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Getting customers to settle debts

Good credit management is an important business strategy to maintain cash flow and stable finances.

A cornerstone of managing credit is not only making sure an invoice gets paid, but gets paid on time. Before a debt recovery process commences (which may delay payment further and damage a relationship with a customer), it is worthwhile for businesses to put a few processes in place to avoid customer debt in the first place.

Prepare your customers
Making sure the customers understand their payment terms from the start is the first step in training them to keep track of outstanding invoices and payment due dates.

Keep detailed records
Businesses should keep all customer records such as payment term agreements, customer limits and outstanding sales to date.

Follow up regularly
Starting following up procedures once a payment becomes overdue will help speed up the process. It is also very important to know exactly who to speak to about payment matters, it may be different to the person you had been dealing with during the transaction process. Being consistent when following up debts will help businesses maintain good customer relationships.

Implement payment in full
Most businesses adopt this policy in regards to payment procedures. This way the customer has a full amount to pay by a concrete due date. Sometimes ‘making it easier’ for the customer by staggering payments and due dates can confuse and delay payments even further. If there are ongoing problems of overdue payments, businesses can consider mediation or debt collection services.

Upfront payments
For labour and time intensive work, some businesses ask for a part payment or deposit up front. This works as a way of showing that the customer is financially committed to the project. It also allows a business to better manage cash flow, knowing that there won’t be months at a time when there are no payments coming in because of works in progress.

Legal action is very expensive and should be considered as a last resort.

Posted on 15 November '17, under money. No Comments.

How to ensure your branding is consistent

Consistent branding is a big factor in your business’ marketing strategy – it can help build loyal customers, improve recognition and trustworthiness.

Businesses that adopt consistent branding techniques gain a competitive advantage by differentiating their products and services from other competitors in the market.

Staying consistent also helps to stay on track in delivering the brand promise to customers and clients through every single touch point.

Here are three ways to focus on delivering a consistent brand:

Similar tone and showcase personality
Whether your business is advertising via social media, TV advertisement or email campaign, the content should be similar in tone. Your marketing campaigns are a way to express your business’ personality and values, so make sure you deliver on this. Use similar language, adopt the voice to suit the type of marketing (i.e., conversational v formal) and stick to key messages for target audiences.

Design
Colours, images, fonts, logos and so on all communicate your business’ brand and identity. Creating a style guide is very useful for communicating your expectations to a graphic designer. If the designer is given a vague brief with no rules or guidelines then you cannot expect their designs to match your overall brand. Ideally, your website, logo, physical store and various marketing communications need to be aligned.

Staff training
Marketing communications can only go so far in proving your business is consistent. Customers and clients want to receive consistent service when they visit your store or office, call and email you. Invest in training your staff in customer service so customers can be guaranteed they will always have an enjoyable experience with your business.

Posted on 15 November '17, under business. No Comments.

SMSF annual return for pension phase trustees

Self-managed super fund (SMSF) trustees who are in pension phase must lodge their SMSF annual returns if they remain active, or choose to wind up the fund.

The ATO is warning SMSF trustees about their regulatory obligations and is paying close attention to those SMSFs that are not meeting their lodgment obligations.

Trustees must lodge a Self-managed superannuation fund annual return 2017 if it was a self-managed super fund on 30 June 2017, or a self-managed super fund that was wound up during 2016-17.

Super funds that are not SMSFs at the end of 2016-17 must use the fund income tax return 2017 and, where required, a separate super member contributions statement.

Even if your fund does not have a tax liability, your SMSF must lodge an SMSF annual return.

Posted on 15 November '17, under super. No Comments.

Using the margin scheme for property sales

Those selling property as part of a business sale may be eligible for the margin scheme.

The margin scheme is a way of working out the GST you must pay on the property that you are selling as part of your business. The scheme is only applicable if the sale of a property is taxable.

The GST on property sales is generally equal to one-eleventh of the sale price. If the margin scheme is used, the GST is calculated on the difference between the sale price and your purchase price of the property (or the property’s value on 1 July 2000 if it was acquired before that date).

To meet the eligibility requirements you need to be registered for GST or required to be registered for GST.

Contact our office to check your eligibility for the margin scheme when selling property as the application of GST to property-related transactions can be quite complex.

Posted on 15 November '17, under tax. No Comments.

How to truly set your business apart from competitors

Making your business stand out can be difficult; especially if you are offering the same services as your competitors.

No matter how big or small, or what the financial status of your business may be, there is one strategy any business can adopt to set you apart: customer relationships. Building and placing value on the relationships you build with customers is free. The main focus of these relationships is to truly value the customer as a unique individual and not just view them as another sale or a number. When people feel their transaction with your business has been genuine, the whole morale and attitude within the business can change for the positive and drive up profit.

Consider the following benefits of developing strong customer relationships:

Creates brand loyalty
It is highly unlikely that a customer will return to your business for future services and sales if they unsatisfied with their initial transaction. If they are happy with their transaction with your business and they leave feeling genuinely looked after and positive, chances are they will be back.

Increase in referrals
Word of mouth is a strong tool for generating more business. If a customer is not happy with the service they provided, they are likely to go straight to social media and discuss their transaction, speaking negatively about your business. On the flip side, a satisfied customer is likely to speak highly of and recommend your business to friends, and even strangers on community social media pages. A referral from an existing or previous customer is often more trustworthy than a marketing campaign, so placing value on treating existing customers with the utmost professionalism and diligence can see the business grow and profits increase.

Cost-effective
Treating your customers well is a great marketing strategy. It is more cost effective to bring in more business through treating existing customers well (whilst making money) rather than splashing out on marketing campaigns that may or may not be as successful as you had hoped.

Posted on 10 November '17, under business. No Comments.

SMSFs: Stats

The Australian Tax Office (ATO) has released its June 2017 quarterly SMSF statistical report detailing key SMSF figures.

As of June 2017, the number of SMSFs increased to 596,516. The number of SMSF members in Australia is 1,124,453.

The estimated value of total Australian and overseas SMSF assets is $696.7 billion.

The number of annual wind-ups including both those initiated by trustees and those as a result of ATO compliance and cleansing activity was 1,419 as of June 2017. This is a significant decrease from 10,551 in June 2016.

The top five asset types held by SMSFs by value include listed shares (30 per cent or $212,210m), cash and term deposits (23 per cent or $159,686m), non-residential real property (11 per cent or $74,772m), unlisted trusts (10 per cent or $71,455m) and other managed investments (5 per cent or $37,695m).

Posted on 10 November '17, under super. No Comments.

Changes to GST on low-value imported goods

Australian goods and services tax (GST) will be implemented on sales of low-value goods imported into Australia by consumers as of 1 July 2018.

According to the ATO, business will have to register for GST, change GST on sales of low-value imported goods and lodge returns if they meet the $75,000 AUD registration threshold.

These business includes merchants who sell goods, electronic distribution platform operators or re-delivers. Customs duty and clearance charges will be changed to the importer at the border under existing process should goods be imported in a consignment over the value of $1,000 AUD.

Through the implementation of this new law, businesses will not:
– Charge GST on a sale where GST is to be charged at the border. This occurs when an item is worth over $1,000 AUD or is a tobacco product or alcoholic beverage.
– Need to charge GST where it is clear that multiple goods will be shipped in the one consignment coming to a value of over $1,000 AUD. In these instances, GST will be charged at the border instead.

The ATO will be holding a number of international engagements on the application of Australian GST to low-value, imported goods sales throughout November 2017.

Posted on 10 November '17, under tax. No Comments.

SMSF: Capital vs revenue expenses

Self-managed super funds (SMSFs) have access to a range of tax deductions for expenses incurred. Whether the expenses are capital in nature or are considered as revenue will affect eligibility for claiming such deductions.

The Tax Office considers an expense that is incurred in establishing or making enduring changes to a super fund’s structure or function as capital and not deductible under the general deduction provision. For example, the costs of establishing an SMSF are capital in nature. An expense incurred in acquiring capital assets is also usually capital in nature.

Trust deed amendment costs incurred in establishing a trust, executing a new deed for an existing fund and amending a deed to enlarge or significantly alter the scope of the trust’s activities are generally not deductible as they are capital in nature.

If trust deed amendments are required to facilitate the ongoing operations of the super fund, they are generally deductible. For example, if a fund amends a trust deed to keep it up to date with changes in super legislation this would be deductible.

Furthermore, expenses incurred in making changes to the internal organisation or day to day running of the fund are not considered to be capital in nature provided such changes do not result in an advantage of a lasting character. If a super fund is carrying on a business, it may be entitled to deduct certain capital expenses under the specific deduction provision, section 40-880 of the ITAA 1997.

Funds that incur expenditure in gaining or producing exempt income or incur expenditure of a capital, private or domestic nature cannot access a deduction under Section 8-1 of the ITAA 1997.

Contact our office if you have any questions about the deductibility of your SMSF’s expenses.

Posted on 1 November '17, under super. No Comments.

ATO to focus on cash-only businesses

To protect honest, compliant Australian businesses, the Australian Taxation Office has placed a strong emphasis on targeting the cash and hidden economy.

The ATO is visiting businesses that deal predominantly in cash, with a focus on those that:

When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to asks questions and discuss:

If the ATO comes across a business that is doing the wrong thing or failing to meet their obligations, they have a duty to take action. This may result in the business facing an audit and possible prosecution.

If you have made a mistake and make a voluntary disclosure detailing your errors, the ATO will work with you to rectify this and create a solution.

Posted on 1 November '17, under tax. No Comments.

How to boost morale

From time to time, it is normal for employee morale to take a plunge. Whether it is a stressful time at work or a major workplace change is occurring, employees may respond unfavourably.

However, if employee morale is low over substantial periods of time, it may point to problems with management and the overall culture of the business. Low morale can have devastating impacts on business too; low levels of employee satisfaction and productivity, and high rates of turnover.

Here are three ways to boost employee morale:

Celebrate accomplishments
Show your staff you care about the work they do by celebrating accomplishments and milestones. Whether it is a good result on a project, meeting a challenging deadline or contributing a useful idea – it should be celebrated. This creates a culture where praise is normal and encourages colleagues to follow suit.

Incorporate fun into their work day
Morale can be greatly determined by an employee’s work environment. Encourage team-bonding by organising team activities such as bowling, go-karting, lawn bowls, etc., during work hours. Start up lunchtime activities, such as a running group or touch football in a nearby park. Celebrate staff member’s birthdays with cake and morning tea or go out for lunch. Although these may sound like obvious tips, they can be easy to forget during stressful times.

Encourage employees to speak up
Communication plays a big factor in employee morale. Implement an open-door policy, if you haven’t already done so. When staff know they can approach you with any question, concern or even idea they have, they are more likely to respect you and enjoy coming to work.

Posted on 27 October '17, under business. No Comments.

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