Easier GST reporting for food retailers
Posted on March 15, 2017 by admin
Many small food retailers buy and sell products that are both taxable and GST-free. Depending on the point-of-sale equipment used, identifying and recording these sales can be difficult for business owners. The ATO has introduced a series of simplified accounting methods (SAMs) to make it easier to account for GST and work out the amount of GST that is liable at the end of each tax period. There are five SAMs to choose from. The SAM you choose will depend on your business’ turnover, the nature of your business and the nature of your point-of-sale equipment (except for the purchases snapshot method). These methods help you work out the information you need to correctly complete the GST section of your activity statement. However, they can only be applied to sales and purchases of trading stock. Here is a summary of the five SAMs you can choose from: Business norms Turnover threshold: SAM turnover of $2 million or less.How you estimate your GST-free sales and/or purchases: You apply the standard percentages to your sales and purchases. Stock purchases Turnover threshold: SAM turnover of $2 million or less.How you estimate your GST-free sales and/or purchases: You take a sample of purchases and […]
Reasons to make a valid Will
Posted on March 9, 2017 by admin
Without an up-to-date and valid Will, you are missing out on a critical opportunity to make proper arrangements for your family’s future. For a Will to be considered valid: – it must be in writing – the will-maker must have the mental capacity – it must be voluntarily signed by the will-maker or by some other person in the presence of and at the direction of the will-maker – the will-maker’s signature must be made or acknowledged in front of two or more witnesses, present at the same time – must be signed, dated and witnessed by two other parties – the signature of the will-maker or person signing at the direction of, and in presence of the will-maker must be made with the intention of executing the Will. Here are five reasons why you should make a valid Will: Provide for the people you care about If you don’t have a Will it is unlikely that what you want to happen will happen. Instead, your estate will be governed by the laws of intestacy under the Succession Act 2006 and the people that you would like to see benefit from your estate may not. Leave particular gifts or items […]
Negotiating price with your customers
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Successful negotiation with your customers is key to maintaining strong and mutually beneficial relationships. Even if you have mastered your sales approach, it is likely you will come across customers hunting for a better deal. Here are three ways to negotiate with your customers for a win-win solution: Ask questions Asking the customer questions shows your interest in understanding, and most importantly, addressing their needs and concerns. It also demonstrates that you are willing to come to a compromise. When trying to uncover the customer’s problems, spend time asking questions but let them do most of the talking. Build rapport Showing a level of respect and care for the customer is a critical factor in effective negotiation. Try to establish a good relationship before entering the negotiation and remain calm during the negotiation process. Be sure to emphasise how much you value your relationship with the customer and follow-up after the negotiation. Make reasonable concessions Before entering the negotiation, think about concessions which wouldn’t cost you much but would bring a lot of value to your customer. Going into the negotiation with a clear idea of how much you are willing to negotiate helps to avoid making unnecessary concessions at […]
Understanding financial ratios
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Financial ratios are useful tools for business owners to monitor, analyse and improve their business performance. A financial ratio contains one or more financial figures and is expressed as a ratio, rate or percentage. Financial ratios are used to measure profitability, cash flow and liquidity, risk and return, and stock turnover and sales. Here are some common financial ratios used in business to: – Measure profitabilityGross profit margin is a percentage of gross profit on sales. To work out: (Gross profit x 100) divided by sales. Net profit margin is a percentage of net profit on sales. Method: (Net profit before tax x 100) divided by sales. – Monitor cash and liquidityWorking capital ratio measures the liquidity of a business (i.e. how much money is available to meet creditors’ demands). To determine this ratio: Working capital = current assets divided by current liabilities. Quick assets ratio measures the solvency of your business, or its ability to meet its immediate commitments. Method: Current assets (minus stock) divided by current liabilities. – Measure turnover and salesStock turnover ratio measures the number of times stock turns over. Method: Cost of goods sold divided by (0.5 x opening + closing stock) Material to sales […]
Acting on customer feedback
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Customer feedback is a great learning source for any business looking to improve their competitive edge. But actually acting upon this feedback is the most important, an often neglected next step. Feedback from customers is a valuable asset for many businesses. It provides them with customer insights which can assist in improving services, products and overall customer experience. Feedback has also been shown to improve a business’s customer retention rates. But while feedback does create a competitive advantage for businesses, that advantage doesn’t just come from collecting the feedback. It is how a business chooses to act based on this feedback that makes all the difference. Businesses may like to treat the challenges that come to light through customer feedback as projects with defined deadlines and expected outcomes. Details such as how long it will take to address a challenge, what strategies should be used or what actions need to be taken, should be taken into consideration when developing the projects. An action log can help to maintain the momentum and focus of these projects, and after a reasonable period of time, may serve to give businesses a good understanding of whether goals and targets were achieved in an adequate […]
Understanding death benefits under the new transfer balance cap
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The introduction of a $1.6 million transfer balance cap for superannuation will take effect from 1 July 2017 which is likely to impact fund members who collectively with their spouse exceed $1.6 million in super. When an individual with a super account dies, the trustee of the super fund will generally pay the deceased’s remaining super interests (accumulation and retirement phase) as a death benefit lump sum to a beneficiary. Superannuation death benefits can be cashed: – to a beneficiary or beneficiaries as superannuation lump sums that are paid out of the super system, or – to a dependant beneficiary or beneficiaries as superannuation income streams that are retained in the super system, or – to a dependant beneficiary or beneficiaries using a combination of the two. A dependant is a person who is either a spouse of the deceased, a child of the deceased (less than 18 years old, financially dependent under 25 years old or has a disability) or a person who was in an interdependency relationship with the deceased. When a death benefit income stream is paid to a dependant beneficiary, a credit arises in the beneficiaries transfer balance account. This may result in the dependant exceeding […]
Understanding cloud storage
Posted on March 2, 2017 by admin
Cloud-based storage is becoming increasingly advanced with age. The service’s easy access, tight security, and flexibility are attracting both big and small business owners. Cloud storage refers to an online space that is used for the storage of data. It allows its users to backup data to a network of servers that are hosted by a cloud service provider. This data is then available through any Internet-connected device. The main advantage of cloud storage is the flexibility of anywhere access. The data stored in the cloud can be accessed through any Internet-connected device, such as an iPhone or laptop at any location. Cloud storage is cost-effective when compared to traditional security measures for protecting data. Traditionally, businesses had to pay for equipment, software, and personnel to ensure the security of their private data. The cost of data security in cloud storage is generally covered through a subscription cost. Another advantage of cloud storage is the ability for businesses to easily scale up or down and only pay for what they actually use. Business owners have been wary of storing private information in the cloud due to the threat of data hacking and privacy concerns. However, cloud security is far stronger […]
Insurance through super: is it right for you?
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Taking out insurance through a super fund can be a great option for some members, but it does also come with some pitfalls. Most super funds provide their members with insurance options and an option to increase, decrease or cancel your default insurance cover. There are many benefits of taking out insurance through super, which include: – the ability to purchase policies in bulk – not having to pay for premiums with your take-home income – the convenience of having your policy managed for you – most policies in super tend to be pre-approved, meaning there is no need for interviews or medical check-ups – life insurance inside super is deductible to the fund at 15 per cent annually; whereas life insurance premiums held outside of super are not tax deductible. However, there are some pitfalls of holding insurance through your super, including: – there is generally a limit on the payout that can be received from an insurance policy purchased by a super fund. In public funds, it is usually between $100,000 and $200,000. For some people, this amount may be more than enough. However, if you have dependents and a mortgage, it may be insufficient to look after […]
Are your website costs tax deductible?
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The ATO has provided business owners with further guidance on the deductibility of website costs in a recent Taxation Ruling. The Tax Office considers a commercial website as a website which is used in the course of a business, irrespective of whether it is used directly to produce income. This does not include software provided on the website for installation on the user’s device. Hardware, the right to use the domain name and content available on or incorporated into a website that has independent value to the business are considered separate from a commercial website. The tax deductibility of a website depends on whether the expenditure on a commercial website is revenue or capital in nature under section 8-1. Examples of expenditure which are tax deductible in the year incurred include: – Periodic operating, registration and licensing fees – Expenditure incurred in maintaining a website – Modifications to a website that add minor functionality or make minor enhancements to existing functionality – Domain name registration fees and server hosting costs – Maintaining a social media presence and updating content mainly for marketing purposes – ‘Off-the-shelf’ software that is licensed periodically Costs that are ‘capital’ in nature are generally claimable over […]
Finding the right cultural fit
Posted on February 22, 2017 by admin
Cultural fit should be considered just as important as competency when making recruitment decisions to benefit your long-term business. Failing to consider cultural fit can lead to plummeting business productivity, poor performance, lost opportunities, poor public relations and high staff turnover. Successful recruitment judges applicants on more than qualifications and experience alone – it extends to assess cultural fit through personality traits and values. To best assess whether a candidate will fit into your business’s culture you must understand your business’s culture in terms of values and expectations towards teamwork, communication, customer focus, integrity, respect and so forth. Knowing your business’s vision and values will help set a precedent when making hiring decisions. Culture can be communicated at the beginning of the hiring process through criteria in the job advertisement, for example, working well under pressure may be a necessity. However, the interview often enables the interviewer to best assess the potential cultural fit, as their CV may not accurately reflect the candidate. When interviewing applicants, use behavioural style questions to gauge cultural attributes. Behavioural questions, such as “Give me some examples of how you resolved conflict at work,” or “Describe a work environment where you had the most success,” […]
