Business, Succession and Exit Strategy planning

Business plans as important as maps for tourists

Business planning gives business owners the opportunity to spend quality time with your accountant analysing every aspect of your business to assist you in getting to the "next level".

business planningThe planning process should be undertaken on an annual basis, with a periodic review during the year so as to ensure that the business is on track to fulfil the targets that have been set in the Business Plan.

Most small and medium enterprises find benefit in a "think tank meeting" which would involve the management team and possibly other team members sitting down to evaluate every component of the businesses operations. This means a Strengths Weaknesses Opportunities and Threats 'SWOT' Analysis would be prepared on the various components of your business plus numerous other questions that would be given in-depth consideration as part of our business planning process.

Every business needs a Succession Plan
Succession Planning is something to which every business should give consideration.

Many business owners prepare Succession or Exit Plans regularly so they are in a position to react promptly to any opportunity to change direction in their business.

While succession planning can apply to shareholders, key management personnel and all team members, often the starting point is to concentrate on the key owner / CEO within the business. 

If you would like to discuss the development of a Business Plan, Succession Plan or Exit Strategy for your business, please contact us in Ballina, Byron Bay or Lismore.

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Australian Accounting Awards 2018

Collins Hume shortlisted for prestigious Australian Accounting Awards

Collins Hume again in the running for Australia's top accounting industry awards.

awardsCollins Hume have been shortlisted as Finalists in six national categories for Business Advisory Firm of the Year, Community Engagement Program of the Year, Office Administrator of the Year, Executive of the Year, Partner of the Year and Marketing Program of the Year at the prestigious Accountants Daily Australian Accounting Awards 2018.

Now in its fifth year, the Australian Accounting Awards, in partnership with Thomson Reuters, recognises the exceptional contribution of individuals and accounting firms across 31 categories. Winners from the individual categories will automatically be shortlisted for the coveted Accountants Daily Excellence Award. 

"On behalf of the team at Accountants Daily, sincere congratulations to all the deserving finalists in this year's Australian Accounting Awards," said Accountants Daily managing editor Katarina Taurian.

"It's great to see such a diverse mix of firms, from micro-businesses right up to nationwide networks.

"We are also pleased to be recognising the broader role accountants play in their locales and in the lives of their clients. Accountants are the backbone of small business in Australia, and the community flow-on effect is enormous."

Partner Peter Fowler and Business Manager David Keith said they were humbled by the nominations. 

"Collins Hume's recognition for our excellent contribution to the accounting industry reinforces the strength of our brand in connecting with our community and engaging with our clients," they said. "None of our achievements would be recognised without the significant contribution from all of our team."

The winners will be announced at a black-tie awards dinner on 1 June at the Hyatt Regency Sydney. Click here to read the full announcement.

Debtor days outstanding

Debtors' Days Outstanding under control?

Debtors' management is an enormous problem for a significant number of small/medium enterprise operators.

paidThe Small Business and Family Business Ombudsman indicated last year that Australia had the highest debtors' days' outstanding figure in the world at 56.4 days, thus debtors' management issues are a significant contributor to cash flow management problems confronting small/medium enterprises.

The Australian Prime Minister announced in late 2017 that he had instructed all Australian government departments to pay bills owing to SMEs within twenty calendar days of the date of the invoice.

This is great news for the small/medium enterprise community – especially for those that have dealings with Federal government departments.

Hopefully, State and Territory governments and big business will follow the initiative of the Federal government.

However, another significant problem that many small/medium enterprises have is that they have not implemented appropriate debtors' management systems nor do they regularly calculate their own "debtors' days outstanding".

A Debtors' Management System would include written policy manual for all aspects of debtors' management for an individual business outlining procedures as follows:

  1. Checking credit applications
  2. Approving of a credit limit and terms of trade for a new customer
  3. Sending confirmation letters to new customers including Terms of Trade Agreement and Retention of Title Agreement
  4. Prompt follow-up with new customers to receive the signed Terms of Trade Agreement and Retention of Title Agreement back from new customers before any goods are provided
  5. Decision making as to whether a new customer is to be registered on the Personal Property Securities Register and, if a decision is made to register a customer on the Personal Property Securities Register, is the registration process being completed within the very short time allowed by the legislation?
  6. Ensuring that tax invoices are sent promptly to customers and that the due date for payment is clearly identified on the tax invoice
  7. End of a month prompt preparation of Debtors' Aged Analysis and, if Debtors' Statements are still being sent to customers, that emphasis is being given to ensuring that the Debtors
  8. Distribution of Statements no later than 48 hours after the end of the month
  9. Calculating the debtors' days' outstanding figure at the end of the month and the figure is treated as a key performance indicator and is circulated to all personnel involved in sales and debt collection

This type of system will contribute to a reduction in debtors' days outstanding in virtually every type of business.

If you would like to explore the introduction or revision of systems to reduce debtors' days outstanding in your business, please contact Collins Hume on 02 6686 3000.

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Reinventing Ballina business 2018

Ballina reinvents at business event

A FULL HOUSE of 160 Northern Rivers business owners were treated to a unique seminar called 'Reinvent: Playing a Bigger Game' at Ballina RSL last month.

reinvent playing a bigger gameIt was great to see members of our business community turn out to enjoy a repeat visit from TedX veteran Paul Dunn, who talked about how myriad of small actions can create big outcomes in any business, all underscored by a giving back theme.

First-time attendee and Collins Hume Accountant Kelly Crethar said, "I found it completely awesome, as did those who attended with me, and will be keen for a lot more information. I hope Paul comes back!"

'Reinvent: Playing a Bigger Game' was enthusiastically supported by sponsors ANZ Ballina, Ballina RSL, Paradise FM, Quadracon Building, Intuit QuickBooks, Somerville Laundry Lomax Solicitors and Cool Promo, whose contributions made it affordable for all sizes of business to attend.

According to Business Manager David Keith, "A lot of people got a lot more out of Paul's presentation with new material plus the afternoon's 'Going Deeper' session."

"It's been great to take onboard the wonderful feedback from so many people who went along," Partner Peter Fowler added. "It's heartening to hear how many business people learnt new ideas, expanded their networks and took so much away from our presentation."

'Reinvent: Playing a Bigger Game' is set to raise some serious funds for charity, including $3,000 to local organisation Veterans' Advocacy Centre in Alstonville. Initial calculations by Global Giving Initiative B1G1 confirmed that funds raised are also sufficient to give 182 people in Malawi access to clean drinking water for life (332,150 giving impacts) – a cause that the Collins Hume team feels very strongly about.

Another attendee added, "Thank you for the awesome event. I found it particularly helpful how you shared tips, notes and examples on how to implement all these small yet powerfully effective ideas. My husband was just as inspired as I was last year, and again this year!"

At Reinvent business owners were able to take advantage of a special rate to participate in Collins Hume's Better Business Workshops. If you're interested in doing this in the future, please let us know as all workshops are currently fully booked.

Copyright 2018. @CollinsHume Ballina | Byron Bay | Lismore NSW

GST on property developments

Big changes for developers and purchasers

If a Bill currently before Parliament passes, from 1 July 2018, purchasers of new residential premises or new residential subdivisions will need to remit the GST on the purchase price directly to the ATO as part of the settlement process. 

propertyThis is a significant change from how GST is currently managed with the developer collecting the full proceeds and remitting GST to the ATO in their next BAS (which can be up to three months after settlement). The reforms are aimed at preventing developers from dissolving the business before the next BAS lodgement to avoid remitting the GST. 

For some developers there will be a significant cash flow impact because the purchaser will be required to pay 1/11th of the full sale price to the ATO, even if the developer's GST liability on the sale would be less than this (e.g. where they can apply the GST margin scheme). In these cases, developers will need to seek a refund from the ATO.

The reforms apply to the sale or long-term lease of:

  • new residential premises (other than those created through a substantial renovation and commercial residential premises); or
  • subdivisions of potential residential land.

For the purchaser
If you are purchasing a new property affected by the changes after 1 July 2018, you will need to pay 1/11th of the full sale price directly to the ATO at settlement. 

The vendor must supply you with a notification advising that the payment is required and the amount that is to be paid.

For the developer (vendor)
From 1 July 2018, the vendor will no longer collect and remit GST on the purchase price of the residential premises. Instead, the vendor must notify the purchaser in writing that the GST needs to be paid to the Commissioner and advise the amount that must be paid. The amount to be paid is simply 1/11th of the full sale price, regardless of whether the vendor is eligible to apply the margin scheme to reduce the GST liability associated with the transaction. In general, this notification will need to include:

  • the name and ABN of the entity that made the supply;
  • when the purchaser is required to pay that amount to the Commissioner (generally settlement date); and
  • where some or all of the consideration is not expressed as an amount of money (e.g. sale of property for cash plus another property) - the GST-inclusive market value of the consideration that is not expressed as an amount of money.

Vendors that fail to provide this notification face fines of up to $21,000 per event.

The vendor will receive a credit for the amount that has been paid by the purchaser to the ATO (if the amount was simply withheld but not paid these amounts cannot be claimed). If the vendor's net amount for the tax period is in a credit, a refund will be made. 

It's expected that the new rules will generally be incorporated into the settlement process but it is something that developers and purchasers will need to be across for any affected property with a settlement date of 1 July 2018 onwards.

If you are developing property and are concerned about the impact of the reforms, please contact us in Ballina, Byron Bay or Lismore on 02 6686 3000.

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