Monthly Archives: July 2019

STP and super payments

The roll-out of Single Touch Payroll (STP) has proved to be an interesting process! 

For some, it just meant clicking another button or two within their payroll program.

For others it meant changing the whole way they processed their payroll.

It has also uncovered some interesting practices.

We have been somewhat surprised to find that some clients weren’t making their employee SG super payments through a SuperStream, nor using a super clearing house. The former is the payment method, the latter is the notification of employee’s contributions.  We have also been surprised to learn that super funds, like some of the really big ones, have still been accepting cheques.

There are free solutions out there but the best solution is almost always the one built within your payroll software. Whilst there may be a cost, it is nominal and avoids double handling.

Please call us if you would like to discuss your situation and needs.

WorkCover remuneration certification

It may be time to complete your 2019 WorkCover remuneration certification. Large employers are required to submit early.

Other employers have delayed lodgement dates. That said, it still may be in your interest to lodge soon.  This is particularly the case if your remuneration will be significantly less in 2019/20 than for 2018/19.

You will get back what you over pay based off their estimate; but why over pay in the first place.

You will also ensure it is lodged.  Many employers forget to lodge and suffer from WorkCover’s default 20% annual increase.  So get it done now when you have finalised and issued the PAYG Payment Summaries.

When growth is bad (and running out of cash)

The following is a re-post from February 2015.  It has been re-posted as it has been a topic of discussion with a couple of existing clients as well as potential new clients.

With our existing clients, we are planning around how fast they can grow and the issues around including cash flow, cash reserves, need to borrow as well as many other issues including their staffing and training.  We have created a clear picture of what sustainable growth will look like, can measure how we are tracking and are dedicating the necessary resources in a planned roll-out. 

On the other hand, some potential clients have come to us and they have found themselves, as you could say, in a pickle. Sadly with no proper planning they didn’t see it coming.  It has come as a very rude and great shock. Pity their accountants didn’t provide such planning and cash flow assistance.

 

Last week I queried whether your plan will work and touched upon good and bad growth.

Increasing sales is not the answer to everything.  It is not uncommon to see a business solely concentrating on increasing sales fall part if they haven’t ensured the business has the right team and systems in place to support greater turnover.

Worse still, some businesses even fail as they run out of cash due to the increased revenue not being enough to fund greater expenses and the greater amount of money locked up in debtors and stock.

Consider this……

Take a business that doubles its sales from $1,000,000 to $2,000,000 and everything else doubles from:-

  • Cost of goods sold from $700,000
  • Overheads from $175,000
  • Net profit from $75,000 (average tax rate remains at 40%)
  • Debtors from $125,000
  • Stock from $160,000
  • Creditors from $75,000.

Sounds good?

Actually, it’s a disaster.

Why – because the working capital required has doubled from $210,000 to $420,000 whilst the doubling of profit after tax has only generated an extra $150,000 – of which $60,000 will go in tax.  What seems to be a new dawn will actually prove to be a nightmare.  The business owner in such a case might think they are going forward in the right direction but there is something coming awfully big and fast straight at them!

The problem here is that the owner has concentrated on sales and sales alone.  The outcome would be quite different if other key drives such as debtors, stock and creditors turnover were addressed (and for which we have many strategies from our many years of experience and supporting tools).

We were a member of the Principa accountants network (from which this example was generated) as well as other accounting groups that provide tools to assist our clients with cash flow control and planning – and for many other areas as well.

Why not refer to our web page’s article on business improvement potential.  Or better yet, why not ring Alex Stewart and make a time to sit down and have an obligation free meeting to discuss how we can help your business.

So again I ask, will your plan work?

 

 

Other STP tasks

Single Touch Payroll (STP) started for all non-large businesses two weeks ago.  So all business should by now be reporting wages at the time of payment.

For some this has meant using a payroll software program for the first time.  This was the perfect opportunity to ensure that all other HR employment requirements had been attended to.

If you are still struggling with all of this then please contact us so we can discuss ways in which we can help you.

 

Why business planning is important

There is an old saying that if you don’t know where you are going then any place will do.

Business planning is crucial as it focuses one’s attention on how a business has been performing and how that can be improved.  Thoughts in the car or shower are brought together and considered in context of all other pertinent matters.  It also presents a road map to better performance.

With the start of a new financial year, now is a perfect time to:-

  • Re-assess your performance over the last financial year.
  • Set goals for the year ahead.

We can assist you this by:-

  1. Set financial benchmarks by which you can assess your performance.
  2. Set non-financial benchmarks by which you can assess your performance – such as the number of sales enquiries per week, the conversion rate of those enquiries … and many, many more from our extensive library.
  3. Show you the effect of changing the key drivers in your business.
  4. Integrate these budgets into your accounting software.
  5. Employ other reporting dashboards to track your performance.
  6. Hold you to account to your stated goals by regularly checking in with you.

Please call us if to arrange a free meeting. The meeting is free so we can gain an understanding of your and needs.  Having gained an understanding of your circumstances and needs will enable us to explain the ways in which we can specifically help you.

As Einstein once said – the definition of insanity is doing the same thing over and over again and expecting different results.

Don’t fall that trap and call Alex Stewart now.

 

Are STP extensions the answer?

Struggling with Single Touch Payroll (STP?

Or have you yet to take action?

There are two things you need to do:-

  • Move to a payroll software solution.
  • Tidy up your HR records.

We can help you with both.

So whilst there are extensions available, we recommend not relying on them – it just creates more work (and therefore cost) later.

Take the first step right now by contacting us (the first meeting is free).