To begin we can define cash flow as the movement of money in and out of a business, so when we speak that there is a positive cash flow it means businesses have more cash coming into the bank than they’re spending.
Why is a cash flow forecast important? Cash flow statements show the net change in your company’s cash position from one period to the next, that’s why based on what your cash flow statements reveal, you might need to cut expenses or increase the cas
Tips to improve your cash flow
Ensure you know your target market and potential customers within that market: A more focused target market results in less marketing expenditure It’s critical to keep your records up-to-date and monitor them regularly. Make sure all your invoices and payments are entered weekly into your financial system.
Understand what problems your product or services solves for your customer
Keep your marketing regular
Keep a database of your customers
Invoice quickly: deliver products as soon as they’re ready, and invoice when the sale is completed
Request a deposit: For special or large orders
Follow up outstanding payments regularly
Get smart digital products to help you cash flow forecast
Control spending: control costs and keep hold of your cash
Monitor stock levels: track the movement of your stock and have processes in place to identify when new stock should be ordered.
Reward staff behaviorthat improves cash flow: such as setting sales targets, reducing expenditure or paying commission on collection of payment from customer.
Sell unnecessary assets: this action increases cash in the business and saves on costs, such as insurance and storage.
1. Inability to pay your debts: Think about ways you could increase cash flow, such as: preparing weekly cash flow forecasts to understand what has to be paid, having solid procedures in place for collecting outstanding debts from customers, talking to your bank about putting a temporary loan in place
2. Poor profitability: Start to monitor profit, identify issues regularly and consider areas such as: gross and net margins, sales, review the productivity of your staff.
3. Inadequate financial records: It’s critical to keep your records up-to-date and monitor them regularly. Make sure all your invoices and payments are entered weekly into your financial system.
4. Continually replacing staff: Think about ways to reduce staff turnover.
Get your business back on track: finding a good bookkeeper or accountant and ask them what key financial areas should be reviewed regularly. Contact us: www.ysaccounting.com.au
Many people are confused and do not know what medicare is and why this insurance is charged in the tax return, so we are going to explain to you what medicare is, and on what occasions you can be exempt from this payment.
Let’s begin, Medicare is Australia’s universal health insurance scheme. It guarantees all Australians access to a wide range of health and hospital services at low or no cost.
Medicare is partly funded by taxpayers who pay a Medicare Levy of 2.0% of their taxable income, that is why the Medicare levy is collected from Australians in the same way as income tax. The actual Medicare levy is calculated by the Australia Taxation office when people lodge their income tax return.
But, when can I apply for a Medicare levy exemption?
It is important that people know that they can apply for a Medicare levy exemption if they were in of the 3 following exemption categories at any time in the financial year:
You meet certain Medicare requirements, such as:
You were a blind pensioner
You received sickness allowance from Centrelink
You were entitled to full free medical treatment for all conditions under Defence Force arrangements or Veterans Affairs Repatriation Health card.
You were a foreign resident for tax purposes during the full year
You are not entitled to Medicare benefits.
In case that you have any dependents, you need to consider their circumstances as well, in order to determine if you qualify for an exemption. If you qualify for a Medicare levy exemption, you can claim the exemption through your tax return.
Starting a successful business is very rewarding. It is a process that improves many people’s lives such us business owners, family members, employees, suppliers and the community in general. Moreover, it could be a good vehicle that helps you to obtain an Australia permanent residency, if the business idea meets the Australian government requirements base on the current Australian Migration conditions.
However, in the process of starting a new business in Australia is essential to cover the follow aspects:
Business Plan: A well-written business plan is an important tool because it gives entrepreneurs the ability to lay out their goals and track their progress, as their business begins to grow. Formulating a business plan should be the first step taken at the moment of starting a new business. It is also important to attract investors so; they can have a clear picture of the business they will invest in. Many businesses are created out of passion, and while passion can be a great motivator, it’s not enough to proof how much it worth to invest in the business. In fact, planning your steps and understanding exactly how you’re going to turn that vision into a successful business is perhaps the most important step, it is when you can tell the differences between concept and reality. Business plans can help you confirm that your great idea makes some sense in the business language. An additional and key element of your business plan is the Market research, that can offer a deep insight about your customers, your competitors, and your chosen industry. It will not only enlighten the entrepreneurs in their process of starting up a business, but it can also help to improve your knowledge about the existing businesses, their activities, marketing, advertising, and releasing new products or services.
2. Right Business Structure: Choosing the right structure for your business is also crucial, as it has a direct effect on aspects such as:
Your level of control.
The amount of tax you need
Health and safety
requirements in the workplace.
The level of personal
liability you will incur.
Perpetuality of your
3. Funding: Having sufficient working capital is a key aspect to keep your business finances healthy. On the other hand, not having enough working capital will have serious implications on the company’s future. Many businesses obtain external funding in order to gain enough working capital by doing that they expect to fulfil their growth ambitions. However, getting a loan can help to cover short-term funding needs but it is just a short term solution, while giving the business enough money, it can make it grow or even if you’re looking to expand your business to take it to the next level, you may need very well funding so you able to execute your business plans.
4. Migration Requirements: The Australian government welcomes business owner either to start a new business or to move their businesses to Australia. This pathway is for existing business owners or entrepreneur who want to settle in Australia with their family and start businesses that can fill and meet the gaps in the Australian market. It is vital to have the right legal advice regarding your business in order to meet Immigration requirements.
At YS Accounting we have join forces with ProjectRH and RC Australia to cover these important steps in any entrepreneur starting their journey, if you need any help please contact us: