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Business Tips – Being an Open-Book business in a Closed-Book world

Business Tips – Being an Open-Book business in a Closed-Book world

Being an Open-Book business in a Closed-Book world

An interesting look at Open-Book business operating in a Closed-Book World (our own emphasis) as Michael Lumsden writes at Great Game of Business – Our company operates in the outsourced contact centre sector. We tend to have relatively few, big corporate clients with large transaction volumes and long term contracts. This means we have quite high levels of single client dependency so we are always trying to make sure we are delivering great services and anticipating our clients requirements so we can satisfy or exceed them. We do a pretty good job generally judging by our client growth and retention rates.

Most of our clients have heard us talk about open-book management but I am not sure they really understand it or appreciate the role it plays in our success and therefore the outcomes we deliver for them as clients. Often times we feel frustrated with our clients because they treat us in a “closed-book management” style. It is not uncommon for large companies to limit the information which is shared with their business partners / suppliers. Information is power and the traditional procurement led approach to supplier management is designed to help the big corporate protect their position of power in the relationship.

As practitioners of open-book management, we know that there is enormous value that can be created when organizations unleash the power and creativity of their employees. We know that an open-book approach is one of the best ways to win the hearts and minds of the employees. So when a major client imposes either deliberately or through omission a blockage to meaningful information flow between their organization and our employees (who are effectively their employees as far as the customer is concerned) we see a shortfall against the value that could be generated. So it got me thinking about how we can help build better Open Book relationships with our clients.

Here are a few ideas we are going to try:

#1 Teach clients the rules of the Game

 We teach our employees the rules of the game but we have never really made the effort to teach our clients. Our frustration at their “closed-book approach” is our own fault given we have never taken the opportunity to educate clients on the Great Game and how it impacts on our culture and performance as a business. We need to help them understand the open-book management system and agree how we can use information better to our mutual advantage.

#2 Align critical numbers

In our client relationships there is a very strong level of measurement against KPI’s. The critical numbers are usually fairly evident and we have a good ability to measure these and communicate them across our business at an aggregated and individual performance level. The “closed-book” gap with clients is not with what the critical numbers are, but with how targets are set against these KPI’s. Often times clients will set targets that are overly ambitious in the belief that they can drive performance outcomes with their outsourced providers by dangling the carrot just out of reach. If you do manage to reach the level, the bar quickly gets lifted a bit higher. Typically when targets are missed this triggers contract penalties which reduce our remuneration from the contract. This has a flow on effect in that as an open-book company we typically share our client targets with our employees and align their bonuses or “Stake in the Outcome” with the client targets. So if the targets are continually set in a way where they are perceived to be out of reach, the power of the bonus or “Stake in the Outcome” is negated. Again education is required with our clients to demonstrate the linkage between realistic target setting and the Open Book Management system.

#3 Teach clients the value of everyone following the game on a scoreboard

Large corporate companies often outsource parts of their business and keep some in house. They may also outsource to multiple providers. When the large corporate takes this multi-vendor and or in-house / out sourced approach, they will be attempting to derive the value of a competitive champion challenger mindset amongst other benefits . This should really play into the hands of an open-book management provider because we know the power that can be harnessed by sharing performance results for various teams on a scoreboard. Unfortunately, the “closed-book” thinking often prevents the client from sharing the competitive data across vendors and or their in-house operations. They will tend to release only snippets of sometimes manipulated data to support their goal of pushing the provider for better performance. This censorship or blacking out of the true scoreboard is potentially incredibly damaging to the performance across the entire estate. We need to teach our clients the benefits of everyone involved being able to “follow the action and keep score”.   

#4 Give clients a Stake in the Outcome

Our clients are naturally interested in achieving better financial outcomes. Being tough on suppliers through a procurement led approach is seen as being financially prudent and helping the big corporate drive profitability. If we want to change the “closed-book” behaviour, we need to be able to demonstrate what the client’s benefit or “Stake in the Outcome” from an open-book approach will be. We need to model the financial benefits and present compelling business cases as to why they need to adopt a more open book approach. We then need to be able to test it and make it work in the real world so that the client gets a measurable benefit.

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

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Business Tax Tips – Instant asset write off 2017 – $20,000 claim limit ends 30 June 2017

Business Tax Tips – Instant asset write off 2017 - $20,000 claim limit ends 30 June 2017

Instant asset write off 2017 – $20,000 claim limit ends 30 June 2017

If you are a small business (aggregated turnover of less than $2 million) contemplating buying machinery or equipment, be aware that these are final months of the $20,000 instant asset write-off 2017.

With a final date of 30 June 2017, you may consider bringing forward any planned asset investments to the next few months – particularly in this current low interest-rate environment.

The ATO says

Small businesses can immediately deduct assets costing less than $20,000 purchased since 7.30pm 12 May 2015.

You can use the new threshold amounts in claiming deductions in your 2015 and 2016 income tax returns.

The deduction is claimed in the income year in which the asset is first used or installed ready for use.

What’s changed?

The instant asset write-off threshold has increased to $20,000 (up from $1,000). This allows you to immediately deduct the business use portion of a depreciating asset that costs less than $20,000.

The changes apply

  • To assets acquired after 7.30pm on 12 May 2015 until 30 June 2017
  • On a per asset basis, so several assets each costing less than $20,000 would qualify
  • To new and second hand assets.

Assets that cost $20,000 or more (which can’t be immediately deducted) will continue to be deducted over time using a small business pool.

The low pool value threshold will also increase to $20,000. This means that an immediate deduction is available if the pool balance is less than $20,000 at the end of an income year.

What’s not included?

There are a small number of assets that aren’t eligible for accelerated depreciation, for example horticultural plants that have specialised depreciation rules.

Record keeping

Just like any other business asset, you’ll need to keep records to support any claims for a deduction.

Find out about:

Simplified depreciation for small business where we read –

You can choose to use the simplified depreciation rules if you have a small business with an aggregated annual turnover (the total normal income of your business and that of any associated businesses) of less than $2 million.

Under these rules, you:

  • Immediately write-off – deduct their full cost in the year you buy them – most depreciating assets that cost less than $20,000* each that were bought and used, or installed ready for use from 7.30pm (AEST) on 12 May 2015 until 30 June 2017
  • Pool most other depreciating assets that cost $20,000 or more in a small business asset pool and claim
  1. A 15% deduction in the first year (regardless of when you purchased or acquired them during the year)
  2. A 30% deduction each year after the first year
  • Write-off the balance of your small business pool at the end of an income year if the balance – before applying any other depreciation deduction – is less than $20,000.

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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Business Finance 101 – What is the difference between Current and Non-Current Liabilities?

Business Finance 101 – What is the difference between Current and Non-Current Liabilities?

What is the difference between Current and Non-Current Liabilities?

Businesses have liabilities – payments that are to be paid soon or later (long term) they are divided into Current and Non-Current.

Current Liabilities are obligations due to be paid within 12 months or less of the date of a company’s balance sheet and will require the use of a current asset (eg money in bank) or will create another current liability if paid by debt or loan.

Current liabilities are usually listed in the following order:

  1. Credit cards and overdraft accounts, loans less than 12 months;
  2. Accounts payable (trade creditors);
  3. The remaining current liabilities such as payroll taxes payable, superannuation, income taxes payable, interest payable and other accrued expenses.

Often, all the parties who are owed current liabilities are called creditors. In special situations, a legal arrangement may be created that gives preference and then those parties are called secured creditors. The majority of creditors are known as unsecured.

Non-Current Liabilities are liabilities that are to be paid over more than 12 months – typically business or vehicle loans and financing such a Chattel Mortgage. Others include Long Service Leave Accruals, and Directors Loans.

Is the business solvent? One overall method that is used to determine if a business is trading in a solvent manner, is to check if the Current Assets are more than Current Liabilities. The amount of current liabilities is used in financial ratios – such as:

  • Working capital (current assets minus current liabilities) and the company’s;
  • Current ratio (current assets divided by current liabilities).

These give an indication of the company health.

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!

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Cashflow Tips – How does Team-Building affect the Business Cashflow game?

Cashflow Tips – How does Team-Building affect the Business Cashflow game?

Cashflow Tips – How does Team-Building affect the Business Cashflow game?

Did you realise the effect of your team on your cashflow and profitability – and how team-building affects your business cashflow?

You know it when you get bad service from a business from a low-caring shop assistant – did you enjoy the experience so that you will go back? Unlikely!

YOUR team is an important, dynamic unit working together to achieve success in accomplishing a goal.

So – what determines how effectively a team will work together?

Lots of things. To create an autonomous, hard-working, high-producing group of individuals is challenging, and there are many factors that will influence your team’s success.

Here are 6 considerations to help you get started.

1-   Begin With the Right People

Know what you are looking for. When recruiting to your team, look for candidates who match your organizational culture. If you’re adding to an existing team, you might consider getting team members to help with the selection of a new recruit. While group cohesiveness has an effect on group performance, any group that works productively will suffer less turnover because they have enjoyed success. Look for people who will help to balance your team professionally.

2-   Be SMART About Goal-Setting

Without goals, teams are aimless. Prepare your team for success with a clear objective, and be sure to attach a value to the goal. Without seeing the value in the work they are doing, a team will lack the motivation to succeed. In goal-setting make your goal SMART:

  • Specific: Your goal must be well-defined so that the team’s direction is clear. Ask: Where do we want to end up? What steps will we need to take to get here?
  • Measurable: In order to measure their degree of success, a team needs precise objectives (amounts and dates). Be specific. If you describe your goal in general terms, such as “Increase sales” without indicating by how much or by when, it’s unlikely you’ll get the results you want.
  • Attainable: Be realistic. Aim too high (set a goal that your team has no hope of achieving) and you will only demoralize your team and eat away at their confidence. Make sure to state how and why you think a goal is attainable.
  • Relevant: Goals should be aligned with your vision of success, and relevant to the direction you want your team to take.
  • Time-Bound: Success will come that much quicker if you have a deadline.

Arrange to have your team revisit their goals regularly. The pursuit of achievement is ongoing, and reminders will help to keep things on track. Encourage open discussion about the team’s progress.

3-   Define Roles Clearly

Without goals, it’s impossible to establish meaningful, valuable roles for team members; in their absence, team member accountability becomes an issue, as do overlap and time-wasting. Clearly defined roles make it easier for each team member to set their own goals for accomplishing work effectively and for making a strong contribution to the larger goal. It is important that each team member accept the role and responsibilities of their own role, and those of their counterparts. You might consider explaining why each team member has been selected, so that their value to the team is clearly established. Clear roles help to:

  • Identify knowledge, skill and capability needed (helps you hire the right people)
  • Determine what resources and strategies are required for success and determines who will be sharing these (helps you get the proper tools to the right people)
  • Eliminate confusion, establish boundaries, and reduce overlap (so a member can focus time and energy on learning/ performing a specific task)
  • Identify any weakness that threatens efficiency and any need for training, support or reassignment

Perhaps the most important role on a team is the team leader. A quality leader who will value the ideas and opinions of its members and hold team members accountable will influence engagement (and efficiency).

4-   Build an Atmosphere of Cooperation

Efficient teams co-operate. In this environment, team goals are of utmost importance and team members support each other in working toward these goals. A member will be measured by their contribution to achievement. Have processes and protocols in place to promote co-operation. Consider the following:

Team charter: A charter defines how work will be done. It is created by the team, for the team. All members should be expected to contribute. The team charter addresses how work will be done. It deals with topics such as:

  • Purpose (A team that understands how a job will align with your organization’s key objectives and strategies is more likely to produce exceptional work. Reinforce corporate values, and business objectives.)
  • Duration and Time Commitment (Ask: How long will this take? What time is required?)
  • Scope (How big is too big?)
  • Stages of development (deliverables)

Communication: This is the most important factor in successful teamwork. The most effective teams exist where members are able to share information and expertise openly with their team, and with their organization as well. Personal expression must not be undervalued. (Points are listed to consider…)

Conflict resolution: Conflict is part of learning to work well together. It is powerful, and can contribute to a team’s success or be its undoing. Deal with conflict quickly. Where a team is relatively uniform in experience, problems may be resolved more quickly than where a team’s members differ widely in experience and approach to problem-solving. If team members cannot resolve an issue, they should have prompt guidance. Encourage openness, and have a method of feedback so that concerns can be brought to your attention. Be responsive.

Team-building: Enable your team to perform their job well. The degree to which you need to invest in team building depends on the size of the team, and member turnover. The dynamics of a team will change with the coming and going of members, and in either circumstance, you want your team to adjust, and continue to be productive. Help them build strong team systems and processes so that work goes on uninterrupted.

5-   Define Expectations

Performance expectations are, basically, the ‘Rules of Engagement’ for team work. They govern professional issues. Be clear about what contributions are expected from individual team members, and consider presenting these expectations to each prospective member during their interview to help assure that you will be working on the same page. These expectations should be laid out in your organizational policies and procedures.

Team expectations should be concrete and directly related to the achievement of team goals. They define how a team will work to achieve their goals.

Expect team members to:

  • Contribute (do their work)
  • Communicate with each other
  • Cooperate (support each other)…

It is very important to the success of your team that you enforce expectations. Make sure that you treat everyone fairly (without favoritism), and that you welcome and accept observations from team members about performance issues. Poor performance must be effectively addressed for team members to feel supported, and so to manage potential conflict. Team members must be held accountable for achieving goals and meeting expectations for the team to be effective.

6-   Recognize Good Work

Effective team members perceive their service to the team as being valuable to their organization, and to their own careers as well. Reward the results of their efforts. To attract and retain motivated and effective workers, your organization must invest in a culture that promotes improvement, and has a means for capturing individual contributions. Recognize and reward individual successes and team successes as well. Learn what keeps your team members motivated. You might consider the following:

  • Profit-Sharing (Share the wealth!)
  • Skills development (training, conferences, webinars)
  • Opportunity (promotion)…

Never let good performance go without recognition, and follow-up. If you or your team see good performance from an individual contributor, they should be sure the individual is both recognized and rewarded.

Effective teams benefit from front-end investment. Spend time structuring a work environment to foster success, and you will be more likely to see your team flourish. Recognize that you are part of the team (even if you are apart). Invest in your relationship with team members, and seek to build trust and loyalty by being accessible, supportive, and responsive. Reward good performance and deter poor performance. Review processes and procedures regularly. Take comments and criticisms, and allow yourself, and your team to grow towards success.

Condensed from http://www.corporatechallenge.com.au/blog/how-build-effective-workplace-team

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Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

Bookkeeping – Quick tip – Don’t use “Miscellaneous” or “Sundry” all the time for Miscellaneous expense in the accounts

If you use a “Miscellaneous Expense” or “Sundry” account, it can indicate lazy bookkeeping. It is also no help when you or the bank reads your Profit & Loss! What is in that account will be the question!

It is better to use the closest correct expense account or to add a new account to better capture the expense type. Also use the memo in the transaction, to fully describe the expense, and invoice number if not using purchases. The more detail you put in now, then you won’t have to sift through your papers later to find out what the expense was, or dig out a copy for your accountant (or the taxman)!

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

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