audience.

Knowing what your customer wants is a fundamental piece of knowledge for any successful business to get to grips with. And when you're running a modern, digital business there's an overwhelming wealth of customer and sales data and analytics at your disposal – making it easier than ever to dig down into the needs and habits of your end user.

Detailed CRM records and customer notes

A CRM system becomes the heart of your customer management, business development and marketing activity, allowing you to log activity, keep notes and record progress throughout the sales pipeline.

The more information you have about your valued customers, the more you can do to meet their needs and deliver the perfect customer experience. And by maximising your use of this customer data, you can tightly focus your marketing campaigns and do more to make every customer feel understood, valued and (most importantly) satisfied.

Apps such as Active Campaign and HubSpot are very popular, with information being generated from accounting sales data or add-on sales management POS systems.

Drilled-down sales records

Keeping tabs on your sales activity is central to any business model. In an ideal world, you want regular, repeatable sales from a loyal customer base. But sales activity can be hard to predict, especially when you’re setting ambitious sales targets for your team to hit.

Having detailed sales records and data at your fingertips has two key benefits:

• You know how sales have fared in the past
• You know how sales may pan out in the future

Being able to run forecasts, based on your historic sales data gives you a stable foundation on which to build your future sales targets. It’s a solid projection, based on real business data.

This data also gives you an encyclopaedic overview of what your customers have been buying.

This sales data helps you understand:

• Which products/services your customers want to spend their money on
• Which specific products/services are failing to convert
• Which points in the year will have peaks and troughs in sales
• When it’s the right time to invest in more sales and marketing activity

This is all gold dust when it comes to planning out your strategy, assigning your sales and marketing resources and building engagement with your core audiences.

Hitting your growth targets, is far easier when you know the needs of your customers and can accurately target your sales, marketing and social activity.

When to Register Your Business for GST

Should you register your business for GST?

Many business owners register their businesses from day one, regardless of income. Others, for example, many sole traders, choose not to register for GST until it is mandatory.

However, it is common that new businesses don’t realise they have exceeded the income threshold at which they must register! This can result in having to pay GST on sales to the ATO even if you haven’t included it in your prices – so you could lose one-eleventh of your income.

When is GST Registration Compulsory?

Your business must register for GST when it makes $75,000 income within a financial year. If you’re regularly making $6,250 or more each month, it’s time to check whether you should register for GST.

It’s good practice to check your turnover every quarter, and when you are getting close to the threshold, check every month. If you’re not yet using online accounting software, talk to us about your options, as this will make reporting and preparing for GST registration much easier.

You must register for GST within 21 days of reaching the threshold.

Special Rules

• You can voluntarily register even if your turnover is less than $75,000. This means you can complete an annual BAS if you prefer.
• If you’re making money through a ride-sharing platform like Uber, you must register for GST immediately. All commercial driving income, regardless of turnover, is subject to GST registration.
• If you want to claim fuel tax credits, you must register.
• If your business is a not for profit, the registration threshold is $150,000 per financial year.
• If you’re not an Australian resident business, the rules for working out GST turnover are different, so talk to us before registering.

Need Help?

When starting a new business, there are many decisions to make, and GST registration is just one of them. Get in contact about the benefits of registering, and we'll help you get set up on appropriate accounting software to help you on your way to business success.

Payroll Updates Sept 2022: Minimum Wage, Super Increase and STP

Are you across the recent payroll and employment law updates?

Below is a summary of these updates. 

Remember, we can help check your payroll setup, award provisions, employee agreements, and payroll costing. We can also assess if your software is ready for ATO STP Phase 2 reporting, so feel free to get in touch. 

Minimum Wage Increased on 1 July 2022

The national minimum wage increased on 1 July by 5.2% to $21.38 per hour (or $812.60 per week).

The minimum wage increase applies to employees if an award or national minimum wage defines their pay rate.

This year, the Fair Work Ombudsman (FWO) has once again implemented minimum wage increases to awards in a staggered approach. Most awards increased on 1 July; however, some will increase on 1 October.

For full details of October award increases, visit Fair Work Ombudsman October 2022 minimum wage increase. The main industries changing in October are Aviation, Hospitality and Tourism.

Tax Table Updates

While most tax tables remain the same for the 2022-23 financial year, the annual indexing of the study and training support loans have been applied.

Check the study and training support loans and working holiday makers tax tables for current withholding rates.

If you use online payroll software, the updates will be taken care of already. But if you process payroll manually, you’ll need to factor in the new rates for these tax types.

Superannuation Increase from 1 July 2022

The superannuation guarantee statutory rate increased to 10.5% on 1 July. Your payroll software should automatically update the rate, but check that the rate has updated, just in case you have manually entered the rate for some employees or payroll categories.

Review any agreements or annualised salary arrangements you have with employees that may be inclusive of superannuation.

Also, remember that the monthly $450 threshold has been removed, meaning that you must pay superannuation for all earnings. If you have a large casual workforce, this could impact your costs significantly.

Your first quarterly superannuation payment at the new rate will be due in October 2022.

Unpaid Pandemic Leave Reinstated for Some

During the COVID-19 pandemic, Schedule X was added to most awards to allow for two weeks of unpaid pandemic leave. The schedule expired in June 2022 but has been reinstated for some awards:

• Aged Care
• Ambulance and patient Transport
• Aboriginal and Torres Strait Islander Health Services
• Health Professionals and Support Services
• Supported Employment Services
• Social, Community, Home Care and Disability Services

Employees who no longer have unpaid pandemic leave available in their awards can take personal leave if unwell or use annual leave if they need to isolate themselves but are otherwise well enough to work. They can also use carer's leave if they need to look after unwell family members.

Review Your Payroll

Now is an excellent time to assess your payroll systems in readiness for the busy summer season ahead.

Talk to us. We can help check your payroll setup, award provisions, employee agreements and payroll costing. 

There are many details to take care of when engaging workers, and we can also advise on the software you are using and make sure it meets the ATO’s Single Touch Payroll reporting requirements. Note: STP reporting requirements are due for all employers by 31 December unless you use Xero, in which case the date has been extended to 31 March 2023.

Changes to Annualised Salaries in Restaurant and Hospitality Awards

Annualised salary arrangements in restaurant and hospitality awards are changing in September 2022.

After a review of the annualised arrangements in these awards, the Fair Work Commission has introduced changes that will make payments for salaried workers fairer.

Employers have been able to pay 25% on top of the base wage to allow for overtime and penalties. This meant they could do an annual reconciliation of actual hours worked to ensure the salary covered the overtime and penalties there were entitled to had they been paid by the hour. Any shortfall in wages could be paid with a single top-up payment each year.

New arrangements

The new arrangements bring in weekly outer limits to overtime and penalty hours. Employees who work more than 18 hours on weekends and public holidays within a week will need to be paid the hourly or penalty rate in addition to the regular wage.

If you’re paying staff an annual salary, the new rules mean you will need to review hours each week to check staff are not working more than the prescribed outer limits for extra hours. If they are, you will need to calculate the amount owing and pay it each week.

While an annual reconciliation of hours worked against the wages paid is still required, you can no longer wait until the end of the year to calculate and pay any shortfall.

The new system should make it fairer for salaried employees who will receive payment in the week that extra hours over the limits were worked. It should also assist with your business’s cash flow, as you'll be paying wages during busy times, and the annual top-up payment should be smaller.

Review Your Annualised Salary Agreements

If you’re paying staff a salary, there are certain obligations you have to meet.

We can help get systems in place to manage your employer obligations and make it as easy as possible to track time and perform the annual reconciliations of hours against wages paid.

Book a time to talk to us about the new provisions for restaurant and hospitality workers and how to implement them in your business.

Preventing business owner burnout

It’s tough going for business owners.

With the labour market tight, businesses are already understaffed. Add high rates of absenteeism, and remaining workers and business owners are under incredible pressure.

When you love your job and always want to do the best for your clients, it’s easy to start overworking yourself and run the risk of burnout.

It’s vital that you take care of yourself.

So here are three ways to start preventing business owner burnout:

1. Start saying ‘No’

Small business owners are experts in saying ‘Yes!’ and then figuring out the details later.

It’s how you grow a small business and build your reputation for being able to solve problems for your clients. However, if you’re overworked and stressed out, it’s time to start saying ‘No’.

Begin by turning down work from difficult clients, or work that’s outside your core business, so you’re focused on where you add the most value.

2. Identify at least one area you can delegate or outsource

You can’t do everything yourself, particularly if you’re understaffed.

Look at your processes and try to identify an area that’s not part of your core business which you can delegate or outsource.  If you look after your social media, it might be easier to delegate this to someone else.  Share the responsibility for office cleaning across the team. Or even subscribe to a meal kit service to take the stress out of cooking.

Plus, your bookkeeping and payroll are two areas that can easily be outsourced and you can always talk to us about this. 

Usually, the cost of these initiatives will quickly pay for themselves: once you feel less stressed, you’ll be more productive.

3. Hold onto your interests outside work

Running a business can be all-consuming, but hang onto your friends, sports and hobbies even when it gets busy.

Letting your relationships, health, and pastimes dwindle away will undermine your emotional, physical, and mental health.

We can help

Not sure if outsourcing tasks will pay for itself? 

We can work with you to analyse the costs and benefits of any business investment. And we can take on your bookkeeping and payroll. Get in touch, we’d love to hear from you.

How to coax your people back to the office

Globally, our relationship with work and the workplace has changed.

People got used to working from home (WFH) during the pandemic lockdowns and enjoyed the freedom it offered.

In fact, 61% of people working from home are doing so because they want to, even though their office is open, according to a recent survey.

But we also need to balance this new WFH ethic with the more sociable aspects of collaborating together at HQ.

What’s needed is a switch to hybrid working, with some time in the office and some time WFH.

So, how do you coax your people back to the office and highlight the benefits of sometimes working in one main workspace?

What turned people off of the office?

The Covid-19 pandemic came along and shook up the work dynamic in a big way. We’d had cloud technology and remote working available for some time. But the pandemic acted as a catalyst for pushing remote working as a viable, everyday work option.

This allowed us all to work. But it also had other repercussions too:

People moved out of the city

Many people moved away from the big cities and out into the suburbs/countryside during the pandemic. With cloud tech and WFH now the norm, some people felt there was no need to be in a city-based office. This removed the commute, saved money on train and travel costs and gave them more time in their day.

A change in property usage and prices

The mass exodus to the countryside pushed property and rental prices sky-high in these greener suburbs – with a huge demand for houses. And, on the flipside, big office buildings in the city have been standing empty, wasting money on rental fees and mortgage payments for companies.

So, how do you entice our people back from their suburban homes and into your office?

Coaxing your workforce back to HQ

People have got very used to working from their kitchen table. So, if you want your team to return to the office, you’ve got to deliver a workspace that offers something more.

Working from the office has to appear like a positive benefit, rather than the poorer cousin of WFH.

Creating a more welcoming environment with added amenity and flexibility will also stand you apart in a tight labour market.

Here are five ideas to try:

1. Make your workspace more inviting

Can you redesign the layout to add different work zones?. Have a hotdesking area alongside breakout tables, informal areas to make the office feel less formal and more like a home-from-home.

2. Offer perks and benefits in the office

If there are perks of being in the office, your team will be more incentivised to work here. Whether that is coffee and fruit or a offering gym memberships or cycle-to-work schemes that add tangible benefits of signing up to working a certain number of weekly hours from your HQ.

3. Have more in-person meetings

In a recent study, researchers found that video conferencing hampers idea generation, so our reliance on technology might come at a cost of creativity.

While Zoom, Teams and Google Meet can be invaluable for collaborating across time zones, it's worthwhile, encouraging your team to meet in-person also. Run more of your internal and client catch-ups as face-to-face meetings and have team huddles on a given morning in the office.

4. Encourage in-person mentoring and education

One thing that remote workers miss out on is face-to-face mentoring.

Try pairing up senior and junior staff members and giving them an assigned mentoring day to work together at HQ. And think about offering extra-curricular training sessions and ‘lunch ‘n’ learns’ to help people upskill and learn new capabilities.

5. Get creative with your ideas

To tempt people back, you’ve got to offer some fun too.

Try a ‘Bring your pet to work’ day, so people can bring their pandemic pooch to the office. Run more charity events where people can get into the spirit and work on their team bonding. Or offer after-work sports and leisure activities, like yoga, five-a-side football, quizzes, cookery classes etc.

Anything out of the ordinary that will appeal to a workforce that’s getting a little bored of working on their own from home.