EOFY alert! Financial year-end is fast approaching

Small business owners who want to buy a vehicle, asset or important piece of equipment and immediately write off the cost have just over a month to act this year.

There’s nothing like an impending deadline to get you moving.

And with June 30 now just over a month away (didn’t that sneak up on us!), time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.

What is temporary full expensing?

Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This helps with your cash flow as it allows you to reinvest funds back into your business sooner.

Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

There is just one small catch though …

The asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);

– first held by you at or after 7.30pm AEDT on 6 October 2020;

– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and

– used principally in Australia.

Obtaining finance that’s right for your business

Being able to immediately write off assets is one thing, but if you don’t have access to the right kind of finance to purchase them now, the scheme won’t be much use to you this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today.

We can help you with financing options that are well suited to your business’s needs now, and into the future.

Albert Waldron

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Finding My Business Niche

Finding Your Niche

An international business survey reveals the habits of highly-effective people. How do you rate?

The world seems obsessed with productivity at the moment. It may reflect the fact people have never had to contend with so many distractions. Even before they leave home, many workers feel overwhelmed: emails, Slack messages, WhatsApp, meeting reminders and voicemails. Phones and devices steadily ping with more throughout the day. Then there's the siren song of social media - Instagram, Facebook and Twitter - all designed to incorporate addiction loops to keep you coming back.

So how do people stay focussed and on task in an age of information overload? In an attempt to answer that question, Harvard Business Review surveyed nearly 20,000 readers around the world in 2019.

The three main findings were:

productivity is not linked to longer working hours (in fact, previous researchers have noted productivity declines sharply past 48 hours worked each week); older, more senior professionals reported higher levels of productivity (which may be linked to learning through experience that the key is working smarter, not longer); gender differences were not significant, although women reported higher focus on preparation-related tasks (preparing efficient meeting agendas and reviewing the next day's calendar to look for possible issues); while men had good systems for coping with high volumes of communications.

Researchers at Harvard Business Review scraped data from survey responses to identify routines most commonly referenced by productive people. From this, they compiled a list of effective work habits based around three key areas: maintaining clear objectives; managing information overload; and making communications efficient and responsive.

This is their advice to workers looking to boost their productivity.

Preparation: Revise your upcoming day's schedule the night before to identify priority tasks and note objectives for each appointment; Send detailed meeting agendas beforehand; Before writing anything lengthy, sketch an outline with a logical structure and word count to keep you focussed on moving forward;

Managing distraction Make a conscious effort to limit checking your phone screen to once an hour rather than every few minutes; Delegate tasks, when feasible, that are not key to your main objective; Leave gaps in your schedule to deal with unexpected problems; Scan messages for sender and subject and tackle by priority rather than chronology.

Communicating effectively Limit meetings to a maximum of 90 minutes, but the shorter the better. End each meeting by listing outcomes and next steps; Speakers should present with dot points rather than a prepared script; Respond immediately to communications from those important to you; Focus on learning from mistakes rather than allocating blame.

The big question is: can time spent reading about productivity be productive? Incorporate some of these goal-focussed habits into your day and it can be. Here are a few more to get you on track.

Retrain your brain Distraction can become a habit; a way of avoiding difficult tasks. But the more people give in to a quick email check or Facebook scroll, the shorter their attention span becomes. Another Harvard Business Review piece ( How to overcome your email distraction habit ) looks at how people can retrain their brains to expand their attention spans and become more productive.

Focus on what matters Italian philosopher and economist Vilfredo Pareto came up with the 80/20 principle back in the 1800s and it still influences the business world today. His observation was that 20 per cent of effort is often responsible for 80 per cent of results. His deceptively simple method to boost productivity was to work out what that 20 per cent is and focus on it. Read more on how to apply Pareto's Principle here.

Plan wisely Don't work longer, work smarter. Studies indicate productivity declines rapidly once workers clock up more than 48 hours in a week. Anything over 39 can have an impact on mental health. Be reasonable in what you expect to achieve each day. Try to organise your day so the most challenging tasks are in the morning when you are fresh and focussed. Schedule time throughout the day to check and respond to emails in blocks, rather than checking them compulsively. Like to talk to someone who can help contact Awesome for a Free Business Strategy Review

Please note we do not provide tax, legal or accounting advice. This article has been written for general informational purposes only and is not intended to provide, and should not be relied on, for tax, legal or accounting advice. We encourage you to consult your own tax, legal and accounting advisers before engaging in any transaction.

Cutting the Gap - How to maximize cash flow

Mind the Gap

Cutting the lag between money out and money in can save you thousands. Are you doing all you can to loosen the cash squeeze?

"You need to spend money to make money" the saying goes, but the real key to business success is cutting the gap in between.

Small businesses can often find themselves caught out by the delay between outlaying on suppliers and receiving payment from customers. The longer this cycle, the more cash a business needs to cover running expenses while money is tied up elsewhere.

But there's a lot that SME owners can do to cut the lag, with new technology making it easier to run a tight ship.

Invoice immediately Bill clients when work is completed, or your product or service is delivered, not at the end of the week, fortnight or month. It's a false economy to think going through invoices in batches is more efficient.

When a business takes a week or more to send an invoice, clients may presume they are in no hurry to get paid. Conversely, online payment company Due reports invoices issued the same day a job is completed are 1.5 times more likely to be paid on time.

Discount prompt payment Offer a discount to clients who choose to pay early, say within 14 days rather than 30. Or if you have shorter terms, make sure clients don't drift past the due day by offering on-time discounts. Follow-up with an automated text or email through systems such as Xero or MYOB when the discount period is about to lapse.

Make it easy Studies indicate procrastination, not lack of funds, is the reason many invoices are paid late. Businesses can avoid getting relegated to the ''I'll do this later'' pile by making their invoices as simple to understand as possible. That means no surprise costs a customer may need to query.

E-invoicing should be standard practice as it's cheaper and faster. Include as many payment options as possible, all with click-through links. Anything that requires a debtor to work harder - cutting and pasting account numbers, for example - risks them abandoning a task until later.

Cut stock Running a tight inventory ship can be a delicate balance. Slow-moving stock can be a killer but you need to have enough to hand to be responsive and reliable.

This is where software can make a dramatic difference to track and identify slow-moving products and changing sales cycles. There is a dizzying array of inventory management software. If you're unsure where to start, ask your accountant or talk to other SME owners at business networking events.

Dig into data Big data is becoming more and more accessible to small business owners. They've always had the information, the problem was they didn't have the time, skills or software, to analyse it. New tools are making it easier for SMEs to drill down into existing information.

The cost of paying an accountant or digital marketing expert to help set up systems to analyse trading data can more than pay for itself. For example, sales records can identify high-margin, high volume products or services - your profit drivers. Once a business has this, delving further into customer metrics can identify what types of person or business is the main buyer, allowing a business to pivot your marketing to focus on this client demographic. Facebook and Google Analytics are good starting points.

Consider shorter payment terms The past few years has seen a huge push by the Australian Small Business and Family Enterprise Ombudsman, along with the Federal Government and Business Council of Australia to highlight the hardship that long payment terms place on small businesses.

SMEs should consider leveraging goodwill to shorten payment terms. It is also worth checking whether clients have existing small business policies. A recent review found SMEs were unaware many large companies had special payment policies in place to fast-track payments to SME suppliers1.

Chase debt early Set a process for chasing overdue accounts promptly. Systems such as Xero can be set up to send reminder emails, for example at three days overdue or seven days overdue. After two weeks, experts recommend phoning to get a commitment to pay. Business Victoria has a range of escalating debt recovery templates from ''friendly reminder'' to ''final demand''.

Stretch your terms On the flipside, monitor your outgoings and make sure you aren't paying your invoices too promptly, sending money out the door before you need. Automated payment systems can schedule payments to maximise cash flow.

Focus on finance Review the finance you are using. If you run a line of credit, review it regularly to make sure the limits and terms are competitive and suitable for your business. Consider invoice finance if you need liquidity fast. Like to apply for a business loan - Contact Awesome Lending Solutions

1 Review of payment terms, times and practices, Australian Small Business and Family Enterprise Ombudsman, pp 8, March 2019.

Please note we do not provide tax, legal or accounting advice. This article has been written for general informational purposes only and is not intended to provide, and should not be relied on, for tax, legal or accounting advice. We encourage you to consult your own tax, legal and accounting advisers before engaging in any transaction.