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Business Tax Tips – Research shows how to increase revenue for small business especially start-ups

Business Tax Tips – Research shows how to increase revenue for small business especially start-ups

Research shows how to increase revenue for small business especially start-ups

If a 21% chance of increasing revenue / sales was possible by working with your accountant / advisor – would you do it?  Rose Powell reports on a survey in SMEs can make better use of their accountant to boost their bottom line“For the third of business owners who worked with an accountant as an advisor, one in five (21%) saw a rise in their revenue over the last year”.

Rose wrote – “Small business operators who used their accountant as a business advisor last year were 31% more likely to see an earning uplift, according to … research from the 2013 MYOB Business Monitor.

The vast majority of the 1005 business owners surveyed, 89% used an accountant last year.

Only 32% of owners reported having an advisory or consultative relationship with their accountant, compared with the 57% whose relationships were for compliance only, such as tax return completion or GST reporting.

Just 11% did not have an accountant.

For the third of business owners who worked with an accountant as an advisor, one in five (21%) saw a rise in their revenue over the last year.

Adam Ferguson, general manager of the accountants division at MYOB, told StartupSmart that using an accountant as an advisor was especially valuable for start-up companies.

‘The start-up phase of a business is very different to when it’s up and running. In that phase, your accountant can help with things like creating a business plan, applying for business loans, building out your business case,’ says Ferguson.

For start-ups who are already in operational phase, the increasing use of cloud accounting systems enables accountants to provide feedback and ask the right questions about compliance and cash flow.

Ferguson says cloud accounting means compliance is no longer a year-end process, and increasingly a monthly one. This makes them well placed to advise on cashflow questions.

‘An accountant can play a key role in helping a start-up, reporting on cash flow on a more regular basis, and understanding the dynamics that drive cashflow,’ says Ferguson.

The report found companies that worked with an accountant as an advisor were less concerned about attracting and retaining customers, and were more likely to increase their overall investment in their business strategies.

‘Once you’ve got your cash flow healthy, it becomes a question of how to use that and where to invest that to grow my business,’ says Ferguson.

Over half, 53%, said they found their accountant advisor provided useful advice on how best to manage the money that flows through their businesses.”

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 – Accounting Standards / Principles (GAAP) – why is it important to have?

Business Finance 101 – Accounting Standards / Principles (GAAP) – why is it important to have?

Accounting Standards / Principles (GAAP) – why is it important to have?

When we do accounting (which is recording the monetary values of financial transactions) there are general rules and concepts that have been developed over many decades that apply. These are called basic accounting standards / principles or guidelines and are the groundwork on which more detailed, complicated, and legalistic accounting rules are based.

In Australia. The Australian Accounting Standards Board (AASB) uses the basic accounting principles and guidelines as a basis for their own detailed and comprehensive set of accounting rules and standards.

There is a phrase “generally accepted accounting principles” (or “GAAP“) which consist of three important sets of rules: (1) basic accounting principles and guidelines, (2) detailed rules and standards issued by AASB, and (3) the generally accepted industry practices.

When a company distributes its financial statements to the owners or the public, it is required to follow generally accepted accounting principles in the preparation of those statements. Further, if a company’s shares are publicly traded, federal law requires the company’s financial statements be audited by independent public accountants. Both the company’s management and the independent accountants must certify that the financial statements and the related notes to the financial statements have been prepared in accordance with GAAP.

GAAP is useful because it attempts to standardise and regulate accounting definitions, assumptions, and methods. Because of generally accepted accounting principles we are able to assume that there is consistency from year to year in the methods used to prepare a company’s financial statements. And although variations may exist, we can make reasonably confident conclusions when comparing one company to another, or comparing one company’s financial statistics to the statistics for its industry. Over the years the generally accepted accounting principles have become more complex because financial transactions have become more complex.

The Accounting Standards (GAAP) are split into various categories eg “Statement of Cashflows”, “Construction Contracts” etc and a list with most recent updates/ pronouncements for Australia can be found HERE.

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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Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Account Keeping Plus has seen real-life examples of results when you focus on Key Performance Indicators (KPIs) to impact your business growth, but coming up with which KPI numbers can seem difficult.

In fact it’s as simple as this: start with a pool of numbers that seem as though they could be important to your overall success, then rule them out one by one until the pool is small enough to count on one hand. Those are your KPIs, or critical numbers.

Here are some ways to generate a pool of possible KPI or “right numbers”:

  • Start with your top-level financial goals and targets such as the specific numbers that define success for your company.
  • Look at the things going on in your market and industry. What are the trends for the last few years? What are your customers and employees saying?
  • Look at your financial statements. Often times, the “right numbers” will include sales, gross profit and net profit from the income statement. Balance sheet numbers might include level of cash, accounts receivable, debt and equity. You may also calculate various ratios such as gross margin percent and current ratio.
  • List all the vital areas of focus – customer service, marketing, sales, products and services, production and quality – then drill deeper into each of them. These may be your various departments or they may be workflow functions independent of the department.
  • Don’t focus only on just financial measures. Operational numbers (i.e. web hits, turnaround time, customer satisfaction, etc.) can be especially helpful in analysing the progress toward your most important goals and growth.
  • Ask yourself these two questions: What numbers do you and your people currently monitor on a regular basis? How did you choose those numbers?

Now that you have a BUNCH of numbers, start the elimination game, as here is my final piece of advice for determining the metrics you’re going to track:

  • Keep the amount of information to a handful of KPI critical numbers so your attention isn’t spread. Just because you CAN measure something doesn’t mean you SHOULD. Sometimes, Less is more. Consider also having key managers taking on some of the KPIs that relate to their area – finance, production, operations, sales, marketing, etc.

Once you’ve narrowed down your KPIs, ask yourself and the team one more question: Are we monitoring the right numbers? Usually time will tell – it sorts out over a period – you’re not going to know your essential and critical numbers right away, and other times you’re spot on.

Finally, it is critical to create a system to organize your numbers. For this, consider starting a dashboard for all to see.

One client of ours, instead of showing the $, prefers to show Quotes and Invoices as Hours, with minimum targets monthly for each. So once we have checked all the accounts receivable is reconciled to deposits in his Xero, we run reports on the previous month total Quotes and total Invoiced. In excel I have created a template to enter this raw data, which is automatically converted to a number called hours (which is derived after financial review of the required $ per hour minimum to cover the business costs and wages and super currently).

I then post the numbers – above or below the Min. target on a white board in the office so all can see.

When targets are met they celebrate, when they aren’t they try to work out what has changed or been missed, and make changes to stop the retreat. And it’s engaging all staff, and creating a team effort! The KPIs are WORKING!

They are part of the AKplus service he receives from us, which includes a Business Health Review of other KPIs – Sales, Gross & Net Profit, Current Ratio. See Services in the Menu, and call to ask us to send a FREE sample of how we help businesses understand the numbers, and GROW!

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

Call 0407 361 596 Aust


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Business Tax Tips – Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

Business Tax Tips – Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

Reconciling GST accounts in the Balance Sheet and GST Reports – How to understand

A client was reconciling the GST accounts: Collected & Paid amounts on the Balance Sheet and GST reports, and wanted to know –

  1. The end of year Balance Sheet shows a different amount to the GST Accrual (& Cash) reports.  Why?            
  2. They thought that the GST Liabilities section of the Balance Sheet gets automatically updated when you enter a Spend Money purchase or raise a Sales invoice.  Is this the case?
  3. Or do we have a classification issue in our MYOB account set ups that we need to fix?

The answer is – the amounts in the GST accounts should reflect the way the transactions are created, and depend on whether cash recording (cheques and deposits or cash receipt sales) or accrual recording is used (invoice sales and purchases or bills).

Cash transactions recognise revenue sales and expenses when actual CASH is received and paid, ie when paid. The GST accounts will have the exact GST amount for each transaction, as and when paid or received.

Accrual transactions recognise revenue sales and expenses when the TRANSACTION occurs, not when paid. The GST accounts will have the GST  from the invoice or purchase.

If you report tax amounts for a period, keep in mind the way transactions are entered, as the GST on sales and the GST on purchases will not be picked up if reporting on Cash basis, and are not paid in the time frame. If they were paid, they would appear in the report.

Always check on screen the GST detail reports to see what transactions are picked up for the period, and after checking, if ok, PRINT to keep a record, then print the GST/Tax summary report.

The balance of the tax accounts also changes, as we post the amount reported to the ATO to them, reducing/increasing the account to reflect what is reported and paid (or refunded). So a tax payment during the period reported also changes the Balance Sheet amount. Look through the detail of the transactions in the tax accounts, and see what has occurred.

See also Cash and Accrual – will there be Debtors (Accounts Receivable – AR) and Creditors (Accounts Payable – AP)?

And for a quick summary of the reports suggested to check and use to prepare a BAS, go to MYOB – Aust. BAS Checks Reports & Entries

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 Tips – Growing – Low cost Marketing with a Lucrative Partner

Business Tips – Growing - Low cost Marketing with a Lucrative Partner

Business Tips – Growing – Low cost Marketing with a Lucrative Partner

Here are some great tips from Bryan Janeczko at Score.com – about finding a partner that can help grow your business.

When I was trying to get noticed after I launched NuKitchen, the online diet service, I tried just about everything to generate sales. One sure technique that I ‘discovered’- which kept a pipeline of new customers coming in the door – was a partnership with a more established business. For us, one of our first partners was Related, a large real estate holding company that owned a string of high rise apartment buildings in New York and the Equinox Fitness chain. Their clients were exactly the same type of customers we were targeting. Establishing a partnership with these folks was one of the best ways for us to get noticed, maintain a continuous flow of potential clients, and ultimately drive sales.

Finding established, recognized names of businesses who are also targeting your customer base, is one of the surest ways to drive your startup sales. Like Related was for me, these businesses already have a customer base that you can tap into. As a startup, however it can be tricky getting them to notice you, let alone partner with you, so I’ve identified 3 tips for landing a lucrative partner:

  1. Identify 5 partners that can drive value for you: Once you’ve identified your target customer, think about established brands in your community who are also targeting your ‘customer’. You’ll want to identify partners in complementary businesses, not necessarily businesses competing directly in your area. Be on the lookout for those potential partners with great reputations. Who would be your ideal partner? Write down the top 5 who you think could most strongly deliver your ideal customers. If you know somebody senior at the business, reach out to that contact but if not, find out who the Director of Business Development is.
  2. Create value for your partner: In order for the partner to listen to you, you’ll need to have a product or service in market (or at least a working prototype). Most businesses won’t risk their reputation if you’ve simply got an ‘idea’. This was actually that case with me when I initially approached Equinox with the NuKitchen concept. I hadn’t yet launched it so they said come back later once you’re in the market. This is exactly what I did- returned a year later as I launched NuKitchen and created a compelling offer for their gym clients. We would provide ‘free’ food tastings at each gym and provide members with a complimentary day of NuKitchen service in exchange for being able to promote our company. They were happy because their members got a valuable benefit. For your own business, what special value add or discount will you offer to your target partner for their clients? Whatever you offer, make sure that you can deliver. Remember, it’s not just your reputation but that of your established partner as well.
  3. Make implementation ‘easy’: Finally, coming up with a compelling offering is great and both parties may get excited. However, the real work is in the execution. Chances are that your Business Development contact is going to be super busy carrying out his or her daily duties. Make it easy on them and do as much of the legwork as possible. Draft an implementation schedule with proposed dates. This may require a little bit of guesswork on your part since you may not have intimate knowledge of their inner workings. My biggest piece of advice is to be flexible since things can take longer than expected or take different twists or turns.

Need help? Not sure?

Call for FREE 30min advice / strategy session today! 0407 361 596 Aust

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 Tax Tips – Business Christmas party ideas – when things can go wrong

Business Tax Tips – Business Christmas party ideas - when things can go wrong

Business Tax Tips – Business Christmas party ideas – when things can go wrong

The festive season should be an enjoyable time of the year but are you aware of your obligation to provide a healthy and safe environment when planning business Christmas party/workplace functions? Don’t be complacent – prepare for when things go wrong…

If a function is organised, promoted and funded by the business, it is more than likely to be considered an extension of the workplace and therefore, your business should ensure it takes all reasonable steps to minimise any risk to the business.

When is the employer liable?

In most legal contexts, an employer function/staff party will be considered as part of the ‘workplace’ and having connection with the employment of employees. As such, all the duties and obligations of the employer that apply in the office, shopfront or yard will continue to apply for the duration of the function or party. In practical terms, this could mean the organisation (or even individual employees of the employer) could be held liable for occupational health and safety breaches for failing to provide a working environment that is safe and without risks to health.

Injuries or illnesses arising out of or in the course of the function may be compensable under statutory workers compensation schemes and inappropriate conduct or comments could lead to harassment or discrimination claims. Additionally, employees must also be aware that they may be disciplined for their actions at the party, as the terms and conditions of their contract and any applicable company policies apply for the duration of the function. The employer’s liability may be limited in some circumstances where the employee has engaged in serious misconduct or for instances that occur after the completion of the organised function. However, such exceptions are assessed on a case-by-case basis. In all circumstances it is clear the employer must be able to demonstrate all reasonable and proportionate steps were taken to educate staff on appropriate standards of behaviour, to provide a safe environment, and eliminate discrimination and sexual harassment.

Some tips to minimise your risk of things going wrong:

  • Plan your function – Select a venue wisely and provide all employees with the details of the function, including clearly communicating start and finish times;
  • Educate and set the rules – Ensure all employees are aware it is a work function and, as such, that the usual code of conduct and associated policies and standards of behaviour apply. Now is also a good time to review relevant policies and consider training employees in acceptable workplace behaviour. For example, Bullying and Discrimination awareness training for managers and employees;
  • Safety – Provide alternative transport options including designated drivers, Ubers and taxi vouchers.

Other Questions

Is the employer liable for the actions of employees at an ‘after party’ event?

Employers may be vicariously liable for the actions of their employees if such actions are in the ‘course of’ or within the ‘scope’ of employment. This will differ on a case by case basis, depending on the factual circumstances of each situation. As discussed above, advising staff of the clear finishing time of the organised function and avoiding sanctioning or funding any post-function activities will assist in reducing such liability.

Does the employer have to provide transport after the function?

Employers have a duty of care to provide a safe workplace environment to all employees. Legislation concerning liability for injuries sustained whilst travelling to or from the workplace (or a workplace function) differs from state to state, but the possibility of providing transport to employees after the event should be considered as part of the planning phase, but is not obligatory.

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 are the key financial ratios that help you understand your business financial health

Business Finance 101 – What are the key financial ratios that help you understand your business financial health

What are the key financial ratios that help you understand your business financial health

With several months of transactions recorded and bank and credit cards and loans reconciled, an important business finance task each month is use the hidden value in your bookkeeping to get key financial ratios to track how the business is going, to understand your business financial health.

To save time, use the reporting features to generate some key margins and ratios. These are like a report card for your business. The most common to monitor are –

  • Gross profit,
  • Net profit,
  • 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.

Then compare to your peers – 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

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.au or call 0407 361 596 Australia