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Become a digital business

Become a digital business

Become a digital business

In the online, connected world that we now live in, it’s important for your business to become a digital business.

Digital technology has revolutionised the options you have available as a small business. There are a wealth of cloud-based solutions and apps to help automate your admin, enhance your productivity, open up your business data and market the company online.

Making the technology work for you

Becoming a digital business isn’t about using technology for tech’s sake. It’s about seeing the huge value and potential of applying digital processes and software tools within the company.

By moving your systems, processes and customer interactions over to digital, your small business can quickly become more streamlined, more efficient and more profitable. And with the ineffective elements of the business removed, you’re ready to grow, scale and expand.

Key benefits of digital transformation include:

Cloud accounting at the heart of the businesss

Cloud accounting moves your bookkeeping and financial management online. This gives you access to your accounts, reporting and key performance indicators (KPIs) through your web browser, on any internet-ready device. You can literally run your finances, invoicing, credit control and bank reconciliation from anywhere with Wi-Fi. And that helps you keep in control of the numbers..

Automation of low-level tasks

The manual tasks involved in company admin begin to eat into your business time. Many digital business tools have elements of automation built in, to help you automate the key time-consuming tasks and become more efficient. Automated bookkeeping, automatic bank reconciliation and automated payment collection all put hours back in to the business and help you do more.

Fintech and payments

Keeping on top of your finances isn’t just about accounting. Financial technology (fintech) tools help you ensure that money is flowing into the business, cashflow is being managed sensibly. And online payments are being made, and collected, automatically – helping to maximise your financial health.

Job management and productivity

Planning and running your operations and project work can be tough. But with software project management and workflow apps connected up to your central system, you’re always on top of the workload and resourcing. Talk to us about which app would work in your business. 

Digital marketing and social media

Most consumers and business customers will begin a search for products/services online. So having a good website, a bold online presence and the right social media channels in place is vital for your sales and marketing strategy. By positioning your brand in the digital space, you make yourself relevant, easy to find and connected to your ideal customer base.

If you’re planning a digital transformation process for your small business, come and talk to us. We’ll help you review your systems and processes, identify your key business needs and recommend the software tools and apps that will build your ideal digital system.

Get in touch to start embracing the digital future.

automation can ease your workload

Automation can ease your business workload

Automation can ease your business workload

Small and medium-sized businesses are spending on average 120 hours a year on admin tasks, according to recent research into productivity at UK SMBs.

If your people are spending 120 hours wading through tedious and unproductive admin, that’s bad for the business and for your overall efficiency. Fortunately, technology and software automation can go a long way towards automating the low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, artificial intelligence (AI), machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

Automated bookkeeping

Just take a photo of your receipts, expenses and invoices and ‘optical character recognition’ (OCR) technology will digitise the output and pull it through into your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.

Automated credit control 

Chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.

Automated payment collection

The easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.

Automated reporting and forecasting 

The better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.

Automated digital marketing

Digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to schedule and post social media content, or email automation that sends a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about embracing the power of automation

If your admin is starting to hold you back, come and talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review you business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

Contact us to discuss your automation opportunities. 

scam-alert-payment-re-direction

Scam Alert – Payment re-direction

Scam Alert - Payment re-direction

As a business owner, high on your priority list is to protect your assets, employees, reputation and most importantly your customers.

Unfortunately, in this highly technological advanced world, businesses are more and more vulnerable to the scams which can be presented in many forms and guises. It is the adverse effects from scams which can have a devastating effect on your most valuable assets.

The damage done can be significant to your business, including financial and reputational. The scammers are capable of being manipulative in sophisticated forms without you even realising.

You will have heard of many types of cons over the years, whether it be overpayment scams, or fake directories & advertising scams to phishing, malware and ransomware scams. The business world is full of them and there are more being formed daily.

Let’s explore further into one of these scams and look at ways of protecting your business:

Payment Redirection

How this scam works

  • Scammers hack into your supplier email accounts and obtain information such as customer lists, bank details and previous invoices.
  • You receive an email, supposedly from a supplier, requesting an electronic transfer to a new or updated bank account.
  • The scammers either disguise their email address or create a new address that looks nearly identical. The emails may be bluffed by adding, removing, or subtly changing characters in the email address which makes it difficult to identify the scammer’s email from a genuine address.
  • The email may look to be from a genuine supplier and often include a copy of the suppliers business’s logo and message format. It may also contain links to websites that are convincing fakes of the real company’s homepage or links to the real homepage itself.
  • The scam email requests a change to usual billing arrangements and asks you to transfer money to a different account, usually by electronic transfer.
  • The scam is usually not detected until the business is alerted by complaints from genuine suppliers that they have not received payment.

Protect Protect Protect

  • Implement effective management procedures in your business to prevent future scams. SCAM PROOF your BUSINESS.
  • Have a clearly defined process for verifying and paying accounts and invoices.
  • Consider a multi-person approval process for transactions over a certain dollar threshold.
  • Ensure your staff are aware of this scam and understand how it works so they can identify it, avoid it and report it. Share this article with them!
  • Double check email addresses - scammers can create a new account which is very close to the real one; if you look closely you can usually spot the fake.
  • DO NOT seek verification via email – you may be simply responding to the scammer’s email or scammers may have the capacity to intercept the email.
  • If you think a request is suspicious, pick up the phone and call your supplier.
  • DO NOT call any telephone number listed in the email; instead, use contact details that you already have on file for the business, or from an independent source.
  • DO NOT pay, give out or clarify any information about your business until you have investigated further.
  • Confirm that all your IT systems are up to date with security requirements. Perform regular security maintenance on your computer systems to ensure anti-virus, anti-spyware and your firewall are up to date.
 

This is one headache that your business can do without!

If you need help setting up these processes, feel free to contact us

Credit Control

Keeping debt low through proactive credit control

Keeping debt low

Credit control: Having a large amount of debt in your business is bad for cashflow, weakens your overall financial health and brings down your credit score as a business.

So when customers don’t pay on time, that ‘aged debt’ is bad news for your finances. Aged debt can begin to stack up, adding to your liabilities and reducing the health of your overall balance sheet. So, it’s important to tackle late payment head on.

Get effective with your credit control

Being proactive with your debt management helps you speed up payment, reduce your debtor days and rein in your overall debt as a business

To improve the efficiency of your credit control:

  • Make your payment terms clear – state your payment terms on all invoices and create a policy that’s part of the terms & conditions that customers sign up to.
  • Run regular debtor reports – check your list of late invoices to see which customers are the late payers, and where the big debts are that need to be collected.
  • Be proactive in chasing late payment – don’t be shy about asking a customer to pay their bill. Set up notifications and schedules to remind yourself to chase late-payers.
  • Automate your credit control tasks – cloud accounting platforms have built-in tools or automated credit control integrations that can automatically chase your late-paying customers as soon as an invoice is overdue.

Talk to us about enhancing your credit control

If late payment and aged debt is weighing heavily on your balance sheet, we’ll help you set up the debtor reports and credit control processes needed to reduce this debt.

Get in touch to improve your credit control.

Cash Flow Management

Why you need to forecast your cash flow

Cash flow is the lifeblood of your business. And when it comes to cash flow management, preventing cash issues is far easier than trying to solve these issues after the event.

Positive cash flow comes from balancing your income (the cash inflows) against your expenditure (the cash outflows). If you’re in control of this then the business will always have the liquid cash needed to cover your liabilities.

Forecasting your cash inflows and outflows

Forecasting works by taking your cash data from prior periods and projecting it forward in time, giving you a ‘crystal ball’ that reveals the future health of your cash flow.

By running detailed cash flow forecasts, it’s possible to:

  • Understand your future operational cash flow – helping you to see the seasonal dips, or the projected drops in income, and get the early warning you need to take action.
  • Plan your costs and expenditure effectively – by working to strict budgets, looking at cost management and reining in expenses – so your future outflows are reduced.
  • Avoid the cash flow issues before they happen – giving you the information you need to plan ahead, take clear action and stay in tight control of your cash status.

Utilising technology to forecast

There are a number of tools you can use to forecast your cashflow, including Add-on Apps. One we often recommend is Futrli. With the ability to connect to Xero and Quickbooks, Futrli can provide integrated forecasting and reporting for small businesses.

Talk to us about setting up cash flow forecasts

If you want to get a grip on cash flow, we’ll help your tailor your accounting set-up and will provide the cash flow forecasting tools you need to reveal your future cash position.

Get in touch and let’s start forecasting.

contractor or employee

Contractor or Employee

Contractor or Employee 

What You Need to Know

Should your staff be contractors or employees?

There are many factors to assess and, as a business owner, it’s your responsibility to get it right.

So, what is the difference between a contractor and an employee?

An employee

  • works in the business and is integral to that business
  • has rights and entitlements under the Fair Work Act 2009
  • has a reasonable expectation of ongoing work, agreed hours and duties
  • is covered by the employer’s workers compensation insurance
  • is paid superannuation guarantee.

A contractor

  • is actively running and advertising their own business
  • is responsible for their own insurance, equipment, licenses and tax
  • has a high level of independence, discretion and control as to how and when the work is performed
  • is able to delegate work
  • is liable to fix mistakes at their own cost
  • may or may not be paid super depending on the nature of the work engagement.

It is the business owner’s legal responsibility to determine the nature of the work and the correct basis of engagement. We can help you get it right.

Multi Factor Test

There are many factors involved in deciding whether a worker is an employee or contractor. And the guidelines must be applied individually to each working relationship.

There is no single overriding factor, rather, the totality of the working relationship and nature of the work being done is taken into consideration.

Sole Trader as a Contractor May Not be Right

When sole traders are engaged as contractors, the business owner needs to check whether they really meet the criteria for being engaged as a contractor. Many sole traders engaged as contractors are not actively carrying on a business, and do not have the level of independence that a contractor should have. This is even if they have their own ABN. 

Sole traders are often engaged for their own services and labour. However they are not free to delegate the work to someone else and must work under the direction of the employing business. In this case, they should be engaged as an employee and not a contractor.

Factors to Consider

This is not an exhaustive list but some of the main factors to assess.

  • Is the worker engaged to achieve a specific result or are they engaged for their labour?
  • Are they able to delegate their contract to another worker within their own business?
  • How much choice do they have in where, when and how the work is performed?
  • Is the service integral to the business?
  • Do they advertise services and accept work from other businesses?
  • Who is liable to fix damages or mistakes?

Contractor or Casual Employee?

If you are not sure whether a worker is an employee or a contractor, check the ATO Employee or Contractor information first.

It’s okay to engage a worker as a contractor initially and to reassess the engagement three to six months later if the situation is unclear.

However, at that point, if the worker does not meet the contractor definition and you don’t need a permanent employee, put them on as a casual employee. This is often the best solution for both parties.  It means the employer is compliant with tax, super and employment laws. Plus the worker retains some flexibility while being paid super and having tax taken care of.

The ATO and the Fair Work Ombudsman are particularly concerned with the validity of sole traders treated as contractors. This is because they are the workers most frequently disadvantaged by being classified incorrectly as a contractor when they in fact meet the test for being an employee.

Get it Right to Avoid Penalties

A business that should have engaged a worker as an employee will be liable for back-payment of entitlements (such as leave, overtime and allowances), and superannuation.

Some situations are straightforward to work out. But many contractor or employee decisions are not so easy with so many factors to consider.

Let us help you get it right and sort out the tax and superannuation obligations for all your workers whether contractors or employees.

understand your cashflow statement

Understanding your cashflow statement

Understanding your cashflow statement

Understanding your cashflow statement means you know how your business has generated and used cash (and cash equivalents) within a specific time period. And this gives you an overall picture of your business performance. 

It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide a good understanding of the financial position of your business.

How does it work?

The cashflow statement integrates the information provided by the profit and loss statement and the balance sheet into a current cash position.

Your cashflow statement is reported on a cash basis, while your other financial statements are usually reported on an accrual basis. Accrual income (from the profit and loss statement) is converted to cash by calculating the changes in the balances of asset and liability accounts.

Report categories

Your statement of cashflows is organised into sections that report on different types of business activity.

  1. Operating activities - all business income, expenses, assets and liabilities (except for those assets and liabilities reported in investing and financing activities).
  2. Investing activities - the purchase and sale of long-term investments, property, plant and equipment as well as security deposits paid to suppliers or received from customers and dividends received.
  3. Financing activities - the changes in balances of equity accounts, for example, issuing and repurchase of stocks and bonds and payment of company dividends if applicable. Loans are also included in financing activities.

Formal financial report packages usually include notes to the financial statements. The notes contain supplemental information that explain significant items or activities that did not involve cash transactions. 

Why is it useful?

Your cashflow statement gives you a valuable measure of cashflow in and out of the business over a given period. It shows the ability of your business to pay bills and fund operating activities. This gives you a picture of overall performance.

It also shows the relationships between assets, liabilities, equity and cash accounts. Your cashflow statement shows changes and movements over time. Whereas the balance sheet and profit and loss reports show account values at a single point in time.

Your cashflow statement gives you vital information on your business.

  • How strong is your cash position?
  • What is the long-term outlook for your business?
  • What activities generate the most cashflow?
  • What is the relationship between your net income and your operating activities? 
six reasons to look at your financial reports

Six reasons to look at your financial reports

Six reasons to look at your financial reports

Making time to look over your financial reports each month is an important task for any business owner.

If you are not taking the time to do this, either because you’re too busy, or perhaps you don’t really understand what you’re looking at and it doesn’t make sense to you, then here are six reasons to look at your financial reports.

But before we get our six reasons, let’s talk very quickly about which reports to look at.

At a bare minimum, and depending on the complexity of your business, you should be looking at the following:

The Profit and Loss report (P&L)

As the name suggests, your P&L tells you how your business is performing over a period of time, such as a month or a financial year. In broad terms it shows the revenue that your business has generated, less the expenses for that same period. In other words, it shows how profitable your business is.

The Balance Sheet

The Balance Sheet shows the value of the business’s Assets, Liabilities and Equity.

  • Assets include things like money in bank accounts, Plant and Equipment, Accounts Receivable balances
  • Liabilities include things like Bank loans and credit cards, Accounts Payable, and Hire Purchase balances
  • Equity is the difference between your Assets and your Liabilities and includes Retained Earnings and Owner Funds Introduced
Accounts Receivable Ageing Report (Aged Receivables)

This shows how much money is still owed to the business as at a certain date in time, and is usually segmented as to how overdue they are, or sometimes by how far past the invoice date they are. Generally, you will have Current, 30, 60 and 90 days columns.

Accounts Payable Ageing Report (Aged Payables)

This report shows who the business owes money to as at a certain date in time and, like the Accounts Receivable Ageing report, is usually segmented by overdue period.

So, why bother? (six reasons)

1. Understand your business better

By looking at your Profit and Loss report monthly you will get a good picture of how your business is performing month by month and it will give you a better understanding of what makes up your profit. It can be helpful to compare periods, or to look at a month by month P&L, so you can clearly see on one page the revenue and expenses month by month. This will help to identify trends in your data and many also help to highlight anomalies in coding/categorising.

2. Accurate information for lending purposes

If you are applying for a loan or an overdraft, the bank or financial institution will look closely at both your Profit and Loss report and the Balance Sheet as a lot can be learned about a business by looking at these reports together. If you are unsure what some of your balances are in your accounts, get in touch and we can explain them further.

3. Get paid quicker and reduce bad debts 

By looking at your Accounts Receivable Aged Summary each month you can follow up with overdue accounts promptly which often results in getting paid quicker. The longer an overdue amount is left unpaid the higher the risk of it not being paid at all, so it is important to keep on top of this.

4. Better relationships with your suppliers

Assuming you are entering your supplier bills into your accounting software (recommended for most businesses to get an accurate profitability figure) your Aged Payables report will alert you to any unpaid or overdue amounts. Supplier relationships are an important aspect of your business and paying on time is crucial to maintaining those relationships.

5. Better cashflow

Having an accurate understanding of how much money the business is owed, and how much money the business owes, can help with cashflow planning to ensure that there is enough money when needed. Additionally, understanding the trends of your business, its profitability drivers, its expenses, etc., can help to plan sales and marketing campaigns so that the revenue keeps coming in.

6. Better decision making

Your financial reports tell the story of your business and it’s important that you understand the story that they are telling you. The better you understand what’s going on in your business the stronger position you will be in to make better business decisions that affect the profitability of your business and its financial viability.

Whats next?

If you would like to know which reports are relevant to your business, and you want to better understand what’s going on in your business , then book a time with us to make a time to go through them with you.

Your business success is important to us and we are here to help you.

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