Caught in the Economic Downturn? Time for a Business Health Check!

Economic Downturn

Human Resources Support

Proposed SG Super Changes

Carbon Tax Debate

Improve Financially

Raising Funds

Keeping the Dates

Staff Achievements

McConachie Stedman Awards

Merry Christmas (Office Times)

The key to operating a successful business and making money in an economic downturn or recession is to know where your business performs well and where it can improve.

The ‘signs’ of a healthy business are sustainable profits and strong trading cash flows, whereas the ‘symptoms’ of an underperforming business at risk of being ‘infected’ by a recession or downturn include declining sales with high fixed costs.

People who care about their health visit an expert – their Doctor. Business owners who care about their business should similarly visit an expert – their accountant and/or financial adviser to complete a business health check.

Prevention is better than a Cure

To ensure your business remains healthy and continues to prosper in these uncertain times you should undertake a business health check. Visiting your key professional advisers can protect you and your business from the full effects of a recession and better prepare you for the recovery. Your accountant or financial adviser can access online valuation technology that includes a Risk and value driver assessment questionnaire.

This questionnaire acts like a health check, grading your business in terms of it’s risk, and pin pointing opportunities for value improvement; the cure!


Below is a sample of the many topics covered in the questionnaire.

How Healthy is your Business?	Your Score 1=Poor 5=Good
1. Have you segmented your customer sales to identify profitable products / service lines and customer risk?
2. Do you use benchmarking to identify your business’ strengths and weaknesses?
3. Does your debtor’s policy include discounts for early payment and personal guarantees for large customer accounts?
4. Does your approach to managing staff include capping salary increases and paying incentives for above budget performance?
5. Do you have systems and procedures in place to reduce the business’ reliance on you?
6. Does your business protection strategies include adequate risk insurance in case of an unforseen triggering event?

Ask your Accountant or Financial Adviser to provide you with a copy of the ‘Risk & Value Driver Assessment’ Questionnaire so that your business not only survives, but thrives into the future.

Human Resource Support

Proposed SG Super Changes

The Government has introduced draft legislation which will make two significant changes to compulsory super. The first change is to abolish the superannuation guarantee age limit, which are currently 70. The second change is to increase (over 7 years) the compulsory employer superannuation contribution rate from 9% to 12%. Both changes will commence on 1 July 2013.

Importantly, both changes are dependent upon the enactment of the Government’s Minerals Resource Rent Tax legislation before 1 July 2013. If this legislation is not enacted by 1 July 2013, neither change will apply.

The first change means that employers will have to provide compulsory employer superannuation contributions for all their employees regardless of their age, assuming the other conditions for compulsory super are satisfied. Currently, where an employee attains age 70 during a quarter, the employer’s superannuation obligations are based upon salary received by the employee before they attain age 70; and any salary received after age 70 is disregarded for superannuation guarantee purposes.

Interestingly, this amendment was originally intended to increase the SG age limit from 70 to 75, to bring the SG amendments in line with general superannuation provisions, including the Income Tax Assessment Act 1997 (ITAA 1997) which allow employers to claim a full deduction for all contributions to superannuation funds made on behalf of their employees up to age 75 and allow self-employed people to make deductible contributions until they turn 75. However, in his Second Reading Speech, Bill Shorten, Minister for Superannuation and Financial Services stated that: “Currently, the superannuation guarantee only applies to people under 70. The current legislation will lift the SG limit to 75.

However, as a result of the strong representations from the members of the Labor caucus and backbench, including not least the member for Petrie and the member for Blair, and from the crossbench the member for Lyne and the member for New England, we have decided to remove the age limit for superannuation contributions altogether.“

The Government accordingly introduced an amendment to the Bill to abolish the age limit. Presumably, as a result of this amendment, there will need to be some consequential amendments to ITAA 97, which limits the deductibility of employer contributions to those made in respect of an employee under the age of 75, and to the Superannuation Industry (Supervision) Regulations which currently do not allow contributions to be made to a fund in respect of a person aged 75 or more.

The second change is that the SG percentage will gradually increase from 9% to 12% as follows:

• 2012/13 and earlier financial years 9%
• 2013/14 financial year 9.25%
• 2014/15 financial year 9.5%
• 2015/16 financial year 10%
• 2016/17 financial year 10.5%
• 2017/18 financial year 11%
• 2018/19 financial year 11.5%
• 2019/20 and subsequent financial years 12%

The changes are set out in the Superannuation Guarantee (Administration) Amendment Bill 2011 which was introduced into Parliament on 2 November 2011.  The Bill passed the House of Representatives on 22 November 2011 and has been referred to the Senate Economics Committee for review.  That Committee is due to report on 14 March 2012.

Carbon Tax Debate – Political or Environmental

 

Is it a political debate or an environmental one? Our planet is warming and this has been proven through the records kept by UK Hadley Centre, US National Climate Data Centre & NASA.
Reference: http://www.carbontax.net.au/category/climate-change/

 The environmental issues are vast, complex and quite frankly very confusing. But what I can glean from the material I have read is that the experts believe human CO2 emissions are the major contributor to this increase in temperature. Therefore in order to reduce the impact humanity is having on the environment we have to change the way we live our lives.

The Australian Government's plan is to introduce a carbon tax to try and influence the way businesses conduct themselves in order to effect this change. By placing a price on Carbon emissions the government is hoping that entrepreneurs are encouraged to developed more efficient methods of producing the resources that we consume and thus reduce the amount of Carbon we emit.

In the short term, the cost of production will be higher and as such the government will provide a benefit back to each household as compensation for the initial impact the carbon tax will have on you. They are providing a benefit back to you via increasing the tax free threshold and thus reducing the level of income tax you have to pay. Also they are going to provide some additional direct payments to lower income households. If you would like to calculate the compensation you will receive please go to the following website http://www.carbontax.net.au/category/how-will-the-carbon-tax-affect-me/ . Click on the "Household Compensation Calculator" and fill out the details.

 Should you have any questions in relation to the benefits you will receive please do not hesitate to contact your accountant.

How can we Improve how we feel financially?

The first step to improve your financial circumstances is to understand your cash flow and create a spending plan. Set goals and implement a plan to make them a reality Understand key aspects to wealth creation and your options Use products and tools to reduce risk Ensure your plan enables you to maintain desired (and realistic) lifestyle now and in the future

Where does your money go?

Treat your household like a business – think and act like a business

• Are you living beyond / within / beneath your means?
• Are you generating a household profit?
• If so, what is it?
• What are you doing with it?

If you want to increase your cash flow, contact our office for a complimentary financial health check today!

Raising Funds for a Great Cause

Carnival Saturday, the 17^th September, 2011 was the perfect spring day for the annual St Andrew’s Hospital Race Day.  It was very fitting to have McConachie Stedman, a local accounting firm, that has been in business as long as our local “icon”, the Carnival of Flowers, as platinum sponsors of the event. 

The grand marquee was bursting with almost 400 attendees trying their luck not only with the horses, but with fashions of the field, lucky door prize, raffle prizes, lucky boxes and many various multidraw and auction items.  “We tried to provide not just sporting memorabilia items but also unique items such as helicopter rides, meet and greet with the Wiggles and many more.  Most notable was a dinner in the auction winner’s home from Danielle Dixon who was a contestant from the 3^rd Masterchef series. “Danielle made a guest appearance on the day and provided the auction winners with a “semi-Masterchef experience” in their home. 

Paul Grealy kept the night flowing as an entertaining MC and also provided a unique fundraising opportunity.  The auctioneer Warren Hohnke enthused the crowd with their spirited bidding for the many auction items. 

In her heartfelt address to the audience, Sharon Stedman spoke of her husband’s struggle with cancer.  The John Stedman Oncology Ward was established in 2001 by John Stedman who was diagnosed with terminal cancer in 1999.  He made it his mission to establish the unit to treat cancer patients and avoid the travel to Brisbane for chemotherapy.  The Ward started out with 8 chairs which were again increased in 2007 to 15 chairs.  Mr Ray Fairweather, the CEO of St Andrew’s hospital, knows only too well how cancer not only affects patients but their families and loved ones.  However, the number of cancer patients in the Toowoomba region has increased significantly and without the fundraising efforts of McConachie Stedman the increase to 25 chairs to cope with the demand would not be possible.

It was the winning combination between McConachie Stedman and St Andrew’s Hospital, which saw the initial goal of $40,000 exceeded with $54,089.03 raised from the event.  “To have this sort of support from the local community in the current economic environment was absolutely fantastic.  It means there will be money for extra equipment offering patients better facilities in the Oncology ward.  On behalf of McConachie Stedman we wish to thank everyone for their support, especially those who attended the sponsors, the staff of McConachie Stedman, the community and all that were involved in any way with this event”. Mr Bill Barrett said.  

McConachie Stedman and all that supported this great local cause hope that this does bring a better chance of a brighter future for patients and families affected by cancer.

Keeping the Dates

24th January 2012 – Business Improvement Workshop Basic starting point for small businesses on how small change can improve the business performance and value.

20th and 21st February 2012 – Succession Planning and Insurance Workshop Looking to sell or retire from your business? Find out where to start and how to simplify the process which is probably your most valuable asset.

19th March 2012 – Business Sales and Valuations Small and Medium Enterprise – sales benchmarking and valuation to know the road ahead, ask those coming back! To get what you want you need to know where you need to be!

10th April 2012 – Farming Workshop The impact on latest legislations change and corporate actions and how best to prepare your farm to survive in this economic climate.

Specialised Presentation for Pharmacies – How to value and improve your pharmacy?

For dates and more information contact Jacko at McConachie Stedman 07 4632 1966

Staff Achievements – Congratulations

Staff Congratulations

It has been a busy year with new arrivals for McConachie Stedman. Firstly a big congratulations to Matt and Toni Chardon on the birth of their 1st child little Sophie Patricia born 4th Nov 2011 (9lb and 12 days late).

What better way to end a year than a wedding. We were lucky enough to have two of our very own Congratulations Kelly and Tim Lowien on their wedding 1^st October and Congratulations Scott and Ange Maroske tying the knot on 8^th October

Hot off the Press — Congratulations to Michael Harding on his recent engagement to Linda Lau.

Congratulations go to Melita Chambers, Andrew Keleher and Bruce Gillbard for completing their Certified Practicing Accountant (CPA) studies.  Congratulations also go to Jessica Gurney, Jessica Buckle, Stuart Coy, Siobhan Lyons, Joshua Karl and Nicole Fing on graduating from University.

McConachie Stedman Incentive Awards Goes To..

McConachie Stedman are proud of their association with Sports Darling Downs and support the organisation by providing quarterly Incentive Awards to young people excelling in their chosen sporting field.

An awards presentation was held at the recent Sports Darling Downs Breakfast. It was a pleasure to present Isabella Mayne with the Incentive Award. Isabella has been recognised for her sporting achievements in the ‘Sport of Hockey’ category.

The Partners and staff wish Isabella all the best with her future sporting endeavours.

Merry Christmas – Dates and Times

The Partners and staff wish you all a merry Christmas, a safe and prosperous new year and hope your travels are safe and enjoyable.
 
McConachie Stedman would like to advise our clients and business associates that our office will be closed on:
Friday 23rd December at 3:00pm and will resume normal trading on Tuesday 3rd January 2012.