Summer and quiet seasons coming

Summer & A Traditional Quiet Period Is Coming… Are You Ready?

With summer settling in and the new year around the corner, many businesses may be facing their slump season. Cash flow can slow down over the warmer months while people are on holiday or facing empty wallets after a Christmas blow out.

With the right planning, foresight and management, the quiet season doesn’t have to be a stressful time for your business.

Read on to discover some useful strategies that can get you through the quiet periods until business picks up.

Dealing With The Summer Quiet Period

Fine Tune Your Annual Budget

Planning ahead is everything. Instead of waiting until the quiet season is looming, take these seasonal fluctuations into account when doing your yearly budget. Put away some of the extra cash you earn during busy times to get by during the troughs.

Knowledge is power. The more information you have, the more prepared you will be. Calculate your bare minimum operating expenses every month and ensure there is enough to see you through even in times of reduced income. Also, have a look back on your financials to discover exactly when those quiet periods are.

Cut Down On Costs

Once you have figured out your essential spending, it is time to look at where you can tighten the purse strings. Perhaps you can reduce business hours or staffing, go easy on the advertising, chat to suppliers about renegotiating contracts, or cut out the complimentary office snacks for a few months.

However, try not to go overboard and downsize too much without really considering the implications for your business. Too many cutbacks could make it difficult to pick up again when the quiet period comes to an end. Talk to your accountant for advice on where you can afford to cut back and what you need to keep up.

Perfect Your Timing

Planning to survive, and even thrive during slow season requires some creative thinking and attention to timing. Before the lull arrives, put in some extra effort to sell and create revenue that will keep you afloat.

Leverage your existing clients by offering exclusive deals and promotions for them to take advantage of during those months. As the quiet season draws to an end, consider an aggressive, early marketing campaign to beat the competition and draw in new customers. Offer promos for early sign-up and emerge from the slow season with some forward momentum.

Expand Your Products And Services

Not all businesses have to experience a slow down over the summer months. Is there a way you can broaden or diversify your products and services to avoid a slump? Though it may not be appropriate for all business types, utilise some creative thinking to identify what complementary services you can introduce that will be in demand at this time of year.

Get Strategic

Quiet season is the perfect time to get to all those things you never find time to do when it is busy. Use the time wisely to evaluate your business plan, review processes, see what is working and what needs improving, research innovations in the industry, look at your branding and marketing strategies – all those juicy things that are essential to growing your business.

You can also use the time to tidy things up from a busy year. Finish off any filing, tidy out the office and organise your desk. Get ahead on that pesky admin work and come up with an awesome plan of action for the year ahead.

If you would like to know how you can prepare for quiet seasons in your business, then get in touch with us here at Accountants Plus. We will be able to provide you with lots of great advice to get through and strengthen your business for when things pick back up again.

Company Vehicle

Financial Considerations For Having A Company Vehicle

Financial Considerations For Having A Company Vehicle

Love the idea of having a shiny new company car or van to cruise around town in but not quite sure how it works and what you need to consider? As much as the idea is appealing and you might think you can write off all the expenses at tax time, it isn’t quite that straightforward.

The financial rules for vehicles can be quite complicated. There are actually different rules for sole traders and companies, variations that depend on whether the vehicle is exclusively used for business or also allows personal usage, and a slew of other considerations.

In some cases, it may be more prudent to maintain your own personal vehicle and claim back expenses such as mileage and maintenance.

Let’s have a look at some of the financial considerations to take into account if you have a company vehicle.

Financial Considerations For Having A Company Vehicle

Is It Viable?

Before you start looking at all the shiny new cars on the lot or deciding whether to go petrol or electric, you need to know if it is a viable choice for your business.

First and foremost, you need to figure out if you have enough financial stability to make such a sizeable investment up front. It is not just the cost of the vehicle to consider, insurance and other associated costs add up. Although you can write off a substantial amount, you still need the money upfront.

If you don’t have the funds upfront, you may decide to take out a loan to purchase a company vehicle. In some cases, the interest on the loan may be tax-deductible. But, don’t bank on that fact. It pays to check with your accountant before making any financial commitments. They will have the right advice for your individual situation and advise whether or not it is a good investment for your business.

Ongoing Costs

Cars and vans are not a one-time purchase. You will need to have the budget to maintain a WOF and registration, make repairs, pay road user charges (if applicable) and cover insurance for all employees who use the vehicle. Again, most of these expenses are deductible, but your bank account needs to be healthy enough to sustain unexpected costs.

Although it is possible to claim back all the running costs, petrol, insurance and even depreciation of the car, bear in mind that you are likely to be required to pay fringe benefits tax (FBT). This is tax your business is liable for if the company car is made available for staff for any form of private use. Even travelling from home to work is considered to be personal use – unless you are a sole trader and using a truck or van as your company vehicle.

The amount of FBT you pay depends on how much the car is worth and how much your company earns. If you are a sole trader, you won’t need to pay FBT on your business vehicle – instead, your accountant will make other tax and GST adjustments.

If your company vehicle is a non-passenger vehicle and is only ever used for work-related tasks, you are exempt from FBT. As a general rule, if you are more likely to use the vehicle for personal use, it makes more financial sense to pay FBT.

Do You Need It?

Probably the biggest consideration is whether or not your business needs a company vehicle? Because it makes your financials a lot more complicated, you should carefully consider if you are buying the vehicle for the right reasons or for vanity’s sake.

Deciding whether or not to invest in a company vehicle is no small decision. You need to discuss your current business requirements and finances with an experienced accountant who can advise you of your options and help you save money in the long term.

If you are considering buying a company vehicle and need to understand how it could impact your business, then get in touch with us here at Accountants Plus today. We can advise you on the best way to handle the vehicle situation specific to your business.

Tasks to make your accounting easier

Tasks You Can Do To Make Your Accounting Easier

One of the biggest time suckers for a small business is trying to maintain your finances. That is why hiring an accountant to manage them for you is a smart move. You give yourself extra time and energy to focus on the important aspects of growing your business.

However, if you don’t utilise or support your accountant, you are not doing yourself or your business any favours.

With any outsourcing you choose to do, you want to ensure that your money is well spent and the service adds value to your business. Because accountants need to charge for their time, it is in your best interest to make sure you have all your ducks in a row. That way, they can get straight to the grunt work without having to chase you for more information.

Here are some key tasks you should be doing to help your accountant do their job effectively and efficiently.

 

Tasks To Make Your Accounting Easier

Organise Your Receipts

In this age of advanced apps and software, there is no excuse for keeping a shoebox piled full of receipts under your desk. Grab an app or use the capabilities of accounting software like Xero to save all your electronic receipts and organise them into categories.

Photograph hard copy receipts and add them to the folder, or assign them to your entries in Xero. You will save your accountant the hassle of endless hours of sorting and cut down on the billable hours you have to pay.

Meet Deadlines

A good accountant will give you plenty of warning in advance of tax time. They will tell you what they need from you to file your tax returns. Help them out by getting them what they need, when they need it. They have many clients and can’t receive everybody’s info back at the last minute. Plus, a late tax return can incur fines and fees which you don’t want to deal with!

Bill Efficiently

Talk to your accountant about the best-invoicing cycle to stay in the black and make sure you chase clients who are late to pay. Your finances can get out of whack if you have already paid for stock and employee wages, but then have to wait another month for the invoices to be paid by clients.

If you struggle to find time for this, consider an automated invoicing system that will remind you of any outstanding invoices and send reminders to clients on your behalf. Most online accounting programs have this function built in.

Communicate

Always keep your accountant up to date on any changes to your personal or business circumstances. They can anticipate problems or challenges that you weren’t aware of and assist you in coming up with solutions.

It is far better to be proactive than reactive. Also, discuss with them if you are intending to make any big financial moves in your business like buying a new significant asset or borrowing funds. Your accountant will be able to advise on the best way to handle it and if it is a smart financial move to make.

Manage Your Books Regularly

Set aside time every day to reconcile your Xero accounts, update your spreadsheets and records, produce your invoices and pay any bills that are due. Delaying these tasks for days or even weeks can lead to gaps or inconsistencies that will cause problems for your accountant and potentially your cash flow. Getting into the habit of dealing with this daily means there is less of a chance you will forget something important down the line.

Using cloud-based accounting software makes this part easy. You can create rules to reconcile transactions so that it would be a 5-minute job to get everything up to date. Plus, your accountant can log in any time to get an accurate snapshot of your finances.

Help Your Accountant To Help You!

If you have a scheduled catch up with your accountant, take the time beforehand to write down a list of questions or outline any plans you have for your business. Send this list to them ahead of the meeting, so they have time to get any information or documents ready for you.

Your accountant has a wealth of knowledge in many areas of business. That means they can provide you with sound advice on how to scale or grow your business. More than just numbers, they cover all the important parts of business.

If you would love to work with an Accountant that loves to work with you, then get in touch with us here at Accountants Plus. We make a point of getting to know your business so that we can always work in your best interests. Get in touch today.

Review your Goals

Why You Should Review Your Financial Goals

The end of the year is fast approaching, and you know what that means – holidays, Christmas trees and parties, right? Yes, while these things are all on the horizon, it also means the end of the financial year is only a hop, skip and a jump after that!

So, it is time to hit the pause button on all those holiday preparations and put aside some time to review the financial goals that you set for your business at the beginning of the year.

Reviewing your goals is a chance for you to get a snapshot of how your business has performed, allows you to figure out if you are on track, and adjust accordingly. You still have two quarters left to rev up and get those goals met. It also helps you to plan how to do things differently next year.

Let’s look into the review process a little further.

Review Your Financial Goals

Remember those goals that you set way back at the start of the year? The ones you were really enthusiastic about?

As part of your business plan, you should be setting goals, whether they relate to business growth, profits, expansion or other aspects of your business. This you know. But then you have to actually put those goals into action to make them happen.

Hopefully, you didn’t file those goals away and forget about them!

Take a look at the expectations you had for your business and check your progress.

If you met your goals, high five yourself! But then take a more in-depth look into the goals that you set. If you have reached them already, then you might have set a goal that was too easy, now is your opportunity to raise the bar for next year.

If you are miles away from completing your goals, try to figure out why. Were they unreasonable? Did you miss an important aspect of your planning? Is there a way that you can step it up now, to still achieve what you wanted to? Then, ask yourself how you can handle things differently next year to set yourself up for success.

Review Your Profits and Spending

Part of your review process should include looking at your numbers. Spend some time examining your income to see if it was what you expected. Brainstorm some ideas on how you can maintain your momentum, or increase it as we head into the last half of the financial year.

Once you have looked at your income, it is time to look at the outgoings. Try to examine them with an unbiased attitude. Did you spend your money wisely? Are there purchases or investments you regret making? Or, are there subscriptions, courses, or services you have signed up for but aren’t using?

These kinds of reviews clearly help you see where you need to build discipline, and what kind of worthwhile spending you might like to continue with. Be ruthless with your examination and remove anything from your business that you don’t need. If there is less spending happening, then you have more in the pot for investing in your business and paying yourself!

Get To Work

Although it may be tempting to spend the warmer months cruising towards the end of the year, don’t give up yet! You don’t need to write the year off, vowing to improve things next time around with a new set of goals.

Instead, focus on switching your attitude and trying to complete any goals that you didn’t quite get to yet. There is something incredibly satisfying about reaching those targets. After all, you set them for a reason in the first place.

Review Timeline

Instead of waiting for halfway through the financial year, or one week before its end, it can be helpful to review your goals on a more regular basis. That way if you are falling behind on your progress, it is easier to get caught up and on track before it is too late.

It is important to remember; whether you are reviewing your financial goals monthly, quarterly or annually, there is always something to learn from the process. Don’t be too hard on yourself if you haven’t managed to achieve everything you hoped. Use those shortfalls as a lesson, study them closely and come up with ways to do things better.

Financial reviews are an essential part of your business growth, and the perfect opportunity to refresh and empower your business. If you need some help with reviewing your financial goals, then get in touch with us here at Accountants Plus. We are not just accountants; we have plenty of business expertise that will help you to take your business to the place you want it to be.

Happy Accountant on Your Team

Why A Good Accountant Is On Your Team

Why A Good Accountant Is On Your Team

Accountants have a bit of a bad reputation. We aren’t sure why; we are actually a pretty cool bunch here at Accountants Plus! But unfortunately, it seems to be a reputation that comes with the territory.

Accountants really are an essential resource for your small business. That is not just us tooting our own horns. A good accountant can help you keep your business on track, position you for good growth and an even better return!

If you aren’t a money or finance person, it can be a mission to get your head around things like payroll, taxes, and financial reporting. Having a professional and qualified accountant to take care of these important parts of your business can really make all the difference.

We want to change the opinion people have about accountants and prove that we really are an integral part of your team. So let’s dispel some myths and look at how we can help you…

Common Misconceptions About Accountants

They Just Want To Make Money Off Me! Not true! The thought of a big accounting bill is of course intimidating. But before you sign on with someone, do some research into their fee and billing structure. Some accountants even offer a package where you are billed monthly and can spread the cost across the year.

They’re boring! Just because you find finances boring does not mean that we ourselves are boring! In fact, we pride ourselves on our friendly, helpful and personable service.

Bookkeeping Is Simple. I Don’t Need Any Help! Bookkeeping and accounting are very different things. It is not just a matter of tracking ingoing and outgoing money. You might do your own bookkeeping, and that’s great! But an accountant does far more. They take that day to day information and turn it into a regular financial statement report. That contains important data about your profitability and assets. They are also available on hand to help with any accounts, tax or payroll advice. While only 14% of small businesses outsource bookkeeping, 71% outsource the more complex tasks such as tax preparation.

They Only Do Taxes: While taxes and GST are some of the main roles an Accountant performs, they actually do far more than that. Their extensive knowledge in a wide range of areas means they can give practical and valuable advice. They can identify areas of weakness in your business and help you turn them into a strength.

Ways A Good Accountant Can Help Your Business

Help With Your Startup: There are a lot of crucial things to consider when starting up a business and if you haven’t done it before, you might miss something. Accountants can help with pretty much everything, including determining your business structure, creating business plans, designing processes to comply with industry regulations, even giving advice on which bookkeeping software to use.

Save You Time And Money: Your time should be spent on what you do best – delivering your products and services. Having someone else crunch the numbers and take care of financial obligations gives you back the time you need to do your job. Getting it right the first time can also help you avoid fines and penalties if you submit things late or incorrectly.

Help Grow Your Business. Over time, your accountant will come to know your business inside and out. They can be an excellent source of objective advice for important business decisions. When the time comes to grow and expand, an accountant who knows your business well is a vital resource.

Are you ready to have a good accountant in your corner? Then we are ready to be on your team! Give us a call today to see how we can help you and your business with more than just your taxes!

Embracing Cloud Accounting

Why You Should Embrace Cloud-Based Accounting

What do clouds, rainbows and accounting have in common?

Normally those are three things that you wouldn’t necessarily hear in a sentence together. But cloud-based accounting really can make rainbows appear in your business. And that is why we think you should embrace it wholeheartedly!

Let’s face it; if you are self-employed or running your own business, your bookkeeping obligations can be a bit of a drag. You got into this to do what you love and be your own boss – not to spend hours at a computer screen trying to make sense of invoices, transactions and tax.

But then, cloud-based accounting entered the market. Many small business owners are choosing to move to the cloud due to the increased ease and efficiency. So if you are still doing your accounting the old-fashioned way, it might be time for a change!

What does it mean to be cloud-based?

Is my information literally floating in the sky?

Kind of! Cloud-based software gives users access to accounting technology on a subscription basis. You pay a monthly or annual fee, and the provider remotely and securely hosts the databases and servers. You can easily access your data from anywhere at any time by simply going online.

Let’s explore why cloud-based accounting is so much better than the old traditional paper methods!

Problems with traditional accounting systems

  • It’s inflexible – Older accounting software is installed on your computer and is usually limited to exactly that – your one Data cannot be securely transferred from one place to another, it often requires the use of a USB drive or something similar. That jeopardises the security of your information and limits where you can do your work (hint – that means you can’t sneak in cafe working hours!)
  • It’s risky – It’s also common to only have one account or user login, because buying additional licences for other users is very expensive. This means if your computer is lost, stolen, or has a virus – you’re up the proverbial creek. Computers can be vulnerable to viruses, and if all of your data is stored on one PC, you could lose it in one hit.
  • It’s outdated – As the software gets older, it gets more out of date and inefficient for your growing business needs. It can be an expensive process to upgrade existing software and keep access to your old data.
  • It’s unreliable – Speaking of data, some older systems do not have the capacity to back it up at all. We’ve all accidentally deleted something that we really shouldn’t have. Not being able to get it back is a less than ideal situation.
  • You’re on your own – It’s almost impossible to get help or support when something is going wrong with your old accounting software. There is usually a customer support phone number, which is either never answered or it’s disconnected.

Benefits of cloud-based accounting systems

  • It’s accessible – Wherever you have Internet or mobile data, you can access your business information. This is essential for meetings on the go or for work trips where you can’t be at your desk, but need to be able to see or edit your data. It also means that your accountants have a clear and up-to-date overview at all times. No more frantic searching for receipts and invoices at tax time!
  • It’s streamlined – Cloud-based accounting systems are relatively new and have been designed to be user-friendly and largely automated. This cuts out a lot of the administrative work for you, giving you more time for other things.
  • It’s really smart – Most cloud-based systems are sophisticated and go way beyond basic spreadsheets and calculations. They feature detailed budgeting and financial analysis and come with heaps of other features to help you run your business better.
  • It Saves You Time – Systems like Xero offer one-click reconciliations, tax and GST reporting (with a direct link to upload to IRD), the ability to set up repeating invoices, automatic invoice reminders and so much more. That means it saves you hours of time completing these tasks manually.

As you can see, we are complete cloud advocates here at Accountants Plus. If you are interested in knowing more about how cloud-based accounting can streamline your business, or even how we can help you manage your cloud accounts then get in touch with us today.

Key Metrics In Your Business

Key Business Metrics You Should Be Monitoring

Do you know how healthy your business is? Could you say with confidence how much money is in your surplus budget, that all of your expenses are accounted for, and that there is little chance of a nasty surprise popping up?

If you answered no to any of that, you need to be monitoring aspects of your business more closely.

The secret to success is tracking key business metrics within your operation. Those metrics are…

Your Cashflow

Monitoring your cash flow is Business 101. It means looking at the physical dollars that are coming into your bank accounts, and the ones that are exiting your accounts too. The money that you pay out is known as negative cash flow, and the money that comes into your business is positive cash flow.

If you don’t know what is coming in and going out, then you don’t know if your business is doing well or not. Do you have enough to cover your expenses? Or do you have surplus money that you should be investing into a growth strategy? Remember this one key thing, positive cash flow does not equate to profits, it is simply the money that you have to spend in your business.

Short-Term Debt

Your most common form of short-term debt is your Accounts Payable. That is the bills that your business has received, but hasn’t paid yet. They will show up as a liability in your financial reports and statements. Tracking this metric is important, as you need to know that you have the cash flow to cover these upcoming bills.

You don’t want to fall into the trap of paying bills late as this can result in penalty fees or a black mark against your business’ credit rating. You also don’t want your bills to impact any debt repayments or your ability to pay your payroll. Keep a close eye on your short-term debt and manage it well.

Funds Owed

Generally, the biggest part of funds owed to your business is from your Accounts Receivable. This is generated by invoices you have sent out, or products sold and services completed that you have not yet been paid for. These funds will show as an asset on your financial statements, as they are revenue that you expect to receive in.

You should not recognise your funds owed as money in the bank until it actually hits your account. Encourage your customers to pay on time so that it doesn’t negatively impact your cash flow. If they are late in paying your invoices, make sure you follow up as quickly as possible. The longer a debt is outstanding, the harder it is to collect.

Direct Costs

Direct costs are also known as the cost of goods sold. They are costs directly associated with providing your products or services – wholesale costs, the cost of materials to make your products and even specific labour time specifically dedicated to producing your products. Monitoring your direct costs will show you how much it cost you to provide your products and services. If these costs become too high then you need to consider the viability of your offerings, or if you can make some cost savings.

Direct costs show on your Profit and Loss statements. If you subtract your direct costs from your revenue then you will be able to calculate your gross profit. Your direct costs do NOT include indirect fees like the cost of advertising, marketing, rent, or insurance.

Operating Margin

Your Operating Margin is the money you have left in your business after your income has been generated, and your direct and indirect costs have been paid. It is a good indication of how well your business is performing after you have paid for your products, all of your marketing and general expenses.

If the amount leftover is low then you might not have enough left to pay your taxes. This may mean you need to review your business model or pricing structure. But if you have a lot leftover, then there is potential you can reinvest the funds.

Net Profit

The net profit is the bottom line of your business. It is the money that is left over after you have paid all your costs, as well as Tax and GST. They are the funds that don’t have to be reinvested into your business. Tracking this helps you to establish how much money you have to invest in the growth of your business, or how much you can draw out.

Cash Balance

How quickly do you burn through any funds left in your business? Do you spend it as soon as it comes in, or can you maintain a healthy balance of positive cash flow? You should think long and hard about how you spend your cash balance as it is the funds you have to invest in your business. If you spend everything you have the second it hits your account, then you will have nothing available to support your future business growth.

While it is important to track these metrics in your business, it is not always possible to do it yourself. Financial terms can seem like a foreign language and who has the time to decipher a new language? After all, time is always an issue when it comes to running a business as you want to focus on the things you do best to generate revenue.

So, if you would rather rest easy knowing that your finances are being looked after, consider letting Accountants Plus monitor them for you. We have a team of financial gurus who are experts in measuring the financial health of your business with these metrics. Get in touch with us today to see how we can help.

Is Business Tax Really That Scary

Is Business Tax Really That Scary?

T… A… X. Three little letters that can strike fear into the heart of any small or medium business. And what about all those other acronyms… FBT, GST, IRD, ACC, and PAYE.

But is tax really all that scary?

Your business tax does not have to be an unsolvable mystery. Let’s have a look at how it works and what you can do to make the whole process easier for your business.

Is Business Tax Really That Scary?

When it comes to tax, you need to be well informed of what is going on in your business and what obligations you need to meet. Unless you are a financial whiz, it is 100% recommended to have an accountant on board to help you meet those obligations.

Here are the benefits of having an accountant when it comes to your tax:

  1. Accountants deal with tax on a day to day basis so have all the up to date information on changes to regulations
  2. There are many ways that you can streamline your tax process, an accountant can help you set up systems that will save you time and keep you compliant
  3. Dates are a fundamental part of your tax obligations, these dates are ingrained in an accountant’s brain so they will always be able to remind you of when milestones are coming up
  4. An accountant can help you claim on all the expenses that you are entitled to which can save you money
  5. Accountants can provide advice on the tax advantages for large purchases, leasing equipment, using a private vehicle, or other business queries

Here at Accountants Plus tax does not scare us at all. In fact, we are actually tax experts. So don’t hesitate to get in touch with us if you need help figuring out what you have to pay and when you have to pay it.

What Is Tax?

Let’s cover off the basic question first. What is tax?

Tax is a compulsory financial payment that every New Zealand business must pay to the government to fund various public services and expenses. The amount of tax you have to pay will depend on your earnings and the setup of your business.

The different tax types are:

Income Tax: The main compulsory form of tax. It is calculated on your net profits (your total revenue, less your expenses) and the rate will differ depending on whether you are a sole trader, partnership or a company. To prevent the shock of a large tax bill, you are encouraged to pay in instalments throughout the year called provisional tax payments.

ACC: An annual levy that you must pay to cover the cost of workplace injuries. Even if you work in a low-risk profession or from home, you will still need to pay this levy. It is like an insurance policy in case injury does occur.

GST: Your business must be registered for GST if you have an annual turnover of more than $60,000. GST stands for Goods and Service Tax and applies to any product or service that is sold within New Zealand. The current GST rate is 15%.

PAYE: If you employ staff and pay them a wage or pay yourself a salary, then you will need to pay PAYE (Pay As You Earn) to the IRD on a monthly basis.

ESCT: A tax paid on any contributions to employee superannuation schemes including Kiwisaver.

FBT: This is payable if you provide perks or benefits to your employees as part of their employment.

This does look like a long and scary list of taxes. But, if you manage your business well and get the required help, then none of them should come as a shock when the bill arrives.

Ways To Make Tax Less Scary

There are a few things that you can do in the day to day running of your business to make tax less scary.

Have A Good System

The key thing with tax is having a clear picture of your earnings and expenses. The best way to do this is to have an effective accounting system in place that allows you to see your numbers at a glance. Something like Xero is easy to use and has great reporting that will help at tax time.

Regardless of the system you choose, it is important to stay on top of your financials regularly. So take the time to reconcile your incoming and outgoing funds on a daily or weekly basis.

Put Money Aside Regularly

It can be really difficult to come up with a large sum of money at tax time. If you set aside a portion of your earnings each month then you will never have to worry about being caught short. Have a chat with your accountant to find out how much you should be setting aside to cover all of your tax obligations.

Don’t Try And Muddle Through Or Stick Your Head In The Sand

Paying tax is a part of business. In fact, it is a positive part. If you have a tax bill then you must be turning a profit. So don’t ignore your tax and hope that it will go away because it won’t.

Likewise, don’t be naive about the process. There are some strict and specific regulations when it comes to tax. If you don’t really know what you are doing, seek help. You can end up paying more tax, or have penalties applied if you don’t follow the process correctly. There is information available online for free, but it is generic information. It is far better to get individual advice specific to your business from your accountant.

If you don’t have an accountant in place or you aren’t happy with your current one, then get in touch with us at Accountants Plus. We will be happy to take your scary tax monster and turn it into a very manageable process with no monster spray required!

Things to check before buying a business

10 Things To Check Before Buying A Business

Buying a business that is already established can be an exciting opportunity… if it is the right business. You can get the benefit of a solid reputation, steady cash flow, loyal customers, proven processes and a reputable brand. But if you aren’t careful, you can end up with a bunch of negatives you weren’t expecting.

When you consider buying a business, it is essential to do your research to ensure you actually want what the seller is offering. It might seem great at first glance, but there could be some skeletons lurking in the closet upon closer inspection.

To prevent any nasty surprises, these are the things we recommend you investigate…

10 Things To Check When Buying A Business

Instead of jumping in blindly with both feet, there are five important questions that you need to ask before you even consider purchasing a particular business.

They are…

1: Why Is The Business For Sale?

This is the first and most important thing to look into. Is the owner selling the business for a legitimate reason, or are they trying to desert a sinking ship? There are many reasons that people decide to sell, just make sure a significant decline in the business is not the reason.

2: What Is The Business’ Reputation Like?

Does the business have a good name? If so, then it is likely to have the loyal customers and steady cash flow that you are after. If it does not have a good reputation, then you need to ask yourself why that is and can it be easily recovered?

3: Is The Business Profitable?

A business needs to make a profit, no matter how much you love what you do. Not just scraping by or covering costs, but a genuine profit that makes it worth your while to invest your blood, sweat and tears. If the business is not currently profitable, is there a way that you can easily turn it around? If not, it is better to walk away now.

4: Are The Conditions Right For Success?

Does the business fill a gap in the market, have local or national importance, or serve a very specific need? Any company needs to have the potential for success. So, the location needs to be right, the products or services need to be on point, and there has to be a need for it in the market.

5: What Is The Outlook For The Future?

Does the business have potential to grow and develop? If not, are the current conditions sustainable and will they satisfy your interest levels and your income needs? If the future looks uncertain or grim, then maybe consider a different business instead.

What Next?

If the answers to those five questions don’t make you run away in fear, then it is time to dig deeper into what’s on offer in the sale. These are the things you should check before proceeding further:

1: Financial Statements & Sales Records

Have an accountant look over the financial statements for the business. Here at Accountants Plus, we are experts in reading the story of how the business has been operating and if it is a profitable investment for you. We can also help you analyse the sales records to see which products or services are the most popular and profitable. This information, plus investigating peaks and troughs throughout the year, will allow us to give you an accurate cash flow forecast.

2: Inventory and Asset Lists

Understand exactly what your money is buying you. Getting saddled with thousands of obsolete stock items is not something you want. You will want to know what assets you are receiving and how old they are. Ensure you have the right assets to keep the business running, but be mindful of ageing assets. They could mean a significant cash outlay to update them in the not too distant future.

3: Legal Documents

Request copies of any legal documents like lease agreements, insurance policies, employment contracts, license agreements, and any other legally binding documents. Have a clear picture of existing obligations and how long they remain in place for.

4: Location and Demographic

Is the business well placed for foot traffic and walk-in sales? Has the surrounding suburb undergone any changes that could negatively impact on the business? Also, consider your potential for digitising, or going online if that has not been done already.

5: Existing Staff

It can be both a curse and a blessing to take on existing staff. They will allow the business to tick over seamlessly while you find your feet but can be resistant to change. Find out about the personalities involved and consider how that will impact your ability to take over the business.

There are a lot of things to consider when buying a business. One of the most important things is to follow your gut instinct. Deep down if you feel like it isn’t the right fit for you, then walk away now. If your instincts say yes, then get in touch with us here at Accountants Plus. We can help you to discover if that business you are eyeing up will be a sound financial investment.

Top tips when starting a business

7 Top Tips For Success When Starting A Business

Starting a business is both scary and exciting. You know you have a great idea, but it takes more than just an idea to be a success. There are a lot of things to consider when starting a business. Some you might not have thought of initially. So, to give your startup the best chance for success, we have put together our top 7 tips for success. Here they are…

1: Choose The Right Business For You

This might sound silly, but you should choose the right kind of business for you. You don’t want to be learning new skills at the same time as learning how to run a business. Choose something that you are passionate about and that you are familiar with. Minimise the amount of learning you have to do. If you can be confident in what you do, then the other aspects will fall into place.

2: Know Your Starting Position

Before you do anything, educate yourself on where you are at. Know your personal situation:

  • How much time do you have to invest in this project?
  • Will you have help and support?
  • Is your family flexible?
  • Is it going to be your side hustle or a full-time career move?
  • How much money can you invest or risk?

3: Do Your Research

One of the key factors for success is knowing if there is a demand for your business. Do people really want what you are trying to sell them? Or, if there are already three cake making businesses in your town, is there need for another? Research the market and see if there are any gaps that you might fill and how you can stand out from your competitors.

4: Make A Plan

If you are serious about getting started, then you need to have a concrete business plan. Especially if you are going to require financial backing. Your plan does not need to be elaborate or fancy, but it needs to set out what your business goals are and how you will achieve them. It is a document that will evolve as your business does when you learn more about your target market and how best to serve them.

5: Test The Waters

Once you know your position and have done your homework, don’t sit on your idea. The only way you will find out if you can make it a success is to test it. Don’t get stuck in the procrastination trap as you may never get out of it. Instead, start small and see which aspects work well. Then you can build on the successful parts and ditch the unsuccessful elements.

6: Understand The Business Side

While your decision might initially have been to earn some money from doing what you love, there will always be a business aspect to consider. Even if you are only testing the waters, we would recommend you do these things

  • Have a separate bank account for your business transactions, don’t confuse them with your personal spending
  • Implement a way to track your revenue and expenses
  • Regardless of how much you earn, put money aside for tax every month
  • Consider registering for GST if you think you might make $60,000 in your first year, or if you want to take advantage of set-up expenditure
  • Get a financial expert on board to ensure you are doing things right (yes, that does mean an Accountant or a Bookkeeper)

If you are unsure of any of these aspects, then feel free to get in touch with us here at Accountants Plus. We are more than happy to provide guidance for setting your business up correctly.

7: Keep Learning

It doesn’t matter how long you have been in business for; there will still be things to learn. Be open to this and take every opportunity available to you. Learn from other businesspeople and even consider a mentor. Upskill yourself where you can with courses and information packets. Be prepared to learn within your business too. Look at the things that work and build on them. Examine the things that don’t work and ask yourself why that is.

Most importantly, understand when something is beyond your learning capacity or not worth your time. When first starting a business you will do a lot of DIY, but specific areas are too time-consuming, or too risky to handle yourself. Your finances are one of those areas. Always outsource the task or call in an expert if you are not sure you are doing something right!