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Cashflow Tips – 5 Ways to Keep Cash Flowing

 

Cashflow Tips – 5 Ways to Keep Cash Flowing

Cashflow Tips – 5 Ways to Keep Cash Flowing

Some handy tips from an Australian Entrepreneur, Brad Sugars –

1.  Know your expenses
Although discounting — through coupon sites like Groupon and BuyWithMe or even on your own – can help you attract new customers, selling anything at a loss won’t help you generate a positive cash flow.
My view? Never discount. But if you do, know the costs and impact of what you’re offering and be prepared for the fallout. Among other things, you’ll need to know your overall cost basis – that is, what you paid for something. You should also know how much you should ideally charge, the cost of your offer and the profit margins on your product or service. How else will you know if your discount has you breaking even or operating at a loss? To do the math, see our break even calculator.

2.  Bundle products and services
Even though discounting isn’t always recommended, adding value is. By creating bundles of products or services, for instance, businesses can inject tremendous amounts of perceived – and tangible – value into their offerings for very little cost.
A good example is the maintenance agreements some car manufacturers are now providing with the purchase of a new car. Not only does that type of offer help allay a major concern or frustration customers have – paying for a breakdown or time lost at the dealership – it also offers real value in terms of limiting out-of-pocket maintenance costs.
Put more simply, you can increase your price point initially since you’ve helped lower a perceived risk by offering something as basic as a guarantee.

3.  Create a back-end product or service
If you know your initial offer to reel in new customers won’t be profitable, find ways to create higher price points on back-end products or services. Perhaps the first hour of catering is free, but subsequent hours shoot up in price. Or maybe an attorney will agree to draft your will for less if she thinks you’re a likely candidate for estate-planning consultations in the future.

4.  Encourage repeat business
If you’re in a volume-driven business like retail, landing repeat shoppers is your holy grail for cash flow, profit and growth. In most cases, you won’t start to profit on a customer until the third, fourth or even fifth transaction. For this reason, you need to devote your efforts toward getting customers coming back – and more often.
Consider loyalty programs, VIP offers and other frequent-shopper programs, which can be ideal vehicles for systematizing repeat business. Also keep in mind that the word “free” is a popular incentive among shoppers, and the costs of funding a freebie may easily be covered as long as you’re dealing with excess inventory or low-cost, but valuable add-ons.

5.  Pre-sell products or services
For owners who want to encourage sales sooner, pre-sell your products or services. You might couch the pre-sale as a way for consumers to plan for their future or get a jump on shopping. You can also offer to take old, outdated products back at a pre-arranged price.

Taken from Entrepreneur article 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!

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MYOB – Mobile Phone Payment System Improve Coming as Mint Venture Signed with MYOB

MYOB – Mobile Phone Payment System Improve Coming as Mint Venture Signed with MYOB

MYOB – Mobile Phone Payment System Improve Coming as Mint Venture Signed with MYOB

Last month, Aug 2013, Mint signed an agreement with MYOB, to integrate Mint’s mobile payment system with MYOB software, reports John Kavanagh at Banking Day.
Mint Wireless completed a share placement on Friday, raising A$3 million of new capital. The company said proceeds of the placement would be used to develop its mobile payments’ platform in Australia and New Zealand.
Mint’s mobile payments technology allows merchants to accept payments on smart phones and other mobile devices.
The company has forecast that mPOS (mobile point-of-sale terminal) transactions in Australia will be worth A$7 billion in 2014, growing to $20 billion by 2017.
Last month, Mint signed a deal with the accounting and business software company, MYOB, to integrate Mint’s mobile payment system with MYOB software. Under the agreement, Mint will receive a licence fee from MYOB, as well as a proportion of the transaction fees from users of the mobile payment solution once it is incorporated into MYOB’s software.
Last week, the company announced that it had also signed a distribution contract with National Australia Bank’s New Zealand subsidiary, BNZ, to distribute mPOS terminals.

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


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Business Tax Tips – Giving or Paying for Benefits for Employees – Fringe Benefits Tax (FBT)

Giving or Paying for Benefits for Employees – Fringe Benefits Tax (FBT)

Giving or Paying for Benefits for Employees – Fringe Benefits Tax (FBT)

The Australian Tax Office (ATO) explains on its site about Fringe benefits tax (FBT) as follows-

What is Fringe Benefits Tax

Fringe Benefits Tax is a tax paid on certain benefits you provide to your employees or your employees’ associates. FBT is separate from Income Tax and is based on the taxable value of the various fringe benefits you provide.

The FBT year runs from 1 April to 31 March.

What is a fringe benefit

A fringe benefit is a benefit provided in respect of employment. This effectively means a benefit provided to an employee (or their associate) because they are an employee.

You can provide these benefits, or they can be provided by:

  • An associate of yours
  • A third party under an arrangement with you.

An employee can be a current, future or former employee.

Some employers, including charities, may need to work out the status of their workers. Many will be volunteers, however, some will be contractors and employees. Generally, benefits provided to volunteers and contractors don’t attract FBT.

Benefits include:

  • Rights
  • Privileges
  • Services.

For example, you provide a fringe benefit when you:

  • Allow your employee to use a work car for private purposes
  • Give your employee a cheap loan
  • Reimburse an expense incurred by your employee, such as school fees
  • Provide entertainment by way of food, drink or recreation.

Are you providing a fringe benefit?

If you are currently an employer the following checklist will help you work out if you are providing a fringe benefit to your employees.

An explanation of each fringe benefit category is provided in the Fringe benefits categories section.

If you answer yes to any of the following questions, you may have to pay FBT.

  • Do your employees take cars home and garage them overnight, even if only for security reasons?
  • Do your employees use cars or other vehicles the business owns for private use?
  • Do you have a salary package arrangement with any of your employees?
  • Have you paid or reimbursed any employees’ expenses?
  • Do you provide entertainment, such as food, drink or recreation to your employees?
  • Have you given property, such as electrical goods, to your employees either free or at a discount?
  • Do you provide any employees with a house or unit of accommodation?
  • Do you provide loans at reduced interest rates to any employees?
  • Have you released any employee from a debt they owed the business?
  • Do you provide any employees with living-away-from-home allowances?
  • Are you a tax-exempt organisation that has provided food, drink or accommodation to employees?

For moreFringe benefits tax – what you need to know

What you need to do

If you provide fringe benefits you will need to:

  • Keep the necessary FBT records
  • Understand what benefits are exempt from FBT
  • Calculate how much FBT you have to pay
  • Register for FBT
  • Report fringe benefits on your employees’ payment summaries
  • Lodge a return and pay FBT to the ATO.

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay.

Fringe benefits tax – exempt work-related items

A number of benefits are exempt from fringe benefits tax (FBT) under the FBT legislation. Providing certain work-related items to your employee is one of these exemptions. Your employee also does not have to pay income tax on the work-related item they receive from you.

Changes to the exemption

In the 2008 budget, changes were announced to the work-related item exemption and these changes are now law. Depending on when the item was purchased or the contract was entered into, the previous law or the amended law may apply.

For details (read carefully!) see here ATO page dated Oct 2008

For more on exempt benefits (FBT not applicable) and which ones, see here link to ATO page dated May2013.

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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Reckon Account Right (formerly Quickbooks) – How to record the Paypal fees when I get paid

Client called and said – I sell some of products on eBay  the customers usually pay with Paypal. Paypal, they just deduct their fees and deposit the balance at the time of the transaction. Can I record the fee at the time that I complete the sales receipt in Quickbooks because that’s when I have all the info in front of me, it would save me having to look back at every sale for that month and add up the Paypal fees. What’s the best way to record the fees like this?

Answer – Have a “bank” account setup called Paypal and record all transactions there same as a bank account.

Create the Sales Receipt and make sure that you’ve selected Undeposited Funds at “Deposit To” the bottom left. The customer pays in full but the Paypal fee isn’t on their receipt because that’s your overhead.
Go to Make Deposits and select this customer’s payment from the Undeposited Funds pop-up menu. Next, in the main deposit screen, Top Left Hand side, select “Deposit To” the Paypal bank account. The customer payment is listed on the first line in the table below. Go to the next line down, skip the Received From column, tab to the From Account column and enter Paypal Fees (an expense account you’ve setup, or Bank Fees). Tab to the Amount column and enter the Paypal fee amount as a negative number n(-).

The Steps –
Customers >Sales Receipt:
Customer …Item Purchased…$120.00..> Deposit To: Undep. Funds
Banking>Make Deposits
(Undeposited Funds pop-up):
Select Customer  and click OK
Make Deposits Screen:

Deposit To: Paypal Bank Account
line 1=Customer …Sales…$120
line 2=[ blank ]…Paypal Fees…. – $ .50
Total Deposit to *Paypal Checking* = $119.50

Save & Close
When you decide to transfer the money in your Paypal account to your bank account just use Banking>Transfer Funds and move funds from Paypal to Bank.

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


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Business Finance 101 – Equity

 

Equity

EQUITY

After Liabilities are taken from the Assets of the Business (at cost value), we are left with Equity.

ASSETS – LIABILITIES = EQUITY

It is also sometimes used to refer to ownership of shares in a company.

In a Company Balance Sheet it is the amount of money contributed by the owners/share/stock-holders PLUS the Retained Earnings (Profit/Loss of past years).

Note because assets are entered at their COST amount (less GST) the MARKET value of the asset is not represented, unless an adjustment is made by journal to reflect change of value (and increase or decrease of asset value are then balanced in a special sale or cost of sale asset account). Hence the Company Market Value may not be the true Market Value, unless the adjustment has been made.

Equity can be called Owner’s Equity – for Sole Proprietors, or Shareholder/Stockholder Equity for a company (usually with more than one director).

Owner’s Equity may consist of several accounts –

  1. Capital
  2. Drawings and
  3. Current Year Net Income/Earnings

 

Shareholder Equity may consist of accounts such as –

  1. Paid-In Capital
    1. Preferred Stock
    2. Common Stock
    3. Paid-In Capital in Excess of Par Value
    4. Treasury Stock (stock re-purchased from shareholders)
  2. Retained Earnings/Net Income
  3. Less Treasury Stock

 

Equity is used in several important ratios that help determine financial health of the business, such as Debt to Equity and Return on Equity.