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Are you one of the many Australians who are looking beyond industry and retail superannuation funds for a better long-term outcome regarding your retirement savings? Then you may be interested in starting your own self-managed superannuation fund (SMSF).

You probably already know that superannuation is an excellent vehicle for saving for retirement. It offers generous tax incentives to encourage people to think ahead, rather than relying on the aged pension. Establishing your own fund means making your own investment decisions, and while this may not sound attractive to some people, many Australians are already managing their own SMSFs.

Setting up the Fund

To set up an SMSF, there must be a valid trust deed executed under law and a trustee declaration indicating that you understand your duties and responsibilities. The SMSF must be registered through the Australian Business Register and elect to be regulated by the ATO. This is just the beginning.

It is in this setting up stage that a lack of knowledge or a bad decision could cause the fund trustees unnecessary problems further down the track. It is, therefore, very important that you seek professional advice before you start. This is the only way you can be certain that the set-up process is correct for your needs and will serve your purpose.

As mentioned earlier, getting the administration right is critical to the success of the fund. Just to give you a better indication of what is involved, consider how you will maintain the investment register, advise on changes to members and trustees, administer pensions and rollovers, prepare regulatory returns and provide investment returns with accounts.

Luckily, help with this is available as there are many companies like Charter Partners that provide SMSF administration services. They assist with establishing the fund and the ongoing administration and compliance, leaving you to contemplate how to grow the fund assets.

Growing the Fund

If you have members who have been working for many years they will already have accumulated significant funds in their industry or retail superannuation funds. When these funds are rolled over into the SMSF, you will be responsible for these assets, their rate of growth and security. Even in a fledgling fund, you could be holding hundreds of thousands of dollars in cash or other assets.

If the prospect of making investment decisions for these assets is suddenly daunting, there is also professional help available in terms of investment management and financial planning. You are not alone, as their role is to help you grow your fund with a strategic focus on providing for a comfortable retirement.

Of course, if you have the time and skills, you can still go-it-alone, but with all this assistance available to you, why would you take the risk and possibly jeopardise your retirement plans and those of your members?

All over the world, we celebrate New Year's Day as the time for making resolutions to change things in our lives. With a new financial year starting on 1 July, perhaps we should begin a new tradition by using this date as an opportunity to make financial resolutions. For business owners, it could serve as a "reboot" to existing plans that have lapsed or an incentive to start this financial year in better shape than the last one.

Strategic Focus Needed to Take Advantage of Every Opportunity

When faced with the daily operational challenges of running a business and the myriad of details involved, many owner-operators overlook the more strategic aspects of their financial situation. This often results in a missed opportunity to correct a situation in its early stages without lasting damage.

Are you one of those business owners who don't really know the overall state of their finances? Here at Charter Partners, we have helped many of our clients in similar situations through our Business Health Check program. We guide them through a process that assesses their current position, and gives them a detailed financial scorecard of their business.

Making Decisions without the Right Information is Risky

As a business owner, naturally you would like to start the new financial year with your financial indicators in top shape. However, you risk making critical decisions without all the information. For example, you may have a healthy cash balance and decide to pay down some debt without realising the effect this action will have on your cash flow.

Start a Structured Program and Take a Long-Term Approach to Improvement

Our program looks at the whole business including the structures and systems it relies on to support all its operations. It will show you the areas that are having a negative effect on profitability and growth. Because you will be fully involved in the process, you will also understand the current state of your business, giving you the confidence to make the critical decisions needed to improve the situation.

No Guesswork Needed

Our reports include instructions on how to increase profitability, charts and graphs that show the current situation, and also projected financial data on the future potential of your business. There will be no guesswork in your decision-making process, as you will have a complete picture of where you are right now.

Every Positive Change Starts Somewhere

If you feel that 1 July this year is too close to get everything in place through a program such as ours, don't put it off. This will not bring about the change you want. Start working with us now, and set 1 July 2018 as the financial year your business increases in value, improves net profit and positions itself for a sound, positive future.

There is no shortage of entrepreneurs in Australia who have a great idea or product, and the ability to create a "start-up" business to bring their creation to the market. According to a recent survey however, many of these fledgling businesses will not exist beyond 1 to 2 years, largely because their owners lack basic financial knowledge.

Early Stage Business Failures due to Lack of Financial Understanding

The survey also found that this lack of knowledge differed across a demographic spread, with Gen Y start-up owners having the least knowledge, Gen X having more and Baby Boomers knowing the most about basic finances. More than 500,000 Australians are involved in a start-up business, and many of the ideas and products have real potential. Unfortunately, this potential is not realised because they fail in the early stages, largely due to a lack of basic financial understanding.

We see this all too often in our capacity as accountants. At Charter Partners, we offer a range of client services for business operators, including Business Partner and Mentoring programs. It is often during our first meetings with new clients that we become aware of how ill-informed many of them are regarding basic financial and business skills.

Start with a Few Simple Strategies

We are not suggesting that every budding entrepreneur needs to take time out to get a business degree. There are many accounting firms like ours that can provide advice and services where needed. What they do need, however, is a few strategies to improve their financial knowledge while they continue running other aspects of their business.

Hire a Contract Bookkeeper and Ask Lots of Questions

One step in the early stages of their business would be to hire a professional bookkeeper on a contract basis to do the day-to-day account entries. During this process, they would be exposed to standard terminology and methods, and gain some understanding of the regular business cycle.

Take an Entry-Level Course

Training is another way to become financially savvy and there are all kinds of options available. If a start at a basic level is needed, we suggest contacting TAFE or a private training provider where entry level courses are generally available. Online training is an excellent option if spare time is an issue, as the course can be done from home.

Conferences, Short Courses and a Business Mentor

Conferences and short courses will also introduce the financial novice, not only to new terminology, but also to current business issues that could impact on their new enterprise. Becoming a member of the local Chamber of Commerce is also an excellent way to meet experienced business people who may be willing to act as mentors.

These are just a few suggestions. There are many other options available to help build the financial knowledge that is essential to the success of every entrepreneur.

As the end of the financial year looms closer, business owners and managers should be gearing up for the extra tasks involved in getting their accounts in order, ready to present to their accountants. However, they should also have been working with their accountants to develop a tax plan, well before this part of the year.

Tax planning is a process with the potential to reduce a tax liability legally, but only if it is approached in a proactive, purposeful manner with a clear objective, and well before financial year end. Leaving it until after 30 June gives accountants little to work with, as they are reviewing transactions that have already happened. This historical information cannot be changed, so any opportunities that there may have been to save tax have already been lost.

There are many ways to reduce tax liabilities, some complex and suitable only in certain circumstances, and others that are used regularly and which apply to most businesses. The most common are methods to defer income in the current financial year while at the same time bringing forward deductions. This should reduce the income on which the tax liability is calculated.

If you are a business owner who has not yet discussed tax planning with your accountant, here are five of the most widely used methods to start you thinking about the possibilities.

  • Bad Debts are the bane of every business, but by reviewing your debtors early, you should be able to identify those unlikely to be recovered. Write them off before 30 June, thus reducing your income tax. If you are registered for GST on a non-cash basis, this should also generate a GST refund.
  • Defer the derivation of income if the business can viably do so. This can be done by holding back some invoices if possible until after 30 June. This reduces the income for the current financial year and drops it into the next financial year.
  • Check the timing of expenses, as they are only deductible when they have been incurred. Some accruals and provisions are not deductible, as they do not relate to an existing liability, so by checking them in advance it may be possible to bring them into the current financial year.
  • Bonuses paid to staff are only deductible when the business is committed to paying them, so make sure that at 30 June there is evidence of this commitment.
  • Prepare in advance for a stock take on 30 June and during this process, identify obsolete or old stock that can be scrapped or written down to its market value. This is likely to be less than the accounting value currently on the books.

These are just a sample of the possibilities that an accounting firm like Charter Partners can open for your business. Contributing to superannuation, investing in tax effective products and diminishing the adverse effects of fringe benefits tax are others. Accountants who are up to date with current tax laws will have other initiatives that may suit your type of business. They will assist you to review your current business structures to identify any changes that will reduce your tax liability and increase your wealth.

There are many more methods available to you if you start your tax planning strategy now, well before financial year end. With a viable tax plan in place that suits your business needs, you will be ready to face 30 June, not with trepidation but with confidence.

For the average worker with a regular income and no complicated deductions it has never been easier to prepare your own tax return. The ATO (Australian Taxation Office) has free software on their website with instructions on how to use it, and information from your employer, bank and any government agencies you have dealt with is already prefilled.

Preparing Business Tax Returns a Complex Process

If you are running a business, however, the process is more complex and the possibility of making errors more likely if you are lodging your own return. Most people in business don't have the time or knowledge to prepare their own tax returns and prefer instead to engage tax agents or accountants.

To help clients finalise tasks in readiness for their initial meeting, many accountants provide them with a detailed checklist of what will be required to finalise the accounts for the current financial year. Here at Charter Partners, we know how busy our business clients are, so we provide whatever assistance we can to help them get ready for the end of the tax year.

Comprehensive Checklists List Everything Likely to be Needed

To illustrate just how complex this exercise is, a typical checklist may be several pages long, covering everything any business would need to lodge a compliant tax return. It may ask to confirm if sundry creditors have been reviewed for accruals or sundry debtors reviewed for prepayments. It may also ask for information about accrued FBT (Fringe Benefits Tax) or trading stock or if the accounting profit/loss before tax reconciles with the profit and loss statement.

Many Questions, Checks and Balances

There may be questions about how finance leases and hire purchase agreements have been treated for tax purposes. It may ask if the entity has derived income that is exempt from tax or if the effective life of new acquisitions has been reviewed for depreciation purposes. There are other questions about superannuation, capital gains, repairs and maintenance and bad debts, and many more.

Checklist is Useful Tool to Assist Management

This type of comprehensive checklist is a trigger for the management to check that all the accounts are up to date and reconciled as a prerequisite to the preparation of the business tax returns. In a small business that is not especially complex, many of these questions will be answered as not applicable, but for a larger enterprise, it is an opportunity to get everything in order.

As you can see, this is not a simple task for a business, so we offer compliance expertise and support to our clients, working closely with them to do much more than just prepare their tax returns.

It seems that our modern electronic age has delivered us an instant solution for almost every problem. If we need information, Google has it at our fingertips; if we are looking for love there is an app for that; we make appointments without speaking to a real person and shop for groceries without leaving home.

If the financial experts and economists are to be believed, however, while we might be clever at using our smart phones and devices for everything, we are not very smart when it comes to staying out of debt. In fact, this week's newspapers report that personal debt in Australian households is the third highest in the western world.

As long as we can service this debt it is smiles all around, but an unexpected life circumstance like unemployment, or suffering a serious injury or illness will very quickly replace those smiles with panic. There are no instant solutions to this problem, just a long and painful lesson in money management.

These lessons have not changed in centuries and are so simple that they are often ignored. Establish a budget, live within your means, pay your bills on time, use credit cards sparingly; this is all excellent advice but once a debt becomes unmanageable, we may need the assistance of financial experts to restore some equilibrium to our world.

For personal debt, a good place to start is to track spending, as most debt occurs when we do not monitor our personal expenses and spend indiscriminately, often using credit cards. The next step is to establish a budget to see how much money is coming in and going out each week, fortnight or month. We can then sort out our money priorities and take control of our spending and saving.

Even while we are paying off the debt we have accumulated, it is important to save something, no matter how small. Throughout the year, there will be events such as family birthdays, outings and Christmas that we want to be part of, so setting some money aside for this is an important part of keeping to our debt recovery plan. Where in the past we may have funded these events on credit, we are working towards being debt-free all year round, so we need cash for these celebrations.

These are just a few simple techniques to start making in-roads into that debt burden. If the task seems overwhelming, there are debt recovery agencies that will help people with personal debt. By the same token, many businesses struggle with debt from time to time, and they also need expert assistance to get them back on track to profitability.

Businesses can fall into debt for many reasons, and not necessarily through bad management, although that is one of the major causes. The business world is more volatile than it ever was, and markets can disappear almost overnight. The rise of on-line shopping, for example, created opportunities for those Australian retailers who saw the opportunity to reach global customers. Others who were slower to react are still struggling to reclaim market share.

Whatever the reason, there is much at stake when a business calls for expert help to manage its debt. Accounting firms such as Charter Partners offer these services to client businesses and work in conjunction with the management to develop debt recovery strategies. Successful small businesses are vital to our economy and the loss of jobs and revenue when one "goes under" affects not only the employees but also everyone else along the supply chain.

Keeping a business debt free all year round is much more of a challenge than it is for a household, but the principles are very much the same. Business processes are much more complicated, the need for lines of credit and finance are more urgent and the management tools much more sophisticated than a simple household budget. However, get it wrong and the result will be much the same.

Every business needs sound structures in place to bring order to daily operational matters. A well-run business would typically have standard operating procedures developed for a range of situations to provide information and instructions for the staff. These procedures and the overarching policies are either in a written manual or on the company intranet for easy access at a moment's notice.

Accounting Software Makes Financial Reporting a Breeze

Such a business would also have financial reports readily available, not necessarily for all the staff but certainly for those who are responsible for this area of operations. These days, it would only be a micro business that would still be using old-fashioned bookkeeping methods as most are now using accounting software.

Management Needs Reports to Identify Problems

Written procedures and reports are two of the most powerful tools available to managers who know how to use them. Procedures save time because clear, proven instructions are there to be followed without staff having to waste time explaining problems and seeking solutions. Reports provide quantitative data on key areas of the business and this information is used by management to check against forecasts to identify problems quickly.

Setting up these business reports can sometimes be a challenge for inexperienced managers. This is something we help our business clients with as part of our range of regular services. At Charter Partners, we know how important it is to the success of a business to have accurate, up-to-date reports, so we work with clients to get the information they need to suit their specific needs.

Financial Reports Use a Standardised Format

Financial reports are not difficult to set up with modern accounting software. The process is standardised across the business world and most businesses use the same reports. The templates generally come with the software so once the right information is entered into the system, printing out reports should only take a few minutes.

Productivity Reports – Knowing What to Measure is Difficult

Productivity reports are a little more challenging. Businesses that rely solely on financial reporting are missing improvement opportunities by not reporting on other key parts of the operations. Knowing what to measure is the first decision to be made, as setting up a reporting system for something that is not critical is a waste of resources.

Accuracy Vital for Improved Reporting

The most important issue in improving your business reports is the accuracy of the source data. Most reports are date driven, so the software will pick up all the data needed for a report within the specified date range. If the date range is right and the source data is right, you will get an accurate report from which you can make critical business decisions.

Virtual Cabinet Document Portal

Charter Partners are moving forward on a digital path to ensure the prompt and secure delivery of your documents.

Our Virtual Cabinet allows you to receive, review, sign and return documents digitally in a secure and timely manner. You can use the portal on any device with internet and email connection e.g. smart phone, iPad, laptop and computer.

Documents sent to you through the portal are signed using a "digital signature". The digital signature is as simple as ticking a box to say that you either accept or decline the document. It is fully encrypted using the very latest AES-2356 bit encryption which is completely secure and traceable. It is now accepted in law that this form of digital signature is legally binding and will be confirmed if challenged in a court of law.

This will eliminate the need to return the original signed documents, and as soon as we receive your digitally signed document, we can proceed with the lodgement process.

Any documents sent to you through the portal can be downloaded for your records. Documents will remain on your portal account for a 12 month period, should you need to access the documents in the future.

Your Choice

It is your choice on how you wish to receive your documents - digitally or paper. If the digital option is your preference, a separate email address will be required for each individual wanting to have access to the portal. You may need to set up a new email account if you do not already have two separate email addresses.

If you have any queries in relation to our Virtual Cabinet, please contact our office.

The ageing population keeps throwing out challenges to our society, not the least of which is how to fund a reasonable lifestyle in retirement without relying solely on the aged pension. With superannuation rules in a constant state of flux, there is a growing realisation that changes to legislation or eligibility rules can be introduced at any time, affecting plans to build wealth for retirement.

Navigating these changes requires up-to-date knowledge of financial products and government legislation including the tax treatment of income from investments. It also requires the skills to make decisions now that will not cause regret in the future. This is a huge responsibility for the average person on top of existing work and family commitments.

The complexity of the rules and the large volume of investment opportunities available have made it impossible for someone with a reasonably sized portfolio of property, shares, cash and superannuation to do anything more than leave everything where it is. While this is understandable under the circumstances, it is a dangerous approach to take. Markets can change rapidly, tax breaks come and go, cash languishing in bank accounts at low interest rates offer little return and opportunities go begging.

These are all compelling reasons for engaging the services of a financial planner. This is an entirely different role from that of an accountant, although accounting firms such as Charter Partners can offer their clients access to a certified financial planner. The decision to take up that offer always rests with the client.

Financial planners provide an extensive range of services concentrated on building and protecting future wealth. Their clients usually have multiple needs such as advice about superannuation, insurance, investments, wealth planning and succession planning. For the client, having these multiple needs met by the same financial planner is very convenient.

With everything integrated into one investment strategy the client gets a better overall result, as the effect of decisions made in one area can be considered and balanced against how they could impact on a different area.

However, there are a couple of things to consider before engaging someone to manage your precious and hard-earned assets. Firstly, do not confuse a financial planner with a financial advisor. A financial advisor is a broad term used to describe any professional giving advice about finances, which can include a financial planner. Not everyone needs the full range of skills of a financial planner.

The difference lies in a person meeting the certification requirements of the Certified Financial Planner Board of Standards, Inc. before they can call themselves a certified financial planner. This is important because, secondly, you are trusting someone whom you most likely do not know, to make investment decisions on your behalf.

Certified financial planners have a fiduciary duty to act for the benefit of the client. They have a legal and moral responsibility to put client needs and interests ahead of their own. If your affairs are such that you need a financial planner, there is an added degree of security in knowing that they have additional expertise, and no conflicts of interest when looking after your assets.

If you find yourself in need of a certified financial planner, talk to us and we can arrange a referral to our preferred financial planner

Your business has been operating successfully for some years, with reasonable profits each financial year that are relative to the overall state of the economy. Your staff members are competent at their jobs; customers comment on the quality of your products and services, and repeat business is solid.

Have You Noticed Problems in Your Business?

It is disconcerting then, when you realise that despite these indicators, the business is not growing at a rate comparable with competitors. Also, you notice that customers are taking longer to pay their accounts, thus putting pressure on cash flow. On a walk through the workshop last week, you saw an increase in wasted material and stock sitting on shelves that should be almost empty.

Over the years, many of our clients have described similar situations about their own businesses, some of them leaving the discussion with us until they have suffered their first major loss. What we offer clients in this situation is participation in our Business Health Check, a program offered by Charter Partners to get struggling businesses back on track.

Identify Waste and Underperformance with a Business Health Check

As the name suggests, the program checks critical aspects of client businesses to identify areas of waste and underperformance. As part of the process, business operators gain additional financial skills they will continue to use long after the program has finished.

We thoroughly analyse your business processes and deliver you a report complete with full instructions on how to increase profitability. You receive a detailed financial scorecard about your business, not a vague overview using statistics that could apply to any business in your industry.

Diagnostic Reports Show Trends – Projected Data Shows Potential

Step-by-step, we walk you through the diagnostic reports, flow charts and graphs we have prepared, pointing out trends and offering explanations. With the key financial drivers of the business now identified, we run 'what-if' scenarios with you, showing the likely outcomes of any changes you may decide to make. This is backed up by annualised and projected financial data on the potential of your business.

Management Gains Valuable Financial Skills

In the process of being immersed in this financial data, business operators see first-hand the benefits of this type of detailed examination. It is here that they gain the most in terms of additional financial skills, giving them the opportunity to evolve these techniques further and include them in their regular suite of business reporting tools.

The Value of 'Lead Indicators'

The program shows business owners the value of creating reporting systems that provide daily information from key operational areas. These 'lead indicators' alert management to issues as they are happening, giving them the opportunity for corrective action before long-term damage has occurred. If you think this early intervention could benefit your business, we are ready to talk.