KPIs that matter


14 Key Performance Indicators that matter

Identifying what to watch

performAs a business owner, it is your responsibility to pay attention to every detail of the business. From employee satisfaction to growth indicators, you need to be on top of how your company is performing at every turn. That's why 14 entrepreneurs from Young Entrepreneur Council (YEC) were asked the following:

"What one key performance indicator should CEOs be tracking above all else and why?"

Key Performance Indicators examples
Here's what YEC community members had to say: 

1. Revenue per Employee
"As a company grows, it's easy to see opportunity on the horizon and often, new resources are needed to go after it. Keeping tabs on the amount of revenue per employee helps you to see if the new resources are enabling you to take advantage of the new opportunities or actually draining the rest of the business." ~Matthew Bernard, Darex LLC

2. Revenue Growth Rates
"I use revenue and growth rate as an important exercise in benchmarking. Revenue tracking gives a great key performance indicator on the success of your initiatives, your departments and how well you are innovating to keep up with the changing needs of your customers. If you follow the numbers closely and break them down by categories, you can compare to last year and identify trends and changes." ~ Michael Averto, ChannelApe

3. Repeat Business
"It's important to know how many people are coming back and buying again. This intent and interest should be tied to other strategies and tactics, so that motivation must be identified. It's what can attract new customers and what may help you determine how to market to those who might be interested in buying again." ~ Angela Ruth, Calendar 

4. Value
"While most company officials are focused on profit and loss, I tend to focus on the two halves of the same coin that make a business work: How much value is in whatever you are trying to sell? How much value lies within the people who run your company? These two must work in tandem or any business will fail. Every single aspect of your business should revolve around a mutual exchange of value." ~ Jason Criddle, Jason Criddle and Associates 

5. Profitability
"It really varies based on what type of company you are. For 90 percent of businesses out there, profitability should be that KPI. A lot of businesses get caught up in revenue, a total vanity metric. I've seen dozens of companies fail while having substantial revenue growth" ~ Grayson Lafrenz, Power Digital Marketing

6. Client Satisfaction
"The most important metric that should be tracked is client satisfaction. When your clients are unhappy, it is safe to say that they will look for better alternatives, which, to your business, will mean loss in revenue. By channelling your efforts toward maintaining or improving client satisfaction, you are in a better position to increase prices or come up with new offerings." ~ Derek Robinson, Top Notch Dezigns

7. Employee Happiness
"If you don't take care of the people who work for you, they won't take care to ensure there are profits within the company. You want to make sure that the company is making money and the people in your business are the ones that make that happen. Keep them happy and motivated, and your business will succeed." ~ Nicole Munoz, Start Ranking Now

8. Month-Over-Month Growth
"Whether it's new users or new revenue, tracking month-over-month growth will give you an irrefutable understanding of how your time is spent each month, and whether your team is moving the business forward or not. It's certainly important to track this weekly and quarterly, but these days, a calendar month is sufficient time for a team to show productivity, or lack thereof." ~ Ben Jabbawy, Privy

9. Year-Over-Year Performance
"Many businesses deal with seasonality or spikes in results depending on the month. By comparing the current year results to prior year results for the same month, a CEO can gain a more accurate snapshot of how the business is performing. Monitoring revenue and expenses for these periods can quickly identify spikes in costs or sales, etc." ~ Shawn Schulze, Names.org

10. Rate of Attrition
"Subscription-based businesses should be keenly aware of the attrition rate (also known as 'churn'). Attrition rate measures the proportion of subscribers who cancel in a given period. If the attrition rate equals or exceeds the number of new subscribers, the business is in trouble and it's time to re-examine some core assumptions." ~ Justin Blanchard, ServerMania Inc.

11. EBITDA
"Earnings before interest, taxes, depreciation and amortization is the single source of truth because it's the least "fudgeable" number that's also the most relevant to all businesses. This assumes that the CEO and key players are receiving a salary - many small business owners don't pay themselves or key players an appropriate salary - but when salaries are factored in, EBITDA shows you how the "business engine" is truly running." ~ Charlie Gilkey, Productive Flourishing

12. Content Marketing ROI
"As more businesses increase their content marketing budgets, it's important to keep track of its ROI. One way to do this is to take a look at your bounce rate and conversions per article in Google Analytics. If you're getting a high bounce rate and low conversion, that's an indicator that your leads are low quality and aren't looking for what you have to offer." ~ Syed Balkhi, OptinMonster

13. Cost per Acquisition
"Regardless of the type of business, cost per acquisition is the most important key performance indicator. If your cost to acquire a new client or customer is greater than the value they bring to your company, then how will you ever make a profit? Keep a close eye on your cost per acquisition and consistently try to find ways to bring it down." ~ Duran Inci, Optimum7

14. Pitch Win Rate
"For companies selling business-to-business, in order to create predictability and smooth out booking, pay attention to pitch win rates to drive pipeline growth, deal closure and assess the size of each opportunity." ~ Ryan Stoner, Phenomenon

While there is an extensive range of KPIs available to you, knowing where to focus your attention when it comes to evaluating your business can make you more effective and make the best use of your time. Call the team at Collins Hume on 02 6686 3000 to point you in the right direction or to formulate a structured KPI reporting system for your business.

Article by The Young Entrepreneur Council, published by Small Business Trends. First published on 9 April, 2018 - https://smallbiztrends.com/2018/04/key-performance-indicators-examples.html

Personal super contributions

Personal Superannuation Contributions

10% rule repealed 

deadlineWith the end of the financial year fast approaching, it is time to start thinking about income tax deductions. 

Under the new Government changes to super, effective 1 July 2017, the 10% maximum earnings condition for personal superannuation contributions was removed for the 2017-18 and future financial years. 

This rule provided that an individual must have earned less than 10% of their income from their employment-related activities to be able to deduct a personal contribution. 

This change ensures that individuals receiving employment income are not dependant on whether their employers offer salary sacrifice arrangements. Self-employed individuals and individuals in receipt of passive income can make deductible personal contributions regardless of the amount of salary or wages they earn. 

This means most individuals under 75 years old can now claim a tax deduction for personal contributions to their SMSF (including those aged 65 to 74 who meet the work test).

Before the end of the financial year you need to: 

  1. Review if you have income available to contribute to your SMSF
  2. Review your total concessional contributions to ensure they are below the annual cap of $25,000
  3. Review any current salary sacrifice arrangement you may have for its necessity and benefits.

To be eligible for the deduction, you need to provide a valid notice of intention to deduct and have received acknowledgement of this notice from the fund. 

Splitting amounts to your spouse 

If you are planning to split all or part of your personal contributions with your spouse, you should give your trustee the notice of intent to claim a deduction first. 

If your trustee has accepted your application to split your contributions, they cannot accept the notice to claim a deduction. 

This change may require you to adjust your contribution strategies going forward. 

This will most likely be the case if you are under 75 and the previous 10% rule prohibited you from making personal superannuation contributions.

How can we help?
Collins Hume's SMSF Specialist Advisers can assist you to ensure you are maximising your personal superannuation contributions based on your specific circumstances and those of your fund. Please feel free to give us a call on 02 6686 3000 to arrange a time to meet so that we can discuss your particular requirements, especially in the lead up to the end of the financial year. 

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General Advice Warning: This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions. Collins Hume is a Corporate Authorised Representative No. 1243440 of GPS Wealth Ltd AFSL 254544.

Collins Hume 2018 community engagement winners

Collins Hume wins Community Engagement Program of the Year 2018

Accountants Daily pleased to present the winners of this year's Australian Accounting Awards.

community engagement awardTogether with principal partner Thomson Reuters Tax and Accounting, Accountants Daily presented Collins Hume with a coveted Australian Accounting Award for Community Engagement Program of the Year at a gala dinner in Sydney on 1 June.

Peter Fowler and David Keith took a moment to reflect when they accepted the award on behalf of the whole Collins Hume team.

"Collins Hume have been financial and business advisers since 1980 and we realised a long time ago that we're privileged to be able to live, work and play in Ballina which is one of the most beautiful and prosperous regions in Australia," they said. 

"On our doorstep, we can choose to partake in any number of lifestyle choices; we thrive in our locale and our kids are healthy and strong and they receive a sound education."

"Given this it would be remiss of us not to give back to the community at a local, national and international level. As such, we support many local causes - through our partnership with B1G1 we have positively impacted over 9.6 million lives worldwide."

"Together we are making a difference but collectively we can change the world."

"Of all the awards we have won in recent times the Community Engagement Award means the most to us as it recognises all the philanthropic and volunteer work our team does and aligns perfectly with the core purpose of our business: to achieve extraordinary results, build stronger communities, change lives and create a better world," Peter and David added.

"Congratulations to this stellar line-up of winners and finalists at this year's Australian Accounting Awards," said Thomson Reuters Australia and New Zealand's marketing director, Marcus Sandmann. "We are proud to recognise talent and support innovation in the Australian accounting industry."

"In a fast-moving, busy and ever-changing profession, accountants - year in and year out - prove their dedication to their clients through the quality of their advice and sheer hard work," said Momentum Media's head of events, Jim Hall.

You can access the full list of winners here.

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Prior financial advice reviews

Financial advice review due for pre-30 June 2017 around super contributions 

Effects of 1 July 2017 super changes could result in past advice needing an update, so this is an important step.

shane bartrimThe super reform measures that commenced on 1 July 2017 introduced additional restrictions on those looking to make non-concessional contributions.

The new "total superannuation balance" rules reduce the ability for people with super benefits exceeding $1.6M from making further non-concessional contributions. A client's total superannuation balance includes all accumulation balances held in all super funds (including transition to retirement pensions that are not in "retirement phase"), all superannuation income streams that are in retirement phase and any roll-overs in progress that are not included in the above.

If your total superannuation balance at the end of 30 June in the previous financial year is less than the general transfer balance cap, you will be eligible for a non-concessional contributions cap; being $100,000 in 2017–18. Some people may also be entitled to a two or three-year bring-forward period for non-concessional contributions cap based on their total superannuation balance.

If your total superannuation balance at the end of 30 June in the previous financial year is NOT less than the general transfer balance cap, your non-concessional contribution cap for the year is $Nil. That is, any non-concessional contribution that is made will be an excess non-concessional contribution. For 2018FY contributions, we will need to review total super balances as at 30 June 2017.

There are additional rules that impose a "transitional non-concessional contribution cap" for people who triggered the bring forward rule for non-concessional contribution rules in the 2016 or 2017 financial years. These additional transitional rules are only relevant if you did make non-concessional contributions in those years that resulted in the bring forward rules being triggered and where you DID NOT make use of the full $540,000 that was available before 30 June 2017.

If you have previously received advice around planned contribution strategies that included contributions to be made post 30 June 2017, it is imperative that you revisit this advice with Collins Hume to make sure that any recommendations and advice is still valid to avoid excess contributions and tax penalties. If you act on prior advice, it could result in excess contributions and tax penalties.

General Advice Warning: This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions. Collins Hume is a Corporate Authorised Representative No 1243440 of GPS Wealth Ltd | AFSL 254 544 | Australian Credit Licence 254544 | ABN 17 005 482 726.

Foreign residents living in Australia

CGT and the family home: Expats and foreign residents beware

Foreign residents living in Australia

AustraliaIf you are a foreign citizen currently living in Australia but planning to leave Australia at some stage in the short to medium term then these new rules are likely to impact on you. If you owned your home at or before 9 May 2017, you can access the main residence rules on or before 30 June 2019 if you sell the property.

However, if you leave Australia and cease being a resident of Australia before selling the property and the sale occurs after 30 June 2019 then you will not be able to access the main residence exemption. This will mean that you will pay tax at your marginal tax rate on any gain you make on the sale of the property. You are also likely to have limited access to the general CGT discount. 

If you are uncertain of your position or the likely impact of these new rules on you, you should seek our advice on 02 6686 3000. Tax residency status is often complex and is not intuitive – it's important to get it right.

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