Have you ever found yourself thinking, ‘I’m in the wrong job’ after being presented with your Accountant’s fees for your year-end tax work? You are not alone! Many small businesses fail to see value in the amount they spend with their Accountant. To minimise unnecessary accounting fees for year-end tax work, and maximise the value of working with your Accountant, follow my top five tips.

1. Use Accounting Packages

 Learn to use your accounting package correctly and understand the effects of processing transactions to the Profit and Loss (P&L) or Balance Sheet. The better you understand these figures and what can impact on them, the easier it will be to spot when you have made an error in your allocation. If you are not confident with this, or you do not have the time to do it properly, then make sure you engage the services of a reputable and qualified bookkeeper.

2. Does It All Add Up?

Reconcile as many of your balance sheet accounts as possible, e.g. your transactional bank account and credit card account. Make sure your balances match your bank statements, ensure your GST accounts match your final BAS for the June quarter, reconcile your wages accounts and make sure they match the PAYG payment summaries you have compiled.

3. Be Prepared

Present your information in an organised and methodical way. Ask your Accountant for a checklist of what they require and have these items prepared for them. Ensure things are totalled and clearly labelled. The more time an Accountant has to spend adding things up, or searching for things and then waiting on you to provide them, the more it ends up costing you.

4. Shop Around

Find an Accountant that suits your budget and requirements. Many small businesses don’t need a top end Accounting firm with expensive offices in the city — and often these large Accounting firms are not in touch with all of the issues relevant to small businesses. Your local Accountant can probably provide you with more cost effective services, without compromising on quality. Also, some Accountants are moving towards packaged fees. Ask your Accountant if they are willing to lock in an annual price that you can pay in monthly installments. Your Accountant may also provide free email or telephone advice – this may be something of great value to you. Lastly, consider working with your Accountant’s staff rather than the owner directly – they will often be cheaper but just as knowledgeable on small business issues.

5. Maximise Meetings

Before meeting with your Accountant, take some time to prepare. Think about any business issues and questions you might have – and write them down! Talk to your Accountant about any challenges you are having or opportunities that you would like to explore. Use the time wisely and minimise personal chit chat.

Most Accountants prefer to spend their time actually helping their clients to grow/impact their businesses, rather than filling out the required tax forms for the year. They enjoy helping you utilise the money you spend with them to your maximum advantage. Ensure you are prepared and organised before you visit your Accountant to facilitate this. Don’t dump a disorganised mess on your Accountant as this makes them a very expensive data processor.

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At the end of the financial year many business owners scramble to ensure they are maximising their deductions and therefore minimising the tax they have to pay.

These days, it is common for business owners to operate from home to save costs, but they often overlook the biggest tax deduction available to them – the cost of running a home office!

There are two types of home based businesses:

1. A business that is run at home – You do most of your work from home and clients also visit you at your home, e.g. an accountant;

OR

2. A business that is run from home – You perform most of your services at clients’ sites, but administer your business from home and do not have an alternate business site, e.g. a plumber.

No matter what type you fall into, or if you simply have a home office that you use when you bring work home, you may be able to claim a portion of the running costs.

Home based business running costs usually include two different categories:

a)    Occupancy costs, such as:

• rent/interest on your mortgage
• council rates
• water rates
• insurance premiums

b)    Running costs, such as:

• electricity
• gas
• telephone
• depreciation on office furniture and home furnishings
• cleaning
• repair
• internet access
• stationery

Typically, when you have an area or room that is specifically used for running your business, you calculate the percentage of floor space that the room occupies of the house. You then use this percentage to claim a portion of the above home expenses as a tax deduction.

If you do not have an area that is used exclusively for business, you need to find an alternative way to measure what portion of your home expenses you can claim as business costs. The most common way to do this is to compare your costs prior to commencing business with your costs after commencing business, and identify what increases are as a result of running your business from home. Other alternatives may include keeping a diary or using the ATO’s predetermined annual rate, which is currently $0.26/hour of work performed.

But what about capital gains tax?

Many business owners are led to believe that if they don’t claim any of the occupancy or running costs in their home business, then they will not have to pay any capital gains tax. Unfortunately for those business owners, that is not the case.

A capital gain arises when you sell an asset, e.g. your home, for a greater amount than you purchased it for. Capital gains tax is therefore the tax on this gain. Normally, your home is exempt from capital gains tax. However, if you are running a business either at or from home, you may have to pay capital gains tax on a portion of the gain.

There are a number of specific exemptions from capital gains tax, or small business CGT concessions, that may apply which can help to minimise or eliminate any potential tax liability. You should ask your Accountant for tax advice specific to your personal situation. However, be wary if you get the old, ‘if you don’t claim the costs in your tax return you won’t have to pay capital gains tax’ answer, and consider getting a second opinion.

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We’ve all heard the saying that ‘cashflow is king’, so how do we get it flowing?

Managing cashflow is imperative to small business and a daily challenge to most. The money coming in to your business doesn’t always keep up with the money going out of your business; in other words, there are cash flow problems.  Even profitable businesses can face bankruptcy if they don’t manage their cashflow.

Here are 5 hot tips to help you manage your cash in-flows

• Review the amount of time that you allow your customers to pay you.  For instance, if you currently give your client 30 days to pay, consider reducing this to 14 days.

• Be strict with collecting the money owed to you!  Have a clean and clinical procedure in regards to collecting your money.  Remember, this money is owed to you, it’s your absolute right to chase it up.  Once the 14 days has passed, get on the phone to the client and even consider visiting them in person.  If this is not possible use emails and letters, but keep in mind that these forms of communication are easily ignored.

• Consider ways of getting paid before you do the work.  Most tradespeople expect payment immediately after finishing a job, and some even want payment before work commences.  Can you incorporate this practice  into your business?  Perhaps you can quote a fixed fee for services, or do a COD job, or at the very least ask for a deposit in advance.

• Consider offering your clients the ability to prepaytheir annual estimated fees to you in small direct debit amounts each month. This helps them spread the payment and also helps you to forecast your cashflow too!

• Invoice regularly! This sounds easy but you will be surprised how many businesses only invoice once a month. If you have provided your goods or services at the beginning of the month, it’s a long time to wait to collect your money. Especially when you add the number of days to the end of the month to the amount of time you then give a client to pay! It can quickly add up to 60 or 90 days.

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It seems like Christmas was only yesterday but before you know it End of Financial Year will be upon you. I’m not trying to scare you! Now is the perfect time to prepare yourself and stay ahead of the game – and when the end of June rolls around you’ll be as cool as a cucumber.

I recommend completing steps 3 to 8 each month from now up to and including May so that any issues can be sorted out before the June madness sets in. Then if anything is out of balance when doing EOFY, it will only relate to June’s transactions. Potential crisis averted? Check.

Download your Checklist for End of Financial Year now and be prepared.

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Sometimes we all need a bit of extra motivation to learn something new or update our skills. You don’t have to ask me twice to learn how to mix a new cocktail or how to update Twitter and Facebook from my mobile. But ask me to learn something a little less exciting and my motivation disappears.

In saying that, learning MYOB is not one of the most riveting things you can do with your time but it certainly comes in handy when you need it the most:If you’re a business owner, attend an MYOB course and you can learn how to do your own BAS (and save the money you pay your accountant).

If you’re an administrator, there are MYOB courses that will give you extra skills which in turn gives you more to offer your boss (and ask for a payrise) or to apply for another job.

And if you’re already a bookkeeper using MYOB, there are always tips and tricks you can pick by doing an Advanced course (you’ll feel instantly smarter!).

So now if you need further reasons, here are the Top 5:

1. Reduce your accounting fees. After doing an MYOB course there are many bookkeeping functions that you could bring in house rather than paying an accountant or external bookkeeper to do them for you. For example, some businesses send their accountant a box full of receipts and then wait for their BAS and financial reports. Imagine what you could save by managing this process yourself! And even if you don’t have a box full of receipts I’m sure there are things your accountant is doing for you that you could be doing yourself - like BAS. The concept behind MYOB is that business owners can “Mind Your Own Business”. The software is easy enough to use that you don’t need advanced accounting knowledge. A basic MYOB course will teach you how to do your own bank reconciliation and run the necessary financial reports to keep a finger on the financial pulse of your business.

2. Learn something you didn’t already know. If you’re a bookkeeper already using MYOB software there is always something you can learn in an MYOB course. I had been using MYOB for 5 years before I discovered the Report Batching function! Shortcuts and hot keys that speed up your day to day processes can be a dream come true.

3. Manage your business financials better than ever before. When businesses outsource their financials, they don’t usually have a picture of how the business is performing until the financial reports are complete. This could be quarterly or even yearly for some. How much more powerful is it if you could run these reports yourself with a few clicks? Would it help you make financial decisions if you knew each month whether your business was operating at a profit or a loss? Absolutely.

4. Upskill. More and more job ads require administrators to have MYOB skills. They’re not asking for a bookkeeper - but a strong administrator who can enter invoices, follow up overdue clients and receipt payments. Take the opportunity now to upskill before the job you want potentially slips through your fingers.

5. Expand your business. Calling all Virtual Assistants! How much more business could you gain by offering basic bookkeeping services to your clients? You don’t need an accounting degree! And what a great way to keep your clients coming back to you rather than looking elsewhere for someone who can do it all.

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Setting up a business can be a very exciting time but it can also scary at the same time! You might have heard of horror stories of businesses being told to change their name or stop trading.  By exploring the benefits of Trade Mark registration, you can see how trade mark can become a business asset, potentially saving you thousands of dollars and NOT letting your brand be stolen.

Starting a business and creating your new “brand” can cost money. Engaging a Graphic Designer to make you a fabulous logo, buying a domain name, setting up a web site so you can be found, getting business cards and brochures printed and starting to market your business to the world.   Sounds familiar - right? Those costs all add up, your business is now an investment.

But how do you protect your “investment”? This is not just the dollars spent in the set up process but also the blood, sweat and tears setting up your brand. How do you stop your rivals and competitors from “ripping off your idea”?  How do you ensure that someone else isn’t going to come along and make you change your name? How do you OWN your brand? 

 The only solution is to secure trade mark protection for your brand

 What is a Trade Mark?

 A trade mark is a sign that is used in trade to help separate your business from other businesses.  This can include your name, logo, tag line or slogan, packaging, colours, shapes, sounds or scents if they are unique to your business.   

 Trade Mark Registration gives you exclusive rights for your brand in your nominated classes of goods and services for your business (which are broken into 45 categories).  Trade Marks can be obtained in as little as 7.5 months (if no problems are raised) and can be renewed every 10 years once registered – so it is vital to think about protecting your brands before you start your business so others can not steal your name or your branding ideas!

 Why do I need a trade mark?

 Trade Marks are not compulsory and are often forgotten about when setting up a business but this is the only way that you can get your name protected and stop others from copying your name/brand.

 Many businesses are under the misunderstanding that they are using their own name, or have a registered business, company or domain name that they “own” the name.  This is wrong!  A trade mark is the only way you can get monopoly, proprietary rights to a name and stop others from copying you! Here is an example of a real business affected by trade mark actions:

 v   Katy Perry (Katheryn Hudson) v Katie Perry (July 2009) – the US singer recently tried to tell the Aussie fashion designer to stop using Katie’s own legal name for her clothing range.  Thankfully Katie had lodged a trade mark and it was almost registered which helped defeat the singers claim! The singer’s lawyers were also pressuring Katie to sign away her rights but thankfully Katie got help and fought back and won!  If Katie had not had a trade mark that was almost registered, her case might have turned out differently. In cases like this – it comes down to a fight of “who used it first” or what is happening more and more - who has the more money to fight it out!

 I’d recommend a Trade Mark Search at the pre-launch stage of any new business not just to protect your band but to make sure you are not infringing on any other brand.  If your new name is too close to another traders you not only have to start your business again but this is a mistake that can cost you thousands of dollars.

 Trade Marks can save you how much?

You can attempt to lodge your own Trade Mark online for as little as $370 per class although it is always best to leave it to the professionals to make sure you are properly protected.  You could obtain a Registration that is valid for 10 years, in one class for as little as $1,290 (assuming no objections or oppositions were lodged). 

When you weigh up the possible costs incurred if you were SUED including the other party’s costs if they are successful, it could cost you up to $200,000 in legal and associated costs .

I hope the above has shown you Trade Mark protection is not just reserved for those multi-national companies, it is for all businesses, small & big - that want to gain an asset and stop others stealing your brands.  So if you are ready to protect your brand – consult your Trade Mark Attorney today.

Mark Your Territory™ is the brain child of Rebecca Stalenberg, who is a Registered Trade Mark Attorney and Solicitor (NSW & Federal Courts). Rebecca has 10 years experience in the Legal Industry and realises clients need practical legal advice without all the "legal jargon".

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