Don't bend over backwards this financial year - tax time is fast approaching!

Maximise your tax return with these 5 Effective Year-End Tax Moves

 

Take the pain out of tax time, be disciplined and take advantage of these effective tax moves to ease your June 30 burden:

1.  Small Business Entity Concessions.  Talk to your accountant or bookkeeper to see if you satisfy the 12-month rule.  If your cash flow allows it, consider paying periodic expenses in advance.  For eligible small businesses expenses like insurances, rent, magazine subscriptions, travel costs can be claimed as an immediate deduction for your business.

2.  Write off bad debts.  If you have amounts owing to you by customers that you are unlikely to receive payment for and for which you have previously declared as income (and effectively paid your hard earned tax dollar on) the ATO will allow you to write these off prior to 30 June.  Review your accounts receivable with your accountant or bookkeeper to determine if your bad debts qualify!  

3.  Be sure to get your super deductions.  The Australian Tax Office (ATO) only allows you to claim superannuation when it is paid.  Even though your June superannuation legally doesn't have to be paid until July 28, paying employee and personal contributions by June 30 could mean valuable deductions for your business this year.  Be prepared & pay early..

4.  Manage your receipts.  Results from a recent OfficeWorks survey showed that one in five (21%) Australians don't start thinking about their annual tax return until after June 30, missing valuable opportunities to capitalise on work related purchases in the lead up to the end of financial year.  Not only does it impact on your personal time trying to find lost receipts but failing to provide proof of purchase or other reporting documentation is ultimately an opportunity missed. 

5.  Hire an expert.  It is much cheaper and smarter to hire an accounting professional than it is to pay someone to fix a messy set of accounts once things are out of control.  One of the biggest problems with losing historical data (despite the fact you are losing money in not claiming valid tax deductions) it means you are unable to make effective decisions about your business.  Engaging people you trust to offer an outside perspective can help steer you in the most profitable direction.  Contact us today for a free consultation ! http://www.accountarts.com/contact/

 

 

 

Don't pay unnecessary taxes ! Record keeping tips for your styling business.

Whether you are just starting up or have an established creative styling business it is absolutely essential that you keep an accurate record of all your income and expenses.  Most creatives will agree that keeping receipts and paperwork is nothing but a bother, this is when I remind my clients that it isn't as bothersome as paying unnecessary taxes! 

Australia's income tax system works on a self-assessment principle, they define an expense as any money spent with the intention of earning income for your business.  ALWAYS ask for receipts even if it is only for a cup of coffee with a potential client.  

To avoid feeling overwhelmed separate your records into two categories - Financial and Business.

1.  Financial record keeping refers to any transaction that has a financial element, for example:

  • Copies of Tax Invoices/Receipts you provide for goods sold or services performed.
  • Invoices for goods or services you purchased or business related bills you pay such as rent/rates for a commercial studio space/premises, insurance, licence fees etc.
  • Records of any capital purchases that you use in your business eg. a new motor vehicle, laptop computer, camera related equipment, tools, office furniture.
  • Records of any payments made to employees/contractors and to other organisations for your PAYG withholding, super and workcover obligations. 
  • Bank account and credit card statements.

2.  Business record keeping refers to records relating to your business and employees.

  • Any contracts, insurance policies and other legal documents.
  • Your lease if you are renting.
  • Licences and permits.
  • Employee records including time sheets, copies of payslips etc.
  • Safety records e.g. workcover/occupational health & safety

As a rule when deciding whether to keep a receipt ask yourself -

does it relate to either my business structure or the earning of income?

if the answer is yes, ask yourself - is it private or domestic in nature ? or is it of a capital nature ?                                

Sometimes the answer will be iron clad and sometimes it is not, this is why it is important to work closely with your accounting professional who knows the in's and out's of your business and will be able to help to minimize your tax and save you money.

 

Work smarter for your creative dollar not harder ...

A designer wardrobe is not meant to be sweated in, spend more time being creative with these top tips for working smarter not harder:

 

Plan the night before.  Preparing your work tasks and writing your to do list for the following day the night before is a very effective time management technique.  Often when you go to sleep at night your subconscious then goes to work on your plans and goals while you are asleep. When you are relaxed, your mind is often at its best.  Waking up with clarity and purpose is an amazing way to start the day !

Establish processes & stick to them.  Becoming an expert in anything takes constant work, it means refining your recipe until it becomes your secret dish.  Progress comes with consistency, if you have a major project map it out in stages, schedule each stage into your calendar to ensure it is achievable that way it is less daunting and overwhelming.

Complete your most important tasks first.  Allocate blocks of time even as little as 20 mins towards getting the most important task done at the start of your work day, it is a simple yet proven technique for productivity. Often we struggle with the most important jobs, we put them off, procrastinate and we come up with excuses .  "Setting goals is the first step in turning the visible into the invisible". (Tony Robbins)

Work with urgency.  A common trait that makes the difference between average and superior performance is urgency.  A sense of urgency drives you to work in a highly productive manner, it gives you momentum and contributes to the long term goals and visions of your business.  Make a conscious decision today and commit to working with urgency, see for yourself the opportunities that will present themselves - remember people will pay more for someone that can satisfy their needs faster than anyone else.

Learn to switch off & unplug your devices.  Constantly checking your phone and being disturbed when a new email pings into your account can make us the opposite of productive.  Learning to switch off and regularly disconnect from the digital world not only helps you to reconnect with yourself, your brain will work better, you will make better decisions and notice improved efficiency in all areas of your life.  Sleeping with your phone next to you on vibrate won't give you a good nights sleep - switch it off completely or better yet leave it in another room so you get the hard earned rest you deserve !

If Karl approves of the cloud so can you..

5 reasons why cloud accounting will change your business for the better...

 

1.  It is completely mobile.  Whether you are working on a photo shoot in Hamilton Island or on location in Sydney it gives you the flexibility to see 24/7 your business bank account balances, you can raise invoices to your customers on the spot and see who still owes you money and assess your overall cash position instantly.  You don't have to be physically present to have certainty in your business.

2. Get paid faster.  On average, it takes over 52 days for a business to get paid in Australia.  Studies show that those who invoice and accept online payments through cloud accounting tools get paid in half the time.  For most creatives this aspect of the business can be a drag but to run a profitable business it needs to be part of your everyday planning and accounting strategy.

3. Collaboration.  Your file is real time which means that you and your bookkeeper can be working on it at the same time.  Your bookkeeper can interact with you in real time to discuss the numbers and how your business is performing.  It saves time and encourages better communication.

4. It is affordable. Moving your accounting functions to the cloud can be a way to cut costs. There are no annual licence fees or upgrade fees, you aren't locked into any contracts and you typically pay as you go on a monthly basis with plans starting as low as $25 per month.

5.  Automatic Backup.  No longer do you need to run time consuming upgrades on the one computer that your accounting software is installed on.  No longer do you need to delete your large video files to make room for your accounting data file.  No longer do you need to remember to backup your data, it is all done for you ! Good riddance.. 

 

What the world's most financially successful bloggers know that you don't..

fashionbloggers.jpg
  • They have identified their audience and know their spot in the marketplace.
  • They didn't just build a blog or treat it as a hobby, they built a BRAND and had a clear-cut vision of where they wanted that brand to go. 
  • They studied the analytics.
  • They learnt an unspoken language - the digital language.
  • They spread their income streams.  If all of a sudden your only stream of income dries up how will you survive? spreading your income sources means your business can carry on.
  • They weren't afraid to ask for help.  Most small businesses especially at the start-up phase try to do everything themselves - from accounting, to sales, to marketing and customer service... you cannot expect to be an expert in all fields so it is important to know when to seek external advice.  Keeping on top of this can save you $$ thousands of dollars in the long run, it is easier to fix problems as they happen rather than months or for some years later!! 

The Spanx for your financial wardrobe ...

Whilst it would be the ultimate solution to just simply increase your prices in order to improve your financial performance, in reality that is not always possible.

Here are a few tips & tricks to increase your profit and cut the fat in your creative business...

  • Manage your debtors.  Invoice your clients as quickly as possible and allocate blocks of time in your calendar to follow up on outstanding invoices, sound debtor management is a proven technique to increase your cash-flow.  A common mistake is to see the sale as everything, there is no sale unless you get paid !
  • Find your best sales margin.  Do you know which product or service is providing you with the highest margin? Working this out and focusing on this will show immediate improvement in your profit.  Spend more time and effort on the products and services that make you the most money. 
  • Service your best customers.  Do you know who your best customer is ? A small % of your customers will provide the highest % of sales.  To run a profitable business you need to understand your customer, your customer's habits and work on developing a strong relationship with them.
  • Eliminate unnecessary costs.  Find alternatives to high-priced suppliers, or negotiate discounts and payment terms.  As a rule carefully check your supplier invoices for overcharging or missing discounts.  Another vital tip is to measure the return on all advertising so you can eliminate what doesn't work.