Over the past 12 months, the ATO has been developing the Cashflow Coaching Kit which has been trialled by select accountants with their small business clients across the country. The aim of this kit is to provide accountants with resources, flash cards and some basic ideas to help small business clients manage their cashflow which the ATO has identified as a key area of concern.
The ATO is currently working with the professional accounting associations to deliver the Cashflow Coaching Kit into the marketplace for use by accountants over the next 12 months to improve the cashflow of small businesses throughout the country and help improve the relationship between small businesses and their trusted advisers. Whilst the design and concepts are very simple, they are effective in allowing the start of a conversation to allow you to go beyond talking about basic tax and compliance work regarding some simple topics with simple answers that can allow you to use your professional experience to elaborate on and improve.
If you would like to discuss the “Cashflow Coaching Kit”, please contact us.
29th September 2017 will go down in history as a great day for small/medium enterprises in Australia!
Why? – this is when Crowd-Sourced Funding Equity Raising is available for companies with turnovers under $25 million and assets under $25 million.
Well-run companies will be able to raise up to $5 million per annum from investors, if they wish.
What will companies need to do to be able to avail themselves of this great opportunity?
- A good business – a business that has a vision and has identified clear strategies for its future.
- Directors who are willing to work with others.
- Shareholders who accept that owning 100% of the shares is not the most important thing for many businesses – theintroduction of external cash can be very important to assist the company to achieve its strategies.
- TV programs like the “Shark Tank” have alerted many smaller company directors to the opportunities that are available, if the company places itself into an “investment ready phase” so that the company is attractive to potential investors.
- Who are the prospects for Crowd-Sourced Funding?
- Companies with visions to expand the business.
- Companies wanting to “commercialise” a new product, process or service and for various reasons they might not be eligible or wish to participate as an Early Stage Innovation Company.
- Willingness to accept external investors into their company.
- Companies with loans, especially if the loans are not secured by first mortgages on the company’s own real estate – these loans could be from family and friends and the directors might be quite happy to raise capital to pay out those loans, thus saving the company interest payments and potential questions about “when will the money be repaid”.
- Companies with credit card debts wanting to repay the debt and save the interest.
- If you are interested in having a discussion with us relative to the potential for your company or business to raise capital as a crowd sourced funding entity please do not hesitate to contact us.
To be successful you must have an aspiration. You must have people you look up to so you can see what’s possible – try and find a mentor or join a group of other people running businesses.
Planning is very important; in fact, it could be described as being “everything”. The reason so many people get themselves into trouble in business is that they haven’t invested enough time in planning their business operations.
Business plans for business people are like maps for tourists – if you don’t know where you’re planning to go, how are you going to know when you get there? A plan will help you survive in business. Businesses do not just “grow” – you will need a template/plan on how to grow your business.
Directors have many legal issues they need to consider in the performance of their duties. Some of the legislation that directors will probably have some involvement with includes:
- Corporations Act and the recent amendments for the creation of Crowd-Sourced Funding Equity Raising
- Taxation Act including:
- Small business entity changes – turnover now up to $10 million
- Company tax rate – companies under $10 million – small business company tax rate has been reduced to 27.5%
- Taxable payments reporting system now includes courier and cleaning industries
- Early Stage Innovation Companies
- Other legislation that directors need to be aware of includes:
- Fair Work Australia
- Workplace Health and Safety Laws
- Environmental Laws
- State/Territory Government Laws
- Ensuring that any product sourced overseas have been purchased from legitimate businesses
Board of Advice
Many company directors have found that a satisfactory way to get started on the journey to appointing a Board of Directors is to initially appoint a Board of Advice.
A Board of Advice has no decision-making powers and normally only meets about four times per annum to give “advice” to the owner, CEO, Managing Director.
In the final analysis, it is the directors who make the final decisions.
The concept of a business having a Board of Advice goes back many years – in fact it is claimed that Mr L J Hooker, the founder of L J Hooker & Co Real Estate, established a regular routine of a weekly “coffee meeting” with a small group of people who he supplied with details on his business operations and these people gave him “advice”.
Many businesses successfully utilise a Board of Advice as part of their business’ growth strategy.
A Board of Advice would normally consist of one to three people who the directors believe have skills that are complimentary to the directors’ skills.
If you would like to have a discussion about the pros and cons of forming a Board of Advice for your business, please contact us.
“Everything changes when you go back to basics and truly understand the process”.
“You need to ask yourself: what are we offering, what money are we making on what we are offering, how much demand is there for what we are offering and why would customers choose our business over the competition?” – Charmian Campbell – number one female business Action Coach in the Asia Pacific region.
“What you need to do is set a common plan and a clear set of values that you’re communicating to your people. It’s the role of leaders to lead that”, Andrew Thorburn, National Australia Bank Chief Executive.
“The Federal government is cracking down on employers short changing their staff over compulsory superannuation”.
“An analysis by the Australian Taxation Office found employees could have missed out on $2.85 billion of their super guarantee payments during the 2014/15 financial year because employers failed to meet their obligations”. Revenue Minister Kelly O’Dwyer says employers deliberately not paying their workers super entitlements are “robbing their staff of wages”. “This is illegal and won’t be tolerated” she said in a recent statement.
If any of these “quotable quotes” relate to an issue that you would like to have a discussion with us about, please don’t hesitate to contact us.
If your prospect says: “It’s not for me…..”
This might just mean you have to target your message more carefully. Selling to the wrong audience wastes money, so does selling to the right audience with the wrong message.
I suggest – show the prospect testimonials from people like him or her or paint a picture of the person the prospect wants to be and show the idealised person using, benefiting and enjoying your product. Also make sure you are targeting a specific audience. Excessively wide appeals fall flat.
If your prospect says: “I do not have time to read your offer….”
They are really saying that they are bored and they do not see enough immediate benefit to continue reading your promotion. But the truth is, we make time for interesting things! “War and Peace”, for example, at well over a thousand pages, has held many a reader.
I suggest – you find the hook. Open with a benefit or jump right into telling a story. When the going gets interesting, people hang on to find out how things end. Quizzes, checklists and fresh news keep readers involved too.
If your Prospect says: “It is more than I would like to spend…”
Remember, it is never about price. It is about value.
When a prospect says your prices are too high, they are really telling you that the value of your product sounds too low. It does not have enough benefit to get them to pay the asking price.
I suggest – you find services like yours that cost more and build a comparison. Sweeten the deal with better premiums. Put a value on the results of your service and compare them more closely to the cost.
If your Prospect says: “I do not know who you are….”
They’re really telling you they need to trust you and want to see your credentials. Testimonials and track record are obvious solutions. But there are some others….
I suggest – try entering questions like these – where do you do your business and why? Who are your clients and especially your well-known ones? Where did you get your training, learn your trade, and hone your craft? Give some success stories. Have you won awards or seals of approval?
If your Prospect says: “I have heard all this before….”
They are telling you to fix your “Unique Selling Proposition” (point of differentiation). How do you stand out in the crowd? You need to give them proof.
I suggest – you check out your competition. Compare offers and make yours stronger. Offer a stronger guarantee. Look for ways your product or service outpaces, out builds or out races your competitors’ product or service.
If your Prospect says: “I would rather take some time to think about it….”
Your prospect is not feeling the urgency of your offer.
I suggest – depending upon how you are presenting it – in print or face-to-face. Is there a deadline? Is the offer scarce? Is there a benefit by buying early? Is there a prepayment plan? What are the guarantees? In other words – how can we intensify the offer?
The smart way to sell is to know what the objections are “generally” going to be with your offer. Make a list and deal with them upfront…. For example, “Mr and Mrs Smith many of our clients like to take time to think about our offer and we encourage them to do that. Just so it is clear we also like to remind them of the special(s) we have will only last until the end of the week etc.”
Trevor Marchant – Marchant Dallas
Board of Directors with Mentor
Some Board of Directors find it beneficial to appoint a mentor to assist in corporate governance training for the directors. The mentor’s role is to advise the directors on corporate governance processes. The mentor is only present to give advice and should not participate in a decision made by the Board of Directors.
There are some government grant programs which may contribute to the cost of companies appointing a mentor.
Company acting as a Corporate Trustee
Many businesses operate through a Trust. It is good business sense to utilise a “Corporate Trustee” rather than individuals as Trustees of the Trust. The Minutes of a Board of Directors meeting acting as Trustee of a Trust should indicate that the Board is acting as Trustee of a Trust when a particular Board of Directors meeting is held.
Board of Directors – External Directors
Some companies are finding it beneficial to appoint one or more external directors to their Board of Directors. Some companies are also inviting one of the external persons to accept the role of “Chair” of the Board of Directors.
The benefit to companies from having external persons appointed to their Board of Directors normally relates to corporate governance matters and the smooth running of a Board of Directors meeting.
The external directors can also bring their knowledge and skills from exposure to other companies and businesses into deliberations at the Board of Directors meeting.
If a company resolves to appoint one or more persons as external directors it should not be viewed as a “lifetime appointment” because there can be some real benefits to the company in “refreshing” the membership of their Board of Directors every few years to get access to new ideas and different thinking on how to approach corporate problems.
If you would like to discuss with us any aspect of the composition of your Board of Directors please do not hesitate to contact us.
Summer is fast approaching and with it a range of potential natural disasters including bushfires, floods, cyclones, hail etc., increasing the urgency for businesses to ensure that they have enough insurance cover to protect themselves financially.
If you haven’t done so recently, it’s a good time to review the value of your assets and check these valuations against the cover that you have on your insurance policies.
It’s also worthwhile checking the fine print in policies such as “consequential loss of profits insurance” to ensure that you have adequate cover in the event of a major event that is going to put you out of business for some time.
Does the policy supply sufficient money for you to continue to employ key people and will the policy supply enough money to cover the fixed ongoing costs that relate to your business?
Another very important insurance area is registration on the Personal Property Securities Register. This process is very important for any business that is contracting with other businesses and for any business that has assets stored or located on someone else’s property.
If you would like to have a discussion with us about your risk management strategies for insurance and the personal property securities register please do not hesitate to contact us.
The very unfortunate death of a 15-year-old boy whilst he was utilising weightlifting equipment whilst working out at a Brisbane gym has highlighted business management duty of care to ensure that business premises/workplaces are safe.
Directors and management should undertake a regular review of the business operations occurring in their businesses to ensure that procedures have been implemented and that the procedures are being monitored to minimise the chances of an unfortunate event occurring.
The Australian government has passed legislation for the introduction of Single Touch Payroll from 1 July 2018. Businesses will be required to commence reporting under Single Touch Payroll (STP) if they are a “substantial employer” on 1 April 2018.
A business is a substantial employer if you have 20 or more employees or you are a member of a wholly-owned group and the group has 20 or more employees in total.
Once you become a substantial employer you must continue to report under STP even though you may no longer have 20 or more employees, unless the Taxation Commissioner grants you an exemption.
The introduction of the STP represents the biggest payroll reporting change in Australia’s history.
Substantial employers will be required to submit information electronically to the Australian Taxation Office every time the business pays its staff instead of once a year.
These advances will probably necessitate an upgrade to your payroll recording system. You will need to be able to access the new payment summaries and tax file declaration form.
There are also benefits for employers with less than 20 employees moving to the STP system. If you choose to report voluntarily, you will receive relief from your current obligations sooner than other businesses with less than 20 employees.
If you would like to have a discussion with us relative to the impact that this change will make on your business, please do not hesitate to contact us at your earliest opportunity.
It has been reported that the government, as part of its reforms to deal with “phoenix” company activity, is planning to introduce “Director Identification Numbers” to allow the Australian Taxation Office and ASIC to track directors and companies and relationships between groups, individuals and other directors.
Of concern to the government, is the identification of the directors involved in recurring company failures which the government estimates cost over $3 billion each year in lost taxation and GST revenue.
The government is very concerned that, in many of these instances, assets are moved into a new company but the debts are left behind in the original company.
The proposed reforms also include a significant extra obligation for directors of companies, in that directors would be personally responsible for outstanding GST obligations. These obligations are in addition to directors potentially being liable for PAYG withholding of employees and superannuation.
Directors of companies will need to ensure that the company is paying all of its taxation liabilities, including GST, especially prior to a company going into liquidation because these debts would then, in all probability, become a personal debt for the directors.
Prior to accepting appointment as a director of a company, it would be very advisable to verify that all taxation debts owing to the Australian Taxation Office have been paid by the company and that processes are in place to ensure that the directors are immediately notified if a payment is not made.
If you would like to have a discussion with us on any aspect of the proposed introduction of the director identification numbers, please contact us.
ASIC has announced that it is now processing applications from businesses with Australian Financial Services Licenses that have applied to be a Crowd-Sourced Funding Intermediary.
ASIC has indicated that the first of the intermediary appointments should be finalised by around the end of October 2017.
If a proprietary limited company wishes to convert to an unlisted public company, so as to take advantage of the Crowd-Sourced Funding legislation, the company will need to lodge a Form 206 “Application for Change of Company Type”.
ASIC is required under the Corporations Act to publish a notice in the ASIC Gazette stating it intends to alter the details of the company registration.
One month after the notice is published, the change of company type will take place.
If you are contemplating utilising the current law to become a Crowd-Sourced Funding Company and you would like to have a discussion with us about the process, please do not hesitate to contact us.