Uplift your business with robust processes, procedures, and systems

Processes, procedures, systems…as a business owner, these topics might not be at the top of your priority list. In fact, they might make your eyes glaze over and your attention wander. But they’re some of the most important tools you hold in your business, and can be the make-or-break items for success. Here’s why:

At the most basic level, processes and procedures help set expectations for your employees. This is where new employees learn about what your business is about. You need to clearly communicate your business vision, values, mission, and culture through these types of documents to ensure employees have a firm idea of what your business is all about. Processes and procedures also offer ongoing guidance – documents that can be referred back to, providing a framework for clear and consistent decision making, in-line with the culture you wish to build.

In addition to your processes and procedures, think about how your systems can support and regulate how guidelines and frameworks are used. Can you make sure that employees cannot break a particular policy by coding it into a digital system? Can you build your procedures into your system, creating a layered system of checks and balances? Well set-up and integrated systems go a long way to supporting the daily operations of any business, and integration should include more than just data – it should drive desired behaviors through well-thought-out frameworks.

Decisions in any business should never be arbitrary. Allowing unstructured, arbitrary, and unregulated business practices to spread creates a high-risk environment. Setting up strong systems, processes, policies, and procedures will reduce risk while allowing your business to keep ticking along in an efficient and safe manner.

If this still seems like a dull and unimportant activity, think about it as a risk mitigation activity. By building a framework of robust policies and procedures to support your processes, and integrate with your systems, you are risk-proofing your business. This set-up brings better, more impartial and unbiased decision making to the table. It gives you a regulatory framework to ensure you’re in full compliance with legislation. It protects not just your employees, but you and your business.

How can Halkin Business Partners help?

 Our specialist can assist in assessing your systems and providing recommendations on how to better integrate your procedures for a fail-safe framework.

We can further assist with setting up a framework of procedures for your business. We do this by making sure your organizational structure is in place and that all employees firmly know their roles and responsibilities.

 Speak to our specialists to see how Halkin Business Partners can help you with your business needs.

Growing your business? Consider R&D Tax Incentives, and Export Market Development Grants.

Is your business in a place where you’re considering whether it’s time for growth? Two things you may want to consider is whether you’re eligible for Research & Development (R&D) tax incentives, and if you qualify for an Export Market Development Grant (EMDG).

Whether you’re looking to expand your business within Australia, or beyond our borders, Research and Development (R&D) is an invaluable tool. However, R&D can also be a costly undertaking, and one which many business shy away from due to the high overhead. What many business owners aren’t aware of, however, is that significant R&D tax incentives and credits are available for eligible businesses. These R&D incentives often go unused or under-utilised due to a lack of understanding – the intricacies of eligibility are often not fully realised by business owners.

The Research and Development Tax Incentive (R&DTI) is designed to offset the expense of eligible R&D activity, which ultimately provides benefits to the Australian economy in the long-term. If your R&D activities are eligible, you may be able to qualify for up to 43.5% tax offset at time of tax return lodgment. In order to claim the R&D offset on your next tax return, you’ll need to register your company’s R&D activity under the R&DTI program. Whether this offset is refundable or non-refundable is dependent on your company type.

To qualify for this incentive program, the Australian Government states you must:

  • Be a company that is liable to pay income tax in Australia
  • Conduct at least one activity that meets the definition of a core R&D activity
  • Have eligible R&D expenditure greater than $20,000

In addition, you may be able to claim for specific R&D activities that have been completed overseas, depending on your circumstances. A financial professional can assist you in determining your eligibility, identifying relevant R&D activities, and completing your application and supporting documentation.

An EMDG is a financial assistance scheme from the Australian Government, specifically for businesses who are seeking to boost their international sales. The grant is for reimbursement of expenditures for promotional activity aiming to increase overseas business, and is available to both existing and new Australian exporters. If this applies to your business, you may be eligible for up to 50% of your promotional expenses above $5000, to a maximum of $150,000. These grants can cover a wide range of promotional activities, ranging from fees for trade fairs, conferences or seminars, costs for marketing collateral and advertising, to engagement of marketing consultants, or other overseas business representation.

Applications for an EMDG open on 1 July 1, 2020, so now is the time to start thinking about whether this may be appropriate for your business. An EMDG consultant can help you assess your eligibility and prepare and lodge your application for the best chance at qualifying for this assistance scheme. A successful applicant may qualify for up to 8 grants, which can make a huge difference to business operations.

How can Halkin Business Partners help?

Our consultants at Halkin have been working with top third party specialists in the areas of R&D and EMDG Grants to assist our clients with their application and claims. We also work with specialists in all type grants available to Australian Business’s.

With the R&D Grants application for the 2018/2019 Financial year being extended till 30 September and EMDG Grants commenced applications from 1 July, let us help you to work with a specialist to put in action as soon as practicable. For more information on Halkin’s service offering contact us.

Advantages of cloud computing in a post-COVID business world

The rapid global spread of COVID-19 has left a lasting impact on the business world, and we can expect to see the implications of these changes for decades to come. Many companies have needed to rapidly pivot to a distributed, remote working set-up for the majority of their staff, and this has presented significant challenges. Providing both employee and customer access to your business’s key data is crucial to keeping your operations up and running, regardless of the circumstance. If you have never considered shifting to a cloud computing model, now may be the time to look at this again.
So, what is cloud computing? At a really basic level, platforms like Google Drive, Spotify, and Microsoft 365 are great examples – these are services offered to the stand-alone consumer, and can be accessed anywhere in the world with a strong internet or data connection. As a business owner, you have a wider variation of cloud computing options to consider. You can choose to opt into a platform-as-a-service (PaaS) like Windows Azure, where you have the opportunity to customize the application to your individual business needs. You can also choose to use a software-as-a-service (SaaS), which means an external company will manage both your account, and the application – think DropBox. Your third option is an infrastructure-as-a-service (IaaS) based model, like Amazon Web Services, which gives you a lot of control over the infrastructure, but can be complex.
Regardless of which type of cloud service you choose, there are a multitude of advantages for your business. Cloud computing offers you increased efficiencies and cost savings in IT, as many of the models will take care of updates, patches, and support for users. Servers can be accessed anywhere in the world, at any time of day, on any connected device – providing you and your staff increased flexibility to work remotely, and to access important data at a moment’s notice. In addition, you’ll find that many cloud solutions are using highly encrypted and secure servers; it’s likely that many of the cloud computing models have a higher level of security than existing business systems and servers.

Another interesting feature of a cloud-based solution is ability to scale rapidly. Many of the available options are able to closely track usage for efficiency reporting; this allows you to monitor and adjust the available features and services offered for better productivity. If your business is rapidly growing, a cloud solution is typically set up so it can scale rapidly alongside your business – after all, if a service has multiple customers using variable degrees of capacity and service, they are well positioned to respond to a huge variation of business needs – yours included. Flexible, reliable, secure, scalable, and measurable: consider if cloud computing, and the subsequent automation that comes hand-in-hand, can benefit your business.

It’s important to do thorough due diligence on any business change, so make sure you are choosing a cloud solution that is the right fit for your business in terms of security, ease of use, cost-effectiveness, and scalability.

How can Halkin Business Partners help?

As business consultants we have 20 years of experience across working with SME clients providing advice across sales, operations, accounting and technology. This in depth understanding gives us the unique ability to view your business holistically and advise on the best in market, scalable technology solutions that will create efficiencies and provide critical insight so you can make better, more informed business decisions.

Halkin can map out your processes, prescribe and implement cloud-based solutions across Point of Sale, e-commerce, Inventory Management, Accounting and CRM systems. For more information click here.

How the humble budget can grow your business

The simple household budget, and its counterpart, the annual corporate budget, have long been staples of financial planning. However, with the advent of ambitious tech companies relying on venture capital and angel investors to turn their disruptive and innovative ideas into pure profit, we’ve also seen a shift in thinking; maybe budgets are too safe. Maybe it’s too difficult to forecast based on market conditions in a volatile economy. Maybe you think your business is too small, or too foolproof, or too steady to need that detailed breakdown. That’s why people say “take the risk!”, and “you’ve got to spend money to make money!”, right? So, what’s the point of a budget?

Much like accurate cash-flow projections, a well-defined and regularly monitored budget is a core tool for any business. Having the ability to track spending and adjust rapidly is a crucial component of building flexibility and agility into your business – and agility is an increasingly important quality in any business in the current economy.

From an internal perspective, budgeting is about controlling costs and allocating resources to the areas of the business you’ve identified are the current focus. This might allow you to leverage your resources to expand a product offering, uplift your brand, or simply maintain a high level of service by retaining the required skill-sets in the business.
From an external perspective, managing a budget and monitoring for overspending is part of any client relationship. If you provide services to external partners, they need to trust you will deliver on time, on budget, for promised value. Without the ability to effectively manage your project spending, you risk client relationships.

Now, these are all the conceptual ways budgets matter. But there are other, more concrete (and logistical) reasons for keeping a carefully thought-out and monitored budget for your business.
Depending on your industry, you may have highly variable income throughout the year. If this is the case, a clear budget and cash-flow projection for the year will assist you to identify months where additional spending on projects or new offerings is feasible. It will also help you to allocate revenue for costs that arise in leaner months, or to plan new hires during profitable times – giving you the opportunity to further uplift your revenue by bringing additional expertise into the organisation.

Finally, a tailored, monitored budget is a great tool to review your year at tax time. Using your budget and financial results to conduct a full annual review is an important way to identify areas for improvement and expansion. Fundamentally, keeping a budget is a way to monitor and improve your business throughout the year, maximising your potential for well-managed growth alongside risk-management.

How can Halkin Business Partners help?

The team at Halkin consists of experienced CFO’s who work with clients across a variety of industries to develop customised budgets and forecasts. Now more than ever its is of utmost importance to review your budget and compare its actuals on a monthly basis. Our consultants are willing and able to assist you with planning, executing and reviewing. For more information click here.

Why Single Touch Payroll is important for Jobkeeper payments

Single Touch Payroll (STP), plays an important role in receiving Jobkeeper stimulus payments. Here’s what you need to know. Single Touch Payroll is key for businesses to gain quick and easy access to the government’s Jobkeeper wages subsidy scheme. This scheme is intended to provide payments of $1,500 per fortnight to millions of Australians via their employer. If your business has deferred implementing Single Touch Payroll, this means you’ll need to act quickly. Otherwise, you’ll need to apply via two alternate routes offered by the ATO: through a registered tax or BAS agent, or a manual form.

How does STP work?

Using STP means you will electronically report all employee payroll information to the ATO. The reporting is based on your payroll cycle, so whether you pay on a weekly, fortnightly, or monthly basis will dictate how often you report.
STP provides greater efficiency to business owners, and to the ATO. Reporting employee salaries or wages, Pay As You Go withholdings, and superannuation is streamlined. This system also allows the ATO to accurately determine eligibility for Jobkeeper payments. This increased accuracy is because STP allows the ATO to match employee data provided by businesses to data provided by superannuation companies about those same employees.
Your payroll system must be connected to the ATO. It’s crucial to ensure that employee tax and superannuation information is submitted at each payroll cycle.
Processing payroll can continue as usual; your employees will be paid as usual, and receive a payslip. On the back-end, a step in the process will push the required reporting directly to the ATO once the payroll cycle has been completed.
To confirm that employers will receive the subsidy for eligible employees, the ATO will use data from STP to administer the Jobkeeper system. Businesses will need to make sure employees remain registered through STP in order to receive the payment.
Please note that a business must be up to date with BAS, tax lodgements, and payment obligations to receive the stimulus payments without delays.

Advantages of STP

Using STP offers efficiency, accuracy, and improved transparency to the tax system. Businesses may connect to the ATO through existing software in use, like MYOB. Payroll processes may be improved, saving time and increasing accuracy.
Fundamentally, STP can simplify payroll processes for your business.
Employers save time and reduce mistakes, while reporting employee payments is no longer as onerous. Using a cloud-based software system will allow for automatic submission of payroll information to the ATO; this eliminates the need for annual PAYG summaries, freeing up crucial resources at end of year reporting periods.

CASH FLOW FORECASTING

The global pandemic has thrown the business world into a period of extreme uncertainty, leaving many business owners wondering what actions to prioritise. Business owners and individual employees are worried about financial liquidity – and with good reason. There are a few key actions you can take now that will assist in your business’s recovery in the coming months. First, and foremost: take direct action to safeguard the health of your employees and customers. Without appropriate measures in place to establish trust, business recovery will be difficult. The second key action is a behind-the-scenes exercise. Sit down and create a cash flow forecast, on a week by week basis, for at least the next six months of operations. This should include a best- and worst-case scenario. This exercise may produce confronting results, but without a realistic picture of potential outcomes, it’s not possible to plan for success. It’s highly likely that large companies are already creating these forecasts, and they are an equally useful tool for mid-size to small businesses as well, especially for smaller businesses who may not have access to cash reserves. When you sit down to create your forecast, approach it with creative thinking. As we’re in the middle of an unprecedented global situation, it stands to reason that typical accounting assumptions may not be the appropriate place to start. Think about your forecast on a personal level – what are you hearing now from your customers? What does this tell you about how they may feel and behave towards your operations in the coming months? Most importantly, what scenarios can you envision arising from these behaviours? Creating a cash flow forecast will give you a path forward that includes business continuity, and resultingly, increased security for your employees – something they are likely in need of at this moment. Think about whether you can involve the team in the planning exercise, taking their insights and experiences with customers on board to stress-test whether your scenarios are realistic. This is also an opportunity to build employee loyalty and team morale. So, now that you know what you need to do, what are your next steps? Your projections and planning should be based on some basic assumptions that apply to most businesses right now. These assumptions can be broken down into 5 areas of business operations:
  • • Sales: assume that your sales are going to fall drastically – potentially more than they have done so already. This absolute worst-case scenario should be in your plan. What does less than 50% of regular sales look like? What about even less?
  • • Receivables: your suppliers and business customers are struggling right now too. If you have outstanding items, look to begin collecting what you can now.
  • • Inventory: realistically assess what you need to meet current or future reduced demand. Make sure that you’ve adjusted your own ordering appropriately to prevent loss from date-reliant product.
  • • Production: assess whether it is sustainable to continue production throughout the pandemic, and if it isn’t, what do next steps look like? Make plans for reduced or shuttered production, and action as necessary.
  • • Available Credit: if you have access to credit, assess what the trigger is for necessitating access. Consider drawing down now.
Post-pandemic planning is the next step, especially if you’ve identified through your forecasting there is a high likelihood that your business will be able to restart quickly and easily. The question then is, how will you restart and what will that look like? This is an opportunity for innovation – a chance to improve operations, create new solutions, and decommission any practices that aren’t working well or adding value to your business. Work with your employees on this project to not only maintain productivity, but ensure that you are able to restart as an energised business with an engaged workforce committed to success. Think of this as an opportunity to demonstrate strong leadership, produce a revitalised business offering, and take your operations to the next level.

How can Halkin Business Partners help?

Speak to our financial and tax consultants today to see how Halkin Business Partners can help you with your financial needs.

TAX PLANNING

The end of the tax year will soon be upon us with 30 June just around the corner. It’s a great time to look at your expected taxable income and profit for this financial year which will allow you to get your affairs in order and plan how to take advantage before 30 June.
There are a few key things to think about as you get started on your plan:

Tax Related Deductions

Think about actions you can take now, before the tax year ends, which will benefit you when it comes time to file your return. For example, are you able to:
  • Pay fourth-quarter super contributions before 30 June, instead of waiting until 28 July
  • Pay upcoming expenses before June 30 – items like rent, loan interest, business insurance, car insurance, memberships and subscriptions
  • Make a voluntary contribution to your superannuation fund
  • Make a donation to a registered charity
  • Address bad debts – look through aged receivables to assess if you have any invoices to be written off
  • Instant asset write-off can be beneficial. Between 12 March 2020 and 30 June 2020, the instant asset write-off specifics are:
    • The threshold amount for each asset is $150,000 (up from $30,000)
    • Expanded eligibility to cover businesses with an aggregated turnover of less than $500 million (up from $50 million)
    • You may also want to consider buying equipment that you need before 30 June — EOFY sales offer an extra opportunity for savings.
  • Working from Home deductions.
    • The Australian Taxation Office (‘ATO’) has announced a temporary, simplified method for individual taxpayers to claim deductions for additional running expenses incurred (e.g., additional heating, cooling and lighting costs), as a result of working from home due to the COVID-19 pandemic. Individuals may claim a deduction for all running expenses incurred during 1 March 2020 to 30 June 2020, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home.
  • Start-up expenses may also be deducted for activities like procuring accounting or legal advice on business structure, as well as fees for establishment of the business structure (e.g. an ASIC company registration fee).

COVID-19 Impacts

If you’ve been impacted by the ongoing COVID-19 pandemic, you may be eligible for further assistance, such as:
  • Stimulus packages announced by the Australian Government (e.g. Jobkeeper, Cashbooster, and other grants.)
  • The ATO may also offer assistance by:
    • Extending deadlines for debt payments or tax form lodgement
    • Remitting penalties or interest charged during the time you were impacted.
    • Expediting refunds owed
    • Setting up a tailored payment plan for your individual circumstances, including an interest-free period

Trust Distribution Actions

Generally, trustees must make valid distribution resolutions prior to 30 June (or earlier if specified as such in the trust deed) to appoint trust income to eligible beneficiaries. It’s important to note that if trustees fail to make valid appointment resolutions before 30 June, the trustee can be assessed at the top marginal tax rate of 47% on all the Trust’s taxable income.

Other EOFY Actions

  • Employee payment summaries must be sent to all employees by 14 July
  • Taxable Payments report should be prepared for the ATO, if your business is in construction and building.

Review Insurances

You may need to review and update your level of cover if your circumstances have changed. Make sure you carefully review product disclosure statements (PDS) for your insurance policies to ensure you’re covered appropriately. To secure the best deal from your insurance company, you may wish to engage an insurance broker.

Review Your Business Structure

If your business has expanded or is experiencing growth, it may be an appropriate time to change your business structure. If you choose to do this, be aware that compliance and taxation regulations will change, along with your business structure. Financial and tax advice is important during this process.

Review Your Finances

Check in with your accountant to review your finances, including whether you met your targets for this financial year. Assess where you can improve next year, and make sure you create a cash flow forecast which will help manage any potential shortfalls while ensuring you can pay staff and suppliers.

How can Halkin Business Partners help?

Speak to our tax specialists today to see how Halkin Business Partners can help you with your financial needs.