Tips For Successful Business Planning

Tips For Successful Business Planning

At PrimeAdvisory we’ve worked out that failing to plan usually means planning to fail.  For years now we’ve diligently set aside time to create a business plan each year, which is then supported by smaller 90 day plans called Quarterly Themes.  Given our tagline is about “keeping you on-track” it’s critical that we walk the talk ourselves and have a process to do so.

This commitment and discipline to planning and tracking results has helped us consistently achieve consecutive year on year growth.  The best plans are one’s that are simple, have clear metrics within them and that are easily understood.  That’s why we choose to base business plans on a simple one-page format.  We like to use Verne Harnish’s One Page Strategic Plan as our template.

This system for business planning keeps everything in the business plan aligned with:

  • The core values of the business
  • The purpose of the business
  • The Big Hairy Audacious Goal (BHAG) the business is focused on

As we’re already starting the new financial year with a fresh new one-page strategic plan, we thought we’d share how we’ve managed to make planning work so well that we’ve stayed on-track to achieve our goals for several years running.

Read “Scaling Up”:

All the directors of PrimeAdvisory have read Scaling Up, by Verne Harnish. This has helped us define the key decisions we need to get right:

  1. People
  2. Strategy
  3. Execution
  4. Cash

The book also provides a practical framework for how to define what it is that we need in those key areas.  With this guide we can focus on the big picture.

Get clear on why you are in business and the rules for how you operate:

Otherwise known as purpose (why you are in business) and values (the rules for how you do business). The book outlines a way to ensure your purpose and values are meaningful and authentic to your business.

Get clear on what your Big Hairy Audacious Goal (BHAG) is:

This is where it get’s exciting!  To help energise and align the entire organisation, it’s key to have a goal that’s measurable but also momentous!  This is when it’s time to think big and define a big goal that you can work towards in say 10 years’ time.

Make sure you’re measuring what matters:

It’s important to spend the time you need to make sure that the KPI’s you put into your plan line up. Ideally, they are directly aligned with your brand promise which is supported by your core values and purpose. These metrics can then be used to focus your teams and measure their success.  Then when those critical numbers have been hit you have appropriate rewards in place to celebrate the success.

Keep everything accountable and make sure there’s always ownership:

To get to where you want to go it’s important that you know who is responsible for achieving the results you are after and what actions are to be undertaken by whom to get it done. Good communication on who is responsible for what will also make sure there’s no confusion.

At PrimeAdvisory we have extensive experience in guiding business owners to stay on track with their goals.  If you would like assistance with facilitating and structuring your own one- page strategic plan, contact us.

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Tips for getting on track with your financial goals

Tips for getting on track with your financial goals

The end of the financial year is the cue for most of us to look at our financial position heading into tax time. Hopefully you’ve made progress towards your goals. But if you find that your expenses are trending higher than you’d like or—shock, horror!—higher than your income, this could be the perfect time for a fiscal makeover.

The starting point is gathering up as much information as possible, beginning with the household budget.

Take a budget snapshot

You can’t set realistic financial goals and savings targets without knowing how much money you have at your disposal. If you don’t already track your income and spending, then take an annual snapshot as you go through your records to prepare your annual tax return.

Deduct your total spending from total income and what’s left is what you have to work with. Any surplus could be used to kick start a regular savings plan. If you discover a budget black hole, identify areas where you are overspending and could cut back.

Pay yourself first

Did you manage to save anything this year or are you are constantly counting on this month’s income to pay last month’s bills? Do you spend first and hope to save what’s left?

Instead of making saving an afterthought, pay yourself first and allocate a percentage of your income to a regular savings plan. Setting up a weekly or monthly direct debit will remove temptation and encourage you to live within your means.

Review your mortgage

If you have a mortgage this is likely to be your biggest monthly expense so it’s a good idea to check your progress at least once a year. Why not use some of the savings you’ve identified and increase your repayments to save interest? If your mortgage has a redraw facility you could use this to create a cash buffer for emergencies. These are the type of strategies that PrimeWealth can help you with.

While you’re at it, go online and compare interest rates. If your rate is no longer competitive consider switching loans and enlist our help to negotiate a better deal.

Negotiate better deals

Your home loan is not the only expense worth haggling over. These days if you want to get the best deal on your electricity, phone, internet or insurance you need to ask. Before you do, ensure you understand what your current plan/policy covers and research what’s on offer elsewhere.

Make a practice of doing this once a year, when your plan or policy is due for renewal. The savings can be substantial and can be put to much better use reducing debt or growing your wealth.

Check your super

Do you know how much you have in super and how it’s invested? When you retire superannuation is likely to be your biggest asset outside the family home, yet almost one in four Australians don’t know which risk profile their super is invested in.* This can cost you thousands of dollars in retirement savings and takes only minutes to correct.

Instead, why not call your PrimeWealth Advisor and ask for your current balance and where it’s invested. As an example, a 25-year-old woman on $80,000 in a conservative option until she’s 70 could improve her retirement balance by $294,000 if she switched to a risk profile more in keeping with her age and circumstances. *

Protect your wealth

Reaching your life and financial goals is not just about growing your wealth but protecting it.

It’s important to review your insurance policies annually—or as your circumstances change—to make sure you and your family have adequate cover. Insurance can be a significant cost for families, but the income it provides when accidents or illness strike is worth every cent.

So why not go beyond the usual search for last-minute tax deductions this June to do a thorough review of your current position. Contact us if you would like us to help you make the most of the year ahead, give us a call.

*source: MLC Wealth Sentiment Survey, 5 April 2018

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EOFY Reminders For Business Owners – Annual Tax Returns

EOFY Reminders For Business Owners – Annual Tax Returns

Another financial year is about to finish!  As a business owner, there are many obligations that you need to consider and action just before and after 30 June.

Some of these will help to minimise your tax.  Others will reduce your exposure to an ATO tax audit.  We have outlined these action points below to assist you.

Please carefully consider this information and contact us immediately if you have any questions we can answer or if there is anything we can assist you with.

Pre 30 June 2019

Trusts: Trustee resolutions need to be in place to be able to distribute trust income for the 2019 financial year to beneficiaries.

Companies: Review shareholder loan accounts and make minimum loan repayments (may need to declare dividends).

Payment of superannuation by 25 June 2019 should have been made to deduct contributions in the current financial year.

Complete a stocktake where required.

Write off bad debts and scrap any obsolete stock or plant and equipment.

Ensure any inter-entity management fees have been raised.

1 July 2019

Single touch payroll is compulsory for all employers. Standard business reporting-enabled software must be used to report payments such as salaries and wages, PAYG withholding and superannuation information.

Taxable payments annual reporting extended to businesses providing road freight, information technology, security, investigation and surveillance services.

14 July 2019 (on or before)

PAYG Payment Summaries provided to all of your staff – or Single Touch Payroll Finalisation Declaration needs to be made by 31 July 2019.

28 July 2019

Quarterly super guarantee payment due (1 April – 30 June 2019).

31 July 2019

Single Touch Payroll Finalisation Declaration needs to be made.

14 August 2019

Annual PAYG Payment Summary to be lodged with the ATO if applicable (not required if you have lodged a Single Touch Payroll Finalisation Declaration). Penalties apply for late lodgement.

28 August 2019

Taxable payments annual report due for the building and construction industry, cleaning and courier service industries.

Key changes you need to be aware of

SINGLE TOUCH PAYROLL NOW REQUIRED FOR ALL EMPLOYERS

All employers are now required to use Single Touch Payroll (STP) from 1 July 2019.

STP is the direct reporting to the ATO of salary and wages, PAYG withholding and superannuation contributions.

Employers with 20 or more employees have been required to use STP since 1 July 2018.  Please note that the ATO has provided a small amount of leniency to smaller employers for a limited period of time.

There are a number of low cost or even free software payroll options for micro employers (1 to 4 employees).

The ATO has also stated that businesses with 20 employees or less can initially lodge STP in a quarterly BAS lodged by a registered Tax Agent.

NO TAX DEDUCTIONS IF YOU DON’T MEET YOUR TAX OBLIGATIONS

From 1 July 2019, if taxpayers don’t meet their PAYG withholding and reporting obligations to the ATO, they will not be able to claim a tax deduction for payments:

    • of salary, wages, commissions, bonuses or allowances to an employee;
    • of Director’s fees;
    • to a religious practitioner;
    • under a labour hire arrangement; or
    • made for services where the supplier does not provide an ABN.

If you make a mistake and voluntarily correct it before the ATO begins a review or audit, a deduction may still be available but penalties may still apply for failure to withhold the correct amount of tax.

PAYMENTS TO CONTRACTORS

From 1 July 2019, security providers and investigation services, road freight transport, and computer system design and related services businesses will need to collect specific information about payments made to contractors (individual payments and totals for the year).  A Taxable Payments Annual Report will need to be lodged with the ATO by 28 August 2020.

Businesses that operate in the building and construction industry, cleaning and courier services will need to report their payments to contractors for the year ended 30 June 2019 by 28 August 2019 to the ATO.

Your 2019 EOFY Reminders & Action Items

PAYG PAYMENT SUMMARIES

If you have not used STP for 2019, then you need to provide all of your employees with their PAYG Payment Summary on or before 14 July 2019.  This includes any employees that left your employment during the 2019 financial year.

The ATO imposes penalties for the late lodgement of PAYG Payment Summary Statements.  The annual PAYG Payment Summary Statement for the year ending 30 June 2019 needs to be lodged with the ATO on or before 14 August 2019. However, if we are preparing your Payment Summary for you and you only employ family members in your business (closely held employees), you may be eligible for an extension.

REPORTABLE FRINGE BENEFITS ON PAYG PAYMENT SUMMARIES

Where you have provided fringe benefits to your employees in excess of $2,000, you need to report the FBT grossed-up amount on their PAYG Payment Summary.  This is referred to as a `Reportable Fringe Benefit’ (RFB) amount and a label is included on the PAYG Payment Summary for this purpose.

STOCKTAKE

Businesses that buy and sell stock generally need to do a stocktake at the end of each financial year as the increase or decrease in the value of stock is included when calculating the taxable income of your business.

If your business has an aggregated turnover below $10 million, you can use the simplified trading stock rules.  Under these rules, you can choose not to conduct a stocktake for tax purposes if the difference in value between the opening value of your trading stock and a reasonable estimate of the closing value of trading stock at the end of the income year is less than $5,000.  You will need to record how you determined the value of trading stock on hand.

If you do need to complete a stocktake, you can choose one of three methods to value trading stock:

    • Cost price – all costs connected with the stock including freight, customs duty, and if manufacturing, labour and materials, plus a portion of fixed and variable factory overheads, etc.
    • Market selling value – the current value of the stock you sell in the normal course of business (but not at a reduced value when you are forced to sell it).
    • Replacement value – the price of a substantially similar replacement item in a normal market on the last day of the income year.

A different basis can be chosen for each class of stock or for individual items within a particular class of stock.  This provides an opportunity to minimise the trading stock adjustment at year-end.  There is no need to use the same method every year; you can choose the most tax effective option each year.  The most obvious example is where the stock can be valued below its purchase price because of market conditions or damage that has occurred to the stock.  This should give rise to a deduction even though the loss has not yet been incurred.

TRUST DISTRIBUTION RESOLUTIONS

Trustees (or directors of a trustee company) need to consider and decide on the distributions they plan to make by 30 June 2019 at the latest.  Decisions made by the trustees should be documented in writing, preferably by 30 June 2019.

If valid resolutions are not in place by 30 June 2019, the risk is that the taxable income of the trust will be assessed in the hands of a default beneficiary (if the trust deed provides for this) or the trustee (in which case the highest marginal rate of tax would normally apply).

ACTION STEP: If you haven’t already signed your Trust Distribution Resolution, please contact our office before 30 June 2019 so that we can properly prepare this document for you to sign.

PAYROLL TAX

Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits.

You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies:

    • fringe benefits based on the grossed-up taxable value of fringe benefits;
    • all employer contributions to superannuation on behalf of employees; and
    • some contractor or sub-contractor fees.

For more detailed information about whether payroll tax applies to your business, please contact our office.

ACTION STEP: The Annual Return/Reconciliation for payroll tax must be lodged by 22 July 2019 with your State Revenue Office.

WORKCOVER / WORKSAFE

Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year.

In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages:

    • fringe benefits based on the taxable value of fringe benefits (do not gross-up);
    • all employer contributions to superannuation on behalf of employees; and
    • some contractor or sub-contractor fees.

For more detailed information about what items to include in the reconciliation statement, please contact our office.

Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year.

ACTION STEP: Complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date.

GOODS AND SERVICES TAX (GST)

A reconciliation of GST should be performed as at 30 June 2019 to determine if there has been an under or over-payment of GST in the 2019 tax year.  If a discrepancy has arisen, then it is possible to adjust a subsequent Business Activity Statement (BAS) to rectify the error, however there are limits imposed on adjustments that can be made in this way.

Income declared on your BAS should be reconciled to income declared on your income tax returns.

Also, please note that you are required by law to substantiate all Input Tax Credit claims with a complying Tax Invoice, and you need to retain these documents for a minimum of 5 years.

ACTION STEP: Complete the annual GST reconciliations, and check that you have all required tax invoices and other supporting documents.

ATO AUDIT ACTIVITY

Please note that the ATO and State Revenue Office are constantly increasing their audit activities.  There has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts.

We can offer a review of your records and record-keeping procedures if you are concerned about your ability to satisfy an audit.

ACTION STEP: Please contact our office if you would like to request this service.

Last Minute Tax Minimisation Tips

Here’s a few final reminders about ways to reduce your tax for 2019:

    1.  Write-off Bad Debts.
    2.  Write-off any trading stock that is damaged or obsolete.
    3.  Review your Asset Register and scrap any obsolete plant and equipment
    4.  Pay for marketing materials, repairs, consumables, office stationery, and   donations before 30 June 2019.
    5.  Ensure employee superannuation contributions are made (and received by   your employees’ superannuation fund/s) by 30 June 2019 to allow a tax   deduction this financial year.
    6.  Realise any capital losses you have before 30 June 2019 to offset against any   capital gains you may have made.

WANT TO TALK?

Feel free to contact our office anytime  – We can’t wait to provide you with better advice to help you stay on-track.

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Thinking About Topping Up Your Super This Financial Year?

Thinking About Topping Up Your Super This Financial Year?

With the end of financial year fast approaching, it’s important to plan ahead to ensure you’re aware of key processing cut-off times that apply to your investment and superannuation platform accounts.

All reasonable efforts will be made to process your request before 30 June 2019 providing the request is complete and valid. However, if you are considering make a superannuation contribution (pre or post tax) you should be aware that estimated cut of times start as early as Friday 14th June. The cut-off times and dates are a guide and are subject to change depending on volumes and the turnaround times.

Please take this into account as you plan for the EOFY as platforms are unable to backdate transactions.

If you have any questions contact your Financial Advisor to begin the process as soon as possible.

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How Quarterly Themes Help PrimeAdvisory Stay ‘On Track’

How Quarterly Themes Help PrimeAdvisory Stay ‘On Track’

For several years now at PrimeAdvisory we’ve been able to achieve consistent year on year growth by implementing ‘Quarterly Themes’. Planning and reporting quarterly and annually has been a key success factor in helping us stay ‘On Track’ with our annual and 5-year business goals.

Once a year we develop our one-page strategic plan that maps out our:

  • Core Values/Beliefs
  • Our Purpose
  • Our Targets
  • Our Goals for the year to help us achieve our 5-year goal

Each quarter we review how we are tracking to our plan and as part of that process put in place a quarterly plan with a ‘Quarterly Theme’.

Quarterly themes are a way for us to be able to communicate what we want to focus on to help our team drive their activities to achieve the results we want.

Overall, they help us achieve our long-term plan by identifying any current issues or obstacles and dealing with them effectively and efficiently throughout the year.  Our ‘Quarterly Themes’ help us know where we are going long term and keep us focused on the little 90-day baby steps towards that.

90 days is short enough to do detailed planning for and it means we can see clearly for 90 days.

Our themes and associated activities for the last three quarters this year showcase how we communicate and keep our team aligned and on track.

October – December 2018 – Quarterly Theme: ‘Ship Shape’

‘Ship Shape’ was about tightening up processes.  Looking at our systems and people.  How do we develop our team to ensure they have the right technical skills, how do we get a good understanding of career and personal goals and what training do we need on the tools we use every day.

January – March 2019 – Quarterly Theme: ‘Help Me Help You’

‘Help Me Help You’ was all around getting feedback from our team on what they needed to deliver awesome client results.  We developed an understanding of our training needs in the business as well as identifying any pain points our staff had in their day to day working and the solutions that they had identified.

April – June 2019 – Quarterly Theme: ‘Renovate and Rejuvenate’

This quarter we are undertaking an office space renovation, so it’s a good opportunity to look at what else we could rejuvenate across the business.  Primarily looking at things in the business that are not fully implemented or perhaps activities that have dropped off and need rejuvenating.  These include formalising a training incentive programme for 2020 and getting a training budget together.

Finally, we will conduct our annual internal ‘Heartbeat Survey’ of all staff members to get important feedback on the happiness and health of our people.

How we close off our ‘Quarterly Themes’

PrimeAdvisory celebrated achieving their last quarterly goals with a team day of barefoot bowling

The team will enjoy a celebration at the end of the quarter when all our goals and targets have been met with an end of financial year lunch.  This quarter we’re hosting a celebration at Cork and Canvas where we will enjoy sipping on a glass of wine whilst painting on a canvas.  Every quarter when we launch a theme, we also clearly communicate the goals aligned with the theme and how we will celebrate when we achieve them.

Assisting with developing annual strategic plans and helping clients stay ‘On Track’ are a key component of our ‘Business OnTrack’ program. If you would like to discuss how a one page strategic plan and quarterly planning could help your business contact us.

 

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