With an increasing number of people being declared bankrupt (either voluntarily or by a creditor obtaining a court order), it’s important to note that despite being declared bankrupt, certain debts are not extinguished and must be paid during and after your bankruptcy period including;
- Court imposed penalties and fines.
- Unliquidated damages you are liable to pay due to accidents (e.g a car accident).
- Commonwealth student assistance debts (i.e HELP debts to the ATO), including supplement loans.
- Debts you incur after your bankruptcy commences, and
- Maintenance, including child support (but only after your bankruptcy ends).
With respect to ATO amounts that you owe:
- Tax debts for the period before the date of bankruptcy are extinguished when you become bankrupt.
- If the ATO has not issued and served a notice of assessment at the time of bankruptcy but there is a tax liability that has arisen before the time of bankruptcy, it is a contingent liability and is extinguished when you become bankrupt.
- ATO debts arising from tax periods after your bankruptcy has commenced will not be extinguished.
Also be mindful that the ATO may keep any tax refund you are due and offset it against any debt you owe them or the Commonwealth (e.g. child support).
Are you having financial difficulty?
Not feeling financially secure?
Don’t leave it until it’s too late!
Most people in today’s society are inundated with commitments from all areas of their lives and feel overwhelmed and stressed.
Generally, we want to make more money so that we can achieve the lifestyle of our choice – but is making more money really the answer?
Co-Director Michael Osborne talks about how our financially well organised program can help you.
Secretly, humans are conditioned to love a good fail. While stories of triumph are inspiring, epic fails are generally more relatable, and certainly more entertaining…
However, we generally forget the key reason we should celebrate failure, which is that failure provides us indispensable learning opportunities. And, if we can shift our perspective to see our stuff ups as valuable progress, failure is lined with gold.
Here are eight ways to help turn fails into future wins:
A recent Australian Securities and Investment Commission (ASIC) report, found that 1 in 6 Aussies are struggling under a mountain of credit card debt, with outstanding balances now totalling $45 million.
With the start of the new financial year, now could be a good time to get started on clearing your debt. Help keep yourself on track with these 20 everyday possible ways to save.
- Get your partner on board – If you have a partner then making sure that you’re both communicating and agreeing about your financial priorities is important.
- Reduce your vices – Do you smoke, Drink? Have an addiction to coffee? Whatever your vice, make a conscious effort to cut back. Healthy and wealthy – a double benefit.
- Learn how to cope with stress without spending – Buying things can be an easy way to relieve stress, but it’s not always good for your wallet or your mental state. Find a healthy and sustainable way to relieve stress and both your mind and your wallet will thank you.
- Stick to one shop per week – Doing one large shop rather than several small ones cuts down on impulse buys, takeaway and wastage. Plan ahead and write a weekly meal menu so you can get all ingredients you need at once.
- Use your own coffee machine – According to a businesses.com.au article, the cost per cup from an office coffee machine lies between $0.40 and $0.60. If you compare this to the average price of a cup of café brewed coffee in Australia, which is currently between $5-6 per cup, there are definitely savings to be had by brewing coffee at home.
- Taking a cut lunch to work – Packing your own lunch or snacks a few times a week could save you a whole lot of cash. You will also be more inclined to make healthier choices when you prepare your own lunch and could cut back on your calorie intake.
- Make school lunches at home – If you have children, making school lunches at home rather than using the tuckshop could save hundreds of dollars and give you more control over what your child is eating.
- Pay your bills on time – avoid late fees and grab a discount – Paying your bills on time is a great way to keep your credit record clean. If you struggle with your bills, consider setting up a regular repayment amount to even out the cashflow. Some energy providers will also offer a discount to customers who pay on time.
- Check how much interest you are paying on your credit card – If you owe money on your credit card, check what interest rate you are paying. Credit card interest rates can vary from less than 10% to more than 22%.
- Phone your bank – Even a small discount could save thousands over the life of your loan.
- Shop around for your car insurance – The cost of a comprehensive insurance policy can vary by over one thousand dollars per annum.
- Review your health insurance – Health insurance can be another great place to make savings.
- Review your personal insurance – including your life, total and permanent disability, trauma and income protection insurance. Some of them can be paid via your superannuation fund.
- Update your telecommunications contracts – There are hundreds of different phone plans. Review yours periodically to ensure that it’s cost effective.
- Review your electricity and gas options – Being on the wrong plan could be costing you. Also, consider making small changes such as washing your laundry in cold water.
- Car pool when you can – If you are going to the same destination, get your friends or family together and car pool.
- Track down your lost super – One in three working Australians have lost track of some of their superannuation, to the tune of around $18 billion. Track down your lost super to potentially increase your retirement nest egg by thousands of dollars.
- Cancel memberships you don’t use – If you’ve got a gym membership, sports club membership, or something similar that you’re paying for but not using, look into cancelling it ASAP. You could be throwing money away.
- Check your family is registered for the Medicare Safety Net – If eligible, ensure that you and your partner are registered as a family for the Medicare safety net, rather than as two individuals. This will lower your Medicare safety net threshold.
- Salary sacrificing – In some work places you can salary sacrifice goods and services.
If you are struggling to make ends meet talk to our professional team today on (03) 9744 7144 about how we can help you with your financial situation.
As we approach the end of another financial year we wanted to share with you some end of year tax opportunities, which could assist you in minimising your tax liability.
We have highlighted some areas to focus on however we encourage you to schedule a meeting as soon as possible to assess your options and the steps you need to take well before the 30th June, 2019.
You can read more about these opportunities by clicking on the link below;
Tax Planning Guide 2019
To assist you we have put together a list of strategies to consider and note:
- To maximise benefits for the 2018-2019 year, we suggest that you prepare a preliminary estimate of your taxable income for the year ending June 30, 2019 to determine if you have a tax ‘problem’.
A review of your latest financials (if current figures are not available, then last year’s figures will suffice) to determine the need for tax planning tactics such as pre-paying some expenses before June 30 for deferring some revenue until after 1st July.
*Trustee Resolutions (Where Applicable)
Trustees of Discretionary Trusts must resolve to distribute the current year’s Income via a signed Trustee Resolution. If no resolution is in place to determine who is to be assessed on the trust income, then the trustee will be assessed at the highest marginal rate of 47%. Distributions will need to be determined based on an assessment of expected final income of the trust and its beneficiaries.
Where a trust is making a distribution to a new beneficiary, we will need to lodge a ‘Tax File Number Information Form’ with the ATO before 28 July. If you elect to prepare the Trust Resolution yourself, please provide us with a copy of the Resolution by 30th June otherwise the Trust may be taxed at 47%.
We urge you to contact us to discuss any strategy you are planning to implement before June 30, 2019.
Sadly, even profitable businesses can go broke if they do not effectively manage their cashflow during tough times – and it’s affecting many small businesses right now.
Not surprisingly then, cashflow is one of the biggest challenges currently facing business owners, with some 92% reporting that they frequently experience stress due to cashflow concerns. If you’re like many of the business owners we’ve talked to recently, you may have had to reduce the scope of your operations, source additional funding, take a pay cut, or even make long-standing staff redundant.
However, it’s not all doom and gloom. The good news is that while cashflow may be the first to take a hit when times are tough, the actual key to surviving is to implement strategic cashflow management policies and systems;
Here’s our top 12 strategies for you to consider;
- Set goal-oriented budgets and proactively manage them. Profit and loss budgets are still very important but right now your focus should be on developing your cashflow budget, which will allow you to plan for your cash requirements and shortfalls in advance.
- Focus on increasing sales and income – a feat that, even during tough times, is possible. Be proactive, provide real value to your customers and identify creative ways to increase your retention rate, generate leads, and increase conversion.
- Avoid easy tactics like discounting, which can be dangerous to business profitability – even a 10% discount can result in your business having to increase sales by 100% to achieve the same gross profit pre-discount.
- Set your terms of trade at the outset, terms should include when you expect to be paid and your ability to add interest.
- Stick to your payment terms. Don’t let your customers pay you late.
- Use a contracted debt collector on slow payers.
- Set aside a percentage of all cash you receive into a separate bank account to cover your tax payments.
- Manage your work in progress by billing regularly, reducing the number of jobs you have on at one time.
- Only hold enough stock to cover the time it takes between the sale of an item and when you get delivery of the same item.
- Measure how long in days on average it is taking to sell each stock item and reduce obsolete stock. You’re better off to convert that slow moving or obsolete stock back into cash.
- Finance the cost of fixed asset purchases using over terms similar to how long the asset will last before it needs replacing.
- Set a budget for income and expenses and stick to it. If a new cost is not in your budget then find a saving somewhere else.
It’s a firm belief that when anyone starts a new role they come to work with the intention of doing a great job. They’re keen to make an impression, to make a difference, and to enjoy themselves. After all life is too short, right? If the average person spends 40,000 hours of their life working, they’d better do something they like.
Nobody likes to fire someone but, more importantly, nobody likes to be fired.
So, why do many business owners loathe the fact that they have to ‘manage performance’ or ‘open the door of opportunities’ or ‘free up the careers’ of some team members?
It’s quite simple; somewhere between induction and the time when performance starts to slip, the enthusiasm to put in a great day’s work is gone. The fire in the belly goes out. If we can discover why this happened and prevent it from happening again, then we’ll spend much less time managing poor performance.
As a leader, we must be committed to acting above the line (by taking ownership, accountability and responsibility for the poor performance).
Now, answer these questions in relation to your interactions with this poor performer:
- Do you demonstrate above the line behaviour and a positive, can-do attitude 100% of the time?
- Does your business have a concise Core Purpose statement (why your business exists for your clients) that your team member believes in and can see how they are contributing to?
- Have you clearly articulated your vision and goals for the business?
- Have you given the team member regular opportunities to align their personal and career goals with your business goals? We must ensure their personal purpose in life aligns with your business’s purpose.
- Have you set clear expectations as to the five most important KPI’s or targets that the team member needs to achieve? It is important to define a great day’s work for them.
- Does the team member understand and agree with these targets you’ve set for them?
- Have you created a process to ensure that the team member can see how they’re tracking to reach these targets?
- Most importantly, when the performance is lacking do you talk about it with the team member? Or, do you whinge behind their back to everyone else and generally live in denial (below the line)?
Of course there will be times when external influences affect performance – this is when people need your support. Or, perhaps you made a poor recruitment decision – if you follow the 8 steps you will come to the right answer together with the team member.
Remember – a poor leader can take a great team and destroy it, causing the best team members to leave and the remainder to become disengaged or, worse, toxic.
Running your own building/construction business can be complicated. Many builders are still very much ‘on the tools’ while still running the day to day operations, which can lead to long nights and early mornings. There are several simple actions you can take to ensure success, growth and customer satisfaction. Here are 7 fundamentals that you should consider when running your business;
- Firstly, ensure that you have a documented list of goals, plans and targets that you can clearly measure against your results.
- Make sure you have an accurate record keeping system recording your numbers, this way you can make informed and educated decisions about your business. Poor record keeping is one of the biggest causes of business failure.
- Ensure that you are getting paid on time. Manage your credit effectively by creating policies and procedures covering terms and conditions for providing goods and/or services, invoicing and payments and debt recovery.
- Create a cash flow forecast. Your cash flow forecast is one of the most important management tools in your business. It shows the expected flow of cash in and out of your business. It highlights potential issues, giving you the time to find ways to either prevent problems or minimise their impact.
- Are you seeking new business? Sometimes it’s easy to get trapped servicing existing customers. Develop a clear marketing strategy to grow your business even further.
- Finding your Niche. If there is something that you specialise in make sure to let your audience know. Promoting your business as a specialist in one specific Niche will ensure that you get the phone call when someone needs that service.
- Are you hitting your margin goals? It can be difficult to hit profit goals when times are tough, but if you are constantly lowering your prices at the expense of remaining profitable, you will not be in business much longer.
General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.]