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Business Tips – How not to give away Free Advice

 

Business Tips – How not to give away Free advice

How not to give away Free advice

Tony Featherstone is a specialist writer on small companies and entrepreneurs at Sydney Morning Herald and wrote an interesting article with ideas about how not to give away Free advice, on 8 May 2014.

A small business owner I know has a simple rule: The “clock” starts the minute a prospective client seeks his advice. There are no exploratory meetings or proposals provided to clients – just a flat fee for an introductory meeting. Every minute of this time is paid for, no matter how small the enquiry.

I’m sure many business owners wish they had a similar policy. Especially those who are “milked” by prospective clients who seek their advice under the pretence of possible work.

It usually goes like this: The pretend client calls asking for your views on an issue. After getting your ideas and contacts, he or she suggests you submit a proposal detailing a path of action. You spend hours or days on the proposal and the pretend client walks away with thousands of dollars of free ideas, intellectual property and advice. You have been milked, good and proper.

Knowing when you are being used – and how to avoid it – is critical in small business. If time is your most valuable asset, you cannot afford to give away ideas and advice for free.

Yes, it’s a fine line: you have to give some ideas to excite the client and get the work, but not so many that you unwittingly become free labour. I’ve learned the hard way that it pays to be more judicious in how you give time to potential clients – and to better vet those seeking your advice.

Here are seven signs your business is be being milked for free work:

1. The “size” card

Entrepreneurs’ number-one weapon for getting free advice. They tell you about their multi-million-dollar revenue and previous successes to excite you about their potential as a client. Then they do nothing with your proposal – other than steal the ideas. Beware any clients who try to sell the size of their business to you: Real clients know their enterprise speaks for itself.

2. The “I’d value your input” phone call 

Here, pretend clients play for your ego by commenting on a previous piece of work, or suggesting your ideas and opinions would add greatly to their project. Some even have the gall to say “I wanted to reach out to you” to get your views, as though they are doing you a favour.

3. The lunch

Remember that Seinfeld episode where one of Jerry’s antagonists argues that “soup is not a meal”? It’s a bit like that when a pretend client invites you to lunch, expecting all your best ideas and help in return. You wonder why you gave away two hours of free work for a $50 lunch, and now feel obligated to provide further help. Better to have a quick coffee with unknown prospective clients, or keep it to an initial phone call.

4. So-and-so recommended I call you

Another classic milking tactic. They drop a big name, flatter your ego and try to get as much free advice as they can. Half the time, the person who “recommended” you mentioned your name in passing, but the pretend client happily leverages off somebody else’s network and reputation to get time with you. My advice: Ask the client how he or she knows the person who recommended you.

5. Sounds great, can you put it in a proposal?

How many small business owners have wasted tens of thousands of dollars writing proposals that go nowhere? The potential client wants you to supply a plan, but positions the request as a “proposal”, knowing that’s much harder to charge for. Ask the client for a proposal specification before supplying your ideas, so that he or she does some work as well. Never submit an open-ended proposal where you supply a range of ideas about what could be done, and far too much unpaid work. Keep it short and specific.

6. Can I mention I spoke to you?

Another common trick of pretend clients. They email or cold call for advice, ask if you know anybody else who might help, and if they can mention they spoke to you. Sharing your network with trusted contacts, or helping genuine people, is worthy; giving away your network to pretend clients who are milking your business – and don’t have contacts of their own – is dumb. Keep your contacts close to your chest until you feel more comfortable with the prospective client.

7. Who needs details?

The classic give-away of pretend clients. They go blank when you ask them what sort of budget will be applied to the project. They have no process or timeframe for choosing the proposal. They take forever to reply to your proposal, claiming they have been too “busy”. They hint at money being available, but never want to talk about dollars when the free ideas are coming thick and fast from you.

SOURCE 8 May 2014.

Get a FREE 10 min strategy session, and FREE ongoing email or phone support for clients – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia.


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Business Finance 101 – Managing the Cash Flow

 

Business Finance 101 – Managing the cash flow

Managing the cash flow

If and when you manage to make a profit in your business, part of good Business Finance 101 means now you have to follow it up with good cash flow management. This requires a good understanding and keeping a close eye on what drives the cash flow – both in AND out!

The key components of good cash flow management are:

  • Profitable income and increasing;
  • Continual management and minimisation of costs and business overheads;
  • Pricing for profit – if you’re able to increase prices, DO IT!;
  • Timely collection from customers – don’t be a bank for them;
  • Stock management – enough to sell but not too much to waste working capital;
  • Good job management – finishing timely and with the best quality possible;
  • Utilising all credit terms from suppliers and increasing where possible.

The very best way to handle cash flow management is to have a ‘Cash Flow Projection’. This is a spread-sheet that plots out what your expected income will be (taking into consideration the time customers are likely to take to pay) and what the expected outgoings will be. As well as income it includes any other funds coming into the business, such as loans, tax refunds etc. Outgoings will include items such as loan repayments, tax, dividends etc. These are just as important to take into account as their timing can have a big impact on cash flow.

Need help? Not sure? Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

***BEFORE you BUY Ask us for a competitive software price BELOW retail – No obligation!

You also get FREE 30 min to assist in setting up your company in the software, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right! Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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MYOB – Need Payroll Tax Tables for 2014-2015

MYOB – Need Payroll Tax Tables for 2014-2015

MYOB – Need Payroll Tax Tables for 2014-2015

You need the new payroll Tax Tables for 2014-2015 because either MYOB says you have out of date tax tables, or you know they are. (To find what you have, click Set Up then General Payroll Information. In about the middle is the table date at the start of that tax year). The problem is tax tables become out of date each year as tax rates and/or Medicare and HECS thresholds change. MYOB only supply new tax tables via full software annual subscription. The latest tax tables are not separately available. Users must upgrade to a new version or take out Cover under their support program to receive the latest ‘pay2myob.bin’ file (MYOB) to keep payroll compliant. (If you want to upgrade, email us – info@accountkeepingplus.com.au).

The special MYOB tax file has been specially formatted disallowing any manual edit, as the tax rates change from year to year. Additionally, each version is formatted specially, so you can’t use a tax file formatted for MYOB Version 19 with say Version 16.

With the Mac version (AccountEdge®) the tax table file is called MYOB Tax Tables or in v9 to 9.6 has a “.tax” extension. Everything else though is the same and all the comments here apply equally to the Mac version. Note third-party tax tables cannot be used in MYOB 2011 onwards – you MUST have subscription or upgrade. Contact to discuss your needs, no obligation 0407 361 596.

There is a Solution up to v19.9 – Third party updated tax tables available for $68.20 (see further for details) provide a substitute, have been tested and work with many prior versions. They are for those who want to continue to use their current versions of MYOB® without the need to upgrade. Note that there is nothing in your license agreement that prevents you using 3rd party tax tables.

Installation is simple. The tables are supplied with easy to follow instructions and instantly downloaded after payment in most instances, or will be emailed to you. You also receive a PDF copy of the applicable Aust Tax Office Weekly Tax Table for you to check the accuracy of the calculations. After-sales email support is available for any installation or setup issues you may encounter.

Note – NO changes are made to the software. The only changes made are to the tax rates in your company data file that the software calls upon to calculate PAYG Withholding in a pay, when processing payroll. The changes made are not permanent and can be reversed by reloading the tax tables from your current tax table file, simply moving a file in the software folder

These third-party tables are available, which Account Keeping Plus have tested in the software and against the ATO tables and work perfectly for us and several of our clients. To get more details and purchase for your MYOB – find out HERE.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

Call 0407 361 596 Aust and also get Free “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right! Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Business Tax Tips – Payment Summaries Magnetic Media Form and Pays that are included in this Financial Year of the Bookkeeping Process?

Business Tax Tips – Payment Summaries Magnetic Media Form and Pays that are included in this Financial Year of the Bookkeeping Process?

Payment Summaries Magnetic Media Form and Pays that are included in this Financial Year of the Bookkeeping Process?

Client emailed - I am hoping that you can “Jog my memory” with my bookkeeping process, as to how/where I print the “Magnetic Media Information Payment Summary Annual Report” form that I send to the ATO. I have all my notes out & my MYOB manual but cannot find this anywhere. Also as we pay on Wednesday which is 2nd July but pay week is for 23rd – 27th is this included in last financial year?? I am in information overload ATM….Thank You J Natasha

Answer – The Magnetic Media form is created as one of the steps in the Payment Summary process in the bookkeeping software, in MYOB and Reckon/Quickbooks.

It is created to be completed and mailed with a CD back-up of the EMPDUPE file that is also created in the same process – save the EMPDUPE to desktop to burn to CD – then keep a copy in a Year End 2014 folder in your accounts documents on computer in case you need it again. I also copy all the Payment Summaries as PDF there so all are together.

If you have an AUSKEY from the ATO you will be able to upload the EMPDUPE via the Business Portal.

Since you pay in July for work in June, usually we don’t worry – just follow the usual routine of pay dates for earlier periods – it will mean the pays are taken as the DATE on the PAY – the date on the pay transaction in MYOB will be the month the pays are recognised and reported.

If you want to include the 23rd – 27th June work as part of  year 2014 you need to date the pays in June – do the “pay date” in the pay run as 30 Jun 14. Then they will be in the June period for reports and tax deduction, etc.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Reckon /Quickbooks – Year End Support to Prepare your Books for YE14!

Reckon /Quickbooks – Year End Support to Prepare your Books for YE14!

Reckon (formally Quickbooks in Australia) can help you with all the tasks to finish off the bookkeeping for the year to be on top of compliance but more importantly for you to have an accurate set of books to UNDERSTAND and gain INSIGHT to MANAGE your business BETTER! Your books and accounts are a treasure-trove of information that tell you about the health of your business and what areas you can work on to improve your business financial results!

Reckon has listed some of the changes and things to watch out for on its Blog

PAYG Tax Tables

The PAYG tax tables have again been updated this year to incorporate the indexation of the HELP repayments and also to deal with the new Deficit Levy for high income earners that the Federal Government has introduced for the next three years. Reckon Accounts business accounting software and Reckon Payroll Premier payroll software is being updated to take into account these new rates. If you currently use one of these products, expect news on an update in the last week of June.

Medicare Levy

Originally announced as part of the National Disability Insurance Scheme, the increase to the Medicare Levy comes into effect this upcoming financial year changing the rate for most tax payers from 1.5% to 2%. This has in turn led to an increase in the PAYG taxation on salaries and termination and bonus payments. For example, the rates for an Employment Termination Payment are now 17%, 32% and 49% (inc deficit levy) depending on age and levy of payment.
Previously these rates were 16.5%, 31.5% and 46.5%. Reckon Accounts business software and Reckon Payroll Premier software will be updated to take into account these new rates.

Super Guarantee Rate Increase

Despite it originally being announced as delayed, the Super Guarantee will increase to 9.5% come 1 July, 2014. This means that eligible employees will need to be paid at least 9.5% of their wages for superannuation. Like last year, both Reckon Accounts business software and Reckon Payroll Premier payroll software have been updated to include an upgrade procedure for you to have employees automatically update to the new required rate.
If you have a pay close to the end of June then you should keep in mind the ATO’s ruling from last year on the rate of super that needs to be paid. It revolves around the reasonable expectation of when the employee will receive the payment into their bank account. If it is reasonably expected that the employee would receive the money before July 1st, then the rate is likely to be 9.25%. If not, 9.5%. However it is best to check with the ATO and/or your accountant before making a decision.

Paid Parental Leave

The government’s proposed paid parental leave scheme is still on the drawing board so the existing scheme remains for the upcoming financial year. However there has been a change to the rate of payments. Due to the change in the minimum wage in Australia to $640.90, that will become the Paid Parental Leave rate.

Superstream

Although it was originally to be made mandatory for 1 July 2014, the Federal Government recently announced changes to delay that compliance requirement until 1 July 2015. However you can choose to opt in anytime over the next 12 months.
Superstream is set to save you a great deal of time if you currently prepare clients superannuation payments manually – we predict days of manual work could soon be done in minutes. Reckon Payroll Premier will be updated for you submit payments via the new method from 1 July 2014, an update to Reckon Accounts business software will be made available later this year.
Read the factsheet on Reckon and Superstream here >
Reckon wishes you all the best over the next week and over the tax time period. If you have questions about any changes and how they may have an impact on your Reckon software feel free to post your comments below.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

                Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!


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MYOB – Year End Support to Prepare Your Books for YE14!

MYOB – Year End Support to Prepare Your Books for YE14!

MYOB – Year End Support to Prepare Your Books for YE14!

MYOB have a huge amount of resources to assist you in better books for your accountant, but more importantly for you to have an accurate set of books to UNDERSTAND and  gain INSIGHT to MANAGE your business BETTER! Your books and accounts are a treasure-trove of information that tell you about the health of your business and what areas you can work on to improve your business financial results!

The MYOB End of Financial Year page is where you begin. The resources include –

Trending Topics

Since 2013, MYOB are trying some things to help make business life easier. From listening to client feedback, we’re producing videos and support notes that help explain some of the areas you’ve told us you need help with. This will be a growing list, and all based on your feedback so we hope you find it useful!

Step-by-step EOFY guide for your software

At the end of the financial year there are a number of important tasks you need to perform to check the accuracy and completeness of your business data. MYOB has prepared a checklist to take you through these tasks to simplify your end of financial year process.

The checklist is customised to the MYOB software that you’re using. Simply enter your serial number or select your product and version from the list on the site page

Tax changes information

A series of essential topics covered including –

The ATO recommendation you can’t afford to miss talks about the ATO letter sent to employers about changes to the tax tables and super, as well as SBR reporting and the future MYOB update coming.
A handy EOFY checklist for small business owners 
When are my GST and BAS deadlines for EOFY?

First time employers, don’t miss these payroll deadlines 
Year-end tax planning for small businesses

Other helpful Tax time whitepapers -

Getting the Compliance Update

You’re entitled to the latest compliance update if you have:

You will be able to download the current update directly from Updates within the MYOB software in many versions see Answer ID 32270

Get a FREE 30 min answer to your query, and FREE ongoing email or phone support – No-one offers as much! Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right! Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Business Finance 101 – Use your Bookkeeping to get Key Financial Ratios to track how you are doing

Business Finance 101 – Use your Bookkeeping to get Key Financial Ratios to track how you are doing

Use your Bookkeeping to get Key Financial Ratios to track how you are doing

Once you have several months of transactions recorded and bank and credit cards and loans reconciled, an important business finance task each month is use your bookkeeping to get key financial ratios to track how the business is going. Use the reporting features to examine some key margins and ratios. These are like a report card for your business. The most common are gross profit and net profit margins, current ratio, quick ratio and debt to equity ratio.

Use the Profit & Loss statementTip – in MYOB choose with YTD (year to date), or in Reckon/Quickbooks, modify to include the YTD. This will automatically give you a percent column that is the amount of Gross Profit or Net Profit as a percent of the total sales at the top. See our Business Profit and Loss Statement and Profit Margins post for more detail to understand more and how to calculate manually. Do you know what your industry Gross Margin % is? Call us and we can give you a guide for FREE!

Use the Balance Sheet to look at the next ratios, which give an indication of the health of your business –

Current Ratio + Total Current Assets / Total Current Liabilities

This confirms whether the business has enough current assets to meet payment of its current debts (current refers to assets and liabilities that will fall due within 12 months). It includes inventory value, as this will be turned over in less than 12 months.

Quick Ratio (Acid Test) = Cash + Receivables/Debtors / Total Current Liabilities

This is like current assets without inventory which can take time to sell if a fire sale is needed, and is mostly the liquid assets. The higher the amount the more “Stable” the business is. That is, the higher it is, the longer the company can stay afloat.

Debt to Equity = Debt/Equity

Divide the amount of debt usually total liabilities) by the equity (owner’s or shareholder’s). the lower the better, but some debt can help you grow and is called leverage – debt can be beneficial, but it must be manageable – higher than 1 can be a warning to keep a close eye and manage the debt carefully. See more

Other ratios may be of importance to your business

Inventory turnover

Accounts Receivable turnover

Accounts Payable turnover

Return on Assets

Return on Equity

The key is to see that huge value lies in your bookkeeping records! The books are and asset not a liability or expense – they are an invaluable source, so use your bookkeeping to get key financial ratios to track how the business is going.

Need help? Not sure? Call for FREE 30min advice / Strategy session today!

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – there’s 18 that the Tax Office see regularly – get them right! Email info@accountkeepingplus.com.auor call 0407 361 596 Australia

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