News Articles | Chartered Accountants & Advisors

Important Changes: Payday Super

Mon, 16 Mar 2026 23:59:16 GMT

Payday Super Update:

What Employers Need to Know and Do Before 1 July 2026

Important changes apply to paying employees superannuation from 1 July 2026. We’ve provided a summary below to help you prepare now to be ready.

Key Changes and Implications – An Overview of the Act

The Act amends the Superannuation Guarantee (Administration) Act 1992. Here's what you need to know:

Payment Deadlines: From 1 July 2026, super contributions must be received by the superannuation fund within 7 business days after payday, compared to the current 28 days after the end of the quarter. This change aims to streamline and expedite super payments.
SG Charge and Contributions: An SG charge equal to any shortfall will apply on payday. However, timely contributions can offset this charge. Employers have a 12-month period to carry forward excess contributions.
Penalties and Disclosure: Starting 1 July 2026, failure to remit the correct SG contribution within the designated 7 business days will attract hefty penalties. Voluntary disclosure statements can mitigate the administrative uplift component of these penalties.
Employer Exemption Certificates: The process for obtaining exemptions when an employee has multiple employers has been simplified, reducing application timeframes and allowing for backdating.
Tax Deductibility: The Super Guarantee Charge (SGC) payment (core amount of the shortfall + notional earnings + uplift) will now be deductible as of 1 July 2026. Any general interest charges (GIC) accrued, and penalties applied on the shortfall will remain non-deductible amounts.
SGC Statements: Employers will no longer be required to lodge a SGC statement for each quarter with the shortfall. The ATO will now determine the SGC automatically from the reported data it receives from employers. There will still be an option for employers to make a voluntary disclosure prior to the ATO’s assessment.

ATO Compliance Approach

The Australian Taxation Office (ATO) has issued a draft Practical Compliance Guideline (PCG) outlining its approach to the first year of Payday Super implementation. Employers will be categorised into low, medium, and high-risk zones based on compliance, with a focus on high-risk categories during the 2027 financial year.

ATO Small Business Clearing House

The ATO has also announced they will be closing this as part of the changes on 30 June 2026. If you are currently using this as your clearing house, you will need to seek an alternative solution prior to this date. We recommend paying the June quarter super before 30 June 2026 if possible and downloading a copy of your payment transactions.

Unresolved Issues

Some challenges remain, including:

Superannuation Clearing Houses: While convenient, they may not ensure timely receipt of contributions by the funds. Employers are encouraged to make direct payments to avoid penalties.

Click below to view a summary of key deadlines and considerations to help your business prepare for the changes.

Next Steps

With the Act now law and the framework taking effect from 1 July 2026, businesses have a narrow window to adjust systems and processes. Some businesses may also be faced with cashflow challenges as a result of this change.

For tailored advice on how these changes may affect your business and how best to prepare, feel free to reach out to us at Brentnalls SA.

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Minimise Taxes, Maximise Wealth

Wed, 28 May 2025 08:28:46 GMT

Tax Planning

Minimise Taxes, Maximise Wealth

By Bradley Barnes , Partner

22 May 2025

Tax planning is an important tool to ensure businesses and individuals minimise tax and maximise wealth. It always makes good financial sense to plan ahead to make the most of the available tax savings. Some of these measures include:

Superannuation Contributions

You could look to maximise superannuation deductions before 30 June 2025 by:

Contributing to your personal superannuation to the $30,000 annual limit.
If your superannuation balance is less than $500,000 and you’ve made concessional contributions of less than the concessional contributions cap in the past 5 years, you may be able to make additional concessional contributions in subsequent financial years for any unused amounts.
If you earn less than $60,400 p.a., you could be eligible for the government co-contribution. The government will contribute 50 cents for every dollar of after-tax contributions you make to your superannuation fund up to a maximum of $500. The full benefit is available for income earners under $45,400 and phases out where adjusted taxable income is between $45,400-$60,400.
If you earn less than $37,000 p.a., you could be eligible for the government low-income super tax offset. This offset will be applied when preparing your tax return and equals 15% for every dollar of concessional contributions you make to your superannuation fund, up to a maximum of $500
Ensuring your business superannuation contributions for employees are paid and cleared by 30 June 2025.

Prepayment of Expenditure

Small businesses, with a turnover of less than $10m, can look to prepay expenditure to bring forward tax deductions. The main prepayments of expenditure are loan interest, and rent.

Note however when applied to interest, the rate needs to be fixed to action a prepayment and therefore your interest rate doesn’t fluctuate with any potential RBA movement. All this needs to be considered carefully to ensure that prepaying expenditure does not drain cash reserves that could be used to take advantage of other opportunities through the following financial year.

The use of Franking Credits

If you find yourself in the position of projecting a taxable loss for the 2025 financial year, there may still be a silver lining. Depending on the structure of your business, you might have the opportunity to reclaim tax previously paid by any companies within your group.

This tax is known as franking credits and they are attached to any dividends declared by a company. If planned right these franking credits can be used to offset tax obligations and, in some circumstances, result in a refund of credits/tax.

Beware of the Asset Changeover

The removal of the temporary full expensing in 2023, which was replaced by the $20,000 small business immediate write off, could cause a significant increase in the taxable income for your business. Careful consideration needs to be given on any assets or equipment traded in or sold during the financial year as this could have some unwanted tax outcomes.

Plan Now Before it’s too Late

With the end of the financial year fast approaching, businesses have a window of opportunity to have tax strategies in place prior to 30 June.

As part of the Brentnalls SA tax planning service, we can do the following:

Review of the expected annual results,
Look at the strategic options available to you, 
Meet with you before the end of the financial year,
Ensure you can maximise the opportunities available to you, and
Make sure your business and family group entity structure are fit for purpose.

Call our team today to discuss end-of-year tax planning. It can set your business up for the following financial year, backed by the possible benefit of valuable tax savings.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Strengthening Medicare: Impact on GP Practices

Thu, 22 May 2025 21:00:00 GMT

Health Industry

Strengthening Medicare: Impact on GP Practices

By Shali Manolev, Partner

22 May 2025

What does the Strengthening Medicare with More Bulk Billing announcement mean for GP Practices?

The Australian Government has announced a significant initiative to strengthen Medicare by expanding bulk billing incentives. This initiative, set to commence on November 1, 2025, involves a $7.9 billion investment aimed at making healthcare more accessible and affordable for all Australians. The Federal Opposition has promised to match this pre-election promise if it was to win the upcoming election.

Here’s a detailed look at what this initiative means for GP practices:

Expanded Eligibility for Bulk Billing Incentives

The initiative will expand eligibility for bulk billing incentives to all Australians. Currently, these incentives only apply to concession patients who are under 16, or those who have a Health Care Card or Pension Card. From 1 November 2025 all Australians including non-concession patients, regardless of their income, will all be eligible for the bulk billing incentives.

The Government is claiming that this will Increase Patient Access: i.e. More patients will be eligible for bulk billing, reducing out-of-pocket costs and making healthcare more accessible. But the reality may be that it just creates Higher Patient Volume as more individuals seek bulk-billed services.

Increasing bulk billing doesn’t necessarily increase access. With most practices struggling for the GP workforce that they need to manage demand, the bulk billing incentives may just further increase demand and extend wait times for the next available appointment.

Bulk Billing Practice Incentive Program

A new Bulk Billing Practice Incentive Program (BBPIP) will be established to support GP practices in bulk billing all patients. The incentive will offer an additional 12.5% on Medicare rebates for GP consultation services.

This incentive will be split between the GP and the practice, but the Government has promised to consult with the sector before determining what portion each party will receive.

Impact on GP and Practice Revenue

There is no doubt that with a promised injection of $7.9 billion dollars into Medicare that there will be an uplift in revenue, but at this stage without a decision of the split that will apply to the BBPIP, it is impossible to determine the impact of this revenue.

Impact on GP revenue : Our analysis across multiple practices including metro and rural practices is that the bulk billing incentives fall well short of the private out of pocket cost being paid by patients who are currently privately billed. The average out-of-pocket cost for a GP consult across Australia is about $45. The triple bulk-bill incentive is currently $21.50 in metropolitan areas and up to $41.10 in the most remote areas of Australia. Therefore, the bulk bill incentive alone does not offer enough value to encourage GPs to increase bulk billing.

However, we know that most mixed billing GP practices do bulk bill a portion of consultations for their non concession patients and they will receive an uplift in revenue for the services that they are already bulk billing. i.e. there will be an increase even if they decide not to bulk bill all their patients.

Impact of 100% bulk billing: Will there be enough incentive through the BBPIP to encourage GPs to change their fee policies and decide to bulk bill 100% of their GP consultations?

Most practices charge a service fee as a percentage of revenue generated by the practitioner. Our analysis indicates that for the majority of practices, bulk-billing non-concession patients will decrease the revenue derived from these services but there will be some uplift from additional incentives for services provided to non-concession patients that are already being bulk billed. The uplift will not off-set the losses.

However, the additional 12.5% BBPIP provides sufficient additional revenue to more than compensate for the loss of private fees, and the overall revenue increase is significant.

If the spilt of the BBPIP is aligned with the Service Fee changed to the GP by the practice, the GP and the practice will both be better off. The Practices with the higher bulk billing rates currently are likely to benefit more proportionally than the practices that currently have a high rate of private billing.

GP practices that use Cubiko will find their calculator for these proposed changes very helpful in calculating the projected increase in revenue, but practices will need to wait to find out the BBPIP split before they can determine the net revenue impact for the GP and the practice.

Will these Bulk-Billing Incentives Work?

Anecdotally, regardless of the financial impact that practices might be able to realise from bulk billing, many GP Practices are reporting that they are reluctant to change their fee policy for what they see could be a short-term gain, resulting in long term pain. The Government's persistent focus on bulk-billing rates as the primary measure of an effective healthcare system has overshadowed more impactful opportunities for funding general practice. This narrow view overlooks strategies that could enhance the capacity of healthcare services and significantly improve the quality of care available to all Australians. By broadening their approach, the Government can ensure a more robust and effective healthcare system.

Conclusion

The Strengthening Medicare with more Bulk Billing initiative represents a significant investment in Australia's healthcare system, aiming to make healthcare more accessible and affordable for all Australians. By expanding eligibility for bulk-billing incentives and introducing the BBPIP, the government hopes to reduce out-of-pocket costs and increase patient access to healthcare services. However, the impact on GP and practice revenue remains uncertain, as the bulk billing incentives may not fully offset the loss of private fees for many practices. While the additional 12.5% BBPIP will ensure that in most cases revenue will increase overall, it is not enough to encourage 9 out of 10 GP practices, as heralded by the Prime Minister, to adopt 100% bulk billing.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Staying One Step Ahead

Wed, 21 May 2025 08:18:24 GMT

Cyber Security

Staying One Step Ahead

By Christina Gulliver , Partner

22 May 2025

In today's rapidly evolving technological landscape, the recent incident involving a major finance company defrauded of $25 million through a deepfake video call underscores the pressing need for heightened vigilance.

At Brentnalls SA, we are committed to safeguarding our clients' assets and maintaining their integrity. We strive to ensure that you are well-equipped to navigate and overcome the challenges posed by such sophisticated threats.

The Incident

This alarming case involved a seemingly routine video call with the company’s Chief Financial Officer (CFO). Unbeknownst to the employees, the person on the call was an AI-generated avatar, skillfully impersonating their senior executive. The deepfake technology convincingly replicated the CFO's appearance and voice, creating an illusion of authenticity. During the call, this digital imposter directed an employee to execute substantial financial transactions, resulting in significant financial loss.

The police involved revealed that previous video footage had been manipulated to create this deceptive impersonation, highlighting the critical importance of data security and vigilance in digital communications. As AI capabilities advance, the spectre of deepfake technology poses a growing concern for businesses worldwide.

Safeguarding Your Business

At Brentnalls SA, we recognise the challenges posed by such technology. This incident emphasises the necessity for robust verification processes, especially concerning financial transactions. As we embrace innovation, it is imperative to implement measures that safeguard businesses from falling prey to such scams. Here are some strategies to consider:

Verification Protocols: Establish and adhere to stringent verification protocols. Always confirm the identity of individuals requesting sensitive information or transactions through an independent communication channel, such as a phone call or a secure messaging app.
Employee Training: Regularly conduct training sessions to educate employees about the risks associated with deepfakes and other forms of digital deception. Empowering staff to recognise red flags during interactions can significantly enhance your organisation's security posture.
Invest in Technology: Invest in advanced security solutions designed to detect deepfakes and other fraudulent activities. This investment is crucial in protecting your organisation from potential financial threats
Stay Updated: Stay informed about the ever-evolving landscape of digital threats. Keeping abreast of the latest advancements in AI technology and cybersecurity can help anticipate and mitigate potential risks.

By fostering a collaborative approach, together we can create a safer business environment in the face of emerging technologies.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

MYOB benefits

Sun, 26 Jan 2025 21:00:00 GMT

Software Corner

MYOB:

Benefits

1. Accounting and Bookkeeping

At the heart of MYOB's software suite is automating tasks such as invoicing, expense tracking, and bank reconciliation. By linking directly with your bank accounts, the software ensures that transactions are automatically imported and categorised, businesses can easily track cashflow, monitor profits and losses, and maintain a clear view of their financial health, all from a central dashboard.

2. Payroll Management

Their payroll feature enables accurate and compliant payroll processing, helping businesses meet tax obligations, including PAYG withholding, Single Touch Payroll (STP) and superannuation. For businesses with more complex payroll needs, they offer scalable solutions, including automated leave calculations, roster management, and

timesheet integration.

3. Tax Compliance

MYOB simplifies tax management by integrating with the ATO and offering tools that allow businesses to lodge their GST, BAS, and PAYG returns directly from the platform. Their tax calculator is up-to-date with current rates and thresholds, ensuring accurate reporting. Moreover, its inbuilt compliance checks help businesses avoid common mistakes, minimising the risk of penalties or audits.

4. Inventory Management

For businesses dealing with physical products, the platform allows businesses to track stock levels, set reorder points, and monitor inventory costs. This ensures having sufficient stock on hand without over-ordering, which helps maintain cashflow and reduce wastage. Additionally, businesses can track their stock across multiple locations.

5. Customised Invoicing and Payments

The platform enables businesses to create customised invoices and send them directly to clients. With built-in payment gateways like BPAY and credit card payment options, businesses can offer clients a range of ways to settle their accounts. Furthermore, it allows users to track overdue payments and send automatic reminders.

6. Time Tracking and Project Management

For service-based businesses, there are tools for time tracking and project management. Users can log billable hours and assign them to specific clients or projects, ensuring that all work is accurately accounted for when invoicing.

7. Multi-Currency and International Transactions

This feature allows businesses to manage sales, expenses, and payments in foreign currencies while keeping track of currency fluctuations. It automatically updates exchange rates, making it easier to calculate gains or losses from currency movements.

8. Integration and Add-Ons

It connects seamlessly with other business applications such as point-of-sale systems, CRM software, Shopify e-commerce platforms, and Stripe, allowing businesses to create a holistic ecosystem that suits their operational needs.

9. Cloud-Based Solutions and Mobile Access

Cloud-based solutions that allow business owners to access their financial data from anywhere, at any time. The cloud storage feature guarantees that data is backed up and secure, reducing the risk of data loss or corruption.

Disclaimer

Foreign resident capital gains withholding

Sun, 19 Jan 2025 21:00:00 GMT

Update

Foreign resident capital gains withholding

Significant changes to the Foreign Resident Capital Gains Withholding (FRCGW) regime will take effect on 1 January 2025.

Currently, Australian residents selling property must provide a Clearance Certificate to avoid having 12.5% of the sale price withheld, applicable to properties valued at $750,000 or more. From 2025, the withholding rate will increase from 12.5% to 15%, and the $750,000 threshold will be removed, applying to all property sales.

If a Clearance Certificate is not provided by settlement, 15% of the sale price will be withheld and remitted to the ATO. Applying early is recommended as certificates can take up to 28 days.

For further information, contact your Brentnalls SA advisor to discuss.

Disclaimer

Navigating the Post-Great Resignation Landscape

Sun, 12 Jan 2025 21:00:00 GMT

Business

Navigating the Post-Great Resignation Landscape

By Sally Storey, Partner

HR in 2025

The aftershocks of the Great Resignation continue to ripple through Australia's employment landscape. While the initial wave of mass resignations during the Covid period has passed, the long-term effects on recruitment, retention, and overall workforce expectations still linger. This evolving environment poses challenges and opportunities for HR professionals as they adjust strategies to suit a changed labour market.

The great resignation: A catalyst for change

The great resignation of the early 2020s saw millions of workers re-evaluate their careers worldwide, with Australia no exception. According to recent surveys, Australia experienced significant job mobility, with 1.1 million workers changing jobs by February 2024, reflecting an 8% mobility rate. Although this rate was lower than the previous year's peak of 9.6%, the demand for new opportunities and flexibility fundamentally reshaped employer-employee dynamics.

By 2025, the conversation has shifted from mass resignations to strategic retention and recruitment. The factors that initially drove employees to leave—such as work-life balance, remote work, and career growth—remain top priorities. With 28% of employees considering switching jobs within the next 12 months, the lessons of the Great Resignation continue to inform HR policies across sectors.

The evolving expectations of the workforce

Heightened employee expectations mark Australia's workforce in 2025. Pay increases, work-life balance, and positive work culture have emerged as crucial retention drivers. Many Australian workers cite toxic work environments as a primary reason for job dissatisfaction. HR leaders have had to adopt a more holistic approach to employee well-being, recognising that competitive salaries alone are no longer sufficient to retain talent.

Upskilling and career development are also central to employees' demands. Workers increasingly seek employers that invest in their professional growth, particularly in light of technological advancements and shifting industry needs. Employers do not provide these opportunities risk high turnover, especially in competitive industries.

Recruitment and retention strategies for 2025

Despite a cooling labour market in early 2024, recruitment challenges persist for many Australian employers. The Australian HR Institute (AHRI) reports that while recruitment difficulties eased in 2024, they remain a concern for 38% of employers. This decline in recruitment challenges suggests that organisations are adjusting. Still, a shortage of skilled workers puts pressure on HR teams.

Retention strategies have become increasingly important as organisations seek to stabilise their workforces. Flexible working arrangements, learning and development opportunities, and enhanced support for employee well-being are some of the most effective tactics. With nearly 40% of Australian workers returning to the office full-time by 2024, employers must continue to balance in-office work with flexible policies to meet the needs of a workforce that now prioritises autonomy.

The future: preparing for a hybrid workforce

As we look to 2025, the Australian workplace is solidifying into a hybrid model. The push for flexibility, spurred by the pandemic and the Great Resignation, is now an embedded feature of many businesses. The AHRI's reports show that flexible working arrangements remain among the top retention tools, with many organisations continuing to invest in hybrid models.

The integration of AI and automation into recruitment and HR practices will further influence the workplace. AI-powered recruitment tools, such as CV screening and candidate sourcing, are widely used and will become more sophisticated. For HR leaders, staying ahead of these technological changes while ensuring human-centric

approaches to work culture and employee engagement will be critical to long-term success.

Conclusion

The HR landscape in Australia for 2025 reflects the lessons learned from the Great Resignation. Employee expectations around flexibility, pay, career development, and culture will continue to shape recruitment and retention strategies. Organisations that adapt to these expectations while leveraging new technologies and maintaining a focus on employee well-being will be best positioned to thrive in this new era.

Sources

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If you would like to discuss, please get in touch.

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Why do you need an accountant?

Sun, 05 Jan 2025 21:00:00 GMT

Business

Why do you need an accountant?

By Matthew Merrett, Principal

6 January 2025

It's not uncommon that new business owners attempt to manage their finances independently; the potential consequences of overlooking the expertise of an accountant can be detrimental for any business startup. Here’s why.

What are the pitfalls that can arise?

While it might seem like accountants are for businesses that have been running for years, this is certainly a misconception. Guidance during the startup phase ensures you choose the right business structure for your personal circumstances, including the setup and establishment of your operating entity. Furthermore, the establishment and setup of software and business operations such as budgeting, cashflow management, management reports, etc.

Without this guidance, it may mean a startup does not meet compliance requirements, such as tax and financial, just to name a few. Having an accountant on board can ensure that a business venture remains fully compliant and avoids potential pitfalls.

At Brentnalls SA, we have tailored a “ New Business Start Up Package ” that covers all the requirements needed for a successful launch of your new venture.

What are the reasons why you should always have an accountant?

Qualified expert on your side: One of the primary reasons why startups should use an accountant is the comprehensive financial expertise that these professionals bring to the table. Accountants are well-versed in managing day-to-day financial transactions and possess in-depth knowledge of tax laws, financial regulations, and compliance requirements. Furthermore, accountants are qualified at providing strategic financial advice, budgeting, forecasting, and business advisory, all essential for a business's long-term sustainability and growth.
Risk management: An accountant’s role is to minimise errors and mitigate risks within an organisation's financial operations. Using their knowledge and tools around financial reporting helps identify potential areas of financial risk. They bring precision and scrutiny essential for sound decision-making, and by ensuring that financial records are correct and up-to-date, they empower businesses to make informed decisions based on reliable financial data.
Tax management: Tax management is critical for businesses of all sizes. Accountants possess the knowledge and skills to navigate the intricate terrain of state and federal tax laws and regulations. Furthermore, by leveraging available tax deductions, credits, and incentives, accountants can help businesses minimise tax liabilities and optimise their financial position, all while remaining fully compliant.
Strategic business planning: Effective business planning and decision-making rely heavily on accurate and insightful financial records. Accountants provide economic data and analysis necessary for strategic planning along with guidance on investment decisions and business management. Their ability to interpret financial statements, identify key performance indicators, and assess the economic implications of various business strategies empowers business owners to make sound, data-driven decisions, ensuring opportunities for growth and expansion.
Enhancing financial transparency and credibility: An accountant’s involvement can enhance the credibility of a business's financial statements, instilling confidence in stakeholders and facilitating positive relationships with lenders, investors, and other key partners. Maintaining high financial transparency and credibility is essential for businesses, particularly when seeking external financing, partnerships, or investment opportunities. With their business advisory function, accountants can ensure the business is well-positioned to capitalise on external opportunities.
The drawbacks of missed opportunities: As previously explained, neglecting to engage an accountant's services can lead to many missed opportunities and detrimental outcomes for businesses. For instance, without professional financial guidance, businesses may miss out on tax-saving opportunities, inaccurately assess their financial performance, make uninformed investment decisions, and expose themselves to heightened economic and legal risks. Ultimately, the drawbacks of missed opportunities can manifest in financial inefficiencies, missed cost-saving measures, and a lack of strategic direction, all of which can hinder a business's long-term success and sustainability.

We go beyond traditional accounting. We recognise that each financial journey is unique, so we've crafted the "Brentnalls for Life" framework. This unique approach, consisting of three entry points, delves into the Now, Where and How of your business and personal finances. Whether you are planning for retirement, expanding your business, or tackling complex financial decisions, our goal is to equip you with the tools, advice, and independent services you need to thrive.

Our ' Brentnalls for Life ' framework is not just a service; it's a proactive partner deeply committed to your long-term financial goals. This proactive approach is the cornerstone of our commitment to consistently delivering exceptional value. We offer tailored solutions that address your specific challenges and opportunities, driving your business and finances forward with tangible results.

In conclusion

Choosing an accountant is not merely a choice between managing finances independently or seeking professional assistance; it is a strategic investment in a business's financial health and prosperity. The comprehensive expertise, risk mitigation, tax efficiency, strategic guidance, and enhanced credibility provided by accountants are indispensable elements for businesses striving to thrive. By recognising the drawbacks of missed opportunities and the potential ramifications of neglecting professional financial guidance, businesses can make a compelling case for engaging the services of an accountant as an essential component of their long-term success, including their invaluable business advisory function.

If you would like to discuss further, contact us today for a no obligation meeting.

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Three books to consider reading during the holiday season break

Sun, 22 Dec 2024 21:00:00 GMT

Business

Three books to consider reading during the holiday season break

By Nadine Hill, Principal

As the holiday season approaches, it's the perfect time to reflect on your business journey and set fresh goals for the coming year. To sharpen your thinking and gain new insights, we've compiled a list of three essential business advisory books that can fuel your planning and prepare you for a successful 2025. These books cover various topics, from financial management to leadership, strategy, and managing successful startups—ensuring you start the year with renewed focus and direction.

1. "The Infinite Game" by Simon Sinek

Overview:

Simon Sinek, the bestselling author of Start With Why and Leaders Eat Last, introduces the concept of "infinite games" in business and life, where the goal is not to "win" but to keep the game going. In The Infinite Game, Sinek contrasts finite games with clear rules and winners with infinite games, where the players and strategies constantly evolve. He argues that businesses and leaders who embrace an endless mindset will have the resilience and adaptability needed to thrive in an unpredictable world.

Key Takeaways:

The importance of adopting a long-term vision over short-term wins.
Building more robust, more innovative organisations by fostering trust and collaboration.
Leadership strategies for cultivating resilience and enduring success in a competitive landscape.

This is a must-read for business owners and leaders who want to cultivate a mindset that embraces continuous improvement and sustainable growth.

2. "Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones" by James Clear

Overview:

Atomic Habits by James Clear has become a modern classic for anyone looking to improve their personal and professional life through the science of habit formation. Clear explains how small, incremental behavioural changes—"atomic habits"—can compound over time to create significant positive results. With insights from

psychology, biology, and neuroscience, this book provides practical tools for building good habits, breaking bad ones, and making meaningful progress towards your goals.

Key Takeaways:

Learn how to build habits that lead to long-term business success.
Understand the impact of small, consistent actions on personal productivity and organisational effectiveness.
Practical strategies for overcoming procrastination and developing focus.

This is a great book to read during the festive season to set the habits for a productive 2025.

3. "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses" by Eric Ries

Overview:

Eric Ries' The Lean Startup is a must-read for entrepreneurs, startup founders, and business leaders looking to innovate in today's fast-paced, ever-changing markets. Ries introduces the lean startup concept, a methodology for creating and managing successful businesses by focusing on continuous innovation and customer feedback. His approach is based on agile development principles, which help companies to test new ideas quickly and efficiently to minimise risks and maximise opportunities.

Key Takeaways:

Using the lean startup methodology to test new ideas without wasting time and resources.
Continuous feedback and iteration are important to improve products and services.
Strategies for fostering innovation while keeping costs and risks low.

The Lean Startup is a vital read for those looking to innovate or optimise their business operations in 2025.

Conclusion

Whether you're a business owner, entrepreneur, or leader, reading during the festive season is a great way to stay sharp and prepare for the new year's challenges. The books listed here offer invaluable insights into leadership, financial management, personal growth, and innovation. Each provides actionable strategies to help you start 2025 with fresh perspectives and a clearer vision for success.

As you relax during the festive break, diving into one of these books could provide the inspiration and practical advice you need to make 2025 your best year in business.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Christmas & New Year Closure 2024/25

Sun, 15 Dec 2024 21:00:00 GMT

Brentnalls SA Christmas & New Years Closure 2024/25

Our office will be closed from:

12.00 pm Friday, 20th December 2024

and we will be back:

8.30 am Monday, 6th January 2025

We would like to wish you all a happy and safe festive season.

Why AI won't replace the need for accountants

Tue, 03 Dec 2024 23:26:53 GMT

Business

Why AI won't replace the need for accountants

By Shannon Sims, Principal

9 December 2024

With the growing wave of Artificial intelligence (AI) making remarkable strides in automating tasks, its potential to revolutionise various industries cannot be understated. AI is already playing a significant role in automating repetitive tasks such as data entry, invoice processing, and even tax compliance in accounting. With the increasing capabilities of AI, many wonder if the accountant's role will become obsolete. However, while AI can handle certain aspects of accounting with speed and efficiency, more is needed to replace the need for human accountants. Here's why.

1. The need for professional judgement and ethical decision-making

Accounting is not just about crunching numbers; it's about making informed decisions based on financial data. Accountants often apply professional judgment to interpret complex financial information, assess risk, and provide strategic advice. While AI can process vast amounts of data, it cannot replicate the nuanced understanding that human accountants have when considering context, client needs, and the broader business environment.

Moreover, accountants are bound by professional ethics and codes of conduct. Ethical decision-making is vital to the profession, particularly in ensuring compliance with laws and regulations and financial decisions' legal and ethical implications, something AI can only be trusted to do with human oversight.

2. Complex problem-solving and advisory roles

The role of the accountant has evolved far beyond bookkeeping and tax filing. Today's accountants are advisors who help businesses grow, optimise operations, and plan for the future. Accountants work closely with clients to understand their goals, assess their financial health, and devise strategies for improvement. Strategy development involves critical thinking, creativity, and understanding industry-specific challenges—skills AI cannot replicate.

Accountants use their experience and industry knowledge to provide tailored advice that goes beyond what algorithms can offer. Whether helping a business navigate complex tax laws, providing insights into financial trends, or advising on succession and retirement, accountants bring expertise and understanding that AI cannot.

3. Interpersonal skills and client relationships

AI needs to gain the personal touch that is so crucial in the accounting profession. Accountants work closely with their clients, often developing long-standing relationships based on trust and communication. Clients rely on accountants for their technical expertise and ability to listen, understand their unique needs, and provide personalised advice.

Relationships are born through trust, and trust is earned through human interaction. While AI can provide accurate financial reports, it cannot engage with clients like humans. The importance of human connection will always be important.

4. Handling the unexpected

AI excels at handling structured, predictable tasks, but real-world accounting is more complex. Businesses often face unexpected challenges that require quick thinking and the ability to adapt. Whether dealing with a sudden financial crisis, interpreting new and complex regulations, or addressing a unique tax issue, accountants are frequently called upon to solve problems that need a clear-cut answer.

AI operates based on patterns and preprogrammed logic. While it's getting better at handling some levels of complexity, it still needs to work on the unpredictable nature of real-world issues, be they financial or otherwise. On the other hand, accountants draw on their experience, intuition, and problem-solving skills to find solutions that are only sometimes obvious or formulaic.

5. Regulatory compliance

In Australia, accountants must navigate a complex and ever-changing regulatory environment. Tax laws, financial reporting standards, and compliance requirements constantly evolve, and staying up-to-date requires a deep understanding of the law and each client's circumstances.

While AI can assist in ensuring compliance by automating specific processes and flagging potential issues, it cannot interpret laws or regulations as nuanced as a human. Accountants ensure that their clients meet regulatory requirements and provide guidance on how best to structure their affairs to be compliant yet efficient.

Additionally, when mistakes or discrepancies arise, clients often prefer speaking to someone who can understand the situation and provide personalised solutions. AI might identify errors but cannot replace the reassurance from speaking to a qualified accountant who can address concerns directly.

6. The human element in strategic planning

Accountants play a crucial role in business strategic planning. They help with budgeting, forecasting, and long-term financial planning—areas that require data analysis and an understanding of the business's goals, industry trends, and market conditions. AI might assist by providing data-driven insights, but it cannot make strategic decisions that consider the broader vision of the business.

For example, when advising a business on growth opportunities, an accountant will consider the financial data alongside other factors, such as market trends, competition, and economic forecasts. AI might provide projections, but the accountant translates those projections into actionable strategies that align with the client's objectives.

7. AI as a tool, not a replacement

Rather than viewing AI as a threat to the accounting profession, it should be used to enhance accountants' capabilities. By automating routine tasks, AI allows accountants to focus on higher-level work that requires human insight, such as advisory services, strategic planning, and client relationships. AI can process data faster than any human. However, human oversight is still required to ensure accuracy, interpret the results, and apply them meaningfully.

Accountants who embrace AI and use it to augment their services will become more efficient and able to offer more value to their clients. In fact, integrating AI into accounting processes allows for more time to be spent on what truly matters—helping clients achieve their financial goals.

Conclusion

While AI will continue transforming the accounting industry by automating specific tasks, it is not poised to replace accountants anytime soon. The profession requires more than technical expertise; it demands human judgement, ethical decision-making, strategic thinking, and strong client relationships—qualities AI cannot replicate. Accountants will remain indispensable in providing the personalised, thoughtful, and strategic advice businesses rely on to navigate an increasingly complex financial world.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Family office: Securing the future of your family business

Sun, 01 Dec 2024 21:00:00 GMT

Family office:

Securing the future of your family business

By Rick Albertini, Partner

2 December 2024

Family businesses often face challenges not seen in corporate enterprises. Often requiring a fine balance between family harmony and business success. A family office provides structured support in navigating these complexities, offering services such as governance, wealth management, and succession planning to ensure both the business and family thrive across generations.

No family business is the same, each requiring a unique balance of trust and communication. Sustaining a business may seem straightforward, however, read more about the elements of a sustainable family business and why a family office is essential for all family businesses in our information sheet: What is family office: how can it help a family business?

How can Brentnalls SA help?

At Brentnalls SA, the family office service operates under the “ Brentnalls for Life ” framework, designed to align family and business goals through education, vision and values, and conflict resolution management. Key benefits include developing governance structures, supporting family communication, ensuring a smooth transition of leadership and ownership, and providing comprehensive wealth management for the longevity of future generations.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Sponsorship | The Penola Royal Cattle Show

Thu, 28 Nov 2024 03:58:21 GMT

Sponsorship

Penola Royal Cattle Show

Sponsorship | The Penola Royal Cattle Show

Brentnalls SA is a proud sponsor of The Penola Royal Cattle Show, held on November 2, 2024. It is the opportunity to showcase the finest cattle in the south-east.

Matthew Merrett, Principal , said "Brentnalls SA was privileged to sponsor the Penola Show cattle event recently. A number of showing classes were supported with some excellent cattle on display, culminating in the Brentnalls SA Supreme Exhibit being awarded to Woonallee Simmentals for their immaculate cow & calf unit.

Congratulations to all of the competitors for what was a high-caliber showing, particularly noting this show was held towards the end of the showing season.

I was privileged to view the competition up close and personal, learning about the judging techniques of both animals and handlers. I quickly became aware that the time, effort, and dedication that go into preparing the animals and perfecting the handling skills all come down to passion. A passion for cattle, agriculture, and farming in general could be seen and felt around the cattle showing arena on the day, but what truly blew me away was the immense feeling of support and community on display. Cattle don’t necessarily behave all of the time, but whenever a handler needed some support or a second pair of hands, a fellow handler or supporter was quick to step in and assist or provide support and guidance.

The passion and community spirit displayed are exactly why Brentnalls SA were excited to support this event. We congratulate the organisers and look forward to being involved in the years to come."

An overview: What is Archa Corporate Card?

Sun, 24 Nov 2024 21:00:00 GMT

Software Corner

An overview:

What is Archa Corporate Card?

25 November 2024

For business owners, effective financial management is essential for streamlining operations and fostering growth. One important yet often overlooked tool in this realm is the corporate card. This article provides insights into the features and benefits of the Archa Corporate Card, highlighting how it enhances expense management for businesses.

Streamlined Expense Management

Corporate cards allow businesses to consolidate everyday spending in one accessible platform. Archa enhances this process by simplifying expense tracking and automating reconciliation. This leads to real-time insights into spending patterns, empowering businesses to make informed financial decisions without the usual complexities.

Enhanced Control and Security

Managing employee spending while ensuring security can pose a challenge. Archa offers a centralised platform that allows businesses to oversee employee expenses effectively. Users can set custom spending limits at the card level and monitor transactions in real-time through a dedicated web portal, enhancing control over financial activities.

Value-Added Benefits

Unlike traditional corporate debit and prepaid cards, Archa provides additional benefits through strategic partnerships. For example, users can access up to 250,000 Velocity Frequent Flyer sign-up bonus points and continue to earn points on every transaction, adding value to everyday spending.

Seamless Integration

To maximise efficiency, it’s crucial for financial tools to integrate smoothly with existing systems. Archa supports flexible APIs and plugins that enable businesses to link their corporate card data with popular accounting platforms like Xero and leading expense management software such as SAP Concur. This integration reduces manual data entry and promotes accurate financial reporting.

Customer Support and Onboarding

Effective customer support is vital for the success of any financial solution. Archa prioritises this by offering dedicated account managers and 24/7 assistance. Additionally, the onboarding process is entirely online, allowing businesses to apply in under five minutes and often receive same-day approval, enabling quick access to cards for their teams.

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Understanding EBIT when selling your business

Sun, 17 Nov 2024 21:00:00 GMT

Understanding EBIT when selling your business

By Wade Crane, Principal

18 November 2024

When the time comes to sell your business, one of the most crucial financial metrics you’ll encounter is EBIT, or Earnings Before Interest and Taxes. Understanding EBIT is essential for evaluating the profitability of your business and, ultimately, determining its market value. This guide will help you comprehend what EBIT is, why it's important, how it's calculated, and how it can affect the sale of your business. We’ll also explore some examples to illustrate its impact and highlight how Brentnalls SA can assist you in navigating the complexities of selling your business.

What is EBIT?

EBIT is a measure of a company’s profitability that excludes interest expenses and income tax expenses. EBIT provides a clear view of a business’s operational performance by focusing solely on income generated from regular business operations.

In simple terms, EBIT is the profit a company makes from its core activities before considering the costs associated with borrowing (interest) and government obligations (taxes). This makes it an important metric for potential buyers, as it shows the underlying profitability of the business without the influence of financing or tax structures.

Why is EBIT important when selling your business?

When selling your business, EBIT is a critical factor in determining its value. Buyers are often interested in EBIT because it gives them a clear picture of how much profit the business is generating from its day-to-day operations. This helps them assess the business’s ability to continue generating profits under their ownership, regardless of how the business is financed or how tax laws might change.

Here are a few reasons why EBIT is particularly important:

Standardisation: EBIT provides a standardised measure of profitability that can be used to compare businesses in the same industry, regardless of their capital structure. This allows potential buyers to make apples-to-apples comparisons.
Operational focus: By excluding interest and taxes, EBIT focuses purely on the business’s operational performance. This is particularly useful for buyers who are interested in understanding the core profitability of the business, rather than how it is financed.
Valuation: EBIT is often used in valuation methods such as the EBIT multiple. This involves multiplying the EBIT by a specific number (the multiple) to estimate the value of the business. The multiple is usually determined by factors such as industry norms, market conditions, and the business’s growth potential.
Negotiation: A strong EBIT can be a powerful tool during negotiations. If your business has a high EBIT, it indicates that it is highly profitable from its operations, which can justify a higher asking price.

How is EBIT calculated?

Calculating EBIT is straightforward. You start with the business’s revenue, subtract the cost of sales (COS), and then subtract operating expenses. The formula looks like this:

{EBIT} = {Revenue} - {COS} - {Operating Expenses}

Let’s break this down with an example.

Example: Calculating EBIT

Imagine you own a retail business with the following financials:

- Revenue: $2,000,000

- Cost of sales (COS): $1,200,000

- Operating Expenses (including rent, salaries, utilities, etc.): $500,000

Using the EBIT formula:

{EBIT} = $2,000,000 - $1,200,000 - $500,000 = $300,000

In this example, your EBIT is $300,000. This means that your business generates $300,000 in profit from its core operations before accounting for interest and taxes.

EBIT in business valuation

As mentioned earlier, EBIT plays a significant role in business valuation. One common method is the EBIT multiple approach, which estimates the value of a business by applying an industry-specific multiple to its EBIT.

Example: EBIT multiple valuation

Let’s continue with our previous example, where your business has an EBIT of $300,000. If the industry standard multiple for businesses like yours is 4x, the estimated value of your business would be:

{Business Value} = {EBIT} x {Multiple} = $300,000 x 4 = $1,200,000

This $1.2 million could be the total value of a business or just its goodwill. If it is merely goodwill, the businesses other assets and liabilities will need to be added and subtracted to this to get its total value. Multiples can vary significantly based on factors such as the industry the business is in, percentage of recurring revenue, the business’s growth prospects, and the overall economic environment.

Factors affecting EBIT and business value

Several factors can influence your EBIT and, consequently, the value of your business. Understanding these factors can help you optimise your EBIT before selling your business:

Revenue growth: Increasing your revenue through strategies such as expanding your customer base or launching new services can boost your EBIT.
Cost control: Efficiently managing your operating expenses and reducing unnecessary costs can directly impact your EBIT.
Operational efficiency: Streamlining operations, improving productivity, and adopting new technologies can enhance your business’s profitability.
Market conditions: External factors such as changes in industry trends, competition, and economic conditions can affect your EBIT and the multiple applied during valuation.
Capital structure: While EBIT excludes interest expenses, the way your business is financed can still impact a buyer’s perception of risk and, therefore, the multiple they are willing to apply.

How Brentnalls SA can help?

Selling a business is a complex process that requires a thorough understanding of financial metrics like EBIT. Brentnalls SA has extensive experience in helping business owners navigate the intricacies of selling their business. Our team can assist you with:

Financial analysis: We can help you calculate and analyse your EBIT, providing insights into your business’s operational performance.
Valuation: Our experts can assist in valuing your business using EBIT multiples and other relevant methods.
Strategic advice: We offer strategic advice on how to improve your EBIT and overall business value before entering the market.
Negotiation support: We provide support during negotiations to ensure you achieve the best possible outcome.

Finally

Understanding EBIT is paramount when selling your business, as it provides a clear picture of your operational profitability and plays a significant role in business valuation. By focusing on EBIT, you can better position your business for sale and negotiate a favourable price. Whether you need help calculating, improving your profitability, or navigating the sale process, Brentnalls SA is here to assist you every step of the way.

With Brentnalls SA by your side, you can approach the sale of your business with confidence, knowing that you have a team of professionals working to maximise your return.

Discuss Further?

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Agtech in 2024: How far have we come in two years?

Sun, 10 Nov 2024 21:00:00 GMT

Agribusiness Industry

Agtech in 2024: How far have we come in two years?

By Bradley Barnes, Partner

11 November 2024

Two years ago, we explored the promising world of agricultural technology (agtech), highlighting innovations like driverless tractors, vegebots, and meat quality evaluation machines. At that time, we were just scratching the surface of what agtech could offer. Now, in 2024, the landscape has evolved even further, and it's worth reflecting on how far we've come.

The growth of agtech in Australia

Back in 2022, the NSW government predicted that agtech could become Australia’s next $100 billion industry by 2030. Fast forward two years, and we’re seeing significant strides towards this goal. The adoption of agtech has accelerated, driven by the rising global population, increased food demand, and the ongoing challenges of climate change. Australian farmers are not just keeping pace with these changes; they’re leading the way.

The digital agricultural revolution, once an emerging concept, is now well underway. On-farm connectivity, a crucial component we discussed in 2022 ( Agtech, where it's at and how it can benefit you ), has seen substantial improvements. The NBN’s partnership with the National Farmers’ Federation has successfully increased the adoption of digital tools, enabling farmers to harness remote monitoring, automation, and big data analytics more effectively.

New developments in agtech

When we first discussed agtech, John Deere’s driverless tractor was just making its debut in the US. Now, in 2024, these autonomous machines are becoming a more common sight on Australian farms. The technology has proven its worth, especially as farmers face continued labour shortages. Australian farmers, known for their early adoption of agtech, have embraced these tractors, using them to boost productivity and efficiency.

Robotics in agriculture has also advanced. Vegebots, once in development, are now operational in various parts of the world, including Australia. These machines, capable of selecting and harvesting crops autonomously, are helping farmers meet the demands of a growing population while reducing the reliance on manual labour.

In the supply chain, technologies like the MEQ Probe, which evaluates meat quality using spectral analysis, have become more sophisticated. The integration of machine learning with physics, chemistry, and biology has allowed for even more precise measurements, giving farmers and processors real-time data to improve their operations.

Agtech: now and beyond

It’s clear that agtech is not just a trend; it’s a transformation. The technologies we discussed in 2022 have matured and become integral to modern farming practices. The challenges of rising costs, climate change, and global food demand that we highlighted remain, but with the advancements in agtech, farmers are better equipped to meet these challenges head-on.

For those in the agricultural sector, the question now isn’t whether to adopt agtech, but how to do so most effectively. The five-point checklist we provided in 2022 remains relevant, but with the rapid pace of technological advancement, it’s more crucial than ever to stay informed and agile.

Agtech is continually evolving, offering new opportunities and solutions. As we continue towards 2030, the potential for growth in this sector is immense.

Agtech is continually evolving, offering new opportunities and solutions.

How Brentnalls SA can assist

At Brentnalls SA, we understand that investing in agtech is a significant decision. As accountants and advisors with deep experience in the agricultural sector, we can help you assess the need for agtech in your business. We work with you to evaluate the financial implications, ensure the technology aligns with your business goals, and provide guidance on maximising the return on your investment.

Whether you’re looking to improve efficiency, reduce costs, or expand into new markets, we can help you navigate the complex landscape of agtech. For more information on how the latest agtech innovations can benefit your agribusiness, and how we can support you in making informed decisions, contact the team at Brentnalls SA. We’re here to help you plan for a future that’s both sustainable and profitable.

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Have you prepared your annual SMSF property valuation?

Sun, 27 Oct 2024 22:00:02 GMT

Superannuation

Have you prepared your annual SMSF property valuation?

By Nadine Hill, Principal

28 October 2024

The ATO has identified 16,500 self-managed super funds (SMSFs) with the same property values in their SMSF Annual Return. The ATO is concerned that trustees are not meeting their legal requirement, under regulation 8.02B of the Superannuation Industry (Supervision) Regulations (SISR), to value and report their assets at market value every year. The ATO is increasingly receiving and analysing data to assess risks across the Australian tax system, and if market values are not updated annually, you may attract the gaze of the ATO. The recent interest from the ATO shows that the annual valuing of assets in SMSFs is a requirement.

Our auditors have advised that a property valuation is valid within 6 months of 30 June. For example, valuations dated between January 2024 and December 2024 can be used for the financial year ending 30 June 2024.

Acceptable valuation methods:

Comparable sales
Compare your property with at least three similar recent sales. This method helps establish a market value based on sales data of comparable properties.
Annual growth rate
This method involves applying a growth rate of the local area to the prior year's market value. Ensure you record supporting evidence to support the growth rate calculated.
Capitalisation of net income
Only appropriate where tenants are unrelated. This method involves collecting evidence to support the capitalisation percentage of net income of the local area.

Recommended options depending on your SMSFs property:

Residential property

We can request an independent third-party valuation through BGL property services at a cost of $89 + GST.
The Trustees may prepare a market valuation using one of the three valuation methods above, but need to ensure they have sufficient supporting evidence. This can only be done for a 2-year period before a new independent third-party valuation is required.

Commercial property

If the property is in South Australia, we can request an independent third-party valuation for you from a commercial property valuer starting at $660 + GST.
If the property is located outside of South Australia, you may obtain an independent third-party valuation from a local commercial real estate agent or qualified valuer.
The Trustees may prepare a market valuation using one of the three valuation methods above, but need to ensure they have sufficient supporting evidence. This can only be done for a 2-year period before a new independent third-party valuation is required.

Farmland

You may obtain an independent third-party valuation from a local commercial real estate agent or qualified valuer.
The Trustees may prepare a market valuation by using one of the three methods listed above, but need to ensure they have sufficient supporting evidence. You may use an aid such as the Rural Bank Farmland Values 2024 Report to form part of your evidence. This can only be done for a 2-year period before a new independent third-party valuation is required.

Vacant land

Council Rates valuation is sufficient supporting evidence of the current market value of the land.

Closing remarks

With the ATO's increased scrutiny and emphasis on yearly valuations, they are encouraging all trustees to ensure that their property values are up-to-date and reflective of the current market conditions. Utilising the recommended

valuation methods, and obtaining independent third-party valuations where appropriate, will help you meet these obligations effectively. This is not all bad, regularly updating your property valuations helps keep your SMSF in good shape and reduces the chance of issues arising.

If you would like more information, please contact your Brentnalls SA advisor .

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Disclaimer

Sponsorship | Butterfield Racing Team (BRT)

Sun, 20 Oct 2024 21:30:00 GMT

Sponsorship

Butterfields Racing Team (BRT)

22 October 2024

Brentnalls SA has been proud to sponsor Butterfields Racing Team (BRT) since 2022. The team established in 2017 by a group of South Australian cyclists, with a vision to support women’s participation in local cycling competitions. Over the years, BRT has become a respected force in the South Australian cycling community, known for its commitment to developing riders and creating opportunities for growth throughout the sport.

Aligned with Brentnalls SA’s own values of nurturing talent and supporting growth, BRT is dedicated to providing its riders with pathways to elite competition. Key events include the AusCycling SA Super Series, Victorian Road Series, and National Road Series, where team members showcase their skills and hard work.

In 2022, Butterfields Racing expanded beyond South Australia, welcoming riders from Brisbane and Canberra. In 2023, the team continued to grow, providing opportunities for cyclists from Sydney and Melbourne, further establishing itself as a nationally recognised development squad.

Throughout our sponsorship over these three seasons, Brentnalls SA supports BRT’s vision to offer continuous development and growth opportunities for riders of all ages, experience levels, and goals. The team’s inclusive and diverse environment resonates with our own values, promoting a culture where individuals from all backgrounds can come together, united by their passion for cycling.

Together, Brentnalls SA and Butterfields Racing are helping shape the future of Australian cycling, ensuring that every rider is equipped with the tools, support, and opportunities needed to succeed. We look forward to sharing more information about up-and-coming events such as the Tour Down Under.

Financial Wellbeing Checklist

Mon, 14 Oct 2024 22:00:00 GMT

Checklist for financial wellbeing

By Nadine Hill, Principal

22 January 2023

Republished 15 October 2024

Preserving and protecting your wealth and assets

Ensuring that you and your family are protected in the event of a critical illness, accident or death is vital as you build wealth and assets.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Sponsorship | Fat Farmers

Mon, 07 Oct 2024 21:15:00 GMT

Sponsorship

Fat Farmers

8 October 2024

At Brentnalls SA, we are proud to be silver sponsors of Fat Farmers , a group that plays a crucial role in fostering health and well-being within rural communities. Supporting this inspiring initiative aligns perfectly with our commitment to encouraging positive outcomes for people, especially those in regional areas.

Fat Farmers began in 2012, when Greg Hean, Ben Wundersitz, and Scott Hoyle —farmers near Maitland on Yorke Peninsula—jokingly adopted the name while getting fit at their local gym. Since then, the group has grown beyond Yorke Peninsula, reaching farmers across South Australia. What started as a small group of farmers over 40, looking to stay healthy, has now expanded to include a diverse range of participants—from cropping and grape growers to almond farmers, and members of all ages, from school children to retirees.

This network thrives thanks to the volunteer team coordinators, who dedicate their time and effort to keeping their groups organised and connected. Their hard work allows Fat Farmers to operate across the state, uniting communities in their shared goal of improving physical fitness and well-being.

Brentnalls SA, we recognise the tremendous value that these initiatives bring to rural South Australia. Bradley Barners, Partner , sits on the board as Deputy Chair and regularly participates in organised events.

By supporting Fat Farmers, we are investing in a healthier, stronger future for the communities we serve, and we are proud to stand alongside such a wonderful organisation.

Recently, Fat Farmers were featured on Landline (ABC) and A Current Affair (9Now) , and we are starting to see other agricultural communities (interstate) getting involved.

Software Corner | The power of managed detection and response (MDR): In today's business landscape

Sun, 06 Oct 2024 21:00:00 GMT

Software Corner

The power of managed detection and response (MDR): In today's business landscape

Guest: Byron Da Silva, Managing Director, Falco

7 October 2024

In the rapidly evolving digital world, cybersecurity has become a critical concern for businesses of all sizes. One solution that stands out is Managed Detection and Response (MDR), a service that provides comprehensive threat detection and response capabilities. At Falco Technology Solutions, we offer advanced security MDR, a premier solution designed to enhance your cybersecurity posture.

Why MDR is essential

MDR services are essential for businesses today for several reasons:

Real-Time Detection Alerts: MDR services provide real-time detection alerts, allowing businesses to respond to threats promptly.
Proactive Threat Detection: MDR services continuously monitor networks for suspicious activities and potential threats. This proactive approach helps identify and respond to threats before they can cause significant damage.
Expertise and Resources: MDR providers have specialised security teams with the expertise and tools needed to handle complex cyber threats. This is especially beneficial for SMBs that may lack in-house cybersecurity expertise.
24/7 Monitoring and Response: MDR services offer round-the-clock monitoring and response capabilities, ensuring that threats are addressed promptly, regardless of when they occur. This is crucial for minimising the impact of attacks.
Advanced Threat Intelligence: MDR providers leverage advanced threat intelligence to stay ahead of emerging threats. They can quickly update their detection capabilities to defend against the latest attack vectors, something that SMBs might struggle to do on their own.
Incident Response and Remediation: In the event of a security incident, MDR services provide rapid incident response and remediation support. This helps SMBs recover quickly from attacks and implement measures to prevent future incidents.
Compliance Requirements: MDR services assist with automated compliance reporting, helping businesses meet requirements for standards like Payment Card Industry Data Security Standard (PCI DSS), National Institute of Standards and Technology (NIST), and Health Insurance Portability and Accountability Act (HIPAA).
Vulnerability Scans: MDR services conduct professional annual internal and external network vulnerability scans, providing a clear view of potential network vulnerabilities.

The Falco MDR advantage

What sets Falco MDR apart is its comprehensive response capabilities. Our security experts can take advanced response actions from within the platform, no matter what security technology you invest in. We also offer deep and dark web monitoring, situational awareness and reporting, and privilege analysis of network accounts, systems, and groups.

Why businesses need MDR

For our managed customer, Brentnalls SA, and indeed all our customers, MDR is a game-changer. It provides robust protection against advanced cyber threats, reduces vulnerabilities, and takes command of sprawling IT operations. With features like world-class analytics, compliance reporting, automation tools, integrated threat intelligence, and 24x7 search for leaked accounts on the deep and dark web, Falco MDR is a cost-effective and attainable solution for small, medium, or large organisations.

Finally

In conclusion, MDR is not just a nice-to-have; it’s a must-have in today’s business environment. It’s time to take command of your cybersecurity with MDR. Protect your business, meet compliance requirements, and ensure you’re prepared for the evolving cyber threat landscape with Falco Technology Solutions' MDR services.

https://falco.com.au/

For further reading on MDR you can head here:

https://www.techopedia.com/top-managed-detection-and-response-benefits?utm_content=293373444&utm_medium=social&utm_source=linkedin&hss_channel=lcp-10890311

Disclaimer

Sponsorship | Alex Haydon, Squash

Thu, 03 Oct 2024 02:16:55 GMT

Sponsorship

Alex Haydon

3 October 2024

28 August 2024 updated

UPDATE

We’re excited to support Alexandra Haydon at Brentnalls SA as she embarks on her journey to the LA 2028 Olympics, where squash will make its debut!

Alex, a 23-year-old Australian professional squash player from the Clare Valley, has already achieved an impressive world ranking of #67. Now living and training in the USA, she is dedicated to bringing home the first-ever Olympic squash medal.

To help her get there, we’re sharing an exciting raffle in partnership with Pivot Sports as part of the Aussie Athlete Fund $1M Challenge, powered by Ampol and 5x Olympian Nat Cook. By joining, you can support Alex’s overseas training and competitions while having the chance to win incredible prizes valued at over $4,000!

Prizes include food, drinks, clothing, mentoring, and premium sports gear, thanks to contributions from Inspire Wellness, Next Level Elite, Dunlop Sports, The Racquet Shop, GripStar Socks, Dapper Chap Distillery, Mayver’s Food, and Liberated Brands.

Join us in supporting Alex’s Olympic dream and grab your raffle tickets today for your chance to win big!

Drawn 31 ^st October 2024

Squash to debut at the Olympics 2028 Los Angelas

Brentnalls SA is proud to sponsor Alex Haydon, a professional squash player, on her journey towards representing Australia at the 2028 Los Angeles Olympics.

Squash was recently announced to make its debut as an Olympic sport at the 2028 LA games, a momentous occasion for the sport. At just 22, Alex is already Australia's second-ranked squash player, with a world ranking of 74 that continues to rise.

Currently living and training in Connecticut, USA, Alex made a trip back to Australia to participate in the Australian Open. Despite an early exit in the first round, she went on to win the World Championship Qualification tournament for the Oceania region. This victory secured her a spot in the world's most prestigious squash competition in Egypt, set against the backdrop of the ancient pyramids.

Over the next four years, Brentnalls SA is excited to support Alex's journey towards the LA 2028 Olympics. Her professionalism, dedication, and high-performance ethic truly embody the values of our firm.

The value of practice management in Australian healthcare

Sun, 29 Sep 2024 22:00:00 GMT

Health Industry

The value of practice management in Australian healthcare

By Danny Haydon, Principal Health Division

30 September 2024

The complexity in an environment

that is constantly changing means

staying ahead in the industry is

paramount. Further guidance on the

elements that underpin the viability and growth potential can be found in our information sheet

“10 Pillars of Practice Management”.

How to achieve excellence in your practice and boost your bottom line

As a practice owner, you know that running a healthcare practice is not only about providing quality care and services to your patients and clients, but also about managing the business aspects of your practice. You need to ensure that your practice operates efficiently, effectively, ethically and legally, and that it meets the changing needs and expectations of the healthcare environment.

Practice management is a complex and dynamic position that requires a range of skills, knowledge and competencies. It involves the process of planning, organising, leading and controlling the resources and activities of a healthcare practice. It is not only about managing the administrative and financial aspects of the practice, but also about managing the human resources, clinical governance, risk management, marketing and the strategic planning.

Why is practice management important for your practice?

The importance of practice management lies in its direct effect on your practice's performance and sustainability, as well as the satisfaction and outcomes of your patients and clients.

A well-managed practice can:

Enhance the productivity and profitability of the practice, leading to reduced costs and increase in revenue.
Increase the engagement and retention of staff and practitioners, potentially reducing turnover and improving teamwork.
Reduce the stress and workload of the practice owner and manager, thereby improving work-life balance and well-being.
Improve the quality and safety of care and services, resulting in increased patient loyalty and referrals.
Ensure compliance with the relevant standards, regulations and legislation, which can avoid penalties and litigation.
Adapt to the changing needs and expectations of the healthcare environment, generating improved opportunities and competitive advantages.

How you manage your practice is significant because it demonstrates the values and ambitions that affect how your practice is perceived by others in the community and industry.

What defines excellence in practice management?

To achieve excellence in practice management, mangers should seek to develop and apply the following core principles:

These are the core skills, knowledge and competencies that improve the performance and sustainability of your practice. They can also help you meet the expectations and needs of your patients, clients, staff, practitioners and stakeholders.

Valuing practice management

It is vital to keep investing in your personal growth by:

Accessing resources and support from the Australian Association of Practice Management (AAPM) , the national peak body for practice management in Australia.
Encouraging certification programs, such as the Certified Practice Manager (CPM) and the Fellow of AAPM (FAAPM) , that can help affirm your manager’s competencies and achievements.
Seeking professional development and education opportunities, such as webinars, workshops, conferences and courses, that can help update their skills and knowledge.
Networking with and mentoring with other practice managers, such as, through local and national events, online forums and peer support groups that can help you share your experiences and challenges.
Accessing resources and information, such as publications, newsletters, guidelines and templates, that can help you implement best practices and standards.

If you need to hire professional practice management resources, look for a professional manager with the skill set your practice requires. CPM through AAPM should at least be a desirable criterion for the position as it indicates they have undergone education and development within the profession.

While practice management is an expense to the business, if you have the right people on board, you will turn that expense into an investment and reap the benefits of having an efficiently run practice that delivers high-quality care and services to your patients and clients. Please reach out if you need assistance to address your practice management capabilities and how those capabilities can be of value to your practice.

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Disclaimer

Maintaining strong records for your agribusiness

Sun, 22 Sep 2024 22:00:00 GMT

Agribusiness Industry

Maintaining strong records for your agribusiness

By Sally Storey, Partner

23 September 2024

Record keeping is no one’s favourite chore, but it can play a key role in the success of your agribusiness. We offer simple strategies to manage your records.

Mention ‘record keeping’ and thoughts of tax obligations often come to mind.

However, strong record keeping goes beyond ATO requirements.

The reality is that good record keeping makes good business sense, helping you:

Understand how your agribusiness is performing,
Manage assets and liabilities, and
Have the paperwork available that lenders may ask for if you apply for finance.

Organising the paperwork

Over time your agribusiness can amass large quantities of records so it’s important to take an organised approach to storing documents. You need to know where key documents are stored whenever you need them.

A useful starting point is to maintain a spreadsheet that sets out where different items of paperwork are kept. Let’s take a look at a few practical examples.

Land and property:

Documents relating to your landholdings are particularly important.

If you need to use a property as security for finance, you may be asked to supply evidence of title deeds. So, it really is a good idea to store the paperwork in a secure place.

Your spreadsheet listing related to land and property doesn’t only have to include information about certificates of title. It can also note records such as land rates, annual valuer general valuations, and any valuations obtained from other sources.

Farm plant and equipment:

Spreadsheet entries for major items of plant and equipment can include information along the lines of:

Identifying details such as vehicle registration, VIN or serial numbers,
Date and purchase value,
Insured value and insurer, and
Whether the equipment is under finance (and with which lender).

These details can be useful if you need to make a claim on insurance or warranty, or if you are trading in equipment as part of a new purchase.

Having these details on-hand can also help you develop a timeline of likely replacement dates for farm machinery.

Yields and prices:

Maintaining these sorts of records helps you identify improvements in crop yields – both over time, or as a result of specific measures such as a change in fertiliser or stocking levels.

What matters is that records of yields and crop/livestock prices can be instrumental to drawing up accurate budgets and forecasts, which a lender may ask to see if you apply for funding.

Equally, these records can be valuable if you sell an individual allotment or your entire agribusiness.

Where to store your records – hard copy or cloud?

As the business world increasingly embraces digitisation, you have the choice of storing many records in hard copy or the cloud.

Cloud storage offered by the likes of Dropbox and Google Drive simply means your digital data is stored on servers in off-site locations. It’s convenient but it can also come at an extra cost. Your accounting software may also offer a storage facility for this documentation.

Learn more

Maintaining good records can be more complex than it seems.

Brentnalls SA can help you understand your legal requirements and offer streamlined solutions for your agribusiness records.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

New reporting requirements for not-for-profits

Sun, 15 Sep 2024 22:00:00 GMT

ATO Updates

New reporting requirements for not-for-profits:
self-assessment of income
tax exemption

By Shannon Sims, Principal

16 September 2024

Starting from the 2023-24 financial year, non-charitable not-for-profit (NFP) organisations with an active Australian Business Number (ABN) are required to self-assess their income tax exemption. These changes were announced as part of the 2021–22 Federal Budget on 11 May 2021.

The changes mean non-charitable NFPs with an active ABN have to submit an annual NFP self-review return to check their eligibility for income tax exemption with the Australian Taxation Office (ATO).

The new annual reporting obligation aims to improve transparency and integrity within the NFP sector, ensuring that only eligible organisations can qualify for income tax exemption.

Who does it apply to?

Organisations with a purpose that fall into the following 8 categories can self-assess eligibility for income tax exemption1:

community service
sporting
cultural
educational
health
employment
scientific
resource development

Exemptions

Certain NFP’s are exempt from the new reporting requirements. These include:

1. Charitable NFP’s: Charitable organisations that meet the ATO's criteria for income tax exemption and are registered with the Australian Charities and NFP’s Commission (ACNC).

2. Government entities including:

municipal corporation,
local governing body,
public authority constituted under an Australian law, and
constitutionally protected fund.

3. Taxable NFP’s: Organisations that only serve their members' interests and not the wider public will usually not qualify for income tax exemption. Taxable NFP’s include:

social clubs and fraternal organisations,
some business and professional associations,
clubs whose main purpose is providing hospitality services for members; and
political parties.

4. Other entities already required to lodge a tax return or notify the ATO when a tax return is not necessary.

How it works

Annual self-review return: NFP’s must lodge an annual self-review return using ATO online services for business or through a registered tax agent.

The ability to self-assess as income tax exempt is only available to NFPs that meet specific criteria and conditions (outlined above), including that:

they fall under one of the specific categories listed in Division 50 of the Income Tax Assessment Act 1997; and
they are not charitable NFP’s and are not registered (or eligible to be registered) with the ACNC.

Key dates

First return: The first NFP self-review return due date for the 2023-24 income year is the 31st of October 2024 for those with an income year ended 30 June. The ATO have recognised this may not be feasible for all organisations and have extensions available.
Extensions available: Additional time to lodge is available up to the 31st of March 2025 for organisations having difficulties lodging their first return.
Subsequent years: NFPs must submit the self-review return annually for each subsequent income year.

Transitional support

I f your organisation needs more time to meet these obligations, transitional support arrangements are available.

Remember, accurate reporting ensures compliance and maintains your NFP’s tax-exempt status. If you are unsure if your organisation will be required to comply with the new obligations, please reach out to your usual Brentnalls SA contact for further assistance.

For further information on the new reporting requirements, please refer to the ATO’s website:

https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/statements-and-returns/in-detail/reporting-requirements-to-self-assess-income-tax-exemption

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Profit margin in the construction industry

Sun, 08 Sep 2024 22:45:00 GMT

Construction Industry

Profit margin in the construction industry

By Wade Crane, Principal

9 September 2024

Knowing the difference between profit margin and mark-up can be the key to building a sustainable business.

The construction industry is continuing to experience high costs. The latest data from CoreLogic shows price changes to materials are stabilising but current building costs are still 27.6% higher than at the start of the pandemic.

CoreLogic 1 notes this is likely putting “significant pressure on builder's profit margins”.

The question is, how could this affect your mark-up?

The concepts of profit margin and mark-up are often sources of considerable confusion. Yet both are critical to your business.

Here’s a deep dive into how the two differ – and why it’s important to make the distinction.

Profit margin explainer

I n simple terms, profit margin measures the percentage of profit earned by your business in relation to revenue.

Looked at differently, it shows how much profit you make for every dollar of revenue.

Let’s say, for example, that Jim is a builder who receives revenue of $100,000 for a home extension. Jim adds up the costs involved with the extension, which come to $90,000, leaving him with profit of $10,000.

In this example, Jim’s profit margin equals: $10,000 ÷ $100,000 x 100 = 10%

Is a 10% profit margin good, bad or average? There is no one-size-fits-all answer. Some sources claim the average profit margin across the building industry is about 6% 2 . Others report an average of 3% 3 .

What matters is that in an environment of high costs and stiff industry competition, it’s paramount that you understand your profit margin so that the business keeps performing well, and you avoid the prospect of underquoting and losing money on projects.

This brings us to the other issue of mark-up.

What exactly is mark-up?

I n the construction industry, mark-up is the additional percentage contractors add to the costs of a project.

Let’s say that Jim wants to quote on another job – a kitchen renovation. He works out it is going to cost him $20,000 in labour and $10,000 in materials, for a total cost of $30,000.

He adds a mark-up of 10%, giving the client a quote of $33,000.

So, how does this differ from profit margin?

This is a key point to consider because in the example above, Jim’s 10% mark-up will equate to a 9% profit margin. However, as many in the construction industry know, the margin used to quote on a project rarely equals the final profit margin.

Unanticipated issues with materials, weather delays, and clients who want to change plans midway through a project are just some of the events that can drive costs up. When this happens, a project delivered under a fixed price contract can end up with a profit margin that’s well below mark-up.

The problem is that when a mark-up is too narrow, a construction company can be left significantly out of pocket, and this cannot be sustained over time.

Steps to keep profits healthy

Studies indicate that profit margins across the construction industry have been in decline for some time 4 .

This is not great news for anyone in the industry, especially at present, when consumers and governments are keeping a sharp eye on spending.

On the plus side, a few simple steps can help to keep your business healthy and sustainable:

Get to know your numbers:
The days of ‘she’ll be right’ are long gone. Keeping track of profit numbers regularly lets you understand how the business is faring and take early steps to remedy declining profitability.
Review overheads:
Overheads are business costs not directly tied to a particular project. This may, for example, include the wages of an admin assistant, or the running costs of a company car.

Your business pays overheads regardless of how many projects are underway. Yet many business owners are in the dark about how much it costs each month just to keep their business open.

Get to know your overheads and consider ways they can be scaled back if costs are starting to climb higher.
Monitor receivables:
Chasing down outstanding invoices is no fun. It’s also costly and time-consuming.

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) says almost 40% of the requests it receives for assistance relate to slow-paying debtors and payment disputes 5 .

Chain dragging customers can leave your business strapped for cash. This can mean relying on high interest credit, which will further squeeze profit margins.

To support timely payment by customers, make payment terms clear on contracts and invoices, offer a variety of ways to pay (such as BPAY or direct debit), and have an accounts receivable ageing report that you review and track weekly to identify late payers before the debt becomes too old.

The bottom line

To recap, mark-up is what helps you quote a fee while ensuring your business makes money on every project. Profit margin is the percentage of revenue that can be identified as profit.

The challenge is to find the sweet spot between a mark-up that allows you to remain competitive, and achieving a profit margin that ensures the business remains profitable.

It can be a fine line to tread, and we encourage members of the construction industry to speak to the team at Brentnalls SA for guidance determining both mark-up and profit margins.

Reference

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Disclaimer

Brentnalls SA Sponsorship

Tue, 03 Sep 2024 22:15:00 GMT

Sponsorship

Adelaide Comets Under 16 Youth Team

4 September 2024

updated 3 October 2024

Kicking goals - next generation

Brentnalls SA is continuing its sponsorship of the Adelaide Comets Under 16 Youth team.

Our ongoing sponsorship reinforces our commitment to nurturing young talent and providing opportunities for growth both on and off the football (soccer) field.

Last year the team where runners up in the Under 15 Carls Jr Cup and this year they are hoping to go one better. Together with Adelaide Comets Football Club we look forward to inspiring the next generation and making a positive impact in the community.

Winners are grinners

The incredible work ethic of the boys moving into Under 16 saw them compete in the Carl's Junior U16 Cup Final.

Winning against the Croatia Raiders 3-1 on 22 September 2024. Congratulations to the team on an amazing effort.

Advisory boards: Invaluable for a family business

Sun, 01 Sep 2024 22:45:00 GMT

Business

Advisory boards: Invaluable for a family business

By Matthew Merrett, Principal

2 September 2024

Family businesses are often managed by one or two family members who lead the decision-making process. While this approach may initially work well for small businesses, more mature and expanding family enterprises can benefit from adopting an advisory board structure.

What is an advisory board?

An advisory board is a select group of independent people who provide a learning forum to offer advice and support to business’s owners, shareholders, and directors. Unlike a decision-making forum such as the board of an ASX-listed company, an advisory board provides non-binding strategic advice and is thus informal in nature. This relative informality gives an advisory board greater flexibility in structure and management compared to a board of directors.

While formal boards of directors have legally defined responsibilities, advisory boards are not regulated under the Corporations Act or corporate governance codes. Advisory boards advise but don’t make decisions like a formal board. However, if a board has a governance function, calling it an ‘advisory board’ does not exempt its members from their legal duties.

When would a small or medium business need an advisory board?

An advisory board can be a valuable resource in various scenarios. For instance, it can benefit a business experiencing rapid growth or one needing to raise working capital. Businesses looking to build strategic partnerships, facing significant decisions or changes in direction, such as entering new markets or launching products may also find advisory boards helpful.

Furthermore, businesses bringing in professional managers or dealing with succession planning issues can leverage the expertise of an advisory board. They can assist with managing business development cycles, staff development and help address challenges with other shareholders. Additionally, advisory boards can help raise the level of strategic conversation across all aspects of the business, particularly when dealing with specific technical and functional issues.

Simply put, an advisory board provides business owners or managers with access to an independent perspective and a “safe” space to discuss significant issues. While the advisory board’s role may evolve, it is beneficial to document a charter to give its members clear direction.

Defining roles and responsibilities

Advisory board members’ roles and responsibilities should be defined from the outset and encompass several key areas. First, they should develop a comprehensive understanding of the business, market, and industry trends, and provide a solid foundation for offering “wise counsel” on issues raised by the owners, directors, or management.

Due to their distance from day-to-day operations, advisory board members can offer directors and management unique insights and ideas. They encourage and support exploring new business concepts, acting as a valuable resource for executives.

Furthermore, advisory board members play a crucial role in fostering the development of a governance framework that enables continued growth without stifling the founders’ spirit or vision. By monitoring business performance, they challenge directors and management to consider options for improving the business.

Advisory boards work best if they meet often

Advisory boards typically meet quarterly and have structured annual plans, standard agendas, and action lists to govern outcomes and follow-up. They should also conduct a yearly review of their performance and achievements.

The advantage of regular advisory board meetings, which include family members, key personnel, advisors, or trusted business associates, is that they minimise the load placed on critical decision-makers. These meetings also facilitate intergenerational involvement and help mitigate resentment if things don’t go as planned. By allowing all board members to voice their opinions and buy into crucial decisions, the likelihood of success increases.

Board meetings cover many aspects of business management, including strategic planning, financial management, business improvement, human resources management, the establishment of policies and procedures, governance, and risk management.

Finally

If your business is growing, an advisory board can provide various benefits. We encourage business owners to speak with the Brentnalls SA team about the value of establishing an advisory board.

Further reading head to our News Article - Expanding your business, what to consider .

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Future SMS communication form the ATO

Wed, 28 Aug 2024 00:12:51 GMT

28 August 2024

Future SMS communication from the ATO

The Australian Taxation Office (ATO) has recently confirmed they will no longer include hyperlinks in unsolicited SMS to prevent phishing scams and enhance trust in ATO communications. The ATO has reported a significant rise in impersonation scams via SMS and email, with a notable shift in scam tactics and demographic targets. The ATO emphasises the importance of not sharing personal information unless necessary and provides resources for reporting and identifying scams.

For more details, visit - https://www.ato.gov.au/online-services/scams-cyber-safety-and-identity-protection/latest-updates-on-scams-cyber-safety-and-identity-protection

Disclaimer

Unlock the cashflow in your accounts receivables

Tue, 27 Aug 2024 06:22:51 GMT

Business

Unlocking the cashflow in your accounts receivables

By Shali Manolev, Partner

27 August 2024

Maintaining a healthy robust cashflow is essential for all businesses. However, unpaid invoices can severely impact cashflow, causing unnecessary stress that may hinder growth. Here’s some tools which can enable you to improve your business cashflow without having to wait weeks or possibly months for invoices to be paid.

The impact of late payments on Australian businesses

A new report by bank payment company GoCardless 1 highlights Australian businesses’ struggle with late payments. More than half of Australian companies fear an increase in late-paying customers in 2024. This concern is well-founded, as one in five Australian business owners and decision-makers estimate annual losses between $6,000 and $30,000 due to late payments. These losses can substantially impact on a businesses financial health and growth.

Recognising the severity of this issue the Federal Government, in the 2024-25 Budget 2 , allocated an additional $25.3 million to improve payment times for small businesses, supplementing the $8.1 million provided in Mid-Year Economic and Fiscal Outlook (MYEFO) 2023–24. This funding aims to enhance the Payment Times Reporting Regulator’s capabilities, including naming slow-paying businesses.

Despite these efforts, businesses with a pile of unpaid invoices still face cashflow challenges. So what tools are at your disposal to assist with this.

What is invoice financing?

Invoice financing, also known as “accounts receivable financing” or “receivables financing”, allows businesses to borrow money against outstanding invoices. This method helps maintain consistent cashflow despite customers’ varying payment terms or delays.

Instead of waiting for the customer to settle the invoice, the business borrows the invoice amount from a lender. It repays this loan when the invoice is paid, typically with some interest. A typical interest rate is around 10% annually 3 . The actual cost depends on several factors, including the business’ creditworthiness.

There may also be a service fee and a fee for due diligence, as the lender needs to analyse the invoices to be lent against.

How it works

Invoice financing is relatively straightforward.

Picture this: you deliver your product or service to a client and send them an invoice with a 30-day payment term. You’re in a holding pattern for the next month, waiting for that payment to come through.

Meanwhile, your cashflow is taking a hit, and unless you’ve got a hefty cushion of working capital, covering your operating expenses can become a real challenge.

Invoice financing is simple compared to other funding options such as “invoice factoring”, which involves selling receivables to a third party for them to collect.

With more lenient qualification requirements, a business with a clean financial slate will likely get approved. This cashflow boost means you can offer flexible payment terms to customers, a game-changer for newer businesses without ample liquid capital. Unlike factoring, invoice financing keeps invoice control in your hands, sidestepping unwanted third-party involvement.

To utilise invoice financing for better cashflow, the following is an example of the steps that can be taken:

Issue an invoice to a customer: After delivering goods or services to your client, issue an invoice as normal.
Submit the invoice to an invoice financing specialist: Select a lender that offers invoice financing services and submit your invoice along with any necessary supporting documents.
Receive an advance: According to Moula, the lender will typically advance you 80% of the invoice value, and the money will arrive within 2-3 days, minus any fees. Some lenders may even provide same-day advances.
Get the remaining balance: When your customer pays the invoice, the lender will release the remaining balance to you after deducting any outstanding interest charges.

Invoice discounting

Another method for unlocking the cashflow within your trade debtors is invoice discounting. This is where the business has the standard payment terms offering its customers i.e. 14/30 days, however, should the customer pay significantly earlier than this, they receive a discount on their invoice.

An example of this would be that a business issues an invoice to a customer for $1,000 + GST and that invoice has payment terms of 14 days. However, you offer invoice discounting where should the customer pay within 4 days, they can get a 2% ($20 + GST) discount on this invoice. The customer pays in 4 days and you receive $980 + GST 10 days earlier than your payment terms.

Discounting may assist labour intensive businesses who are having to pay their employees periodically but may not receive the cash from the work performed for a significant period after.

Selection of this discount is important to ensure it’s incentive enough for the customer to want to pay early but not significant enough to effect your overall profit.

Finally

To learn more about how to unlock your cashflow gaps from unpaid invoices, contact Brentnalls SA today.

References

Discuss Further?

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Summary of recent tenancy reforms for landlords and agents

Sat, 24 Aug 2024 23:30:00 GMT

Property Investment Updates

Landlord's

By Brentnalls SA Team

22 August 2024

Summary of recent tenancy reforms for landlords and agents

Effective from July 1, 2024, South Australia's rental laws have been modernised to better protect renters while ensuring landlords can still manage properties efficiently. Key changes include:

Termination of Tenancies: Tenancies can no longer be ended without a valid, prescribed reason. Valid reasons for termination now include needing the property for personal use, planned renovations, or sale (as per below).
Minimum Housing Standards: New requirements ensure that properties meet minimum standards for safety, cleanliness, and habitability at the start of each tenancy.
Drug Testing and Remediation: There are now specific regulations for testing properties for drug contamination and steps required for remediation.
Alterations and Pets: Tenants now have more rights to make minor alterations and keep pets, with certain conditions.
Domestic Abuse Protections: Enhanced protections for tenants experiencing domestic abuse, including the ability to terminate leases early without penalty.
Privacy and Property Rights: New rules restrict landlords' access to tenants’ private information and set clear guidelines on entering rental properties.
Rent and Inspections: Regulations have been updated on rent increases, inspections, and maintenance responsibilities to ensure fairness and clarity.

New evidence requirements for rental terminations

Recent changes to the Residential Tenancies Act 1995 has introduce stricter evidence requirements for landlords terminating tenancies. Here are the essentials:

Demolition required: Demolition permit and a contract with a builder.
Repairs/Renovations required: Photos, written statement, and either a tradesperson’s quote or a building permit.
Landlord/Family Occupancy required: Statutory declaration stating who will move in and no new tenancy within six months.
Sale of Property required: Signed contract of sale.

Ensure you have the right documentation to avoid legal issues. For further information, please contact your Brentnalls SA advisor .

Disclaimer

Getting better returns on your superannuation

Wed, 21 Aug 2024 21:58:25 GMT

Superannuation

Getting better returns on your superannuation

By Yanli Ye, Manager

Around one in four Australians lack confidence that they will have sufficient superannuation to fund a rewarding retirement 1 . While there are multiple ways to grow your super balance throughout your working life, the way your super is invested can have a significant impact on the final balance of your super on retirement.

Most Australians have the flexibility to select the underlying investments for their super – regardless of whether they use a professional managed superannuation fund (APRA) or a self-managed superannuation fund (SMSF).

This choice matters because different investments impact the returns, and also the level of risk, for your super savings.

The balance between investments which can provide capital growth (such as shares and property) and those more focused on investment income (such as fixed interest and cash) is crucial. There are five main asset classes and the risk versus return you can expect from each is summarised:

One of the benefits of having a SMSF is the flexibility and control you have over investments. Fund trustees can make decisions regarding the fund’s product selection, or they can seek the advice of a financial advisor.

Additional fees may be charged when using managed investments or investment platforms. These fees may not be paid in cash from the fund but may be embedded within the capital value of your investment.

If you feel you are losing money inside super, or your superannuation is consistently underperforming, we suggest you review your investment allocation to check if it is in line with your financial objectives and risk profile.

Finally

Your Brentnalls SA advisor can also prepare an analysis of the returns your superannuation has earned to date and compare them against market-leading superannuation funds.

Reference

1 https://www.finder.com.au/news/millions-too-poor-to-retire-2023

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FBT implications on credit card reward points

Tue, 13 Aug 2024 03:19:38 GMT

Business

FBT implications on credit card reward points

By C hristina Gulliver, Partner

13 August 2024

Fringe benefits can be a useful way to attract and retain quality staff. However, it can be a minefield for businesses to navigate – even credit card reward points could land you with a tax bill.

‘Fringe benefits’ are the perks that employees may enjoy in addition to their wage and salary. Common examples include a car for private purposes or reimbursement for private expenses, such as school fees.

The Government worked out many years ago that these benefits could be seen as a substitute for taxable income. Enter fringe benefits tax (FBT), set at a flat rate of 47% 1 , which (by no coincidence) mirrors the top marginal tax rate plus Medicare.

“One area of notable complexity can be credit card reward points.”

‘Fringe benefits’ aren’t always obvious

Part of the FBT challenge is that fringe benefits come in a variety of forms.

Some are easy to identify. Paying an employee’s childcare costs is a fairly obvious fringe benefit.

Other perks are less easy to recognise as a fringe benefit. For instance, giving a present costing more than $300 to a worker attracts FBT.

In other cases, the rules can seem inconsistent. While cars have long been subject to FBT, since July 2022, employers don't pay FBT on benefits provided for eligible electric cars. (Review our information sheet for further details on FBT benefits for eligible electric cars .)

The upshot is to speak to Brentnalls SA if you are unsure about any non-wage or salary perks provided to staff.

Credit card rewards can be especially uncertain

One area of notable complexity can be credit card reward points.

Loyalty schemes that offer points for card spending have ballooned in Australia, and they are available with both personal and business credit cards.

The ATO is taking a keen interest in employee use of both business and personal credit cards that offer rewards including frequent flyer points. And it can be remarkably easy for a business to inadvertently rack up an FBT liability.

Scenarios

Let’s say a business allows a staff member to redeem reward points accumulated on a business credit card that is used to pay for personal expenses. The reward points are likely to be viewed by the ATO as a taxable fringe benefit.

Alternatively, an employee may use their own credit card to purchase goods that relate to the business, with the cost being reimbursed to the employee. Here too, any card reward points can be seen as a taxable fringe benefit.

Talk to us for FBT advice

FBT is a complex area and often confusing. Even something as innocuous as credit card reward points could expose your business to an FBT liability.

We encourage business owners to speak with the Brentnalls SA team for expert answers to your FBT questions.

References

https://www.ato.gov.au/tax-rates-and-codes/fringe-benefits-tax-rates-and-thresholds

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Mastering Money: 4 tips to writing a budget

Sun, 23 Jun 2024 22:00:00 GMT

Business

Mastering money: 4 tips to writing a budget

By Wade Crane, Associate

24 June 2024

A solid budget is the foundation for any successful business. Whether you're a startup or a seasoned enterprise, managing your finances should be considered paramount for growth and sustainability. However, compiling a business budget can be daunting, especially if you're new to the process. This article highlights four important tips to help you write a business budget.

Understand your income and expenses: The first step in creating a business budget is to understand your income and expenses. Take the time to analyse your revenue streams, including sales, investments, and any other sources of income. On the flip side, identify all your expenses, including fixed costs like rent and utilities, variable expenses such as materials and labour, and one-time costs like equipment purchases. Utilise accounting software or spreadsheets to organise this information effectively.
Be realistic and conservative: When projecting your income and expenses, having a realistic yet conservative approach is essential. While aiming for ambitious revenue targets is tempting, it's crucial to base your projections on historical data, market trends, and reasonable assumptions. Similarly, when estimating expenses, factor in potential fluctuations and unexpected costs. Building a buffer into your budget can help cushion any financial surprises and ensure you're prepared for unforeseen challenges.
Prioritise essential expenses: Not all expenses are created equal. When writing your business budget, prioritise essential expenses critical to your operations and long-term growth. These may include investments in marketing and advertising, employee salaries, technology upgrades, and research and development (R&D). By focusing on these critical areas, you can allocate your resources more effectively and maximise your return on investment (ROI).
Monitor and adjust regularly: A business budget is not set in stone. It's a dynamic tool that requires regular monitoring and adjustment to reflect changing circumstances and goals. Establish a system for tracking your actual income and expenses against your budgeted figures, either monthly or quarterly.

Finally

A well-crafted business budget is more than just a financial roadmap—it's a strategic tool that empowers you to make informed decisions, manage resources effectively, and achieve your business objectives. Seek professional advice from accountants, financial advisors, or business consultants. These experts can provide valuable insights, identify potential hidden spots, and help you optimise your budget for maximum effectiveness. Their guidance can give you the confidence and clarity to make sound financial decisions and propel your business forward.

For more information on this topic head to:

Budgeting for Growth

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Cashflow and managing projects - Part Three

Sun, 02 Jun 2024 22:00:00 GMT

Construction Industry

Cashflow & managing projects

Part three

By Construction Team

3 June 2024

In our final part of this three part series “Cashflow & managing projects”, we delve into managing scope creep, and technology challenges while making sure you have the right people in place.

Managing scope creep

Developing strong project reporting practices allows companies to identify scope creep and manage this challenging aspect of every project. Scope creep is when a project’s scope changes and the project work starts to extend, or “creep”, beyond what was agreed initially. With just about any project, change is inevitable, but it’s the uncontrolled changes that delay projects and cause scope creep.

For example, if a sub-contractor arrives at a job site and is asked to do extra work outside the scope, this cost is usually borne by the lead contractor, and often without the customer signing off on the variation. Many construction businesses are reluctant to ask customers to approve a variation.

"Good luck going back to the customer to seek a variation payment..."

This is a risky practice, especially if the variations have blown the budget, a situation often aggravated by inadequate WIP reporting.

Good luck going back to the customer to seek a variation payment after the work is done and the subcontractor paid. It can usually be too late if you realise this several months after the project has been handed over to the client.

The technology challenges

The construction industry has been notoriously slow in digital adoption—with Excel sheets, A3 drawings, and clipboards still commonly used to manage large projects. Not surprisingly, the sluggish technology adoption has heightened the complexities of managing project profitability. Paper documents are unwieldy and lead to inaccuracies, duplications, and mistakes.

Likewise, accounting departments and Project Managers relying on spreadsheets are operating with 20th Century technology that will most likely leave them overwhelmed by inventory resources and vendor updates, which can change quickly.

Despite the techno tardiness there are software solutions available that address the unique needs of the construction industry. Digitisation, combined with cloud-based technology, provides real-time access to data, helping to improve the industry's WIP scheduling success.

"Successful project reporting involves having the right people in the right seats."

Have the right people in place

Having the right software in place is just the start. To succeed in managing a project, you need the right people in place who know how to use digital tools and the right metrics to utilise to ensure project success, including:

Maintaining accurate, real-time data

You’ll need to digitise your processes.

Tracking work completed rather than just hours or labour costs

By taking this approach, a construction business will be alerted early if productivity falters and overruns creep in.

Estimating percent to complete more accurately

By using real-time and historical data to spot project trends.

Knowing your ‘cost to complete’ (ETC)

The ETC is the measure that shows you the remaining cost you should expect to pay to complete a project. Note, that ETC isn't the final overall expected project budget - this is called Estimate at Completion (EAC).

Successful project reporting involves having the right people in the right seats. Those holding the keys to the reports must understand the job, the scope, and planning process. It’s important to have the right people on board to ensure your reports help deliver a true profit position in each respective reporting period.

Learn more about how Brentnalls Construction solutions can support your business and help you to improve your profitability by requesting a discussion with one of our specialists.

You can read the previous parts here:

Cashflow and Managing Projects: Part One

Cashflow and Managing Projects: Part Two

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Software Corner - 2024 Software trends

Thu, 30 May 2024 04:48:09 GMT

Software Corner

2024 Software trends to embrace for success

17 June 2024

As the digital environment is rapidly progressing; businesses constantly seek innovative software solutions to streamline operations, enhance productivity, and drive growth. From small startups to large enterprises, investing in the right software can make all the difference in gaining a competitive edge.

Let's look into some of the latest software trends that are revolutionising how businesses operate.

Artificial Intelligence (AI) Powered Analytics: AI-driven analytics software takes data analysis to new heights by providing actionable insights and predictive capabilities. These advanced analytics tools can sift through vast amounts of data, identify trends, and make recommendations to optimise business strategies. Whether it's customer behaviour analysis, demand forecasting, or supply chain optimisation, AI-powered analytics software is becoming indispensable for businesses of all sizes.
Cloud-Based Collaboration Tools: With remote work becoming increasingly prevalent, cloud-based collaboration tools are necessary for teams to stay connected and productive. These tools offer features including file sharing, real-time document editing, video conferencing, and task management, making it easier for teams to collaborate regardless of physical location.
Robotic Process Automation (RPA): RPA software automates repetitive tasks and processes, freeing up valuable time for employees to focus on more strategic initiatives. RPA bots can perform various functions such as data entry, invoice processing, and customer support, increasing business efficiency and cost savings.
Customer Relationship Management (CRM) Software: CRM software is a cornerstone for businesses looking to manage customer relationships and drive sales effectively. Modern CRM platforms offer many features, including lead management, sales automation, marketing automation, and customer support, empowering businesses to deliver personalised experiences and foster long-term customer loyalty.

Finally

In conclusion, staying ahead requires leveraging the latest software trends to streamline operations and drive innovation. While the cost of implementing these software solutions may vary, the long-term benefits of efficiency, productivity, and profitability make them a worthwhile investment for businesses of all sizes. Embracing these trends will position businesses for success today and future-proof them for tomorrow's challenges. If you would like to discuss these further, call us at Brentnalls SA.

Read our previous Software Corner article:

MYOB AccountRight Live

Disclaimer

Understanding the impact of Australia's Temporary Full Expensing initiative and what that means for you

Sun, 26 May 2024 22:00:00 GMT

Business

Understanding the impact of Australia's Temporary Full Expensing initiative and what that means for you

By Christina Gulliver, Partner

27 May 2024

Background

In response to the economic challenges posed by the COVID-19 pandemic, the Australian Government introduced the Temporary Full Expensing initiative on 6 October 2020; aiming to bolster businesses by facilitating investment through immediate deductions for equipment purchases. This initiative, which concluded on 30 June 2023, was designed to stimulate economic activity by allowing businesses with aggregated turnovers of less than $5 billion to access immediate deductions for depreciating assets without any limit. Under this concession, eligible businesses could claim an immediate deduction for the full purchase price of equipment, and any remaining existing small business depreciation pools were reduced to nil and claimed in full.

It is crucial to note that while this resulted in a tax deferral, it did not lead to tax minimisation, as it merely accelerated deductions that would have been claimed over several years. For many businesses, the end of the Temporary Full Expensing initiative raises questions about their future tax planning strategies. While the Temporary Full Expensing initiative provided crucial support to businesses during a challenging period, its conclusion necessitates a strategic rethink for businesses navigating the current economic environment.

Implications

Understanding the implications of this initiative and adapting accordingly will be vital for businesses seeking to thrive in the post-pandemic era. We have highlighted the three distinct depreciation methods and their respective implications.

"Understanding the implications of the changes in depreciation concessions is vital for businesses to continue to strive."

* Assuming taxable entity is a base rate entity.

What next?

As at 30 June 2023, most businesses will have depreciating assets with a $nil tax value – this means that when asset are sold, 100% of the proceeds are assessable if the asset has been claimed under the temporary full expensing rules. This creates a tax problem, managing unexpected tax profits on trade-ins of equipment and vehicles.

We can see this in a worked example, the business has purchased an excavator for $200,000 on 1 July 2021 and claimed a 100% deduction for the excavator in the 2022 financial year. It is now 1 April 2024 and the business wants to sell the excavator and buy a new excavator for $180,000. The sale price for the current excavator is $110,000. We can see that the business will incur $20,750 in tax payable due to this asset change-over.

Tax trap: Equipment sales / change over and taxable profit

Previously under the old 100% write off rules, if a new asset purchased was more than the old one sold, one would end up with a deduction for the difference. However, from 1 July 2023, the sale proceeds of an asset claimed under temporary full expensing are added to income and only a small claim for depreciation results from the new purchase, typically 15%, resulting in a taxable profit from the changeover. A solution to partly offset this tax issue is to purchase the new asset before 30 June and claim 15% in 2024. Then sell the old asset after 1 July so the sale proceeds are in the 2025 financial year. This will then align with a 30% depreciation deduction in the second year of the new asset ownership, meaning a total of 45% of the new asset will be depreciated by the time the old asset sale proceeds are included in taxable income.

This timing strategy effectively offsets the majority of the sale proceeds with depreciation on the new asset: we note there is different treatment where the asset being sold was previously a small business pool asset and is being replaced with a new pooled asset.

While this timing strategy proves beneficial, it's important to acknowledge that purchasing the new asset before selling the old one may not always be feasible, particularly in cases involving trade-ins.

Another option is to consider purchasing other assets valued at less than $30,000 (immediate write off available) or bringing forward asset purchases without a corresponding changeover. Each scenario requires careful consideration of depreciation coverage and individual business circumstances.

Understanding the implications of the changes in depreciation concessions is vital for businesses to continue to strive. Strategic timing strategies, such as purchasing new assets before selling old ones, can effectively offset sale proceeds with depreciation on a new asset, but feasibility may vary and the rules are complex, requiring careful consideration and review.

Call our team today to discuss end of year tax planning. It can set your business up for the following financial year, backed by the possible benefit of valuable tax savings.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Tax planning: Imperative for agribusinesses

Sun, 19 May 2024 22:00:00 GMT

Agribusiness Industry

Tax planning: Imperative for agribusinesses

By Matthew Merrett, Associate

20 May 2024

Tax planning is important in most industries to ensure businesses minimise tax and maximise wealth. It is incredibly imperative for agribusinesses, as these businesses and their individuals have access to tax-saving opportunities not available to everyone.

It always makes good financial sense to plan ahead to make the most of the available tax savings.

Removal of the temporary full expensing

As discussed in our earlier article, " Temporary full expensing: Beware of the sting in the tail ", the removal of the temporary full expensing, and replacement of the now announced $30,000 small business immediate write-off, could cause a significant increase in the taxable income of your enterprise.

Agribusinesses must consider the impact of any assets or equipment traded in or sold during the financial year.

Future changes in tax rates

Stage 3 tax cuts, although changed from their original form, also need to be considered when looking at the current year's tax. All individuals whose personal income exceeds $18,200 receive a tax reduction in the following financial year. Therefore, expenditure incurred or Farm Management Deposits (FMDs) taken out this year could have a more significant tax saving this year, rather than if incurred next year.

A change in tax rates also brings a change in the primary production averaging rates, which needs to be considered when forecasting the current year.

Prepayment of expenditure

Primary producers can look to prepay expenditures to bring forward tax deductions. The main prepayments of expenditure are agriculture supplies, loan interest, and leases.

However, this can be a balancing act for agribusinesses as prepaying expenditure can potentially deliver tax savings, yet, when applied to interest, the rate needs to be fixed to action a prepayment and therefore, your interest rate doesn't fluctuate with any RBA movement. With agricultural supplies, you can be locked in with that supplier, which may diminish your ability to access price comparison advantages.

All of these must be considered carefully to ensure that prepaying expenditure does not drain cash reserves that could be used to take advantage of other opportunities through the following financial year.

Other tax savings strategies include:

Farm Management Deposits

Investing in FMDs can help individual primary producers reduce fluctuations in taxable earnings caused by economic and seasonal changes to primary production income. They are a reduction in an individual's primary production income in the year they are taken out and primary production income in the financial year they are withdrawn. However, these must be held for at least 12 months; otherwise, the tax benefit of investing in an FMD will not be retained. Although interest is paid on such FMDs, this is assessable income to the individual to which the account is in the name of. There is also a maximum limit for deposits of $800,000 per person.

Superannuation Contributions

You could look to maximise superannuation deductions before 30 June 2024, head to our superannuation article for all the information.

"The end of the financial year is always a valuable time to review estate and succession plans."

Looking at the bigger picture

Tax-driven measures implemented by an agribusiness should be viewed through the lens of succession planning. This is often an incredibly complex area for farmers.

By their nature, family farming businesses involve close personal connections. Conversations around succession planning can be emotional, especially as some members of the next generation will run the farm, others will not, and the 'retiring' generation will likely retain a decisive say and interest in the

business.

The end of the financial year is always a valuable time to review estate and succession plans – which can cue a rethink of the way the agribusiness is structured. The main point is that tax planning strategies can and should feed into succession plans. Having a professional third party, such as your Brentnalls SA agribusiness specialist, engage in these conversations can be a wise investment for the future.

The time to plan is now

With the end of the financial year fast approaching, agribusinesses have a window of opportunity to take advantage of these tax strategies prior to 30 June.

As part of Brentnalls tax planning service, we can do the following:

Review expected annual results,
Look at the strategic options available to you,
Meet with you before the end of the financial year,
Ensure you can maximise the opportunities available to you; and
Make sure the business and family group entity structure are fit for purpose.

Call our team today to discuss end of year tax planning. It can set your agribusiness up for the following financial year, backed by the possible benefit of valuable tax savings.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Navigating the payroll tax crisis

Sun, 12 May 2024 22:00:00 GMT

Health Industry

Navigating the payroll tax crisis: Challenges facing medical practices across Australia

13 May 2024

While the focus of the payroll tax crisis has been on the GP sector, the issue is not limited to general practice and is likely to have a profound impact on privately operated health practices throughout Australia, including specialist, dental, and allied health practices.

What is Payroll Tax?

Payroll tax is a state-based tax levied on the wages paid by employers. The tax rate and threshold vary across different states and territories in Australia. Typically, businesses are required to pay payroll tax if their total wage bill exceeds the specified threshold, which varies from state to state (further details in this article).

There is no question that medical practices that exceed the threshold for employee remuneration need to pay payroll tax. The critical question in this crisis is whether the remuneration received by independent practitioners working within medical practices is assessable for payroll tax.

This issue has been percolating for several years due to several cases brought by state revenue offices to retrospectively assess payroll tax on payments made to various practitioners. This action signalled a change in the interpretation of the Payroll Tax Act in respect to independent practitioner arrangements that were previously thought to be exempt if set up correctly.

Revenue SA Payroll Tax Amnesty for General Practices

The outcome of the Revenue SA payroll tax amnesty for general practices should have delivered greater clarity for medical practices in SA and across state borders. For the vast majority of practices that applied for the amnesty, the key outcomes were:

Their service agreements are determined to be Relevant Contracts under the payroll tax relevant contractors provisions, meaning payments to the practitioner are assessable for payroll tax.
Practices were granted amnesty from retrospective action by Revenue SA.
Practices were advised that payments made to practitioners would be assessable from 1 July 2024.

The contentious part in reference to 3. is the question of what constitutes a “payment”.

The appeal of the Thomas and Naaz case to the Supreme Court Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 offers some guidance for the management of Independent Practitioners' payments. Section 63 of the ruling indicates that if patient fees are paid directly to the practitioner, and the only transaction between the practitioner and the practice is the payment of the service fee, then there is no payment from the practice to the practitioner that would be deemed assessable wages for payroll tax purposes.

As a consequence of this ruling, practices across Australia have been advised to direct patient fees owed to independent medical practitioners into the practitioner’s bank account.

Queensland Revenue Office’s (QRO) Public Ruling PTAQ000.6.2 1 issued 21 February 2024 affirms in paragraphs 47, 56-62, that where payments of patient fees are paid directly to the practitioner, these payments are not assessable for payroll tax.

The payroll tax rulings issued by the SA, NSW and Victorian Revenue Offices have no such paragraph and Revenue SA, has indicated to practices, that they do not apply the same interpretation of the Act and their view is that the payments by patients and Medicare into practitioners' individual bank accounts are "Third-Party Payments" that are assessable for payroll tax.

What about Harmonisation?

Aside from Western Australia, the payroll tax legislation is meant to be harmonised to deliver a National Seamless Economy 2010 Harmonisation Joint Protocol | Payroll Tax 2 . The table below summarises the current state of play across all states demonstrating that these recent developments have created disharmony and confusion for medical practices across Australia. As practices seek to navigate the murky situation where the business viability of running a medical practice could depend very much on which state the practice is located.

Unfortunately, it appears that until Revenue SA’s interpretation is legally contested, there is unlikely to be a clear and harmonised state of play across Australia.

What can practices do?

1. Increase patients' fees

It is reported that practices are being advised to significantly increase their fees to cover the additional cost of payroll tax. However, this strategy means that the practitioner is retaining the majority of that revenue and the practice is only gaining the portion from the associated service fees.

Increasing the practitioner’s net income also increases the practitioner's remuneration for payroll tax purposes and the amount of payroll tax to be paid.

Practices with high bulk-bill rates would need to increase private patients' fees to an unaffordable level to generate sufficient additional revenue to fund payroll tax.

2. Increase service fees

Practices are also considering increasing the service fees charged to the practitioners, but this is difficult to do particularly with the current workforce shortage across most sectors.

3. Charge a payroll tax fee

It has been reported that some practices have already added or are considering adding a payroll tax fee as an additional cost on each invoice. The fee is then clawed back from the revenue received by the practitioner in addition to the service fees being charged.

A payroll tax fee can only be charged on a private fee so practices with high bulk billing rates would again find it more difficult to raise the funds necessary to cover the additional payroll tax burden.

4. Prepare for the worst

Payroll tax will continue to be the hot topic for medical practices across Australia, and there is still more of this saga to play out across the various states. The current state of confusion and disharmony is only likely to get resolved when a Court determines which of the state’s interpretations is correct.

For the time being, at least in South Australia, all medical practices need to be considering their payroll tax strategy to ensure that they are not caught with an unexpected payroll tax bill. This is particularly critical for specialist and allied health practices that do not have any assurances from the SA Government protecting them from retrospective action.

Conclusion

The payroll tax crisis presents a formidable challenge for medical practices across Australia, threatening their financial sustainability and ability to deliver essential healthcare services to communities nationwide. Addressing this crisis requires concerted action from government, industry stakeholders, and the broader community to enact meaningful reforms that support the viability of medical practices and ensure continued access to quality healthcare for all Australians.

Previously written articles:
MyMedicare: The foundation for funding reform for general practice

RACGP wins payroll tax reprieve for SA general practice

Independent practitioner arrangements

Disclaimer

ATO updates

Thu, 09 May 2024 22:00:00 GMT

Tax

ATO updates

By Brentnalls SA Team

10 May 2024

General interest charge and shortfall interest charge—beware new ATO penalty

Starting on 1 July 2025, taxpayers will no longer be eligible to claim a deduction for general interest charge (GIC) and shortfall interest charge (SIC) incurred in the 2025-2026 income year onwards.

This decision comes of the back of a noticeable surge in debts owed to the government. The measure was originally introduced to incentivise taxpayers to accurately assess and promptly settle tax debts.

Furthermore, the rates of GIC and SIC have seen an increase from 11.15% to 11.38% and 7.15% to 7.38% respectively since 1 January 2024.

These rates are higher than most bank institutions so taxpayers should review their borrowing arrangements prior to 1 July 2025 to ensure these are structured in the most tax effective way.

Individual income tax rates and threshold changes

On 25 January 2024, the government announced changes to the previously legislated stage 3 tax cuts on individual income tax rates and thresholds starting from 1 July 2024 . These changes have received royal assent.

From 1 July 2024 , the proposed tax cuts will:

reduce the 19% tax rate to 16%
reduce the 32.5% tax rate to 30%
increase the threshold above which the 37% tax rate applies from $120,000 to $135,000
increase the threshold above which the 45% tax rate applies from $180,000 to $190,000 .

Disclaimer

Affiliation Conference April 2024

Wed, 08 May 2024 03:27:07 GMT

National Affiliation Conference

Brentnalls Conference April 2024

By Matthew Holden, Managing Partner

8 May 2024

Over the course of 3 days in April 2024, a few of the leaders at Brentnalls SA attended the bi-annual Brentnalls Affiliation Conference.

These conferences provide a great opportunity for us to learn from fellow professionals, and we always leave with a long action list to implement back home.

Starting on Wednesday, April 17, the attendees broke out into different sessions, including the tax specialist group and business advisory group, where we shared knowledge and stories with the other affiliation firms. Also on Wednesday, a panel session organised by the "Women in Brentnalls" committee provided an opportunity to learn from some of the new equity owners of the member firms on their career journey so far. This included Wade Crane from Brentnalls SA, who spoke about his start here as an undergraduate in January 2017 and his progression to being a leader and equity owner of the firm.

On Thursday, a packed schedule had us learn from our respective firms via practice updates, whereby each firm shares information about practice matters, such as marketing, systems & processes, & HR issues. A great opportunity to learn from each other's successes (and mistakes – although these are few!).

We also heard from guest speakers, including demographer Simon Kuestenmacher, who gave a session on ‘Demographic shifts: navigating new customer values in a changing nation’ , and Alan Fitzgerald, who is a specialist in IT systems and processes for accounting firms, and gave a session on ‘Putting the Relationship back in Client Relationship Management & AI’ . In addition, we heard from Nick Zouros from FYI Docs, which is a new & innovative document management system that we have implemented over the last 2 years. Nick presented further enhancements they are looking at providing for firms like ours.

On Friday, James Mason from Mindshop hosted a session on ‘Advisors of the Future’ , and Robyn Jacobsen from the Tax Institute provided a session on new and upcoming changes in tax for our clients and ourselves as a practice.

The conference was held in Melbourne, and it was wonderful to learn and share with fellow affiliates.

Back left to right: Gavin Mitchell, Ryan Buiatti, Matthew Merrett, Matthew Holden and Wade Crane.

Front left to right: Nadine Hill, Amalia Caporella and James Moore.

Maximise your superannuation deductions before 30 June 2024

Tue, 07 May 2024 22:00:00 GMT

Superannuaton

Maximise your superannuation deductions before 30 June 2024

By Superannuation Team

8 May 2024

The current year maximum concessional contribution is $27,500. This needs to have cleared within your superannuation fund by the 30 June 2024. You are then required to notify your superannuation fund, and receive an acknowledgement from your fund stating the amount you will be claiming as a tax deduction.
If your superannuation balance is less than $500,000 and you’ve made concessional contributions of less than the concessional contributions cap in prior years you may be able to make additional concessional contributions in subsequent financial years of any unused amounts. Unused cap amounts can be carried forward up to five years.
If you earn less than $58,445 p.a., you could be eligible for the government co-contribution. The government will contribute 50 cents for every dollar of after-tax contributions you make to your superannuation fund up to a maximum of $500. The full benefit is available for income earners under $43,445 and phases out where adjusted taxable income is between $43,445—$58,445.
Ensure superannuation contributions for employees are paid and cleared by 30 June 2024. We recommend paying these by 15 June to ensure the payments clear with the superannuation funds before 30 June 2024.

From left to right: Olivia Phillips , Intermediate Accountant, Nadine Hill , Principal and Yanli Ye , Manager recently attended the 2024 National Conference SMSF.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Leave management: A roadmap for business

Mon, 06 May 2024 22:47:16 GMT

Business

Leave management: A roadmap for business

By Sarah Hall, Associate

10 June 2024

Managing employee leave effectively is non-negotiable, why? If your employees have been accruing excess annual and Long Service Leave, addressing accumulated leave is essential for your business's financial health. Moreover, excess unused leave can pose challenges for staffing resources, such as disruption of operational continuity and strain on resources, especially during critical periods if an employee takes extended leave.

However, it's not just about ensuring operational continuity; it's also about fostering a workplace culture that values work-life balance and employee well-being. In Australia, where regulations around leave entitlements can vary between states and territories, understanding and implementing leave management strategies should be important for a business's financial health and operational efficiency.

Employee well-being is a cornerstone of success, and mastering leave management has become a critical factor. Beyond mere compliance with regulations, effective leave management can unlock organisations' hidden potential, potentially driving productivity, increasing employee satisfaction, and, ultimately, business growth. Furthermore, unused Long Service and Annual Leave are recorded as liabilities on your business’ balance sheet.

Regulations and leave entitlements: what you need to know

Understanding the regulations: Long Service Leave entitlements vary by state and territory in Australia. For instance, in South Australia, employees can take or cash out their Long Service Leave 1 after completing ten years of service. Employers and employees can discuss the option of a pro-rata long service leave entitlement that becomes available after 7 years of continuous service. It's essential to be aware of specific rules and any exceptions that may apply to certain categories of workers, such as those in the construction industry or public service. We note Long Service Leave is applicable to casual workers as well as permanent staff.
Navigating annual leave entitlements: Annual leave entitlements are regulated by the Fair Work Act 2009 and the amendments 2 , with provisions for negotiating cashing out accrued annual leave. However, some conditions must be met, including maintaining a balance of 4 weeks of annual leave. Most awards allow cashing out annual leave, but limitations exist to ensure employees maintain adequate leave balances. It's important to note that full-time and part-time employees are entitled to paid annual leave, which accrues based on their ordinary hours of work. Casual employees do not have paid annual leave entitlements but may receive a casual loading instead.
Continuous learning and development: Effective leave management requires learning and adapting to evolving regulations, industry trends, and employee preferences. Investing in training and development opportunities for HR personnel and managers can ensure they stay informed about changes in leave policies and best practices. Additionally, fostering a culture of continuous learning encourages innovation and promotes a growth mindset within the organisation.

Leave management is an essential aspect of workforce management

Benefits of a well-organised leave schedule: Implementing a leave schedule can lead to a more efficient business operation. A well-organised leave schedule ensures that your business is adequately staffed during busy periods and allows your employees to rejuvenate, leading to improved performance and morale without the pressures of staff shortage.
Flexible work arrangements: There has been a growing trend towards flexible work arrangements, including remote work, compressed workweeks, and job sharing in recent years. Embracing flexibility in scheduling can accommodate diverse employee needs and preferences, ultimately contributing to a more inclusive and adaptable workplace culture. Integrating flexible work options into leave management practices can enhance employee satisfaction and retention while maintaining operational efficiency.
The role of technology: With many applications available, leveraging technology can streamline leave management processes and enhance efficiency. Many businesses opt for leave management software solutions that automate leave requests, approvals, and tracking, reducing administrative burdens and ensuring compliance with regulations. These platforms often provide valuable insights into leave patterns and trends, empowering businesses to make data-driven decisions.
Promoting work-life balance: While maintaining a healthy work-life balance for employees is beneficial, it's worth reiterating the benefits of prioritising employee well-being. Organisations prioritising work-life balance tend to experience lower turnover rates, higher employee engagement, and increased productivity. In addition, by fostering a culture that values and supports employee well-being, businesses can attract top talent and cultivate a positive workplace environment.

Taking action

To effectively manage leave in your business, consider the following:

Assess the situation: Determine if there is excess leave accumulation and its impact on operations and finances.

Implement a leave schedule: Develop and implement a schedule that meets operational needs and employee well-being.

Stay informed: Stay up-to-date with relevant regulations and seek professional advice to ensure compliance.

Communicate transparently: Communicate leave policies and entitlements to employees, fostering a culture of transparency and trust.

Address excess leave: Take proactive steps to address excess leave accumulation, such as encouraging employees to take leave or implementing leave cash-out options where applicable.

Finally

In conclusion, mastering leave management is not just a compliance requirement; it's a strategic imperative for Australian businesses seeking to thrive in today's competitive landscape. By addressing excess leave, embracing technology, promoting work-life balance, adopting flexible work arrangements, and prioritising continuous learning, businesses can unlock their workforce's full potential and drive long-term sustainable growth.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Exploring the power of the 80/20 Principle

Sun, 05 May 2024 23:06:22 GMT

Exploring the power of the 80/20 Principle

By Rick Albertini, Partner

6 May 2024

The 80/20 Principle, also known as the Pareto Principle, unveils a fascinating insight into efficiency and productivity. A small portion of causes, inputs, or efforts often leads to a significant portion of outcomes, results, or rewards.

Let's put it into context

Consider this:

80% of outcomes are driven by merely 20% of inputs.
Similarly, 80% of consequences stem from just 20% of causes, and
80% of results emerge from a mere 20% of effort.

This intriguing pattern extends across various domains, including business.

Consider these examples in business:

Roughly 80% of sales frequently come from only 20% of products or services offered, and the same proportion of sales often originates from a select 20% of customers.
Astonishingly, around 20% of customers contribute approximately 80% of an organisation's profits.

But why does the 80/20 Principle matter?

Its importance lies in its counterintuitive nature. When examining financial data on causes and results, this principle often reveals a disproportionate distribution, offering profound insights into business dynamics.

Implementing the 80/20 Principle in our daily lives can yield significant improvements. Individuals can enhance their effectiveness and happiness, profit-seeking corporations can boost profitability, and non-profit organisations can deliver meaningful outcomes to their communities. By distinguishing the vital few from the trivial many, resources can be strategically allocated to maximise value and minimise waste.

Furthermore, adopting the 80/20 Principle in business can yield numerous benefits, empowering organisations to optimise their operations, enhance productivity, and drive sustainable growth. Here are some key advantages:

Increased efficiency: Focusing on 20% of activities that generate 80% of results – enables businesses to streamline their processes and allocate resources more efficiently.
Enhanced profitability: By directing attention and resources towards the most profitable activities, businesses can maximise their revenue and profitability. Whether it's focusing on top-performing products, high-value customers, or lucrative market segments, simply leveraging the 80/20 Principle can lead to significant improvements in the bottom line.
Resource allocation: Such as time, money, and manpower – 80/20 Principle provides insights into a more strategic approach. By concentrating efforts on the most productive areas of the business, leaders can prioritise resources and avoid wastage.
Improved decision making: Embracing the 80/20 Principle encourages data-driven decision-making based on empirical evidence rather than assumptions or intuition. By analysing the relationship between inputs and outputs, leverages the decision-making process through informed choices about where to invest resources and which strategies to pursue for maximum impact.
Greater focus and clarity: Prioritising the vital few enables businesses to maintain a clear focus on their core objectives and key priorities. This clarity of purpose offers less distractions, and fosters a more agile and responsive culture.
Enhanced customer satisfaction: By identifying and catering to the needs of top-performing customers, businesses can deliver superior products, services, and experiences that resonate with their most valuable clientele. This targeted approach not only strengthens customer relationships but also drives loyalty and advocacy, leading to long-term business success.
Competitive advantage: By consistently delivering exceptional value and focusing on their strengths, organisations can differentiate themselves from competitors and position themselves as leaders in their respective industries.
Continuous improvement: By regularly assessing and refining strategies and processes, it allows adaption to changing market conditions, capitalise on emerging opportunities, and stay ahead of the curve.

80/20 has two approaches

80/20 Analysis is a systemic, quantitative method of comparing causes and effects.

80/20 Thinking is a broader, less precise, and more intuitive procedure, compromising the mental models and habits that enable us to hypothesize what are the causes of anything important in our lives, to identify these causes, and to make sharp improvements in our position by redeploying our resources accordingly.

These approaches provide businesses the opportunity to exponentially multiply valuable outcomes by recognising and leveraging the vital few. By nurturing the few things that work exceptionally well and minimising investment in low-value endeavours, organisations and individuals can achieve remarkable results with minimal input.

Finally

In conclusion, the 80/20 Principle delivers extraordinary efficiency and productivity. By embracing this principle, we can harness the power of the vital few to propel ourselves toward tremendous success and fulfilment. At Brentnalls SA, our Brentnalls for Life is a framework (below) and is designed to establish what you want out of life and create the pathway to get there. More importantly, the 80/20 Principle is a strategy we use to get you there. If you want to know more about how we deliver the Brentnalls for Life framework, contact us at Brentnalls SA to make an appointment.

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The patient experience that drives quality patient referrals

Tue, 23 Apr 2024 04:36:03 GMT

Health Industry

The patient experience that drives quality patient referrals

By Danny Haydon, Principal/Health Division

23 April 2024

If growing your healthcare business is reliant on quality patient referrals, think no further than your current loyal and satisfied clients. Their word-of-mouth referrals are invaluable and have the potential to provide your practice with a high volume of quality new patient referrals.

Ask your team these questions:

When is ‘the moment’ when patients are fully engaged with you and your practice?
When do they put their trust in you to provide them with the health outcomes they desire?
When do they start enthusiastically referring your practice to their family and friends?

Securing highly engaged patients who are advocates for your practice takes planning and does not happen by accident. It requires all aspects of your business management systems to work seamlessly together, creating a practice environment where clinical and support teamwork go hand in hand. As a team, you let the patient know they are at the centre of their care and that they are supported and in the right place to reach their health goals.

The patient experience can be identified through seven key areas, as shown in the infographic below.

Lead generation
Your value proposition and alignment with potential patient's values
Why your practice? (Convenience/recommendation)

Quality service standards/practice culture alignment
Clinical and support staff training and support

Location and access
Quality modern facility

Patient connection
Communication and follow-up
Training and support

Meets patients' needs and expectations
On-going care and referral to allied services

Encourage and reward
On-going communication, such as newsletters and social media

Mon itoring success
On-going training and patient experience system development

A patient experience system provides your practice with an integrated system of patient care and connection and with this, business growth.

It starts with defining your team’s collective goals and values, then drawing a roadmap of possible improvements that can be actioned through assessment and review of your current systems.

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Disclaimer

Agile Leadership

Sun, 07 Apr 2024 23:00:00 GMT

Business

Agile leadership: What is it?

By Bradley Barnes, Partner

8 April 2024

According to the simplest definition, the word “agile” means having the ability to move quickly and easily and being able to think and understand quickly.

Given the huge number of publications on the concept, it may seem like it is just another buzzword in today’s world of business. However, this is not the case when it comes to agile leadership. In its recent report, the World Economic Forum published a list of top skills required to be successful as leaders in 2020, many of them related to being more agile.

The Agile Business Consortium (the UK based not-for-profit body) released their first white paper on the topic in late 2017. To this day, this document remains to be an extremely relevant guide on how to be agile as a business leader.

According to it, the keys to agile leadership lie in the concepts of Communication, Commitment and Collaboration and the following nine principles:

Communication

1. Actions speak louder than words

2. Improved quality of thinking leads to improved outcomes

3. Organisations improve through effective feedback

Commitment

4. People require meaning and purpose to make work fulfilling

5. Emotion is a foundation to enhanced creativity and innovation

6. Leadership lives everywhere in the organisation

Collaboration

7. Leaders devolve appropriate power and authority

8. Collaborative communities achieve more than individuals

9. Great ideas can come from anywhere in the organisation

Agile organisations can thrive in a changing environment and are better equipped to adapt to unpredictable challenges.

To be an agile leader, you may need to change your mindset from reactive to creative and from top-down decision-making to empowering autonomous teams within your business.

Change can be difficult. If you would like to read the white paper, click the link:

https://www.agilebusiness.org/page/Resource_paper_nineprinciples

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Disclaimer

Software Corner: MYOB AccountRight Live

Sun, 24 Mar 2024 21:00:00 GMT

Software Corner

MYOB AccountRight Live

By Brentnalls SA Team
25 March 2024

MYOB AccountRight Live offers the following features:

Anywhere access - Make your accounts available from any internet connected PC which has MYOB AccountRight Live installed. Your accountants and bookkeepers can have access as well as yourself and other staff members in your business (which can be restricted).

Multiple users - One set of accounts, same time access for your team, bookkeeper and accountant.

Backup data in the cloud and / or to your PC - Access your accounts exclusively in the cloud and / or make a local backup to your PC whenever you like.

Data Security - data files do not need to be transferred via email or USB . If your computer is stolen you can stop access. If your computer is destroyed you will still have the file in the cloud to access, the data is stored on servers which are backed up and maintained by MYOB (using the Windows platform and with storage in America). The servers use similar data encryption to that used by the banks.

Automatically import and match bank transactions - Bring your bank transactions into your accounts and automatically match them to your data, which will eliminate hours of manual input such as dates, amounts and transaction descriptions.

Automatic updates - Your subscription includes access to all the latest software and payroll updates upon release.

Real time data - with the bank feeds in place you will be able to have real-time data which will enable you to make decisions based on more current information and you will be able to make better decisions for your business. You will have access to management reports being generated within days, implementation of budgeting and key performance indicators (KPI) reports which gives you the ability to work with us to improve your business and achieve strategic goals.

24/7 Service and Support - You’ll always have access to MYOB software experts to answer your queries on the phone and online with freedom to cancel at any time.

Prices shown are as at 1 December 2023. Try MYOB free for 30 days and then get 50% off the next three months.

* Prices shown include GST. Brentnalls SA clients can access a 30% discount when subscribing through us (total offer duration 5 years which at the end will automatically revert to the standard pricing). MYOB Cover subscriptions have a minimum term of 12 months, with fixed pricing for this term and will include a subscription to use MYOB AccountRight Live services for a single company file. If you require additional files to be in the cloud the cost will be 60% off the monthly price of the product.

Disclaimer

A cautionary tale - GST refund fraud and ABN scams

Sun, 17 Mar 2024 21:00:00 GMT

Business

A cautionary tale - GST refund fraud and ABN scams

By Bradley Barnes, Partner

18 March 2024

The Australian Taxation Office (ATO) last year brought to light a significant upswing in attempts to perpetrate Goods and Services Tax (GST) refund fraud, resulting in an astonishing $850 million in fraudulent claims involving approximately 40,000 individuals.

This revelation underscores the ramifications of fraudulent activities associated with registering an Australian Business Number (ABN) and false claims for GST refunds.

Comprehending the scam

The modus operandi of this scheme involves individuals fabricating fictitious businesses and ABN applications. Subsequently, they submit contrived Business Activity Statements (BAS) to obtain illegitimate GST refunds. The sophistication of these schemes has prompted the ATO to deploy advanced risk models, collaborating with financial institutions such as the Reserve Bank of Australia and the AUSTRAC-led Fintel Alliance to identify and mitigate such fraudulent activities.

Real-Life implications

An example of this is a woman who garnered over $250,000 in fraudulent GST refunds from 63 false returns lodged between February and July 2022, resulting in a 20-month jail term. This underscores the gravity with which authorities are addressing such fraudulent behaviour.

Red flags and reminders

The ATO has disseminated critical reminders to the broader community to prevent falling victim to such scams:

The ATO does not extend loans, and any claims suggesting otherwise are false.
If one is not engaged in a business or enterprise, there is no necessity for an ABN or to file a GST return.
Attempting to register a business to claim a refund retroactively is a high-risk endeavour.
False declarations may affect eligibility for other government payments.

Impact on legitimate businesses

Regrettably, authentic businesses may encounter additional challenges as the ATO intensifies ABN and GST registration controls to forestall fraudulent claims.

What to do if involved

In the event of inadvertent entanglement in such a situation, the ATO encourages disclosure as soon as possible. Proactively coming forward may lead to a more favorable outcome than facing later, more stringent consequences. Seeking assistance from the ATO or engaging a trusted advisor, is pivotal to rectifying the situation.

Staying well-informed and exercising caution is paramount in a landscape teeming with fraudulent schemes. Remember that seeking independent advice before taking action is essential if something appears too good to be true.

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Understanding loan accounts in trusts: a simple guide

Tue, 12 Mar 2024 21:03:55 GMT

Health Industry

Understanding loan accounts in trusts: a simple guide

By Shali Manolev, Partner

11 March 2024

If you've ever come across the term "loan account" in the context of trusts, you might have wondered what it means and how it works. Loan accounts in trusts can be a bit tricky to grasp, but we're here to break it down in plain English.

What is a loan account?

A loan account is like a virtual piggy bank within a trust that keeps track of money transactions between individuals and the trust itself. It's not an actual pile of money, but rather a record of how much money you or others have contributed or withdrawn from the trust. Think of it as a running tally of financial transactions within the trust.

How can the loan account increase when I haven't actually loaned any funds?

This is where things can get a bit confusing, but it's important to know that a loan account doesn't always involve actual loans. Instead, it keeps track of the movement of money related to you, in and out of the trust. So, even if you haven't given or received a traditional loan, your loan account balance can change based on various transactions.

Example: Let's say you put $10,000 into the trust initially. You receive a monthly distribution of $1,000 and you are entitled to a profit allocation at the end of the year of $15,000. So, your loan account balance actually increases by $3,000 to $13,000, due to the fact that not all of your profit share was paid out during the year.

This means that your loan account can go up even if you didn't physically lend any money to the trust. That’s because the trust can have income or assets that it distributes to you or allows you to use. When this happens, the trust records this as a loan or entitlement to you, even though you didn't give them money.

Where did the funds in the loan account come from?

The funds in a loan account can come from several sources:

Contributions: When you or someone else puts money into the trust, it increases the loan account balance.
Income and Gains: Money earned by the trust, such as interest, dividends, or capital gains, can also boost the loan account.
Withdrawals: If you or someone else takes money out of the trust, it decreases the loan account balance.

Why are they sometimes different for various principals?

In a trust, there can be multiple principals or beneficiaries. Each principal might have a different loan account balance based on their individual contributions, withdrawals, and earnings from the trust.

Example: Imagine a Medical Service Trust with 4 associated Doctor owners owning different numbers of Units in the Trust. The Service Trust distributes profit based on the ownership proportion and so different doctors receive different amounts. Each Doctor would have their own loan account, reflecting their various financial interactions with the trust.

What happens to my loan account when I exit?

Exiting a trust involves settling your loan account. If your loan account is in the negative (meaning you owe the trust), you'll need to repay the trust for any funds or assets you've used. If your loan account is in the positive (the trust owes you), you'll receive the funds or assets attributed to you.

Example: If your loan account balance is $50,000 when you decide to exit the trust, you might receive that amount as a payment or as assets equivalent to that value.

In a nutshell, loan accounts in trusts are like IOUs that help keep track of who owes what within a trust. They can increase for various reasons, and the source of the funds can vary. When you leave the trust, your loan account will be settled to ensure you get what you're owed or pay back what you owe. If you would like to discuss loan accounts in trusts further, we are here to help.

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Disclaimer

Cashflow & managing projects - Part Two

Mon, 04 Mar 2024 20:39:30 GMT

Construction Industry

Cashflow & managing projects

Part Two

By Brentnalls Construction Team

5 February 2024

In our first part of this three part series “ Cashflow & managing projects ”, we emphasised the importance of cashflow and management of work in progress (WIP) reporting. In part two, we discuss ways to mitigate financial risk through project reporting and avoiding contract penalties.

Project reporting mitigates financial risk Project reporting is paramount for companies and the need to have adequate working capital in their balance sheet in order to:

carry costs,
wait for payment of progress invoices issued to customers, and
borrow money.

With construction enterprise resource planning (ERP) software in place, companies can use the data within the system to generate reports that identify inefficiencies and potential overruns that provides further the following essential information:

Efficiency improvement opportunities.

The project report assists project managers to identify where:

a project may require more or less staff,
how to allocate labour to improve efficiency,
manage subcontractor spend, and
ways to trim material expenditure and sweeten profits where possible.

Extra clarity and transparency

A report shows the progress on-site and can alert a project manager to possible cost increases and fast-approaching or missed deadlines that could cause cost overruns.

Faster and more accurate business decisions

Allowing a business lender to provide underwriters with more precise data about a project and the business will improve underwriting analysis and risk and faster access to finance, where required.

Notably, when there is more accurate information about a project’s progress, expenditures to date, and remaining budget, it becomes easier to minimise financial risks upfront.

Other pain points and avoiding contract penalties

Without the proper project reporting management tools in place from the get-go, businesses will always be playing catchup. If you don't manage a project from the outset you'll quickly fall behind schedule. There can be hefty penalties in some contracts for not meeting timeline milestones that will eat away at cashflow and ultimately profits.

There is a clear separation between project reporting and project management. That being project reporting is about managing a project's profitability and cashflow. So, for example, let's assume you have a series of progress payments that must be paid as a commercial building goes up.

Let's also assume you're a builder, and you're 15% through the build phase, and you're only getting a progress payment once construction reaches 20%.

You need to track your WIP for the first 15% of the project or the time spent accurately to tell if you're under or over budget.

Then, by the time you make the first progress payment claim, you might be so far out of kilter with budgets and projected costs that you might have already lost a chunk of money before you hit the first progress payment.

Having timely and accurate project reports enables a business in real time on a daily, weekly or fortnightly basis to have accurate data on where all jobs contributing to the project are at, and whether you're under or over budget.

On the flip side, project management involves managing critical activities, including timelines, booking surveyors and technical personnel, hiring equipment, ordering materials, letting out to all subcontractors, and checking plans, as well as overseeing operational plans, people, and budgets. If all the hard work is done in the planning phase the project will more than likely run smoothly and on or above budget.

If a builder or project manager only looks at these project reports sporadically, there will be a significant risk to a business. If they wait until the project's completion (or near the end of completion) and once the final reports are delivered, the job might be so far off track that it has lost significant money, and there is nothing that can be done to get it back on track.

In the third instalment, we discuss managing scope creep and the risk involved if the variations have blown the budget. Technology challenges that are often found within the industry through sluggish adoption. Do you have the right people in place? All this and more in our Autumn 2024 newsletter .

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Disclaimer

Employee vs. contractor

Mon, 04 Mar 2024 20:39:27 GMT

Agribusiness Industry

Employee vs. contractor

By Sally Storey, Partner

29 March 2024

Your rural property frequently hosts skilled professionals—electricians, veterinarians, and mechanics—who are engaged for specific tasks. Additionally, independent contractors are sometimes used for specialised jobs such as shearing or truck driving. Clearly defining a worker’s status as an employee or a contractor is crucial due to differing rules, rights, and responsibilities.

Contractors offer advantages to your agribusiness over employees by potentially sidestepping additional costs such as superannuation, leave, Workcover, and payroll tax liabilities. Yet, this path is riddled with potholes, and the devil often lies in the detail. Court rulings have also focused a spotlight on this issue, highlighting the crucial need for agribusinesses to make accurate distinctions between employees and independent contractors.

On February 9, 2022, the High Court issued rulings in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2. These rulings hold significance concerning the ATO’s advice and directives affecting the classification of workers. The ATO has released new rulings and a decision impact statement for those interested or willing to explore further details i .

More recently, in October 2023, the High Court rejected the Commissioner of Taxation’s application for special leave to appeal the Full Federal Court decision in JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76. This outcome is a notable victory for individuals seeking clarity regarding applying the ‘principally for labour’ definition of an employee within the Superannuation Guarantee (Administration) Act 1992 (Act) ii .

The case emerged from disputes over superannuation guarantee charges issued by the ATO to JMC Pty Ltd. The core of the JMC case revolved around determining the employment status of Mr Harrison, a lecturer, and whether he should be categorised as an employee or an independent contractor. Mr Harrison’s engagement was outlined in a contract that detailed his responsibilities and compensation and granted him the right to subcontract his tasks with the employer’s consent. The crux of the matter in JMC concerned the common law definition of an employee as per section 12(1) of the Act, as well as the alternative extended definition under section 12(3) of the Act, which states:

“If a person works under a contract that is entirely or primarily for their labour, that person is considered an employee of the other contracting party.”

The Full Federal Court found that Mr Harrison was not an employee within the ordinary definition of that term, nor was the contract ‘wholly or principally’ for Mr Harrison’s labour. Consequently, imminent legislation now aims to safeguard independent contractors who exhibit characteristics akin to employees.

The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Bill) was presented to Parliament on September 4, 2023, and is presently under review in the House of Representatives.

Distinguishing between contractor and employee

The ATO explains the difference this way: “Employees work in and are part of your business. Contractors are running their own business iii .”

At its core, the fundamental divergence lies in the nature of the engagement. An employee operates within a contract of service, subject to the employer’s directives and often contributing within a more structured and directed environment. Conversely, an independent contractor enters a contract for service, running their own business, offering specialised services, and retaining substantial autonomy over their work.

The criteria for determining these distinctions often involve a multifaceted evaluation. Factors such as the level of control exerted over work methods and schedules, the hours invested, expectations of continued engagements, assumption of financial risks, provision of tools and equipment, payment methodologies, entitlements to leave, opportunities to engage with other entities, and the right to delegate or subcontract all contribute to this nuanced evaluation.

Who is a contractor?

Contractors, functioning as independent businesses, typically negotiate the terms of engagement directly with the client. This negotiation often includes outlining project scopes, timelines, service deliverables, and payment modalities. However, due to the diverse nature of projects, contractors might enlist the expertise of subcontractors to execute specific tasks integral to the project but beyond their direct expertise.

For instance, in an agribusiness scenario, a general fencing contractor might engage a subcontractor to handle the fencing of a paddock. In this intricate web of relationships, a distinct subcontractor agreement delineates the terms governing the interaction between the contractor and subcontractor. This agreement expands upon the responsibilities, deliverables, payment structures, and other pertinent clauses crucial for a successful collaboration.

Penalties and charges

The legal ramifications of misrepresenting these relationships are profound, especially under regulatory frameworks such as the Fair Work Act 2009. Instances where the nature of the association is misrepresented could result in the classification of a “sham contracting arrangement,” leading to potential legal repercussions for the party responsible for such misrepresentation.

Penalties and charges will also apply if you incorrectly treat an employee as a contractor, including:

PAYG withholding penalty – for failing to deduct tax from worker payments and send it to the ATO
super guarantee charge (click here for more information).

In addition to the super guarantee charge – which imposes nominal interest and an administrative charge in all cases on top of the super guarantee shortfall – the ATO can impose additional penalties of up to 200% of the super guarantee charge.

Distinguishing between an employee and an independent contractor requires a thorough assessment considering factors such as PAYG Withholding, Superannuation, Fair Work, LSL regulations, and Workcover laws in different areas. This evaluation ensures legal and operational framework compliance while promoting transparent and mutually beneficial professional relationships.

To gain a deeper understanding of the distinctions between contractors and employees and to safeguard your agribusiness from potential pitfalls, get in touch with Brentnalls SA.

i https://www.ato.gov.au/Business/Employee-or-contractor/Difference-between-employees-and-contractors/

ii https://www.holdingredlich.com/jmc-pty-ltd-high-court-rejects-the-commissioner-s-leave-to-appeal

iii https://www.ato.gov.au/Business/Employee-or-contractor/Difference-between-employees-and-contractors/

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Why culture matters - the competitive advantage

Mon, 04 Mar 2024 20:39:23 GMT

Business

Why culture matters - the competitive advantage

By Leanne Schuppan, Associate

29 January 2023

Culture is more than just a vibe that permeates the workplace during daily tasks. It serves as the focal point where the businesses values converge, influencing performance and enhancing its long-term return on investment. It plays a crucial role in attracting and retaining employees that serves as a juncture for a competitive advantage. A healthy corporate culture isn’t about flashy perks: free lunches, unlimited time off, and dog-friendly offices. It’s about how employees are valued, trusted and encouraged to contribute to the values of an organisation.

Creating the ideal business culture defies a one-size-fits-all formula. How your culture develops will always be distinct to your organisation and its individuals. Elements that hold significance for them might not be explicitly outlined here, or in any list, for that matter. Our perception of the employee experience varies widely from person to person. Creating and sustaining a strong company culture isn’t just the responsibility of the CEO or upper management, it’s an organisation-wide effort.

Consider these elements as a starting point and then explore how you can build upon them to encompass what holds significance for your organisation.

Trust is a must

Renowned author and thought leader Patrick Lencioni emphasises, "When there is trust, conflict becomes nothing but the pursuit of truth, an attempt to find the best possible answer." Trust stands as a fundamental element in robust cultures. Businesses must establish trust across their people, suppliers, and leadership teams when they seek to drive high performance.

Trust fosters open communication, mutual respect, shared goals, and a commitment to employee growth and development. It serves as the cornerstone upon which all other elements of culture are built. Trust is necessary for retention and employee engagement; at its worst, it can affect a business performance and brand recognition in the community.

Consider this: employers who are trustworthy, credible, and personable exert a significantly positive influence on employee retention, overall workplace satisfaction, employees' likelihood to recommend their business and their motivation to go above and beyond at work.

"words on paper or the lobby wall mean nothing if they are just words."

Values are valuable

The DNA of an organisation lies in its business culture – reflecting its values, beliefs, and commitment to upholding standards in day-to-day operations. Organisations can leverage values to create and maintain a culture that makes the enterprise a desirable place to work.

Values describe the behaviours and mindset expected from employees to realise the businesses vision. Regularly assessing your vision and values statement is crucial as the organisation evolves and adapts to changing times. Shared values can engage and empower, fostering innovation, creativity, and productivity. As Susan Hostetter (executive vice president for HR at TAB Bank Ogden, Utah) aptly states , it's essential to remember that "words on paper or the lobby wall mean nothing if they are just words." Simply put, be true to the values you choose as they can be valuable to your organisation.

Leading the way

The success or failure of a team often hinges on leadership. A proficient leader can inspire, motivate, and instil purpose, while an ineffective one can demoralise, hinder productivity, and drive employees away. Leadership serves as a pillar of culture, empowering employees to fulfil the businesses mission and recognise the vital importance of their contributions to these objectives.

The great place to work - leadership effectiveness indexi gauges business leaders across four key areas, assessing how well they:

Align their words and actions
Avoid favouritism
Demonstrate competency, honesty, and approachability
Show a genuine interest in employees as individuals

Effective leadership goes beyond merely achieving targets; it involves fostering

a team mentality that ensures everyone collaborates to the best of their abilities. This collaborative environment, in turn, contributes to reaching the necessary targets. The encouraging aspect is that great leaders can be developed, not necessarily born.

Establishing a corporate culture demands considerable patience and unwavering

commitment.

In conclusion, the most significant lesson and the primary obstacle share a common thread. Establishing a corporate culture demands considerable patience and unwavering commitment. How your culture evolves will always be distinctive to your organisation and its individuals. Dedicating regular time to assess the efficiency of your businesses culture is a crucial step in the right direction and an opportunity to gain a competitive advantage against the competition.

i https://greatplacetowork.com.au/

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Disclaimer

Small business energy incentive

Mon, 04 Mar 2024 20:39:21 GMT

Small Business Energy Incentive

By Bradley Barnes

22 January 2024

Small businesses with less than $50 million annual turnover, will be able to deduct $1.20 for every $1 spent on expenditure that supports electrification and more efficient use of energy.

This bonus deduction will be available for expenditure incurred from 1 July 2023 until 30 June 2024. It applies to eligible assets or upgrades first used or installed ready for use during this period.

The measure will help small businesses make investments like:

electrifying their heating and cooling systems,
upgrading to more efficient fridges and induction cooktops, and
installing batteries and heat pumps.

The additional deduction will be available for eligible expenditure of up to $100,000 and is therefore capped at $20,000 for each business. Note that that this incentive does not apply to solar panels or electric cars.

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Disclaimer

Transfer balance account reports changes

Mon, 04 Mar 2024 20:39:17 GMT

Superannuation

Transfer balance account reports changes

By Nadine Hill, Principal

15 January 2024

In the latter part of 2022, the Australian Taxation Office (ATO) indicated its intent to reassess the existing deadlines for submitting Transfer Balance Account Reports (TBAR) with the aim of transitioning to a unified reporting framework. Subsequently, the ATO has finalised its decision.

On the 1 July 2023, the TBAR reporting process for all Self-Managed Superannuation Funds (SMSFs) was streamlined. It is now mandatory for all SMSFs to report transfer balance account events no later than 28 days following the conclusion of the quarter in which the event transpired.

What this means, as of 1 July 2023:

The total super balance of an individual will no longer be a determining factor for the reporting deadline.
The option for an "annual reporter" will cease to exist.

Please note that these changes only effect members that have commenced or are about to commence an Account Based Pension in their fund. Members that are 60 years or greater.

As a result of these changes, members will need to tell us if the following events occur during each quarter:

If you plan on starting a pension, or you would like to commute an existing accumulation account to a pension account.
If you plan on ceasing a pension.
If you have taken any lump sum (large amounts) from your fund.

If you have deposited any large amounts into your fund. For the majority of SMSFs, members typically encounter only one or two TBAR events throughout their lifetime. It's important to note that in some cases, an SMSF may need to submit a TBAR even earlier than the designated 28 days after the quarter's end.

If you would like to discuss this further, contact your superannuation team member to make an appointment.

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Disclaimer

New year, new strategies - 5 steps to get your business growing in 2024

Mon, 04 Mar 2024 20:39:06 GMT

New year, new strategies - 5 steps to get your business growing in 2024

By Rick Albertini, Partner

8 January 2024

The new year offers a fresh start and a chance to reset your business for growth. Here are 5 steps to position your enterprise for prosperity in the year ahead.

Each year brings its own unique set of opportunities and challenges.

None of us can say for sure what lies ahead over the next 12 months. What is certain is that taking the time now to prepare for 2024 can help all small- and medium-sized enterprises (SMEs) lay strong foundations for whatever the new year brings.

Our 5-point checklist hones in on the most effective strategies that time-poor business owners can take at this busy time to be ready.

Let’s review 5 ways to turn the new year into new opportunities.

1. Refresh your business plan

Drawing up a business plan is something most entrepreneurs do when they first launch their venture. It’s a sensible step. Business plans spell out what you are aiming to achieve—and how you’ll get there.

The problem is that once the venture is up and running, that initial business plan tends to be overlooked and outdated.

That’s a shame because revisiting your plan is a simple way to track your performance, understand which goals you have achieved, and provide clarity on what’s working and what’s not.

Your business plan is not a set-and-forget document. As a blueprint that sets out how your venture intends to be profitable and grow over short-medium-and long-term timeframes, it is worth reviewing your business plan annually.

The end of the year or beginning of a new one is an ideal time to reflect on any changes in direction, priorities or goals. This is especially important if you, or your business, have changed or evolved over time.

Key aspects of your business plan that deserve special scrutiny include:

Your vision statement – does your vision remain the same? Or has it changed since you first wrote your vision statement?
Your business goals – have your goals shifted? This may be the case if you have expanded into new markets or adjusted your product range in response to changes in the economy or commercial environment.
Milestones to achieve – review the milestones that you believe matter most to the success of your business. You may be surprised at how many goals you have achieved since you last reviewed your plan. This can provide valuable motivation to establish new milestones!

Software is available that can provide business plan templates or help to update your business plan. Bear in mind though, this is not a tick-and-click exercise.

Developing a plan that truly reflects your business calls for careful thought. Brentnalls SA can help you put together a plan that takes into account aspects of your operating environment, which you may not have considered.

2. Complete a SWOT analysis

A flip of the calendar is the perfect time to conduct a SWOT (strengths, weaknesses, opportunities and threats) analysis of your business.

It’s almost certain these different facets of your enterprise have altered over time as the business matures, the market evolves and you gain experience. SWOT analysis can be a useful tool that lets you:

Deepen your understanding of the business
Recognise areas that could be improved
Make key decisions such as introducing a new product or service line.

Your SWOT analysis doesn’t have to be extensive but it is worth getting multiple perspectives. Ask your team and your customers for their input to gain a more holistic picture.

3. Draft a cashflow forecast

Big businesses do it, governments do it, and there are compelling reasons for your business to do it.

We’re talking about drafting a cashflow forecast.

The ebb and flow of funds into and out of your business throughout the year shapes your ability to pay bills, invest in inventory, expand your team, and boost productivity through the purchase of new equipment.

Not only will a cashflow review leave you better placed to plan your business finances for the year ahead, it can be a money-saver, helping you identify and prepare for those periods when you could face a cash squeeze.

Having an up-to-date cashflow forecast is also something a lender will request if you apply for commercial finance at some point through the New Year. It can take time to draft an accurate cashflow forecast, and of course time is something many business owners don’t have enough of. If you would like assistance to create a cashflow forecast, Brentnalls SA can help.

4. Embrace innovation

In today’s rapidly changing world, innovation is critical for businesses to stay up-to-date with changing consumer preferences or staying ahead of the competition.

SMEs have a critical advantage over their larger counterparts. They are nimbler, less weighed down by legacy systems, and are well placed to respond to change quickly. It’s a head start worth capitalising on.

There can be a variety of ways to innovate. For some businesses it can mean rejuvenating their product/service mix to stay abreast of new trends. For others it can mean investing in different modes of delivery for their products and services.

In all cases, innovation means keeping your business relevant to its market, and prospering in the process.

The bottom line is that if you don’t innovate, your competition will, and your market share and profitability could suffer.

There can be tax-based incentives for businesses to innovate. Small businesses, with aggregated turnover below $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024 i . Also, corporate businesses might be eligible for the R&D tax incentive if they invest in innovation.

Before you invest in any new equipment as part of an innovation strategy, it is worth speaking to the tax experts at Brentnalls SA to know how this could

impact your venture’s tax position.

5. Engage an advisory board

As a SME owner, you can be called upon to wear many hats. This can be both exhausting and time-consuming. And the reality is that while many business owners are experts in the field in which their business is engaged, they do not always have broad brush experience in other areas including tax, legal, marketing and compliance matters.

At Brentnalls SA, we encourage small business owners to engage with external advisors, who can act as a sounding board for owners.

Having your own advisory board allows for collaboration, sharing of ideas and experience, and gives business owners the benefit of a ‘big picture’ outlook even when their business is small.

Our Business Advisory team has helped many small businesses benefit from our extensive experience, to ensure they meet their business and personal goals.

Our expert support spans:

Business Analytics
Cashflow, Budgeting and Performance
Efficiency Reviews
Management Reporting, and
Strategic Planning.

It is all about helping your business be the best it can be by acting as a sounding board for you, your partners, and other stakeholders in the enterprise.

What matters is that an advisory board has your back, helping you navigate a rapidly changing world. It can be the lynchpin that sees your business reach new heights as opposed to failing to reach its full potential.

We’re here to help – at every time of year

As we mentioned earlier, no one can say for sure what 2024 will bring. However, we do know that the new year will kick off with noteworthy challenges.

High inflation, a cost-of-living-crunch, high interest rates and consumers who are being forced to carefully consider discretionary spending patterns, all of which will impact the business community.

These are not insurmountable challenges. The key is to know that you don’t have to ‘go it alone’.

Remember, the Brentnalls SA team is ready to help by bringing our broad experience and professional skills to the table, to help your business forge ahead in 2024. It could be the X-factor that gives you a winning edge in 2024 and beyond.

i https://www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/small-business-support-20000-dollar-instant-asset-write-off#:~:text=Small%20businesses%2C%20with%20aggregated%20turnover,2023%20and%2030%20June%202024.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Christmas & New Year Closure 2023/24

Sun, 03 Dec 2023 21:00:00 GMT

Brentnalls SA Christmas and New Year Closure 2023/24

Our office will be closed from:

12.00 pm Friday, 22nd December 2023

and we will be back:

8.30 am Tuesday, 2nd January 2024

This year we are proudly supporting
Make-A-Wish Australia, bringing hope, strength, and joy to children with life-threatening medical conditions by granting a cherished WISH.

We would like to wish you all a happy and safe festive season.

Focus on your cashflow in the lead up to the festive season

Sun, 26 Nov 2023 21:00:00 GMT

Focus on your cashflow in the lead up to the festive season

By Bradley Barnes, Partner

27 November 2023 &

27 November 2024

As the festive season approaches, it's necessary for business owners to strategise and manage their operations effectively. More importantly, maintaining a healthy cashflow during this period is paramount.

The following checklist outlines key actions that business owners should consider in relation to sales, staffing, expenses, and funding matters.

Sales:

Invoice Early: To ensure you don't miss your customers' payment processing runs and timely payments, consider invoicing earlier in December.
Debt Collection: Focus on collecting outstanding debts before your customers' offices close for the holidays.
Prioritise Short Sales Cycles: Boost cashflow in the short term by closing any outstanding sales orders and emphasising sales with shorter sales cycles rather than complex transactions.
Inventory Management: Concentrate on sales that allow you to reduce inventory, particularly fast-moving items.
Work in Progress: Invoice for any outstanding work in progress.
Deal with Slow-Moving Stock: If you have old or slow-moving stock that hasn't sold, consider selling it at a loss to convert it into cash.

Staffing:

Staff Review: Assess your staffing levels to ensure you have adequate coverage during the holiday season.
Encourage Leave: Encourage employees to take leave if it aligns with your business's operational needs.
Evaluate Staff Composition: Examine the ratio of casual staff to permanent employees and adjust as necessary.
Overtime Management: Review and control overtime levels to prevent unnecessary expenses.

Expenses:

Discretionary Expenditure: Scrutinise all discretionary expenses, such as training and travel, and cut back where possible.
Hire Equipment: If you have hired equipment that won't be needed during the holidays, return it to reduce costs.

Funding:

Cashflow Forecast: Prepare weekly cashflow forecasts for December, January, and February to identify potential funding shortfalls.
Supplier Relations: If needed, consider renegotiating terms with key suppliers, contacting the tax office to discuss any tax-related matters, or exploring additional funding options through your bank.

If you require assistance with implementing any of these strategies, please don't hesitate to contact our office. The festive season can be a challenging but also rewarding time for businesses, and careful planning and execution can provide avenues for success.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Software Corner - Xero Update

Sun, 19 Nov 2023 21:00:00 GMT

Software Corner

Xero Update

20 November 2023

Xero at a glance for your business

We are seeing more clients than ever make the switch to Xero and loving the results.

Xero is online, so you can receive automatic bank statement feeds into your accounting software each day. You'll have much greater visibility of your cashflow and no more data entry or downloads.

Dashboard - A real-time view of your business at a glance, including bank balances, money coming in and going out, key accounts, and business ratios.

Online - Access to your accounts anywhere and at anytime. Your data is secure even if your computer is lost or stolen.

Work together - Give your accountant access so they can work on your books from anywhere and offer better advice.

Unlimited users - All for one monthly fixed price.

Banking - Connects with your bank accounts, making reconciliations simple and accurate.

Reporting - Generate and view interactive reports with ease.

Invoicing - See at a glance who owes you money. Customise, create, send and receive quotes and invoices.

Support – Unlimited, around the clock email support and detailed online help centre.

Add-ons – Link related software to Xero to reduce data entry and improve business overview.

Xero pricing increase

From 13 September 2023 , the price of Xero Business plans in Australia are priced as follows:

Payroll-only plans increasing to $15 per month
Starter plans increasing to $32 per month
Standard plans increasing to $65 per month

Premium 5 plans increasing to $85 per month
Premium 10 plans increasing to $99 per month
Premium 20 plans increasing to $125 per month
Premium 50 plans increasing to $170 per month
Premium 100 plans increasing to $205 per month

Ultimate 10 plans increasing to $115 per month
Ultimate 20 plans increasing to $135 per month
Ultimate 50 plans increasing to $180 per month
Ultimate 100 plans increasing to $215 per month

The price of any optional Xero add-ons will not change.

If you have a current Xero promo code, it will continue to be applied to the new pricing, until the code expires.

If you would like to discuss Xero further, please contact our office.

Note: if you pay your subscription through Brentnalls SA, you will receive 15% discount invoiced in advance.

Disclaimer

MyMedicare The foundation for funding reform for general practice

Sun, 12 Nov 2023 21:00:00 GMT

Health Industry

MyMedicare
The foundation for funding reform for general practice

By Danny Haydon, Principal/Health Division

13 November 2023

MyMedicare has been heralded by some healthcare leaders as the first step towards reforming the funding model for general practice which is currently based on the Medicare system created by the Hawke/Keating Government in 1984. While detractors consider it to be the first step towards the failed NHS capitation model implemented in the UK. Looking through the politics of funding general practice, this article investigates what MyMedicare means for your practice and your patients.

The facts

Voluntary Patient Enrolment

The MyMedicare system is voluntary and requires the patient and the practice to be willing to accept registration. Voluntary Patient Enrolment will be available from 1 October 2023, and all Australians with a Medicare or DVA card will be eligible to register with a practice. There is a requirement that the patients need to have attended the practice twice in 2 years, or once in 12 months for patients living in Modified Monash 6-7 regions.

The patient is registered with their practice and a preferred GP. There are three different ways in which patients can be enrolled:

Practices can register patients through PRODA, where the patient signs a consent form.
Practices can register patients through PRODA, subsequently accepted or declined by the patient through the Medicare app.
Patients can register themselves online through MyGov, subsequently accepted or declined by the practice through PRODA.

The registered practice and nominated GP will be visible on the patient’s MHR.

Patients can choose to change their registration to a different practice at any time, and the practice losing this will be notified through PRODA.

Funding implications of MyMedicare

The funding impact associated with MyMedicare registration will be limited in the first 12 months through the initial phase of implementation.

1st November 2023 - Telehealth Services

The new longer MBS telehealth consultations (Levels C, D & E) will be linked to MyMedicare.
The triple bulk billing incentive will apply to these telehealth consultations for children under 16, pensioners, and concession card holders.

1st August 2024 – General Practice Aged Care Incentive

The General Practice in Aged Care Incentive (GPACI) applies for registered aged care residents.
The current aged care service incentive payment (SIP) will be replaced with a SIP/PIP (practice incentive payment) combination where 70% will be paid to the GP and 30% to the practice linked to registration.
Incentives will reward the provision of proactive care for aged care residents such as annual health assessments and other planning items.

1st November 2024 - Chronic Disease Management

The high value Chronic Disease Management (CDM) items will be linked to a patient’s registration in MyMedicare, to support continuity of care for people with chronic and complex conditions.
For registered patients, only the practice that they are registered with will be able to claim the Chronic Disease Items.
Patients who are not registered in MyMedicare will still be able to receive Chronic Disease Management items from their usual GP.

Bundled Payment Initiatives

A new blended funding payment will support better care in the community for people with complex, chronic diseases who frequently attend hospitals (10+ times per year).
These arrangements will roll out progressively across the country over three years from FY2024–25. Initially only 9 PHN regions will be involved, with 9 more regions in the subsequent year, and all 31 regions by the third year.
The bundled payment is reported to be $2,000, for an estimated 13,000 eligible patients across Australia.
Further bundle payments will be rolled out over time.

Our thoughts

Health Care Homes by stealth

Having been actively involved in the design and implementation of Health Care Homes (HCH), the Brentnalls Health team sees MyMedicare as the national roll-out of a HCH type funding model. HCH was a trial of an alternative model of funding of care for patients with chronic care needs, based on voluntary patient registration and bundled payments.

While there is conjecture regarding the success or failure of the HCH trial, there were practices freed from the shackles of the MBS system that demonstrated the model worked and delivered more flexible and tailored care for patients. In our experience, the successful practices were those that were able to register a critical mass of patients which created greater flexibility for how they managed the funding from the bundled payments.

It is anticipated that the same principle will apply for the early adopters of MyMedicare however with all practices participating, MyMedicare will become business as usual, and practices will be able to move forward from an initial focus on registering patients, to focus on delivering the services associated with registration.

Soft launch

The Government has purposefully planned for a soft launch of MyMedicare with very limited funding opportunities linked to registration, however, more funding is expected to be channelled through this platform in the future. John Butler, Minister for Health and Aged Care said “the true power of MyMedicare is not what it is … but what it allows. MyMedicare is the foundation upon which we can build a range of blended funding models to better serve the needs of patients that fall through the cracks of our 1980s Medicare.”

The problem with implementing such a soft touch is that the initial measures applying through the next 12 – 14 months offer very little incentive for patients to register.

What is the benefit for patients?

This appears to be the missing piece in the strategy. The ‘soft launch’ also means that there is very little benefit that practices can offer registered patients. Is the promise of “greater continuity of care” and access to longer telehealth services enough to motivate patients to register for MyMedicare?

Practices may need to develop their own communication strategies for promoting MyMedicare and incentivising their patients to register.

Long term financial viability

The government intends to use MyMedicare as the foundation for funding reform in general practice. While all parties report that they are strongly committed to retaining the MBS fee-for-service model, any further funding boosts or financial incentives for general practice will be channeled through MyMedicare. Practices may elect not to engage with MyMedicare for now but, in time, it is expected that financial viability for general practices will be dependent on effectively managing the interface with MyMedicare and having a high proportion of their relevant patients registered.

Payroll Tax

Payroll tax continues to be the hottest issue in the sector, mostly focused on general practice, but it is also a concern for specialist, dental and allied health practices engaging independent practitioners. Concerns have been raised that the bundled payments may create a payroll tax liability if practices receive the funds and pay what is owed to the practitioners.

The new General Practice Aged Care Incentive payment commencing in August 2024 avoids this problem by paying 70% to the practitioner and 30% to the practice. It is not yet clear if all future bundle payments will use this approach. The HCH model demonstrated that a bundled payment to the practice helped to facilitate flexible models of team care and the design of these bundled payments will require a delicate balance to address the payroll tax implications, while not compromising team-based care.

Impact of changes to CDM

The 2023 Health Budget included a commitment from the government to implement the changes to the Chronic Disease Management Services recommended by the MBS Taskforce.

This specifically means the removal of Team Care Arrangements Item 723, dramatically reducing the red tape requirements for delivery of care planning services. It also includes balancing the value of GP Management Plan Item 721 and GP Management Review Item 732, so that the creation of initial care plans and the review of these care plans have the same rebate, providing a greater incentive for regular reviews to be conducted.

There is currently no indication of the value that will apply to the GP Management Plans and associated reviews, but these measures are documented as savings measures in the 2023 Budget Papers. When these details are known, practices will need to review the structure and viability of their chronic disease models of care.

Brentnalls Health is already dev eloping a tool that will assist practices in evaluating the viability of chronic disease services models. If you would like to discuss this further, please do not hesitate to contact one of our health team members.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Investing in the long-term success of your business

Sun, 05 Nov 2023 21:00:00 GMT

Business

Investing in the long-term success of your business

By Sarah Hall, Associate

6 November 2023

Investing in skills, technologies, financial resources and sustainability initiatives is a pivotal element in accelerating growth opportunities. To remain competitive in today's dynamic marketplace, businesses should consider how they adapt and evolve continuously. The call for innovation, improved customer experiences, and using data and technology is louder than ever. This transformative journey is not without its challenges. Still, it holds many opportunities for those willing to embrace it.

Here are some examples of how these investments, which include business strategies, marketing, HR, Environmental, Social, and Governance (ESG) initiatives, technology, succession planning, and retirement planning, can make a significant impact:

Skills development:

Employee training: Consider a manufacturing business that partners with a training expert to design specialised training programs. These programs not only improve employee productivity and job satisfaction but also ensure compliance with evolving industry standards and current tax incentives.
Mentorship programs: An accounting firm may establish mentorship programs in collaboration with HR consultants. These programs help experienced accountants pass on their knowledge to younger colleagues, ensuring a smoother succession planning process and retirement transitions.

Technology adoption:

Cloud computing: Imagine a startup partnering with cloud software providers to modernise its operations. This move not only reduces upfront infrastructure costs but also enables rapid scalability, data security, and accessibility while staying compliant with evolving regulatory requirements.
AI-Driven marketing: All businesses can deploy AI-driven marketing strategies through customer segmentation, A/B Testing using personalised email campaigns, search engine marketing (SEM) and social media strategies, to target consumers effectively and personalise the customer experience potentially driving sales growth.

Financial resources:

Venture capital: A technology startup seeking funding may collaborate with financial advisors to create a comprehensive financial plan. This plan can include profit strategies, investment allocation, and financial planning to accelerate product development, expand its market presence, and prepare for succession and retirement.
Bank loans: A construction enterprise looking to take on larger projects may obtain a bank loan with the guidance of an accountant, providing the necessary financial resources required for growth.

Sustainability initiatives:

Green supply chain: Construction companies can optimise their supply chain to source materials from environmentally responsible suppliers, reduce emissions, and improve their ESG ratings, refer to article: Financial benefits through sustainable construction practices .
Circular economy practices: Businesses adopting circular economy practices with the assistance of sustainability experts find opportunities to repurpose materials, reduce waste.

The benefits

By partnering with industry experts, businesses can use these advantages to unlock their full potential. Here are some key benefits:

Enhanced agility in the operating model: Through effective accounting practices and tax strategies, businesses can adapt quickly to changes in regulations, market dynamics, and customer demands. This flexibility allows for swift decision-making and a competitive edge in a fast moving environment.
Inclusive growth and long-term value: A well-executed mentorship program, can fuel growth and drive long-term value creation not only for current stakeholders but for overall long-term value. By aligning financial goals with transformative initiatives, businesses can ensure success across the businesses life-time.
Richer customer experiences: AI-Driven marketing strategies offers businesses the platforms to connect with their customers on a deeper level. By analysing financial data and market trends, businesses can tailor their offerings, improve customer experiences, and create lasting relationships for continued growth.
Accelerated technology adoption: Early adoption allows businesses to navigate the complexities of implementing new technologies more efficiently. This enables faster deployment of cutting-edge tools and systems, enhancing operational efficiency and staying ahead of the competition.
Inspired and engaged employees: A successful transformation is not possible without the commitment and engagement of employees. Implementing a ESG strategy, businesses can inspire their workforce, foster a purpose-driven culture, and nurture the next generation of transformation leaders.

In conclusion, in the pursuit of growth businesses require a multifaceted approach that includes investment in skills development, technology adoption, financial resources, and sustainability initiatives. By aligning these elements with a future forward approach, organisations can position themselves for long-term success.

If you would like to discuss these concepts further, please contact your Brentnalls SA advisor.

Discuss Further?

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Disclaimer

Structuring for success

Sun, 29 Oct 2023 21:00:00 GMT

Agribusiness Industry

Structuring for success

By Matthew Merrett, Associate

30 October 2023

Agribusinesses run in a complex environment where they are affected from everything from weather/climate, legislation to foreign currency movements. All of these influence the businesses profitability and potential tax obligations.

As a result, the structure of your agribusiness group is pivotal. It empowers you to mitigate tax burdens, accumulate wealth, and protect your assets against unforeseen threats. Allow us to take you on a journey through the past and present of agribusiness structures.

The past: A simpler time

Long ago, farming entities operated within uncomplicated frameworks. Typically, husband and wife partnerships oversaw the entire operation, from running the farm to owning the equipment. Land was either held jointly or individually owned by them. The simplicity of this structure was cost-effective, granting access to primary production tax concessions such as farm management deposits and primary production averaging. However, the drawback was apparent: any profits could only be realised at the primary production averaged marginal tax rate. Furthermore, in the unfortunate event of legal disputes, all business assets were exposed to risk.

The dawn of trusts

With the advent of capital gains tax, discretionary trusts emerged as the favored vessel for managing farmland and farming enterprises. All trusts necessitate a trustee, which can be an individual or a company. Opting for a company as a trustee provides superior asset protection and removes the need for notifying the land titles office in case of ownership changes.

Nonetheless, it's worth noting that trusts have their limitations, mostly that losses are quarantined.

The merits of a discretionary trust are diverse. Profits can be distributed tax-effectively, while individuals still enjoy access to primary production tax concessions. Additionally, the appointor of a trust wields ultimate control and can change the trustee via a legal document. This flexibility enables the seamless transfer of trust assets to a new owner without incurring capital gains tax or stamp duty.

The popularity of trusts as landholders has been particularly high in South Australia as there are no restrictions on how long a trust can last.

Nonetheless, it's worth noting that trusts have their limitations, mostly that losses are quarantined.

Harnessing the power of companies

Historically, companies were not the preferred trading entity within agribusiness structures, save for their role as trustees. Equipment and land companies were sporadically part of a group, while trusts assumed the trading entity mantle. This arrangement allowed assets to be strategically moved away from the trading entity for the sake of asset protection, with the company as a beneficiary of trust profits. A caveat, though: companies do not enjoy the capital gains tax discount, necessitating careful consideration when being considered as a land holding entity.

Opting for a trading company restricts individuals' access to primary production tax concessions, as primary production income is quarantined within the company. As with trusts, losses incurred by the company are also isolated.

However, the recent introduction of a base company tax rate of 25% has breathed new life into the concept of using companies as trading entities. This is especially enticing because the individual marginal tax rate currently stands at 32.5% beyond $45,000, making it 7.5% higher (plus Medicare Levy).

Furthermore, structuring shareholders of this company as a trust can ensure dividends are disbursed in the most tax-efficient manner.

Should you discover that your existing structure falls short of your aspirations, rest assured that numerous rollover provisions are available to optimise your arrangement without incurring undue tax liabilities.

Finding your ideal structure

The ideal structure for your agribusiness hinges on a multitude of factors, including your risk appetite, consistency of profit, and the nature of your enterprise. What is paramount, however, is that you comprehend the intricacies of your chosen structure and the rationale behind it. If you find yourself in uncharted territory, do not hesitate to seek guidance from your advisor.

For a comprehensive review of your agribusiness structure, we invite you to reach out to one of our Brentnalls agribusiness specialists. We are committed to empowering your success in the ever-evolving landscape of agribusiness, where astute structuring paves the path to prosperity.

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Four straightforward tips for new businesses

Sun, 22 Oct 2023 21:00:00 GMT

Four straightforward tips for new businesses

By Wade Crane, Associate

23 October 2023

Starting a new business can be daunting but if you follow these four simple steps it will set you up for success.

Set SMART goals: Instead of vague, uninspiring objectives, implement Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals. SMART goals provide clear direction while ensuring a motivated culture with everyone working towards the same objective. Everyone should have a well-defined target to accomplish within a reasonable timeframe, contributing to the overarching business goals.
Standardise and automate processes: Don't let your business get bogged down by chaotic, ad-hoc workflows. Standardise processes so that anyone stepping into a role can follow a straightforward procedure, ensuring consistent continued quality and less slowdown during handover. Consider investing in automation tools for social media management, email marketing, and customer relationship management. These tools not only save time but also lay the groundwork that ensures consistency for customers.
Know your SWOT (strength, weaknesses, opportunities and threats) analysis: Identifying your business' strengths and weaknesses while also understanding your opportunities and threats is crucial for any business. Leveraging your strengths to gain a competitive edge in the market while simultaneously addressing your weaknesses to avoid pitfalls as you grow. Regularly assess your position in the market to stay ahead of the curve.
Nurture your network: Building and maintaining relationships is vital to business growth. Cultivate connections with service providers, sales partners, suppliers, and customers. Stay open to potential collaborations and partnerships, as they can lead to new opportunities for expansion. Networking isn't just about who you know, it’s the doors they can open for your business.

Incorporating these practical strategies into your business approach will streamline processes and foster a culture of adaptability and innovation within your organisation. These simple tips offer a starting point for new businesses.

It will take time, but with consistency and fine-tuning the processes, your business will be setup for growth. If you would like to benefit from further advisory solutions, Brentnalls SA are here to assist. Contact us today.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Cashflow & managing projects - Part One

Sun, 15 Oct 2023 21:00:00 GMT

Construction Industry

Cashflow & managing projects

Part One

By Brentnalls Construction Team

16 October 2023

Recently, the team from Brentnalls Construction hosted a series of leadership roundtable discussions. As a result, we conducted reached to consolidate views on how the industry manages complex business management while achieving cashflow objectives. The result is a series of three articles that combine our findings and pose vital questions about the industry’s readiness for survival in this current climate, while offering solutions to these questions.

Cash is king, this statement still rings true

Construction organisations feeling the pinch often experience cashflow problems, and this critical pain point is often exacerbated by not having timely, accurate, and meaningful project profitability reports at their fingertips.

Caused by numerous factors, cashflow gaps force construction organisations to delay paying their suppliers and employees while squeezing their ability to order equipment, materials, and supplies for a project.

Organisations should not accept new projects to grow their businesses without the funds or working capital required to manage the existing book of projects. More importantly, they may not be able to meet various prequalification status criteria to tender for government works at or above a certain value as a result of not meeting their working capital or profitability ratios.

In this series of articles, we explore and discuss the importance of how organisations are battling insolvencies and the steps to mitigate financial risk. More specifically, we touch on the most robust ways reporting can be used to drive the profitability of their business.

Growth and cashflow

Without decent cashflow, construction businesses can forget about expanding their workforces or offering existing employee benefits and pay increases, which poses a significant risk in the post-pandemic construction labour market. At its worst, a lack of cashflow can seriously thwart an ability to succeed, and many fail without steady cashflow.

88% of contractors agree that inappropriate risk allocation is one of the main impediments to reducing construction cost, according to a recent report by the Australian Constructors Association. ii

Australian Constructors Association

Market Sentiment Report

With construction organisation insolvencies increasing by 30% over the last twelve months, according to research from credit agency Equifax i , one way of staving off creditors and maintaining cashflow is by putting greater emphasis on work-in-progress (WIP) reporting. Hence, a WIP report is critical in telling them where each project is from a performance and cashflow perspective.

What is a WIP report?

The WIP report reveals where active jobs or projects have been invoiced in advance. In addition, the report identifies where costs have been incurred on a project until it can be billed based on a particular stage or milestone or its contractual obligations have been met; this difference usually boils down to who’s funding the project.

Construction organisations typically aim for the project cashflow to come from clients through invoicing clients for a more significant portion of the contract in the earlier stages (upon agreement), i.e., resulting in billings that are higher than costs to assist with funding in the later stages of a project. However, when carrying costs without billing for a period of time, i.e. WIP, this is recorded in the balance sheet as an asset. It invariably means that the organisation is financing the project, which can jeopardise completion and negatively impact profits if not managed well.

To make a project’s financial and project management aspects more clear-cut, organisations increasingly rely on WIP reporting tools and software solutions. These platforms, such as a construction enterprise resource planning (ERP) system with accounting software, are designed specifically for the industry.

A construction WIP schedule should provide a status update on projects underway, including whether they are on budget, based on the timeline. The report also offers valuable details about how the fiscal milestones relate to the various project phases.

A typical WIP report will include the following metrics:

The job description
Total Estimated Project Income
Total Estimated Project Costs
Total Estimated Project Profit
Project Income for the month and to date
Project Costs for the month and to date
Stage of completion of Project
Work In Progress (based on stage of completion of Project)
Income in Advance (based on stage of completion of Project)
Project and Overall Profit for the month and YTD
Estimated Project costs still to be incurred
Estimated Project Revenue still to be invoiced
Variations to be raised/invoiced

Capturing and recording this data across all departments in a timely and accurate manner can help businesses be more in control of managing their project costs, ultimately managing and driving profits as well as cashflow more effectively.

Project profitability - finding the right systems & processes

There are many reasons why businesses should invest in the right systems and processes to monitor project profitability.

Staying on time with a project and within budget is a continuous challenge. Most projects involve many shuffling components such as recruiting and retaining labour, supply chain management, contracts, and cost estimation.

To contain overruns and budget blowouts, businesses must track and report all costs in detail. Therefore, this is where managing your WIP and project costs will prove advantageous and allow construction businesses to monitor the many stages of a project’s completion. Hence, having timely reporting and appropriate systems and processes allows businesses to pick up variations quickly. It’s vital that all such reporting processes are automated, enabling businesses to get this information promptly. If businesses don’t manage their WIP effectively, they can lose substantial sums of money.

Without the right technology/software solution supporting project profitability reporting, businesses may only catch onto problems when it may be too late in the piece. Once the horse has bolted, organisations will have significant issues pulling projects and costs back into line or even have the opportunity to identify variations that need to be approved by the client before it all gets way out of hand. Project managers must deal daily with multiple change requests requiring rapid decisions. This constant flux can make tracking and reporting on WIP an arduous undertaking.

In summary, as the industry grapples with the challenges of cashflow management and project profitability, it becomes increasingly evident that the adage "cash is king" remains as true as ever. Effectively managing cashflow and project profitability becomes increasingly a priority, especially as the industry continues to face challenges. To confront these challenges, construction firms should prioritise the adoption of comprehensive reporting tools, particularly WIP reports. These reports serve as vital barometers of a project's financial health, equipping businesses with the information needed to make informed decisions and proactively mitigate financial risks.

In the second instalment, we delve into the realm of project reporting and its role in minimising financial risk by harnessing working capital, thereby facilitating quicker and more precise business decision-making.

i https://www.equifax.com.au/knowledge-hub/news-and-media/construction-insolvencies-are-small-operators-canary-coal-mine

ii https://www.constructors.com.au/advocacy/collaborations/market-sentiment-report/

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Embracing ESG: A vital call for business owners

Sun, 08 Oct 2023 21:00:00 GMT

Embracing ESG:
A vital call for business owners

By Gavin Mitchell, Partner

9 October 2023

The principles of Environmental, Social, and Governance (ESG) have become increasingly significant. What this means for businesses is that incorporating ESG practices into their core strategies is not merely a passing trend; it is a crucial step towards sustainable growth and business resilience.

As the world faces environmental crises, social inequalities, and evolving governance expectations, businesses should be seeking to embrace ESG to secure a brighter, more inclusive future for themselves and generations to come. Especially in the face of the urgent environmental concerns, it’s important that we all do our share.

A comprehensive approach to success

ESG goes beyond mere checkboxes; it's a holistic approach to assessing an organisation's impact on the environment, society, and its internal operations. Some examples are:

Environmental considerations include :

carbon footprint,
resource efficiency, and
waste management.

Social aspects encompass :

employee well-being,
community engagement, and
diversity and inclusion.

Governance involves :

transparency,
ethics, and
decision-making accountability.

Organisations successfully integrating ESG often demonstrate higher innovation levels, better risk management, staff retention, and an enhanced reputation that can foster brand loyalty and attract sustainable investments.

Addressing environmental challenges

The urgent need to address climate change, illustrated by bushfires, droughts, and coral bleaching, requires swift action. Businesses aren't just bystanders; they are essential partners in addressing these challenges.

Implementing environmentally conscious practices, like reducing carbon emissions, conserving water, implementing waste management strategies, and adopting renewable energy, offers opportunities for everyone to be involved. Green building practices offer solutions such as solar panels, rainwater tanks, using sustainable products, and incorporating natural lighting and ventilation, just to name a few.

Recently, some local South Australian councils i have offered additional services to their communities such as the kitchen caddy bins for food scraps. These extra services serve as a reminder to consider better waste management practices.

Promoting social equity

Beyond environmental concerns, ESG also encompasses social aspects. Australia's multicultural society calls for inclusive workplaces and a commitment to social justice. Diverse teams are known to drive innovation, offering varied perspectives that lead to better decision-making.

Furthermore, businesses can contribute to social equity through philanthropic initiatives and community engagement. Collaborating with local communities, supporting education and healthcare projects, and addressing broader societal issues can create a positive impact extending beyond the boardroom.

Fostering transparent governance

Robust governance forms the foundation of a successful business. Upholding transparency, ethical conduct, and accountability safeguards an organisation's reputation and builds trust among stakeholders. Aligning governance practices with globally recognised standards ii ensures compliance and enhances confidence. Small and medium-sized entities can take advantage of advisory boards to implement such practices.

Effective governance is especially crucial in the digital age, where data privacy and cybersecurity are paramount. Integrating ESG principles into governance structures ensures that ethical considerations remain at the forefront of decision-making.

Green finance

Some Australian lenders are offering green loans for purchases of commercial property and equipment. However, they must meet certain eligibility criteria set out by the institution. If met, borrowers could receive much lower interest rate charges.

Planning an ESG future

To make ESG processes central to their strategies, businesses are urged to follow a deliberate path and start with comprehensive evaluations of their current practices. Collaboration with all stakeholders is vital for a thorough approach. Establishing measurable ESG objectives and regularly reporting progress not only showcase dedication but also reinforce accountability.

Business owners should recognise that embracing ESG is not just a moral obligation; it’s a necessity for the future of business. By ingraining ESG principles into their strategies, businesses can seek to thrive. This integration has the power to attract responsible investments and facilitate positive contributions to society and the environment. These reporting frameworks serve as indispensable tools for businesses aiming to provide a holistic view of their sustainability efforts.

It may seem like a huge hurdle, but to quote Barack Obama, “When we succeed, we succeed because of our individual initiative, but also because we do things together.” The opportunity for Australian businesses to lead the way, through positive changes and playing a pivotal role in shaping a sustainable future for their businesses and the community, is a powerful opportunity.

For a discussion on governance and the processes for planning your ESG strategy, please contact our office and schedule an appointment today.

i https://www.localcouncils.sa.gov.au/services/rubbish-waste

ii https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/

Further reading: https://www.standards.org.au/flagship-projects/environmental-social-and-governance-esg

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$20,000 Instant asset write-off

Thu, 05 Oct 2023 00:17:41 GMT

$20,000 instant asset write-off

By Sally Storey, Partner

5 October 2023

Small businesses, with an aggregated turnover of less than $10m, are eligible to this instant asset write-off. The Government is extending the instant asset write-off for assets costing less than $20,000 until 30 June 2024 .

Note, this legislation is in parliament but not yet law.

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TPG/iiNet/Internode and Westnet

Wed, 04 Oct 2023 23:56:40 GMT

TPG/iiNet/Internode and Westnet

By Sally Storey, Partner

5 October 2023

The above providers have decided to stop providing email services in 2023.

Opt-in

You have the option to either opt-in and transfer your email account to The Messaging Company (Atmail.com) free until 15 September 2024 *. You will not lose any of your emails, contacts or calendar events**.

Opt-out

If you do not opt-in by 18 October 2023 your email address will be suspended, which means you will no longer have access to your sent or received emails, or access to any existing emails stored in the mail server. On 30 November 2023 the email address will be deleted and will no longer be recoverable.

* Important to note: even if you opt-in slave accounts (or aliases) that point back to your username will not move over.

** Approximately sixty days prior to the 15 September 2024, you will be advised of the cost to keep your account.

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Managing your Director ID

Wed, 04 Oct 2023 23:46:26 GMT

Business

Managing your Director ID

By Sally Storey, Partner

5 October 2023

The Australian Government introduced a legal requirement for all Directors of Australian registered Companies last year, whereby requiring them to apply for a Director Identification Number (DIN) which is held for life. If this applies to you, please note i t is the Directors responsibility to ensure they update their details on an ongoing basis, particularly change of name.

To update simply log in to the ABRS— https://mygovid.gov.au/AuthSpa.UI/index.html#login

Once you log in you can update and review all your details.

Please note, if you are unable to log in head here to find out how you can alternatively update your details:

https://www.abrs.gov.au/director-identification-number/manage-your-director-id

Directors must notify their company of any change in details within 7 days. Please contact our office if you have any change in details.

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The importance of stakeholder management P2

Sun, 24 Sep 2023 21:30:00 GMT

PART TWO

The importance of stakeholder management in driving business success

By Bradley Barnes, Partner

25 September 2023

How do you nurture the relationships when life is so busy?

Nurturing these vital relationships is pivotal to the overall success of your business. Failure to do so can adversely affect your stakeholders, ultimately hampering your business performance. Striking the right balance between relationships and time commitments is undoubtedly challenging, with no definitive right or wrong approach.

However, adopting the following practices can be a significant first step towards nurturing relationships:

Review your customer service processes regularly, identifying areas for improvement. Implement periodic customer surveys and benchmark against similar businesses to gauge your performance.
Foster a culture within your organisation that upholds the business purpose and core values. Encourage your team members to embrace these values, as they serve as the bedrock of your business.
Consider the interplay between stakeholders and the driving forces of your business. Develop a comprehensive plan enabling you to engage, strengthen, and build upon these connections, striving for the ideal balance.

While nurturing relationships may demand considerable effort, purposefully engaging your target audience is essential. Offer regular and relevant information that supports their needs, demonstrating your commitment to their well-being. Every interaction should exude a sense of care, memorable experiences, and mutual respect that maximise the lifetime value of your customers and safeguarding the future of your business ( Maximising the value of your business and how to protect it ).

Driving the competitive advantage through relationship building

Building relationships between your employees and stakeholders enhances their capabilities and bolsters your business. Businesses are competing with every other related company with which a client interacts. Finding what sets you apart from your competition isn't hard; all that is required is to ask the right questions and conduct the analysis. Demonstrate a personal and genuine interest in their engagements, topics, issues, and outcomes. It sets you apart from competitors ( Competitive Advantage ) giving you the edge that truly drives success.

Staying focused and driving outcomes should be supported with effective time management. Brentnalls SA provides an excellent time management tool to assist you in this process.

Focus your energies and stay true to your vision

Above all, maintain clarity regarding your financial and non-financial vision for your business. Establish strategies and implement concrete plans to achieve that vision, ensuring alignment throughout your organisation.

To truly understand the drivers of your business, it is imperative to comprehend its purpose and the key metrics that drive performance . These may include sales, profit margins, staff costs, productivity levels, inventory turnover, debtor and creditor days, and adherence to bank covenants. Once you have a solid grasp of these drivers, regularly track, communicate, and manage them effectively.

As a leader, it is your responsibility to set the tone for your team. Your team members are there to complement your skills and experiences, enabling you to achieve more collectively. However, they must operate within an appropriate and accountable framework. Invest in their training and development to enhance their capabilities and contribute to the overall success of your business.

Finally, clearly define what success means to you and your business. Communicate this vision to your team, ensuring everyone is aligned and working towards shared goals. By focusing on the things that truly matter and finding the right balance, you will be well-positioned to drive future success in your business.

In conclusion , recognising the importance of stakeholder management is central for any businesses aiming to thrive in the Australian market. By nurturing relationships with your customers, team members, suppliers, and financiers, you will foster an environment conducive to long-term success. Remember, it is the collective efforts of all stakeholders that propel your business forward. Embrace these principles, invest in relationships, and watch your business flourish.

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The importance of stakeholder management P1

Sun, 17 Sep 2023 21:30:00 GMT

PART ONE

The importance of stakeholder management in driving business success

By Bradley Barnes, Partner

18 September 2023

In the dynamic business landscape, where factors of utmost importance are under constant evaluation, the current economic scenario marked by rising interest rates demands our attention. As a discerning business owner, you likely recognise that certain stakeholders carry greater weight within your enterprise.

These crucial stakeholders encompass esteemed customers, committed team members, dependable suppliers, and indispensable financiers. More importantly, it is imperative to recognise that each of these stakeholders plays a pivotal role in the success of your business. Managing and nurturing relationships with them in line with your business's long-term vision is the key driver of your organisation's triumph.

Your Customers

Comprising both existing and potential clientele, customers are the lifeblood of your business, responsible for generating revenue and enhancing your profit margins.

Embracing the following simple yet powerful principles will undoubtedly improve your sales:

1. Strive to comprehend their businesses and explore how you can serve them better.

2. Communicate your unique service offerings to ensure they are well-informed.

3. Cultivate a service-oriented philosophy that permeates your entire organisation.

Overall, foster a business culture that epitomises the purpose and core values that define your business.

Your Team

Encompassing not only your employees but also your management personnel, all of which serve as the “face of your business”. Fostering the right attitude ( Managing change in business positively ), employees will feel like they are invested in the business’s future strategies.

Your organisation's reputation is significantly influenced by its behaviours, service quality, knowledge, stability, and level of care. While customers can often find alternatives elsewhere, your team's unwavering commitment sets your business apart from the competition.

Your Suppliers

Whether providing raw materials, finished goods, or essential consumables and infrastructure, are all instrumental in facilitating your business's outcomes. Ensure you maintain adequate stock levels to meet demand. Critical factors such as warehousing arrangements, distribution efficiency, pricing, and rebate agreements can significantly impact your business.

For this reason, cultivating strong relationships with your suppliers is paramount to achieving long-term success.

Your Financiers

Which include banks, investors, and trade partners, provide the capital necessary for your business operations. It is essential to thoroughly understand the terms of any agreements and establish robust processes to manage them effectively. By doing so, you can focus on nurturing relationships with your customers and team, in turn will drive positive business outcomes.

In conclusion to part one of stakeholder management , in this the dynamic and ever-evolving business world, stakeholder management should stand as a cornerstone for driving sustained success. Acknowledging the profound impact that customers, team members, suppliers and financiers provide business owners are the first steps.

Additionally, strong ties with suppliers ensures smooth operations and outcomes, while robust financial management keeps the capital flowing and enables focus on fostering positive business outcomes. Embracing these principals and recognising the significance of each stakeholder, you can forge a path forward amidst economic fluctuations.

In the part two , we discuss the importance of nurturing relationships and how to strike the right balance between relationships and time management. Part two out 25 September 2023 .

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Unleashing the power of Chat GPT: Revolutionising communication and overcoming limitations

Sun, 10 Sep 2023 21:30:00 GMT

Software Corner

Unleashing the power of Chat GPT: Revolutionising communication and overcoming limitations

11 September 2023

Chat GPT, based on the GPT-3.5 architecture developed by OpenAI, is an advanced language model that has revolutionised the field of natural language processing. With its ability to generate coherent and contextually relevant responses, Chat GPT has found numerous uses across a wide range of applications. However, like any technology, it also has its limitations and considerations to keep in mind.

How can it benefit you?

One of the primary uses of Chat GPT is in customer support and chatbot systems. By integrating Chat GPT into these systems, businesses can provide instant and automated responses to customer inquiries, improving efficiency and reducing the workload on human agents. Chat GPT can handle a variety of customer queries, ranging from simple frequently asked questions to more complex troubleshooting scenarios. Its ability to understand and generate human-like responses enables a seamless user experience.

Another area where Chat GPT excels is in content creation and writing assistance. It can serve as a helpful tool for authors, journalists, and bloggers, providing suggestions, generating ideas, and even assisting in drafting content. Chat GPT's vast knowledge base allows it to provide relevant information on a wide range of topics, making it an invaluable resource for research purposes.

Moreover, Chat GPT has proven useful in language translation and interpretation. With its multilingual capabilities, it can assist in translating text from one language to another, facilitating communication between individuals who speak different languages. This feature is particularly valuable in a globalised world where language barriers can hinder effective communication.

There are limitations, be mindful

However, despite its remarkable capabilities, Chat GPT has certain limitations. One significant limitation is its susceptibility to bias. Since Chat GPT learns from vast amounts of text data, it can inadvertently replicate and amplify biases present in the training data. Bias in AI systems is a significant concern, as it can perpetuate discriminatory or unfair behavior. Efforts are being made to mitigate this issue by incorporating fairness and inclusivity considerations into the training process.

Another limitation of Chat GPT is its lack of true understanding. Although it can generate coherent responses, it does not possess genuine comprehension or knowledge like a human being. It relies solely on patterns and statistical relationships in the training data. Consequently, Chat GPT may occasionally produce incorrect or nonsensical responses, especially when faced with ambiguous or contextually complex queries. Users must exercise caution and critically evaluate the information provided by Chat GPT.

Furthermore, Chat GPT's long-form coherence is not always consistent. While it can generate coherent responses in short bursts, sustaining a meaningful and coherent conversation over an extended period can be challenging. The model may produce inconsistent or contradictory answers, which can lead to confusion and frustration for users.

To address these limitations, it is crucial to use Chat GPT as a tool rather than a definitive source of information. Human oversight and intervention are necessary to ensure accuracy and address any biases or inaccuracies that may arise. Additionally, ongoing research and development efforts are focused on refining and enhancing the capabilities of language models like Chat GPT.

What do we think?

In conclusion, Chat GPT has emerged as a powerful language model with various applications, ranging from customer support to content creation and translation. Its ability to generate contextually relevant responses has transformed the way we interact with machines. However, it is essential to be mindful of its limitations, including bias and lack of true understanding. By understanding these limitations and using Chat GPT responsibly, we can harness its potential while ensuring accurate and unbiased communication.

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The high stakes of late superannuation payments: An expensive lesson

Sun, 03 Sep 2023 21:30:00 GMT

The high stakes of late superannuation payments: An expensive lesson

By Shannon Sims

4 September 2023

Picture this

You're the captain of a small business ship, navigating the treacherous waters of day-to-day operations, managing your crew, and juggling countless financial responsibilities. But in the chaos of it all, you accidentally overlook a crucial deadline—the payment of Superannuation Guarantee (SG) for your hardworking employees. Little do you know that this innocent mistake can unleash a storm of severe penalties, enforced by the Australian Taxation Office (ATO). Brace yourself as we delve into the depths of the extreme costs incurred when superannuation payments are made late.

The 8 penalties for late payments: they are severe

The SG payment, due on the 28th day following the end of each quarter, carries penalties that can quickly spiral out of control, even if you're just a day late. Here's a breakdown of the significant penalties you'll face when you miss the mark:

Penalty 1: The Superannuation Guarantee Charge (SGC) statement

Late payments necessitate the completion of a time-consuming SGC statement, to be lodged with the ATO within one month after the SG due date. This intricate form calculates the total superannuation, administrative fees, and interest amounts payable.

Penalty 2: Administrative fee per employee

For every quarter that the SG payment is late, an automatic non-deductible administrative fee of $20 per employee is slapped onto your bill. It may seem trivial initially, but when multiplied by your workforce, this fee can rapidly accumulate.

Penalty 3: Interest charges

The ATO levies interest at a nominal rate of 10%, calculated from the start of the relevant quarter until the SGC statement is lodged. This interest is paid to the ATO as part of the SGC and then disbursed as a concessional contribution to employees' superannuation accounts. Unfortunately, there's no escaping or negotiating this interest—it must be paid in full.

Penalty 4: Super on all salaries and wages

While ordinarily, SG is payable solely on Ordinary Time Earnings (OTE), excluding overtime, late payments require superannuation to be calculated on all salaries and wages, including overtime. This means a more substantial chunk of your payroll budget will be allocated to superannuation.

Penalty 5: Lost tax deduction

Late superannuation payments come at a cost—specifically, the loss of a crucial tax deduction. According to section 26.95 of the Income Tax Assessment Act 1997 (ITAA97), no part of the SGC statement payment, including the superannuation component, is tax-deductible. This loss of a tax deduction often constitutes the largest expense for businesses when superannuation payments are only slightly delayed.

Penalty 6: 200% "Part 7" Penalty

The ATO can impose an additional penalty known as the "Part 7" penalty for late lodgement of the SGC statement. By default, this penalty amounts to a staggering 200% of the SGC amount, turning a financial setback into a full-blown disaster.

Penalty 7: Director's personal liability

The ATO wields the power to issue a Director Penalty Notice (DPN) for unpaid SGC amounts, making directors personally liable. If the SGC statement was lodged on time, directors can avoid the DPN by appointing an administrator within 21 days. However, if the statement was lodged late, the only option is to settle the DPN by paying the full amount. Even if the company is liquidated, the ATO retains the authority to estimate SG amounts and hold directors accountable.

Penalty 8: Potential criminal charges

Since 2019, the Commissioner of Taxation can pursue criminal penalties, including imprisonment for up to 12 months, for directors involved in serious breaches of SG obligations. It's a harsh reality that could turn a business owner's world upside down.

But wait, there's more to consider:

Single Touch Payroll (STP) and electronic super reporting have given the ATO real-time data on late super payments, leading to increased scrutiny in this area.
The ATO leaves no stone unturned—they pursue every dollar owed in SGC, regardless of the amount.
The law does not discriminate; even if the SG is owed to a sole director and shareholder, the penalties still apply.
Prospective buyers conducting due diligence on businesses will meticulously review several years' worth of super payments to ensure there are no unfiled SGC statements.
Employees now have easier access to their super balances, empowering them to report any unpaid super complaints directly to the ATO.

So, when exactly is super considered paid?

Super is deemed paid only when it reaches the employee's super fund bank account. While some clearing houses recommend allowing 10 business days for processing, it's essential to verify the timeline with your chosen clearing house.

Let's illustrate the potential costs with an example:

Imagine SmallBus Pty Ltd, with 10 employees, paid wages of $250,000 in the March 2022 quarter, with $25,000 in accrued super. Although SmallBus Pty Ltd pays the full $25,000 on April 27, 2022, the amount doesn't reach the employees' super funds until April 29. Unfortunately, no SGC statement is lodged until April 1, 2023, prompted by a letter from the ATO.

The non-negotiable cost of this one-day late payment would be:

Admin fee: $200
Interest: $3,116
Lost tax deduction (at 25%): $6,250

Total: $9,566

In addition, the ATO could impose a total penalty of 200% of the SGC amount, amounting to $19,132. Assuming the ATO reduces it to 100%, the total cost of paying the super just one day late would still be a staggering $19,132.

And that's not all—directors could also face personal liability for the SGC amount, even if SmallBus Pty Ltd goes into liquidation.

Tips to minimise SGC risk:

To avoid this financial nightmare, consider the following strategies:

Make monthly super payments or include them in each pay run to spread the risk and reduce the impact of any potential mistakes at the end of a quarter.
Pay super well in advance of the due date to ensure ample time for processing.
Monitor the super payable account closely to ensure that super accrued from payroll aligns with the payments made.

Remember, the cost of late superannuation payments can be astronomical, and staying on top of your obligations is crucial to avoiding the financial storm that awaits those who fall behind. Make sure to read our Key Dates to Remember .

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Financial benefits through sustainable construction practices

Sun, 27 Aug 2023 21:30:00 GMT

Construction Industry

Financial benefits through sustainable construction practices

By Christina Gulliver, Partner

28 August 2023

The pursuit of sustainable practices in the Australian construction industry not only contributes to a greener future but also offers numerous financial benefits for businesses. By prioritising sustainability, construction companies can drive positive change while improving their bottom line.

Let's uncover some of the advantages of sustainable practices and provide practical examples of how construction businesses can tap into these benefits:

1. Cost savings and operational efficiency

Implementing waste reduction strategies: By adopting practices such as recycling, reusing materials, and implementing efficient waste management systems, construction businesses can minimise physical waste and associated disposal costs.

Optimising resource utilisation: Streamlining processes and using resources efficiently, such as water and raw materials, reduces expenses and promotes operational efficiency.

Adopting lean construction principles: Embracing lean construction methodologies minimises waste, enhances productivity, and reduces costs throughout the project lifecycle.

2. Regulatory compliance and risk mitigation

Meeting environmental regulations: Construction companies that adhere to stringent environmental standards set by Australian regulatory bodies avoid potential fines and legal liabilities, mitigating financial and reputational risks.

Managing climate-related risks: Taking steps to mitigate the impact of climate change, such as adapting to extreme weather events or considering climate-resilient design, helps safeguard construction projects from costly damages.

Construction companies that adhere to stringent environmental

standards set by Australian regulatory bodies avoid potential fines and legal liabilities, mitigating financial and reputational risks.

3. Competitive advantage and market differentiation

Building a sustainable brand: Demonstrating a strong commitment to sustainability creates a competitive advantage, attracting environmentally conscious clients and investors who prefer to work with businesses that align with their values.

Showcasing eco-friendly credentials: Certifications like Green Star or Leadership in Energy and Environmental Design (LEED) provide a competitive edge by verifying a company's sustainable practices and distinguishing it from competitors.

4. Access to funding and incentives

Government grants and subsidies: The Australian government offers various funding programs and incentives to support sustainable initiatives in the construction industry, such as grants for energy-efficient upgrades or renewable energy installations.

Financial institution support: Banks and financial institutions may offer preferential terms, loans, or investment opportunities for construction projects that prioritise sustainability.

5. Reputation and stakeholder relationships

Strengthening stakeholder relationships: Engaging with stakeholders, including employees, suppliers, and local communities, through sustainability initiatives fosters positive relationships, encourages collaboration, and enhances the company's reputation.

Attracting talent: Emphasising sustainable practices helps attract and retain top talent who are increasingly seeking employers that align with their environmental values.

By implementing practical steps such as efficient waste management, resource optimisation, and adherence to environmental regulations, construction businesses can unlock the financial benefits of sustainability. Embracing sustainable practices is not only an ethical obligation but also a strategic choice that positions companies for long-term financial success in the Australian construction industry.

Let us seize this opportunity to transform the construction sector, driving both financial prosperity and a sustainable future in Australia. By embracing sustainable practices, construction companies can unleash their full potential while contributing to a greener and more prosperous industry.

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Safeguarding your digital fortitude: Protecting yourself from cyber hacking

Sun, 20 Aug 2023 21:30:00 GMT

Safeguarding your digital fortitude: The increasing importance of protecting yourself from cyber hacking

By Gavin Mitchell, Partner

21 August 2023

In our increasingly interconnected world, the threat of cyber hacking poses a significant risk to both individuals and businesses. The need to protect ourselves from cyberattacks has never been more crucial. This article highlights key factors to consider for personal and business security and emphasises why taking proactive measures is of utmost importance in the present digital landscape.

1. Personal security:

a. Identity Protection:

Cybercriminals target personal information to carry out identity theft, leading to devastating consequences for victims.

b . Financial Safety:

Vulnerabilities in online banking systems and payment platforms make individuals susceptible to financial fraud.

c. Privacy Preservation:

Unauthorised access to personal information compromises privacy and may result in various forms of exploitation.

2. Business security:

a. Data Safeguarding:

Cyberattacks can result in severe data breaches, leading to financial losses, reputational damage, and legal consequences for businesses.

b. Operational Continuity:

Ransomware attacks can cripple business operations, causing significant disruptions and financial setbacks.

c. Intellectual Property Protection:

Cyberhackers often target valuable intellectual property, putting businesses at risk of losing their competitive edge and stifling innovation.

Key factors for protection:

Strong and unique passwords: Use complex passwords for all accounts and avoid reusing them to minimise the risk of unauthorised access.
Multi-Factor authentication (MFA): Enable MFA whenever possible to provide an additional layer of security by requiring multiple verification steps.
Regular software updates: Keep operating systems, applications, and security software up to date to patch vulnerabilities and protect against known threats.
Secure network connections: Use encrypted Wi-Fi networks, avoid public Wi-Fi for sensitive transactions, and consider using virtual private networks (VPNs) for enhanced security.
Email and phishing awareness: Be cautious of suspicious emails, links, and attachments. Verify the legitimacy of requests for personal information and exercise caution when sharing sensitive data.
Security awareness and education: Stay informed about the latest cybersecurity threats and educate yourself and your employees about best practices for online safety.

Why protection is more important than ever:

Increasingly sophisticated attacks: Cybercriminals continuously develop advanced techniques, making it essential to stay vigilant and update security measures accordingly.
Proliferation of connected devices: The widespread use of Internet of Things (IoT) devices increases the attack surface, requiring comprehensive security measures to protect personal and business information.
Remote work and digital transformation: The COVID-19 pandemic has accelerated remote work and digital transformation, leading to an expanded attack surface and heightened vulnerability.
Global interconnectivity: The borderless nature of the internet means that cyberthreats can originate from anywhere, making robust protection necessary regardless of geographical location.
Legal and reputational consequences: Data breaches and security incidents can result in legal liabilities, damage to reputation, and loss of customer trust, highlighting the importance of robust cybersecurity measures.

Key takeaways:

Protecting ourselves from cyber hacking is no longer a choice but an imperative. With personal and business security at stake, it is crucial to implement proactive measures to safeguard our digital fortitude. By prioritising strong passwords, multi-factor authentication, regular software updates, secure network connections, email awareness, and security education, we can significantly reduce the risk of falling victim to cyberattacks. In today's digital landscape, where threats are evolving and interconnectedness is increasing, the importance of protecting ourselves from cyber hacking has reached unprecedented heights.

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Passing the torch: Retirement planning

Sun, 13 Aug 2023 21:30:00 GMT

Passing the torch: Ensuring a smooth transition of your family business

By Sharon Lloyd, Partner

14 August 2023

Retirement is a milestone that many business owners look forward to, and for those who wish to keep their business within the family, it can be a fulfilling choice. However, handing over your business to your children or other family members requires careful planning and consideration to protect the business and ensure its continued success. In this article, we will explore some essential steps to take when passing the torch, along with valuable tips and insights.

1. Cultivate the next generation

It's crucial to invest time and effort into preparing your successors, especially if they are family members who have expressed interest in the business. Training and education should be provided well in advance, allowing them to gain the necessary skills and knowledge for their future role. This process can take years, so it should never be treated as a last-minute endeavor. By mentoring and guiding them, you are setting them up for success and equipping them with the tools they need to thrive.

2. Choose the right successor

While it may be tempting to hand over the reins to your children solely for sentimental reasons, it is essential to evaluate their suitability for the business. Consider their skills, experience, and commitment to ensure they are the best fit. Holding meetings to discuss the changeover process and its various aspects can aid in making an informed decision. These discussions also help establish open lines of communication and foster a sense of shared vision and purpose.

For instance, let's imagine a family-run bakery. The parents, who have been the heart and soul of the business, decide it's time to retire and pass it on to their daughter, who has a passion for baking and a natural knack for managing operations. By involving her in crucial decision-making processes and offering guidance, they can ensure a smooth transition that upholds the bakery's legacy while allowing their daughter to take charge and put her own vision into the business.

3. Develop a comprehensive succession plan

A well-defined succession plan is a roadmap for the future of your business. It outlines who will take over, how the transition will occur, and any other essential considerations. Having a formal plan in place facilitates a seamless transfer of ownership and allows you to pass on your wisdom and expertise to your successor.

Consider incorporating a structured training/mentoring program within the succession plan. This program can cover everything from day-to-day operations to long-term strategies. By sharing your insights and teaching your successor the tried-and-true methods, you are ensuring continuity and a smooth adjustment for customers and clients. Remember, this plan is not set in stone; it provides a foundation for your successor to build upon, allowing them to make necessary changes and improvements while appreciating the business' core principles.

Seek the assistance of

professionals such as

lawyers and accountants

to ensure all legal

requirements are met.

4. Navigate legal and financial matters

Succession planning involves dealing with legal and financial intricacies. Seek the assistance of professionals such as lawyers and accountants to ensure all legal requirements are met. They can guide you through the process, from transferring ownership and assets to managing tax implications. By staying organised and handling these matters diligently, you can avoid potential pitfalls and set your successor up for success.

5. Define your role going forward

It's natural to feel a sense of attachment to the business you've built. However, it's essential to define your role going forward and establish boundaries with your successor. Overstepping your boundaries or attempting to maintain control can strain the relationship and hinder the growth of the business. Embrace the transition and respect the new owner's authority. Consider becoming a silent partner or advisor, offering support and guidance when needed while allowing your successor to make independent decisions.

Furthermore, plan for life after retirement. Consider how you will fill your time, pursue personal interests, or engage in new ventures. By proactively preparing for this transition, you can embark on a fulfilling post-business chapter with enthusiasm and purpose.

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Unlocking financial success: The power of budgeting for medical practices

Sun, 06 Aug 2023 21:30:00 GMT

Health Industry

Unlocking financial success: The power of budgeting for medical practices

By Danny Haydon, Principal/Health Division

7 August 2023

In the ever-evolving landscape of healthcare, medical practices find themselves facing tighter profit margins and greater concerns about cashflow management. Gone are the days when budgeting was an afterthought. Today, it has become a crucial discipline that high-performing practices embrace to optimise their financial performance. Let us delve into the compelling reasons why budgeting should be at the forefront of every medical practice's financial strategy.

Gone are the days of reactive financial management

A startling truth emerges: the majority of medical practices do not utilise budgets to manage their finances effectively. Instead, they rely on comparisons to previous years, only to realise the need for proactive remedial action when it's too late. Waiting until their accountants deliver financial statements leaves them without the power to take timely corrective measures. Budgeting empowers practices to be proactive, making informed decisions that drive financial success.

Budgets: A lifeline during workforce reductions

Imagine a scenario where a medical practice faces a significant reduction in its workforce. In such instances, adjusting the budget becomes crucial, as it highlights whether the practice needs to make tough decisions to adapt to the projected loss of revenue. By analysing the budget, practices can identify areas where expenditures can be reduced while maintaining optimal patient care. Budgeting in times of change ensures that practices weather storms and emerge stronger than ever.

Beyond its financial

advantages, regular reviews

of a practice's performance

against the budget offer

another powerful

benefit.

Boosting financial literacy: A budget's hidden benefit

Beyond its financial advantages, regular reviews of a practice's performance against the budget offer another powerful benefit. Principals with limited financial knowledge can enhance their financial literacy through this process. By understanding the variances between actual results and the budget forecast, these principals gain insights into the sources of any financial problems. This newfound knowledge allows them to implement remediation strategies promptly, effectively bridging the gap between medical expertise and financial acumen.

The art of budgeting unveiled

Budgeting, once seen as a daunting task, is a foundational business discipline that yields remarkable rewards. Let's explore the steps to unlock financial success through effective budgeting.

1. Constructing a financial blueprint

The purpose of budgeting is to create a forecast of revenues and expenditures, providing a model of how a medical practice might perform financially based on strategies, events, and plans. By constructing this financial blueprint, practices can plan their cashflow and anticipate peaks and troughs throughout the year. This enables proactive management of financial operations, with variances between actual results and the forecast acting as guideposts for remedial strategies.

2. Navigating the cashflow journey

Consider the example of a profitable general practice showcased in the diagram. While profitability is evident, there are months throughout the year where a deficit is forecasted. Budgeting helps practices manage their cashflow, ensuring sufficient funds are available to weather the less profitable periods.

3. Where to begin

Embarking on the budgeting journey can be simplified with a few key steps:

Summarise the most recent financial year on an Excel spreadsheet or use accounting software's budget manager tool to import last year's income and expenses.
Incorporate projected adjustments of patient fees and related service fees.
Accommodate changes in staffing levels, adjusting for any known Award or EB conditions.
Increase overheads by relevant factors such as CPI.
Convert the annual budget into monthly amounts.
Establish a regular reporting schedule to review the budget against actual performance.

4. Embracing technology: Accounting software as your ally

Harnessing the power of accounting software presents distinct advantages over traditional spreadsheets. Periodical reports are embedded within the software, eliminating the need for cumbersome data extraction. The process becomes quicker, simpler, and more streamlined. Additionally, specialised tools like Fathom can be used to further enhance the budgeting experience.

Navigating the financial landscape: Balancing income and expense considerations

As part of the budgeting process, practices must carefully consider various income and expense factors:

Income Considerations:

Expected patient fees: Will there be changes in practitioners' workforce levels? How can income estimates be refined on a per-doctor basis? Are factors such as CPI or other increases taken into account?
Incentives or grant revenue: Are there any anticipated changes that will impact revenue streams?
Other income sources: Will rent received or training subsidies experience any expected changes?

Expense Considerations:

Staffing levels: Will there be changes in the practice's workforce?
Wage costs: Are there anticipated increases due to CPI adjustments or award changes?
Rent: Will there be CPI increases or other known changes?
Computer/IT expenses: Have hardware requirements, software renewals, or staff license considerations been factored in?
Occupancy costs: Will electricity, rates, or significant repairs impact expenditures?
Medical supplies: Have anticipated usage changes or cost-saving measures been incorporated?
Other costs: Are CPI increases or alternative calculations, as well as potential cost-saving measures, considered?

Monitoring progress: From budget to actual performance

Creating a budget is only the beginning. Medical practices must regularly measure their actual performance against the budgeted amounts. Accounting software or Excel can serve as powerful tools for this task. Additionally, specialised programs can extract financial data and generate automated reports, simplifying the measurement process. Reviewing variances, particularly significant ones, on a monthly or quarterly basis becomes paramount. This consistent monitoring empowers practices to optimise financial performance, proactively managing costs and implementing cost-saving strategies when needed.

Conclusion: Empowering financial excellence

Budgeting holds the key to financial success for medical practices in the modern healthcare landscape. By adopting this foundational business discipline, practices can navigate financial challenges, optimise cashflow, and unlock greater financial literacy. The path to financial excellence lies in embracing the power of budgets, transforming reactive financial management into a proactive journey toward a brighter and more prosperous future.

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Temporary full expensing: Beware of the sting in the tail!

Sun, 30 Jul 2023 21:30:00 GMT

Agribusiness Industry

Temporary full expensing: Beware of the sting in the tail!

By Bradley Barnes, Partner

31 July 2023

Let’s take you back to 2020, and the world is reeling from the aftermath of Covid-19. In a bid to stimulate the economy, the then Government introduced the popular Temporary Full Expensing (TFE) legislation on October 6th. This financial incentive allows businesses with a turnover of less than $5 billion to write off 100% of their eligible capital expenditure of the 2021 and 2022 financial years. Later it was extended to include the 2023 financial year.

Here’s where the tale takes a twist! For Small Business Entities (SBE’s) using the simplified depreciation rules, any remaining balance in their small business pool is completely written off in the 2021 financial year. Therefore, this means that unless they opt out of these simplified rules all their eligible capital assets will be fully depreciated, holding no further taxable value for them.

Fast forward to the recent Federal Budget the Government decides against extending the TFE measures. Instead, they set the immediate asset write-off for SBEs at a mere $20,000 from 1 July 2023, to 30 June 2024. Importantly, that’s a significant reduction in both eligibility and value. Considering most agribusiness equipment alone far surpasses this new limit, this spells potential tax consequences for businesses in the foreseeable future.

Let’s dive into a scenario to understand the impact (all amounts are GST exclusive)

In 2020, you purchased a tractor for $350,000, which was added to the small business pool. As part of the pool balance write-off in 2021, the tractor was fully depreciated. Fast forward to the 2024 financial year, and you realise it no long has the horsepower to meet your expanding needs. You decide to upgrade to a bigger and newer version worth $500,000. With the buoyant second-hand market, you receive a trade-in offer of $275,000 for the original tractor, resulting in a changeover cost of $225,000.

Now, let us explore the tax consequences of this transaction

The new tractor, priced at $500,000, will be included in your small business pool. Under the simplified depreciation rules, you’re entitled to a 15% deduction in the first year, amounting to $75,000.

The original tractor holds no tax value, which means that 100% of the trade-in proceeds, i.e., $275,000 will be taxable.

More importantly, this transaction alone adds an additional $200,000 ($275,000 proceeds minus $75,000 deduction) to your business’ taxable income.

Considering most

agribusiness equipment

alone far surpasses

this new limit, this spells

potential tax

consequences for

businesses in the

foreseeable future.

The repercussions of these

changes are significant,

particularly for businesses that embraced the TFE rules.

The repercussions of these changes are significant, particularly for businesses that embraced the TFE rules. The situation becomes even more dire if TFE assets are sold without a replacement since 100% of the disposal proceeds will be taxable income, without any deduction to offset it.

Taxing terrain: here are some strategies to help you navigate

Firstly, consider quantifying the value of the deferred tax on any future sales of your current capital assets. This will allow you to recognise this liability on your balance sheet, giving you a clearer view of your business’s future obligations. While this may be more straightforward for companies due to the constant tax rate, other entities can estimate this liability as well.

Secondly, tax planning is vital, so make sure you speak to your accountant before undertaking any sales or changeovers to understand the transaction’s tax consequences.

Taking stock and reviewing expected annual results, along with any taxable income resulting from these transactions, essential measures can be put in place to reduce the potential tax burden of these transactions.

Last, but not least, any business decision, be it equipment sale or changeover, should never just be viewed from a tax perspective. Decisions need to be made with the business plan in mind to ensure they maximise the returns for the business.

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RACGP wins payroll tax reprieve for SA general practice

Tue, 25 Jul 2023 08:37:33 GMT

Health Industry

RACGP wins payroll tax reprieve for SA general practice

By Matthew Holden, Managing Partner

25 July 2023

The Royal Australian College of General Practitioners (RACGP) has successfully campaigned for a payroll tax reprieve for general practices in South Australia (SA).

Key points:

The SA Government has announced a 12-month payroll tax amnesty for GP practices, valid until June 30, 2024. This falls short compared to Queensland's amnesty, which extends until June 2025.
GP practices must submit their applications for the amnesty by September 30, 2023.
By registering for the amnesty, practices safeguard themselves against retrospective penalties.
RevenueSA will collaborate with registered practices to provide tailored advice regarding their payroll tax liabilities.

This amnesty presents an opportunity for practices to seek clarity from a State Revenue Office on the various models for engaging practitioners, and whether any of these models preserve the intent of the independent practitioner tenant arrangement and protect practices from these arrangements being deemed as “relevant contracts” for which payroll tax must be paid. The grace period allows registered practices to modify their structures if necessary.

Wait, devil is in the detail

On the other hand, there is a risk of unnecessary scrutiny for practices that register for the amnesty. If practices are confident in their payroll tax compliance, registration may add time and cost pressures. The specific information to be disclosed to RevenueSA and their capacity to offer timely guidance for corrective action by June 30, 2024, remain unclear.

RACGP has communicated with the SA GP community, announcing their plans to host webinars with RevenueSA team members. It is reported that this education will be delivered prior to 30 September 2023 to enable practices to make an informed decision about whether to apply for the amnesty. This educational initiative may prove to be RACGP's most significant achievement through its advocacy efforts.

The devil is always in the detail and making an informed decision is crucial. Given the complexity of payroll tax, we strongly advise GP practices to wait for the webinar education that has been promised by the RACGP then seek accounting and legal advice before decided whether to register for the amnesty.

It is important to note that the amnesty exclusively applies to general practices, but the rising threat posed by the cases prosecuted in NSW also impacts on specialist, dental and allied health practices.

Link to RACGP press release:

https://www.racgp.org.au/gp-news/media-releases/2023-media-releases/june-2023/racgp-wins-payroll-tax-reprieve-for-sa-general-pra

Link to RevenueSA release:

https://www.revenuesa.sa.gov.au/payrolltax/contractors/amnesty-for-medical-practitioners-with-contracted-general-practitioners

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Four strategies for an engaging and effective performance review

Mon, 24 Jul 2023 07:23:59 GMT

Four strategies for an engaging and effective performance review

By Sharon Lloyd, Partner

24 July 2023

Performance reviews are pivotal moments in the professional journey for both employers and employees. These conversations hold the potential to shape careers and drive organisational success. To transform these reviews into impactful experiences, we present four powerful strategies tailored to enhance effectiveness and engagement in the business environment.

1. Set clear expectations from the onset

At the commencement of each year, seize the opportunity to establish clear expectations for your employees. Define targets, key performance indicators (KPIs), and performance plans that align with their roles and responsibilities. This framework creates a solid foundation for evaluation and accountability.

Furthermore, invest time in understanding your employees' career ambitions. Engage in conversations to explore their long-term goals and aspirations, seeking ways to align their professional experiences with their career plans. This not only fosters their growth but also showcases your commitment to their development.

To promote a focused and productive dialogue, provide employees with a copy of their appraisal before the review meeting. This allows them to review the document, collect their thoughts, and arrive prepared for a constructive business conversation rather than a potentially emotional one. Granting this preparation time creates an environment conducive to meaningful and objective discussions.

2. Thorough preparation for maximum impact

To ensure impactful performance reviews, dedicate ample time to thorough preparation. In the weeks leading up to the scheduled review, request employees to share examples of their proudest achievements from the past year. Encourage them to provide specific instances where they excelled or made significant contributions. This approach sets a positive tone for the review and underscores their strengths and accomplishments.

As the manager, review any notes you have maintained throughout the year pertaining to each employee's performance, milestones, and challenges. Seek feedback from relevant managers or team members to gain a comprehensive understanding of each employee's performance from diverse perspectives. This broader view enables you to provide well-rounded feedback during the review, facilitating a more accurate evaluation.

3. Strike the right tone

Effective communication is central during performance reviews, and striking the right tone is pivotal. Rather than adhering to the outdated feedback sandwich approach, which involves sandwiching positive and negative feedback between compliments, aim for clarity and consistency.

When addressing high-performing employees, center the conversation on acknowledging their strengths and achievements. Discuss their exceptional performance and the positive impact they have made. By recognising their contributions, you motivate and inspire them to continue excelling.

In dealing with underperforming staff, adopt a direct and honest approach. Avoid sidestepping the discussion of their shortcomings. Use this opportunity to address their underperformance directly and request improvement. Evading the issue only hampers the employee's growth and inhibits the organisation's progress. By confronting the problem head-on, you demonstrate your commitment to their development. Offer specific feedback and guidance on areas for improvement, outlining actionable steps they can take to bridge performance gaps.

4. Coach with a constructive approach

The performance review is an ideal moment for coaching and development. Engage in open and meaningful conversations with your employees, regardless of their performance level.

For high-performing employees, go beyond providing feedback and delve into their aspirations, challenges, and areas for further growth. Encourage them to share their thoughts on their current trajectory and create an environment where they feel heard and valued.

When delivering feedback, employ the STOP, START, and CONTINUE model for both high and low performers. Identify behaviours or actions that need to be discontinued or modified, highlight effective practices that should be continued, and suggest new strategies or approaches they can adopt. This method offers employees a clear roadmap for improvement, aligning their actions with their career objectives.

Remember to focus on behaviours rather than character flaws. By emphasising specific behaviours tied to outcomes, you maintain an objective and constructive feedback approach. Provide guidance and suggestions on how employees can develop the desired behaviours and skills necessary for success in their roles.

Lastly, if salary discussions are included in the review (although it is recommended to hold a separate meeting for this purpose), address them at the beginning of the conversation. By addressing this topic early on, you eliminate distractions and enable the employee to focus entirely on the review itself.

By implementing these four powerful strategies, your performance reviews will become engaging, effective, and meaningful experiences for both employers and employees. These strategies will foster growth, improve performance, and contribute to a positive and productive business environment. Embrace these strategies to unlock the full potential of your team and drive success in your organisation.

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Skills and training boost

Wed, 28 Jun 2023 22:16:53 GMT

Business Update

Skills and training boost

By James Moore, Manager

29 June 2023

What is the boost?

Small businesses with annual turnover less than $50 million, will be entitled to a bonus 20% tax deduction on eligible expenditure incurred on training and upskilling employees.

The boost applies to expenditure from 7.30pm 29 March 2022 until 30 June 2024. There is no cap on the bonus deduction.

For example, a training course provided to employees by an external training provider that costs $10,000 will provide a total deduction of $12,000 for the employer.

What is it aimed to do?

Encourage small businesses to upskill their employees to build a better trained workforce and address skills shortages.

Who is eligible?

Small business entity with aggregated annual turnover less than $50 million, and
Expenditure incurred in the period from 7.30pm on 29 March 2022 until 30 June 2024

Eligible Expenditure

Expenditure must be external training for employees (either in person in Australia, or online)
Other persons are not eligible for bonus deduction e.g. sole traders, partners in partnership or contractors
Expenditure must be charged by a registered training provider and be within the scope of the provider’s registration
It can be charged indirectly through an intermediary, however costs added onto an invoice by an intermediary are not eligible for the bonus deduction (e.g. commissions and fees)
The training provider must be registered with at least one of the following four government authorities
Australian Skills Quality Authority (ASQA)
Tertiary Education Quality and Standards Agency (TEQSA)
Victorian Registration and Qualifications Authority
Training Accreditation Council of Western Australia
Registered training provider must not be an associate of the small business
Enrolment in a training course must be after 7.30pm on 29 March 2022
Expenditure must be ordinarily deductible under the taxation law
Incidental costs, such as books and equipment, will be eligible provided they are charged by the registered training provider.

Excluded Expenditure

Cost of in-house or on-the-job training is not eligible

How do I get it?

Any expenditure incurred in the 2021–22 income year will not get the bonus deduction until you lodge your 2022–23 income tax return. Bonus deductions for expenses incurred in 2022-23 and 2023-24 income year will be included in the tax return when the expense is incurred.

Closing comment

Should you have any queries regarding this measure, please contact our office for more information.

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Technology investment boost

Wed, 28 Jun 2023 22:13:52 GMT

Business Update

Technology investment boost

By James Moore, Manager

29 June 2023

What is the boost?

Small businesses with annual turnover less than $50 million, will be entitled to a bonus 20% tax deduction on eligible expenditure incurred on business expenses and depreciating assets that support their digital operations.

The boost applies to expenditure from 7.30pm 29 March 2022 until 30 June 2023 .

An annual cap of $100,000 of expenditure applies. Therefore, the maximum bonus deduction is $20,000 per income year (20% of $100,000). As the bonus deduction is available in 2 financial years, an overall maximum bonus deduction of $40,000 is available.

What is it aimed to do?

Encourage small businesses to invest in digital technology and digitalise their business operations.

Qualifying Expenditure

Expenditure must support a small business’s ability to transition to a digital business. Items which may be eligible for the technology investment boost include

Computer hardware and equipment
Computer networks
Software (that is not developed in-house)
Repairs to the software
E-commerce platforms
Cyber security systems
Digital media and marketing
Portable payment devices
Design or upgrade of website
Telecommunication hardware/equipment
Subscription to cloud services
Digital tracking for livestock or other inventory

The expenditure must be ordinarily deductible under the taxation law. Bonus deduction will be calculated on GST-exclusive amount of expenditure if the business is registered for GST.

Where some of the expense is private, the bonus deduction will need to be apportioned.

In respect of a depreciating asset, the bonus deduction is calculated based on the asset’s cost (regardless of depreciation method). An entity cannot claim the bonus deduction for expenditure on a depreciating asset if it sells the asset within the relevant time period.

If the expenditure is on a depreciating asset, the asset must be first used, or installed ready for use, before 1 July 2023.

Excluded Expenditure

Salary and wage costs
Capital works costs
Financing and interest costs
Training or education costs (see Skills & Training Boost )
Trading stock costs

Example 1

On 1 April 2022, a small business entity pays $2,000 (GST-exclusive) annual subscription to a cloud service to store client and sales data.

On 2 April 2023, they renew their subscription for an additional $2,200 (GST-exclusive).

In their 2021-22 tax return, they will claim a deduction for $2,000 under the general deduction provisions.

In their 2022-23 tax return, they will claim a total deduction of $3,040 calculated as follows:

Example 2

On 29 June 2022, a small business entity purchases multiple laptops to allow its employees to work from home. The cost was $100,000 (GST-exclusive).

The laptops were delivered on 2 July 2022 and were issued to staff.

In their 2021-22 tax return, no deduction will be allowed as the laptops were not yet delivered and ready for use until the next financial year.

In their 2022-23 tax return, the business can claim a deduction for the depreciation of the laptops. Under temporary full expensing, the business can claim the full purchase price of the laptops , as well as a 20% bonus deduction. The total deduction will be $120,000.

How do I get it?

Any expenditure incurred in the 2021–22 income year will not get the bonus deduction until you lodge your 2022–23 income tax return.

Closing comment

Should you have any queries regarding this measure, please contact our office for more information.

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Managing change in business positively

Sun, 28 May 2023 23:00:00 GMT

Managing change in business positively

By Sally Storey, Partner

29 May 2023

As interest rates continue to rise its become necessary to consider changes within a business to ensure its continued viability. So, how do you manage change positively ?

Managing change is crucial to ensure growth, success, and sustainability in any business, particularly if inflation continues to dominate headlines. Despite its intimidating and challenging nature, change can become an opportunity for improvement and progress with the right mindset and approach. In this blog, we'll provide some tips on how to manage change positively in your business:

1. Create a plan: A solid plan is necessary before implementing any changes. Identify the goals and objectives of the change, create a timeline, and assign responsibilities to the team members. A well-thought-out plan can help you stay on track and avoid potential setbacks. Consider using a time management tool to facilitate your plan.

2. Communicate effectively: Communication is vital when managing change positively. Communicating the changes to your employees, suppliers, customers, and stakeholders is crucial. Explain why the change is necessary, how it will benefit the business, and what challenges may arise. Encourage feedback and be open to suggestions.

3. Involve your team: Since change affects everyone in the organisation, involve your team. Encourage them to share their thoughts and ideas and empower them to take ownership of the changes. This can help build trust and foster a positive environment.

4. Embrace a growth mindset: Embracing a growth mindset is essential since change can be uncomfortable. Encourage your team to view change as an opportunity to learn, grow, and improve. Celebrate small wins along the way and use them as motivation to keep moving forward.

5. Stay flexible: Change is not always linear, so staying flexible and adapting to new situations is essential. Monitor progress regularly, adjust the plan if necessary, and be open to new opportunities.

Fostering the right attitude

For the best results, your employees should feel that:

Their skills and talents are being used appropriately;
They have a say in what's happening;
They're part of a team with shared goals and commitments; and
There is a direct connection between work and the company's mission.

In other words, you are responsible for ensuring that your employees understand your company's goals and feel they have a role in fulfilling them.

Awareness and anticipation

The most effective way to navigate changes is to understand the forces surrounding it, national and global, thoroughly. You can then keep your employees informed, feeling as secure as possible and that they are working with you towards a common goal.

Facilitate communication within the organisation;
Listen to your new employees as fresh eyes in the organisation;
Develop a strategy to identify options, make choices, act and make adjustments;
Experiment , innovate and accept individual initiatives without feeling they may lead to instability; and
Reward employees and partners for participating in knowledge creation, discovery and sharing.

In conclusion , planning, effective communication, team involvement, a growth mindset, and flexibility are necessary when managing change positively in a small business. By implementing these tips, you can create a positive environment that fosters growth, success, and sustainability. Remember that change is not always easy, but it can lead to great things with the right approach.

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Software Corner - DALL-E

Sun, 21 May 2023 23:00:00 GMT

Software Corner

Cutting edge imaging AI is set to change business processes

22 May 2023

DALL-E is a new artificial intelligence program created by Open AI i , a technology research lab based in San Francisco, California.

But even more fantastic than this, the software’s moniker combines the names of the animated robot Pixar character WALL-E and the Spanish surrealist artist Salvador Dalí.

But DALL-E is no Dali-esque dream sequence and is a big deal, with the likes of Coca-Cola already clamouring to harness the power of DALL-E in industry-leading ways to improve their already world-class brands, marketing, and consumer experiences.

“We are excited to unleash the next generation of creativity offered by this rapidly emerging technology,” said James Quincey, Chairman and CEO of The Coca-Cola Companyii . “We see opportunities to enhance our marketing through cutting-edge AI, along with exploring ways to improve our business operations and capabilities.”

So, what is DALL-E?

DALL-E is an artificial intelligence program that can create images from descriptions when a user gives it a textual command. All you need to do is log in, write a description of your imaginative combination and voila, you get a unique result that accounts for other users’ searches and algorithmic bias.

At its core, DALL-E is the result of a combination of several existing technologies, including Natural Language Processing (NLP), Generative Adversarial Networks (GANs), and neural networks. NLP allows the AI program to interpret and respond to language commands. GANs are used to generate high-resolution images from scratch, and neural networks are used to adjust the images until they match the description given to the AI. Open AI explains, “We’ve trained a neural network called DALL-E that creates images from text captions for a wide range of concepts expressible in natural language.”

At the same time, DALL-E can take cues from associated words to create a real-world image. For instance, if asked to draw “a red car with a Christmas tree on the roof”, DALL-E will generate an image combining both elements into a scene. Known as “conceptual blending”, this is one of the unique abilities of DALL-E.

This technology has many potential applications ranging from art to medical imaging. For example, the technology could help medical professionals accurately generate an image of a rare condition or body parts. It could also be used to help illustrate conceptual ideas such as climate change or the impact of pollution on the environment. Likewise, designers and artists could incorporate AI capabilities into their artwork to help create stunning visuals.

Overall, DALL-E is an exciting development in AI technology that has the potential to revolutionise how we interact with computers. By allowing us to communicate with a computer on a natural language level and blend various concepts into a single image, this AI program can help us create striking visuals and make our data more valuable and meaningful.

Breakout: What are the benefits of DALL-E

Allows for the creation of realistic images from almost any text description.
Reduces the time and cost of creating, managing, and updating visual content libraries.
Enhances the ability of applications, such as virtual content curation and streaming, to rapidly find and utilise specialised visual content.
This technology has many potential applications ranging from art to medical imaging.

____________________

i. https://openai.com/product/dall-e-2

ii. https://www.bain.com/about/media-center/press-releases/2023/bain--company-announces-services-alliance-with-openai-to-help-enterprise-clients-identify-and-realize-the-full-potential-and-maximum-value-of-ai/

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Will the Australian construction sector bounce back in 2023?

Sun, 14 May 2023 23:00:00 GMT

Construction Industry

Will the Australian construction sector bounce back in 2023?

By Christina Gulliver, Partner

15 May 2023

After an abrupt slowdown in the residential construction sector throughout 2022, there are positive signs the industry is headed for a recovery this year, particularly in light of the positive data on dwelling approvals released by the Australian Bureau of Statistics in February.

Over nine interest rate rises in a row, plus mushrooming material costs, supply chain disruptions, and labour shortages stalled new home construction last year, setting back an urgent need for new dwellings across Australia.

According to HIA Chief Economist, Tim Reardon, “The 2022 cash rate increases were sufficient to bring [the] building boom to an end and further increases in 2023 will accelerate this downturn,” he added.

“There was a large volume of work in the pipeline when rates started to rise in May 2022, and there remains a record number of homes under construction, but this will shrink quickly as market confidence continues to fade.

Lending for the purchase or construction of a new home had already fallen to its lowest level since 2012 by the end of 2022, and the full impact of last year’s rate increases is still to flow through to households.

This will see the number of detached housing starts fall below 100,000 starts per year for the first time in a decade to just 96,300 in 2024. This is a very rapid slowdown from the 149,000 starts in 2021.”

Master Builders Australia CEO Denita Wawn, said, “The current environment is a difficult one for the industry marked by rising interest rates, robust cost pressures and labour shortages. Despite this, the total volume of construction activity grew modestly (+1.5 per cent) to $215.1 billion during 2021–22.

Whilst detached housing and renovations are stable or steadily growing off the back of the COVID stimulus boom, medium to high density remains hardest hit. This segment is more sensitive to interest rate fluctuations and is still recovering from the absence of inward migration over the past three years. Even before the pandemic, higher density dwellings were in decline.

The challenge will be to make sure that we put downward pressure on building and construction costs to increase output.”

She continued, “At present these challenges relate to supply of housing, workforce shortages – particularly key trades, bottlenecks in the market for key building materials and products, and increased costs from regulatory changes.”

ABS provides better news

Meanwhile, the total number of dwellings approved rose 18.5% in December, in seasonally adjusted terms, according to the latest data released by the Australian Bureau of Statistics (ABS)i.

Daniel Rossi, ABS Head of Construction Statistics, said, “this rise followed an 8.8% decrease in November 2022. The increase in the total number of dwellings approved in December was led by a sharp rise in approvals for private sector dwellings excluding houses (+56.6 per cent). The result was driven by a number of large apartment developments approved in New South Wales and Victoria."

He continued, "Approvals for private sector houses continued to track downwards, falling by 2.3%."

Across Australia, total dwelling approvals rose in New South Wales (+48.4%), Victoria (+20.7%), Queensland (+8.3%), and Western Australia (+6.4%), while Tasmania (-49.7%), South Australia (-24.6%), recorded decreases.

Approvals for private sector houses were mixed, with increases in Western Australia (+8.2%), Victoria (+0.3%) and Queensland (+0.2%), while South Australia (-7.4%) and New South Wales (-4.2%) fell.

The value of total building approvals rose 3.0% in December, following a 0.6% decrease in November. The value of total residential building approvals rose 6.6%, comprised of a 7.25% increase in new residential building and a 2.7% increase in alterations and additions.

Government doing its bit too

In the 2022-23 Budget, the Australian Government is delivering on $9.6 billion of election commitments for vital infrastructure projects across Australia that will help underpin the non-residential construction sectorii.

Commitments funded in the Budget include:

$300 million for Western Sydney Roads Package and $500 million for the High Speed Rail Authority.
$2.2 billion for the Suburban Rail Link in Victoria.
$586.4 million of additional funding for a major upgrade of the Bruce Highway to widen a 13-kilometre stretch through Brisbane's outer northern suburbs.
$1.5 billion for upgrading important freight highways, sealing the Tanami, and upgrading Central Arnhem Road, as well as the Dukes, Stuart and Augusta highways in SA.
$540 million to upgrade Tasmania’s important road corridors, including the Bass Highway, the Tasman Highway and the East and West Tamar Highways.
$125 million funding to help build an electric bus network for Perth.

A further $250 million has been committed for the Local Roads and Community Infrastructure program, enabling every local council across Australia to deliver priority projects to quickly stimulate local economies.

The Australian and South Australian governments have committed a total of $685 million to fund the Main South Road and Victor Harbor Road duplication (Fleurieu Connections) projects, with the Australian Government committing $221.6 millioniii.

The Victor Harbor Road duplication involves duplicating approximately four kilometres between Main South Road, Old Noarlunga and Main Road, McLaren Vale.

The duplication will improve road safety, improve traffic flow and increase capacity.

The adoption of technology

Technology is also playing a key role in the development of the construction sector, bridging the gap between manual and digital processes creating new ground for the industry. Many companies are now adopting solutions such as 3D printing and artificial intelligence, reducing the time and cost for production, whilst creating efficient and cost-effective solutions for the public.

Overall, the growing demand for construction services and with advances in technology is providing a unique opportunity for construction companies to succeed as the sector continues to grow. With the sector starting to show early signs of a return to form, the construction sector in Australia is expected to grow significantly over the coming years, providing a sustainable and reliable market for all industry participants.

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i. https://www.abs.gov.au/media-centre/media-releases/apartment-approvals-drive-december-increase

ii. https://minister.infrastructure.gov.au/c-king/media-release/96-billion-infrastructure-boost-australia

iii. https://minister.infrastructure.gov.au/c-king/media-release/major-milestone-duplication-victor-harbor-road

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Payroll Tax: The viability of independent practitioner arrangements

Sun, 30 Apr 2023 23:00:00 GMT

Health Industry

Payroll Tax: The viability of independent practitioner arrangements

By Matthew Holden, Managing Partner

1 May 2023

It has been over 16 months since the Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 259 case hit the medical media, with the title “GP practice loses legal battle over $800,000 Payroll Tax bill”.

This case re-ignited the Payroll Tax issue across the health sector and private medical practices have since been in a spin, anxiously trying to find out whether the independent practitioner arrangements commonly used for engaging medical practitioners would be deemed a “Relevant Contract” and therefore assessable as wages for Payroll Tax purposes.

To recap, Thomas and Naaz operated three practices in Sydney, and were found to owe the state almost $800,000 in retrospective Payroll Taxes as payments to doctors were deemed to be assessable for Payroll Tax as payments under a Relevant Contract. For various reasons, Revenue NSW determined that the way in which:

the practitioners were remunerated;
the collected funds were accounted for;
the practitioners were contracted; and
the practice controlled their conditions,

all lead to this determination.

Since this case came to light, there has been a great deal of uncertainty as the sector waited on Revenue NSW to release their guidance on this matter. Meanwhile an even more substantial case erupted in Queensland where a practice was reported to owe $3M of Payroll Tax.

On 22 December 2022, Queensland Revenue Office (QRO) then released a Public Ruling PTAQ000.6.1 Relevant contracts—medical centresi. This ruling makes it clear that from their perspective there will be very few situations where the contract arrangements for engaging medical practitioners will not be deemed a relevant contract attracting Payroll Tax. These exemptions are:

The practitioner provides services to the public generally. (i.e. working for other medical practices operated by unrelated groups or hospitals) – you must make an application to the Commissioner to approve the application of this exemption.
The practitioner performs work under a contract for no more than 90 days in a financial year. (Part days worked are counted as 1 day).
The practice contracts the practitioner, and that practitioner employs at least one other person to perform the work under the contract.

While Payroll Tax is a state-based tax, the relevant legislation is harmonised across most states. Considering QRO‘s interpretation of the legislation, it is a reasonable expectation that in time all states will adopt the same interpretation. This means that the independent practitioner arrangements which the majority of medical practices have in place will create a Payroll Tax liability.

In response to the advocacy of the AMA & RACGP, QRO (early February 2023) announced a two-year Payroll Tax exemption for GP practices until June 2025. This provides temporary relief for Queensland practices, and it is hoped that the two-year amnesty offered in Queensland will also be offered in other states.

Meanwhile, a subsequent appeal of the Thomas and Naaz case to the Supreme Court of NSW was unsuccessful, with a ruling handed down on 14 March 2023 that there were no grounds for appeal and the matter was dismissed. It is understood that the AMA is now advocating an amnesty in NSW to match the actions of the QRO.

We know that the viability of the business model for general practices is under a great deal of stress, and most practices are not going to be in the financial position to absorb the extra cost of Payroll Tax. The big question is, who is going to pay if a practice is required to fund Payroll Tax? Will the practitioners be willing to take a reduction in their remuneration? Or will patients need to pay more? In the context of declining bulk billing rates there are many more patients paying for access to GPs than ever before.

Payroll Tax Thresholds

For many small practices, while it is prudent for owners to be across this issue, due to the minimum Payroll Tax thresholds in each state, they may find that regardless of how their arrangements are structured, they will have no liability to Payroll Tax due to their size.

Below is a list of the current minimum Payroll Tax thresholds for each State. If you are a small practice owner, and your total employee remuneration (wages plus superannuation), plus net payments to doctors (collections less service fee) is under this threshold, then you will have no Payroll Tax liability.

If you find you are only marginally over the threshold, you may determine that the cost of re-structuring does not support the expected level of Payroll Tax you may be required to pay.

Brentnalls SA’s position

Firstly, we acknowledge that the independent practitioner arrangements used by many practices across Australia to engage medical practitioners are at risk of extinction. It appears that no matter how practices are operating, there is a high probability that their arrangements with independent practitioners will be deemed to be Relevant Contracts for Payroll Tax purposes, meaning Payroll Tax will need to be paid.

Our approach to date has been to not over-react to this situation and work with our clients to focus on ensuring the arrangements that practices have in place for their independent practitioners minimises the risk of audit and minimises the risk of an adverse finding as a consequence of an audit.

We are not convinced that some of the strategies being adopted by some medical practices to minimise risk will be all that successful. For example, we do not believe that setting up individual bank ac counts for each practitioner will offer any greater protection.

Our understanding is that Revenue NSW have indicated that they will see through these arrangements and the income will still be considered remuneration for Payroll Tax purposes.

Either way, it is important that, before embarking on any structural or procedural changes to your practitioner arrangements, you understand the quantum of Payroll Tax you might otherwise pay in order to make a sensible business decision protection arrangements and the income may still be considered remuneration for Payroll Tax purposes.

Our recommendation

1. We encourage owners of medical practices to contact their accountant or legal advisor if you have any concerns about the contractual arrangement that you have in place for the engagement of medical practitioners.

2. It would be prudent for medical practices that have not recently reviewed their independent practitioner arrangements to undertake a thorough review to reduce the risk of an adverse Payroll Tax finding. A review should cover the following areas to:

Practitioner Service Agreements
Banking and Practitioner Payment processes
Accounting Treatment of practitioner payments
Disclosure of Service Fee income and related transactions in Activity Statements and Income Tax Returns

3. In addition, as we expect Payroll Tax audits to continue to occur, potentially more frequently in response to this matter, it would also be prudent for practice owners to review any tax audit insurance cover they hold. Importantly, they should ensure any tax audit insurance provides cover for state taxes such as Payroll Tax. We are aware of some tax audit insurance policies which provide cover for federal taxes only, in which case they would not cover a Payroll Tax audit.

4. Re-consider the contractual arrangements and terms that are being offered to any newly engaged practitioners.

5. Continue to look out for further guidance from your accountant and state revenue department so that you stay informed.

_________________

i. https://www.treasury.qld.gov.au/resource/ptaq000-6/

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Smart estate planning for businesses

Sun, 23 Apr 2023 23:00:00 GMT

Smart estate planning for businesses

By Bradley Barnes, Partner

24 April 2023

Do you want to protect your hard work and assets? Running a small business can be challenging, and planning for the future is smart.

To help with this planning, we strongly recommend seeking estate planning advice from a legal professional who can help you prepare a legally binding Will and a Power of Attorney. These legal documents will help protect your business interests if you're deceased or incapacitated.

As your accountant and advisor we understand your group structure, where your business and wealth assets are held and controlled. As a result, we can assist to ensure your estate plan not only reflects your wishes but it seamlessly integrates every facet of your business, personal, financial and legal affairs.

Writing a Will

Apart from outlining your wishes about distributing your assets, a Will is a legal document outlining how your business assets are allocated or managed. A Will is an essential part of estate planning, which, if prepared incorrectly, can have serious consequences for how your estate is distributed on your death. Any errors or confusion can also cause unnecessary delays and costs which could harm your business.

By creating a Will, you can ensure the allocation of these assets according to your wishes, and your business can continue to operate smoothly if that is your desire. It is particularly important if you hold assets in varying structures, such as Companies, Family Trusts, or Self-Managed Superannuation Funds. If your explicit wishes for assets in structures are not legally specified, their control may be left to the discretion of executors, trustees or directors. As part of this process, you must pick an executor and possibly an alternate executor to oversee the management of your estate.

Consider naming a successor for your business who will take over if you wish for it to continue after you pass away. Remember to spell out how you'd like your business assets managed, and if there is no successor, outline how the business should be sold and the proceeds distributed. These instructions may be complex so it may be appropriate to have these in a separate document referred to in the Will.

Protecting your business in the event you're debilitated

In addition to a Will, creating a Power of Attorney is crucial. A Power of Attorney is a legal document that designates an agent – this could be the same person you've chosen as your executor or someone different – to act on your behalf if you cannot do so yourself.

A Power of Attorney will enable this individual to make decisions about your business, such as signing contracts or managing finances. By creating a power of attorney, you can protect your business interests even if you become incapacitated or unable to make decisions.

Creating a Will and power of attorney can also provide peace of mind for you and your loved ones. By putting these legal documents in place, you can rest assured that your business interests are protected and that your loved ones will be able to act as you want them to.

Dying intestate

Dying "intestate", or without a Will, can have significant consequences for small business owners. It's important to note that each state and territory have specific legislation. Here's what may happen to a small business owner who dies intestate:

The distribution of assets: In the absence of a Will, the distribution of the deceased's assets, including business assets, is determined by intestacy laws. The distribution of assets is usually based on the deceased's family relationships, with the surviving spouse or children being the first to inherit. However, if there is no spouse or children, other relatives such as parents or siblings may inherit, or in some cases, the assets may pass to the state.
The sale of the business: In some cases, the business may need to be sold to pay off debts or to distribute the assets according to the intestacy rules. This process can devastate family-owned businesses.
The appointment of an administrator: When a business owner dies intestate, an administrator is appointed to manage the distribution of assets. This can be lengthy and costly and cause significant business operation delays.
Disputes among family members: In cases with multiple heirs, disputes over the distribution of assets can arise, leading to lengthy and costly legal battles. These quarrels can result in the collapse of the business and the family's relationships.
The impact on employees: When a small business owner dies intestate, the employees may face uncertainty about their future employment. For example, the new owner may want to select new staff if the business is sold. This situation can be particularly devastating within a close-knit and loyal workforce.

It's critical to consult with a legal professional to ensure your Will is legally binding and comprehensive.

Creating a Will and ensuring that your business and assets are distributed according to your wishes is essential to avoid these consequences. Therefore, it's critical to consult with a legal professional to ensure your Will is legally binding and comprehensive. Don't leave the fate of your business to chance – take action today to protect your business and your loved ones .

Breakout: A basic checklist for writing a Will:

Make a list of personal assets: Include all personal assets such as your home, car, jewellery, art, and personal bank accounts.
Make a list of business assets and the structures they are held in: Include all business assets such as equipment, inventory, intellectual property, and business bank accounts.
Choose beneficiaries for personal assets: Decide whom you want to inherit your assets, including individuals, organisations, or charities.
Choose beneficiaries for business assets: Decide whom to inherit your business assets, including family members, business partners, or employees.
Appoint an executor: Choose someone you trust to carry out your Will's instructions for personal and business assets. This person will be responsible for managing your assets and distributing them to your beneficiaries.
Name a successor for your business: If you own a business, name a successor who will take over after you pass away.
Include instructions for selling business assets: Specify how you want your assets managed or sold and the proceeds distributed.
Include instructions for continuing the business: Specify how you want your business to continue after you pass away, if applicable.
Sign and date your Will: Remember to sign and date the Will in the presence of eligible witnesses.
Store your Will in a safe place: Keep your Will in a secure location, such as a safe deposit box or with your accountant or solicitor, and ensure your executor knows where to find it.
Review your Will regularly: Review and update your Will, especially if you have significant life changes, such as the birth of a child, a divorce, remarriage, or substantial changes in your business.

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7 ways to take back your time

Sun, 16 Apr 2023 01:00:00 GMT

7 ways to take back your time

By Sarah Hall, Associate

16 April 2023

We all face the challenge of limited resources and time. However, with the right strategies and tools, it’s possible to work more productively and efficiently, and master your time.

Research shows high performing people are 400% more productive than those who achieve average performance 1 . So, what are the best doing that the rest are not? Let’s look at seven ways to become more productive and reclaim your time. It could be a personal productivity game-changer.

1. Know your MIT

Identify your ‘Most Important Task’ (MIT) for each day. To pinpoint your MIT, understand the return on the investment of your time. Consider whether completing a task will advance your primary goals – then focus on getting it done.

2. Delegate

Trying to micro-manage every aspect of your life will suck up oodles of time. Know what you’re good at, focus on it, and have trust in those you delegate to.

3. Tap into tech

Are outdated tools and personal organisation strategies holding you back? High performers use the right resources to maximise their productivity. This can include technology such as productivity apps and automation tools.

Beware though, tech can also be a time thief. Rather than responding immediately to every beep, ping or vibration, highly productive people schedule a set time to read and respond to messages and emails.

4. Learn to say "no"

High performers learn to say "no" to tasks and activities that do not align with their goals or values. By saying "no," they can focus on their top priorities and avoid overcommitting their time and energy.

5. Try the Friday afternoon ROAR process

By Friday afternoon most of us are ready to down tools. However, in his book “Smart Work”, author Dermot Crowley suggests completing the following ‘ROAR’ process each Friday before hanging up your work boots for the week:

Review the week – reschedule incomplete tasks and look through meeting notes for any actions you need to add to your calendar the following week.
Organise next week – schedule, plan and prepare.
Anticipate – check your calendar to know what the next 3-4 weeks will bring. In particular, identify and plan for upcoming deadlines.
Realign – take a moment to look back at the week, and how well you have worked towards your objectives and key results.

Find the time management technique that works for you

High performers make the most of their time by employing proven time-management techniques. These can include:

Time-blocking – divide your day into blocks of time, each dedicated to accomplishing a specific task.
The Pomodoro technique – divide your time into intervals (or ‘pomodoros’), typically 25 minutes in length. Separate each interval with a short break. It’s a technique used by many time management apps.
The Eisenhower matrix – provides a 4-square matrix that identifies urgent, important and non-essential tasks as well as those that can be delegated ( Time Management Tool review our version).

7. Ditch the distractions

Distractions kill productivity. Start each day with your goals in mind. Stay organised, and resist the urge to succumb to distractions like checking social media. It’ll steal your time – and take you longer to regain concentration.

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i. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1744-6570.2011.01239.x

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Disclaimer

Farm Management Deposits

Sun, 09 Apr 2023 23:00:00 GMT

Farm Management Deposits

By Sharon Lloyd, Partner

(updated 6 April 2023)

Primary producers can smooth cashflow and tax liabilities with a Farm Management Deposit (FMD). Australia's farmers and rural communities know that climate events such as drought, floods, and bushfires must be endured and planned for in our dry continent.

Moreover, primary producers know drought isn't like a flood or fire. It creeps up slowly, but when it starts to hit, it hits hard, and this is one of the reasons a Farm Management Deposit can come in handy.

What is a Farm Management Deposit (FMD)?

The FMD scheme was created as a risk-management tool to help primary producers deal with uneven profit caused by these climate events that can impact cropping, livestock, or feed availability. An FMD is a bank account much like a term deposit.

An FMD is available for use by individual primary producers who have non-primary production (off-farm) income of less than $100,000. The maximum amount of funds held within an FMD is capped at $800,000 per individual. That said, separate deposits of varying amounts can be held with multiple banking institutions so long as the total of these accounts doesn't breach the $800,000 cap.

An FMD must be held on deposit for a minimum of 12 months to enable an individual deposit holder to claim a tax deduction. However, deposits can be withdrawn after the 12-month term and will be assessable as primary production income on withdrawal.

Where you are affected by natural disaster or severe rainfall deficiency, there is the opportunity to withdraw deposits before the minimum 12-month period. Still, individuals need to meet specific criteria to do so.

Useful tax planning tool that can smooth the flow of cash

FMDs are a useful tax planning tool to help defer tax liabilities from one year to the year the deposit is withdrawn. An FMD allows the income produced in a good year to be carried into a less profitable year.

Another benefit of holding money in an FMD, it allows the primary producer to smooth their taxable income over several years. In this way, they can manage an individual's average income level for primary production averaging purposes.

Also, FMDs can improve the credit position of a primary producer. These deposits are considered an asset contributing to the primary producer's wealth; they can be used as collateral to gain finance access.

Using FMDs can be particularly beneficial for the younger primary producers compared to superannuation, another common tax-saving tool. With FMDs, release conditions are much shorter than superannuation ; therefore, access to the funds can be sought when required.

Use your FMD as an offset account

FMDs can be used as offset accounts against primary production business debt. The business debt must be an eligible loan held by an FMD owner or a partnership they're involved in and be directly related to their primary production business.

The offset can only be used against one loan at a time, and the loan must be held with the same institution as the FMD. Be mindful, though; not all financial institutions are offering offsets with their FMD products.

Where to make deposits into an FMD

Only an authorised deposit-taking institution can accept deposits for FMDS and an entity with a Commonwealth, state or territory guarantee for deposits.

All banks, building societies and credit unions are authorised deposit-taking institutes regulated by the Australian Prudential Regulation Authority (APRA).

If you are a primary producer, don't hesitate to contact us to discuss the value of FMDs as wealth creation and tax minimisation strategies to support your business.

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Disclaimer

IR reform and its impact on the construction industry

Sun, 09 Apr 2023 01:00:00 GMT

Construction Industry

IR reform and its impact on the construction industry

By Wade Crane, Associate

9 April 2023

IR reform was a big deal last year, and on 27 October 2022, the Labor Government tabled the widely expected Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.

The legislation, which will have plenty of implications for the construction sector, aims to make numerous changes to industrial relations legislation with the intention of:

encouraging and facilitating enterprise bargaining, and multi-business enterprise bargaining in particular.
simplifying the bargaining and approval processes for enterprise agreements, including simplifying the better-off overall test (BOOT).
improving job security and gender equity, including limiting the use of fixed-term contracts and prohibiting pay secrecy clauses.
improving workplace conditions and protections by providing an enforceable right to request flexible working arrangements.
abolishing the Australian Building and Construction Commission (ABCC) and making the Fair Work Ombudsman (FWO) the workplace relations regulator for the building and construction industry.
abolishing the Registered Organisations Commission and transferring its functions to the General Manager of the Fair Work Commission i .

Abolition of the Australian Building and Construction Commission

On 2 December 2022, the Government passed the legislation after garnering the support of the crossbenches, and one of the significant changes involves the abolition of the Australian Building and Construction Commission (ABCC).

The ABCC was the independent statutory authority responsible for facilitating understanding and enforcing workplace relations compliance in the building and construction sector. The Fair Work Ombudsman has now assumed the role of workplace relations regulator accountable for implementing the Fair Work Act for the construction industry. Moreover, the FWO will take on all proceedings adjudicated by the ABCC.

The Code for the Tendering and Performance of Building Work 2016 (Building Code) was also repealed. This change will impact the penalties imposed on building industry participants. The Fair Work Act now deals with matters such as coercion, adverse action, freedom of association, unlawful industrial action, and discrimination.

The Ombudsman has a range of other powers to investigate and address breaches of the Fair Work Act, including acquiring information under notice but does not have the same compulsory examination powers as the ABCC.

Establishing the National Construction Industry Forum

The amended Act established the National Construction Industry Forum. This new body will commence on 1 July 2023 and is chaired by the Minister for Employment and Workplace Relations. The Forum is a statutory advisory body for the building and construction industry. Its members will have experience representing employees and employers in the building and construction industry.

What do the changes mean for you?

Building industry participants will no longer need to comply with the requirements previously prescribed by the Building and Construction Industry (Improving Productivity) Act 2016 BCIIP Act and the Building Code. However, they will need to familiarise themselves with and continue to comply with the relevant provisions of the Fair Work Act.

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i. https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd2223a/23bd034

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Disclaimer

Tax on high superannuation balances

Sun, 02 Apr 2023 01:00:00 GMT

Superannuation

SMSF Association Conference 2023 and Tax on high superannuation balances

By Nadine Hill, Principal

2 April 2023

Yanli Ye, Manager and myself recently attended the 2023 SMSF Association National Conference at the Melbourne Conference Centre.

Over 2 ½ days Yanli and I attended sessions presented by the leading specialists in SMSF’s. These sessions included topics such as contribution and pension strategies, the importance of deeds and details of the most recent changes to legislation.

There was a special address from Hon Stephen Jones MP (Labor Minister for Financial Services) in the morning and later that day a special address from Hon Stuart Robert MP (Shadow Assistant Treasurer and Shadow Minister for Financial Services). Both generated a lot of discussion. It was during the following week that the Government made an announcement.

On Tuesday 28 February 2023, the Government announced that the superannuation fund concessional tax rate applied to accumulation phase earnings will increase from 15 per cent to 30 per cent for taxpayers with superannuation balances above $3 million, from the 2025–26 income year.

Individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to a tax of 15 per cent on earnings. This tax is in addition to any tax their superannuation funds pay on earnings in accumulation. This means that earnings attributable to balances above $3 million will generally attract a combined headline rate of 30 per cent. This measure will commence on 1 July 2025 and apply to the 2025-26 financial year onwards. Earnings corresponding to funds below $3 million will continue to be taxed at 15 per cent or less.

The individual will be liable for the additional tax of 15 per cent. The individual can choose to pay the tax themselves or can nominate their super fund, or one of their super funds if they have multiple.

Earnings will be calculated with reference to the difference between the individual’s total superannuation balance (TSB) at the start and end of the financial year, adjusting for withdrawals and contributions.

An individual’s TSB includes all of their superannuation interests and is not a separate figure for each interest — i.e. the $3 million threshold will be applied on a per-individual basis and not on a per-account or per-fund basis. The calculation of earnings includes all notional (unrealised) gains and losses, similar to the way superannuation funds currently calculate members’ interests.

Negative earnings will be able to be carried forward to reduce the tax liability in future years.

Please note that it is expected to only affect 0.5% of taxpayers or 85,000 individuals when it starts on 1 July 2025.

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Working from home - what can you claim?

Thu, 30 Mar 2023 00:29:25 GMT

Working from home - what can you claim?

By Sharon Lloyd, Partner

1 June 2022

updated 30 March 2023

On 16 February 2023, the ATO announced changes to working from home (WFH) deductions.

Taxpayers can choose either the ‘actual cost’ or the ‘fixed rate’ method to claim WFH deductions. Only the fixed rate method is changing. The revised fixed rate method applies from 1 July 2022 and can be used when taxpayers are working out deductions for their 2022–23 income tax returns.

From 1 July 2022 to 28 February 2023, the ATO will accept a record representing an estimate of the total number of hours worked from home (such as a 4-week diary). From 1 March 2023 onwards, taxpayers must keep records of the total number of hours they actually work from home.

Tax deductions for working from home (WFH)

As a result of the COVID-19 pandemic many people have been and still working from home. This means an increase in their utility costs, phone and internet expenses as well as the use of personal equipment. If this applies to you, the good news is that some of these expenses can be claimed back as a tax deduction on your next tax return.

Home office running expenses

Usually when working out home office deductions, the ATO requires a 4-week consecutive diary listing the number of hours you work from home per week and then averaging that out for the rest of the year. However, if there is a period where your working from home time has significantly increases, keep a separate diary to detail your costs relating to this period to justify your larger claim and do not average this cost out throughout the year.

Capital Gains Tax (CGT) implications

In most cases, if you work from home as an employee and claim working-from-home expenses, it will not have CGT implications and you will not lose your main residence CGT exemption. If you do claim occupancy expenses, i.e. lighting, heating and cooling bills, then you do not get the full main residency CGT exemption, although you may be entitled to a partial exemption.

Below provides detail around what you can and cannot claim. We also show you the details on calculating running expenses:

Your home office

Can Claim

Phone and internet expenses.
Small capital items such as furniture and computer equipment costing less than $300.
Depreciation of equipment, furniture and furnishings in the area you use for work.
The cost of repairs to this equipment, furniture and furnishing.
Cost of cleaning your home work area.
Lighting, heating and cooling bills.
Other running expenses, including computer consumables (such as printer ink and stationery).

Cannot Claim

Property insurance.
Land taxes and rates.
Rent payments.
Mortgage and interest payments.

Calculating Running Expenses

Fixed Rate

The changes are:

The cents per work hour have increased from 52 cents to 67 cents and it covers energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables.
Expenses that can be claimed separately:
Depreciation of equipment used while WFH.
The repairs and maintenance of these assets.
The costs associated with cleaning a dedicated home office.
Taxpayers are not required to have a dedicated home office to claim WFH expenses under this method.
Taxpayers need to keep a record of all the hours worked from home for the entire income year. The ATO will not accept estimates, or a 4-week representative diary or similar document, under this method from 1 March 2023.
Records of hours worked from home can be in any form provided they are kept as they occur, for example, timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year.
Records must be kept for each expense that taxpayers have incurred which is covered by the fixed rate per hour.

Actual Expenses

If you have a dedicated work area, you can claim additional running costs and the depreciation of office furniture used in the area for work purposes. To calculate actual expenses for your dedicated work area you need to:

keep a record of the number of actual hours you work from home during the income year,
work out depreciation of assets based on work-related use percentage,
work out cleaning expenses based on floor area percentage of your dedicated work area, and
work out cost of heating, cooling and lighting on cost per unit of power used and average units used per hour for work-related purposes.

This method generally leads to bigger claim than the fixed rate but is more complicated and more substantiation is required.

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Disclaimer

Time Management Tool

Tue, 21 Mar 2023 22:00:00 GMT

Time Management Tool

By Sarah Hall, Associate

22 March 2023

There are never enough hours in a day. As a business owner, it is easy to get caught up in the day-to-day operations of your business and not find time to work on what really matters.

Focus On What Really Matters

At Brentnalls SA, we have devised this simple time management tool to help you prioritise your precious time.

First, list all of the activities you do or would like to do for the business.
Rank each one on a scale of 1-10 where 10 is an activity with the greatest impact on achieving business goals, increasing profit and cash flow in your business, and 1 is of little impact.
Then rank each one on a scale of 1-10 where 10 is the activity that will have the quickest impact (i.e., low-hanging fruit) and 1 is an activity that will only impact the business in the long-term.
Total the scores to get a ranking out of 20.
Delegate all tasks with a score less than 16 and focus your time on those with scores 16-20.

Another way of looking at this is if you mark each activity in the following quadrant:

How it works

All activities marked in Quadrant B should be where you invest your time now (i.e. your immediate goals).

Quadrant A requires more time to achieve your goals and these should have clear action plans with key people assigned to them to assist you with achieving the desired outcome.

All other activities in Quadrants C and D should be delegated to people in your team to free you up to focus on your activities in Quadrants A and B. The outcomes of attending to the above include:

Ability for you to refocus your attention to areas that will generate the greatest impact on your business;
Drive growth and profitability;
Increase the value of your business; and
Force you to delegate tasks to your team members and empower them to assist you to grow the business - resulting in you being freed up to work more on the business rather than in the business.

If you require further information about this tool and other business tools such as Ansoff Matrix and Benchmarking .

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Disclaimer

Software Corner - SimPRO

Sun, 12 Mar 2023 00:00:00 GMT

Software Corner

SimPRO

Job Management Software

12 March 2023

In these days of rapidly rising costs, it has become critical for businesses to manage input costs and ensure teams are working productively at all times – time lost is profit lost.

SimPRO is job management software that’s designed to streamline tasks and help everyone work from the same page to keep projects rolling along efficiently – and within budget.

What it does

Designed with trade contractors in mind, SimPRO covers a number of aspects of project workflow. It generates quotes, manages inventory, and features functions for invoicing and receiving payments. By tracking field personnel time, SimPRO allows for accurate costing and billing.

SimPRO can also be used for asset maintenance scheduling. It lets users capture asset defects and test readings, register new assets and access test history from the field. In this way, SimPRO can automate asset maintenance schedules and provide alerts and notifications of key maintenance dates.

Key strengths

From a data analytics and reporting perspective, SimPRO can help in five key areas:

Inventory management – the software allows monitoring of stock levels, and picks up on price discrepancies, so businesses can avoid being charged incorrectly by suppliers.
Workforce reports – SimPRO allows users to view field staff activity, completed tasks, employee and contractor licensing status and job costs per employee. It’s also possible to measure how well teams are working with labour productivity reports.
Project tracking – keep projects on track and monitor budgets through work in progress reports, job summaries, costs to complete and a list of jobs at all stages.
Financial data – SimPRO generates a number of financial reports including profit/loss, sales invoices, monthly breakdown and aged receivables reports.
Customer service – By identifying the average response time for jobs and tracking customer records, SimPRO lets a business see whether it is living up to its promise of great client service, and identifies those customers that are generating the most business.

To streamline projects further, SimPRO connects with QuickBooks and Xero for simplify accounting and job management.

Potential downsides

Like many software programs, it can take time at the set-up stage to integrate SimPRO into your own accounting system. However, SimPRO offers a number of eBooks, webinars and customer support to streamline the process.

The verdict

SimPRO may be suited to businesses using large teams or teams spread across a variety of locations as it allows everyone to know where they need to be, and what they need to do. In this sense, SimPRO can be a cost saver, potentially eliminating unnecessary phone calls and conversations to determine job status, order status, keep teams informed and minimise down time.

For more details head to https://www.simprogroup.com/au .

Learn more about how Brentnalls Construction can assist you with your Construction, Building and Allied Services .

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Health providers can futureproof practices with strategic planning

Sun, 05 Mar 2023 00:00:00 GMT

Health Industry

Health providers

can futureproof practices with strategic planning

By Danny Haydon, Principal

5 March 2023

Health providers are progressively discarding bulk billing, according to a survey of almost 500 GPs. Cited as the key reasons being out-of-touch Medicare rebates, declining profit margins, and the escalating costs of running a practice.

HealthEd, a private, professional education company for doctors, surveyed 477 GPs in August and found more than one in five – 22%i – had recently changed their billing model.

Bigger than Medicare

However, Medicare rebates are only part of the challenge. Practices also must contend with a myriad of uncertainty , including independent practitioner arrangements and the impact on payroll tax obligations.

At the same time, the medical sector isn’t immune to the Australia-wide staff shortages attributable directly to the COVID-19 pandemic, with workforce supply limitations for practitioners and support staff creating unique challenges. Indeed, the war for talent in Australia’s job market is hotting up, with our unemployment rate falling to 3.4 per cent in October, the lowest in over fifty yearsii.

While it is pleasing that the Federal Government has pledged to increase its migration program to 195,000 permanent skilled migrants from 160,000iii clearly, practices can no longer afford to be reactive to the external influences that dictate how they function.

Getting on with the new norm

For medical practices to remain viable in times of constant change and uncertainty, they will need to transform into proactively managed businesses that are determined to create the preferred future based on a shared vision and purpose by developing a strategic plan.

Throughout COVID-19 medical practices, like virtually every other business, have been in a constant state of reactive action, adapting to the frequent changes in health policy and associated laws.

Focusing on strategy will enable practices to proactively wrestle back control of their businesses and move forward in a manner of their own volition even in the face of increasing staff shortages, higher business costs and flawed rebate indexation.

Now is the time for practices to lift their eyes and start considering the sustainability and viability of the business. Park COVID to the side and focus strategically on where the practice needs to go.

This means responding strategically to the headwinds such as staff shortages, the escalating costs of doing business and the changing nature of billing.

Planning for success

In our experience, high-performing practices embrace opportunities. Importantly, partners in high-performing practices regularly take a step back from running the business and invest time in strategic planning to improve its performance and look at what they do better.

These practices work through a process that highlights their priorities, and more contemporary practices focus on one, two or three issues only to ensure they fully execute and address them well.

It’s worth noting that the RACGP’s Standards for General Practice (5th edition) Criterion C3.1—Business operations systems require practices to demonstrate strategic thinking and business planning. This recognition by the medical profession to incorporate planning as an accreditation indicator endorses the importance of embedding strategic planning as a routine practice discipline.

Benefits of strategic planning

Aligning a practice’s vision and goals through the strategic planning process will ensure your daily operations work harmoniously towards achieving sustained success. The benefits of strategic planning include the following:

Focusing attention on the vision and purpose.
Reducing distractions caused by differences of opinion and other influences.
Providing a platform for effective decision-making.
Reducing your vulnerability to external forces in the industry.
Enabling your practice to be proactively managed.
Providing a clear focus on the investment of effort and resources.
Increasing productivity because all activity is heading in the same direction.
Building stronger teams and the buy-in of people involved in the process.
Communicating goals and objectives to key stakeholders.

Drafting your strategic plan

Drafting a strategic plan involves several steps. However, in its simplest form, the plan addresses three key questions:

Where is our practice now?
Where do we want to be in the future?
How are we going to get there?

The steps below provide a structure for practices to work through in drafting their strategic plans:

1. Who are we?

Marketing strategists love this stuff, but the “purpose” of a business is critical to its success. The purpose involves considering why the practice exists and what difference does it make? Also, consider your guiding principles or the core values that underpin the decisions made by your practice.

2. Where do we want to be?

This is where a vision statement will prove valuable. A vision statement provides you and your employees with direction, purpose, motivation, and inspiration to achieve the desired outcome for your practice in the future.

3. Where are we now?

A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is the best way to gauge a practice’s health. A SWOT also identifies problems the practice faces that are likely to impact the future. As part of the SWOT, consider factors internal to the business and external, such as the changing profile of your practice’s suburb, the impact of staff shortages, rising business costs and the failing bulk billing model.

4. How do we get there?

The next step is to work out how you build a sustainable business, and this involves outlining your priorities, objectives, and strategies,

Our priorities—key areas where your practice needs to focus.
Our objectives—outcomes the practice aims to achieve in each vital area and deadlines for each outcome to provide some measurability.
Our strategies—initiatives or actions to be undertaken to achieve these outcomes and any resources or constraints that must be considered, for example, budget constraints or time.

Put the strategy in writing

Your strategy doesn’t need to be ‘War and Peace’ but rather a simplified one-page document that is shared with the practice team. There are plenty of useful templates online – it might be worth looking at what your accounting software provider offers. Create an action plan which includes a more detailed list of action items for each priority area, defining who does what by when.

How to make it happen?

It’s crucial to regularly review your progress in executing the plan and measures for success. This should be a standing agenda item at the beginning of your practice’s regular business meetings.

Your strategic plan is one of the essential tools in your business tool kit. Investing time to plan prepares your practice for success and can enable your business to weather the impact of the challenges created as the healthcare environment evolves.

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i. https://www.healthed.com.au/clinical_articles/1-in-5-gps-switch-from-bulk-billing-to-mixed-billing/

ii. https://www.abs.gov.au/articles/historical-charts-august-1966-october-2022

iii. https://immi.homeaffairs.gov.au/what-we-do/migration-program-planning-levels

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Prequalification - open the door to new sources of revenue

Sun, 26 Feb 2023 00:00:00 GMT

Construction Industry

Prequalification -

open the door to new sources of revenue

By Wade Crane, Associate

26 February 2023

If your business isn’t prequalified, you could be missing out on valuable government contracts. Here’s what’s involved.

For many businesses in the construction sector, landing a government contract can be the equivalent of finding gold. It can give a business the surety of a regular and reliable source of income from a customer that comes with few risks of non-payment or insolvency.

Long story short, winning a government contract can be ‘as good as money in the bank’.

The catch is that plenty of other businesses – large and small, vie for government contracts. And the tender process isn’t the only hurdle these companies face.

A number of government departments including SA’s Department for Infrastructure and Transport (DIT), require companies in the construction sector to be ‘prequalified’ before they can submit a tender.

What is prequalification?

Prequalification is a system designed to give government bodies the confidence that companies placing a tender for a government contract have the skill, experience, technical capacity, available resources and management systems needed to competently undertake the project.

Prequalification does not mean your company can bypass the tender process. It simply means your business is eligible to tender.

Why do some government bodies request prequalification?

For government bodies – and suppliers – prequalification offers a number of benefits. These include:

Minimising cost and risk – it’s perfectly reasonable that a government department seeking tenders for a project wants to be sure a supplier is up for the job. But prequalification also has advantages for businesses that plan to tender. The cost of preparing and submitting a tender can be time consuming and expensive. So it is in the best interests of any business planning to submit a tender to be sure they have a reasonable chance of winning the bid.
Streamlining selection of suppliers – the faster a tendering business knows whether they have secured the project, the better. Prequalification helps to speed up the tender selection process as it eliminates tenders that would be unlikely to win the contract.
Setting clear standards for supplying businesses – prequalification provides objective, quantifiable data to support the selection of suppliers. This works in the favour of the business community by establishing a transparent playing field. It also helps businesses to understand exactly what is expected of them if they win the tender.
Encouraging the development and improvement of tendering businesses – a business that fails to meet the criteria for prequalification has clear goals to work towards to gain prequalification in the future. This can provide a real impetus for a business to improve its systems, and potentially become more productive and profitable.

The below sums up what prequalification is all about at a glance:

Prequalification is a process that aims to qualify suppliers who may be capable of providing a specific category of good/service for a number of contracts.
There is no specific tender in mind when suppliers are prequalified, but prequalified suppliers have the potential to win a range of contracts.
Prequalified suppliers could win a number of contracts over time though there is no guarantee of any work.
Prequalification eliminates suppliers from the tender process that don’t meet the relevant criteria.
Prequalification is aimed at reducing the costs to suppliers of submitting a tender, and reducing the risk of contract failure.

Who can apply for prequalification?

Prequalification for DIT construction contracts is open to general building contractors, trade/subcontractors and professional services contractors.

There are various levels of prequalification, which reflect the complexity and value of contracts that a company will be permitted to tender for. When a contract is advertised, the Request for Tender will specify the level of prequalification required.

When should my business apply to become prequalified?

A company can apply for prequalification at any time. You don’t have to wait for a contract to be advertised. In fact, it works in your favour to seek prequalification long before tenders are invited. That’s because the DIT says it can take six weeks from the time of making an application to be notified of prequalification (if successful).

It's worth noting that prequalification doesn’t typically last indefinitely. Businesses are usually required to undertake a prequalification assessment at regular intervals, typically every three years. This being the case, it’s important to know how the prequalification works as it is unlikely to be a one-off process.

How does my business gain prequalification?

Exactly what is required to gain prequalification can vary in line with the nature of work to be undertaken. The metrics used for prequalification for electrical work for example, can be quite different from the criteria for demolition and asbestos removal. Even within the same category of work, prequalification criteria can vary in line with the complexity and value of the project.

That said, the overarching common thread is that prequalification assessments review both quantitative and qualitative information in relation to a business' operations, performance and position.

Financial metrics can include:

Turnover
Working capital
Assets as a % of liabilities
Profitability as a % of turnover
Paid up share capital

Non-Financial metrics typically address:

Business structure – a company structure is usually required. Trusts, natural persons and partnerships are generally ineligible for prequalification.
Company management experience – applicants may be required to have a minimum 3 years operational experience relative to the category level.
Technical capacity and resources.

Where can I get help applying for prequalification?

Application forms to become prequalified can be downloaded via the DIT SA website . However, as many businesses in the construction industry have found, the paperwork required to apply for prequalification is lengthy, and you want to be sure of giving your business the best possible chance of receiving prequalification.

We have assisted many clients in understanding prequalification requirements and implementing strategies to ensure ongoing compliance. As construction business advisors, we are acutely aware of the importance of maintaining prequalification to ensure business sustainability and a healthy pipeline of work.

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What are the advantages of a corporate trustee

Sun, 19 Feb 2023 00:00:00 GMT

Superannuation

What are the advantages of a corporate trustee

By Nadine Hill, Principal

19 February 2023

Thinking of a SMSF? A corporate trustee is a smart option

When it comes to self-managed super funds, there are compelling reasons to have a corporate trustee.

A self-managed super fund (SMSF) operates through a trust structure, so a trustee is needed to fulfil a number of roles including making sure the SMSF complies with super regulations.

In a professionally managed super fund, a board of trustees makes decisions on behalf of all fund members. SMSFs work a little differently. Each member is also a trustee – or a director of the trustee company if you choose a corporate trustee.

Families often tussle over whether their SMSF trustee should be individuals or a special purpose company. We look at five key reasons why it pays to use a corporate trustee.

1. A corporate trustee won’t pass away

It’s a reality of life that none of us live forever. And when you have a SMSF, the passing of a trustee, or the arrival of a new trustee to the fund, can bring significant administrative hassle including the need to change the names on bank accounts, shareholdings and other assets. Using a corporate trustee makes life easier from a succession perspective.

2. Banks usually insist on a corporate trustee

You may not have immediate plans to use limited recourse borrowing through your SMSF, but this could change in the future. If your SMSF applies for a loan, the bank will usually insist on a corporate trustee.

3. Better asset protection

If a SMSF is sued and a large debt results, the trustee’s personal assets can be at stake. The prospect of your SMSF being sued may sound unlikely, but let’s say your SMSF owns an investment property, and someone gets injured while working on the property. This could leave your SMSF liable to pay damages. If the SMSF’s assets are insufficient to cover the cost – and the fund is run by individual member trustees, you can be personally liable to pay the balance1. As a separate legal entity, a corporate trustee offers better protection.

4. It’s easier to maintain "separation of assets”

One of the overarching rules of SMSFs is that fund trustees must keep personal assets separate from SMSF assets. Having a corporate trustee helps to prevent breaching this rule.

5. Minimising penalties

If your SMSF contravenes certain super rules, the ATO is able to impose administrative penalties. However, these penalties are imposed on each trustee. For example, if a penalty of, say, $1,000 is levied against a SMSF with four trustees, each trustee is liable to pay $1,000 meaning a total of $4,000 is paid. Using a corporate trustee would mean the penalty of $1,000 would apply only once.

We’ve focused here on the key advantages of using a corporate trustee – there are other benefits. To find out more, or to learn more about setting up a corporate trustee for your SMSF, speak to the team at Brentnalls SA.

__________________________

1. https://growsmsf.com.au/wp-content/uploads/2020/09/Case-highlights-need-for-public-risk-insurance.pdf

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Disclaimer

Strategic marketing can work for agribusiness too

Sun, 12 Feb 2023 00:00:00 GMT

Agribusiness Industry

Strategic marketing can work for agribusiness too

By Leanne Schuppan, Associate

12 February 2023

The Australian agriculture industry has boomed in 2022 thanks to strong demand for soft commodities and record-breaking crops1. The war in Ukraine has contributed to a surge in grain prices, and livestock prices are also up significantly.

Unsurprisingly, there is a common misconception that agribusinesses don't need to market themselves. However, Bradley Barnes, Partner at Brentnalls is urging agribusinesses to rethink the value of marketing. “Farmers should invest time and money in marketing as it helps attract potential new clients to an agribusiness and its products rather than relying on the hard slog of sales.

Moreover, having a good brand reputation can not only support sales but may even provide enhanced access to more land for lease or sale if the business expands.”

Take a leaf out of the wine and fruit book

The use of marketing is standard fare for wine and fruit producers seeking to build brands celebrated for quality and consistency. However, there is no reason other agribusinesses can't take a leaf from the same marketing textbook to improve their bottom lines.

Bradley adds, "In truth, grain growers, in particular, can use business strategies to improve profits, such as forward contract sales to lock in prices and hedge wheat sales against wheat futures.”

Alternatively, livestock sellers and milk producers can use long-term fixed price contacts. "Amongst other things, a farmer could look to go organic or make production changes for added quality that helps them stand out.”

These strategies should all be reviewed for their business case value to ensure the additional investment leads to improved margins and profits. Nevertheless, strategic marketing goes further than pricing strategies and will potentially have more customers knocking on your cellar or farm door.

Moreover, having a good brand reputation not only support sales but may even provide enhanced access to more land for lease or sale if the business expands.

Marketing puts your business on the front foot with buyers

Buyers have more choices than ever before and make buying decisions based on an endless stream of information they can access 24/7. By the time a buyer contacts you, they've already completed as much as 80 per cent of their decision-making2.

But before you start blogging or advertising, you'll need a marketing plan, which should be an element of your overall business plan – some say the most crucial but often the most difficult to develop. A comprehensive marketing plan examines global and consumer trends, reviews the marketing mix of product, price, place, and promotion. It will also detail how you will market your product or service over a certain period.

Once you have a plan of attack for your marketing, be sure to establish a budget. Of course, every business is different, but your budget should be appropriate to your revenue.

When it comes to calculating your budget, here's a general rule of thumb3:

Up to 5% to 7% of your total revenue, and you can maintain your existing sales.
Up to 7% to 10% of your total revenue allows you to grow your business and be competitive.
Up to 10% to 15% of your total revenue means you're being aggressive and seeking brand saturation.

Marketing drives your growth

Good marketing and growth happen when a business knows its brand, unique selling proposition (USP) and target market. These three elements combined give you a powerful tool to drive more customers and, most importantly, the right buyers to your business.

Your USP is your marketing holy grail — it's what will automatically drive customers to your door. It makes a client buy your livestock rather than from the competition.

Every business has a target market or markets. Markets can be segmented in many ways, such as demographics (customers of a certain age), gender, culture, product, location, industry or function and customer values. It's vital that you know yours so that you can communicate with buyers in the most appropriate and effective ways.

If you are starting from scratch and have no idea whom you should market your products, research your potential competitors and observe their customer base. This information will give you a group of prospects that will most likely buy from you as they are buying similar products from your competition.

Getting on with the marketing

Now that you've established what you're selling, whom you're selling it to, what makes it different, and a budget, you're ready to start marketing. Most marketing plans incorporate a variety of components and typically will include a website, the use of social media, association membership, advertising, and events.

There's no denying it—today's farmer needs to be technologically savvy, including having a website. A website serves as the most accessible hub for your business. It gives an agribusiness complete control of its online presence. A website is cost-effective and reaches a vast number of customers. Whether you use your site as a static farm brochure to get your name out or sell products online, a website can help your marketing shift to the next level for a minimal investment, especially if you use a web building templates such as WordPress, Weebly and SQUARESPACE. Template subscriptions are offered on monthly and yearly plans. At the time of writing, Managed WordPress starts costs AU$28 a month4, while Weebly offers a basic template free of charge5.

At the same time, a branded social media page for your agribusiness on Facebook or LinkedIn, that are free to set up, can be used as a marketing channel. Also, consider public relations, blogging, and online advertising such as AdWords to spread the word about your products and brand reputation and drive engagement to your agribusiness.

Join farm associations

Association membership of the likes of the National Farmers Federation can also be a cost-effective way to market your agribusiness. Membership fees are typically modest, and benefits include newsletter subscriptions and membership directory listings. Meat & Livestock Australia even lists consultants that may be able to help an agribusiness with its marketing plans.

Monitor your results

The success of your marketing won't become apparent for six to 12 months. At this juncture, ask yourself the following questions:

Did we sell more?
Did we make a more significant profit?
Did our products sell faster?
Did we retain more customers?
Did we attract new customers?
How many leads are in the sales funnel for future conversion?

By monitoring what works and what doesn't work within your marketing plan, you'll be able to evaluate whether the extra sales were worth the cost and effort.

Speak with the Brentnalls SA team for expert advice on how you can incorporate your marketing strategy into your business planning to help you stay on track to meet your agribusiness goals.

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1. https://www.agriculture.gov.au/abares/research-topics/agricultural-outlook/agriculture-overview#:~:text=Another%20bumper%20year%20forecast,than%20average%20outlook%20for%20spring

2. https://www.professionalplanner.com.au/2017/03/call-marketing-whatever-you-like-just-dont-call-it-optional/

3. https://www.pixelrush.com.au/blog/how-much-should-you-spend-on-marketing/

4. https://wpengine.com/plans/

5. https://www.weebly.com/au/pricing

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7 strategies for your business to beat inflation

Sun, 05 Feb 2023 00:00:00 GMT

7 strategies for your business to beat inflation

By Sally Storey, Partner

5 February 2023

As inflation continues to dominate headlines, it is critical for your business to take action. We have comprised seven steps that can help you get the better of rising prices.

The latest inflation figures are out from the Australian Bureau of Statistics, and they’re not pretty.

Inflation eased slightly in October 2022, according to new, more timely monthly (rather than quarterly) figures.

The headline annual inflation rate was 6.9% down from 7.3% in September 2022 1 , but it’s a far cry from the 2-3% inflation range the Reserve Bank of Australia would like to see.

High inflation can be a significant source of business stress, potentially eroding profitability and even threatening the viability of an enterprise.

However, there are a number of strategies your business can adopt to mitigate the impacts of consistently rising prices. Here are seven strategies to consider.

1. Explore opportunities to limit external cost increases

Loyalty to a long-term supplier could be costing your business.

Now is the time to gather quotes from a variety of suppliers to gauge if you could get a better deal without compromising on quality, freight costs or delivery timeframes.

If you have the financial capability and storage space, consider stocking up on inventory before prices rise further, or take advantage of early payment discounts. This can be a juggling act as it requires the necessary cashflow and a good understanding of whether stock will become obsolete. However, in the long term it will be worth the effort.

2. Look at ways to lower operating costs

Improving the efficiency of your business can lower costs, reduce waste and improve profit margins without the need to pass higher costs onto customers or clients.

Conduct an expense audit of the business to identify where costs have crept up, and areas where costs can be reduced without too much impact on operations. It can pay to focus on discretionary expenses such as advertising, research and development and staff training.

Recurring annual costs such as insurance premiums should be researched in advance of renewal date to identify potential savings by switching to an alternative provider.

It’s no secret that energy costs are rising – and are set to soar in 2023, so it’s important to get serious about reducing electricity costs. According to Canstar Blue2, only one in four business' have made a conscious effort to use less power in the last year.

One in ten businesses have invested in tools to monitor and understand their energy usage and only 10% have taken the initiative to switch providers in an effort to save money.

Consider getting your entire team to buy into cost reduction strategies by incorporating cost reduction targets into key performance indicators or offer incentives for employees who contribute to cost savings.

Inflation isn’t the only thing rising. Interest rates have seen a dramatic upswing since May 2022, and the Reserve Bank has hinted at the possibility of more rate hikes to come.

3. Review your pricing strategy

No business can continually absorb higher input costs indefinitely, and at some point you may have to review how you price your own goods and services.

Changing your pricing strategy so that it reflects cost increases doesn’t have to mean upping prices, potentially losing market share. There can be other options such as scaling back the size of your product while maintaining the same price.

Alternatively, consider enhancing your value-add when raising prices.

Whichever strategy you opt for, it is critical to undertake analysis to forecast the impact of a price increase on both your bottom line and customer reputation. Strategy is something Brentnalls SA can assist with so that you can make an informed decision, which won’t leave your business worse off.

4. Evaluate your labour costs

Wages are often the single largest expense for a business, so this is an area that deserves special attention. And in a tight labour market, businesses can face the challenge of maintaining a loyal and productive workforce while keeping a lid on wages and labour-related expenses.

In periods of high inflation, maintaining a strong level of productivity is essential. If possible, introduce flexible work arrangements so that the maximum number of employees are working during peak times, while reducing staff numbers during quiet periods of the day/week/month.

Outsourcing, or the use of contract staff, can help a business lower labour on-costs and match staff numbers to workflows. Furthermore, it can also be a way to overcome labour shortages.

Importantly, focus on retaining your best employees. If your business cannot afford to offer a pay rise or bonuses, look for non-cash incentives such as opportunities to work from home or additional annual leave.

5. Invest in technology to boost efficiency

There’s more than a grain of truth to the maxim ‘you need to spend money to make money’. Upgrading an ageing computer network, or introducing software that automates manual tasks such as invoicing can improve productivity and lower costs.

Similarly, upgrading plant and equipment can reduce future repair and maintenance bills, with the added potential to trim power costs.

6. Review financing arrangements

Inflation isn’t the only thing rising. Interest rates have seen a dramatic upswing since May 2022, and the Reserve Bank has hinted at the possibility of more rate hikes to come.

Rising interest rates don’t just add to business costs, they also eat into valuable cash. It makes now the time to reduce debt where possible, or consider restructuring existing finance arrangements.

Making the move to a new lender can be time consuming but it is an area where the Brentnalls SA team can help. It lets you benefit from a streamlined refinancing process, with the potential to deliver valuable cost savings to your business.

7. Partner with an expert

Simply hoping your business will ride out high inflation is not a solution.

Speak with the Brentnalls SA team for expert advice on how and where you can cut costs or grow revenue to navigate a path through high inflation and position your business for the future.

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1. https://www.abs.gov.au/media-centre/media-releases/monthly-cpi-indicator-rose-69-cent-12-months-october-2022

2. https://www.canstarblue.com.au/electricity/electricity-providers-for-small-businesses/

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Disclaimer

ATO to increase penalities for late lodgment

Sun, 29 Jan 2023 00:00:00 GMT

Update

ATO to increase penalties for late lodgment

By Kurtis Willson, Manager

29 January 2023

Taxpayers who fail to lodge their year-end Tax Returns and ongoing Business Activity Statements are soon to be hit with even bigger fines.

These fines are set to increase by 35% and are likely to take effect midway through 2023.

The ATO has the power to issue these increased fines even if lodgment is only a little late. The ATO still retains the right to waive penalties in certain circumstances, nonetheless, it is very important for taxpayers to remain vigilant and punctual in keeping their tax obligations up to date, because no one wants to be hit with these increased penalties.

Federal News

In our recent Federal Budget Newsletter we detailed proposed legislation which were announced on the night. The following proposals have recently passed as law and explained in further detail below:

Child care subsidy changes

From 1 July 2023, the maximum Child Care Subsidy (CCS) first child rate is set to be increased from 85 per cent to 90 per cent for eligible families earning less than $530,000, up from $356,756. The current benefit for families receiving the higher subsidy rates of up to 95 per cent for any additional children in care aged 5 and under will continue.

The government will also aim to improve the transparency of the child care sector by requiring large providers to publicly report CCS-related revenue and profits.

The subsidy is applied on a scale depending on family income. If you need assistance calculating how much you can get, please contact us .

FBT exemption for electric vehicles

From 1 July 2022, an employer who provides an employee with an electric vehicle will not be liable for fringe benefits tax on the employee's private use.

To be eligible for the exemption, the electric vehicle must be below the luxury car limit, which is currently sitting at $84,916. The eligible cars must be first held and used on or after 1 July 2022.

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Disclaimer

5 Metrics you should be tracking in the construction industry

Sat, 14 Jan 2023 22:00:00 GMT

Construction Industry

5 Metrics you should be tracking in your construction business

By Wade Crane, Associate

15 January 2023

The construction industry in Australia faces unique business and operational challenges and can be highly unpredictable. Over time, margins in the sector have tightened, and margin and contract management are more critical than ever.

This is accompanied by the additional challenge in the industry of attracting and retaining quality employees.

These challenges make monitoring and reviewing your business benchmarks essential for business success.

While we recognise that no two businesses in this sector are the same, we believe there are five key benchmarks all construction businesses should be actively tracking and reporting.

1. Gross Profit Margins

By Job

It seems the most obvious metric to be tracking, yet so many businesses move on to the next job and fail to take the time to review the profit and performance of each project, comparing the actual result with the budget or estimate. In the current market of tightening margins, this has never been more important. Without this insight, recurring trends on issues will go unnoticed.

By Project Manager

Are you allocating the right work to the right employee? Have you reviewed your project managers' performance (and other staff, including estimators, site managers, etc.) across the business, as well as across the various segments of your business? Perhaps one of your project managers is performing well for some work types but poorly in others. Possibly one project manager is far outperforming the others, and the intel as to how this is being achieved can be shared throughout the business. Until you track these metrics, you cannot make the informed decisions to ensure your business operates in the most effective and efficient way.

By Contract Value

How much of your profit is generated by high-value projects when compared to smaller jobs? You may find that high-value jobs are generating a large proportion of your revenue but a much smaller proportion of your profits due to squeezed margins. By tracking this metric target contracts can be identified.

By Service Offering

Every business offers multiple service offerings, whether it be New Builds v Renovations or Residential V Commercial, it is important to track how profitable each of your service offerings are and to view this with an eye to target new opportunities within your industry and drive efficiencies.

By Client & Client Group

Which of your clients and client industries are generating the most revenue and the highest gross profit? How does this compare with the clients which cause the most headaches or require the most administration? Are there some clients or client groups on which you should be focusing your efforts and others which could be managed more efficiently?

2. Your Real Cost of Labour

In our discussions with clients we have found that a number do not fully understand the cost of their employees.

Questions which are common include:

How much per hour does an employee cost an employer?
How much should be charged for labour by a service organisation?

The answers to these are different for each employer. We have created an easy-to-use calculation to assist our clients in considering their own situation.

This calculation takes into account all the costs relating to each employee, including downtime and unproductive time, to give you the real cost of the labour unit per day/hour.

3. Pipeline

As a business owner, you need to be focused on both the revenue coming in today as well as looking forward to the revenue that is projected into the future.

Inherent in this process is the review of your pipeline of work. Your pipeline should be carefully monitored and reported on by:

Month – do you have a pipeline of work which will carry your business, assets and employees through the coming months. Has the work been planned and allocated accordingly?
Employees – has your pipeline of work been evenly and appropriately allocated to your key staff?
Type of work – have you reviewed your pipeline of work by service offering and compared this with the margins historically earned for each of these? If your pipeline of work is in areas where you have historically low margins, should you be reviewing processes with an eye to increasing efficiencies or generating leads and applying for tenders in segments with higher margins?

Pipeline example

Type of work example

4. Asset Utilisation

Construction businesses are generally very asset rich and purchasing a new asset or retiring an old asset is a common, but important, business decision. However very few businesses track how much their assets are being used on an asset-by-asset basis. This simple metric can help business owners to make targeted decisions about purchasing, hiring or selling assets within their business.

5. Net Promoter Score

The final metric we consider essential is the Net Promoter Score (NPS). This score tracks the results of one simple question asked to your customers:

The results of this simple question can tell you about how satisfied your customers are and how likely you are to generate new work off the back of the work performed for that client. If the results are low and you have identified either passive clients or detractors of your business, work must be done to identify the shortfalls in your business performance and rectify these going forward.

How can Brentnalls SA help?

If you would like to discuss the 5 metrics or other business matters with an experienced Chartered Accountant who specializes in your industry, speak to the team at Brentnalls SA.

Discuss Further?

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Disclaimer

Practice Nurses

Sat, 07 Jan 2023 22:00:00 GMT

Health Industry

Practice Nurses: A valuable practice resource

By Danny Haydon, Principal/Health Division

22 April 2024

It has been said that our practice nurses are the heart and soul of a medical practice. They provide patients with a familiar face, empathy, and trusted support.

Over the years, their role has broadened due to acknowledgement of their increased scope of practice and the introduction of government incentive programs such as Practice Nurse Incentive Payment (PNIP) and Workforce Incentive Program (WIP).

Retention of your practice nurses is vital to the care and health outcomes of your patients, as well as contributing to the revenue generation of your practice.

However, a survey by the University of Wollongong found one in five of the practice nurses surveyed would like to leave general practice nursing. So, how do we retain our valuable general practice nurses?

Employment

Employment contract outlining conditions of employment and pay.
Ensuring employment conditions of nursing staff are in-line with Fair Work Australia – Nurses Award (including amendments) http://awardviewer.fwo.gov.au/award/show/MA000034
Job descriptions clearly define the role, the roles responsibilities, how work performance will be measured, and feedback provided.

Registration, Professional Indemnity Insurance, Professional Development & Competency Standards, and clinical mentoring

Actively engage and support nursing staff in PD activities required to meet registration and competency standards.
Australian Nursing & Midwifery Federation provides a Toolkit for general practice nurses that includes a self-assessment template against the ANMF National Standards and a PD planning template. http://www.anmf.org.au/documents/ANMF_National_Toolkit_for_Nurses_in_General_Practice.pdf

Practice team values, leadership and planning

Inclusive engagement of nursing staff in practice strategic planning activities, team events, and opportunities for promotion to a leadership role provides a framework for job progression and on-going job satisfaction.

Practice nurses are large contributors to a high performing practice across the financial, clinical, operational, and business success of the practice.

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Disclaimer

Planning A Retreat

Sat, 31 Dec 2022 22:00:00 GMT

Planning a retreat?

By Danny Haydon, Chairman/Principal

1 January 2023 updated 3 September 2024

Retreat: what does it really mean in business?

The word "retreat" projects images of turning around and running away from the challenges or adversity we face. The definition of retreat is the act of moving back or withdrawing. In business, the purpose of a planning retreat is contrary to this definition. Focusing on future success should be the key objective of a productive retreat. Most importantly, to redefine priorities and goals for the period ahead. As we herald the new year in, our focus is often on planning, so we ask the question:

What is the importance of having a retreat?

We believe that planning a retreat is an essential discipline for working on the business, not just in the business. It is an opportunity to take a step back from the busyness of work commitments and deadlines, to take stock of the current state of the business, and to consider the challenges and opportunities that lay ahead. Consider doing a SWOT or competitor analysis. Learn more about the 5 key business elements for a competitive advantage as we discuss how one small planning task could leverage your business to gain a competitive advantage.

The fluidity of the economic environment makes it even more essential to take stock, to think strategically, and to act strategically. It also helps to identify and understand whatever challenges are ahead so that they can be leveraged and converted into business opportunities.

How committed is Brentnalls SA to the idea of a planning retreat?

Brentnalls SA holds a planning retreat every year. We believe that it is an essential business discipline that ensures Brentnalls SA is steering in the right direction. The significant investment of time and effort involved is rewarded by the alignment of collective effort, improved teamwork, and productivity, all of which enable the effective execution of our plans and the delivery of the outcomes that we aspire to achieve.

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Disclaimer

5 Key business elements for a competitive advantage

Tue, 20 Dec 2022 22:00:00 GMT

5 Key business elements for a competitive advantage

By Shali Manolev, Partner

25 December 2022

That one small thing could leverage your business to gain a competitive advantage. With interest rates going up and the uncertainty of a recession, now is an excellent time for business owners to review the key elements that make their companies competitive.

Businesses are competing with every other business with which a client interacts. Finding what sets you apart from your competition isn't hard, you just need to ask the right questions and conduct the right analysis.

1. Know the outlook for your industry

Ask yourself these questions:

Do you know and understand the outlook for your industry?
What will it look like in 5 to 10 years?
What are your professional or trade industry bodies predicting?
How will advances in technology, environmental issues, modified working arrangements, political issues or regulatory issues change the nature of your industry?
Considering the outlook of your industry will it give you confidence moving forward and can you adapt particular areas of your business accordingly?

2. Know your competition

Consider this:

Make a list of your top five competitors and identify what your business does better than them.
Determine what do they do better than you.
How did they adapt to survive the pandemic, and what are they implementing now?
Think about issues in the quality of your service or product and the value proposition your business provides.

The value proposition will help you identify your strengths and weaknesses compared to those of your competitors and will assist you when you complete a SWOT analysis.

3. Innovation

Depending on the nature of your business, innovation is a critical element of how thriving businesses stand out from their competitors. Encourage your employees to look for opportunities in innovation and reward them accordingly. If you believe you have found a change worth implementing to minimise risk and cost of failure, first test it on one or two customers. Seek positive or negative feedback from these customers to assist in implementing the innovation across your client base.

4. Conduct a SWOT analysis

To bring all this information together, conduct a SWOT analysis by documenting the strengths, weaknesses, opportunities and threats of your business. A SWOT should be performed on a systematic basis. Documenting these will allow you to review changes over time, will help you to understand where your business/industry has come from, and know how you have adapted and where it is going.

5. Track your key performance indicators (KPIs)

In moving forward from this process, it's essential to measure the success of any actions taken by through KPIs. Tracking your KPI's will give you and your employees a snapshot on the success or failure of actions taken and assist in highlighting areas of strength or weakness. There are many areas which your KPIs could focus, as well as the traditional financial measures think 'outside the square' about non-financial KPIs.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Let's deep dive into the definition of retirement

Sun, 11 Dec 2022 00:00:00 GMT

Let's deep dive into the definition of retirement

By Nadine Hill, Principal

11 December 2022

Australians today are working longer and retiring later, and the question of when to hang up the boots is, for many, a personal decision.

When you meet the definition of retirement it can impact your wealth when the next phase of life begins.

Retirement is a condition of release that allows members who are of the “ preservation age ” and who wish to voluntarily tap into their superannuation before the age of 65 to gain access to their retirement savings without any restrictions.

Your preservation age is the age you can access your super if you are retired (or start a transition to retirement income stream), and the rules seem very straightforward.

If you were born before 1 July 1960, you have already reached your preservation age of 55 years. If you were born after 1 July 1960, your preservation age depends on when you were born. For instance, for those born after 1964, the preservation age is 60, and you can access your super once you have met a condition of release.

So why keep revisiting the concept of ‘retirement’ when we appear to have all these clearcut age brackets? After all, the idea of retirement has been around for many years. But like everything in modern life, from how we travel, communicate and work, the way we retire is also evolving.

Since 1 July 2017, for example, retirement allows a member to start a retirement phase income stream within their Transfer Balance Cap (TBC) to be able to claim the pension exemption on earnings generated by its pension assets.

Additionally, for members between the preservation age and age 65, satisfying the ‘retirement’ condition of release is the only way they can access in-specie lump sum superannuation (i.e., non-cash benefits). This allows super fund members to avoid the need and cost of selling and repurchasing assets in the market.

The rules for working and contributing

Although retirement is associated chiefly with accessing a member’s superannuation benefits, it also impacts their ability to make superannuation contributions between 67 and 74. Only members in this age bracket, who satisfy the work test, can make voluntary super contributions.

The ATO will check to see if you meet the work test requirement at the time you lodge your income tax return as part of its standard assessment of your claims for various tax deductions.

For members under the age of 67, there is no need to meet a work test to contribute to super. Also, those super members who have access to unrestricted non-preserved benefits have the option of implementing a re-contribution strategy to help fund a financially secure retirement. Unrestricted non-preserved benefits don’t require a condition of release to be met and may be paid on demand by the member. These conditions might include, for example, benefits for which a member has previously satisfied a condition of release and decided to keep the money in the super fund.

Those who quit work under the age of 60 and have reached their preservation age can take advantage of a once-in-a-lifetime low-rate cap threshold. This means they can access up to $230,000 (2022/23) of the taxable component of their retirement savings as a lump sum, tax-free.

For more information about the importance of meeting the retirement definition before accessing or making extra contributions to super, speak to the team at Brentnalls SA.

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Disclaimer

7 ways to manage your agribusiness cashflow

Sun, 04 Dec 2022 00:00:21 GMT

Agribusiness Industry

7 ways to manage your agribusiness cashflow

By Matthew Merrett, Associate

4 December 2022

Earlier this month, a national broadcaster covered a radio story on farmers renting space for start-up businesses in a bid to diversify income. It may be a laudable idea, but agribusinesses often have a cyclical cash flow, and managing the ebb and flow of cash doesn’t have to involve branching into entirely new ventures that can demand large chunks of capital with no guarantee of success. It can make better financial sense to rethink the way you manage on-farm cashflows.

The team at Brentnalls SA has significant experience in the agribusiness sector, and our combined depth of knowledge means we know what works and what doesn't when it comes to juggling lumpy farm cashflows.

We know, for example, that right now, many grain growers have seeded pastures and may not receive noteworthy cash inflows until 2023, so they will be at a low point in the annual cash flow cycle. Others, such as viticulturists, may be at the peak of their cash flow cycle.

No matter where in the cycle your agribusiness currently sits, it is important to plan year-round.

So, this month we look at seven strategies agribusinesses can deploy to ensure they have the year-round cash needed to run smoothly and seize opportunities when they arise.

1. Set a business budget and stick to it

There is no getting around the fact that budgeting is the single most important and effective tool for getting your agribusiness cash flow under control.

It’s a big claim, but few successful businesses coast along without any plans—and at the heart of every well-formulated plan is a budget.

An agribusiness budget lets you maintain financial control and prevent money or resources from being wasted.

Chances are your accounting software has functions to help you draw up a budget for the year ahead. But a budget is only as good as the input data, and we can help you draw up a realistic budget for the year ahead—it’s never too late to start.

With your budget in place, it’s a lot easier to compare actual-to-budget results to identify where and when cash shortfalls arise, and this can be instrumental in planning for cash deficits and finesse future budgets.

2. Prepare a cashflow forecast

Cash is king in any enterprise, and a well-prepared cashflow forecast will estimate an agribusiness's future financial position and identify whether it will have the necessary cash holdings to meet future demands while providing pointers on better managing working capital.

Cashflow forecasts are particularly important for agribusinesses, which are notorious for having inconsistent cashflows.

The upshot is that a cashflow forecast will show cash peaks and valleys, letting you know when to take action to stabilise cashflow.

If you are unsure how to prepare or analyse a cashflow forecast, talk to a Brentnalls Agribusiness team member.

3. Put discretionary spending under the spotlight

While some agribusinesses have very little fat to cut from spending at this time of year, there is almost always a level of discretionary spending that can be put under the spotlight.

As a guide, it can be possible to trim travel costs by holding virtual meetings instead of in person. Rather than attend conferences, consider linking in to webinars if cashflow is tight.

4. Seek out better deals

In an environment of rising inflation and higher costs, it is critical to question every expense rather than simply accepting a supplier’s price.

Seeking out a better deal may mean an investment of your time. But all too often we see agribusinesses ‘do what they have always done'—be it automatically renewing insurance coverage or sticking with the same supplier (and the same supplier’s terms) year after year.

This inertia could be draining business cash flow.

Take the time to compare quotes, prices, and payment terms, and you could find innovative ways to spread cashflow more evenly.

5. Review your finances

Short-term finance can provide a quick fix to challenging problems. But it often comes at the cost of higher interest rates, fees, and charges.

A more cost-effective solution can be longer-term finance.

The main point is to take a close look at your financing costs to see how you can minimise the costs while maximising cash flow.

It can be a juggling act; however, our team can do the sums for you to let you know the appropriate blend of finance options for your agribusiness.

In today’s environment of rising interest rates, it is critical to review all your business debts.

If your business is continually having to rejig cashflow to manage multiple debts, an option worth thinking about can be a debt consolidation strategy. It can be an easy way to streamline cash flow and achieve savings through a lower overall interest rate.

6. Carefully manage stock

Stock can be a major part of an agribusiness’ working capital and therefore plays a key role in cash flow management. However, stock comes with holding costs. Holding stock and looking for the top price may seem like a good idea, but this can put pressure on cash flow. When doing this, you also need to consider the incidental costs of holding stock for a longer period, i.e., interest, maintenance, and storage.

7. Consider diversifying on-farm activities

If you can diversify activities, it may help to flatten out cashflow peaks and troughs. This can mean finding a combination of cropping and livestock or assessing carbon farming options—what’s right for your agribusiness is a very personal issue. Nonetheless, diversifying revenue streams doesn’t just smooth out cash flow; the upside is that it can also protect farmers against a downturn in one particular market.

For more information, contact the team at Brentnalls Agribusiness to discuss further.

Discuss Further?

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Disclaimer

Why are GPs turning their backs on bulk billing

Sun, 27 Nov 2022 00:00:15 GMT

Health Industry

Why are GPs turning their backs on bulk billing?

By Shali Manolev, Partner

27 November 2022

More Australian GPs are shifting away from 100% bulk billing as the costs of running a practice continue to outstrip the Medicare rebates offered by the government.

A study of 477 GPs by Healthed in August 20221 revealed that 22% of those surveyed had recently changed their billing model.

When the same survey question was put to over a thousand GPs in July last year, only 10% had recently changed their billing model, although 7% said their practice was considering switching.

Following the research release, the Royal Australian College of General Practitioners (RACGP) warned2 that general practice care needs a shot in the arm, citing inadequate Medicare rebates for patient consultations were central to driving doctors to ditch bulk billing.

From 1 July 2022, an MBS indexation increase of 1.6% applied to most general medical services items, all diagnostic imaging services, except nuclear medicine imaging, and some pathology items. The Medicare indexation is calculated using the Wage Cost Index 5 method, which results in annual increases significantly lower than the Consumer Price Index or CPI, which hit a 30 year high of 6.1% in September.

Compounding the inadequacy conundrum, rebates were frozen in 2013 as a cost-cutting measure for attendance items until July 2019. Consequently, research from the University of Queensland’s Medical School3 found the gap between the AMA-recommended fee (around $86) and the Medicare rebate for a standard GP consult ($39.10) had grown by $13.50 over a decade to around $47.

Meanwhile, average patient out-of-pocket costs for services directly provided by GPs have increased by 50% over the last decade.

Patients are the losers

Outgoing RACGP President Adj. Professor Karen Price said that the current mode of indexation increase was insufficient4. “The miserly 1.6% increase is yet another reminder of why a boost in investment for general practice care is sorely needed,” she said.

The RACGP President said the way the indexing of MBS was a long-term problem requiring urgent attention.

“If practices are struggling to make ends meet due to Medicare rebates not keeping pace with the cost of providing high-quality care, they have little choice but to pass the cost on to patients.”

Great financial pressure, nothing new

General practice has been under great financial pressure for a while, with some now struggling to keep their doors open. “The profitability of most practices now relies heavily on incentive payments or rental income because the revenue from consulting fees is insufficient to cover the costs of running the practice”, said Danny Haydon, Chairman/Principal , Health Division, Brentnalls SA.

The RACGP President agreed that investment in general practice was sorely needed. “General practice care must be put on a more sustainable, long-term financial footing,” Dr Price said.

“Medicare patient rebates for GP consultations simply haven’t kept pace with the cost of providing high-quality care, and on top of that, the impact of the Medicare rebate freeze stretching all the way from 2013 to 2019 is still being keenly felt by GPs and general practice teams across Australia.”

Shortage of GPs another factor

Adding to the bulk billing malaise is the fact the general practice is in a deepening workforce crisis.

Research published in the Medical Journal of Australia in 2020 showed that the proportion of medical graduates from the University of Western Australia registered as GPs in December 2019 had dropped from about 40% of those who graduated in 1985–1987 to about 15% of those who graduated in 2004–20075.

Moreover, there is a trend for GPs to increasingly work part-time. Consequently, there could be situations where two or three GPs are required to replace a retiring full-time GP, which adds to the workforce crisis.

GP earnings are another issue. In 2018, specialists earned almost double the amount of GPs. Importantly, this gap has widened over time, according to an ANZ/Melbourne Institute Health Sector Report6.

Danny Haydon summed up, “The Government and community at large have failed to appreciate the value of their GP services. If the government doesn’t invest substantially, general practice as the foundation of our primary health care system will soon collapse. Patients who can afford to pay, but still expect to be bulk billed, may find they won’t have access to a local GP.”

The situation will inevitably mean more people are forced to attend emergency departments because they can’t get an appointment with a GP. This extra patient traffic won’t help our already overcrowded and under-resourced hospitals.

Surviving in this challenging climate

In this climate of decreasing GP resources, increasing costs and high demand for services, practices need to be strategic in the way in which they review their billing practices and set their fees.

Our Brentnalls Health team have assisted many practices to commence mixed or private billing, and providing them with calculated strategies for setting fees. These are our top 3 hints for successful implementation:

Wholesale changes can be difficult to implement. Gradually implement one change at a time, or focus on implementing the change that will have the greatest impact.
Effective communication with patients about the changes is needed to manage patient expectations and reduce negative responses directed at reception staff.
Increase fees regularly, at least annually applying incremental adjustments rather than larger hikes being applied less frequently.

Taking the right action that supports your practices objectives is our priority. If you would like to discuss further, contact one of our health professionals for a no obligation meeting.

__________________________

1 https://www.healthed.com.au/clinical_articles/1-in-5-gps-switch-from-bulk-billing-to-mixed-billing/

2 https://www.racgp.org.au/gp-news/media-releases/2022-media-releases-1/august-2022/racgp-free-falling-bulk-billing-rates-a-sign-of-th

3 https://www.racgp.org.au/gp-news/media-releases/2022-media-releases-1/july-2022/racgp-medicare-rebates-must-keep-pace-with-the-cos

4 https://www.racgp.org.au/gp-news/media-releases/2022-media-releases-1/august-2022/racgp-free-falling-bulk-billing-rates-a-sign-of-th

5 https://www.mja.com.au/journal/2020/212/9/decline-new-medical-graduates-registered-general-practitioners

6 https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0011/3809963/ANZ-Health-Sector-Report-2021.pdf

Discuss Further?

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Disclaimer

Traps for the unaware in the building and construction award

Sun, 20 Nov 2022 00:00:07 GMT

Construction Industry

Traps for the unaware in the building and construction award

Guest Michael Eleftheriou, Consultant

from EMA Consulting

20 November 2022

In Australia’s industrial relations system, the building and construction industry has several ‘nuances’ not common to other sectors. For example, various provisions in the Building and Construction General On-site Award 2020 (Award) differ significantly from other modern awards. Another nuance unique to the sector is its portable long-service leave scheme.

This article briefly explains some of these nuances with a focus on the Award’s redundancy provisions and the South Australian long service leave laws for the building and construction industry.

Industry specific redundancy scheme

Instead of the redundancy provisions provided in the National Employment Standards (NES) of the Fair Work Act 2009 (Cth), the building and construction industry award includes an industry-specific redundancy scheme.

Moreover, three essential parts of these redundancy provisions set it apart from the other modern awards.

First, the term 'redundant' in the award does not carry its usual meaning. Employees, for example, can be entitled to redundancy pay even if they resign - although this provision doesn't apply to workers with less than one year's service.

General award provisions

In keeping with the distinctive nature of the building and construction industry, the Onsite Award includes special provisions involving the employment categories that reflect the type of work in the industry and the flexibility of work. For example, a ‘daily hire’ employee can be a tradesperson or labourer. These workers are uniquely engaged or terminated with one day’s notice by either party, which is distinct from casual work in other industries. Other examples of work practices that are distinctive to the building and construction industry include:

Employees, for example, could be entitled to redundancy pay even if they resign...

Industry allowances paid for ‘all purposes’ in the Award effectively become part of an employee’s ordinary pay rate.
Detailed provisions for workers working at remote worksites away from their place of residence. The Award also has explicit provisions for travel required during work.
Varying shift work provisions depend on whether the employer and employee are in the general building and construction or civil construction sectors. The main differences apply to the civil construction sector, with its special provisions for shift workers’ ordinary hours, penalty rates, overtime, and days off. Apart from these provisions, the civil construction sector falls under the broad category of the general building and construction industry in the award.

Second, the amount of redundancy pay differs from other modern awards and the NES, and it has more variations for each year of service. As of the date of writing, the entitlement to redundancy pay under the award is as follows:

Also, an employer may offset an employee’s redundancy pay entitlement in whole, or in part, by making advance contributions to a redundancy pay scheme. The scheme must be an Approved Worker Entitlement Fund under the Fringe Benefits Tax Assessment Act 1986 (Cth).

The amount an employee is entitled to on termination, or the amount the employer can offset with contributions, depends on the benefit the employee receives from the scheme.

Construction industry long service leave

Some South Australian workers in the building and construction industry are covered by the Construction Industry Long Service Leave Act 1987 (SA) (CILSL Act).

This legislation is South Australia’s portable long-service leave legislation for the construction industry. In summary, the CILSL Act allows workers to accrue long service leave based on service in the construction industry. While the employer grants leave under the CILSL Act when the employee’s entitlement has accrued, the Construction Industry Long Service Leave Board pays for long service leave.

What about long service leave accruals under the Long Service Leave Act 1987 (SA) (LSL Act)? The CILSL Act provides for those situations when a worker has accrued long service leave under the LSL Act (for example, if they transferred from a construction role to a non-construction role for the same employer).

Depending on the circumstances, an employer may be entitled to payment from the Board or be required to reimburse the Board, depending on whether the leave was taken while the worker was a building and construction worker or a non-construction worker. Can can read more about Portable Long Service Leave in our information sheet.

What does this mean for employers?

This summary is not advice and shows some of the nuances employers need to be aware of in the building and construction industry when it comes to leave awards in South Australia. For more information contact the Construction Industry Long Service Leave Board or speak to a construction and building industry expert from Brentnalls SA.

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Property development and GST

Sun, 13 Nov 2022 00:00:01 GMT

Property development & GST

By Gavin Mitchell, Partner

13 November 2022

Property development can describe a myriad of ventures, from building a portfolio of office spaces, to investing in vacant land, subdividing off land from your home, or even just becoming a serial house renovator.

It can be an incredibly prosperous and clever way to invest your money, however one of the most important factors to consider when it comes to property development is GST (goods and services tax).

Do your homework

There can be far-reaching consequences if the correct path is not taken when it comes to GST. A landmark legal decision1 closed a popular loophole that enabled trustees of self-managed super funds (SMSF) involved in property developments to avoid GST.

The case involved a retired couple with an SMSF having to pay GST on a $10 million subdivision of a 24-hectare site that was their former commercial nursery. While the couple were not blatantly attempting to evade tax, they were adopting a common tactic used by businesses and developers seeking to avoid paying tax by claiming their operations were in the final stages of being wound down, rather than undertaking a new enterprise.

If your property development is running like a business, it is likely that GST will be applicable. It is best to seek advice when it comes to this, rather than getting on the wrong side of the Australian Taxation Office (ATO).

How does GST relate to property development?

GST applies to the supply of certain property types if the supplier (seller or vendor) is registered or required to be registered for GST purposes.

The GST treatment of property varies depending on the type or its purpose and how you go about building or renovating these properties (i.e., as a one-off or as a regular activity) could affect your tax obligations.

The first step involved is determining whether your property development is being carried on as an enterprise.2 An enterprise can mean an activity or series of activities done in the form of a business, trade, profession, vocation or calling. Even isolated transactions can be caught under this umbrella, so it is highly recommended that your situation is discussed with your accountant prior to proceeding with any property development.

If you are carrying on an enterprise, and likely to sell a property for greater than the GST threshold ($75,000), then you will need to register for GST. You can claim GST credits on the cost of your property development, but you’ll need to pay GST when selling the property, which is calculated as 1/11th of the sale price.

A whole range of other factors such as type of property, the GST margin scheme and GST withholding on a settlement also come into play with property development.

At Brentnalls SA we have the knowledge and expertise needed to help guide you through property development and the treatment of GST on these transactions.

__________________________

1 https://www.koalainvest.com.au/post?post_id=9665

2 https://www.brentnalls-sa.com.au/resources/fact-sheets/business-advice/gst-property

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Employers & employees set for big savings on electric cars within FBT discount

Sun, 06 Nov 2022 00:00:01 GMT

Employers & employees set for big savings on electric cars with FBT discount

By Sally Storey, Partner

6 November 2022

In July, the Federal Government introduced the Treasury Laws Amendment (Electric Car Discount) Bill 2022 into Parliament, which has the potential to save employers and employees many thousands of dollars off the annual running costs of electric vehicles.

According to a joint statement from the Federal Treasurer, the Hon Dr Jim Chalmers MP, and the Hon Chris Bowen MP, Minister for Climate Change and Energy1, the “bill is good for motorists, good for employers and their workers, and good for climate action.”

The amendment implements the Government’s plan to remove the fringe benefits tax (FBT) to make electric cars cheaper so that more families who want them can afford them.

The legislation will amend the Fringe Benefits Tax Assessment Act 1986 to exempt the use of eligible electric cars made available by employers to employees from FBT.

This FBT exemption will apply to battery electric cars, hydrogen fuel cell electric cars and plug‑in hybrid electric cars.

The exemption will be available for eligible electric cars with a first retail price below the luxury car tax threshold for fuel-efficient vehicles ($84,916 for 2022‑23) first made available for use on or after 1 July 2022.

Significant savings for employers and employees

According to the Government, if an employer provides a model valued at about $50,000 through this arrangement, the FBT exemption would save them up to $9,000 a year.

Individuals using a salary sacrifice arrangement to pay for the same model would save up to $4,700 a year.

This measure forms part of the Government’s Electric Car Discount, reducing the up‑front and ownership cost of electric vehicles, addressing a significant barrier to their uptake.

The FBT exemption will be implemented as an ongoing measure and reviewed after three years in light of electric car take‑up to ensure it remains effective.

Of course, there is always some devil in the detail with amendments of this nature. For instance, the bill states it will apply to low emission vehicles first held, used and for private use by employees on or after 1 July 2022. Also, the car must not have been used before 1 July 2022, even by someone else. This rule means the vehicle must be a new car or if second-hand was new after 1 July 2022. Please note, it has not been made law at time of this publication.

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1 https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/electric-car-discount-bill-introduced-parliament?utm_source=miragenews&utm_medium=miragenews&utm_campaign=news

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Is it time to take cryptos seriously?

Sun, 30 Oct 2022 00:00:04 GMT

Is it time to take cryptos seriously as central banks explore digital currencies?

By Bradley Barnes, Partner

29 October 2022

Central banks have started taking a greater interest in cryptocurrencies such as Bitcoin and digital assets – and with good reason.

The price of Bitcoin, for example, increased from about US$30,000 in mid-2021 to almost US$70,000 toward the end of 20211. The flagship cryptocurrency fell to around US$21,000 in August 2022. Rival cryptocurrencies such as Ethereum have experienced similar volatility.

The latest Roy Morgan research into Australians’ investments shows that 5%, or over 1 million Australians aged 18+, own at least one cryptocurrency2. Leading cryptocurrencies include the illustrious Bitcoin and Ethereum and less familiar names such as Ripple, Cardano, Dogecoin, Shiba Inu, Solana, Binance Coin, Litecoin, Cronos, Polygon and many more.

Interestingly, over two-thirds, or around 742,000 (69%), of Australian cryptocurrency investors are men compared to only 332,000 (31%) who are women, indicating a significant gender difference when it comes to investing in cryptocurrency. Another fascinating statistic is that older Australians aged 50+ have the biggest average cryptocurrency investments. According to Roy Morgan Australians aged 50+ have the largest average cryptocurrency investment at an average value of around $56,200. This average investment size means the value of all cryptocurrency holdings for people aged 50+ is around $7.6 billion – higher than any other age group and over 35% of the total market.

Is cryptocurrency money?

A question often asked is whether cryptocurrency is money. The short answer is no because cryptocurrency is not a widely accepted means of payment used to buy and sell goods and services. Money generally comes in the form of a nation’s currency and is accepted as a means of payment. While cryptocurrencies are occasionally used to make transactions, they are not widely accepted.

Unlike money, cryptocurrency isn’t much good as a store of value because of the massive price fluctuations. These value instabilities mean that the purchasing power of cryptos such as Bitcoin oscillate over time, reducing the effectiveness of cryptos as a store of value.

While some businesses may accept cryptocurrencies as payment, they are not commonly used to measure and compare prices. Moreover, unlike cash, cryptocurrencies are not a common way of measuring the value of goods and services. In Australia, the Aussie dollar measures the costs of goods and services.

A question often asked is whether cryptocurrency is money.

What are cryptocurrencies?

Cryptocurrencies are digital tokens and are a type of digital currency that allows people to make payments directly to each other through an online system. Cryptocurrencies have no legislated or intrinsic value and are simply worth what people are willing to pay for them in the market.

This contrasts with national currencies such as the Australian Dollar, which are legal tender. That the Aussie Dollar or US Dollar is legal tender gives it an intrinsic value.

How do cryptocurrencies work?

Cryptocurrency transactions occur through electronic messages that are sent to the entire network with instructions about the transaction. The instructions include information such as the electronic addresses of the parties involved, the quantity of currency to be traded, and a time stamp.

Cryptos don’t exist as physical coins or notes, but as digital tokens stored in a digital wallet. These digital tokens rely on cryptography and technology such as blockchain for security and other features.

A digital wallet is typically an app on a mobile device that can be used to store information that can be easily accessed by the user. Not only can you keep Bitcoins in a digital wallet, but like an old-school leather wallet you can also store credit cards, access cards, movie tickets and much more.

Because of the extraordinary interest in cryptocurrencies, central banks worldwide are looking closely at developing their own digital currencies. In Australia, for example, the Reserve Bank of Australia (RBA) is actively researching central bank digital currency (CBDC) as a complement to existing forms of money. A CBDC is a type of cryptocurrency that could be issued and governed by a country’s central bank.

That’s the theory, but the reality is that the central banks are jumping on the cryptocurrency bandwagon because more people and businesses are transacting online. The existing banking system is complex and expensive. On the other hand, crypto technology is making it easier and cheaper to transact between consumers and businesses globally.

How are cryptocurrencies different from each other?

At its core, a cryptocurrency is a piece of computer code. It’s like a little set of instructions or conditions contained within every coin.

Different cryptocurrencies can have other things programmed into them. Some cryptos are designed for quick payments. Some are programmed to keep their owner anonymous, and some are designed to split in two should a certain amount of them start circulating.

There are over 10,000 cryptocurrencies in circulation, with different uses and functions. The value of these cryptocurrencies changes how much the market values the functionality they’re programmed to do. Interesting, Bitcoin doesn’t have any special features and was created as an alternative payment system that would operate free of central control but otherwise be used just like traditional currencies.

Generally, the way to access cryptos, whether it’s Bitcoin or any other competitors, is to swap them for Australian Dollars and then trade those for a new coin.

The shortcomings with cryptocurrencies

Bitcoin and other cryptocurrencies are not without risk, as we’ve seen with the significant value drop this year. Buying a cryptocurrency is a purely speculative investment based on a rise in virtual currency. There are no ongoing returns as you would have with dividends from shares or rent from an investment property.

Also, crypto investors currently have little to no protection in the market, as there is no regulatory framework in place to ensure protection of assets, and this can create risks. This is important because, in 2019, the NSW Cybercrime Squad warned that digital currencies are a money laundering option for organised crime networks3. This issue underscores the importance of choosing a crypto exchange with care.

There can be challenges from a tax perspective too. A few years back, the Australian Tax Office reconfirmed that Bitcoin and other cryptocurrencies are not money but are assets subject to capital gains tax4. This ruling can lead to complex tax reporting if you buy and sell cryptocurrencies.

The message to investors is to tread carefully when it comes to cryptocurrencies. If you have queries about the tax consequences of buying cryptocurrencies, speak to one of our professionals from Brentnalls SA.

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1 https://www.rba.gov.au/education/resources/explainers/cryptocurrencies.html

2 https://www.roymorgan.com/findings/8929-cryptocurrency-february-2022-202204120119

3 https://www.austrac.gov.au/cybercrime-squad-and-austrac-remind-digital-currency-exchanges-reporting-obligations

4 https://www.ato.gov.au/super/self-managed-super-funds/in-detail/smsf-investing/smsf-investing-in-cryptocurrencies/

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How JotForm is powering the way we work

Sun, 16 Oct 2022 00:00:00 GMT

Software Corner

How JotForm is powering the way we work

16 October 2023

Jotform offers

10,000 ready-made form templates, 100+ integrations, and more than

400+ widgets,

making it one of the most popular form builders for companies

worldwide.

In the post-pandemic world, we are discovering new opportunities to reorganise the way we work, including the distribution and management of online forms and surveys.

Partially driven by necessity and due to technological advances, big and small companies are adopting better organisational methods to streamline their operations and remain competitive.

According to a recent global consulting company McKinsey survey, 85 per cent of respondents 1 said their businesses have somewhat or significantly accelerated the implementation of technologies that digitally enable employee interaction and

collaboration.

Roughly half of those surveyed reported increasing digitisation of customer channels, for example, via eCommerce, mobile apps, or chatbots. In addition, some 35 per cent have further digitised their supply chains, for example, by connecting their suppliers with digital platforms in supply chain management.

Introducing Jotform

Illustrative of the technological advances is JotForm, an online program that can create and customize online forms, then gather and analyse the data using connections to other programs.

Jotform offers 10,000 ready-made form templates, 100+ integrations, and more than 400+ widgets, making it one of the most popular form builders for companies worldwide. Today, over 15 million users are utilising the boundless applications built into the Jotform platform.

Due to the broad adaptability of its features, Jotform’s clients operate in many sectors, including healthcare, education,
e-commerce, food and beverage and finance industries.

Multiple applications for one-of-a-kind Jotform

Jotform’s applications include the ability to manage surveys for restaurant reservations and customer orders seamlessly. At the same time, it can handle customer or employee feedback and provide signup and registration forms.

If that isn’t enough, Jotform can be used for running customer and employee quizzes and uploading videos or files. Jotform can also automate approval processes for budgets, leave requests, expenses, or customer orders, with additional ready-made templates available. With powerful integrations, responses from a client survey or employee feedback can be sent to almost any online program such as SharePoint, Google Sheets or even emailed to relevant parties for approval.

Jotform provides additional design components to create sleek and professional forms compared to other market offerings such as Microsoft Forms or Google Forms.

There is simply no other tool like Jotform because it’s how people use this pioneering technology that makes it unique. Better still, Jotform empowers organisations to adapt as their organisation evolves. To find out more, visit www.jotform.com/pricing/ .

__________________________

1 https://www.mckinsey.com/featured-insights/future-of-work/what-800-executives-envision-for-the-postpandemic-workforce

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Maximising the value of your business and how to protect it

Sat, 08 Oct 2022 22:00:00 GMT

Maximising the value of your business and how to protect it

By Gavin Mitchell, Partner

22 October 2022

How valuable is your business when it comes to retirement?

In many cases, a business represents the owners' 'nest egg' for retirement. Therefore, creating a sustainable and profitable business will help you maximise its value and help secure you and your family's financial future.

So, what are some of the things to consider in maximising and protecting the value of your business?

Operational considerations, empowering the next generation

In a potential business sale, a purchaser will conduct a due diligence review that will look at the numbers to determine the value of the business and review business operations to assess whether they can enter the business and operate it successfully.

Over-reliance on individuals or management could affect the valuation. Thought needs to be made to engage the next generation of leaders within your business and find opportunities to empower them with ownership of essential tasks and projects. The development of your team will help build capacity for management and ownership to focus their efforts on other value-add areas to foster business growth.

Implementing a mentoring and skill retention strategy to help provide an environment where your leaders are supported and encouraged to become the best they can be.

Financial considerations, understanding the numbers.

Beyond the financial performance of your business, ensuring processes and measures are in place to allow for prudent financial control is vital. Monthly management reporting will help identify trends and strategies to improve margins and profitability. A detailed understanding of your business segments will help identify areas of strength or identify critical areas for improvement – this should underpin your business strategy. Tracking actual performance against a thorough budget allows you to measure performance against expectations and identify abnormal items or unexpected deviations.

Safeguarding the future of your business

Once you have established a valuable business, the following safeguards can help protect it.

Insurance

Conduct an insurance review to determine whether you hold adequate insurance for:

professional indemnity
business premises
product liability
plant and equipment
loss or incapacitation of vital employees/management
business interruption and cyber threats.

Key Agreements

Ensure that you have sufficient agreements in place to help navigate shareholder or business partner disputes or disagreements. For example, obtain advice regarding the documentation of a succession agreement to ensure that if there is an unforeseen death or incapacitation of a business owner, there is a plan to move forward as best as possible (i.e. protecting family and remaining business owners).

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Disclaimer

The information provided here does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Why should a trust have a Corporate Trustee?

Sat, 03 Sep 2022 23:00:00 GMT

Why should a trust have a Corporate Trustee?

By Bradley Barnes, Partner

4 September 2022

Asset protection for business owners can be tricky

This is where a trust can be a great vehicle within the group structure of business owners. It provides tax flexibility and estate benefits whilst giving you asset separation in two directions. But what does asset separation in two directions mean? And why might we recommend it?

Why do you want separation? Where you own multiple assets, you want to ensure that if someone makes a claim against a particular asset that your other assets can be quarantined from that claim. This isolation will mean that they can't gain access to the assets that are yours and separate from the claim.

For example , suppose you personally own a business and have a successful financial claim made against your business, and the claim is for an amount that is more than the businesses assets. You will first need to use the business to cover the claim and then find additional assets to supplement the shortfall. If this is the case and you own your own home, your home may be used to meet the claim by combining the business assets' worth and the family home's value. This could result in you losing your family home!

However, if we structure your business in a particular way, then the person making that claim will only have access to the assets in the business, and you'll likely be able to keep your family home.

This type of structure is commonly called asset separation. Generally, it's a good thing to employ, but it does have one flaw – it usually only goes one way.

If a claim is made against your business, they won't get your house. Still, if they successfully make a financial claim against you personally, they will potentially have access to your assets to the value of the claim, including those of your business. So, is it worth the risk?

When operating a business through a trust, you will merely "control" it; instead of owning that business. More importantly, you are one of several beneficiaries who are considered by the trust when distributing any profits or capital from that business.

However, although you are only one of the beneficiaries who are considered, it would be set up, so it is you that "considers" who gets the profit or capital. This means that if someone claims against you, they can't access assets in the trust, hence providing two-way asset protection.

The only issue with trusts is that although you will see the trust's debts as debts of the trust, they are the trustee's debts. So, if you are a trustee, all the debts of the trust are your debts. You can use the trust assets to pay down those debts, but if the trust assets are insufficient to pay the debts, it will be up to you to pay off the rest.

When you're an individual trustee of a trust, you lose the perk of asset separation, which is why it's more beneficial for a company to be used as a corporate trustee. The company does nothing other than act as the trustee of the trust; therefore, if there are insufficient funds in the trust to cover the trust's debts, then those debts fall on the corporate trustee which has no assets. Creditors will have no access to your personal assets, assuming you have no individual debts owing to the trust.

Picking the right structure for your business depends on a number of factors, review these factors in our information sheet here .

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5 Steps to manage cashflow in your Agribusiness

Sat, 27 Aug 2022 23:00:00 GMT

5 Steps to manage cashflow in your Agribusiness

Rick Albertini, Partner

28 June 2022

updated 29 August 22

Five steps can ensure your agribusiness has the cash to run smoothly, and seize opportunities when they arise.

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Get up to speed with Health professionals and Support Services Award

Sun, 21 Aug 2022 01:00:00 GMT

Health Industry

Get up to speed with health professionals and support services awards 2020 changes

By Shali Manolev, Partner

22 August 2022

In May, a significant change was made to the Health Professionals and Support Services Award 2020, administered by the Fair Work Commission.

The changes came into effect on 9 May 2022 and the onus is now on employers to review the pay practices of full-time health professionals or support service staff who are paid annualised salaries and are not covered by enterprise agreements. This review must also include checking timekeeping records and employment contracts.

The Fair Work Commission has new, stringent conditions for annualised wages for a broader range of classifications in the Health Professionals and Support Services Award 2020.

Danny Haydon , Chairman/Principal, Health Division, Brentnalls SA, said, “The changes to the Health Professionals and Support Services Award 2020 have been enacted to ensure that employees are not disadvantaged by annualised salary arrangements.”

An overview of the changes

The Fair Work Ombudsman 1 has provided an overview of the changes included in the Health Services Award. For starters, full-time employees can agree to be paid an annual wage instead of a weekly or hourly pay rate if they’re classified as:

Support Services levels 8 or 9, or
Health Professional levels 2 to 4.

An annual wage under the Health Services Award can compensate an employee for their award minimum:

wages,
allowances,
overtime, penalty and shift rates for a limited number of hours, and
leave loading.

Employees and employers can end an annual wage arrangement:

at any time, by agreeing in writing that the arrangement is ending, and
by giving the other party 12 months written notice that the arrangement is ending.

The Fair Work
Commission has

new, stringent

conditions for

annualised wages

for a broader range

of classifications

in the Health Professionals and Support Services

Award 2020.

Written annual wage arrangement

The annual wage arrangement needs to be in writing and explain:

the annual wage that will be paid,
which award entitlements are included in the annual wage,
how the annual wage has been calculated, including any assumptions used in the calculation, and
the maximum (or ‘outer limit’) penalty hours and overtime hours the employee can work in a pay period or roster cycle without extra payment.

Employers must give their employees a copy of the arrangement.

Record-keeping

The employer needs to record the employees:

start and finish times, and
unpaid breaks.

Employees then sign the record of hours, either in person or electronically, at the end of every pay period or roster cycle. This record is used for annual reconciliations.

Overtime and penalty rates

An annual wage doesn't mean an employee isn’t paid overtime or penalty rates. If an employee works for more than their agreed maximum (or ‘outer limit’) overtime or penalty hours in a pay period or roster cycle, they need to be paid for the extra hours at the overtime or penalty rate in the award.

Annual reconciliations

Employers must undertake a reconciliation of the employees annual wages:

every 12 months after the arrangement starts, and
when the arrangement or employment ends.

If the amount actually paid to the employee is less than the award payments that they would have been paid under the award, their employer must pay them the difference within 14 days.

What must be done and by when?

The changes started from the first pay period on or after 9 May 2022 , which means the clock is ticking for all employers to get compliant. Failure to properly engage with these requirements for affected employees will be a breach of the Award and may therefore be subject to pecuniary penalties.

To comply with the changes to the Award, employers must:

Make a new annualised wages agreement if paying annualised wages or “salaries” in the relevant classifications. Note : that employees can elect to accept this agreement or not.
Identify which Award entitlements are accounted for in the agreement and the assumptions.
Specify a maximum number of overtime hours in a roster cycle. Where an employee exceeds this amount of overtime in a pay cycle, they must be compensated.
Revise letters of offer for new employees in those classifications for compliance.
Keep records of the above and records of the employees start/finish times and unpaid breaks, which must be signed by employees every pay period or roster cycle.

Where to seek help?

Employers paying “salaries” to full-time employees should seek expert assistance from their HR advisor to determine whether their arrangements are compliant.

As these amendments to the Award have already commenced, employers must act now if they feel they need help navigating the impact on individual employment contracts, payroll processes, timekeeping, and records.

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1. https://www.fairwork.gov.au/newsroom/news/new-annual-wage-arrangements-health-services-and-marinetowage-industries#overview

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Businesses urged to prepare for Google Analytics (GA4) - it's coming fast

Sun, 14 Aug 2022 01:00:00 GMT

Software Corner

Businesses urged to prepare for Google Analytics 4 (GA4) - it's coming fast!

By Vanessa Willans, Marketing

15 August 2022

A new financial year is always an important date for Australian businesses. However, 1 July 2023 has even more significance as on this day, “Google Analytics 4” (GA4) replaces “Universal Analytics”.

Why does this change matter?

In today’s competitive commercial landscape where measurement is king, businesses need to navigate new challenges to understand the complex, multi-platform journeys their customers take with them — all while prioritising user privacy.

To this end, two and a half years ago, search engine giant Google introduced GA4 to address these evolving measurement standards and help businesses succeed. GA4 is an analytics service that enables business to measure and predict traffic and engagement across their websites and apps more efficiently.

Time is ticking

More significantly, in just over a year, GA4 will replace the established Universal Analytics, an older version of Google Analytics that in 2012 set new standards for how user data was collected and organised.

However, in the world of technology, a decade is akin to millennia, and Google has decided it’s time for its old school standard to go the way of Tyrannosaurus Rex and into extinction in just over a year.

What are the primary benefits?

According to Google, while Universal Analytics has done a great job, GA4 will offer additional flexibility to measure many more kinds of data and deliver a more robust analytics experience designed for the future. GA4 allows businesses to see unified user journeys across their websites and apps, use Google’s machine learning technology to predict new insights, and most importantly, keep up with a changing digital ecosystem.

As an example of how GA4 works, consider the results from custom surveys (Google surveys is a marketing tool that gathers valuable insights into the minds of your target audience). If your business regularly surveys its database, it’s common for plenty of your contacts to not respond for whatever reason. However, once you transition to GA4, you’ll receive enough data from a survey to make predictions about consumer behaviour outcomes enabling managers and leaders to make strategic decisions about the future of their businesses.

The next step is to

get GA4 on your

websites and apps.

It’s not too late to

start a new strategy

to fit the new tracking

method and create your

GA4 properties, but

delaying parallel tracking may cause reporting,

remarketing, and

compliance challenges.

How to prepare for the transition to GA4?

From 1 July 2023 , standard Universal Analytics properties will no longer process data. That said, businesses will be able to see their historical Universal Analytics reports for a period after 1 July 2023.

Now is the time for businesses to start migrating to Google Analytics 4. The first step is to identify whether you have a Universal Analytics property or a GA4 property. You can do this by looking at your property ID to see which type of property you have:

Universal Analytics property IDs start with UA and end with a number (UA-XXXXXXXXX-1).
Google Analytics 4 property IDs have only numbers (XXXXXXXXX) 1 .

Make the switch to Google Analytics 4 now

The next step is to get GA4 on your websites and apps. It’s not too late to start a new strategy to fit the new tracking method and create your GA4 properties, but delaying parallel tracking may cause reporting, remarketing, and compliance challenges.

Important tip: make sure to follow Google Analytics best practice when making the switch.

After that, learning how to take advantage of GA4 should spark ideas and conversations beyond migration within your marketing and technology teams. If you don’t have in-house resources, be sure to reach out to your web or digital marketing consultants to ensure you are GA4 ready now rather than in May 2023, which might be too late. Finally, if you’re not using Google Console 2 , now is a great time to add this into your strategy.

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1 https//support.google.com/analytics/answer/11583832

2 https://support.google.com/webmasters/answer/9128668?hl=en

Disclaimer

Skills shortage 'Challenge of the Decade' for Australia's construction industry

Sun, 07 Aug 2022 01:00:00 GMT

Construction Industry

Skills shortage 'Challenge of the Decade' for Australia's construction businesses

By Christina Gulliver, Partner

8 August 2022

Recently I wrote about how to “ Re-think the way we approach business in 2022 .” Let’s delve deeper into that discussion and look at the challenges the industry faces meeting the demand.

Australia's economic survival in the current COVID era is firmly bound to the national construction industry, with all levels of government announcing unprecedented investment into infrastructure development.

However, there are other headwinds the construction sector must navigate, with skills and labour shortages contributing to higher building prices. Moreover, a recent report in the Australian Financial Review 1 (AFR) confirmed that higher building costs are here to stay as materials and labour shortages won’t ease from the current high levels. Arcadis National Director for Cost & Commercial, Matthew Mackey, agreed, “Over the medium term and beyond costs will rise steadily, driven by labour shortages caused by border closures, expanded investment in social infrastructure, increased material costs, and strengthening construction demand from the private sector 2 .”

More significantly, the AFR article suggested the mounting costs of labour and materials will contribute to total construction sector inflation of 9.5% over the year to June 2022, and 6% over the year to December 2022.

Consequently, for those construction businesses faced with the triple whammy of skills and materials shortages, surging demand for their services and sector inflation, now is the time to ensure they have a firm grip on the numbers vital to their business. There are three key numbers to track in business to grow it successfully: sales, profits, and cash, but there are also other key indicators worth monitoring.

Meeting demand from massive infrastructure opportunities

Demand for construction services won't decline anytime soon. According to a report from the Australian Construction Industry Forum (ACIF) 3 , Federal, state and local government budget stimulus measures have largely driven a growth of 2.7% for the construction sector, which delivered up to $243 billion in construction and building work in 2021.

ACIF 4 says, the issues of skills and materials shortages remain significant concerns, owing to the demands placed on the construction industry due to The Federal Government’s HomeBuilder introduced in 2020 and large-scale infrastructure projects.

State and federal governments and the construction sector can partly alleviate the skills shortages by hiring and retaining skilled construction staff. While this sounds easier said than done, ACIF suggests worker shortages could be addressed by attracting and retaining more women, and more skilled migrants to Australia now COVID-19 borders are reopening closures.

Recruiting and retaining skilled construction staff

Employees can make or break a business—and therefore should be considered the most valued resource. The construction industry employs almost 1.2 million Australians 5 and while employment in the sector is higher than five years ago, staff turnover in some businesses can be up to 50% or more of their workforce 6 .

Recruit for both

skills and attributes—ensuring future employees don’t just have the

skills—they should

also help build

the culture and

functionality of

your team.

Workforce recruitment and retention involves choosing the right people for the right roles at the right time. Choose your workforce carefully and ensure the workplace you present will help retain staff longer-term rather than hiring for a quick fix.

A blog from Bluebeam Inc., a developer of technology solutions for the global architectural, engineering and construction (AEC) industries suggests several ways to build your construction workforce. These tips include 7 :

Consider your upcoming projects for the year and the resourcing requirements needed to successfully deliver these scopes of work on time and within budget.
Map project requirements, including volume and skills to your existing workforce and identify where the gaps exist.
Identify the members of your workforce who may be upskilled and plan their development to align with your incoming priorities.
Recruit for both skills and attributes—ensuring future employees don’t just have the skills—they should also help build the culture and functionality of your team.

Keeping up to date with new technologies

Other measures to fill the skilled worker gap could involve promoting greater prefabrication and digitalisation. However, the construction industry has been slow to embrace digital technologies and innovations. For example, less than 40% of Australian construction businesses have a web presence. Only 3% have a digital business strategy.

Harnessing new technologies enables construction companies to optimise operational processes by optimising time and resources. These improvements will result in more robust construction project performance with near-real-time visibility into progress.

Staying abreast of the numbers

To help manage the challenges of skills shortages, equipment inflation and so on, there are three key numbers to keep tabs on to grow a successful business: sales, profits, and cash. Moreover, it is imperative to be proactive in setting pricing and ensuring quotes cover future cost increases.

Many businesses also use Key Performance Indicators (KPIs) to show how well they are performing. In a business sense, KPIs can address sales goals such as the number of sales the business must close monthly or marketing goals such as the number of leads generated this month. Examples of operational KPIs might be order fulfilment times, safety or incident reporting, employee satisfaction ratings and employee churn rates. KPIs should apply to short- and long-term goals.

When developing KPIs for your business, it is best to start with the business’s core goals, then look at the critical success factors affecting those goals. Many business owners may say the goal is profit, but you need to consider precisely how to achieve that. For example, if your goal is to grow market share, a KPI might indicate how many customers you expect to service per week.

All KPIs should be easy to measure and easy to understand. They should also be specific to a period appropriate to what is being measured. Once you have a set of KPIs that are right for your business, you will be able to paint a clearer picture of your organisation’s strategic performance and empower you to make agile decisions to impact your team’s success.

As part of our accounting and business advisory services at Brentnalls Construction , we can assist you in to stay abreast of your numbers and support you to improve your results and achieve your short and long-term business goals.

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1 https://www.afr.com/property/commercial/don-t-expect-building-costs-to-come-back-down-20220430-p5ahdw

2 https://www.arcadis.com/en-au/news/australia/australia/2021/5/arcadis-releases-key-annual-survey-of-international-construction-costs

3 https://www.acif.com.au/acif-news

4 https://www.acif.com.au/sb_cache/associationnews/id/605/f/2022%20ACIF%20Policy%20Priorities%20PDF.pdf

5 https://buildforce.com/blog/why-is-employee-turnover-high-in-construction

6 https://blog.bluebeam.com/au/construction-industry-challenges-2022/

7 https://absolutetraffic.com.au/traffic-management-sydney/

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Disclaimer

Australian Business Domain Name

Wed, 03 Aug 2022 04:35:18 GMT

IMPORTANT INFORMATION

Australian Business Domain Name

By Brentnalls SA Team

03 August 2022

Now is the time to register your .au domain name before it becomes available to the general public.

Essentially, shorter, simpler domain names will be available that end in .au rather than .com.au, .net.au, .org.au, .gov.au or .edu.au.

All Australian businesses have till 20 September 2022 to reserve their .au equivalent domain name before it becomes available to the general public.

Why is this so important to act now?

The new shorter domain name option could open your business up to fraudulent cyber activities. How? Put simply, after 20 September, if you haven’t registered your .au domain name, a cybercriminal could register your business.au or yourbusinesscom.au and use these domains to conduct fraudulent cyber activities, potentially putting your brand at risk.

Protect your business

The Australian Cyber Security Centre (ACSC) recommends that all Australian businesses with existing domain names register their .au equivalents before 20 September 2022, otherwise, risk your business name becoming available to the public on a first-come-first-served basis.

Therefore, we recommend you reserve your .au domain name by visiting https://www.auda.org.au/accredited-registrars

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Transfer of asset ownership between spouses

Sun, 31 Jul 2022 01:00:00 GMT

Transfer of asset ownership between spouses

By Sally Storey, Partner

1 August 2022

As part of every business owner’s risk management plan, they should obtain advice about protecting their assets from creditors.

Some company directors, for example, transfer their interest in the family home to their spouse to protect the property against the risk of business insolvency. The harsh reality is that the director may mistakenly consider the family home in the spouse’s name safe in this situation.

The Bosanac scenario

Last August, the Full Court of the Federal Court of Australia in Commissioner of Taxation v Bosanac [2021] FCAFC 158 underlined the central message that company directors must be prudent before making assumptions that personal assets are safe from creditors.

The issue in the Bosanac matter was whether the bankrupt had an interest in the family home valued at $4.5 million 1 registered solely in his wife’s name. The matter revolved around Mr & Ms Bosanac, who purchased a home in 2006. According to a media report, the couple paid a $250,000 deposit with funds from a pre-existing joint loan account in their joint names. The Bosanacs borrowed the remainder to acquire the property in Dalkeith, Western Australia. The property was subsequently used as collateral to acquire other investment assets.

The central issue in the Bosanac matter was the “presumption of advancement”. The presumption of advancement is a starting point for assessing whether spouses have an interest in property regardless of whether they are on the title.

What the full court considered

In the Bosanac matter, the Court accepted that advancement was the starting point but found that the presumption was rebutted by evidence that:

The property was intended to be the family home and used jointly to benefit both the husband and wife.
The husband and wife contributed half of the purchase price by taking out joint loans secured over the property.
It was unlikely that the husband would have taken on substantial borrowing liability without acquiring a beneficial interest in the property.
It was unlikely that the husband would have taken on a considerable loan liability to gift the property to his wife in all the circumstances.
The husband later took out a significant investment loan secured by a mortgage over the property, suggesting that he had an interest in the property that allowed him to do so.

After consideration, the Court found that Mr Bosanac owned a 50% stake in the property, despite the asset being held exclusively in the wife’s name.

The case demonstrates that proper legal advice is critical before putting a family home at risk in bankruptcy. If you’re a company director and wish to understand ways to protect your personal assets, contact us .

__________________________

https://www.accountantsdaily.com.au/tax-compliance/16359-a-shock-to-the-system-federal-court-spousal-asset-ruling-to-impact-accountants

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Disclaimer

Tax changes to bolster carbon farming

Sun, 24 Jul 2022 01:00:00 GMT

Tax changes to bolster carbon farming

By Sally Storey, Partner

24 July 2022

In the Federal Budget earlier this year, the former government announced plans to apply concessional tax treatment to primary producers that generate revenue from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates. The changes aim to encourage “carbon farming” activities and help Australian governments meet their emissions targets.

The new Labor Government, is aiming to reduce emissions by 43 per cent below 2005 levels by 2030.

Recognising the part agriculture must play in reducing emissions, many industry bodies have also created their targets. The National Farmers Federation (NFF) and Grain Growers Australia, for instance, are aiming for net-zero emissions by 2050, and Meat and Livestock Australia (MLA) is striving for net zero by 2030.

Tax savings in carbon farming

Apart from encouraging greener agricultural processes, the Federal Government expects it is expected the concessional tax changes will provide farmers with an estimated $100 million benefit through the tax system over the forward estimates 1 .

Under the new tax regime, farmers will treat revenue from the sale of ACCUs as primary production income, providing access to income tax averaging arrangements and the Farm Management Deposit scheme. Revenue from ACCUs will be recognised in the year of sale to support cash flow. The treatment of biodiversity certificates will be aligned with the new tax regime for ACCUs.

The Government believes the changes will further encourage carbon abatement and biodiversity activities while providing primary producers with a diversified source of on-farm income.

The goal is to give genuine farmers more options when deciding to hold or sell their credits—whether for investment purposes or to enhance the environmental credentials of their operations—without being penalised.

The Government said the changes would also encourage more farmers to participate in the Emissions Reduction Fund (ERF) and earn revenue from ERF projects.

According to Leanne Sherriff, Climate Change Leader from agribusiness consulting and grain marketing firm Pinion Advisory , trading carbon may provide an opportunity for a long-term sustainable income stream. Leanne says, “There is potential to generate income from low production land, allocating the most sustainable use for all land types.” However, there are risks associated with trading carbon and farmers should ensure that they have thoroughly done their homework to see whether trading carbon is the right fit for them and their business. Carbon farming projects are for a minimum period of 25 years, and carbon cannot be double counted (i.e. the same carbon can’t be used as a tradable commodity and to offset emissions from the farm business as well).

What is carbon farming?

According to Carbon Famers of Australia 2 , carbon farming is simply a way of farming that reduces greenhouse gas emissions or captures and holds (also called “sequestration”) carbon in vegetation and soils. It is managing land, water, plants, and animals to meet the treble of challenges: “landscape restoration”, “climate change”, and “food security”. Carbon farming aims to trim down emissions from agricultural production processes while increasing production and sequestering carbon in the landscape.

For those unfamiliar with carbon sequestration, this refers to capturing and storing atmospheric carbon dioxide. It is one way of cutting the amount of carbon dioxide in the atmosphere to reduce global climate change 3 .

The benefits of carbon farming and carbon sequestration include less erosion and soil loss, improved soil structure and fertility, lower soil salinity, healthier soils, vegetation, and animals. Other benefits include more biodiversity, buffering against drought and greater water efficiency.

Carbon farming ranges from a single change in land management, such as introducing no-till cultivation or grazing management, to a whole-of-farm integrated plan which maximises carbon capture and emissions reduction. Carbon Farmers of Australia says farmers have many practices to choose from to develop a compliant land management plan, including:

maximum groundcover (no bare earth),
pasture cropping,
mulching,
stubble retention,
precision application (fertiliser),
natural fertilisers,
soil inoculants (probiotics),
low methane animal genetics,
methane-reducing feed supplements, and
manure management 4 .

The most common methods landholders or farmers use to create ACCUs is by avoiding deforestation, revegetation, and soil carbon sequestration.

Creating Australian carbon credit units

The Federal Governments’ Clean Energy Regulator creates and regulates the methods under which anyone can generate ACCUs.

According to Hamish Webb, a Director and Interim CEO of Precision Pastures and a sheep and cattle farmer based in the New England region of NSW, “The most common methods landholders or farmers use to create ACCUs is by avoiding deforestation, revegetation, and soil carbon sequestration.”

“Soil carbon sequestration is structurally different. The method is measured, not modelled, which requires the landholders to undertake soil tests with accredited organisations to provide measurements of the carbon that has been sequestered.”

Hamish continues, “This measured approach is highly accurate and is ranked number one in global standards for soil carbon methods. It also provides the added benefit of providing the farmer with soil data which can be used to solve soil health issues or constraints and ultimately increase farm production.”

The benefits of green farming and getting the right advice

"The main advantage of conducting a soil carbon project," says Hamish, "is the potential alignment of eligible project activities with improvements in on-farm production."

“These activities include applying fertiliser (organic or synthetic), lime or gypsum, implementing irrigation, rejuvenating pastures with seed, or switching from set stocking to rotation grazing." According to Hamish, "many farmers are already embracing these activities as part of their program, so it is vital to understand your current carbon levels and the potential cost-benefit analysis for undertaking a soil carbon project.”

“Given the increasing demand for carbon-friendly products this is an important consideration. It’s critical for farmers to know their own carbon balance before they commit to selling,” explains Leanne Sherriff, Climate Change Leader, Pinon Advisory. Whatever pathway farmers take, managing for carbon delivers clear on-farm environmental and production benefits and provides opportunity to improve business resilience. Examples of on-farm co-benefits include healthier soils with improved water holding capacity, shelter, and shade for stock and improved biodiversity.

Hamish adds that apart from the benefits of carbon farming to an agribusiness, it’s essential to get the accounting and financial side of the ledger right too. “It is important to consider the project ownership structure, your potential developers or partners and the strategy to monetise the ACCUs once they are issued. Engaging with your trusted advisers, including accountants, is very important during this process. Engaging with your trusted advisers, including accountants, is very important during this process," said Hamish.

__________________________

1 https://www.minister.industry.gov.au/ministers/taylor/media-releases/tax-changes-farmers-bolster-land-stewardship

2 https://carbonfarmersofaustralia.com.au/carbon-farming/

3 https://www.usgs.gov/faqs/what-carbon-sequestration#:~:text=Carbon%20sequestration%20is%20the%20process,carbon%20sequestration%3A%20geologic%20and%20biologic

4 https://carbonfarmersofaustralia.com.au/carbon-farming/

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Disclaimer

Superannuation contributions changes

Sun, 17 Jul 2022 01:00:00 GMT

Superannuation contributions changes

By Nadine Hill, Principal

1 0 July 2022

Several key super changes which may impact your ability to contribute to your superannuation, took effect from 1 July 2022 . These changes create opportunities for all superannuation fund members, young and old, to grow their retirement savings.

What are the changes?

Originally announced in the 2021 Federal Budget, the following changes applied from 1 July 2022:

Individuals up to the age of 74, will no longer need to meet a work test to make voluntary non-deductible, contributions.
Individuals up to the age of 75, with a total super balance under $1.7 million, will have the opportunity to make large non-concessional contributions (possibly up to three years’ worth) in a single year.
The minimum age to make downsizer contributions will reduce to 60, allowing more individuals to use the proceeds from the sale of their home, to fund their retirement.
The Superannuation Guarantee (SG) rate has increased from 10% to 10.5% p.a. for all and the $450 minimum income threshold for SG contributions has been removed.
Under the First Home Super Saver Scheme (FHSSS) eligible individuals have access to an extra $20,000 of voluntary contributions to fund a home deposit.

Downsizer contributions

Presently, you can only make a downsizer contribution if you are 65 or older at the time of the contribution and have satisfied the other eligibility requirements.

As from 1 July 2022 , the minimum age will reduce to 60. All other eligibility rules remain unchanged and the maximum amount of downsizer contributions that can be made remains at $300,000 per person or $600,000 per couple.

If you are selling your home, please contact our office to discuss the timing of a downsizer contribution and the potential to boost other contribution opportunities. For example, if you get the timing right, you may be able to combine a downsizer contribution with the bring forward rules to contribute up to $630,000 to your SMSF, in one year. As a couple this could present a one-off opportunity to boost your retirement savings.

First home super saver scheme (FHSSS)

Currently the FHSSS allows you to withdraw a maximum of $30,000 of voluntary contributions (plus associated earnings/less tax) from your super fund to fund the deposit of a new home.

As from 1 July 2022 , the maximum amount that can be withdrawn will increase to $50,000 meaning each eligible person will be able to withdraw an additional $20,000. All other eligibility rules remain unchanged.

Also, unchanged is the maximum amount of contributions that an individual can make each year that can count towards the FHSSS – this remains at $15,000 p.a. This means that it will take a member, at least four years of voluntary contributions, to reach the higher $50,000 limit.

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Disclaimer

What does inflation mean to you?

Sun, 10 Jul 2022 01:00:00 GMT

What does inflation mean to you?

By Bradley Barnes, Partner

11 July 2022

Australian consumer prices surged at the fastest annual pace in two decades in the first quarter of 2022 as petrol, home building and food cost all climbed, prompting the Reserve Bank of Australia to increase interest rates 1 .

Inflation is going up at an annual pace of 5.1%, the fastest rate since before the Global Financial Crisis and, consequently, our country is seeing some of the biggest economic changes experienced since the start of the century, but what does this mean for you?

Changes in the inflation rate can affect consumers and businesses, but first, let’s define inflation.

What is inflation?

The financial watchdog, the International Monetary Fund, defines inflation as ‘the rate of increase in prices over a given period of time’ 2 . Typically, a broad measure, inflation considers the overall increase in prices or the increase in the cost of living in a country.

Generally measured annually, it is most common for prices to rise over time, but they can also fall (deflation).

The Australian Bureau of Statistics (ABS) measures inflation via a Consumer Price Increase (CPI), which is published quarterly. They take into account household costs such as food, bills and transport, amongst other everyday expenses.

An ‘inflation target’ is used to provide a framework to help keep the CPI between certain rates - generally between 2-3 percent is the RBA’s preferred inflation target. This in turn supports the RBA in strengthening price stability, full employment and the welfare of Australians. "If the ABS are the ‘scorekeepers’ of inflation, the RBA are the ‘goal setters’ 3 : setting the target rate for inflation and trying to influence it," says Canstar.

Coming out of the pandemic, economists say that Australia and the RBA may have underestimated the strength of demand on the CPI and a resulting drop in joblessness 4 , as well as Russia’s invasion of Ukraine, energy and soaring food prices caused by snags in supply chains. The supply chain challenges that can be traced to the pandemic are pushing up the cost of doing business. In turn, supermarket chains and other retailers are passing onto consumers these extra costs by way of higher prices. Consequently, further increases in inflation are predicted.

Preparing your small business for inflation

There is no doubt that inflation rises affect all industries, big or small. Some may benefit, while others will find the rising costs a tough slog.

The benefits of talking to an accountant about strategies to help combat inflation is obvious, no matter what type of business you are running. There are a number of ways to address the inflationary environment we now find ourselves in, and reassessing business costs and margins could be a good place to start.

At the end of the day, as a business, you don’t want to drop the ball on quality and reputation. But there may be some clever approaches that could help increase margins, hence keeping your business safe from any major financial losses.

Cutting unnecessary costs is a no-brainer. There are many ways to go about this, for example changing or ditching a material that is rarely used. What about build up stocks of popular and inexpensive supplies before there are more price hikes?

Raising prices is also an option, and while customers don’t always like this strategy, they will understand if you do it slowly and fairly. It could be the difference that helps keep your business afloat during these challenging times.

Brentnalls SA would be more than happy to guide you in how to do this in a way that won’t drive away business. For an evaluation of your businesses preparedness to operate in a higher inflationary environment, we are happy to help.

__________________________

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Disclaimer

What does a change of government mean for your small business?

Sun, 03 Jul 2022 01:00:00 GMT

What does a change of government mean for your small business?

By Matthew Holden, Managing Partner

4 July 2022

Governor-General David Hurley has officially sworn in Anthony Albanese as Australia’s 31st Prime Minister after nine years of Coalition rule.

Now that the celebratory red balloons and streamers have been cleared, small business owners are sure to be questioning what a Labor government has in store?

New Federal Treasurer, Jim Chalmers has warned of a ‘dire’ budget situation as inflation soars. Labor is inheriting a sizeable national debt, rising inflation, slowing economic growth, increasing cost of living and stagnant wages.

Despite these pre-existing challenges, many observers agree that the impacts of government change will be minimal, especially in the investor market. Shane Oliver, Head of Investment Strategy and Chief Economist, AMP, said, “The absence of significant macro policy differences between the new Labor government and the Coalition suggests minimal impact on the share market and the Australian dollar.”

“The key economic challenges for the new government relate to inflation, interest rates & housing affordability. Higher inflation and rates argue for faster deficit reduction,” Dr Oliver added. Small business will be another major consideration for the Labor Government.

What are some of Labor’s new small business policies?

Several of the main policy planks outlined in Labor’s small business policy called Better Deal for Small Business 1 include:

Ensuring small businesses are paid on time to sustain growth across the economy with a mechanism to ensure payment within 30 days. The current average contract payment time sits at 37 days above the 30-day benchmark.
Making unfair contract terms illegal so small businesses can negotiate fairer agreements with large partners.
Driving a genuine collaboration with small businesses and government to reduce the time spent doing taxes, cutting paperwork, and targeting support. Eight out of 10 small businesses find government regulation overly complex.
Reducing small business transaction costs at the point of payment with a clear timeline for implementing least cost routing or similar. Small businesses are disproportionately impacted by higher transaction fees that eat into profits – around $804 million a year.

These commitments from Labor complement plans to:

Maximise small business participation in Commonwealth procurement, providing greater business and Australian job opportunities. The Commonwealth can use its $190 billion purchasing power to support small businesses, deliver better value for money and grow the local economy.
Provide an environment for businesses to thrive through Labor’s Start-up Year initiative, Fee-Free TAFE to address skills shortages, and cheaper Child Care to remove barriers to returning to work.

"Therefore, it is no surprise that Labor went to this election with very little difference from existing tax policies of the Coalition government."

Wait and see for tax measures

Many observers believe that Labor lost the 2019 Federal election (contested under its then leader, Bill Shorten) in a large part due to substantial differences in tax policy, particularly associated with franking credits, CGT discount and negative gearing.

Therefore, it is no surprise that Labor went to this election with very little difference from the existing tax policies of the Coalition government.

During the term of the previous government, the Labor opposition supported the Stage 3 tax cuts, which will see the abolition of the 37% tax bracket for individuals, with individuals earnings between $45,000 and $200,000 to be taxed at 30%, and the highest marginal rate of 45% applying from $200,000 onwards, instead of $180,000 as currently stands.

The Stage 3 tax cuts are already legislated, and will apply from 1 July 2024 .

The Low to Middle Income Tax Offset (LMITO) which was introduced from 1 July 2018 as a temporary measure is due to expire on 30 June 2022 . The LMITO provides a tax offset up to a maximum of $1,500 for individuals with taxable income between $37,001 and $126,000. It remains to be seen whether an extension for this will be granted.

The new government hasn’t indicated that it will pull the plug early on “early temporary full expensing” and “temporary loss carry-back” that are set to end 30 June 2023 .

A critical measure for most SMEs, the temporary “full expensing” scheme also known more broadly as the “instant asset write-off”, allows businesses with a turnover or income of less than $5 billion to immediately write off the cost of assets they first use or install by 30 June 2023 .

Training and technology investment boost

Equally, there’s little direction about the Small Business Technology Investment Boost and Training Boost from the new government – although this measure ends on 30 June 2023 . This boost allows small businesses with an aggregated annual turnover of less than $50 million to take advantage of a 120% tax deduction for eligible technology expenses up to $100,000, plus deductions for upskilling employees.

Small Business Skills

The Small Business Skills was another popular carrot introduced late in the day by the previous government. Small businesses with an aggregated annual turnover of less than $50 million can deduct an additional 20% of the expenditure incurred on eligible training courses provided to employees.

This measure will apply to expenditure incurred from 29 March 2022 until 30 June 2024 , so it has a longer shelf life than the technology boost. It will be a case of ‘watch this space’ whether the Labor government allows this initiative to run its full term.

It’s important to note that neither of these boosts are legislated, while we have dates, the boosts are not in place.

Commonwealth Seniors Health Card

The new government has announced they will increase the income tests for the Commonwealth Seniors Health Card from 1 July 2022 . The new income tests will be $90,000 a year for singles (up from $57,761) and $144,000 a year for couples (up from $92,416), drastically increasing the number of older Australians eligible for the cards. The card is for people not otherwise getting a government pension or other payment.

Seniors must be Australian residents aged at least 66 years and six months if born before 1 January 1957 or 67 years after that date . The cards provide:

cheaper PBS medicines,
bulk billing at the doctor,
access to the Medicare safety net, and
concessions on council rates, ESL and energy bills.

Applications can be made via Services Australia 2 .

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1 https://alp.org.au/policies/better-deal-for-small-business

2 https://www.servicesaustralia.gov.au/

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Disclaimer

Do you have good risk management practices?

Sat, 25 Jun 2022 23:00:00 GMT

Do you have good risk management practices?

Rick Albertini, Partner

26 June 2022

Managing risk is a critical facet of the roles of CEOs and board members. Unfortunately, many businesses are relatively relaxed about risk management. Yet, the COVID-19 pandemic demonstrates the significant commercial advantages of managing risk.

Illuminating a path forward on strategic risk management planning

Whether it's a devastating flood, ongoing disruption, innovation and technology, or a pandemic, businesses regularly encounter risk. Increasing disruption leads to more significant risks—which, when left unchecked, become a greater risk because they're intertwined and interconnected. And because these risks don't occur in isolation, addressing them in silos can be an exercise in frustration and futility. Specific risks can pose the most significant threats, why? as these risks can undermine the organisation's ability to execute strategy and achieve performance goals.

Therefore, having risk management practices in place is critical to commercial success while also assisting owners in making better business decisions. Consequently, we have compiled five key focus areas to consider when planning, as follows:

1. Different risks to consider

In business, there are various levels of risk. Some risks will have minimal impact and can be easily managed, while others can be catastrophic. At the same time, when considering risk, you can also look for opportunities that can have a positive effect on your business.

Commonplace business risks include damages to/destruction of premises, loss of a significant contract, failure of an IT system, injury to an employee or client, withdrawal of financial facilities and COVID-19, to name a few. Through narrowing down potential threats you will have a starting point to work from.

2. Identifying risks

Recognising risks through a risk management plan is a sensible first step 1 . Moreover, a risk management plan can assist your business prepare and protect its assets by identifying emerging dangers.

Some standard methods used in identifying risk include a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis 2 , brainstorming sessions, compliance audits, health and safety audits and customer satisfaction surveys. But even before you jump into a team SWOT, an excellent place to start the risk planning is to ask yourself what could stop or hinder the business from achieving its strategic success.

A matrix allows implications to be plotted against the likelihood of the risk occurring.

3. Risk analysis

Once you have identified a risk, it’s time to analyse it and consider the potential consequences if it occurs. You may use different methods, but one of them may be to utilise a matrix. A matrix allows implications to be plotted against the likelihood of the risk occurring. You may rate risks as extreme, high, moderate or low against the possibility of being rare, unlikely, moderate, likely or almost certain.

To assist this process, some businesses are using the Ansoff Matrix 3 , a communication tool that helps identify possible growth strategies and can be used to identify risk potential. You can read our article to gain further understanding of the Ansoff Matrix .

4. Setting some priorities

When determining how to prioritise risks, businesses can utilise the principle of ALARP (As Low As Reasonably Practicable) ⁴ to enable them to reduce their risk exposure to a reasonable level.

As part of the ALARP process, you want to demonstrate that decreasing the risk further would be grossly disproportionate to the benefit gained.

5. Addressing the risk

Dealing with risk involves decreasing the exposure to a threat or the likelihood of it occurring.

Addressing risks could include physical measures such as security systems or physical safeguards. Alternatively, the mitigation steps might consist of internal controls to reduce the risk of fraud, such as financial authorisations, reconciliations, and cybersecurity. It's also essential to consider projections such as insurance, derivatives or even cultural attitudes within the business. In short, what is the tolerance for breaching policies and procedures? After this consideration, the remaining risk level is considered acceptable or justifiable.

Risk will still occur. However, if a business undertakes planning, it can call on predetermined strategies to diminish the effects of costs of a potential risk happening or re-occurring. Therefore, companies adopting a more formal process to facilitate better risk processes invest in a Risk Management Framework that oversees the management of risk as an integral part of decision-making practices. Furthermore, it's important to note that it isn't only at the board level but throughout the whole organisation.

Furthermore, continual assessing needs to be part of a regular review and not something your organisation does annually. Better still, businesses that invest the time insensible risk management practices will benefit. These rewards can include:

protection of business assets
increased competitive advantage
improved employee satisfaction
reduced compliance costs
improved efficiency and productivity

Further information can also be found in our Risk Management Information Sheets.

_________________________

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Disclaimer

What happens to your superannuation when you die?

Sat, 18 Jun 2022 23:00:00 GMT

What happens to your super when you die?

By Nadine Hill, Principal

19 June 2022

We spend our working lives trying to increase our superannuation balance which helps us save for our retirement and enjoy the tax concessions superannuation provides. Still, we often forget to consider what happens to our superannuation when we die. More specifically, the tax consequences of this.

What are the tax consequences?

There are two main issues to consider when talking about tax consequences for superannuation on death, they are:

Non-dependants receiving superannuation proceeds, and
The split between the taxed, untaxed and tax free elements of the superannuation fund.

If a non-dependant receives superannuation proceeds, the taxed element of those proceeds is taxed at 15% and the untaxed element of those proceeds is taxed at 30%. Non-dependants include your adult children who are no longer financially dependent on you.

What are your superannuation components?

Your superannuation balance generally includes two components, taxed/untaxed and tax-free. The taxed element includes amounts you have claimed as a tax deduction (including employer contributions) when contributing into the superannuation fund and the fund's earnings on these whilst the fund is in accumulation phase. The tax-free component includes contributions which you have not claimed as a tax deduction. The untaxed element includes deductible contributions where, due to the specific rules around that fund, a fund has not paid any tax on the contributions or earnings. Tax-free is the component of contributions, and earnings on these, which was contributed without a tax deduction being claimed.

Pension phase

When the last member of a superannuation fund dies the pension superannuation interest continues in pension phase until the benefits are paid out. This legislation has applied since 1 July 2012. Previous to this legislation a pension was considered to cease on the death of the member. This had tax consequences for the fund when a member passed away such as reduced exempt current pension income and tax on capital gains incurred after death.

These issues are highlighted in the following basic example:

Mum and dad have their self-managed superannuation fund ( as detailed in the table below ).

The family farm was transferred into the fund and contributions have been invested into listed securities. Dad has subsequently passed away, leaving his balance to mum. What happens to mum's superannuation when she dies, assuming the proceeds are to go to their non-dependent adult children?

In this scenario there would be a capital gain of $750,000 and tax to pay of $75,000 (assuming that assets are held for greater that 12 months). If Mum has the maximum amount in pension phase at the time of her death ($1.6million) then based on a $2million total fund balance, 80% of the capital gain is not taxable to the fund as it is part of the exempt pension income amount. Tax payable on the capital gain will be $15,000 (20% of the $75,000).

When the taxed element of the fund is paid to the children there will be tax payable of $75,000 (15% of $500,000). Total tax payable in this scenario would be $90,000. Can this tax be avoided? Potentially yes, or at least in part. Strategies such as withdrawal and re-contributions, power of attorney and testamentary trusts can all help lower the tax payable.

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Tips and traps when subdividing your main residence

Sat, 11 Jun 2022 23:00:00 GMT

Tips & traps when subdividing your main residence

By Sally Storey, Partner

April 2021

Fly out of any state capital, and one of the first things you’ll notice on the ground below is the number of backyard swimming pools. This is especially the case in middle ring suburbs, where lot sizes tend to be generous compared to the 400 square metre average found in greenfield housing developments 1 .

This isn’t just about pool-spotting. As federal, state and local governments embrace the trend to urban consolidation 2 , it’s becoming easier to subdivide big suburban blocks – selling off part of your land, and maybe retaining the now-smaller lot on which your home sits.

If your home is on a large block, you could be sitting on a goldmine, but subdividing can lead to a minefield of tax issues.

We look at some of the keys factors to consider if you’re thinking about subdividing the land that forms part of your home.

What is – and isn't – free from CGT

The sale of your main residence is normally tax-free. If you sell the property at a profit, those gains aren’t subject to capital gains tax (CGT).

Exceptions can apply, i.e. if you’ve rented the property out for a time, or if you work from home, you won’t get the full benefit of the main residence exemption 3 . Under these circumstances, a portion of the profit made on the sale of your home can be subject to CGT.

A more complex situation can arise if you subdivide your land, and sell the newly created lot. We’ll say for instance, that your property comprises a 1,000 square metre block, and you decide to keep 500 square metres on which the home is situated, and sell the remaining 500 square metres of vacant (former backyard) land.

In this situation, the land sold separately from your home is subject to CGT. Only the land on which your home sits remains CGT-exempt 4 .

The challenge is that you’ve now created two separate blocks. These are regarded by the Australian Taxation Office (ATO) as new assets for CGT purposes, and they each have to be assigned a value representing the cost base. This involves apportioning the original cost of the property between the two lots (one with a dwelling, one without). As you may imagine, this can be a complex calculation.

What if I build on the vacant lot?

If you decide to construct a new dwelling on the vacant lot, it won’t come under the umbrella of your main residence (as you’ve never lived there). So, CGT can apply on the sale of the new building.

Moreover, if this new dwelling is sold immediately on completion of construction, it is classified as new housing stock, and the sale will attract Goods and Services Tax (GST).

The timing of your sale matters

If you sell the newly sub-divided lot straight away, you may be entitled to a 50% CGT discount on the profit on sale.

However, if you opt to build a new dwelling on the vacant land, the project can be regarded as a business activity. In this case, you may not get the benefit of the CGT main residence exemption or any potential 50% CGT discount. Instead, you’ll pay tax on any profits on the sale as if you were running a business, with the net profits regarded as ordinary income.

What if I demolish my home and rebuild?

If you opt to knock down your current home, and replace it with a newly constructed dwelling, a full CGT exemption should still be passed onto the new building as long as:

you move in and make it your home as soon as possible after completion
it continues to be your main residence until you dispose of it, and
the dwelling is your main residence for at least three months 5 .

Good advice, early on can avoid a tax trigger

Embarking on the process of subdividing and selling off part of your land can be lucrative, with added sweetener of less garden maintenance.

But without upfront tax advice, the steps you take can trigger adverse tax consequences. This is why it’s so important to speak to the team at Brentnalls SA from the earliest possible stage. We can help you plan your project to manage the tax risks, and maximise the benefits of your subdivision.

_____________________________

1 https://udia.com.au/wp-content/uploads/2020/03/State-of-the-Land-2020_web.pdf

2 https://www.commsec.com.au/content/dam/EN/ResearchNews/2019Reports/November/ECO_Insights_111119-Home-size-trends-report.pdf

3 https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Your-main-residence/

4 https://www.ato.gov.au/General/Property/Land---vacant-land-and-subdividing/Subdividing-land/

5 https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Your-main-residence/Building-or-renovating-your-home/#Replacingademolishedordestroyeddwelling

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Insurance: an overview

Sun, 05 Jun 2022 00:30:00 GMT

Insurance:
an overview

Nadine Hill, Principal

5 June 2022 republished 12 June 2023

It is easy to think that the worst won’t happen and ignore the need to protect the very thing that generates our wealth: our health and ability to work. But if an accident or severe illness does occur, the impacts can be devastating.

Insurance is a vital consideration for all individuals and businesses

If you have a financial plan it should include a strategy to minimise risks jeopardising your present and future plans. In simple terms, if you cannot afford to lose something, you should try to protect your exposure. But, again, insurance can provide a cost-effective protection mechanism.

This may take a combination of personal, general and health insurance policies. There are many different aspects to insurance, and it is best to tailor a package that suits your needs as well as your budget.

The following provides a brief description of some of the critical personal insurance products available to you:

Life Insurance
Total & Permanent Disablement (TPD) Insurance
Trauma Insurance
Income Protection Insurance
Private Health Insurance
Tax Audit Insurance
Partnership/Share Purchase Buy/Sell Insurance
Difference Between Stepped & Level Premiums
Using an Insurance Broker
Annual Review Process

If you can't afford to lose something, make sure it's insured.

Personal Insurances

Life

Life cover can be used to provide and care for the finances of your family in an event of death.

Life policies provide a lump sum payment to the owner of the policy that could be your estate, your spouse or children, or a business partner, in the event of your death. A benefit may also be paid should you be diagnosed as terminally ill.

Total & Permanent Disablement (TPD)

TPD policies provide a lump sum payment if you become totally and permanently disabled. The meaning of total and permanent disability can vary and is defined in each policy document.

Some policies have an option allowing you to choose the types of total and permanent disability insured, such as "own occupation" or "any occupation".

An "own occupation" definition would pay a benefit if you become disabled in such a way that you are unable to perform your current role. An "any occupation" definition would only pay a benefit if you became disabled in such a way that you were unable to perform an occupation you were reasonably suited by education training or experience. A "home duties" definition would pay a benefit if it is unlikely you will ever again carry out normal household duties.

Trauma

Trauma policies provide a lump sum payment in the event of you being diagnosed with one of a specified range of critical illnesses or injuries. The list of conditions covered is often optional and varies between insurance providers as do the definitions of those conditions. Some trauma benefits are subject to a qualifying period.

The type of events covered by critical illness policies include heart attack, stroke, cancer, paraplegia, multiple sclerosis, chronic liver, lung and kidney disease.

Income Protection

Income protection provides you with a regular source of income should you be unable to work for a period of time due to sickness or injury. There are a number of options available relating to waiting periods and benefit periods.

Private Health

Private health is available for those who wish to cover the costs of becoming a private patient. Being a private patient means you have more control in choosing your treating doctor in hospital and, in some instances, can reduce your waiting time for elective surgery by having treatment in a private hospital.

Private health also offers cover for some or all of the costs of other services not covered by Medicare, such as ambulance services, dental, optical items, physiotherapy and a wide range of other services.

By taking out private health cover, you may also avoid paying the Medicare levy surcharge, depending on your income levels. The current Medicare levy surcharge ranges from 1.0% to 1.5% of taxable income.

Tax Audit

In recent years, there has been increased activity by the Australian Taxation Office (ATO) in audits, reviews and investigations into the various taxation obligations of taxpayers. In the event that you should be subject to an audit, review or investigation by the ATO or any other government agency, the costs incurred to attend to these matters can be significant.

Our firm has established an Audit Insure policy to financially protect clients, we use Accountancy insurances. The Audit Insure policy covers professional fees our firm incurs to assist you with the audit process, up to the ‘Shared Limit’ you select. If you would like to join our Audit Insure Policy, please contact our office for more information.

Other Considerations

Difference Between Stepped and Level Premiums

An important consideration when dealing with some personal insurance policies is understanding the difference between stepped and level premium options.

Stepped premiums increase each year as you get older and the amount the premiums increase each year will depend on age. For example:

Age 20 - 30: little if any increase each year
Age 30 - 40: average 6% increase each year
Age 40 - 50: average 8% increase each year
Age 50 - 60: average 11% increase each year
Above age 60: average 15% increase each year

Please note the above is a general guide only in regard to the annual increases. The actual increases will vary depending upon the insurance provider who takes into account a range of factors when determining the increases.

Consequently, as you get older, premiums can be relatively high. An alternative to avoid these high premiums is level premiums. Level premiums are where the premium will remain constant up to age 65. So long as the cover remains constant. Level premiums may be higher earlier in the policy's lifecycle, but they can generally be significantly cheaper over the longer term.

Partnership/Share Purchase Buy/Sell

A partnership or company is a team effort, requiring commitment and determination. In a continually changing economic environment, the one constant factor in the success of a business is the knowledge and expertise of its co-owners; without them, the future of the business is at risk.

Many people have not truly considered what would happen to their business interests if their partner or co-owner could no longer work because of illness or death. In many cases, such a tragedy would mean sharing the business with the relatives or heirs of your co-owners.

If your family would be likely to sell your share in the business in the event of your death or disability, or you would like to purchase your business partner's share of the company in the event of their death or disability. Moreover, it's essential that you have a buy/sell agreement in place.

Death and disability life insurance is a way of funding these buy-out arrangements that are documented by the buy/sell agreement.

Insurance Broker

As demonstrated by the above commentary, there are many insurance covers to which you should give consideration.

Most people will not have the necessary experience to be able to effectively decide what type of covers are required for their particular circumstances.

Consideration should be given when appointing an experienced insurance broker; we can assist you here.

Many people have not truly considered what would happen to their business interests if their partner or co-owner could no longer work because of illness or death.

Annual Insurance Review

A sound insurance strategy includes the need to have an annual review with your broker and financial advisor.

Allowing you to review your circumstances to make sure your insurance broker is aware of any significant changes that may impact your insurance cover.

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Succession planning - why the right time is now

Thu, 26 May 2022 03:54:14 GMT

Health Industry

Succession planning why the right time is now

By Danny Haydon, Chairman/Principal

26 May 2022

You’ve worked hard, built a successful business, and are reaping the rewards financially. But what of the future? How will you maximise the value of the business when it’s time to move on? That’s where succession plans play a vital role.

Running a successful health business can be all-consuming. However, it pays to keep an eye on what lies over the horizon.

Succession plans are a critical feature of a strong, forward-facing business. Failing to address a handover of leadership or ownership can bring severe impacts – anything from a deterioration of the business or personal wealth, through to family conflict.

Despite these risks, succession planning is woefully neglected across Australian businesses.

One in two businesses have no plan

An industry survey 1 found 54% of small to medium family businesses have no documented succession plans in place. Among businesses where leadership succession is on the cards within five years, only 26% have identified who ownership would pass to, and just 27% have a retirement plan for the CEO or managing director.

It’s common for business owners to have a vision of what they would like to see happen with the business ‘someday’. The archilles heel tends to be making hard and fast plans to make that vision a reality. Yes, succession planning can mean addressing personal issues around when you plan to retire – and while this can call for some soul searching, the reality is that no leader stays at the helm forever.

Add in the possibility of life’s curve balls – ill health for example, could force you to exit the business prematurely, and the need for succession planning becomes doubly important.

What does succession planning involve?

Effective succession planning spans multiple disciplines. Among the issues to address, it is important to consider:

Who you have identified as a successor,
How you can engage business partners or family members with your succession plans to find a solution that works for everyone,
How assets can be transferred (if necessary) in a tax effective way,
An appropriate business structure suitable to your succession plans,
Whether you will remain engaged in the business – or if you depend on the practice for retirement cashflow, and
How and when the business will be valued if it needs to be sold as part of your plans.

With so many aspects and complexities to weigh up, succession planning calls for professional advice.

"Planning ahead means not leaving the future of your practice - or your wealth, to chance. It can provide certainty for you, your family, your business partners and your staff."

When to create succession plans?

In a perfect world, voluntary succession plans could be prepared ahead of a known retirement date.

But the world is not perfect.

The unexpected can happen that derails even the best laid plans. Involuntary succession can be the result of the forced departure of a business owner due to serious injury or illness, bankruptcy or even death.

The upshot is that the right time to put succession plans in place is now .

Succession isn’t a ‘flick of the switch’ process. It needs to be managed from both a practical – and emotional perspective, and this can take time.

Planning ahead means not leaving the future of your practice – or your wealth, to chance. It can provide certainty for you, your family, your business partners and your staff. It also means being able to confidently hand your patients over to your successor.

Something that is often overlooked is that having a succession plan in place can help to maximise the value of your business . This matters for you and your family, and it is also a critical aspect of managing the relationships you have with business partners. On that score, it’s worth pointing out that every partner in a practice – not just those approaching retirement, should have succession plans in place.

What’s in it for you?

In the daily cut and thrust of a busy medical practice, succession planning can be put on the back burner as something you’ll get around to eventually. But it pays to act now.

The team at Brentnalls Health can help you maximise the value of your business, and either help you transition to the next generation of owners – possibly family members, or prepare it for sale when you’re ready.

The key is to maximise the value of your business, mentor your successors, develop clear systems and processes within the business for successors to follow and give thought to the need to restructure entities if necessary.

It can sound like a tall order but with professional support it can be done efficiently and without disruption to the business. The reward is peace of mind that you can enjoy the retirement you deserve, while the business you have worked hard to build continues to thrive into the future.

__________________________

1. https://assets.kpmg/content/dam/kpmg/au/pdf/2018/family-business-survey-2018-report.pdf

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Crowdfunding: tax & GST implications

Sun, 22 May 2022 00:30:03 GMT

Crowdfunding: tax and GST implications

By Gavin Mitchell, Partner

22 May 2022

In this article we provide a brief introduction to crowdfunding and the implications of this practice on both the entity receiving the funding and the entities that contribute or pledge money.

What is Crowdfunding?

Crowdfunding is a method used to raise funds to finance a project or venture. Crowdfunding is typically achieved through an intermediary, accessed via an online platform. The two most common models of crowdfunding used within Australia are:

Donation-based crowdfunding —funders make donations to the project without receiving anything in return; and
Reward-based crowdfunding —the promoter provides a reward to funders in return for their payment (e.g. free or discounted merchandise) .

Equity-based and debt-based crowdfunding where funders make payments in return for a commercial loan or an interest in the equity of the business are also available.

The income tax and GST treatment of any crowdfunding arrangement will vary depending on the nature of any agreements made and consideration given.

How can crowdfunding create opportunities for businesses?

Businesses can capitalise on the growth of the crowdfunding industry to access funding for projects which may otherwise be difficult or costly to obtain. Crowdfunding can also be a useful means of generating buzz around your project and facilitating social media interest.

The two main players in the Australian market are Pozible and Kickstarter who claim a funding success rate of 58% and 35.8% respectively - project funds are generally not provided until the funding target is reached.

What are the tax implications?

When engaging in crowdfunding, it is important to determine whether the money you receive is assessable income for tax purposes and whether GST needs to be applied to any funds received. The income tax and GST treatment of any crowdfunding arrangement will vary depending on the nature of any agreements made and consideration given.

How can Brentnalls SA help?

At Brentnalls SA, we have the knowledge and experience to help you to investigate the broad range of funding opportunities available to businesses in this current digital age and to navigate the complex taxation implications associated with transactions of this nature.

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Agtech, where it's at and how it could benefit you

Sun, 15 May 2022 00:30:03 GMT

Agribusiness Industry

Agtech,

where it's at and how it could benefit you

By Bradley Barnes, Partner

15 May 2022

Driverless tractors, vegebots and machines that evaluate meat quality. It’s all part of the brave new world of agtech. As the global population grows and the cost of food production soars, agtech is set to change the face of farming. But what is it and how can you benefit?

Agricultural technology, or agtech, is predicted to become Australia’s next $100 billion industry by 2030 1 . That’s according to the NSW government, which says a rising middle class, especially in the Asia Pacific, is seeing diets shift towards the kind of agriculturally-intensive foods that Australia specialises in.

Add in global warming, rising costs of energy, labour, fertiliser, seeds and herbicides, and the stars have aligned for agtech to shine.

What exactly is agtech?

Agtech refers to innovations that improve efficiency, profitability and/or sustainability. This covers hardware and software, new technologies and new applications – all of which help farmers meet emerging consumer demands and/or enter new markets.

Harnessing the digital agricultural revolution is regarded as the next big opportunity for Australian farmers. However, the key to unlocking much of this digital agriculture revolution is on-farm connectivity – not just at the homestead but out in the paddock.

In support of this goal, the NBN and the National Farmers’ Federation have announced a 3-year partnership, designed to lift adoption of digital agriculture.

According to Paul Fletcher, Minister for Communications, Urban Infrastructure, Cities and the Arts, “Capabilities such as remote monitoring and automation can drive efficiency and productivity for our agricultural sector – lifting its value from $60 billion to $100 billion by 2030.” 2

What’s available right now?

Already, we’re seeing the use of big data for predictive weather modelling, while in the UK, robotics known as vegebots are being developed that can select and pick harvestable fruit and vegetables.

In January 2022, John Deere rolled out its first driverless tractor 3 . The idea is that the tractor can be transported to a field and configured for autonomous operation, allowing farmers to leave the paddock to focus on other tasks, while monitoring its status from their mobile device.

It sounds simple enough but the tractor relies on six pairs of stereo cameras that enable 360-degree obstacle detection and calculate distance to determine if the machine continues to move or stop.

John Deere Australia/New Zealand Production Systems Manager, Ben Kelly, explains, "Australian farmers have always led in the adoption of agtech, and as they continue to be faced with limited availability of skilled labour, access to autonomous machinery for large-scale production has never been so important.”

The tractor has launched on the US market, and will be available in Australia over the next few years.

Agtech is also being used at various stages of the supply chain. MEQ Probe for example, uses spectral analysis to determine the eating quality of meat on a carcass-by-carcass basis. The technology blends physics, chemistry and biology coupled with machine learning to provide meat processors with an objective measure of meat quality, with real-time information shared with on-farm growers.

Can agtech work for you?

According to John Deere Managing Director Australia/New Zealand, Luke Chandler, "With the world population forecast to increase to nearly 10 billion people by 2050, global food demand is predicted to grow by 50%, meaning farmers will need to be as efficient and sustainable as possible in every phase of production."

He adds that farmers will need to meet this challenge while working with changing climate and weather conditions, variations in soil quality and the presence of weeds and pests.

Agtech holds plenty of promise, but how do you know if technology is right for your farming business?

"Agtech holds plenty of promise, but how do you know if technology is right for your farming business?"

We offer a 5-point checklist of what to consider.

1. Know the problem you are trying to solve

Agtech can come at a significant cost though this is likely to fall over time. Understand your motive for purchasing – be it automating a task or reducing costs.

2. Understand the agtech’s capabilities

Evaluate what the technology is designed to do and consider how well this fits your agribusiness.

3. Does the agtech fit with your connectivity and internet speed?

Can the agtech interface with your existing equipment/programs, and how reliant is it on good connectivity and speed?

4. Ask about back-up support

Can you test drive the agtech, or are there decent case studies and/or testimonials to validate its efficiency and reliability? Enquire about any warranty and the availability of back-up service.

5. Evaluate the full cost

Does the agtech involve a one-off purchase, or are there ongoing subscriptions or additional costs? Ask about troubleshooting support, and whether the agtech can be maintained and serviced locally.

Agtech isn't just changing the face of farming, it’s helping to produce, supply and store food in sustainable ways. For more information on how agtech could benefit your agribusiness, contact the team at Brentnalls Agribusiness .

__________________________

1. https://invest.nsw.gov.au/sector-opportunities/agtech

2. https://nff.org.au/media-release/new-paper-explores-opportunities-for-australian-farmers-to-unlock-the-digital-agriculture-revolution/

3. https://www.deere.com.au/en/news/all-news/first-autonomous-tractor-for-large-scale-production/

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Allocation of professional firm profits framework

Mon, 09 May 2022 23:47:07 GMT

Allocation of professional firm profits framework

By Sally Storey, Partner

10 May 2022

The ATO has recently released guidance on how they will approach the allocation of professional profits to individual professional practitioners (IPP) and related entities.

These guidelines apply from 1 July 2022. However, there are transitional provisions in place for pre-existing arrangements to continue applying the superseded guidelines until 30 June 2024.

Risk factors have been identified to help indicate if an IPP's income is being taxed appropriately or if the arrangement warrants the attention of the ATO. Professional practitioners operating through an entity where income is distributed/attributed to anyone other than the IPP may be affected, e.g. partnership, trust or company.

This encompasses all of the professional areas, including:

Doctors & Medical Centres
Lawyers
Allied Health Practitioners
Psychologists
Accountants
Engineers
Architects
Other professions requiring credentials to maintain practice

The ATO has provided a framework to assess the risk weighting of each arrangement. The framework considers where profits are allocated, how much they are taxed and whether practitioners are appropriately remunerated.

Assessment under the framework is not required by law but considered prudent in managing the risk of an ATO audit.

If you would like an assessment of your current arrangements -

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Expanding your business, what to consider

Sun, 08 May 2022 00:30:03 GMT

Expanding your business, what to consider

By Matthew Holden, Partner

8 May 2022

Growing and expanding your business can be driven by a number of things, but whatever the reasons, it is important to step back and take a measured approach to any expansion decision.

Growth can generate a whole new set of challenges (as well as opportunities).

Central to expansion is keeping an eye on cashflow and how it will work. Larger businesses need more capital so it is vital a complete analysis of cashflow is conducted.

To help with the decision, you may also want to undertake an environmental analysis of your business. To prepare for any change in business, understanding your internal strengths and weaknesses, and your external opportunities and threats (SWOT) is important. It is imperative to evaluate clearly and not just react.

If you do not have a strategic plan, this is now the time to incorporate one into this next phase.

If you conclude that expanding is the way to go, you should then consider the following:

Examine your long term ownership goals. Start with the end in mind and determine your exit/succession strategy. This will help to focus your planning.
Review your ownership structures and whether these are the best for your future business model.
Model how the expansion will come from internal growth, acquiring new technology, acquiring a new facility, expanding your markets, or by acquiring an existing business.
Consider what key elements of your business will need to change; growth may mean new systems and processes are required for IT, HR, CRM etc.
Prepare a business plan and analyse what you need to accomplish growth.
Plan , if you have a strategic plan in place, review it, and see how an expansion fits into the original plan. If you do not have a strategic plan, this is now the time to incorporate one into this next phase.
Project and prepare a financial projection to test the feasibility of the expansion from a cashflow standpoint and to analyse the amount of time it will take you to recoup the investment or how fast you want to be paying back debt.
Utilise , by looking for efficiencies you can take advantage of utilising the existing infrastructure and factor those into the financial projection model.
Ensure that you, as the business owner, have the ability to create the time to prepare for expansion carefully. Also being able to lead your staff through the process may require extra time and effort from you.
Set up an advisory board with outside expertise to bring together a team of professionals to assist you in your growth.

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Re-think the way we approach business in 2022

Sun, 01 May 2022 01:00:03 GMT

Construction Industry

Re-think the way we approach business in 2022

By Christina Gulliver, Partner

2 May 2022

The road out of the pandemic remains uncertain, and businesses may need to re-think their strategy to forge a path ahead.

2022 marks the second anniversary of COVID. It’s hardly a date to celebrate, and while Australian businesses have had to adapt, shift and pivot over the past two years, the road ahead calls for a further rethink.

It’s a fair bet even the best laid contingency plans didn’t address lockdowns, border closures, supply chain pressures, and more recently, record volumes of staff on sick leave.

That’s exactly what many small and medium enterprises (SMEs) have had to deal with, and few industries or sectors have been spared.

“The constraint on home building is not demand but the availability of land, labour and materials. The shortage of labour and materials has led to construction timeframes increasing significantly.”

Support has been a double-edge sword

While a number of sectors have benefited from targeted government support, this has, in some cases, created problems of its own.

By way of example, the Federal Government’s HomeBuilder program delivered a tremendous shot in the arm to the construction industry. But it has also fuelled supply shortages and delivery delays, which are leading to price increases across house and

apartment construction.

Thomas Devitt, Economist at the Housing Industry Association 1 believes we’re seeing a ‘super cycle’ of housing demand across Australia. However, he adds, “The constraint on home building is not demand but the availability of land, labour and materials. The shortage of labour and materials has led to construction timeframes increasing significantly.”

As the Australian Financial Review noted, the stimulus measures pitched at the construction could turn out to be a double-edged sword, potentially worsening the construction industry’s boom-bust cycle 2 .

New strategies to plan ahead

All this highlights the need for SMEs to re-think their business model. There are still hurdles to cross but some outside the square thinking can help you manage them.

As part of the planning process, look back at what you have learned over the past two years. What steps have you taken to make your business more resilient? Can you build on these initiatives to make your business sustainable over the longer term – by which time the pandemic will (hopefully) be a distant memory?

Areas to focus on

As part of this re-thinking, some key areas deserve special focus.

"It's not just about taking care of permanent employees. The same approach needs to be applied to contractors, who may be able to step up to the plate when you experience gaps in permanent staff."

Attracting and retaining talent

According to recent analysis by IbisWorld 3 , the Omicron outbreak is forecast to exacerbate existing labour shortages as people with the virus and close contacts are forced to isolate, significantly restricting staff availability and business output.

It comes at a time when the labour market is already tight. ABS data shows that at the start of 2020, around one in ten business were reporting job vacancies. Today, that figure is closer to one in five.

This makes it essential to review your approach to attracting and retaining talent. In particular, consider if you are offering market wages or salaries at the very least. It’s also worth planning ahead to manage the possibility of a COVID outbreak among your team that could leave your workforce thinly stretched.

It’s not just about taking care of permanent employees. The same approach needs to be applied to contractors, who may be able to step up to the plate when you experience gaps in permanent staff.

Review contracts and pricing

Take a closer look at contracts with suppliers to see whether you are protected from price rises or possible delays – be it as a result supply chain hold-ups or other issues.

On the flipside, your own pricing can also be a powerful lever for your business right now. A forward pricing approach can factor in price increases so your margins aren’t heavily impacted.

Build a war chest

I n uncertain times, cashflow management is critical. Businesses need to ensure they have cashflow under control, and building cash reserves can help your business ride out the worst of the situation.

The catch is that research by small business lender OnDeck shows many businesses had their cash reserves depleted by lockdowns. Only two out of five had adequate cashflow to make the most of lockdowns lifting in mid-late 2021 4 .

This makes now the time to review your cashflow management – and nurture relationships with your business bankers.

You’re not alone

In the current climate, businesses need to have the right strategy, culture, and execution plan to succeed. This calls for having the right people, and making the right decisions at the right time.

Being agile, adopting a strategic focus and having time set aside to plan for any potential headwinds can help you navigate the months ahead until hopefully, many of the main issues facing the business community settle down.

This call can be easier said than done. But remember, you don’t have to go it alone.

The team at Brentnalls Construction is here to help. At times like the present, having an expert in your corner can be the strategic advantage that helps you chart a course for a sustainable future. If you would like to discuss this further contact our office to make an appointment.

__________________________

1. https://hia.com.au/our-industry/newsroom/economic-research-and-forecasting/2022/01/pandemic-drives-super-cycle-of-housing-demand

2. AFR Stimulus worsens construction’s boom-bust cycle 4 November 2021

3. Omicron, Supply Chains and Labour Shortages, Jan 2022

4. https://www.ondeck.com.au/press-releases/only-two-out-of-five-small-businesses-have-the-cashflow-needed-to-make-the-most-of-lockdowns-ending/

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

What is business structuring and restructuring?

Sun, 24 Apr 2022 01:00:03 GMT

What is business structuring and restructuring?

By Christina Gulliver, Partner

24 April 2022

Are you setting up a new business?

Are you looking to change your business structure?

Are you buying a new business?

If the answer is yes, then one of the key considerations for every business owner is to ensure that their structure supports their needs and goals (both short and long term). A preferred structure will depend on the size and type of your business, level of risk and profits generated.

Most importantly , the structure of your business will impact certain key areas, such as:

the tax you are liable to pay,
asset protection,
control over the business, and
set-up and ongoing compliance cos ts.

A preferred structure will depend on the size and type of your business, level of risk and profits generated.

The four most common types of business structures in Australia are:

Sole trader – the simplest, and most cost-effective structure. It has no asset protection benefits, and tax is paid at personal marginal tax rates.
Partnership – two or more people or entities operating as partners who allocate profits between them and are jointly and severally liable for debts. Taxed at the partners’ applicable tax rate.
Company – this is more costly to setup and has ongoing complex compliance requirements. It has a flat tax rate of 25% or 30% so can be effective for businesses with significant profit, along with asset protection benefits as it is a separate legal entity.
Trust – profits are distributed to beneficiaries which provides flexibility in profit allocation it assist with minimising tax. It can provide some asset protection benefits, but a trust is not a separate legal entity and therefore the trustee is responsible for decision making.

For further information on structure types head to our Entity Structures information page.

If you operate in an effective structure that meets your needs, you can realise the following benefits :

risk minimisation and asset protection,
tax minimisation,
reinvestment of profits within structures to build wealth,
succession opportunities for your business; and
retention of key staff members through equity ownership (with or without control over the business).

We suggest reviewing your structure regularly (we provide this to you annually as part of our ongoing service) to ensure it meets your needs. There is flexibility to change structures throughout the lifecycle of your business and concessions are available to restructure in a tax effective manner if needed.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Varying your PAYG instalments

Sun, 17 Apr 2022 01:00:03 GMT

Varying PAYG instalments: things to know

By James Moore, Manager

17 April 2022

The Pay As You Go (PAYG) instalment system

The system provides taxpayers the option of making regular prepayments over the course of the year towards anticipated tax on any untaxed investment or business income. The idea is to help mitigate a large tax bill realised when you come to lodge your end of financial year tax return.

Taxpayers are given the choice to vary these instalments if they believe the payment(s) they’re requested to make will either result in them paying too much or too little tax for the income year. For a variation to be done, this needs to be actioned on or before the due date for payment. Once a variation has been done, this will apply to all the remaining instalments unless another variation is made prior to the end of the financial year.

An example would be if you had paid $6,000 in total over the PAYG instalments for the September, December and March quarters (i.e. $2,000 per quarter) but estimate your total tax for the financial year will be $7,000. Before the date the $2,000 payment is due to be made for the June quarter, you could vary the June instalment to $1,000, giving a total of $7,000 ($6,000 + $1,000) of PAYG instalments paid for the financial year. This will be deducted from the actual tax calculated when the tax return is prepared to give you a refund, nothing more to pay or an additional payment.

It is important to note that a penalty can apply if the ATO believes you have been unreasonable in estimating your end of year tax liability. However, for the 2021-22 income year, no penalties or interest charges will be applied for these unreasonable variations. For further information head to the the Additional support during COVID . On other occasions, if your varied instalments are less than 85% of your total tax payable, you may have to pay a general interest charge on the difference, in addition to paying the shortfall. Depending on the circumstances there may also be penalties.

The ATO encourages taxpayers to continuously monitor their tax position and utilise the option to vary the instalments if there is a situational change.

Speak to your Brentnalls SA team member if you would like further information or assistance with your next PAYG Instalm ent notice or call us to discuss further.

Disclaimer

The state of cyber security, and why you need to care

Sun, 10 Apr 2022 01:00:03 GMT

The state of cyber security, and why you need to care

Guest Writer

Jasmine Illic, COO, Control Z

controlz.com.au

25 September 2022

Reflecting on the current state of cyber security, it would be remiss of us not to acknowledge the significant impact the COVID-19 pandemic has had on the way that Australian individuals and businesses behave online. To work remotely, access services and information, and to communicate we have been heavily dependent on the internet. It is this increased dependence that has enlarged the attack surface and generated increased opportunities for cybercriminals to exploit Australia.

This increased volume of cybercrime equates to one report of an attack every eight minutes, this is up 13% from the 2019-2020 financial year 1 . During this same period, losses from cybercrime total more than $33 billion, and this figure does not consider the ongoing financial and reputational damage caused by stolen data and intellectual property. When speaking with Chief Information Security Officers, 81% report that staying ahead of cybercrime is a constant battle 2 . What that means for your organisation is that cyber security can no longer remain a concern for only the IT department. A business’ cybersecurity and importantly, cyber resilience strategy must be developed by all key stakeholders with business objectives in mind.

Key cyber security threats and trends

Ransomware is a type of malicious software (malware), designed to infiltrate your device and make your computer or its files unusable. To unencrypt and restore access, cybercriminals will demand that you pay a ransom and often threaten to release sensitive information should you not do so.

Once slowed by its linear attack model, ransomware has evolved to a subscription-based Ransomware as a Service (RaaS) beast. RaaS removes the need for technical know-how, empowering the most novel hackers to execute highly sophisticated cyber-attacks.

Rapid exploitation of security vulnerabilities , State and criminal cyber threat actors continue to compromise organisations by manipulating publicly disclosed vulnerabilities at speed and scale.

An example being the recent Log4J exploit, which has been called one of the biggest cyber security breaches in history. The Australian Cyber Security Centre implored all organisations to audit for vulnerabilities immediately and continue to watch as this vulnerability was exploited by hackers far and wide.

Business email compromise (BEC) continues to present a major threat to Australian businesses, especially as more of us work remotely. Cybercriminals conducting BEC attacks have become more sophisticated and organised, developing enhanced and streamlined methods to ensure their attacks cause significant business disruption.

The three tools every business needs to adopt today

1. Multi-Factor authentication (MFA)

Enabling MFA ensures that your account is protected by more than one identification check. It makes it significantly harder for cybercriminals to access your accounts. You need to do this for every account, right now!

2. Establish and maintain secure password practices

You need a unique secure password for every account that you have. Most accounts should have highly complex and randomly generated passwords that are stored in a password manager. For those passwords that you need to remember, i.e. for your computer or your password manager’s Master Password, a Passphrase may assist.

3. Level up your cyber security

To be threat-centric and business aligned you must give cyber security a seat at the table. Given the cyber threat landscape, businesses should prioritise the implementation of a strong security framework like the Essential Eight Maturity Model, and consider the following actions:

Implement a “business continuity disaster recovery plan”
Adopt a “comprehensive backup strategy”
Ensure multi-factor authentication is enabled and monitored
Employ endpoint and network protection and monitoring
Prioritise application/device updates and patches
Embrace a strong cyber security culture (Staff Training)
Develop and maintain secure password practices

__________________________

1. Australian Cyber Security Centre (2021) ACSC Annual Cyber Threat Report 2020-21

2. Accenture (2021) The State of Cybersecurity Resilience Now 2021

Jasmin Illic, COO, Control Z

Jasmin is the Chief Operating Officer of Control Z , a forward-thinking, security conscious Managed Service Provider committed to furthering the adoption of technology among Australian Business. Jasmin is passionate about empowering individuals to do more with technology, and has a keen interest in increasing cyber security awareness among executives and school students. Jasmin is a strong advocate for increasing female representation in STEM careers, particularly within the IT and cyber security fields.

Disclaimer

Is a testamentary trust right for you?

Fri, 01 Apr 2022 00:48:57 GMT

Is a testamentary trust right for you?

By Shali Manolev, Partner

1 April 2022

There’s a lot about our lives we can’t control. But a testamentary trust lets you have a say even when you’re no longer around. The question is, should a testamentary trust be part of your estate plan?

If it seems like our lives are becoming more complex, you could be right.

These days plenty of us have blended families, complicated business structures, and our wealth can be spread across a variety of assets. Just to add to the complexity, the people we wish to bequeath our estate to can also lead multifaceted lives.

While having an up to date Will can identify your assets and give clear instructions about who gets what, a testamentary trust goes much further. And in many respects it can let you have a voice long after you have passed away.

The concept of a trust can seem complex. So we’ve broken down the key points to help you understand what’s involved with a testamentary trust, and whether it could be the right option for you.

What is a testamentary trust?

Instead of your assets being handed over directly to individual beneficiaries – as is the case with many Wills, a testamentary trust holds assets for, on behalf of, your beneficiaries.

This is an important distinction, which as we’ll see, can play a vital role in the financial wellbeing of beneficiaries.

"A testamentary trust can also let you offer a vital helping hand in the upbringing of grandchildren."

Why testamentary trusts are becoming more popular?

Recent times have seen an uptick in the use of testamentary trusts – and with good reason. They can provide a number of benefits including:

Control over how your assets are used in the future

Control can be especially important if you want to provide for the long term care of loved ones. This can especially be the case for beneficiaries who may need long term financial support such as a child with special needs.

A testamentary trust can also let you offer a vital helping hand in the upbringing of grandchildren. A testamentary trust can be used to make very specific bequests such as paying a grandchild’s school fees. In this sense a testamentary trust can be more effective than bequeathing assets directly to your adult children in a Will.

Protecting your assets from a beneficiary's creditors and matrimonial claims

As noted earlier, assets held in a testamentary trust are not owned by a beneficiary personally. Instead, they are held in trust for the potential benefit of the beneficiary.

If a beneficiary becomes bankrupt the assets held in a testamentary trust cannot normally be claimed by creditors. That’s a very different situation than if you bequeathed assets to them personally. In the case of relationship breakdown, if the primary beneficiary is the trustee for the testamentary trust, these assets will be considered as part of the split but if the beneficiary is not a trustee, these may be protected. Careful wording and legal advice is required if this outcome is desired.

Providing a beneficial tax outcome

A testamentary trust has significant taxation benefits where children and grandchildren are aged under 18.

Generally, any unearned (typically investment) income of youngsters aged under 18 years (minor) has a tax-free threshold of only $416. Above this, income can be taxed at either 66% or at the top marginal tax rate depending on the level of income involved.

Income distributed by a testamentary trust to a minor beneficiary will be taxed at normal adult marginal tax rates. This means that for the financial year ending 30 June 2022, each minor beneficiary can receive a tax-free distribution of $18,200, above which normal adult marginal tax rates apply. This can produce valuable tax savings, allowing you to plan your estate in a way that maximises the financial benefits for the people you care most about.

Additional tax benefits

There is no stamp duty payable on the transfer of property from your estate to your testamentary trust or on the establishment of your testamentary trust.

Capital gains tax savings can also apply. No capital gains tax is payable on transfer of property from your estate to your testamentary trust, or on the transfer of the initial trust property of your testamentary trust to a beneficiary (the cost base and terms of acquisition rules should be considered separately).

Flexibility

Death may be one of life’s certainties but none of us know exactly when we will pass away. That being the case we can’t be sure what the personal circumstances of a beneficiary will look like when we die. This is where testamentary trusts give a beneficiary more flexibility around options to hold their inherited assets in another entity such as a company.

By contrast, if you left assets directly to a beneficiary, they would likely have to pay stamp duty and/or capital gains tax if they choose to transfer an inherited asset to a separate entity.

“Each state has its own rules regarding how long a testamentary trust can last and this can vary from 80 years to in perpetuity.”

Longevity

Each state has its own rules regarding how long a testamentary trust can last and this can vary from 80 years to in perpetuity. This allows the opportunity to provide for up to two, maybe more generations of family members.

Generation skipping

Families can be very complicated with a whole variety of dynamics at work. And a testamentary trust can be used to skip a generation. In other words, you can ensure the majority (or part of) your wealth goes to grandchildren rather than adult children.

How do testamentary trusts work?

A testamentary trust is established by your Will. So it only comes into existence after you die.

You can choose which assets are to be held by the testamentary trust, with the exact rules of the trust set out in your Will via a trust deed. Where there is more than one beneficiary, your Will can also establish a separate testamentary trust for each beneficiary.

Most testamentary trusts are discretionary trusts. This gives the trustee some free rein about how the assets are to be used. It may sound compelling to provide strict rules, but a degree of leeway can be useful as the trustee may have to deal with unforeseen events.

Nonetheless, given the level of discretion a trustee has, most testamentary trusts name an ‘appointor’. This is another person(s) who has the power to remove the trustee/s if necessary.

“The trustee’s duties can include investing the trust’s assets wisely so that they generate a decent income, looking after the needs of beneficiaries, and keeping accurate and up to date trust records.”

What to be aware of with testamentary trusts

A testamentary trust is not suitable for everyone. A key reason for this is that accounts will need to be prepared for the trust each year, and a tax return lodged. These requirements bring their own set of expenses, and the trust needs to have sufficient assets to make the cost worthwhile.

It’s also worth noting that tax and trust laws can change. This can make it essential to have an expert review the trust deed from time to time to be sure everything is still in order, and the trust is still operating in the most tax-friendly way.

The importance of choosing a trustee

As we noted earlier, a testamentary trust can have a long lifespan. So it pays to give careful thought not only to who will act as trustee, but also to have succession plans in place for the trustee if they too should pass away.

In fact, selecting a trustee calls for careful consideration. The trustee takes on quite a bit of responsibility and depending on the circumstances, he or she may need good financial skills. The trustee’s duties can include investing the trust’s assets wisely so that they generate a decent income, looking after the needs of beneficiaries, and keeping accurate and up to date trust records.

A corporate trustee can be used in place of an individual(s). While this may have the advantage of independence, it can be more expensive as the trustee company will also incur annual costs.

Is a testamentary trust suitable to your estate?

Death, particularly our own, is hardly the stuff of upbeat conversations. And perhaps for this reason a lot of Australians neglect estate planning.

However, we shouldn’t just look at how our wealth will be managed during our lifetime, but also afterwards, when the assets we have accumulated are left to your estate.

Knowing if a testamentary trust is right for you, calls for expert advice, and it’s a decision that should be taken as part of your overall estate plan. Take a look at our information sheet on testamentary trusts , or talk to the expert team at Brentnalls SA about your broader estate plan .

Taking steps today can give you peace of mind that your assets will be used in the way you choose when you’re no longer around to call the shots yourself.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Contractors Vs Employees: Under the Spotlight

Thu, 24 Mar 2022 02:15:44 GMT

Contractors Vs Employees

By Christina Gulliver, Partner

24 March 2022

Why consider the contractor issue now?

The contractor issue is not at all new, nor has it been subject to any dramatic recent change. However, there are a number of diverse factors that have brought this issue back to the spotlight.

Growth in the number of Contractors: There has been an increase in contractors over recent years.
Government / Treasury Attention: Contractor reporting regimes have been introduced for several industries.
Tax Office Attention: The Tax Office's audit activity is evidence of how important the contractor issue has become.
Institutional attention: It is reasonable to expect that union scrutiny of contractor arrangements will continue.
Legal rulings: Cases have concluded which consider these arrangements.

Determining your obligations requires a detailed review of the legislation and case law under each specific area.

What are your obligations?

There are very different obligations depending on whether you engage a contractor or employee in such areas as:

PAYG Withholding
Payroll Tax
Superannuation Guarantee
Fringe Benefits Tax
Workers' Compensation, and
The Fair Work Act

Review our Salary/Wages, Superannuation, Return to Work SA & Payroll Tax (SA) Matrix for more information.

Why the complexities?

Whether an entity is an employee or a contractor is not clear cut. An employee is rarely defined in any legislation and therefore case law is often the only guide to define this relationship.

Determining a worker’s status depends upon the terms and conditions under which the work is performed.

Recent cases have shifted attention to a formal agreement being in place between parties.

Agreements are important

With more weight now given to agreements, we recommend all contractor agreements are reviewed and documented.

Formal written agreements should be developed with consideration given to the key factors listed below. In particular, recent case law has indicated where robust written agreements are in place, there will be significant factors when considering an arrangement. If agreements are poorly written, courts will look beyond them to the factors listed below. We recommend engaging appropriate legal advice when preparing your contractor agreements.

Factors to consider

We have provided a table below to help structure your agreements and determine whether you have engaged a contractor or employee.

Does the worker have an ABN?

If a worker has an Australian business number (ABN) this does not automatically mean the worker is a contractor. You still need to consider the nature of your agreement with the worker.

What if the contractor is a company, trust or partnership?

A contractor that is a company, trust or partnership is more likely to be treated as a contractor, however if a structure is ultimately put in place to avoid an employment relationship, it is likely that the authorities will look through the structure.

Please review our Independent Contractor v Employee Checklist which offer a series of questions designed to prompt assessment of the relationship between Principals and Contractors, and the potential of that relationship being assessed at common law as an employment relationship.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Software Corner | Sage Intacct

Sun, 27 Feb 2022 03:43:38 GMT

Software Corner

Sage Intacct

22 February 2022

Sage Intacct is a cloud-based financial management system catered towards small to medium-sized businesses. Whether you’re a growing start-up or an established public company, Sage Intacct has the necessary tools to automate complex processes and deliver rich financial and operational insights to help your business grow.

With four core areas being financial, planning, analytics and HR & payroll, the software package deliver a range of core accounting applications such as a general ledger, accounts payable, accounts receivable, cash management, and order management to any accounting department or finance team. It also supports built-in dashboards, real-time reporting, time and expense management, project accounting, revenue management, and global consolidations for multiple entities.

The software can be utilised in any industry. With an open API structure, Sage Intacct’s accounting solution integrates with any CRM, payroll, POS, or ERP system such as Salesforce, ADP, and more. The pricing model depends on the type of plan required by the organisation If you would like further information on what Sage Intacct could do for your business, please visit the website to see a demo https://www.sageintacct.com/ .

Discuss further?

Disclaimer

Closing or selling a business?

Sat, 19 Feb 2022 23:38:58 GMT

Closing or selling a business

By Gavin Mitchell, Partner

20 February 2022

We have provided an action list of the common areas you need to consider when selling or closing a business. Our lists are a starting point that you can expand on depending of your industry.

What do I need to do?

Cancel your GST registration within 21 days of ceasing business.
Cancel your ABN within 28 days of ceasing business.
Cancel or transfer any business names.
Cancel any employer registrations, including PAYG withholding, return to work SA and payroll tax registrations.
Finalise payroll and prepare annual reconciliations of return to work SA and payroll tax.
Make any required GST adjustments on your final activity statement.
Lodge and pay any outstanding activity statements and instalments notices.
Transfer or cancel leases, licenses and permits, if applicable.
Notify suppliers and customers of the sale or closure and pay outstanding amounts.
Look at any insurance requirements for your business, such as run-off cover (where you are insured for any legal claims that are made after you close your business).
Close your business bank accounts.
Cancel or transfer any web hosting or domain names and Google analytics details.
Cancel or transfer social media accounts.
Cancel or transfer all subscriptions where necessary.

What are the tax implications?

There may be income tax, GST and Capital Gains Tax (CGT) implications on selling your business. However, there are many concessions in place in relation to the sale of business including the following:

Sales of businesses considered to be going concerns may be GST free, and
You may be eligible for the various small business CGT concessions on the sale of your business and any related assets.

Upon winding up your business, there may also be additional tax issues that need to be considered such as debt forgiveness, Division 7A loans and the finalisation of employee and independent contractor obligations. When a company is involved, there are additional ASIC requirements, including liquidation and/or voluntary deregistration.

How can Brentnalls SA help?

At Brentnalls SA, we have the knowledge and experience to help you plan and execute your business exit by:

Assisting with planning for your business exit including succession and estate planning .
Preparing appropriate documentation regarding the sale of your business including liaison with legal advisors and assisting with the selling process.
Assisting with finalisation of employee obligations and entitlements.
Advising and calculating income tax, GST and CGT implications of the sale or closure of your business.
Assisting with ASIC requirements of closing or selling a company.
Advising regarding wealth planning after the closure or sale of your business.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The information provided i n this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Wine Equalisation Tax (WET)

Mon, 14 Feb 2022 01:03:43 GMT

Wine Equalisation Tax (WET) - turning wine into tax

By Sally Storey, Partner

14 February 2022

Wine Equalisation Tax, referred to as WET, is an Australian levied tax which affects wine producers, wholesalers, and importers. It generally doesn’t affect retailers unless they meet certain criteria, set out below.

It’s also fair to say WET comes with some complexity

Therefore, consulting with one of our dedicated Agribusiness team at Brentnalls SA can help you understand some of the finer details of this tax, how it’s calculated, and any rebates or tax credits you might be entitled to claim.

WET is not a GST in disguise

First and foremost, WET is not another alias for a GST on vino. According to the ATO, if you make wine, import wine into Australia or sell it wholesale, you’ll generally have to account for WET.

Instead, WET is a tax of 29% of the wholesale value of wine, cider, and sake (more on this later). It is usually only payable if you are registered or must register for GST – plus you still might need to pay GST as an additional impost.

For example, if you wholesale your wine, you will need to calculate the price of the wine plus WET of 29%, and after this, you will calculate the additional 10% GST against the value of your wine inclusive of the WET. In other words, the purchaser will pay WET and GST (or 41.9 %) in extra taxes on top of the value of the wholesale price of the wine.

Applying the WET

WET must be calculated by required entities. Retailers, however, do not have a WET liability unless they make wholesale sales or bottle their wine. Generally, WET is included in the price that the liquor retailers and restaurants pay when purchasing wine. As such, retailers can’t claim back the cost of the WET, as this impost is built into the price they pay for the wine, although they can pass the expense of the WET onto the consumer. Please refer to our information sheet for more details.

When and who pays WET

WET is a one-off tax on the value of the wine and applies when you sell or deal with wine:

through wholesale sales;
through some retail sales (for example, cellar door sales and retail sales of repackaged bulk wine);
for own use where WET has not already been paid; or
by importing into Australia.

Except for imports, WET is only payable if you are registered or required to be registered for GST. It is designed to tax the last wholesale sale of wine in Australia. Usually, this is a sale from a wholesaler to a retailer. If you import wine, WET is payable directly to the Department of Home Affairs at the time of importation.

You will also have to pay WET if you’re a wine producer or you obtain the wine under quote, meaning the tax hasn’t already been paid, and you either:

Drink the wine yourself;
Use the wine for tastings or promotional purposes; or
Transfer ownership of wine under a contract as a donation to a charity.

A winery that allows a retail store to use its wine for promotional tastings must pay the WET.

Rebates and credits

Wine producers may be entitled to a credit (producer rebate) of the WET amount they have paid on a dealing with wine, or the amount of WET they would have paid on the dealing, if the purchaser does not quote their ABN. From 1 July 2018, the maximum rebate claimable each financial year is $350,000. Before 1 July 2018, this was $500,000. To review the eligibility criteria needed to claim the WET producer rebate, please refer to our information sheet Wine Equalisation Tax for further information.

In some circumstances, producers could be entitled to a WET credit if they paid the tax in error or overpaid it. For example, a wholesaler sells wine and pays WET but subsequently allows a settlement discount. Credits are also available if you pay WET on wine that has already had the tax paid on it, or you wrote off bad debts that already included a WET payment.

How can Brentnalls SA help?

There are other aspects to calculating your WET liability, including using the “Half Price Retail Method” or the “Average Wholesale Price Method” that we have not addressed in this article. If you require any guidance or further information concerning WET or how it is calculated, please contact our office.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

What are the benefits of an investment property?

Tue, 08 Feb 2022 03:52:52 GMT

What are the benefits of an investment property?

By Shali Manolev, Partner

27 November 2022

People are consistently turning to real estate investment for its capital growth, tax benefits and future retirement income.

Planning your structure

As accountants and advisors, we can help in determining the optimum structure for the purchase of your investment property by assessing your current and future income.

Selecting the correct structure is vital and the options include:

As an individual
As a partnership - jointly or tenants in common
In a company
In a trust (unit trust, discretionary trust)
In a Self Managed Superannuation Fund

Before settling on a type of structure, consideration should be given to the following:

Asset protection
Income tax planning
Refinancing
Costs
Retirement planning
Succession planning
Other taxes (GST, land tax, stamp duty)

Earning an income

Income generated from your investment property is taxable. However, you are entitled to claim deductions against your property income, the following:

Rates
Land tax
Interest
Insurance
Real estate agent management fees
Depreciation
Capital works
And, other expenses incurred to generate income

Negative-gearing

Borrowing to acquire an investment property is a popular and common form of financial leveraging. Often the cost of borrowing exceeds the income received from the property; but it is only a timing issue - incurring losses now in favour of perceived capital gains on sale. The tax treatment of losses incurred can be used to offset other taxable income.

Making a gain

It is wonderful to sell your investment property for a handsome profit however, this may also attract a potential tax liability from capital gains tax.

Tax planning is essential when considering the acquisition and disposal of any investment. It will allow you to explore all strategies or options available to minimise potential capital gains tax.

Cash flow

Whilst we want to look at ways of minimising tax, this should not be your only focus when considering the acquisition and disposal of various investments. Equally important is planning and understanding the investment to ensure you have sufficient and consistent cash flow to sustain the property, personal finance and other pursuits.

We can help in determining the optimum structure for the purchase of your investment property by assessing your current and future income.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Employing a contractor within the construction industry

Mon, 17 Jan 2022 01:12:52 GMT

Construction Industry

Employing a contractor within the construction industry

By Christina Gulliver, Partner

17 January 2022

Contracting is evolving

As an alternative to the traditional employment relationship across many sectors and is particularly widespread as a mode of working engagement in the construction industry.

A contractor can be hired directly through an another entity or using a labour-hire agency.

"According to the ATO, an employee works in your business and is part of your business, while a contractor runs their own race."

While some businesses may prefer to employ their workers, sometimes contracting is necessary. For example, maybe the business requires specialist skills to complete a project as these talents may not be available within their existing team. Alternatively, some skilled individuals may prefer to operate as contractors, particularly if they have various clients.

Contracting can also prove more cost-efficient than traditional employment as bosses don’t have to pay holiday and sick leave entitlements. However, there are risks when engaging an individual as a ‘contractor’, especially if you don’t understand the following:

laws relating to the use of contractors,
tax obligations,
superannuation,
insurance, and
long service leave responsibilities.

For example, according to the law, a contractor may indeed tick all the boxes to be an employee, which brings a range of legal obligations for an employer – and liabilities if you were to get it wrong.

Difference between employees and contractors

According to the ATO, an employee works in your business and is part of your business, while a contractor runs their own race. There are other variances too. For example, a worker can’t subcontract someone else to do their work. In contrast, a contractor can pay someone else to complete the job.

An employee is paid for time worked, using a price per item or through a commission. On the other hand, a subcontractor is compensated according to their tabled quote before the job begins. In the construction industry, quotes are calculated using hourly rates or price per item to work out the total cost of the work.

Employees must be provided with all the equipment, tools and other assets required to complete their work. On the flip side, a contractor will arrive on site with their tools and equipment.

Furthermore, when it comes to responsibility for commercial risks, an employee wears no liability for covering the costs of rectifying defective work. Whereas, a contractor is legally responsible for all work rendered, such as being liable for the cost of repairing a defect in their work, which leads into the issue of insurance coverage.

Your tax and super obligations

Whether you hire a contractor for a day, a week, or a year or a small or large construction project, they must have appropriate insurance cover. This cover will protect the contractor and their business and safeguard your business into the bargain.

It is also essential that business owners recognise that their existing insurance policies may not cover contractors, as exclusions often apply to activities executed by external contractors. So instead, the contractor must have up-to-date “public liability” and “professional indemnity” policies.

Public liability covers property damage or personal injury caused by business activities and typically covers the legal costs associated with a claim, the employees of your contractor, loss of damage or goods or injury to a third party.

Along with public liability, a contractor must also have adequate legal liability protection, such as professional indemnity insurance. Professional indemnity covers the business owner for any legal liability concerning advice and services given to your clients. Businesses would be well advised that (in most cases) professional indemnity insurance won’t cover external contractors.

"You must also pay super, at least quarterly, for eligible employees and report and pay fringe benefits tax (FBT) - that is, if you provide your employee with fringe benefits."

There are several other insurances such as ‘contract works insurance’, ‘plant and equipment insurance’ and ‘workers compensation’ that contractors might have taken out. Still, the public liability and professional indemnity certificates are of utmost importance to protect a business and its owners. Moreover, if a contractor doesn’t have these policies in place, you might be better off looking elsewhere.

Your tax and super obligations

Portable long service leave

If you think using contractors reduces a construction businesses leave entitlements, think again. While you don’t have to fork out for holiday pay, in South Australia, workers who spend at least half of their time on-site performing building services, electrical or metal trades work are entitled to portable long service leave. This entitlement means a contractor doesn’t have to work for the same business for ten years to be eligible for long service leave.

To cover the costs of this scheme, businesses must pay a levy to the Construction Industry Fund every two months. The current levy rate of 2% is fixed by the Construction Industry Long Service Leave Board. To find out more about your long service leave obligations for contractors working on your projects, Brentnalls SA has produced an information sheet: Portable Long Service Leave .

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Benchmarking

Sun, 02 Jan 2022 22:03:47 GMT

Benchmarking

By Rick Albertini, Partner

22 January 2022

Benchmarking is an important tool for any business, be that against other similar businesses, or your past or forecast performance.

Snapshot for Business Improvement

To aid discussions, we work with you and delve into questions, such as:

Infrastructure

Are your premises really suitable?
Are you utilising your plant and equipment effectively?

Business Management and Risk

Do you have adequate document policies and procedures ( Governance )?
Do you have a disaster recovery plan ( Risk Management )?

Operations Management

Are your inventory management practices efficient?
What is your customer relationship management like?

Business Performance

Is your working capital under control?
Do you monitor the performance of the business regularly?

The numbers form part of the outcome, but the real discussion is needed around the drivers and fundamental elements of your business.

Self Management

How many days leave do you have a year?
Do you take time to work on the business?

Human Resources (HR)

Does everyone understand their roles and responsibilities?
Do you keep up to date with changes in the law and regulations that relate to your business?
Do you have performance management processes in place Performance Reviews?

Environmental Sustainability

Do you understand climate change, water use and energy management and how they impact your business?

Marketing and Distribution

Do you have a marketing plan?
How do you win and keep customers (Competitor Advantage)?

Brentnalls SA's approach is to pull together an assessment of your business performance, challenges and opportunities over a series of workshops and use this as the foundation for determining agreed plans, actions and targets.

The plans and activities are then actioned by you, in conjunction with us and other professionals as needed, along with periodic meetings to review progress and outcomes.

Our snapshot tool provides a principally non-financial-based approach to the questions that matter in business. Put simply, it is a process of collecting the views of different stakeholders in the business, and honing them towards the areas that need focus or alignment.

Essentially, gaining clarity in improving business performance and operational management makes a real difference both in financial rewards and owner/manager peace of mind in addition to making your business ready for sale, succession or capital raising.

An example of snapshot:

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Software Corner | Microsoft OneNote

Mon, 27 Dec 2021 02:38:03 GMT

Software Corner

Microsoft OneNote

27 December 2021

If you’ve been looking for a solution to your digital note-taking problem, then Microsoft’s OneNote may be your answer.

OneNote acts as a notebook, a scrapbook, a whiteboard, and a pad of Post-It notes; all rolled into one program. The program allows you to create multiple notebooks that can be divided into sections and pages. It is simple to navigate and search; you’ll always find your notes right where you left them. For instance, your organisation may wish to create a notebook for each department and include sections for training materials, social spaces etc. The possibilities are endless.

Depending on your version, there are several ways to add content to your notebook, including:

typing or writing using a stylus,
recording audio and video,
capturing screenshots,
embedding files, and
even copying text from a picture or files.

OneNote provides the perfect platform to collaboratively create and share your ideas with friends, family, and teammates.

While OneNote is a free program to use, if you are a Microsoft 365 subscriber, you’ll have the added benefit of integrations with other programs in the Microsoft suite, such as Word and Excel.

If you feel you may benefit from using OneNote, follow this link https://www.onenote.com/download to download your free copy.

If you would like to discuss Microsoft 365 and OneNote, please contact one our professional advisors.

Disclaimer

Budgeting For Growth

Mon, 20 Dec 2021 00:55:43 GMT

Budgeting for growth

By Christina Gulliver, Partner

20 December 2021

It may seem obvious that business growth can only occur when there is money available for reinvestment.

However, many businesses do not consider this enough when budgeting and planning for their medium to long term goals. One of the biggest impediments to growth can be access to finances that will fuel the investments that are needed to support growth. Therefore, it is important that a business plan for any future expansions considers funding accordingly.

Businesses may need to raise funds through debt or equity in order to grow.

If a business is planning to fund investment in its own infrastructure, it will need appropriate levels of profit margins and cashflow. Without this, the business may need to raise funds through debt or equity in order to grow.

Here are some key aspects of business growth that may require funding:

Capital investment and premises
Depending on the growth strategy, capital investment in new equipment may be required. Consideration should also be given to premises and whether a change or redevelopment of premises is required to meet the expansion goals. You may be looking to expand your business? To help with the decision-making process, review our blog - Expanding your business - what to consider .

Investment in new support systems
With more data to process through increased transactions, there must be sufficient finances to fund the necessary support systems. These include financial, logistics, quality control, human resources, customer relationships management (CRM), complaints handling and asset tracking.

Within these systems, budgets are crucial to being able to grow your business without your overheads increasing at the same rate.

Staff development
The time it takes to train staff will have an impact on the cashflow of the business. This training will be necessary if new products or operating systems come into play with business growth. Furthermore, new marketing operations may need to be implemented when adopting and inventing new products for sale.

Buffering periods
The ability to absorb mistakes, evaluate what went wrong and identify solutions can mean the difference between complete failure and just a bump in the road. Rather than needing to cut back or take drastic action instantly, a business with a cash buffer can reposition in the market with a renewed approach. Therefore, even without any immediate prospects of business growth, it is wise to implement strategies that, from day one, allow for buffering. After all, business growth does not come from standing still.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The real cost of labour

Fri, 17 Dec 2021 22:00:00 GMT

Construction Industry

The real cost of labour

By Christina Gulliver, Partner

18 December 2022

Pricing jobs in the construction industry can be complex, particularly when it comes to accurately calculating labour rates and understanding all the associated costs involved. Getting this right is essential to ensuring profitability and sustainability in your business. In our discussions with our clients, we have found that a number do not fully understand the cost of their employees.

Questions which are common are:

How much per hour does an employee cost an employer?
How much should be charged for labour by a service organisation?

The answers are, of course, different for each employer. We have set out the basic calculation to assist clients in considering their own situation.

Cost of labour

Assume a full-time employee earns $70,000 per annum i.e.. $1,346.15 per week for a five day, 38 hour week. This is $269.23 per day or $35.43 per hour. Also assume superannuation of 10.5% is paid by the employer, WorkCover is 3% of salary and superannuation. No fringe benefits are included in the employee’s remuneration package.

* Please note payroll tax maybe applicable in some business situations.

This is 35.5% higher than the base hourly rate of pay detailed above of $35.43 per hour. This type of calculation is relevant where an employee is not directly producing income.

For employees who produce income (by manufacturing, construction or provide services), allowance should be made for unproductive time. Overheads should also be assessed as part of the calculation to ensure the hourly rate charged takes these into account. Also.

Conclusion

Whilst the above figures are fictitious, it is clear that the real cost of employment and the necessary charge for labour services are much higher than the actual salary. These facts should be considered when making business decisions about employment or charge rates. We would be pleased to assist with the full calculation exercise and/or with interpreting the results; please do not hesitate to contact us .

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Risk Management Framework Overview

Sun, 12 Dec 2021 23:21:05 GMT

Risk management framework overview

By Christina Gulliver, Partner

13 December 2021

It's important to understand that doing nothing is the greatest risk to your business. No one wants their business exposed to factors that may lower its profits or cause it to go bankrupt. However, risk is a natural part of human undertakings which includes the activities of an organisation. Therefore, it’s important that all businesses review and implement a risk management framework. How do you assess what is risk and what is not risk to a business?

What is risk?

It's important to note; not all risk is inherently flawed. However, risk can be unforeseen and best defined by The International Organisation for Standardisation (ISO), "the effect of uncertainty on objectives" 1 .

Organisations that manage risk as an essential part of corporate governance process understand how it plays a crucial role in decision making that benefits the business.

Risk comprises strategic, emerging, operational, people, and compliance and is based on internal, external, and broader assumptions, such as staff skills, funding, and political changes.

What are the steps in identifying risk?

Understanding the many factors that cause risk is the first step to identifying the many risks encountered in business. The Australian Institute of Company Directors (AICD) ² explains, there is no one-size-fits-all approach to developing a risk management framework. Then where do you start?

One of the first steps is to identify and comprehend the many risks encountered in business. Some risks may only have minimal impact and be easily managed, while others can be catastrophic (e.g. COVID-19 pandemic).

Risk comprises strategic, emerging, operational, people, and compliance and is based on internal, external, and broader assumptions, such as staff skills, funding, and political changes.

The more common risks include damage to/destruction of premises, loss of a significant contract, failure in technology, injury to an employee or client, withdrawal of financial facilities, to name a few.

What is a risk management framework?

The framework is best described, "A risk management framework is a set of components that provide the foundations and organisational arrangements for designing, implementing, monitoring, reviewing and continually improving risk management throughout the organisation."

Through businesses adopting a more formal process to facilitate better risk processes, this allows the board to manage risk as an integral part of its decision-making practices on an ongoing basis. Furthermore, this is not only at board level but throughout the whole organisation.

If you would like to discuss how your business can develop a risk management framework, please contact us .

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Child Care Subsidy

Sun, 05 Dec 2021 22:22:42 GMT

Child Care Subsidy:

Increase brought forward

By Sally Storey, Partner

6 December 2021

In August, Parliament passed changes aimed at cutting child care costs. These changes have been brought forward, initially taking effect in July 2022. The child care subsidy is a federal government’s primary program that assists families with the cost of child care.

What are the changes?

From 10 December 2021, the current annual cap on couples earning more than $190,015 per annum will be removed.

Families who have two or more children in care under six years of age will be eligible to receive an additional 30 per cent on top of the existing subsidy.

An example could be that you have your first child in child care and you receive a 50 per cent subsidy rate; if you have a second child who also attends child care, you will be eligible for 80 per cent. However, the subsidy will cap at a maximum of 95 per cent.

The increased subsidy comes into effect on 7 March 2022.

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Corporate Governance

Sun, 14 Nov 2021 20:54:41 GMT

Corporate governance

good for business?

By Bradley Barnes, Partner

15 November 2021

Back in 2004, Australia enacted important corporate governance reforms. But what does it mean for you, and how can good governance help your business?

What is corporate governance?

Put simply, corporate governance addresses how those in control of a company are held to account. On this score, the Australian Securities Exchange (ASX) says, "corporate governance promotes investor confidence, which is crucial to the ability of entities listed on the ASX to compete for capital1."

But even if you're not at the helm of a publicly listed company, having governance principles in place makes good business sense.

allow organisations to manage their affairs with proper oversight and accountability, to create value for shareholders or members...

Why corporate governance matters

Think back to 2004. At that time, the Corporate Law Economic Reform Program, commonly called CLERP 9, modified the Corporations Act (which governs company law in Australia), partly in response to the HIH Royal Commission.

If you're not familiar with the backstory, HIH was a prominent Australian insurance company. Its $5.3 billion collapse in March 2001 is often viewed as a case study in how not to run a company – and it demonstrated the potentially far-reaching impacts of a poor corporate governance culture.

Fast forward to 2021, and good corporate governance is now recognised for the value it brings to a business in terms of fostering integrity, positive performance and helping to build a sustainable long term business.

Notably, a robust approach to good governance publicly demonstrates that a company is well-managed. That said, in a cutthroat commercial market, good governance can deliver competitive advantages.

As the name suggests, governance is all about the rules that 'govern' your business. But it doesn't end there.

The principles of good governance

A quick online search can suggest there are a myriad principles of good governance. However, the principles of good governance are enshrined in the ASX's Corporate Governance Principles and Recommendations2.

While these apply to publicly listed companies, the principles still hold true for how any organisation is governed regardless of scale – and even in the absence of a company structure .

The eight principles laid out by the ASX are:

1. Lay solid foundations for management and oversight

Clearly delineate the roles and responsibilities of the company board and management, and regularly review their performance.

2. Structure the board to be effective and add value

This can be harder to achieve in a small private company, but ultimately it's about having the collective skills, commitment and knowledge to help the business reach its full potential.

3. Instill a culture of acting lawfully, ethically and responsibly

This goes beyond acting with integrity. It also encompasses safeguarding the accuracy of corporate reports with the appropriate processes to verify all the figures.

4. Safeguard the integrity of corporate reports
While a listed company should have appropriate processes to verify the integrity of its corporate reports, it makes sense for all businesses to have the systems in place to deliver accurate reports.

5. Make timely and balanced disclosure

In the case of a listed company, it's a no-brainer that the company should disclose matters that could affect the share price. But in any business, it pays to be honest about the position of the business, especially when it comes to financial dealings.

6. Respect the rights of security holders

Your business may not have public members as shareholders; however, you still need the appropriate information to exercise your discretion as a business owner or organisation leader to make key decisions.

7. Recognise and manage risk

Does your business have a risk management framework? If not, this is something to look into as it can play a crucial role in decision making.

8. Remunerate fairly and responsibly
Part of attracting, motivating and retaining quality employees involves offering remuneration in line with each employee's skills, experience and ability to add value to your business.

What's in it for your business?

As the name suggests, governance is all about the rules that 'govern' your business. But it doesn't end there.

So, what can you do to improve governance?

The Australian Institute of Company Directors (AICD) ³ notes that effective governance structures "allow organisations to manage their affairs with proper oversight and accountability, to create value for shareholders or members through sound investment and innovation, and provide accountability and control systems commensurate with the risks involved".

Those are goals worth aiming for, and on that basis, all organisations can benefit from good governance – from the largest companies to small not-for-profit organisations.

How should I respond?

As the AICD explains, there is no "one size fits all" good practice solution for effective governance. Factors to consider include the nature of the organisation's activities – particularly the complexity and risks involved, the legislation that governs your organisation, and the organisation's constitution.

In the most simple terms, good governance doesn't just mean compliance. It's also about defining accountability across your team to build productive relationships. It means having effective risk management in place so that all stakeholders (including employees) are protected, and it encompasses measuring organisational performance. This can be achieved by identifying the key performance drivers suitable to the organisation and determining measures of success or failure.

Practical steps to take

So, what can you do to improve governance? A few simple steps can help your organisation improve its governance.

Build a diverse team – this allows the organisation to benefit from a variety of viewpoints.
Let voices be heard – in a company structure, this means giving all directors an equal voice. But all organisations can benefit from having systems in place that allow everyone to express their views.
Ensure leaders have the information they need when they need it – there is no getting around the fact that quality information is the foundation of good decision-making.
Build a culture of collaboration and accountability – encourage people to come to meetings fully prepared and informed. Actively invite contributions from a cross-section of people, and have an open mind to the views of others.

___________________

1. https://www.asx.com.au/documents/regulation/cgc-principles-and-recommendations-fourth-edn.pdf
2. https://www.asx.com.au/documents/regulation/cgc-principles-and-recommendations-fourth-edn.pdf
3. http://www.companydirectors.com.au/~/media/resources/director-resource-cent re/governance-and-director-issues/guiding-principles-of-good-corporate-governance.ashx?la=en

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Independent Practitioner Arrangements

Tue, 02 Nov 2021 22:00:00 GMT

Health Industry

Payroll tax case

By Matthew Holden, Managing Partner

& Sarah Bartholomeusz from You Legal Pty Ltd

25 July 2023

Earlier in the month, we alerted our clients to an article from 27 September 2021 titled GP practice loses legal battle over $800,000 payroll tax bill acknowledging that this case had the potential to unravel the independent practitioner arrangements for engaging medical practitioners that are commonly used across the health industry.

The article provoked much discussion in the health community, amongst Practice Owners, Associate Doctors, Practice Managers, and advisors to the industry including lawyers, accountants and consultants.

As always, the devil will be in the detail, and we need to understand this detail to be fully informed before reacting and implementing any changes.

We have worked with a trusted legal expert for medical practices, Sarah Bartholomeusz from You Legal Pty Ltd and together provide this update to give further background and clarification regarding the issues at hand.

Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2021] NSWCATAD 259

Dr Thomas (runs three practices in Sydney) was found to owe the state almost $800,000 in retrospective payroll taxes as payments to doctors were deemed to be assessable for Payroll Tax as payments under a "Relevant Contract."

For the purposes of NSW Payroll Tax assessment, the key features of a "Relevant Contract" are:

They are a contract, agreement, arrangement or undertaking under which a contractor provides an employer with the services of a worker.
The individual who performs the work may be the contractor or another worker engaged by the contractor.
The independent contractor is deemed to be an employee.
The person who receives the services is deemed to be an employer.
Payments by the deemed employer that relate to the performance of work by the contractor are liable for payroll tax unless an exemption applies.

Despite the doctor contractors holding themselves out as individual sole traders, their income was still deemed a relevant contract & how the money flowed to their accounts was subject to payroll tax.

How?

Dr Thomas was 'billing, on behalf of his doctors, patient fees and charging a flat 30% service fee on everything the doctors had billed' (obviously this is not dissimilar to many general practices operating in Australia). The money flow seemed to be the key decider – money flowed into a single practice operating bank account then out of it to those sole trader doctors who work at the practice. i.e. The gross fees generated were paid into the practice's operating account and the practitioner was paid their net remuneration directly from that operating account.

Importantly in the context of this case, in accounting for this flow, the gross fees generated were recorded as practice income, and the payments to the practitioners as an expense. This flow constituted a "relevant contract" for payroll tax purposes.

How should fund/payments flow?

Gross patient fees are collected by the practice on behalf of the practitioners and held in trust. From these funds, the practitioner's net income is paid directly to the practitioner and the service fee is paid to the practice.

While the practice will deposit patient fees into a trust account it manages, it is done this way out of administrative convenience and importantly, the practice should never have ultimate ownership of those patient fees. A reconciliation at regular, pre-determined intervals (weekly/fortnightly/monthly) should be performed which disburses the patient fees to the relevant doctor while the practice invoices and retains its service fee, as calculated by the service contract with the doctor.

In accounting for this flow, the practice income is limited to the Service Fees charged for the services rendered to the practitioner. There is no expense recorded for payments to the practitioner.

In addition to the impact this accounting process may have on payroll tax obligations, it also has implications for income tax and GST, therefore it is important that the processes are correctly established and followed.

What it means for you:

Owners of medical practices are now more open to a large retrospective payroll tax bill where their doctor payment processes may appear to take on the form of a relevant contract (relevant to those doctors who have always been thought of as "tenants" or "contractors", not employees).
It is important that practice agreements with doctors accurately reflect an arrangement whereby the practice is providing a service to those doctors to enable them to practice their profession, and not result in a quasi-employee arrangement.
Accounting for receipt of funds and payments to practitioners needs to be consistent with the agreement, and the practice should be able to demonstrate that patient fees it may collect on behalf of its doctors are not treated as general practice revenue.
The payroll tax laws are different in each state, however we understand all states have an interest in reviewing payroll tax and its application to medical practices.
While the outcome of this case is concerning, it is important to bear in mind that the High Court refused to hear the matter, and this decision is a less authoritative tribunal (not court) decision.
It is also important to remember there were some fundamental errors in the manner in which this practice was engaged with its practitioners and how it recorded payments in its books, which would have contributed to this decision.
A key takeaway from the case is to remove obligations on the doctor which may be deemed relevant contract, and to ensure distinction between the "first supply" being the doctor providing clinical services to individual patients, and the "second supply", i.e. the transaction between the practice and the doctor.

Our recommendation

It would be prudent for medical practices that have not recently reviewed their independent contractor arrangements to undertake a thorough review to reduce the risk of an adverse Payroll Tax finding.

A review should cover the following areas to:

Practitioner Service Agreements
Banking and Practitioner Payment processes
Accounting Treatment of Practitioner payments

In addition, as we expect Payroll Tax audits to continue to occur, potentially more frequently in response to this matter, it would be prudent for practice owners to review any tax audit insurance cover they hold. Importantly, they should ensure any tax audit insurance provides cover for state taxes such as Payroll Tax. We are aware of some tax audit insurance policies which provide cover for federal taxes only, in which case they would not cover a payroll tax audit.

We encourage owners of medical practices to contact their accountant or legal advisor if you have any concerns about the contractual arrangement that you have in place for the engagement of medical practitioners. If you would like to learn more about what we do for the Medical & Allied Health Industry , please reach out and ask to speak with one of our professional advisors here .

Sarah Bartholomeusz | Principal

Sarah is the Founder of You Legal. With over 18 years' experience as a lawyer, she is passionate about protecting business leaders to allow them to focus on what matters to them most, making their impact in the world. With an extensive understanding of corporate and commercial issues, Sarah works with a range of clients. Want to chat? Book a call here .

Discuss Further?

If you would like to discuss, please get in touch.

Disclaimer

Voluntary Patient Registration

Sun, 31 Oct 2021 22:00:00 GMT

Health Industry

The Australian Government Primary Health Care 10 Year Plan 2022 - 2032

By Danny Haydon, Principal/Health Division

1 November 2021

(The Plan) Consultation Draft closed on the 9 November 2021.

This document lays the foundation for much-needed reform of the Primary Health Care System. If adopted by the Australian Government, it will aim to deliver a more integrated, patient-centred, equitable, less fragmented and contemporary system.

Embedded in this plan is a commitment that the Australian Government has already made, announced in the 2021 Budget, to implement the MyGP Voluntary Patient Registration (VPR) scheme as the "building block" for reform.

What is Voluntary Patient Registration (VPR)?

The purpose of VPR is to improve continuity of care by strengthening the relationship between individuals, families, and carers have with their chosen primary health care provider and practice.

Every Australian will be able to voluntarily register with their chosen practice and general practitioner, as long as the practice is accredited against the RACGP Standards for General Practice. The registration formalises this relationship, creating a single health care reference point that can focus the coordination and delivery of integrated care in the future.

What will it enable?

In the first instance, VPR will enable patients to continue to access Telehealth services from the practice they have registered with once the current temporary COVID-19 Telehealth services cease.

Telehealth has proven to be popular for both patients and providers, improving patient access and flexibility for how care is delivered. GPs are also being remunerated for the care they have been previously provided but was not funded by Medicare Benefits Schedule (MBS).

VPR will support the ongoing delivery of telehealth services post the COVD-19 pandemic by limiting these services to patients who are registered with a specific practice. The Plan also indicates that in future, access to MBS services for chronic disease management, health assessments and medication reviews will also be linked to VPR, protecting these services from otherwise being inappropriately claimed.

How will VPR work?

The process for VPR is expected to be managed through the Health Provider Online Service (HPOS), building on the system used for registering patients for the Indigenous Health Incentive and Health Care Homes. While the specific details are not public, it is understood that a patient can only register with one practice at a time. A patient will subsequently be able to change their registration to another practice at any time.

One of the practical challenges for practices highlighted through the Health Care Homes trial was identifying registered patients in the Practice Management software. It will be crucial for patient software providers that their software identifies registered patients within the medical record, appointment booking and patient registration functions.

The VPR system will commence in July 2022.

The Ansoff Matrix

Sat, 09 Oct 2021 22:00:00 GMT

What is the Ansoff Matrix?

By Rick Albertini, Partner

18 September 2022

Who is Ansoff and what is the matrix?

The Ansoff Matrix was originally developed by Harry Igor Ansoff who was a Russian American. An applied mathematician and business manager, Harry was broadly acknowledged as the father of strategic management. First published in the Harvard Business Review in 1957, titled "Strategies for Diversification." It has given generations of marketers and business leaders a quick and simple way to think about the risks associated with growth. The matrix is a tool which supports businesses to identify possible growth strategies within their organisations.

How does it work?

The matrix can also be known as the Corporate Ansoff Matrix and the Product/Market Expansion Grid. The grid or matrix is broken down into four quadrants, each providing a strategy for you to use, make strategic decisions or develop a new product or service. As you can see below, the quadrants provide the analyses of the risks associated with Market Development, Market Penetration, Diversification and Product Development. Furthermore, the risk will change along with the reward when you move into a new quadrant (horizontally or vertically) providing you with insight that will support decision making.

Market Penetration

The first quadrant in the Ansoff Matrix is marketing penetration. Often the strategy that is adopted when an organization has an existing product with a known market and needs growth within that market.

Market Development

The second quadrant is the strategy that is used when a business targets a new market with existing products.

Product Development

The third quadrant refers to a business which already has a good market share in an existing market and therefore might need to introduce a new product for expansion. Often needed when a business has a good client base and understands their market.

Diversification

The fourth quadrant applies when the product is completely new and is being introduced into a new market.

Our approach to building value within your business is captured in our service process; we want to see you grow and develop; therefore, we are here to assist you in implementing the use of the matrix in support of your endeavours. If you want to learn more about how the matrix works, don't hesitate to contact one of our professionals.

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Find more information on how to use the matrix: https://www.mindtools.com/pages/article/newTMC_90.htm

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Monitor the health of your business with KPIs

Fri, 08 Oct 2021 05:17:26 GMT

Monitor the health of your business with KPIs

By Matthew Holden, Managing Partner

23 October 2022

Why? to show how well they are performing, not unlike how GPs use KPIs such as blood pressure and cholesterol to measure the health and wellbeing of their patients. In a business sense, KPIs are the quantifiable, outcome-based statements you'll use to measure whether your business is on track to meet your goals or objectives.

KPIs will be different for each business, but the basic idea is the same: to measure your business' essential features. Once armed with this information, you can use this knowledge to make effective, strategic decisions.

Moreover, KPIs can address sales goals such as the number of sales your business must close monthly or marketing goals such as the number of leads or blog articles published each month. Examples of operational KPIs might be order fulfilment times, time to market, employee satisfaction ratings and employee churn rates. KPIs should apply to short- and long-term goals.

Where to start with KPIs

When developing KPIs for your business, it is best to start with the business' core goals, then look at the critical success factors affecting those goals. For example, many business owners may say the goal is profit, but you need to consider precisely how that is to be achieved. For instance, if your goal is to grow market share, a KPI might indicate how many customers you expect to service per week.

All KPIs should be easy to measure and easy to understand.

If your goal is to make the best quality product, a KPI may address the number of returned goods per month. Alternatively, a KPI may address the average cost per unit produced weekly if your goal is to deliver your product or service more efficiently.

All KPIs should be easy to measure and easy to understand. They should also be specific to a period of time that is appropriate to what is being measured.

The traps for KPI newbies

Care should be taken when developing KPIs because if poorly implemented, they can be counterproductive. For example, suppose a KPI involves generating ten new customer contacts per month.

In this case, staff are encouraged to increase new business activities, which may be detrimental to servicing existing customers who find themselves ignored by your business. The result is that established customers may take their business elsewhere.

To monitor and improve overall business performance, a range of KPIs for different business functions are usually required. For example, the sales and production managers should have their own KPIs relating to their roles and the SME's overall goals. Similarly, KPIs can be developed concerning staff turnover and absenteeism to assist the human resources department in improving workplace culture.

KPIs measure performance, but be careful not to take them at face value. A sales dip recorded by a KPI might be due to snap government lockdown, as we have seen regularly over the last 18 months. Unfortunately, there's not much you can do about it, and then drop off in business is not the fault of your sales staff.

Communicating KPIs

Once KPIs are defined, you can set targets for these metrics that are communicated across the organisation. Ensure the targets are realistic because your staff will be less inclined to strive to reach them if they are not obtainable. Communicating KPIs effectively is important.

Once you have a set of KPIs that are right for your business, you will be able to paint a clearer picture of your organisation's strategic performance and empower you to make agile decisions to impact your team's success.

As part of our accounting and business advisory services at Brentnalls SA, we can assist you in fin etuning your KPIs based on the industry you operate in, the size and location of your business, as well as your short and long-term business goals.

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How business owners can leverage their assets

Sat, 11 Sep 2021 23:00:00 GMT

How business owners can leverage their assets during uncertain times

By Shali Manolev, Partner

11 September 2022

Small businesses are bouncing back from the pandemic, but fresh challenges are emerging including difficult operating conditions, higher fuel costs, rising inflation and higher interest rates, a recent survey finds.

According to ACA Research, difficult operating conditions will be compounded by significant challenges with most SMEs concerned about fuel costs (86%), rising inflation and interest rates (79%) and ongoing supply chain issues (78%) 1 . Accordingly, investment intentions have started to reverse with 25% intending to reduce capital investment and 21% marketing spend over the next 3 months.

Making changes in uncertain times

Even before the pandemic, it's likely there were changes you wanted to make within your business but didn't, making now the time to act. Start by evaluating and reviewing your major assets, such as your staff, commercial premises, and equipment. Likewise, while many business owners often choose to take the foot off the marketing pedal during uncertain times, now more than ever i s the time to consider ways to extend your brand's marketing reach.

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1 https://www.acaresearch.com.au/australian-market-research-blog/weak-sme-sentiment-despite-upbeat-revenue-and-employment-numbers

2 https://imags.com.au/rh_commercial_insight_q2_2022/38/

3 https://www.homeloanexperts.com.au/commercial-property-loan/commercial-loan-interest-rates/

4 https://www.abs.gov.au/media-centre/media-releases/200000-more-job-vacancies-pandemic#:~:text=There%20were%20423%2C000%20job%20vacancies,Bureau%20of%20Statistics%20(ABS).

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What to know about Cryptocurrency

Sat, 17 Jul 2021 23:00:00 GMT

What to know about Cryptocurrency

Christina Gulliver, Partner

10 July 2022

It seems like Bitcoin is rarely out of the news. But what is it, and should you get involved?

Bitcoin works very differently from normal 'fiat' currencies – those backed by governments that come in the form of notes and coins such as the Australian dollar. As a cryptocurrency , Bitcoin is a purely digital, or virtual, currency that takes the form of online tokens or coins.

In fact, there is a whole range of cryptocurrencies including Ethereum and Litecoin to name a few. However, Bitcoin has attracted the lion's share of attention because of its extraordinary gains – and at times, losses.

As a guide to what has often been a rollercoaster rise, in 2017 Bitcoin leapt from $AUD1,374 at the start of the year to be worth $AUD23,648 by December 2017. The market quickly fizzled out, and by the end of 2018, Bitcoin was worth less than $AUD5,000.

More recently, Bitcoin has enjoyed a resurgence. By Christmas 2020 it was worth $AUD26,400, and in mid-2021 Bitcoin was sitting at around $AUD47,000.

What's especially interesting about Bitcoin is how it is increasingly gaining mainstream appeal. The Independent Reserve Cryptocurrency Index (IRCI) shows one in five Australians own some form of cryptocurrency 1 . That's despite the fact you can't simply walk into a store and pay for purchases with Bitcoin.

Think of this as a bit like a stockbroker for shares. Just like stockbrokers, crypto exchanges charge fees, so this is something to watch for.

How do you invest in a currency that only exists in the digital world?

The first step to get started with Bitcoin is to set up a 'digital wallet'. This can be a small, portable hardware device or a computer program or online platform. It's used to keep your Bitcoin safe as only you hold the key, or password, to your wallet.

Next, you select a crypto exchange. Think of this as a bit like a stockbroker for shares. Just like stockbrokers, crypto exchanges charge fees, so this is something to watch for.

The key question can be how much you'd like to invest.

Part of the appeal of Bitcoin – and indeed other cryptocurrencies, is that you don't have to buy a whole bitcoin. 'Fractional' investing is possible, and many crypto exchanges let you invest as little as $100.

The downsides

Bitcoin and other cryptocurrencies are not without risk. This is a purely speculative investment based on a rise in the virtual currency's value. You'll receive no ongoing returns as you would with dividends on shares or rent on an investment property.

The other issue is that Bitcoin is not managed by governments. This matters because in 2019, the NSW Cybercrime Squad warned that digital currencies are rapidly becoming a money laundering option for organised crime networks 2 . This highlights the importance of choosing a crypto exchange with care.

Bear in mind too, Bitcoin has not always enjoyed a steady uphill run. Plenty of investors have had their fingers burnt.

In 2017 for instance, Australians 'invested' more than $3.9 billion in cryptocurrencies – mostly Bitcoin. More than half those trades were placed in December of that year 3 . Yet by the middle of that month, Bitcoin started to nosedive, leaving plenty of people out of pocket. And remember, no one rings a warning bell just before a cryptocurrency starts to head south.

There can also be challenges from a tax perspective. Some years ago, the Tax Office clarified that Bitcoin and other cryptocurrencies are not money but are potentially assets subject to capital gains tax 4 . This can lead to complex tax reporting if you buy and sell cryptocurrencies.

The message is to tread carefully when it comes to Bitcoin and other cryptocurrencies.

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1 https://www.independentreserve.com/static/independent-reserve-cryptocurrency-index-irci-2020.pdf

2 https://www.austrac.gov.au/cybercrime-squad-and-austrac-remind-digital-currency-exchanges-reporting-obligations

3 https://newsroom.accenture.com/news/australias-digital-currency-market-expanding-accenture-and-australian-digital-commerce-association-research-reveals.htm

4 https://www.ato.gov.au/super/self-managed-super-funds/in-detail/smsf-investing/smsf-investing-in-cryptocurrencies/

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Brentnalls SA Accelerates Client Advisory Services

Sat, 05 Jun 2021 23:00:00 GMT

Brentnalls SA accelerates client advisory services

6 June 2021

Brentnalls SA predictive leap

When the pandemic struck, advisory and accounting firm Brentnalls SA was already on the front foot, ensuring its staff could continue to meet client needs without interruption. To optimise operations, it upgraded its technology infrastructure which has it now poised to enter the predictive analytics era.

Advisory and accounting firm Brentnalls SA has built a prized reputation among its clients for the swift, informed advice it provides.

Led by Rick Albertini , who has been a key pillar in the growth of the Adelaide based business over the last 21 years, Brentnalls SA provides services to businesses around Australia and internationally, some of which generate annual revenues in the hundreds of millions of dollars. Its broad range of accounting and tax , business advisory , wealth creation and preservation , succession and retirement planning , and self-managed superannuation funds.

Early recognition and response to COVID

With this reputation in mind, it is hardly surprising that Brentnalls SA took early action at the pandemic's beginning to prepare for a new way of working that would ensure its staff were safe and its clients received the service they valued without interruption.

Sensibly, Brentnalls SA's partners recognised early the need to transition the vast majority of its employees to remote work in early 2020. This move meant that when lockdowns took hold in Australia, the accounting and advisory firms 90 staff were comfortable working outside of the office and engaging with clients online.

The pandemic has fostered new ways of working, with Microsoft technology changing the game for both internal operations and client services. Christina Gulliver, Partner

The ongoing challenges of COVID

Brentnalls SA advisors have for several years used Microsoft's Power BI to support clients, access financial data and perform analytics. The firm's accountants and advisers also utilise BI's user-friendly dashboards to provide clients with easily digestible information to make informed business decisions. Power BI was also critical in supporting Brentnall's shift to online working, and its ability to service its clients as COVID gripped.

While the South Australian firm prides itself on rapid support for clients, it quickly discovered that after pivoting to a work from home model, its underlying technology infrastructure was insufficiently nimble. People had taken their work systems home, but the processing and communications available through its hosted cloud platform simply wasn't fast enough to support its clients.

Brentnalls SA's diverse client base includes one of the largest luxury inbound tourist businesses, which COVID-19 impacted. But many other clients in construction, health services, and agribusiness were also experiencing increased demand and needed as much if not more support from Brentnalls SA as they had in the past.

Solving the new COVID demands with time-saving measures

Working with South Australian based Control Z, Brentnalls SA set about upgrading its technology infrastructure to turbocharge operations. In addition to migrating Brentnalls SA to Exchange Online & SharePoint Online, Control Z deployed a Windows Virtual Desktop environment in Microsoft Azure, running Windows 10 Multi-Session to provide users with a familiar desktop interface and access to all their applications and data from any device at any time.

Since implementation, user Logon times have reduced from over a minute to less than 20 seconds. Users have reported significantly improved Outlook performance with Office ProPlus optimised for WVD.

This solution has been supported by a solid security foundation utilising Microsoft Technologies including Microsoft Endpoint Manager, Azure Firewall, Azure AD, Conditional Access Policies & Multi-Factor Authentication.

Game changing upgrades allowed for new online engagements

The update meant that Brentnalls SA staff could connect using Microsoft Teams, use Power BI and Power Automate to streamline processes and accelerate the speed at which they could service clients. It also meant that as operations started to return to normal, and with many Brentnalls SA personnel eager to return to the office, the firm could offer new online engagement models to clients.

By holding at least some client meetings over Teams, the firm has been able to rein in travel costs with no compromise on service levels.

Power BI, Power Automate and the Microsoft Teams platforms have been a game-changer in the way that we, one, work with our clients and, two, work internally.
Rick Albertini, Partner

Rick Albertini says, "Instead of having these Excel spreadsheets or Word documents saved in remote servers with versions needing to be emailed, it's now a collaborative document for everyone to have input.

There are user right restrictions for sensitive information, but it's provided that level of transparency, open communication, and all of a sudden, we're talking a different language. It's been great and very enlightening."

Technology changes supports recruitment

Since implementation, Brentnalls SA have added ten new staff members to their team while the dynamic nature of the platform allows for rapid fluctuations in user count with no impact upon performance. It is this scalability that excites Control Z's Head of Technical Services Dale Williams.

"When Control Z were approached to produce a new solution for Brentnalls SA, the need for scalability was at the top of my mind." Control Z's solution architects responded by designing a solution based entirely out of Microsoft Azure, with Windows Virtual Desktop taking the spotlight. "This had dramatic scalability advantages over a traditional privately hosted server environment and became an obvious choice for the customer's evolving requirements."

It was clear they were a fast growing business and we needed a system that would be infinitely scalable.
Dale Williams

With the new technology infrastructure in place Brentnalls SA is primed to take the next step on its innovation journey, expanding its use of artificial intelligence and machine learning to support predictive analytics and work even more closely with clients to build real time dashboards and stoplight style reporting – green, amber and red – so that they can take action faster. "We can actually be alerted on a daily basis, not six months after year end. It's too late then," says Rick Albertini.

The digital improvements at Brentnalls SA ensures the accounting and advisory firm can continue to provide the insights and intelligence to ensure its clients make strategic, and informed decisions based on up to the minute accurate data and advice.

Control Z are passionate about working with Australian businesses to make the most out of their investment in Microsoft technologies and can be reached on (08) 8132 0006.

Article released: 12 April 2021 | Microsoft
https://news.microsoft.com/en-au/features/brentnalls-sa-accelerates-client-advisory-services-prepares-for-predictive-leap/

High performing practices - How healthy is your practice?

Sat, 20 Feb 2021 22:00:00 GMT

Health Industry

High performing practices: How healthy is your practice?

By Danny Haydon, Principal/Health Division

15 April 2024

High Performing Practices think and act strategically, are well governed and managed, engage high-quality and talented people, and operate efficiently while delivering high quality services while ensuring the business's financial viability.

Most practices work in isolation, having little insight into how other practices operate. Brentnalls Health has the privilege and opportunity, through our work, to see how many different practices operate. Through this experience, we have gained an understanding of the key factors that distinguish a high performing practice.

These are the key attributes that we see in successful practices that give them a competitive advantage:

Think and Act Strategically

Planning for success
Constantly scanning and aware of the changing healthcare environment
Being Proactive, with a forward-thinking approach

Well Governed and Managed

The ability to make effective decisions and implement them
Disciplined management structures in place

Financially Profitable

Sustainable financial growth over time
Strong financial fundamentals and financial disciplines

Talented People

Focused on evidence-based practice
The ability to convert quality care into profitability
Highly functioning teams

Operate Efficiently

Streamlined and efficient systems
Shared approach across the entire team

Questions you might ask yourself:

Are you running a high performing practice?
If not, what do you need to do to convert your practice into a high performing practice?
What aspects of your practice could you improve, to improve the performance of the practice?

Brentnalls Health offers a service called " Practice Snapshot Assessment " that enables practices to identify areas for opportunity and growth. If you would like to learn more about how we can help you become a high performing practice, contact us here .

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