"Add Budgeting to your End of Financial Year 'To Do' List" Article by Tina Zawila

The new financial year is almost upon us!  By now, you should have done” all you can do” to make 2013 a success and implemented your tax minimisation strategies.

Now, it’s time to look forward to the new financial year and set our goals and targets that we want to achieve over the next 12 months. 

A budget is the only instrument that can give financial reality to your goals, objectives, strategies, priorities and plans.  A budget is the numerical expression of your plans for the next and future years.

Your budget process should consist of at least three main parts:

 1. Forecasting revenue (sales) and expenditure (expenses),

 2. Recording actual revenue and expenditure and,

 3. Reporting and acting on any variances (differences) between the two. 

At this time of the year, we generally focus on Step 1, and we encourage you to attend to this step as soon as possible, so that you can move onto steps 2 and 3 as soon as the new financial year ticks over.

A budget which incorporates working capital requirements provides an even more useful management tool.  It provides a clear indication of your working capital requirements, your desired stock levels and expected debtor and creditor balances based on desired credit terms.  Generally speaking, businesses struggle with cashflow more than they struggle with profitability.  Therefore, a budget which considers your cash position helps you prepare for those “ups and downs” that are common within many businesses.

The ultimate benefit is achieved from your budget if you use it proactively – that means that you consider your budget prior to actual revenue being earned or expenditure being incurred.  It shouldn’t be a “set and forget” document, but one that you refer to on a regular basis to monitor your progress towards achieving your goals and targets.

Have you set goals and targets to achieve over the next 12 months?

Did you consider your cash position for those “ups and downs” throughout the year?

Do you have a procedure in place to monitor your budget on a regular basis?

We strongly encourage all business owners to invest the time in creating a budget and then use it proactively.  Contact the team at Sothertons Gladstone on 4972 1300 for professional assistance and advice in creating your 2013/14 financial road map.

"Hurry! 30 June is fast approaching" Article by Tina Zawila

As we approach 30 June, many business owners are looking for last minute tax minimisation strategies, and time is quickly running out.  Obviously, your own particular circumstances will be key to determining what strategies will benefit you, however, in this article we will discuss some general strategies that you may wish to discuss further with your financial advisor.

For businesses:

1. If possible, defer business income until after 30 June 2013, particularly if you expect that your income will be lower in 2013/14 than in 2012/13.
2. Ensure that you have written off any bad debts from your Accounts Receivable list before 30 June in order to claim the deduction in the 2013 year.
3. To obtain a deduction for employer or self-employed superannuation contributions, they must be paid to, and received by, the super fund before 30 June and must be within the contributions cap (generally $25,000 per individual).
4. Small businesses (with turnover less than $2million) can claim expenses prepaid up to 12 months in advance, for larger businesses, this is generally limited to expenses below $1,000.
5. Do a stocktake to determine the value of stock on hand as at 30 June.   Stock should be valued at the lower of cost or market selling value.  Remember, the greater your stock on hand, the greater your profit.

For individuals:

1. If you expect lower income in 2013/14 due to retirement or any other reason, consider deferring income until after 1 July when you may be in a lower tax bracket.
2. Consider realising capital losses if you have already realised capital gains on other assets during 2012/13.  Conversely, consider realising capital gains if you have unrecouped capital losses, or you expect substantially higher income next year.
3. Consider making tax deductible donations to your favourite charities (tax deductible gift recipients).

Have you considered utilising any of these strategies?

Do you need help implementing them?

Unsure if you have seen all the possible savings?

For advice to align your specific circumstances with these tax minimization strategies please contact our professional team at Sothertons on (07) 4972 1300.

"The Overhead Dividend" Article by Steve Marsten

Last week we spoke about Organisational Structure reviews and how important this is when business is tightening or the economy is slowing. Being adaptable will put you ahead of the game and your competitors. At this time most well run businesses are setting up their 2014 budgets. This is an ideal time to address a key cost centre of your business – the overheads!

While speaking to a client about how difficult things had become in their industry, their Business Manager chimed in to say that the budgets were complete. When asked about the overheads and how they were arrived at, she said that she adds 5% to them all in order to finalise the budget. That’s 5% on last years figures. I asked why?  Did she think that this year is going to be 5% better?

This is obviously the best way to cut the corner and miss out on a serious Overhead Efficiency Dividend for the business. Sometimes it’s even worthwhile having incentives in place for Business or Administration Managers to seek and identify savings from the review and questioning of each and every overhead.

So many things get taken for granted. In one case recently we commissioned a report from Telstra for a business that had 9 in coming lines and 7 outgoing. The report found that only once in 12 months had they actually had all 9 incoming lines in use and they had never used 7 outgoings at once – ever! Once things were streamlined the saving turned out to be over $1,000. You only need a few of these and the Christmas party pays for itself. OK Just joking! However the point is that expenses such as these can and often do provide improvements to the bottom line of the business. Even asking the bank to review their services and ask how these can been streamlined to obtain a better value outcome is so very possible.

We recently identified overhead costs savings of $150,000 for a client. Savings in Overheads fall straight to the bottom line. All businesses should review this area on an annual basis. There are many areas within overheads that can save a business money. Using a professional can often stream line the process and provide a clear action sheet or road map to follow and save.

Have you reviewed your Overheads?

If so, have you saved from streamlining a process?

Do you have incentives in place for your Managers to seek and identify savings?

At Sothertons we can help you stream line the process and provide a clear action sheet to follow and save. Please contact us on (07) 4972 1300 for a consultation today.

Your Invited to the Sothertons Tax & Property Seminar

Want to make the most of your hard earned dollars?
Want to take advantage of 2013’s taxable deductions regarding your income & investment property?
Need financial guidance?
Want to retire early, but don’t understand the tax implications?

Have you found yourself asking any of these questions? 

Sothertons is holding a complimentary Tax & Property Seminar - Wednesday, 19 June at 7pm, Rydges Hotel Gladstone, that will help you get answers!

Tina Zawila and I will be presenting “What you need to know about Tax & Property for the 2013/2014 financial year” (full details listed below).  If you, or someone you know would be interested in attending please call our office on 4972 1300 or email sothertons@sothertonsgladstone.com.au to complete your RSVP.  Look forward to seeing you there.

"It's time to be adaptable and flexible" Article by Steve Marsten

No doubt you will have read that the mining boom is slowing in Australia. Essentially that simply means that companies are not investing as much in mining sites; construction and capital outlays on new ventures. Many businesses have benefitted significantly from the recent mining boom and Gladstone is one city that has reaped the rewards handsomely. However its crunch time! Many businesses doubled or triple or in some cases have increased their turnover by 20 or 30 times in a very short space of time and as the economy slows and tightens – management has to adapt quickly or risk going under.

We have been helping several companies who have gone from small to medium or medium to large and in several cases small to large businesses in the space of just 3 years. These usually are the ones that, because they have never experienced such growth before, are the slowest to adapt or act to reorganise the significance of the change before its too late.

Larger business tends to operate with several profit centres and recently we have carried out Organisational Structure reviews or Overhead Assessments reviews. They are two separate yet equally important procedures. Structure reviews look at middle management. This area tends to be one of the most expensive for business. However its only expensive if the managers don’t do their job. Key KPI’s and clarity about what management expects should be communicated to the manager and then followed up weekly so its clear they fully understand what’s expected of them.

In more difficult times managers are asked to review their section costs to find improvement dividends for the company. This often highlights the real experienced managers from the flash in the pans. We are finding in several businesses that in some cases managers can look after more than one division and hence due to streamlined processes, a cost saving dividend can be achieved.

Structure reviews give a fresh look at how to have the most adaptable and flexible management team in place and best practice for your industry. Next week we will talk about the Overhead Assessment review further.

Is your  business being effected as the economy slows and tightens?
Have you looked at a Structure or Overhead assessments review?
Are your managers meeting their KPI’s?
Can you streamline some of your processes?

At Sothertons we can help you become adaptable and flexible within your business with Structure and Overhead Assessment Reviews. Please contact us on (07) 4972 1300 for a consultation today.

"Focus on People" Article by Tina Zawila

An Australian Institute of Management event I attended recently was “Management Explained” by Devora Zack.  Devora is an international speaker and author specialising in the field of leadership development.

Most managers become managers simply because they were very good at what they do and therefore they are “promoted”.  For example a good tradie, often becomes a supervisor or team leader – however, just because they are good at what they do doesn’t necessarily mean that they will be good managers – or even that they want to be a manager!

Often these new managers are not given adequate training or tools/techniques to deal with the issues arising in a management role such as emotions, conflicts and personalities, whilst still achieving goals, targets and deadlines.

Devora believes that it is important to identify our own “management style” that fits who you really are.  She identifies two styles – “thinkers” and “feelers”, and encourages managers to be true to themselves, and their own style to be successful, whilst recognising the “style” of their team members to be more effective in managing and communicating with them in a way that they will relate and respond to.

Generally speaking, “thinkers” communicate directly, are focussed, productive and efficient and like clear lines of responsibility and authority.  “Feelers” on the other hand, are focussed on friendly interactions, want to build rapport and relationships and like positive reinforcement.

If you try to communicate with a strong “thinker” by using a “feeler’s” language and approach, you may find that they will have “tuned out” at the first “So, how was your weekend?” question.  Similarly, if you approach a strong “feeler” with a direct approach without exchanging any “pleasantries”, they will be thinking about “what is wrong with the relationship, that you don’t care enough to ask how they are?”, rather than focussing on your message.

The key is to “treat others as they would like to be treated”, whilst still staying true to your own management style.  The more we focus on people, the more successful we will be.

Have your managers been given adequate training?
What kind of “management style” do you have?
Is there a particular technique you use within management you find most effective?

At Sothertons we are committed to lifelong learning and we are always keen to share and receive good ideas – call us on 4972 1300 to discuss your thoughts on Management Styles and Techniques.

"Building a Community" Article by Tina Zawila

Recently I have had the opportunity to attend a couple of breakfast meetings hosted by the Australian Institute of Management.  In late April “The Complexities of Managing in the Regions – A Leadership Forum” was chaired by Kurt Heidecker (GILG)  with an outstanding discussion panel including Kevin Berg (Bechtel), Glenn Schumacher (NRG) and Julie Boyd (Previous Mayor of Mackay).

This was an excellent discussion around the challenges of being a manager and leader in a regional area.  Importantly, whilst it was recognised that working and living in a regional area has its own unique challenges, there are many challenges faced by managers of teams, organisations or businesses, that are ‘global’ and generic.

The key insights I obtained from the experienced and knowledgeable panel included:

1. Be a role model, make good business decisions - Be the best you can be.  Seek out a mentor for yourself – even one outside of your industry to keep you challenged, focussed and on a path of continual self-development (personal and professional).  It was said that “we all become a little bit of the good people we meet along the way”. 
2. Create a community with a positive environment - As a manager/leader you should be actively involved with your team/organisation.  Get to know them, and what is going on in the workplace, and where possible interact on a personal level with your team.  Stop. Listen. Understand.
3. People make the difference - Understand that the success of the team/organisation or business is completely dependent on the skills and success of the people involved.  It is people that make the difference –not machinery, software or technology.  If your team members are not successful, you won’t be.

One of my favourite sayings (and Kurt also shared it on the day) is one by Charlie Jones “You are the same today as you’ll be in five years, except for two things: the books you read and the people you meet”.  

Do you agree with these 3 keys insights on managing?

Is there a quote or saying which you strive to implement in your life?
How do you “build a community” within your organisation?

At Sothertons we are committed to lifelong learning and we are always keen to share and receive good ideas – call us on 4972 1300 to discuss your thoughts on Building a Community.