Client Portal and DocuSign
We will be slowly introducing our client portal and DocuSign to make it easier for us to share information and for you to return documents with an electronic signature to us.
The client portal meets the industry's rigorous security certification standards, and uses the strongest data encryption technologies available.
This service includes:
- Ability to view and save copies of documents we wish to share with you.
- Provide documents needing review and signature, with the ability to electronically sign and return these via the portal with no need for printing.
- Ability to upload documents securely and share with us.
- Secure access to other useful applications as we see fit.
The portal can be accessed via all devices in the office or outside the office. This means documents can be viewed and signed on the go without any need for printing and signing, making it more time efficient and easier for you to view and return your documents to our office.
You will receive an email in due time to invite you to the portal, please follow the prompts to register.
Small Business Depreciation Changes
Three small business depreciation thresholds will apply for the 2019 financial year as per the below.
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From 7:30pm on 12 May 2015 Until 28 January 2019 |
From 29 January 2019 until before 7:30pm 2 April 2019 |
From 7:30pm on 2 April 2019 until 30 June 2020 |
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You can immediately deduct the business portion of most depreciating assets costing less than $20,000 each. |
You can immediately deduct the business portion of most depreciating assets costing less than $25,000 each. |
You can immediately deduct the business portion of most depreciating assets costing less than $30,000 each. |
Please note the above applies to business with turnover of less than $10 million however if you're a business with a turnover from $10 million to less than $50 million you may be eligible for the instant asset write-off for assets purchased from 7.30pm (AEDT) on 2 April 2019.
Knowing Your Business' Break Even Sales Help
Do you know what the break-even amount of sales for the various operations/activities being conducted in your business?
"Break-Even Sales": are the level of sales necessary to cover all fixed and variable expenses. This shows you the level of sales that your business needs to make to generate neither a profit nor a loss. The overall gross profit percentage that your business achieves has a significant impact on the calculated amount of sales to achieve break even.
"Fixed Expense": is an expense that does not vary relative to production or turnover within reasonable production or sales levels. Rent would normally be considered to be a fixed expense and would not vary until such time as it was necessary to obtain larger premises. Management salaries would also normally be considered as a fixed expense. Some component of staff salaries could be considered a fixed expense, but in the main staff salaries that relate to production or sales would normally be termed a "variable expense" because variable costs normally move directly in relation to increases in production or sales by the business. To calculate the break-even sales you also need to know the gross profit percentage for that particular operation within the business.
To determine your break even for a particular operation within your business, you need to prepare a list of the fixed expenses relating to the business or to that particular activity and then prepare a list of the variable expenses which relate to that activity and add the 2 totals together. Example: if the fixed costs were $195,750 and the variable costs were $392,000, the total would be $587,750. If the business was achieving a gross profit percentage of 32%, then the calculation of the breakeven sales would be as follows:
Total of Fixed and Variable Costs Divided by Gross Profit Percentage x 100/1 = Break-Even Sales
e.g $587,750 divided by 32% x 100/1 = $1,836,718
Proof
Sales $1,836,718
Gross Profit Percentage 32%
Gross Profit $587,750
Total of Fixed Costs and Variable Expenses $587,750
Result - no profit/loss = break even sales
If you would like to have a discussion with us relative to the establishment of the break-even sales for your business or operations within your business, please do not hesitate to contact us.
Planning Vital For All Businesses
You wouldn't go on a cross-country holiday without looking at a roadmap to plan where you are going to stop and what sightseeing activities are available on the way, would you?
Planning a business, irrespective of the age of the business, is no different. You need to find some quiet time and sit down and think about what your business wants to achieve for the owners, management, team, customers, suppliers and the community in which you operate.
To undertake the preparation of a business plan you need to consider:
• How the business is going to operate.
• What is happening in the marketplace?
• Who are the potential customers for the products or services that your business is going to produce or is already producing?
• What marketing strategies do you utilise?
• The sales strategies that you will need to utilise.
There are a number of key items to be considered in the development of a business plan including:
• Current business situation.
• Financial position of the business.
• The products or services that your business is producing – Is your targeted market aware of them? Do you need to employ significant marketing strategies to inform your target market about your products or services?
• What is happening in your industry?
• Who are your customers/clients – Do you understand why your customers/clients might be interested in your products/services?
• Is the location of your business suitable for your current customers and prospective customers?
• Who are your competitors? Have you prepared a SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis on your competitors?
• Have you developed a marketing strategy, including social media, internet?
• Are you a manufacturer? If so, has your business invested in state-of-the-art manufacturing plant and equipment?
• Have you had discussions with suppliers relative to their terms and conditions relative to the products that you're going to purchase from them?
• Do you subject your costing processes to regular review?
• Have you reviewed your business' approach to setting prices?
• Are you exporting or do you have the potential to export product or services? If so, have you had discussions with Austrade and reviewed your eligibility for the Export Market Development Grant?
• Have you implemented appropriate staff training for your team?
• Has your debtors' management system been reviewed so that you can reduce, as far as possible, your debtors' days outstanding?
• Do you benchmark your business against industry averages or against a group of similar businesses?
• Do you need to review your business funding including the relationship with your bank, and the possibility of raising capital as a Crowd Sourced Funding Equity Raising Company?
• Is your company undertaking significant research and development activities? If you are, is your company claiming the research and development rebate? If your company is developing new products, services or processes? Have you implemented procedures to ensure that the intellectual property that has been developed is being protected?
• If your business is a new business – under 3 years of age and you are developing new products, processes or services, have you researched the possibility of your company being deemed to be an "Early Stage Innovation Company"?
• Is your management team aware of the challenges that are going to be facing all businesses over the next few years? Has your management team developed policies to assist your business to navigate the problems that some commentators are forecasting are going to affect all businesses in the next couple of years?
• Has your management team and board of directors analysed the risks that could potentially affect the ongoing performance of your business, including Personal Property Securities Register non-registration potential problems, adequacy of insurance covers, succession planning within your business?
• Are you contemplating "scaling up" your business? If so, what do you envisage your business will look like in 3 years' time? What strategies do you need to implement so that your vision for 3 years' time can be achieved?
These are some of the items that we would assist you to consider in the preparation of a business plan for your business. In future editions of Business Plus we will supply additional information on each of these items to assist you in the analysis of your business and in the preparation of your business plan.
Succession Planning
Succession planning is one of those items that many business people know is important but it tends to get put off as it seems to be something in the future and there are always pressing current issues that demand attention. Does this sound like you?
Succession planning is a very personal activity for most business operators. Most of us would prefer not to really have to think about it.
However, a succession plan that is continually reviewed can assist in identifying issues that need attention, can assist with the motivation of the team in that they can gain an understanding of what the future within your business might look like for them and will assist in the professional development of many of your team members as they prepare themselves for future roles within your business.
There are many questions to be considered in the development of a succession plan that you're happy with. These questions could include:
• What type of business do you want to pass on to the next generation?
• Are you more interested in being able to sell the business? If this is your strategy, are you ensuring that your business is in an "investment ready status" at all times?
• Would you like to "scale up" the business before you cease your day-to-day operations with the business? If so, have you articulated your vision for the business in 3, 5 or even 10 years' time?
• What is your preferred timetable for your personal succession within the business?
• Have you identified persons currently employed within the business who should be groomed for senior executive roles in the future? Do these persons need to undertake some specific additional professional development activities to prepare them for the responsibilities that you envisage them assuming within the business? e.g. Institute of Company Directors Diploma Course to give them a better grounding of corporate governance and corporate law, an understanding of business financing – dealing with banks and the opportunities that are now available for small companies and medium-sized enterprises to raise capital direct from the public, leadership training, training to understand the concepts of "scaling up"?
• If you are unable to identify suitable persons to fulfil senior executive positions in your organisation in the future is it time to commence internal team training and professional development activities to upgrade the skill level of your team members?
• If you envisage that your organisation will have to identify potential new executive members from outside your organisation have you developed a strategy to assist in this executive identification process including identification of outstanding talent working for one of your competitors, identification of talent working in other specific organisations?
• Are there family members who could undertake a wider range of responsibilities within your organisation? If so, should a personal development program be implemented for each of these persons to develop their skills and their knowledge of "business matters"?
• What do you envisage your role will be in the first phase of the implementation of your succession? Do you wish to still be involved on a regular basis with the company for example as a director?
• At this stage, is the business heavily reliant on your reputation, knowledge and skills and, if so, what are the strategies that you will include within your succession plan as to how to ensure that others in your organisation gain a complete understanding of your knowledge and skills and contacts so that they can ultimately gain a genuine reputation for their personal skills within the marketplace?
These are some of the questions that need to be considered in planning a succession strategy for business operators. If you would like to have a discussion with us relative to your succession planning, please do not hesitate to contact us.