"Big Brother is Watching!" Article by Tina Zawila

Our clients and regular readers will be familiar with the warnings we have issued over the past 7 or 8 months regarding travel claims being made in individual tax returns in Gladstone.  

Unfortunately, there seems to have been a lot of misinformation out there and some taxpayers will be caught out if they are audited, with incorrect deductions, tax to repay, penalties and interest.

The Australian Taxation Office (ATO) made it clear at the start of this tax season that one of their identified audit areas would be travel deductions in 2014 income tax returns.

The latest news on this matter, is that the ATO are now following through on this 'threat' and have noticed the "trend/pattern" of travel deductions in Gladstone resident's income tax returns, and now they are starting to make enquiries.  

Just last week, one large employer in Gladstone received a telephone call from the ATO asking questions to "get clarity" on how and when the employees of the company travel and use their own vehicles for "work purposes".  Questions such as, "do your employees have to travel between sites in their own vehicles" and "do they have to carry their own tools and bulky equipment" are clearly pointed towards travel and vehicle deductions claimed in individual returns.

Once again, we remind you, it's YOUR income tax return, and its YOUR responsibility to ensure your deductions are correct and that you have the appropriate substantiation/evidence to support your claims.  Even if someone else (including a tax agent) prepares your return, the onus is on YOU.  You will be the one required to repay the tax, the penalties and the interest.  Oh and if you think "audit insurance" will 'save' you, make sure you understand what this insurance really covers.

For professional, ethical advice, please call our Sothertons Gladstone team on 4972 1300.

 

 

 

"Getting paid faster…What would you like on your pizza?" Article by Steve Marsten

I had always planned on writing an article about how to get paid faster and then someone did something that we would all love to do! There is a small businessman in Gladstone who was owed money from a large corporate and had all sorts of problems getting paid. He had rung and emailed, sent statements and did everything in his power to try to get his money however the corporate continued to hold out using every excuse from the “book of excuses” that you could imagine! So he devised the plan to head over to the local office and walked in just before closing time and asked to speak to the manager. They obliged. He then asked the manager what he would like on his pizza because he was about to phone in an order and would not be leaving until he received his money!

Of course this is a ballsy action and it lead to confrontation, gnashing of teeth and modicum of swearing. After an hour or so – out came the manager’s personal credit card and the payment was made for the outstanding account.

For many small businesses, few things are more important then getting paid on time. Cashflow disruption is one of the biggest issues in business. The invoice you send is by far the most important communication in regards to getting paid. Here are a few tips to keep the cash flowing.

1.       Always use please and thank you when it comes to invoicing. Good manners actually increases your chances of being paid.

2.       Make it a habit to keep your invoices consistent. Take the time to explain your invoice. Talk to your customer or client and customise it if necessary;

3.       Are you offering a discount? Some business owners object to this however it should be balanced with the time it takes to chase up outstanding debtors or ensuring that your credit policies and procedures allow you to properly vet your customers and clients before offering credit.

4.       And finally give clients options to pay. I.e. BPay, credit card or financing facilities. The more options the greater the likelihood of payment.

At Sothertons, we can show clients the best policies and procedures to maximise their cashflow. Cash is king in small business – give us a call on 4972 1300.

 

"Get Serious!" Article by Tina Zawila

Well January is done and dusted for another year, how has 2015 started for you?  

 During the Christmas break I always take the time to do my own "health check" - not just physically, but also financially.  And like most people, there were a few improvements I could make.  Usually by the end of January my resolutions have already started to get a little "off track".  Not this year though!

 This year, I 'got serious' with my health and well-being, and our financial position, and

·         I committed to a health and fitness program focusing on my diet, exercise and my mindset towards my health and vitality.

·         I prepared a detailed, realistic financial budget for the 2015 year, and I am tracking it daily.

So I've done this type of thing before...why am I already more successful than in past years?

There are three main reasons:

1.  I committed my goals, actions and intentions to paper.  I was clear about the outcomes I want to achieve, and I documented the actions, changes, and challenges that I needed to face on a day-to-day basis.

2.  I made a commitment to a third party to help me achieve my goals.  A coach for my health and fitness goals, and I shared my financial goals and commitments with my own financial advisors (yes, even as a financial advisor myself, I recognise the benefit of having someone else hold me accountable!).

3.  I track my progress daily.  I report to my coach and document my diet and exercise daily to keep me on track.  I use Xero Online Accounting Software on a daily basis to monitor our personal finances.  I know where our money comes and goes, I compare it to our budget, and it takes me less than a couple of minutes a day to do this!

So, if you are serious about achieving your goals this year, make sure you have given yourself every chance of success.  Document your goals, get a third party to help you, and keep track of your progress every day.  It's that simple.

At Sothertons, we help people achieve their financial and life goals.  Call us on 4972 1300 and let us help you.

 

 

"Is it time to tidy up the Balance Sheet?" Article by Steve Marsten

Recently I attended a presentation on the Australian Economy in 2015 and beyond. They painted a fairly benign future – not a lot of positives and plenty of negatives.   Interest rates will more likely go down over the next twelve months. The dollar should head down with it – that’s good for exporters and Australian Tourism.

The banks will have plenty of money to lend however they may not do too well. And the stock market should track quietly upwards – but nothing too spectacular.

The two major things I got from the presentation were that interest rates will reach their lowest point over the next twelve months, and the banks will have plenty of money to lend. So what does that mean for small and medium business? Hopefully the business owners who own businesses that are heavily leveraged and have large loans on their Balance Sheets – this is the year to consolidate debt and hit it hard. Time to clean up the Balance Sheet!

Reduce the stress of debt by getting a debt reduction plan in place. Identify which loan to focus on first. Improve the credit score of you and your business with your local bank so that when you are ready to go to the next step you have a track record of dealing with debt. Further, you remove decision making about your money away from your lenders and back to you.

This requires discipline and in recent years some businesses carelessly ran up debts while not focusing on the costs and the profitability of their sales and services to actually meet the repayments. This approach of course tends to end in tears.

Those businesses that have little or no debt – they may have a different question to deal with - Is it time for expansion or improving services or products with newer equipment? Is it time to take out a low interest loan and consider locking in the rate? Is the business profitable enough to handle new debt? And with the capital purchases, will there be greater profit as a result?

At Sothertons we assist businesses prepare debt reduction plans as well as Budgets and cashflows, and help them implement and monitor them to ensure their objectives are achieved.  Call 07 4972 1300.