Looking forward to the new financial year

Now that your wild end of financial year celebrations are winding down (okay, maybe only accountants do that), it is time to take stock of your business' current financial position and review your business plan. Over 2,500 years ago, the Greek philosopher Heraclitus was credited with penning the quotation "The only thing that is constant is change." Looking to the 2017-2018 financial year, it is not just the taxi industry that has had to adapt as new competitors and ways of doing business enter the market. Retailers in Australia have the expansion of Amazon. Hoteliers have the rise of sites like Air BnB. Within smaller regional areas, even the opening of a new competitor to the market (e.g. coffee shop, restaurant, mechanic, IT consultant, medical practice) can significantly impact on existing businesses. Only businesses that are nimble, in touch with what their customers want, and financially sound will continue to grow and prosper.  Over the coming weeks I'm going to be posting advice on how you can review your current operations to give yourself the best chance of success this financial year.

Happy New Financial Year

The team at C.T. Harris & Company would like to wish you and your family a happy and prosperous New Financial Year.  It is now time to start putting your New Financial Year's resolutions into action.  However, have you set yourself the right goals?  Remember, goals must be SMART (Specific, Measurable, Agreed Upon, Realistic, Time-based).  Best wishes.

With the end of financial year only a few days away there is limited time left to make donations to deductible gift recipients.  The benefit for the recipient is that they receive funds to continue their good work. The benefit for you is that you may be able to claim the donation as a tax deduction which results in you having less income tax to pay for this financial year. 

As there are a lot of worthy causes to choose from we recommend that you consider organisations which provide critical support.  While some organisations have significant marketing budgets and are well known there are others which you may not have heard of which provide great assistance in your local area.

Some of the organisations which we support are: Beyond Blue, Camp Quality, Cancer Council, Capricorn Rescue Helicopter, Doctors without Borders, Edmund Rice Foundation, Endeavour Foundation, Guide Dogs Qld, Horse Riding for Disabled, Leukaemia Foundation, Mater Hospital Appeal, Qld Meals on Wheels, Red Cross both in Australia and International, Royal Flying Doctor Service, St Joseph's Cathedral Conservation Fund, State Emergency Service Queensland, Shelter Box Australia, Spinal Cure Australia, Spinal Injuries Association, Sporting Wheelies and World Vision. 

Ensure that you receive and retain receipts for any donations made. 

The amount you give is totally your decision. 

As businesses usually only pay tax quarterly, it is very easy for large tax bills to arrive unexpectedly and this would have a negative impact on your cash flow.
This can cause great stress to business owners and can potentially threaten their operations if a significant amount of their working capital has to be paid to the Australian Taxation Office. 
Tax planning helps business owners know in advance what their tax obligations will be so they can budget accordingly.

At the end of the financial year, it is worth reflecting on what has gone well for your business and what can be improved. 
The tax planning process provides you with detailed information, allowing you to know how your business fared throughout the year.
This information can be used to make improvements in the coming year and to consider ways that staffing and operations can be best adjusted to account for likely periods of high and low activity. 

As a business owner, it is important to make sure you plan for your retirement.
Making contributions into Superannuation are a great way to reduce your taxable income while building up your retirement nest egg.
To be able to qualify for a deduction for a superannuation contribution there are a number of conditions which need to be met.
Also your taxable income and availability of cash are also considerations. 
Tax planning is a good way of reviewing your taxable income to determine if putting more money into superannuation is beneficial for you.
To benefit from this for this financial year you will need to act before 30 June, 2017 so if you need assistance on determining whether this is suitable or not just let us know and we would be happy to assist.

 Savvy business owners always consider carefully when and how to make major purchases to best take advantage of tax incentives.  It is obviously best to make major tax deductible purchases in years when your profit is high and cash is available. Tax planning will help you evaluate what kind of year you have had to help you decide if now might be the most tax effective time to buy or if it would be best postponing purchases until the next financial year.  Given the government's current incentives for small businesses, you may want to make purchases before 30 June, 2017 for the purchase to have any impact for this financial year.

It is vital that business owners have a clear idea of their business' financial position at all times, but it is especially relevant towards the end of the financial year.  Knowing where your business is at financially allows you to make data driven decisions about how to best maintain and grow your business.  Tax planning calculations provide an excellent health check for your business, allowing you to identify and deal with any potential cash flow issues before they become problems.

Have you started tax planning?

As the end of June approaches, at C.T. Harris and Company we are hard at work doing tax planning for our clients. During the tax planning process, we review their financials to date for the year, make projections around income to the end of June, and provide recommendations about how they can best minimise and budget for tax obligations.

We believe this is vita as tax planning helps:

  • Put business owners in the driver's seat
  • Allow them to strategically time the purchase of major equipment and infrastructure
  • Decide if it will be advantageous to make additional superannuation contributions before the end of the financial year
  • Identify times of peak and low activity within the business, allowing staffing and operations to be made more efficient in the coming year
  • Enable business owners to know what tax obligations are coming so they can budget for them

Over the coming posts, we will explain in more detail how tax planning works and how it can save you time and stress.

Doctors without Debt

C.T. Harris & Company would like to thank the staff at UQ Rural Clinical School - Rockhampton who helped organise our recent financial literacy workshop 'How to be a financially smart doctor: Using your medical income to set yourself up for life.' Thanks also to the fourth year medical students from University of Queensland who attended.
It is great to meet so many people who are interested in creating a better financial future for themselves by learning more about how to save and invest in assets and the associated tax implications.
These free seminars are just one way we at C.T. Harris & Company are trying to help those in our local community make good financial decisions which will help individuals and our local economy grow and prosper. If you want to know more about upcoming workshops or think people within your organisation would benefit from such a workshop, please contact us at C.T. Harris & Company.
For more information about improving your financial position, be sure to connect with us on Facebook and Linked In or contact the team at C.T. Harris & Co. to learn more!