Board Meetings aren't just for Big Business by Tina Zawila

Every month Steve and I set aside time to have what we call our Monthly Board Meeting.  It is locked into our calendars well in advance and not negotiable.  For at least a few hours we are focused solely on our business with no interruptions.

What do we discuss?

• We review our monthly and year to date financial results - assessing our profitability, cashflow and net asset position.  We compare our results to budget and analyse any variations.
• We monitor other key performance indicators (KPI's) to identify trends, and areas requiring improvement.
• We discuss other business management matters including resourcing, upcoming capital expenditure, marketing and professional development.
• We report on the progress of our ongoing projects and actions, and we keep minutes of decisions made.

Why is it important?

• The analysis of our financial results and KPI's every month enables us to identify any problems or variances from budget early and take action to rectify any issues before they escalate.
• The formal process of meeting (with an agenda and minutes recorded) keeps us accountable to each other for our decisions and actions and keeps us on the same page.
• It gives us an opportunity to work ON our business instead of IN it.

Why should you do it too?

• You can't manage what you don't measure.  If you are only looking at your financial statements once a year, and monitor your business performance by "gut feel" alone, how can you be sure that your business is performing well?  How can you identify those small but recurring changes that over time may become a significant issue?
  
  
• To stay focused on your big picture.  Taking the time to stop, check and realign with your business goals, will ensure you stay on track.
  
  
• You will make better decisions.  This time away from the normal day-to-day activities of your business will give you perspective and allow you to think clearer.

What if you are a sole trader?

• Call on your trusted advisor or a mentor to either meet with you or hold you accountable to ensure that you make the time to go through this process on a regular basis.

At Sothertons, we meet with our most successful business clients on a monthly or quarterly basis.  Don't leave the success of your business to chance.  Call us today on 49721300.

“Do you know how to find a good accountant?” by Steve Marsten

I was asked recently by an under 30’s businessman how to find a good accountant. It’s a good question and I guess there are several ways to approach it. Many people check out social media and ask others. That may well be okay, however it depends on how you want to use an accountant and more importantly, whether those who are recommending are in business or just get their tax returns prepared.

People in business need to be sure about a number of key points:

1. Are they certified or qualified?
2. How experienced are they in your industry? How long have THEY operated a business?
3. What expertise do they have in advising business owners?
4. Do their clients recommend them?
5. What networks are they associated with?

So you can call us biased, however accountants who are CPA or CA accredited are qualified professionals who have had to complete a degree-level of study as well as considerable on the job experience to ensure they have reached a certain level of competency. Everyone’s entitled to use someone who isn’t certified however for a business, it may not be a wise move. Recently an accountant in Gladstone maintained he was qualified but could not produce any certificates and certainly was not registered with the relevant professional bodies.

The next step is knowledge about the industry your business operates. Some accountants specialise in particular industries, while others are specialist in a limited number of industries. Others of course are simply all-rounders. The key is making sure they have some experience and are aware of key business drivers within your business industry.

Consider their experience in providing business advice or do they just focus on tax returns and compliance? Again if it’s the latter – it may not add a lot of value to your business.

Ask other business owners if they shop local – who do they use and why? Listen carefully to the why. Accountants who can demonstrate their value are more likely to be beneficial to your business regardless of what they charge you.

Finally, what networks are they associated with?  Do they use up to date technology for their bookkeeping? Do they follow their own advice? I wouldn’t want a retail salesman servicing my car; hence I would be concerned about taking advice about investment property from someone who doesn’t own any!

Good accountants work with you. They are available, accessible, keep up to date and have the necessary experience to add value to your business. Gladstone is blessed with some good advisers. At Sothertons we offer new clients a no obligation consultation to get to know us and vice versa. Call us on 07 4972 1300.

“A $250,000 Christmas Gift” by Tina Zawila

This week I had the pleasure of meeting with a 23 year old starting out on his financial journey.   His parents bought him an invaluable Christmas Gift – a voucher entitling him to a meeting with me to improve his financial literacy and education.   I’m sure he was very excited when he opened that gift on Christmas day!!

So, I knew I had a task ahead of me – to show this young guy the value of good financial advice!

We started with some basic principles:

1. Personal Budgeting – He was the proud owner of his home and his first mortgage.  How was he managing his money to ensure the mortgage was paid and that he could pay the rates, insurance, repairs and all the other ‘perks’ of home ownership?  And most importantly, was there enough left over for some fun?  I showed him how Xero (online accounting software) could help him in this area.
   
   
2. Insurances – Now that he had moved out of home and has a mortgage, had he considered how he could pay his bills if he became sick or injured and couldn’t work?  And what if something happened to him – would he like to leave the house to his Mum and Dad minus the debt?   We discussed the various insurances available – life, sickness and accident, trauma etc. 
   
   
3. Superannuation – At 23 I expected him to yawn throughout this part of the meeting, but I actually believe this is the area he will act on immediately!  I demonstrated how salary sacrificing as little as $10 a week into superannuation could grow into over $250,000 by the time he is ready to retire!  Yes, that got his attention.  In fact, to put $10 into superannuation, he would only have to give up $7.40 out of his net pay (due to the tax savings).  And just to show him the power of starting early, I demonstrated that for me to be in the same position when I am 65, I would have to sacrifice $80 per week into super…this is the difference between acting on this advice when you are 23 or 46!

Of course, there’s still lots for us to discuss in future sessions such as wealth creation and investment and who knows, one day he might want to start or buy a business.  But for now, he has a few actions that he can take to review and/or improve his financial position.

Please note that these principles are general advice only and you must consider your own individual circumstances. 

The professional team at Sothertons, can assist you on your individual financial journey no matter how far along the path you are.  Call us on 4972 1300 and let us help you, or someone you love.

“Don’t lose your hard earned Super!" by Steve Marsten

Recently I have been contacted by a company that “found” my lost superannuation funds! For a fee of $250 they could obtain it. Now obtaining access to your lost super is quite easy for anyone. It simply needs some basic knowledge of the internet; your tax file number; your full name and date of birth. Type in “Find lost super” on your browser and you are underway.

This is handy if you have ever changed your name or address and in today’s environment where you could change jobs several times throughout your working life, it can be easy to lose track of where you super is                                                                                                      being paid.

Having several superfund accounts could mean that fees and charges are reducing your overall super investments. The ATO believes there is around $17 Billion owing to account holders and hence it is conceivable that they are holding monies on your behalf.

The funds end up in the “consolidated revenue” bin when superfunds transfer balances of what they consider, are small or inactive accounts, directly to the ATO.

There are two ways to find these funds – The ATO Website encourages you to establish a myGov account which I do not encourage anyone to do. It is the ATO’s Big Brother portal so they can keep a closer eye on each taxpayer and it is a headache for most who go there.

The second option is AUSfund. It’s a similar option however it is sensitive to spelling, name changes and whether you used a middle name for a particular superfund or not.

The other interesting fact though, that many people often overlook especially those with Self Managed Superfunds, is that if they were previously receiving dividend cheques and lost them, then often the Share management companies simply register the “unpaid cheques” with the State  Revenue Offices. Most of Australia’s share management companies are registered in NSW or Victoria. Hence it pays to carry out a search on the State Revenue Office’s websites as well.

In my case, I found over $600 in lost super sitting in the Victorian State Revenue Office. Don’t get caught up in the “offer to find” super when it’s so easy to do it yourself!

To make sure you are not giving back your hard earned superannuation contact Steve and Tina at Sothertons and we will show you how to retrieve your funds efficiently. Call us on 4972 1300.