Blog

Portfolio_Management_Presentation

Portfolio_Header

Wednesday night we were fortunate enough to have Steve, Jock, Johnno and Christine from Portfolio Management join us for an information evening on the state of the investment property market.

For those that missed it, the main themes to come out of the presentation were:

  • Over the long term property can provide a great return on your investment
  • Population growth is a key indicator to look at when selecting an investment property as there is a correlation with demand for property in that area
  • When looking to purchase residential property look at suburbs in high population growth areas with:
    • Established infrastructure e.g. roads, good transport links, hospitals, schools, shops etc
    • Where there is limited potential for more land to become available
  • The value of the land is important, look at properties where you can buy below replacement value e.g. if the house burnt down it should cost more to rebuild than it was worth
  • The purchase of existing dwelling is preferable to buying new or off the plan propertiesGeelong_House
  • Don’t be afraid to add value – often a bit of a makeover can add significant long term value
  • It is getting harder to find good value in capital cities like Sydney, Melbourne and Brisbane so be selective
  • Be prepared to look further a field to find the right mix of yield and capital growth, for instance presently parts of Geelong appear to present good value
  • Record low interest rates could be here for a while making it easier to get started
  • There is a trend toward investors using SMSF (Self Managed Super Funds) as an investment vehicle to get into both residential and commercial property

The team at Portfolio Management can help with:

  • Selection based on your criteria or from investment properties they have already researched and are ready to purchase for the right buyer
  • Expert advice
  • Screening of potential tenants
  • Property inspections and more…

To get started please contact your accountant at Watts Price Accountants to discuss just how Portfolio Management can assist you reach your investment property goals.

Contact Details:

Ph: 03 5382 3001
E: mail@wattsprice.com.au

Population_Growth

5 Essential Services

Emergency_services

5 Essential Services for Small Business Owners

 

A recent report published by research house Bstar has highlighted the lack of preparedness of many business owners.

 

The recent Bstar 2016/17 SME Research Report revealed the following observations:

 

·         Indicates 72 per cent of small businesses don’t have a formal business plan.

·         Only 34 per cent of SMEs spend time on strategic planning.

·         Further, 95 per cent of SMEs believe opportunities exist to grow their business, however only 22 per cent have a plan in place to grow their business’ value.

·         SMEs also have an “urgent” succession planning need, with 90 per cent of SMEs not having a formal succession plan in place.

·         Also, 70 per cent of SMEs believe their business has key person risk, with only 30 per cent believing their business can operate without them.

 

 

Does this sound familiar? If so we would like to draw your attention to the following service offerings:

  1. Business Plan

A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It will usually contain background information about the organization or the relative strengths and weaknesses compared to competitors as well as macro issues such as opportunities and threats.

A business plan will help a business to obtain finance, it helps identify potential problems, provides a greater understanding of your marketplace, it provides direction and clarity as well as greater accountability.

Ideal for medium to long term planning and giving your team direction!

 

  1. Strategic Planning

Strategic planning is a business management activity that is used to set priorities, focus energy and resources, strengthen operations and ensure that employees and other stakeholders are working toward common goals.

It also helps establish agreement around intended outcomes/results, as well as assessing and adjusting the business direction in response to a changing environment.

Ideal for establishing and communicating your short to medium term priorities!

 

  1. Business Model

A business model is the way in which a company generates revenue and makes a profit from business operations.

A review of your business model involves looking at core activities in relation to current customer and market demands, how efficient the business is, how the business’s goals are progressing, your current financial position and where you sit compared to your competitors in the market.

Ideal for assessing where future profits will come from when growth stalls!

 

  1. Succession Plan

Succession planning is a process for identifying potential buyers or developing people with the potential to fill key business leadership positions in the business.

Succession planning will help you to maximise the value of your business, it will help identify the main pathways and help set relevant timeframes. It will help identify the key financial considerations, any potential risks that need managing and what personnel and skills needed to be retained within the business.

Ideal for planning and maximising the return from your departure from the business!

 

  1. Key Person Dependency Risk Analysis

Key person dependency is when either you or one of your employees is solely responsible for something and there is no back-up plan.

To counter key person dependency the focus needs to be on developing the right systems for your business, finding the right talent and/or skillsets, delegation and empowerment, time management, setting priorities while still having adequate control through monitoring the right KPIs and appropriate accountability.

Ideal for business owners that need to free up time for other interests!

 

All business owners need to plan for their success. If you need assistance in regard to the topics above or any other business development issues we encourage you to contact one of our knowledgeable team members as soon as possible.

 

Improve Your Cash Flow with EziDebit

Illustration depicting many roadsigns with a cash flow concept. White background.

Improve Your Cash Flow with EziDebit

How Can You Get Paid Quicker?

At Watts Price Accountants we use a provider called EziDebit. They provide Direct Debit and BPAY facilities for Small Businesses. That’s correct you can access these great facilities without going through your commercial bank! If you want to speed up your collections process consider EziDebit. Read more below.

You’ve probably used direct debit personally, so you know how convenient it is as a customer. You can set and forget a payment schedule, resting assured bills will be paid on time. As a business, this means you and your customers can focus on other things, and reduce late payment conversations with your customers.  Ezidebit’s direct debit helps your business take control over cash flow by ensuring customer payments are collected on time, every time.  With direct debit, customers authorise payments to be collected automatically from their credit card or bank account. Ezidebit collects and manages these payments on your behalf and transfers settlement amounts to your bank daily, keeping you in control of the payment process, and your cash flow. Whether your business runs on scheduled or on demand payments, for either fixed or variable amounts, Ezidebit can help. We have options for self-serve or managed accounts allowing you the level and flexibility that works best for your business.

With direct debit you get:

  • Reliable cash flow
  • No contracts
  • Reduced admin time chasing payments
  • Local support available by phone or email
  • Increased customer satisfaction
  • Competitive fee structure

Ezidebit integrates with leading software providers, allowing your business a seamless payment solution that saves time and money and reduces unnecessary admin work. Individually receipting payments and chasing late payments will be a thing of the past.

10 Crucial System Tips for Small Business

10 Crucial System Tips for Small Business

systems

Have you ever stopped to notice just how many business owners you come across that are always under the pump, jumping from one urgent problem to another, working ridiculous hours just to stay on top of things. In my experience these business often suffer from a lack of quality systems. There the focus of this article will be looking at some systems small businesses owners can implement to improve the operations of their business.

Firstly, so we are all on the same page let me simply define a system as a way of performing any given task in a consistent way that will give a predictable outcome. This may include computer hardware or software but it is certainly not limited to them. It may include application forms, scripts or any number of resources including people that simplify your various business processes.

10 Systems Tips for Small Businesses

1.    Possibly the most important reason to develop great business systems is to create a better, more consistent customer experience. Look at your customer touch-points and ensure you are delivering a great experience through systems that ensure consistency and reliability.

2.    Don’t rush and make hasty decisions regarding your systems. You should have a strategic plan in place and this should help determine the best systems for you. Your systems need to align to your goals and your vision for the business.

3.    For a small business it is essential that the owner is able to step away from the day to day operations and work on the business. Systems will create that invaluable freedom.

4.    Some basic yet often overlooked systems revolve around your people. Don’t forget your people systems. Ensure you have Performance Standards, Position Descriptions, Procedural manuals, Staff Reviews and Reporting systems in place to get the most from your team members.

5.    Systems help grow your potential sale price. When looking to sell your business a potential buyer is looking at how they can run it without you. If you have no documented systems this will have a detrimental effect on your businesses valuation.

6.    Many businesses implement new systems and they turn out to be a disaster as the team reject them. To maximise the chance of successful implementation don’t impose change (be consultative), communicate the benefits and address any fears.

7.    Avoid biting off more than you can chew. Lack of time and resources can quickly kill good intentions so start small and build momentum through the successful implementation of smaller projects before attempting larger changes.

8.    Systems are a great way to grow your business. I see too many businesses where everyone is busy but there is no growth. The development of systems will create the necessary capacity to help your business grow.

9.    Don’t set and forget. Once you have implemented a system don’t assume it will manage itself. Ensure you review the system at regular intervals and make any changes required to improve the system.

10.Off the shelf software is often expensive and generally better suited to larger organisations than small businesses. When looking for a solution don’t be afraid to get a quote from a Systems Analyst or Software Developer that can develop a customized system for your business on an hourly rate.

Bonus: Get your team involved by creating a culture of continual improvement. Encourage team members to challenge the status quo in an environment that supports and rewards change.

There are a host of reasons why you should be systemizing your business, from improved customer experience, to more freedom, to a higher business valuation, higher productivity, whatever your reason there are numerous options available to you.

Richard Kemp
E: richardk@wattsprice.com.au

Q&A8 Contribution payment timing

Tax Planning Questions and Answers

Do I have to pay my superannuation contribution prior to 30 June to ensure its tax deductible in that year?

Answer – Yes. In both cases where you pay employee super and personal superannuation contributions, you must ensure the payment has not only been made, but to be certain, the payment must have also been cleared in your bank account. It is best not to leave these type payments until 30 June, in fact, to be sure make them at least 5-10 days prior to 30 June.

 

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.

Q&A7 Super Co-contribution payments

Tax Planning Questions and Answers

Super Co-contribution payments

Answer: If you are a low or middle-income earner and make personal (after-tax) super contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

You will be eligible if you can answer yes to all of the following:

  • you made one or more eligible personal super contributions to your super account during the financial year
  • you pass the two income tests
    • your total income for the financial year is less than the higher income threshold ($50,454 for 2015-16)
    • 10% or more of your total income comes from eligible employment-related activities or carrying on a business, or a combination of both
  • you were less than 71 years old at the end of the financial year
  • you did not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
  • you lodged your tax return for the relevant financial year.

You are not entitled to a super co-contribution for personal contributions you have been allowed as a tax deduction.

Source: http://bit.ly/1Mc167f

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.

Q&A6 Self Education Expenses

Tax Planning Questions and Answers

Can I claim Self Education Expenses for a course I am undertaking?

Answer – Self-education expenses are deductible when the course you undertake leads to a formal qualification and meets the following conditions.

a) The course must have a sufficient connection to your current employment and:

  • maintain or improve the specific skills or knowledge you require in your current employment, or
  • result in, or is likely to result in, an increase in your income from your current employment.

You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current employment even though it:

  • might be generally related to it, or
  • enables you to get new employment.

Source: http://bit.ly/1BLosLZ

 

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.

Q&A5 Super Contribution Splitting

Tax Planning Questions and Answers

Splitting your Super contribution into your Spouse’s super and reap the tax savings rewards

Answer: You can split up to 85% of you pre-tax super contribution with your spouse. This can help their super grow and possibly reduce the tax you’ll pay as well if you make salary sacrifice contributions. The types of contributions you can split include your Super Guarantee Liability and Salary Sacrifice (RESC).

Source: http://bit.ly/1PSxVRh

 

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.

Year End Planning

Files mountain execute

“Why should I see my accountant about year end planning?”

For most businesses the last 12 months have been a fairly rocky road with changing consumer spending patterns, poor crops, housing pressures and declining sales. Hence it would make sense to ensure that you avoid getting taxed unnecessarily on what you did make or consider ways to minimise your potential losses prior to 30 June.

Typical issues beyond the normal tax issues that you might want to discuss with your tax adviser include:

  • Ensuring your Family Trust Distribution Resolutions are provided to your accountant prior to 30 June
  • Consider asset protection issues
  • Consider whether investments outside of super are the most effective tax strategy
  • Any business succession issues
  • If a farmer: the use of FMDs or available allowance or grants
  • Consider whether your Will and BDBN are up to date and are the most tax effective strategies
  • If nearing retirement consider whether starting a pension is right for you
  • If you are an employer are you on top of your obligations such as SuperStream
  • Is it an appropriate time to refinance any loans

A typical tax planning session will take between 1 – 2 hours and will require a little bit of preparatory work beforehand. Typical outcomes include:

  • Preparation of interim accounts to 30 June.
  • An estimated tax liability for the financial year.
  • Preparation of a personalised Tax Planning Scenario Summary Report with conclusions.
  • A meeting to discuss legal alternatives to reduce your tax and the best option to suit your circumstances.

Paying taxes is part of life so ensure you are paying no more than you are legally obliged to by seeing your accountant before 30 June!

Checkout our Tax Planning checklist!

The advice provided on this Article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. 

Q&A4 Tax on Interest or Dividends

Tax Planning Questions and AnswersDo I pay more tax on Interest or Dividends?

Answer – They are taxed is the same, it’s at your marginal rates (for individuals). What makes these two types of income streams different for tax purposes are:

Interest is paid on funds held in bank accounts or that were loaned to people/entities. Dividends are distributions to shareholders;

a) If any tax is withheld, it is prior to its distribution to you.

b) In most cases, Interest has no tax withheld from it prior to it being paid to you (an exception to this is where you have not quoted your TFN to the bank or are a foreign resident).

Dividends are made up of Franked and Unfranked components. Franked Dividends have had 30% tax taken out already when they are paid to you. You can claim the tax taken out already in Franked Dividends as a credit, which helps reduce your overall tax payable / refundable for an income tax year. Unfranked dividends, are like interest and have no tax withheld from it prior to it being paid to you (an exception to this is where you have not quoted your TFN to the bank or are a foreign resident).

c) How they are treated when bank accounts are closed versus selling your shareholding.

When you close a Bank Account or are repaid a loan that was earning interest, these are cash payments and the type of assets are all cash. The are no Capital Gain Tax Implications on Cash Assets.

On the other hand, any profit between the sale price and the purchase price of shares sold are subject to Capital Gains Tax. If you have owned the shares for more than 12 months, current law allows you to half that capital gain (for individuals).

 

Disclaimer

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.