What's Happening at DSR in July?

In this issue:

• Benchmarking - How do you rate compared to other businesses in your industry?
• Plan or Perish. Staying Cautious in today's economy
• DSR Secure Client Sites - Available Now
• Banklink - A solution for the new tax year
• In the Spotlight - Trusts
• Tax Tips - Rental Properties
• Important Dates
• Client Testimonial

 

Welcome Note Welcome to What's Happening at DSR in July. Each month we aim to bring you interesting and tax effective ideas for saving you money, growing your business and ultimately building a successful retirement plan. Remember, whatever your financial and accounting needs we can work with you to find a solution.

 

Benchmarking - How do you rate against others in your industry? Have you ever wondered how your business performs compared to your competitors? Small business benchmarks are designed to help businesses by tracking your performance against other businesses in their industry.  By comparing your business to an industry benchmark you can assess how your business is performing. In turn this provides you with the knowledge to implement Key Performance Indicators (KPI's) to measure your ongoing business and make informed decisions about how to move forward and grow. Survival in today's business climate requires you to spend more time working on your business rather than in the business. *    Are you spending enough on advertising?  *    Are you paying too much rent?  *    Are your staff costs too high?  *    What is the average bottom line of your competitors?   We can show you by providing you with accurate, timely and informative benchmarking reports enabling you to: *    See how your business compares against your competitors  *    Understand how the rest of your industry works  *    Analyse the key performance indicators of your industry   Armed with this information, we'll work with you to develop action strategies to improve your bottom line.  Talk to us today and take charge of your business.

 

Planning Ahead Stay cautious on the economy Australia survived the global economic crises relatively unscathed but be wary, it might not be over yet as our economy is still susceptible to international conditions. We’re predicted to grow at a comparably healthy 3.25% but that assumes that conditions remain reasonably consistent. In Australia, the economy is uneven. We’re starting to see a slow-down in some sectors as the impact of the interest rate hikes (there was a substantial fall in new and used dwelling investment last quarter) and the end of the economic stimulus packages are felt (business investment was down 6% last quarter). Production within our economy is also slowing with a 0.9% fall in the March quarter. The strength of our economy continues to be driven by the mining sector and continued resource demand from China. Plus, with an election looming, everything slows down as the economy shifts into a ‘wait and see’ mode. So, remain cautious and ensure that you plan for the next 12 months and keep a strong eye on performance.

 

Plan or Perish...? With a new financial year just under way you have the opportunity to financially map your business. If you get this financial mapping right, you reduce your risk and remove some of the surprises that can occur along the way. Start by putting together an operating budget for the business. This should not be last years’ figures adjusted by some percentage. Look at each line item and assess it critically. Start with your revenue and work up a reliable estimate of your income for the coming year. You should start to think about what marketing or other activities will be required to produce this income. Once you are comfortable with the income estimates have a look at your expenses and again work up your expenditure budget. Be tough on your costs. Can you manage them more effectively? Also, allow for increases that are likely to flow through into the current year or any additional costs you will incur due to growth. Working through this exercise should allow you to produce your operating budget and identify your likely profit for the coming year. Once you have this figure then it might be an idea to do a couple of alternative estimates so that you understand the impact of changes to your assumptions. Once you have your forecast profit position, reduce that to a cash flow forecast. You need to know both your profit and cash position. Arriving at your cash position is about understanding the timing differences: How long will it take for your customers to pay you? How much stock will you need to hold? And, what are the payment terms required by your suppliers? With your cash flow, don’t forget to allow for things like tax payments, loan repayments, dividends and any capital purchases that are planned. These can be ‘big ticket’ items and if you don’t allow for them then you will get caught out. As part of your cash flow forecast identify your capital expenditure requirements. Don’t deal with these on a one-off basis as they arise, plan them in advance. We can help you, call us today and we’ll get your financial road map underway.

 

Secure Client Sites DSR Secure Client Sites.....available now for business clients.  As part of our ongoing service to our clients, secure client sites will be setup upon completion of your 2010 Financials and Tax Work. Managed through our website, your secure area can provide you with exclusive access to reports and documents that we hold in our files that you may wish to access and you can print, download or view at your convenience. This service is highly mobile and you can log in whilst meeting with your bank manager for direct access to information such as your financial statements and tax returns. No more worry about finding your information in a pile of papers at home, this is a one stop library for your tax information. Your secure site is also an excellent way to transfer your tax information files to us.   Wondering how to get your MYOB or other data file to us because it is 'too big' to email, through your Secure Site you can upload files to send to us (up to 200MB).  Sent by you and received by us in a secure environment.  If you want to know more talk to your accountant today.

 

Banklink - A solution for the new tax year As we enter into a new tax year it is a good time to evaluate the last 12 months and work out for the time ahead what changes we can make whilst saving us time and money. The one thing that comes to mind for most business owners is how can they make preparing their accounts simpler and time efficient? Banklink could be your solution. The Banklink System allows us to complete your accounts efficiently and accurately, whilst saving you precious time and money. Your financial institution can simply provide our office with your bank statement data electronically and securely encrypted. From here we can process all your transactions with minimal input from you. It is that SIMPLE. No more worry over missing bank statements or spending hours at your computer doing your monthly book work. Banklink frees up your time so you can focus on important matters like running your business or doing the things you like to do. The number of  clients now using Banklink is increasingly rapidly and they are discovering that the hours they spent preparing their accounts each month, has now turned into just minutes. To view a short demonstration on the benefits of Banklink - Banklink Service Presentation So do yourself a favour and make sure the time you have left at the end of the week isn't wasted on writing up your books or data entry.  Call us today to discuss how Banklink will work for you.

 

In the Spotlight... Mine or yours? Taking cash out of and into your business The Tax Office is very interested in the way business owner’s access money from their businesses. Trusts are currently in the spotlight. A common approach utilised by many businesses with a discretionary trust is to distribute income to a company, pay tax at the corporate tax rate but leave the distribution in the trust for use by the business owners. In effect, the distribution only occurs on paper. Owners then use the distribution as working capital to fund growth, or in some cases, to fund personal assets. The Tax Office intends to tax any of these distributions that remain within the trust (called unpaid present entitlements) under Division 7A. This change essentially requires you to: Ensure that distributions to corporate beneficiaries are paid in full before the company’s lodgement day for the year in which the income is appointed; or Put a complying loan agreement in place between the company and trust before the company’s lodgement day for the year in which the income is appointed; or Look at restructuring to achieve the best result for you and your business. Talk to us today to discuss what is the best solution for your situation.

Tax Tips If you have an investment property, it can be depreciated. Think of it as ‘wear & tear’. Houses, units and commercial properties all qualify. Even older properties can be depreciated. By using an ATO recognised Tax Depreciation Schedule, as a property investor, you can claim thousands of legitimate tax dollars back on your investments, conserving your cash flow and safeguarding your future. Speak with us about organising a Tax Depreciation Schedule for your rental property.

 

Important Dates 1 July 2010 -     New Income Tax thresholds apply 14 July 2010 (on or before) -    PAYG Payment Summaries provided to all your staff 28 July 2010 -    Quarterly superannuation guarantee payments due (1 April - 30 June) if not already paid prior 30 June 14 August 2010 -    Annual PAYG Payment Summary lodged with the ATO. Penalties apply for late lodgement.

 

Client Testimonial The service and support offered by DSR alleviates a load of potential stress. Doing what they do best, and doing it so well, leaves me free to focus on what I want to be doing. DSR take care of a vital aspect of the business and I know I can count on a professional result every time. Chris Bratby Detune Pty Ltd

   

About Davis Stewart Rowland Davis Stewart Rowland is a three partner firm located at The Entrance on the NSW Central Coast. With over 50 years experience we have an in-depth knowledge of what the business owner and investor needs to embark and stay on the path of growth and wealth creation. We have a unique appreciation of the issues business owners and investors face, which makes us an integral part of our client's advisory team. Our comprehensive approach includes: Benchmarks Tax minimisation plans Cash flow forecasting Business information processing Management & strategic advice Whatever your needs we can help find a solution.  Contact us today