Carbon Staff Books

Should your staff know your books?

There are many schools of thought on how open you should be with staff around the performance and financial position of your company. Many small business owners find themselves stumped; How much information is useful and motivating vs. stress-inducing overload? Where does transparency end and overshare begin?

On one hand, staff need to know the business is viable and solvent to assure them of job security. It’s an important factor for their mental wellbeing, enabling them to plan their personal finances, mortgage payments, school fees, etc

On the other hand, managing staff perceptions and the resulting expectations is a tricky business. If staff see the business is performing well it might lead them to believe they are entitled to increased remuneration which ultimately impacts business profitability. If staff see the business is underperforming they might believe they need to start looking at other careers opportunities.

We understand the idea of financial transparency gives some Business Owners butterflies, and while we’re not proposing the wholesale distribution of sensitive financial information, there is some data you can share with staff.

What data you ask? The big picture.

Here at Carbon Group we have quarterly #carbonite networking events during which each division Partner tells staff about their results for the quarter; how it compares with last quarter; and what their commitment is for future growth. Why is this beneficial? It keeps staff on the same page, and encourages within them a sense of ownership and purpose.

As you move into the more sensitive financials of the business, the key is to be consistent and establish protocols early for who the information is communicated to.

We believe a good strategy for senior managers is to share only those financials relevant to their area of responsibility. All communication at this level should have a focus on areas they can control (gross profit, income, divisional cost of sales, divisional wages ect). A good incentive model for these managers is to tie performance related bonuses to their divisional gross profit numbers. This creates a win/win situation for both the company and the manager in question.

One crucial element, no matter how much you choose to share, is consistency in communication; consistency in frequency, in transparency and in detail. While senior managers might work better and smarter when they see the numbers, unless you are an ASX listed company, it isn’t necessary to share them with every member of staff. Not only can it be a distraction, it can be disadvantageous if they were to fall into the wrong hands.

Feeling overwhelmed? Carbon Bookkeeping manages the books for hundreds of businesses and can help you take control of your business finances. Give us a call 08 6444 6617.

Carbon Group Aquisition

Carbon Group New Business adVenture

We are pleased to announce Carbon Group is taking another big step forward today with the launch of a new business under our Carbon Partner Empowerment Model. Under this model, Gail Rogerson will be running her own Bookkeeping Business powered by Carbon Groups infrastructure.

Gail is not new to Carbon Group having sold her business to Co-Founders Jamie Davison and Nathan Hood in 2015 so she could explore different career avenues. Now two years on and with overwhelmingly positive reports from the clients she left behind about the Carbon Group approach, Gail has made the bold decision to launch a brand-new business under the Carbon Partner Empowerment Model (CPEM). Knowing she can run her new business within Carbon Groups existing infrastructure and leverage off Carbon Groups award winning brand was all the encouragement Gail needed to take on this entrepreneurial venture.

Jamie Davison is excited by the new business ‘Welcoming Gail back to the Carbon Group family and being in business with her as she launches her new business is exciting. A fantastic step forward for both Gail and Carbon Group’.

After three fantastic years of unparalleled success, Carbon Group has decided to take progressive steps in assertively expanding their business operations through their CPEM. In coming months, you will see quite a few exciting advancements.

The CPEM is a new initiative developed by Carbon Group, and targets the next generation of accountants and bookkeepers ready to advance their career prospects by building a new business. Launching under the model enables the new businesses to leverage off Carbon Groups reputation, brand and tech-savvy practises. Differentiated from other start-up’s, unrestricted access to fellow Carbon Group Divisions gives them a more holistic advisory service offering for clients.

If you are looking to take control of your future and start your own business, you should contact us to find out more about how Carbon Group can help through our CPEM. Simply email us jamie@carbongroup.com.au

Carbon Fair Work Amendment

How changes to the Fair Work Amendment Act could effect your business

Guest Blog

You may have heard that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 was recently passed. Our friend Andrew Crean, Special Counsel at MILLS OAKLEY has put together this quick outline as to how the changes could affect your business.

One of the impacts of the legislation is that it changes the risk profile for franchisors with respect to workplace relations matters; specifically payment entitlements of employees.

In summary, a franchisor will now be liable for a franchisee’s breach of payment obligations (e.g. paying below the applicable award rate) under the Fair Work Act if:

  • the franchisor has a significant degree of influence or control over the franchisee entity’s affairs;
  • the breach occurs in the franchisee’s capacity as a franchisee entity; and
  • the franchisor or one of its officers knew or could reasonably be expected to have known the breach would occur.

A defense to liability exists when a franchisor entity can show that, at the time of the breach, they had taken reasonable preventative measures.   

The risk profile also extends to holding companies, who can be held liable for the breach’s of their franchisor subsidiary if the holding company or an officer of it knew or could reasonably be expected to have known that the contravention would occur.

In light of these changes, it is being recommended that franchisors:

  • review their franchising arrangements, and in particular the degree of influence they have over their franchisees’ arrangements;
  • consider their level of involvement in the affairs of their franchisees, and whether this means that they would be considered a ‘responsible franchisor entity’, for the purposes of the Act; and
  • consider what reasonable steps are appropriate within the franchising network to ensure compliance with pay related obligations, which in turn may impact on existing franchise arrangements.

If you think this Act could affect your business, would like some clarification or just want to have a chat about how your business could be performing better get in touch with us today.

 

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Four ways automated accounts receivables improve your cash flow

Ask any small business owner what keeps them up at night, and many of them will answer: the stress of cash flow problems. Recent research from Xero found while cash flow fluctuates over the year, two things remain constant. A predictable swell in December as businesses register their Christmas sales and a deep deep dive in January, where just 48% of Xero small businesses report positive cash flow.

The New Year brings holiday closures, reduced trading hours and more outstanding invoices languishing in idle inboxes. For the small business owner, it’s a stressful time, especially with fewer hands on deck to chase overdue debtors.

Small Business Insights

Enter automation.

According to Jamie Davison, Partner at Carbon Group

most business owners will neglect to follow up their accounts receivable on a regular basis. Either they get busy running their business, have other things on their mind or they choose to avoid the uncomfortable conversation. By automating this process through technology, you avoid these issues because you create predictable schedules and routines which in turn brings cash into the business.

Here are four ways automating your accounts receivables can improve cash flow:

1. Easy Reach

If your business is issuing a high volume of invoices each month, it’s almost impossible to manually contact every overdue debtor with reminders to pay. A time-poor business might prioritise chasing their high-value customers, leaving hundreds of small-value debtors to slip under the radar. With many debtors requiring multiple reminders, the burden of chasing quickly becomes tedious.

With automation software like ezyCollect, all open invoices in your accounting system, regardless of value, enter a schedule of reminders when they become overdue. Allowing you to contact every overdue debtor with reminders, hands-free.

2. Multi-Channel Approach

While email may be your preference to communicate with debtors, it is easy for your reminders to get lost in a bursting accounts payable inbox, especially if you’re one of many demanding payment. A good approach is to mix up your communications with a workflow that includes multiple channels. Doing so significantly increases your chances of reaching your debtors.

Did you know: SMS messages have a close to 100 percent open rate!

Multi-Channel Approach

3. Consolidation

It’s easy for your customer to feel bombarded if they receive reminders for every overdue invoice individually and it becomes time consuming for you to chase and accept each payments. Automation software like ezyCollect groups all outstanding invoices into a single reminder, so your debtor is prompted to pay the total overdue amount.

Consolidation

4. Escalation

Ageing invoices often become bad debt write-offs when business owners stall in the collections process. Software like ezyCollect outsources stubborn payers to a third-party agency who can keep the ball rolling. Integrated with debt collectors, the software gives you single click access to agencies who can go about collecting the debt on your behalf.

So before the stress of fluctuating cash flow becomes too much to bear maybe you should consider automating your accounts receivables. It could be just the tap that turns the trickle into a tide!

ezyCollect and Carbon Group are joining forces in a fantastic (and free!) webinar to empower you with the tools to streamline, schedule and personalise your collection activities in just minutes. As an added bonus, if you save your spot online today you will receive a free copy of ‘5 proven reminder templates’ to boost your business’ cashflow. Register Here.

When-Should-I-Prepare-My-Business-Tax-Return-Carbon-Group-Accounting-Perth-Xero

When Should I Prepare My Business Tax Return?

Many of us have our tax returns prepared through a registered tax agent. As a result, the due date for your return to be lodged can often be pushed back well into the following financial year. Agents get concessions that allow you to lodge your returns from March through to June of the following year. Consequently, a lot of business owners have to wait, and just like it was when you were at school, you try to get everything done at the due date in a mad panic.

There are however benefits to avoiding this approach, and attempting to have your return done in the first half of the year.

Cashflow Planning

Preparing your tax return in the first half of the year doesn’t mean you have to lodge it in the first half of the year. Seeing your accountant early may bring you some bad news (the dreaded tax bill), but at least you know where you stand, and you can start putting money aside for when it is lodged later in the year. The flip side of this is, maybe you are entitled to a refund that you weren’t prepared for, so now you can lodge your return early, and get access to those funds within a few weeks.

Possibly reducing your instalments

When you are prepaying tax liabilities, often you are basing this on prior year tax results. If you are entitled to a tax refund based on overpaying, these instalments can be reduced, meaning more cashflow for you in your business over the course of the next year. Alternatively, if your instalments are going to increase as a result of your increased tax liability, holding off lodging until later in the year will keep your instalments low in the short term, and understanding what they will move to will allow you time to put money aside, to stay in line with your future tax liabilities.

If you want to know more about the benefits of preparing your tax return early, contact the team at Carbon Accounting. Arrange a complimentary 30 minute consultation by calling (08) 9446 8588.

Carbon Group Networking event August held at Voyeur Bar Subiaco

Carbon’s Quarterly Networking Event – August

Last week, Carbon held our quarterly networking event for Perth’s business community, and it was another full house of industry leaders. Held at Voyeur Bar in Subiaco, we were joined by guest speakers Nic Hayes, Media Stable; Andrew Crean, Mills Oakley; and Kohen Grogan, Yappy Group. Knowledge was shared, drinks were flowing, and new contacts were made.

Nic Hayes was first up, and he shared his knowledge in why it’s important for businesses and individuals to have a media presence. In Nic’s twenty years working in media it’s not what he has done it’s what hasn’t he done. From media intelligence, public relations, broadcaster, journalist and he now works in an industry where he represents the talent and experts that media uses. Nic described the fact that the ability to get in front of media is not difficult, but before you begin approaching the media, individuals need to ask why they are engaging media. Are you in it for the right reasons? Do you know what you want to achieve? Once that is sorted, it’s time to start talking. As Nic explained, once you have established a great relationship with the media, you become their first point of call when they need to engage an industry expert, which provides fantastic value in exposing your business as a leader in the industry.

Andrew Crean was up next, and he shared tips, traps and methods of maximising value when businesses engage professional advisors. Andrew is a trusted advisor to listed and unlisted clients (both international and domestic) across a range of sectors, including consumer services, energy and infrastructure, mining services, life sciences and biotechnology. He has an extensive track record of practical, pro-active and solutions-based advice, and managing and leading teams to successfully deliver corporate transactions. Andrew advised us on the importance of doing your research before seeking the help of a professional. Check their reputation, and ensure they will be fully invested in your business relationship. Once engaged, set expectations from the beginning and agree on the scope of work required. An honest approach with clear communication is the best method for success.

Our final speaker was Kohen Grogan, Managing Director/Founder of Yappy Group. Aside from squeezing in as many puns as he could, Kohen reminded us of the importance social media plays in the marketing strategy for any business. 85% of CMOs cannot quantitatively prove the impact of their social media activity. CMOs, meet Yappy. While everyone else is figuring out how to get you the most likes, the team at Yappy focus on business metrics. Businesses can relax while Yappy drive growth and engagement using a special blend of technology and social awesomeness. Kohen described the extent of how social media platforms such as Facebook have developed over the last few years, such as the ability to target extremely specific audiences to maximise ROI. Kohen advised us that websites must ensure they have the Facebook pixel added to their site to track conversions coming from Facebook advertising. More data = better insights to how your consumers are behaving on your website = more precise and effective advertising.

A big thank you to everyone who attended. Ticket sales went straight to Oxfam, as Carbon have a team participating in the 100KM Traiwalker event in September. If you couldn’t attend and wish to make a donation instead, visit their fundraising page. Our next networking event will be held 28th November, so save the date and we’ll see you there! Details will be posted closer to the date on our event page.

How-to-choose-the-right-bookkeeping-software-for-your-business-Carbon-Bookkeeping-Group-Perth

Choosing The Right Bookkeeping Software For Your Business

Using cloud-based accounting software can save you heaps of time when it comes to doing your day-to-day bookkeeping, and quarterly or end of financial year lodgements. But with so many online accounting software options on the market, how do you know which one to choose?

We’ve put together a few points to help you pick one that suits your business.

Desktop & Mobile Options For Bookkeeping Software

How is your internet speed? Is it stable or intermittent? Check your internet speed via the link. This test will tell you your upload and download speeds. Call your internet service provider and ask about your “up time” for stability. Hybrid softwares such as MYOB AR Live are great if you experience intermittent internet. This software can be shared over the internet and doubles as a desktop software.

Accessing Your Accocunts On-The-Go – Are you a trades person or just someone that wants to use all daytime to get your work done? Taking your bookkeeping software mobile is a great way to keep on top of things. Use your phone or iPad to keep up with your book work in the field, raise invoices and get paid on the spot. Fully cloud solutions like Xero and QBO are great for mobility

Features Needed in Bookkeeping Software

Write a list of tasks that you want your software to do for you, and ensure the accounting software is capable of doing them. Some examples:

  • Sales orders
  • Purchase orders
  • Payroll
  • Stock management
  • Single click supplier payments
  • Send customer statements

What reports do you want once you have processed your sales invoices and expenses? Some examples:

  • Details per job / project
  • Report by Profit centre or department Gains and Losses on multicurrency transactions
  • Cashflow
  • Budget vs actuals

Industry-Specific Accounting Software

If you’re engaging a bookkeeping firm, look for someone who uses a range of accounting software. They will look at the features you have listed and the industry that you are in. A bookkeeping/software professional is most likely going to use their experience to add some things to your wish list. They can also suggest names of softwares that you would normally integrate with as you grow and then map back to the correct starting bookkeeping software. For example, if you’re in the hospitality industry, there are some fantastic online applications that can integrate with certain accounting programs, such as online point of sale solution Kounta, or online rostering TSheets.

What Accounting Software Have Your Staff Used Previously?

What software have your staff used previously? If they’ve got experience in one program, they’ll have a head start when you implement the system into the business. However, if it’s a new system, you can train your staff relatively quickly and easily. WiseClick Training have some great day courses in Xero, MYOB and QuickBooks.

A little bit of advice goes a long way when starting up, and it’s important you don’t choose a software on price alone. There are some shockers out there that are really cheap but will cost you more in lost time and productivity very quickly (due to lack of appropriate features). Carbon have specialist bookkeepers that can help advise you on the right choices to make. We see the clients that we setup initially go from strength to strength when using accounting and bookkeeping software that is a great match for their business. Contact our team if you’d like some assistance, on 1300 454 174.

Should i have a fixed or variable home loan? Carbon Group Perth

Should I Fix My Home Loan?

To fix or not to fix? That is the question… or is there another way?

Mortgage. Its origins are Latin and literally mean a “death pledge”. It can certainly feel like that sometimes. How can you beat the market and stay ahead of the game?

The Reserve Bank of Australia has maintained its current stance by keeping the official cash rate on hold at 1.50% for eleven months now and there is an expectation that this will continue for the rest of this year and well into the next one. Despite this though, variable and fixed business and home loan rates have been on the move throughout 2016 and 2017, and they’re on the rise.

With the average standard variable home loan rate nationally at 4.47%, savvy borrowers can currently get fixed rates much lower than that (saving as much as half to three quarters of a percent). That’s a huge saving in what is often the biggest budget buster. With most economists agreeing that when the RBA do eventually make a change to the official cash rate it will be an increase, not a further reduction, is now the time to look at locking in a rate?

Fixed vs Variable Home Loan Rates?

Let’s look at the pros and cons.

Advantages of a fixed rate loan:

The main advantage is cash flow certainty, knowing exactly what your loan repayment will be over the fixed term period. When you are a new home owner, or are perhaps setting up a business, or have some other significant demand on your cash, this certainty can give you great peace of mind. It also protects you from any future rate increases of course – that payment is locked in.

Disadvantages of a fixed rate loan:

They are certainly inflexible and can be expensive if you break the contract. You also miss out on the benefits of any interest rate decreases over the timeframe of your fixed term.

The vast majority of people in Australia choose to finance their home with variable home loans, largely due to the freedom and greater number of options they offer. More than convenience, this flexibility can actually allow you to save substantial amounts of money over the course of your mortgage. How? With a variable loan you have the ability to make extra repayments on top of your scheduled instalments with no penalty. Do this regularly and you could shave years off the length of your mortgage, greatly reducing the overall amount of interest you need to pay. Open an offset account and you can benefit further and save even more.

So if I choose to fix my home loan when is a good time?

Sadly, there’s no one correct answer to this. If we look at the history books a comprehensive analysis by Canstar found that over the last 20 years, around 50% of borrowers who took out a fixed loan SAVED more money than if they’d taken a variable mortgage so with a healthy dose of luck you may be able to use a fixed rate mortgage and beat the market but by no means is it a certainty.

There is a third option of course that sits alongside fixed and variable and that’s to take advantage of BOTH. Split the balance of your loan across fixed and variable and hedge your bets!!

The best advice?

Speak to an expert and talk through with them your own personal circumstances. Then you can make the decision that’s right for YOU.

We love helping so reach out to one of the team at Carbon Finance today!! To arrange a complimentary chat, call us on (08) 9446 8588.

What-your-cash-flow-forecast-says-about-your-business-Carbon-Group-Perth-Float

What Your Cash Flow Forecast Says About Your Business

Cash management is one of the biggest obstacles standing in the way of small business success. Having the right amount of cash on hand at the right time is key, it can determine if you’re able to expand internationally or whether you can even afford to pay next month’s salaries.

Luckily, there are plenty of tools available to help business owners stay on top of their cash flow. A cash flow forecast is one such tool and can be used to diagnose the health of your business. Below we’ve written a list of many of the insights that can be gained by simply looking at your cash flow forecast.

Your cash flow forecast reveals…

1. Your level of financial security

Your cash flow forecast shows exactly when – and how much – cash is going to enter and leave your business’s bank account over the next week, month, or year. Knowing this, you’ll be able to predict the security of your business’s future cash position and see whether your financials are in good shape or whether can even continue operating at all.

2. Whether or not you can afford to make certain business decisions

With an accurate cash flow forecast, you can estimate the impact that different scenarios, such as hiring a new employee or a 10% sales decrease, will have on your business. Maybe you’ll have to wait until next year to hire that operations manager or maybe you’ll need to downgrade your software subscription to avoid burning up the cash you’ll have on hand.

3. Early warning signs that your business should prepare for cash shortages

A cash flow forecast can tell you well in advance when your business will be strapped for cash. You’ll be able to see if you need to improve the efficiency of certain business areas or if you should take out a loan or find ways to cut costs.

4. The accuracy of your budgets

Your cash flow forecast will allow you to compare the budgets you’ve estimated for sales and outgoings with the actual amount of cash that flows into and out of your business. By doing this, you can see if your budgets are accurate, or if you need to go back to the drawing board and make some changes to your budgeting strategy.

5. How realistic you’re being about invoice due dates

If you’re unable to pay your employees or suppliers at the end of the month, you should make sure money is coming into your business as expected. A cash flow forecast tells you when cash will actually enter or leave your business rather than the date the bill or invoice was raised. If you find less cash in your account at the end of the month than expected, you may need to do a better job of chasing your clients to pay their invoices.

Consider adding an ‘expected payment date’ to your invoices in addition to their due dates, which will show a more accurate picture of when funds will actually hit your bank account. Cash flow forecasting apps such as Float for can link to your accounting software (i.e. Xero) allowing you to factor expected payment dates directly into your cash flow.

6. If you should seek out where you can reinvest excess cash

You can also anticipate when your business will have more cash at its disposal than usual. With a cash flow forecast, you can know exactly when these cash-rich periods will happen and explore what you can do with these excess funds, such as reinvesting in other areas of the business like employees’ salaries or buying more inventory.

7. If your business is on track to meet its goals and objectives

A cash flow forecast will allow you to see if your business can meet expectations in sales, client growth, turnover, etc. If you’re not on track to meet these goals, your cash flow forecast can also flag the specific areas of your business that need attention – maybe you’ve overspent on marketing & advertising or maybe you need to cancel that weekly fruit basket delivery. Your cash flow forecast will be able to help you identify these areas.

8. If you need to improve your business’s financial planning

Even if you’re developing a revolutionary new product that will change people’s lives, your business’s financial situation cannot – and should not – be ignored. If your cash flow forecast needs help, it’s time to consider investing time to formalise your business’s financial planning efforts with things like cloud accounting software, better cash flow forecasting, or management reporting. Seek advice for your accountant or bookkeeper, who will be able to advise you what strategies are best for your business.

This is a guest blog by Float, for more information visit floatapp.com.

Do-I-Need-Business-Interruption-Insurance-Carbon-Group-Perth

Do I Need Business Interruption Insurance?

As a small business owner, you’ve probably got an adequate level of business insurance to protect the equipment you use, loss in terms of theft, and damage as a result of fire or other natural disaster. But have you considered business interruption insurance? Too many small business owners fail to think about how they would manage if their business couldn’t operate temporarily resulting from a disaster.

Business interruption insurance, often referred to as business income insurance, covers you in the event you suffer an interruption or interference to your business following an insured event which results in a reduction in gross profit. An example of this may be a furniture manufacturing business suffering damage caused by fire. The business not only suffers a material damage loss to contents and equipment (covered in general business insurance), but also suffers a large financial loss due to a reduction in trade. In many cases, this loss can exceed the initial material or physical loss. This is where business interruption insurance comes in.

Business interruption insurance is made up of several key elements such as;

• The indemnity period
• The sum insured
• Increased costs of working

The key focus of this blog is around the indemnity period. The indemnity period is the period of time that a business is interrupted. The indemnity period commences from the date the insured event has taken place through to when the business is back up and running to the same level is was prior to the loss or the indemnity period on your insurance policy expires.

When discussing the indemnity period with your broker, the following points are crucial to ensuring you are adequately covered;

• Dependency on the premises and or location
• The availability of another premises that suits your businesses requirements
• The availability of machinery and equipment to replace the damage items

The above points can have big impacts on the time it may take to get the business back up and running to the same level it was prior to the loss. It’s important to consider these when choosing a business insurance package that suits your needs. Unsure what you’re covered for? Contact the insurance brokers at Carbon Group for a confidential chat. Call us on (08) 9446 8588.