The course was built as a result of the needs of people who’ve been using our training materials to help in their own training. What’s interesting is how important your current inventory and inventory management is to managing the cashflow and profitability of a project.
While I was getting my hair cut the other day, I casually asked the hairdresser how her business was doing. Now this woman is a highly experienced and personable stylist who runs a modern and professional-looking salon with terrific co-workers.
Yet she lamented the fact that business was quiet and she was struggling to get new clients. So what’s going wrong?
The hairdressing salon owner I spoke with the other week was quite downcast about her sales. This is despite regularly receiving ecstatic feedback from her clients about the service they receive and the way the salon looks.
As consumers, we’re hit with a tonne of messages from the start of the day — all vying for our attention online, offline and everything in between. You have to find a way to cut through the noise.
But how? You can do this via a combination of ways, but consistent email marketing, also referred to as content marketing, is a powerful place to start.
With the right strategy, email content marketing allows you to inexpensively stay in touch with current, potential or lapsed clients. It’s a way that you can start to connect with people, as often as you want, by sharing your story and what it is about you and your business that makes you unique. These days, it’s getting more informal too, so authenticity is key.
Get the ball rolling on your email marketing campaign
Not sure where to start? The very first step is an easy one and will start you on an email marketing strategy for your business.
Collect your clients’ email addresses
What’s a beautiful email without someone to send it to? A waste of time…
Get your client database started by using every opportunity to collect as much information about your clients as possible. It’s this information that gives you a valuable and complete database and it must be kept up to date. And happy customers won’t mind.
Start collecting client email addresses with these ideas:
Record email addresses every single time you have a relationship or interaction with a client
Whenever a client calls you, immediately add them to your client list
Add a signup or subscribe form to your website so clients receive your monthly e-newsletter: make it really easy for them!
You can’t be everything to everyone; it’s never going to be possible to create a single email that all your clients will love.
Basic rule of thumb: Keep your content relevant and personal. Try to be yourself. Business speak is much more conversational than ever before. In fact, businesses are increasingly using Instagram and Facebook messenger to converse with clients; a domain previously reserved for informal contact with friends, family and sometimes colleagues.
People will be much more likely to open and read your emails if they can relate to them and don’t feel like you’re wasting their time bragging about how great you are. (Remember, they are expecting you to say you’re good, so it’s very ho hum to your clients; you’re not exactly going to tell them how bad you are, are you.)
Our Job Tracking and Projects Training Course case study highlights the seemingly simple example of the erection of a garden shed. Our client purchases the shed directly from a hardware supplier, then employs the services of a builder to deliver and erect the shed.
Although it seems very easy, just like life itself, the process is actually more complex than meets the eye. Here are the issues the tradie needs to consider:
Some of the products the tradesperson uses are stock (inventory),
others he needs to buy for the job,
others products and parts need to be purchased while on the job (expenses incurred by his staff).
Then there are circumstances which the tradie didn’t account for in his quote:
Some days the build is rained out and
some things end up taking longer than expected.
An extra staff member is required and the tradesperson then has to keep keep track of his worker’s timesheets,
In developing our course content, we actually liaise with the relevant suppliers, including various tradespeople, interviewing them and finding out the variations and possible blow outs they experience and the contingencies they implement to offset these.
We also draw on ATO benchmarking which compares the information gathered from your financial returns to the information the ATO gathers from all other similar businesses.
‘Social proof’ is testimonials, reviews and feedback of others, that vouches for the product or service we’re thinking of buying. Social proof backs up the fact that what we’re considering buying is what it says it is.
Come see some social proof about EzyLearn by meeting some students from the past few weeks — you just might have a lot in common with them.
These factors combined produced a bottleneck effect in the job market, which made it difficult for certain workers to advance their careers, while others, typically young graduates, struggled to gain a foothold in the job market at all.
Businesses have been able to set up payment gateways in their accounting software for sometime, using PayPal (or Stripe or Braintree or many more in the US), for sometime. The downside, of course, is that you’re charged a fee each time your customer uses one of these services.
This is fine if you run an online shop, because you can incorporate the fee into the price of your products. It’s not so great if you offer professional or other services that may vary in price customer-to-customer, project-to-project. Hence, the PayPal-QuickBooks partnership was such a game changer.
Again, this option has been around for a while, with Xero and QuickBooks especially, but was only recently added to MYOB. It’s not dissimilar to the payment gateways feature we mentioned above, only it enables customers to pay your invoice securely and quickly directly from your invoice, with just the click of a button.
These are the latest players in seamless payments, and they specifically relate to payments made by tapping or waving mobiles devices (smartphones, tablets, smartwatches) at a EFTPOS machine.
Currently, the Apple Pay is only available to AMEX customers, while Android Pay is available to customers of the ANZ, Bendigo Bank, Macquarie Bank and most credit unions.
If you accept credit card payments in person, and you’re EFTPOS terminal has the option for customers to tap or wave their cards to make a payment, you can also accept them from connected smart devices.
TSheets is a cost effective way to manage and track your time
TSheets, THE TIME MANAGEMENT SOFTWARE, is a great way for independent and remote contractors to manage their client’s projects. It’s especially useful for contractors who are collaborating remotely with other contractors and businesses on one project.
But back to TSheets. TSheets was recently acquired by Intuit, the parent company of QuickBooks. Both TSheets and QuickBooks shared 12,000 customers in common and the time management system had been developed to work specifically with QuickBooks. Deeper integration with QuickBooks can be expected now, following the acquisition.
If you were to think about the top three cloud accounting apps in terms of the types of businesses they appeal to, QuickBooks would appeal most to micro businesses and independent contractors. Check out an earlier blog post where we assess two main factors: User Experience & Ease of Use, and Reporting Tools in a comparison between MYOB and Quickbooks for small businesses.
What to know about partnering exclusively with Xero
XERO HAS BECOME ONE of the major accounting software players in Australia. Like the other two major cloud accounting programs, Xero offers a partner program (officially, the Xero Partner Program), in which bookkeepers and accountants “partner” with Xero to exclusively offer Xero-based bookkeeping and accounting services to clients.
In return, Xero helps the bookkeeper or accountant grow their practice by adding them to the Xero Advisor Directory, which allows businesses to browse and hire bookkeepers in the same local area or with the skills they’re looking for.
The other drawcard: Xero Partners earn a commission each time they refer a client to Xero. If you’re a bookkeeper working exclusively with Xero, there’s the potential to earn around 15 to 30 percent of Xero’s subscription fees each time you sign a new client to Xero.
Xero’s unofficial commission
Officially, Xero doesn’t give bookkeepers or accountants any kickbacks for referring or signing new clients to their accounting software. Rather, they give a 15 to 30 percent discount to the bookkeeper or accountant, which they can pass on to their client. If the bookkeeper chooses to pocket it, well, that’s none of Xero’s business.
Based on EzyLearn’s research, we’ve found that a lot of Xero Partners do pass on the discount to their clients. Why? Because doing so helps them stand out among other bookkeepers or accountants, and brings them more clients — and ultimately, more revenue than if they pocketed the discount for themselves.
A lot of Xero Partners do pass on the discount to their clients. Why? Because doing so helps them stand out among other bookkeepers or accountants, and brings them more clients … and revenue.
But just as many bookkeepers choose to keep the discount.
QuickBooks ProAdvisor Program
At the beginning of this post, we mentioned that the other two major cloud accounting programs offer “partner programs.” QuickBooks calls theirs the QuickBooks ProAdvisor Program. It provides bookkeepers and accountants who become “certified” in QuickBooks Online (via an online training course, delivered by QuickBooks), with a discount off their own QuickBooks subscription, a listing on the QuickBooks “Find-a-ProAdvisor” directory, and discounts off software for their clients.
QuickBooks, however, stipulates that, in order for ProAdvisor’s to receive any discounts for signing up new clients, the discount must be shared between client and ProAdvisor. EzyLearn hasn’t been able to determine how much the discounts are, or how QuickBooks distributes discounts. But if you’re familiar with how the QuickBook’s ProAdvisor Program works, let us know!
Xero, QuickBooks: not affiliate marketing
The best and most successful example of affiliate marketing is the Amazon Associates program. If you’re not familiar with the Amazon Associate program, you can read a detailed explanation at the Australian Small Business Centre website.
Neither Xero’s nor QuickBooks’ partner programs share any of the same characteristics of the Amazon Associates program, with the exception that all three involve an individual partnering with a company.
In the Amazon Associates program, associates rate and review products relevant to them and their industry, and include links from their website to the Amazon site, so that if a purchase is made, the associate receives a commission. (Commissions vary based on the type of product purchased.)
Xero Partners manage clients’ Xero accounts
With the Xero Partner Program, bookkeepers create a Xero account and manage the subscription of their clients’ behalf. The bookkeeper bills their client each month, along with the rest of their services, for the client’s Xero subscription — either with or without the discount applied.
If the client decides to change bookkeepers or accountants, their bookkeeper is required to change the subscription details into the client’s name or the name of their new bookkeeper or accountant. In the past, this has caused some issues, where business relationships have broken down, but for the most part, it apparently runs quite smoothly.
EzyLearn isn’t familiar with how QuickBooks ProAdvisors manage the signup of new QuickBooks clients. But if you do, we want to hear from you! Drop us an email, or let us know in the comments.
And this is not about shaming or pointing the finger. Getting behind in your bookkeeping happens to some of the best businesses. It can be because an inexperienced person has previously been handling the books; you didn’t have the right systems in place to keep on top of it; or maybe your data file was set up incorrectly.
Diagnosing rescue bookkeeping
If your business has any of the following issues, you probably need rescue bookkeeping:
Your bank balance in Xero or MYOB doesn’t match with your bank statements
Bills have been paid, but they’re still showing as outstanding
There are many different reasons why people get behind in their bookkeeping. If it’s because the business owner lacks the time and let their bookkeeping pile up, it’s usually easy rectify, though it is time consuming. (There’ll be months and months worth of transactions and receipts to code and keep records of.)
If their data file was set up incorrectly, it’s sometimes a little harder to diagnose and it’s even harder to fix. It’ll need to be set up again and all of your transaction data re-entered; again, there’ll be months and months worth of transactions and receipts.
What happens during a bookkeeping rescue?
When you first meet with a bookkeeper, they’ll review your records to determine what your problem might be, and what needs to be done to get your bookkeeping up-to-date and in shape.
Given the volume of work and the complexity of it, your bookkeeper might not be able to tell you exactly how long it will take to get your accounts under control. They’ll generally have a ballpark idea of how long, but nothing concrete.
When your bookkeeper starts working on your accounts, they’ll be in fairly regular contact. You’ll need to be available to respond to emails or phone calls during this time.
Fast forward a decade, and Xero is now the preferred accounting software in Australia and New Zealand, with 692,000 subscribers compared with MYOB’s 585,000 paid users. (Overall, Xero claims 1.2 million subscribers worldwide.) In the 2016/17 financial year, Xero’s revenue increased 43 percent year-on-year to $295.4 million NZD ($271.7 million AUD); during the same period, MYOB’s revenue increased 13 percent to $370.4 million AUD.
If you’ve been paying attention, you’ll notice Xero has more paid subscribers than MYOB, but its revenue is about $100 million AUD behind. That’s largely due to differences in the price of both products.
So you can’t tell which one of Xero or MYOB is the true market leader — yet.
How Xero is growing their subscriber base
Basically, they’ve reached an impasse. There’s not much opportunity left in Australia and New Zealand (there are other players, like Intuit’s QuickBooks and Zoho competing the same space, too) to grow your subscriber base — unless you’ve a carrot to dangle under their noses that’ll lure them away from your competitor.
[Xero has lured people away from competitors via their] suite of apps, plug-ins and integrations [they’ve] added to their offering through acquisitions and partnerships — anything that would make Xero a one-stop-shop for small businesses…
Meanwhile, MYOB’s strategy for market share
To its credit, MYOB has pursued a similar strategy, acquiring payment firm PayCorp last year, which followed the launch of the company’s PayDirect Mobile and PayDirect Online payments service in 2014 and 2016 respectively, as part of MYOB’s push into payment processing technology.
MYOB also acquired Reckon’s accounting practice software last November for $180 million AUD. The company said the acquisition was part of MYOB’s strategy to see accountants become business advisors, rather than tax and compliance experts.
MYOB chief executive Tim Reed sees automation as being critical to the company’s ongoing success, as it pursues a “connected practice strategy,” which brings transaction processing, compliance and business advisory together and sees accountants become more like business coaches.
“They will be like personal trainers in the gym, but for business,” he said. “This is starting today. Accountants are already working down this process and what I’m seeing is the pace of change start to increase.”
And unlike Xero, which is simultaneously pursuing overseas markets (the U.K., North America, Southeast Asia), MYOB is content to stay focussed on its home market — Australia and New Zealand. (It’s also pushing deeper into big businesses with its enterprise software Greentree, acquired in 2016.)
Accountants and the cloud accounting ecosystem
With Xero pursuing code-free accounting, MYOB pushing into “connected practices,” and Intuit beefing up its own ecosystem of apps and integrations to simplify the bookkeeping and accounting process for small businesses, where does that leave accountants and bookkeepers?
Better off, actually.
Bookkeeping is a necessary step in the overall accounting process. But it’s the most time intensive one. There’s reconciling bank accounts, entering receipts, coding transactions, invoices, and so on. Small business owners don’t — or won’t — do it, so they outsource it to a bookkeeper or accountant, who has a preferred or in-house bookkeeper.
Despite being a time intensive task, it’s lower skilled work — like untangling a jumble of coat hangers; almost anyone can do it. And so it commands a lower rate of pay than other tasks, like financial forecasting, business planning and filing activity statements.
Automating elements of the accounting process, in particular the coding of transactions, eliminates inefficiencies and time wastage. Bookkeepers and accountants can charge their clients the same hourly rates, but they’ll spend much less time doing it.
More apps, more services
And with access to more apps — like a payroll plug-in — they can begin offering more services.
Just as QuickBooks, MYOB and Xero have become more valuable to their customers, by positioning themselves as a one-stop-shop for small business, accountants and bookkeepers can do the same.
Why would a business need to engage a data entry bookkeeper, a tax or BAS agent, and a payroll company when they can hire just one individual to manage all of these tasks efficiently in one cloud accounting program?
Food for thought: Why would a business need to engage a data entry bookkeeper, a tax or BAS agent, and a payroll company when they can hire just one individual to manage all of these tasks efficiently in one cloud accounting program?
And just as MYOB boss Tim Reed stated: Accountants and bookkeepers have already cottoned onto this.
But it means bookkeepers and accountants need to become more skilled at what they do; they need to possess a greater understanding of a wider array of softwares and systems in order to remain competitive.
And even though Intuit, MYOB and Xero have all acquired or partnered with companies that offer payroll platforms, there are still plenty of third parties businesses can choose to connect to their accounting system — that’s democratised accounting for you — so you need to watch the market, and keep your skills up-to-date.
Where to from here?
The cloud accounting space is certainly in flux. There’ll be more acquisitions, more technologies, and definitely more automation. There’ll also be more global companies, as more businesses export their goods and services overseas — and more fintech companies pursuing growth outside Australia.
KeyPay is one such company. It’s based in Wollongong in NSW, and last December announced it would expand its services to the U.K. — a pre-release was slated for January this year, with a full launch due in April.
According to CRN, the company grew 53 percent last year (though it didn’t specify what or how that “growth” was calculated; as a private company, it doesn’t disclose financials or its share of customers). And KeyPay’s co-founder Richard McLean said the company decided to enter the U.K. market because 60 percent of businesses there outsource their payroll to a third party company.
The company intends to rollout its automated payroll system in the U.K. first, with an Australian launch due later in year, and also plans to expand to New Zealand and Southeast Asia.
And how bookkeepers and accountants can become a “one-stop-shop” for those needing help with their finances (Part 1 of 2)
EARLIER THIS YEAR, Intuit, the parent company of cloud accounting system QuickBooks, announced it had acquired U.S.-based time-tracker platform, TSheets, in a deal worth $340 million U.S.. This was part of Intuit’s strategy to expand its offerings to small businesses and the self-employed. (In the U.S. and Canada, Intuit also operates a cloud software package called TurboTax, which lets individuals file their own federal taxes.)
What the TSheets acquisition means
The TSheets acquisition makes a lot of sense, and provides a good guide to the kinds of businesses cloud accounting firms look to acquire. For example, TSheets and QuickBooks already shared 12,000 customers worldwide, and TSheets had been developed to integrate specifically with QuickBooks (though it also works with Xero and Reckon). It also brings Intuit and QuickBooks in line with one of its competitors, Xero, which acquired a similar project management system WorkflowMax back in 2012.
For TSheets, being part of a big global brands means it’ll be able to innovate faster, with access to the Intuit technology and product team; for Intuit, it’s an additional source of revenue and market share. (Although a privately held company prior to the acquisition, TSheets had been valued at around $40 billion US.)
The cloud accounting ecosystem
Intuit’s TSheets acquisition signals that both Xero and QuickBooks intend to push further into the cloud accounting ecosystem, by partnering with, acquiring, or developing integrations that simplify the accounting process and expand their product offering.
Intuit’s TSheets acquisition signals that both Xero and QuickBooks intend to push further into the cloud accounting ecosystem, by partnering with, acquiring, or developing integrations that simplify the accounting process and expand their product offering.
Xero’s latest suite of products
In 2017, Xero introduced a new suite of products — Xero Expenses, Xero Projects, Xero HQ App Suite, Xero HQ Ask, and Xero Discuss — all aimed at providing SMEs with the technology generally reserved for big enterprises, only far cheaper.
Xero already has an app ecosystem of more than 600 certified app partners and 40,000 developers. And since Xero migrated its platform to Amazon Web Services, the subsidiary of Amazon that provides cloud-computing platforms to companies, Xero has been developing its machine learning (ML) and artificial intelligence (AI) capabilities in a push towards completely code-free accounting; in March 2017, Xero released a code-free invoicing and bank transactions feature. (MYOB previously released a similar feature called SmartBills two years earlier.)
Xero has been developing its machine learning (ML) and artificial intelligence (AI) capabilities in a push towards completely code-free accounting.
The company’s chief executive Rod Drury said that the move towards automation “will be bigger than the move to the cloud.” He also said the company was working on a feature that would automate invoices entirely.
What else has Intuit acquired?
On Intuit’s part, it’s Asia Pacific arm of the businesses has made a number of acquisitions over the last few years to beef up its product offering, some of them you might not even be readily aware of — like the 2014 acquisition of Invitco, which created a product called Invitbox that extracts data from PDFs, and operates behind the scenes to extract data from bills and receipts uploaded to the QuickBooks system.
Intuit Asia Pacific also acquired the document management company Fifo in 2013.
Next blog: We look at how the cloud accounting ecosystem has paid off and how and why bookkeepers and others working in the accounting space must continue to up-skill.
AS YOU MAY BE AWARE, each year the ATO updates the tax concessions for businesses. This is usually the result of a budget measure being passed by the Government. Other times it’s due to the ATO simplifying the tax processes for businesses.
For the financial year ending June 30, 2018 (FY17/18), there have been four big changes that affect small business. In particular, how a small business is defined, which lowers the tax rates for more Australian businesses.
Small business threshold increases to $25m
The threshold for how a small business is defined was increased to an aggregated turnover of $25 million. Aggregated turned over includes any other form of income associated with the main business — i.e., shares on the stock market, revenue-generating property owned by the business, shareholdings in other companies, and so on.
Providing your aggregated turnover is below $25 million, your business is eligible for the company tax rate of 27.5 percent.
In the financial year ending June 30, 2019 (FY18/19), the turnover threshold will increase to $50 million, while the company tax rate will progressively decrease until it reaches 25 percent by FY26/27.
Instant asset write-off
The instant $20,000 asset write-off threshold has been extended until June 30, 2018, which means any computers, vehicles, furnishings or other assets purchased for your business between July 1, 2017 and 30 June, 2018 can be deducted immediately.
This deduction can be used for any asset that costs less than $20,000, whether new or secondhand.
Professional expenses deductions for startups
Startups can immediately deduct any profession, accounting, legal advice in the year it was incurred. For instance, a person who, in the process of setting up a cafe, hires a consultant to determine a suitable location for the business, may deduct the consultant’s fees in the year they incurred. This is true even for an established business that is setting up a new business, unrelated to their existing one.
For example, the cafe owner may already operate a restaurant. As long as the cafe doesn’t share the same name and is independent of the cafe, the fees may be deducted. If the new cafe was an expansion on the existing business, the deductions wouldn’t apply.
Immediate deductions for prepaid expenses
You can now claim an immediate deduction for prepaid expenses where the payment covers a period of up to 12 months and ends in the next financial year. If you took out a 12 month lease on premises for your business and paid 12 months rent upfront, the deduction would apply. It wouldn’t apply, however, if you signed a 24 month lease, as the service period is greater than 12 months.
Small business restructure rollover
Small businesses can now change the legal structure of their business — from partnership to a company, for example — without incurring any income liability when the assets are transferred from the partnership to the company.
This rollover applies to any active asset, whether they’re CGT assets, stock, revenue assets or depreciating assets.
In changing the structure of a partnership to a company, the rollover only applies where there is no change in economic ownership. For example, if a husband and wife decide to change the structure of their caravan park to a company, and both husband and wife remain equal shareholders in the business.
The rollover wouldn’t apply, however, if a third person became a shareholder in the company or the shares were distributed unevenly between husband and wife. Both would constitute an economic change in the ownership of any assets, even though they’re a couple.
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