Using a dedicated lead generation service can be more useful than advertising but the quality of the leads may be questionable.
CHANGING YOUR BUSINESS STRATEGY to include additional services will require an additional investment in marketing if you are to make this successful. In terms of simply paying money to advertise your additional services, as you’re probably already aware, advertising doesn’t always yield immediate results. Therefore you might consider spending money on a lead generation service.
There are websites that make it easy to change your business name
Having a plan rather than changing your business strategy in an ad hoc fashion, ensures greater success of your business going forward.
PLENTY OF BUSINESS OWNERS change their business strategy, but what makes this successful? We say, above all, planning and a willingness to change the ordinary operations of your business. In a new workbook contained in our Xero training courses, we take you through the steps you would take in Xero to affect a change in business strategy.
In this blog post, we’re going to look more generally at some of the things you might need to do if you were making a change to your business strategy — even before you would start making these changes in your accounting software.
Business name change
A change of business strategy and direction may warrant a business name change. As a basic example, a builder who begins offering plumbing, electrical, and handyman services should change their business name from John’s Building Services, for example, to John’s Building and Home Maintenance Services.
If considering a business name change, visit the ASIC website. There you’ll be able to register a new business name and make sure one you’re thinking of doesn’t already exist. ASIC doesn’t allow you to update or change your business name, but provided you’re operating your business under the same structure — i.e., sole trader — there’s no limit to the number of business names you can register and assign to your ABN.
In April this year, the business.gov website launched a new Business Registration Service, which although still in Beta, allows you to easily and quickly apply for a business name, ABN, company, and tax registrations for free. At the moment it’s only available for new businesses — whether they’re sole traders, partnerships, companies or joint ventures — but it’ll soon be rolled out to existing businesses, trusts, and superannuation funds.
Registering for GST
Many contractors don’t register for GST because they do a combination of contract work on their ABN and TFN. Provided their business doesn’t generate $75,000 per year or more, they won’t have to register for GST, even if they do earn more than that by also working as a contractor on their TFN.
If the change in business strategy means your business is going to generate substantially more than $75,000 per year, or even if your suspect it may get close to it, you should register your business for GST.
You can register for GST via the ATO’s Business Portal. Registering for GST does mean your business will need to lodge regular business activity statements. This is additional compliance that can yield fines for late or inaccurate lodgements.
If you’d like to try and defer registering for GST for as long as possible, run a profit and loss statement in Xero and compare your current revenue with the estimated additional revenue your new business strategy will generate.
If there’s good, safe margin between your projected income and the $75,000 GST threshold, you can hold off.
You can learn what you need to implement the financial side of your changed business strategy, plus how to run profit and loss statements, complete and lodge business activity statements and much more in our Xero training courses. For more information, visit our website.
We mentioned that Jerry should use his accounting software to determine whether his he’ll have the start-up capital required to fund his new venture for the next 12 months. The best way to do this is to create a cash flow forecast, and we’re going to show you how.
Cash flow is a better indicator of available funds
If you’re wondering why you wouldn’t create a profit forecast, it’s pretty simple. Cash flow represents money in the bank, after you’ve paid all your suppliers and staff and loan repayments and so forth, while profit just shows how much the business earned but doesn’t take into account any cash outlays.
Profit just shows how much the business earned but doesn’t take into account any cash outlays.
It’s important to understand that it’s not uncommon for businesses to be profitable; however due to cash outlays, these same businesses may not actually have enough money in the bank to fund investment, or in this case, a new venture.
Generating a cash flow report in Xero
Follow these steps in Xero to generate a cash flow report for your business:
Go to Reports, then click All Reports.
Under Financial, select Cash Summary.
Enter the following report settings:
Date — The latest finalised month
Period — 1 month
Compare With — Previous 11 Periods
Select the Include GST and Show YTD filters
Click Update to generate the report in Xero
At the bottom of the report, click Export and select Excel to download the report in Microsoft Excel format.
Set up formulas to forecast 12 months ahead
In Excel, you’ll need to create formulas that will show you the average cashflow of your business across the previous 12 month period, so you can then forecast ahead for the next 12 months.
If you don’t use Xero and you’re using MYOB or QuickBooks, our MYOB and QuickBooks training courses will also show you how to run cashflow reports, among many others.
Case Study: Costs for starting up a second, related business
Contemplating starting a second business, related in some way to your first? Excel can help you forecast start up costs.
A LOT OF BUSINESS OWNERS branch out into related fields when their flagship business becomes successful enough (just look at Jim’s Mowing). However, this can be a bit dicey if the business owner doesn’t properly forecast all the start up costs. Not doing so can not only have an adverse impact on the new venture, but also on the existing business.
In this case study, we’re going to look at the start up costs associated with starting a real estate sales business. With real estate licencing laws changing and digital marketing available to everyone the ability to start your own business and work at home is now very realistic.Continue reading Thinking of Starting a Second Business? Introducing Jerry
Documenting and tracking your business premises’ expenses leads to accurate tax and activity statements.
IF YOU DECIDE TO buy your business premises it will have an effect on your tax. Our Xero training courses will show you how to account for your business premises, but here is what you need to consider about your tax and GST obligations.
Capital gains tax (CGT)
If your business will be operated out of the premises you buy, it will be subject to CGT when, or if, it is later sold. As such, you need to keep records about when and for how much the property gained so you can work out the capital gains when you sell it.
Capital gains occurs when the amount the property is sold for is greater than what it originally cost to acquire it. If the property is sold for less than its original purchase price, this is known as a capital loss.
Capital losses
If you make a capital loss when you dispose of the premises, you can use that loss to reduce any other capital gain you might have also made in the same year — another property or shares in another business, say.
If you haven’t made a capital gain in the same year, you can use the capital loss to reduce a capital gain in a later year, but you cannot use a capital loss for any other income.
Income tax deductions
If the premises is used to run a business, or is available to rent for that purpose, you can claim tax deductions for expenses associated with owning it; such as interest on a loan to buy the property and maintenance expenses. Keep records of your expenses from the start, so you can claim everything you’re entitled to.
GST
If you buy commercial premises, you may be eligible to claim a credit for the GST included in the purchase price. Additionally, you may also be able to claim GST on other expenses that relate to buying the property — such as the GST included in solicitors’ fees and ongoing running expenses.
However, you can’t claim GST in the following instances:
The seller used themargin scheme to work out the GST included in the price
You purchase property from someone who is not registered or required to be registered for GST
You purchase the property as a GST-free supply
You’re not registered for GST.
Keeping track of the purchase and expenses related to your business premises properly in your accounting software is vital to the ongoing financial health of your business — and accurate tax and activity statements.
Struggling to manage your online payroll management? Our Xero and MYOB courses will help you get the most out of this software so you can manage payroll in house.
MANY COMPANIES OUTSOURCE PAYROLL because it contains many moving parts. For instance, there’s the payment of wages each week or fortnight or month, sure. But there’s also superannuation contributions, PAYG obligations, annual and sick leave accrual.
Fortunately, most accounting apps like Xero and MYOB have made payroll easier to manage, particularly if you only have a handful of employees.
Superannuation clearing houses
Nearly every major cloud accounting package has a connected superannuation clearing house within its payroll package. Xero and MYOB are both SuperStream compliant, a government initiative to help business owners tell which accounting software apps will let them make electronic superannuation payments. And QuickBooks uses a partner payroll system which is also SuperStream compliant.
Batch wage payments
Electronic superannuation payments are one way that paying staff is made easier, but paying a dozen or so employees individually each week or fortnight can be tedious. Fortunately, both Xero and MYOB have a ‘pay run’ function that lets you make batch wage payments. This eliminates the tedium of paying employees individually, as well as the potential for error.
Accounting software calculates entitlements
MYOB, Xero and QuickBooks, if you’ve set up your employees correctly and have the appropriate payroll subscription, will also calculate your employees’ sick and annual leave entitlements, also reducing the time it takes to process payroll and the potential for error.
EzyLearn courses now include real life case studies
At EzyLearn we are constantly refreshing the content of our online training courses. Relevant to those of you doing Payroll, might be our Excel Ad Hoc Payroll case study which is part of our Intermediate Excel Online Training Courses. Where possible, we draw on real-life case studies as examples, to help you learn, and apply your skills, in a relevant way that makes sense. Visit our Micro Courses page to learn more.
Dive deep into your claimable expenses and don’t forget all those smaller prepaid expenses like magazine subscriptions or domain name registrations – you can only claim all of these during the period in which they occurred.
WE’RE IN THE LAST QUARTER of the 2016/17 financial year, so now is the time to dive in deep and check you’ve included every single business expense — prepaid or otherwise — to ensure all your expenses are in order.
We all know this, but remember, they can only be claimed for the period in which they occurred. If you forget to claim a major business expense in the financial year that it occurred, you can’t make it up by claiming it the next year.
It’s really important you thoroughly check your credit cards and business accounts to make sure you’ve accounted for each expense. The final quarter of the financial year is also a good time to make any purchases for your business, because you can claim them straight away.
Prepaid expenses are often forgotten
Magazine or journal subscriptions, domain name registrations, business name registrations, car registrations, website fees, insurances — collectively they add up, but they’re also the easiest to forget.
These deductions are often prepaid and may not come up on your radar and may certainly not show up on your final quarter bank statements.
Make a list and check it twice
Over the next month or so, make a list of all of your expenses as you think of them. This makes it easy to spot them when you’re going through your bank and credit card statements and checking them against the expenses in your accounting software.
Want to make your business presentations and publications more eye catching?
Gone are the days of excruciatingly dull PowerPoint slide presentations. Nowadays PowerPoint is the hidden gem used to generate animations, videos, movies, advertising and graphics. It’s a great ally to the marketer or social media person in your organisation.
Depending on the structure of your business, you may be legally required to include a P&L statement with your tax return or activity statements. Your tax agent will be able to advise you if your business will be required to file a P&L, which requires all of your bookkeeping to be up-to-date before you can run it.
Even if you don’t have to file one with your activity statements or tax returns, it’s still a good idea to run a P&L for your own sake. A P&L statement identifies whether your business has made a profit or loss and which accounting period these occurred.
Accounts receivable, payable
Find out who owes money to your business and to whom your business owes money. This is obviously part of the credit management process, which any good business will have in place already, but it’s a good idea to keep a steady eye on what’s coming in and what’s going out as EOFY approaches.
PAYG, superannuation
The end of each quarter brings a lot of PAYG and superannuation reporting, but EOFY brings a double whammy of activity statements tax returns and PAYG and superannuation compliance. You’ll need to run these reports so your bookkeeper can complete the payroll component of your returns.
Inventory stocktake
If you sell goods, you’ll need to complete a stocktake of your business’s inventory so that any missing stock can be written off, and to ensure you’re starting a clean slate for the new financial year.
WE’VE ENTERED QUARTER 4 for the 2016/17 financial year, so we’ve been writing about the things your business should be doing this quarter in preparation for the end of the financial year. In our last post we wrote about writing off stock and inventory. Now we’re looking at business expenses.
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At EzyLearn we are constantly refreshing the content of our online training courses. Relevant to those of you doing Payroll, might be our 
Magazine or journal subscriptions, domain name registrations, business name registrations, car registrations, website fees, insurances — collectively they add up, but they’re also the easiest to forget. 
