Superannuation Death benefits are an estate planning matter that is a crucial aspect of financial planning.
It is essential to consider what happens to superannuation upon death.
Understanding the intricate system of superannuation death benefits is essential for effective financial planning and ensuring that your loved ones are taken care of.

When a superannuation member dies, the remaining balance in their super fund and any associated insurance payouts are generally paid out as a superannuation death benefit. This benefit is intended to provide financial support to the deceased member’s beneficiaries, including their spouse or partner, children, or other dependents.

However, the distribution of these benefits is subject to various regulations and considerations, making it a complex area of financial management.
It’s important to note that superannuation death benefits are not automatically distributed according to a will.Firt thing to remember is that super funds typically provide a set of criteria for determining who is eligible to receive the benefits.

In some cases, the Fund Trustee may have discretionary power to allocate the benefit to the most appropriate beneficiaries, considering the deceased member’s relationships and financial dependents.
This is an estate planning opportunity or danger for those operating an SMSF.

With this purpose in mind, everyone should familiarise themselves with superannuation death benefits rules and options. The result is to ensure that your wishes are carried out, and their loved ones are well provided. This involves nominating beneficiaries, understanding the tax implications, and integrating superannuation benefits into estate planning strategies.

Who Receives the Superannuation Death Benefit?

A superannuation death benefit distribution is typically prioritised according to specific rules and regulations. A death benefit is first paid to the deceased member’s dependents. These include their spouse or partner, children, and any individuals financially dependent on the dead at the time of their death. If there are no eligible dependents, the benefit may be paid to the deceased member’s estate.

It’s worth noting that the definition of dependents can vary between superannuation funds and may include both financial and interdependency criteria. Understanding these distinctions is crucial for ensuring the benefit is allocated appropriately and by the deceased member’s intentions. Furthermore, the rules governing who can receive a superannuation death benefit may change depending on the specific circumstances, such as the age and marital status of the deceased member.

In cases where the deceased member has not made a binding death benefit nomination, the fund trustee may exercise discretion in determining the benefit distribution. This underscores the importance of proactive planning and communication to ensure the benefit is directed to the intended beneficiaries. By understanding the eligibility criteria and potential beneficiaries, individuals can make informed decisions regarding the nomination of superannuation death benefit recipients.

Taxation of Superannuation Death Benefits

Taxing superannuation death benefits is a critical consideration that can significantly impact the ultimate value of the beneficiaries’ benefits. The tax treatment of these benefits is influenced by several factors, including the relationship of the beneficiary to the deceased member, the components of the superannuation benefit, and the age of the dead at the time of their passing.
Generally, superannuation death benefits paid to a deceased member’s dependents are tax-free.

This includes benefits paid to the deceased member’s spouse, children, and any individuals who were financially dependent on the deceased. However, the tax treatment may differ if the benefit is paid to a non-dependent, such as an adult child who was not financially dependent on the deceased.
In such cases, the tax payable on the superannuation death benefit is influenced by the components of the benefit, which typically include taxable and tax-free elements. The taxable component of the benefit is subject to tax at a beneficiary’s marginal tax rate, while the tax-free component is not subject to tax. Understanding these tax implications is crucial for both the deceased member and their beneficiaries, as it can inform decisions regarding the nomination of beneficiaries and the potential tax consequences of the benefit distribution.

Furthermore, individuals may explore strategies to minimise the tax impact of superannuation death benefits, such as utilising binding death benefit nominations or implementing effective estate planning measures. By considering the tax implications in advance, individuals can optimise the financial outcomes for their beneficiaries and minimise potential tax liabilities.

How to Nominate Beneficiaries for Your Superannuation

Nominating beneficiaries for your superannuation is a fundamental step in ensuring that your superannuation death benefit is distributed according to your wishes. Most superannuation funds offer members the option to make binding or non-binding death benefit nominations, providing a mechanism for specifying who should receive their superannuation benefit in the event of their death.

A binding death benefit nomination legally compels the superannuation fund trustee to distribute the benefit to the nominated beneficiaries, provided they meet the eligibility criteria. This nomination must be kept current and aligned with the fund’s requirements to remain valid. In contrast, a non-binding nomination serves as a guide for the trustee but does not impose a legal obligation to follow the member’s wishes.

Individuals need to review and update their death benefit nominations regularly, particularly in the event of significant life changes such as marriage, divorce, or the birth of children. By keeping these nominations current, individuals can ensure that their superannuation is directed to the intended recipients and aligns with their evolving family and financial circumstances.

Moreover, considering the potential tax implications of superannuation death benefits, individuals may seek professional advice to structure their nominations tax-efficiently and maximise the financial outcomes for their beneficiaries. By proactively nominating beneficiaries and staying informed about the nomination options available, individuals can exercise greater control over the fate of their superannuation benefits and provide for their loved ones according to their wishes.

Claiming the Superannuation Death Benefit

Once a superannuation account holder has passed away, claiming the superannuation death benefit begins.

This involves navigating the administrative procedures outlined by the relevant superannuation fund, which may include submitting necessary documentation and fulfilling specific requirements to facilitate the benefit payment.

Step one involves notifying the deceased member’s superannuation fund of their passing and initiating the process of claiming the death benefit. This may entail providing the fund with a certified copy of the deceased member’s death certificate and completing any required claim forms. Additionally, the fund may request information about the deceased member’s beneficiaries and their relationship to the deceased, mainly if a binding death benefit nomination is in place.

The beneficiaries must engage with the superannuation fund promptly and comply with any documentation requests to expedite the processing of the death benefit claim. Delays in the submission of required information or discrepancies in the provided details could prolong the benefit payment process, potentially impacting the financial stability of the deceased member’s dependents.

During this period, beneficiaries may also seek professional guidance to ensure they understand the steps in claiming the superannuation death benefit and are equipped to navigate any potential complexities. By actively participating in the claiming process and communicating effectively with the superannuation fund, beneficiaries can facilitate the efficient distribution of the benefit and mitigate any administrative hurdles.

Options for Receiving the Superannuation Death Benefit

Upon the approval and processing of a superannuation death benefit claim, beneficiaries are presented with several options for receiving the benefit. The payment method can significantly influence the tax treatment and long-term financial implications for the beneficiaries, making it a critical decision that warrants careful consideration.

One standard option is to receive the death benefit as a lump sum payment. This provides the beneficiaries immediate access to the total benefit amount, allowing them to utilise the funds according to their financial needs and priorities. However, it’s essential to recognise that receiving the benefit as a lump sum may result in tax implications, particularly for non-dependant beneficiaries and the taxable component of the benefit.

Alternatively, beneficiaries may opt to receive the superannuation death benefit as a pension or income stream, providing a regular and potentially tax-effective source of income over an extended period. This can be particularly advantageous for dependant beneficiaries who seek ongoing financial support and prefer to manage the benefit as a long-term income stream.

By evaluating the available options and their associated considerations, beneficiaries can make choices that align with their preferences.

Superannuation Death Benefit and Estate Planning

Integrating superannuation death benefits into estate planning is critical to comprehensive financial management. By strategically aligning superannuation benefits with estate planning strategies, individuals can exert greater control over the distribution of their assets and ensure that their loved ones are well provided for after their passing.

One key consideration in estate planning is the interaction between superannuation death benefits and your will. While superannuation benefits do not automatically form part of an individual’s estate, they can be directed to specific beneficiaries through binding death benefit nominations, bypassing the probate process and providing expedited access to the benefits.
Furthermore, individuals may explore the use of testamentary trusts to manage the distribution of their superannuation death benefits. Testamentary trusts can offer increased flexibility, asset protection, and potential tax advantages for the beneficiaries, making them a valuable tool in structuring the inheritance of superannuation benefits.

In addition, those with self-managed superannuation funds (SMSFs) may consider including a comprehensive succession plan within their fund’s trust deed.

Ultimately, by integrating superannuation death benefits into their broader estate planning framework, individuals can exert more significant influence over the allocation of their assets and provide their beneficiaries with a secure and efficient inheritance process.

Seeking Professional Advice on Superannuation and Death Benefits

In conclusion, the fate of superannuation after death is a crucial aspect of financial planning that warrants careful consideration and proactive management. Understanding the intricacies of superannuation death benefits, including the eligibility criteria, tax implications, and distribution options, is essential for ensuring that the benefits are directed to the intended recipients and aligned with the deceased member’s wishes.
Individuals should prioritise the nomination of beneficiaries for their superannuation, regularly review and update their nominations, and integrate superannuation benefits into their broader estate planning strategies. Seeking professional advice from financial advisors, estate planning experts, and taxation specialists can provide invaluable support in navigating the complexities of superannuation death benefits and optimising the economic outcomes for the beneficiaries.

By proactively engaging with these considerations and seeking professional guidance, individuals can secure the financial well-being of their loved ones and ensure that their superannuation benefits serve as a lasting and impactful legacy. Empowered with the knowledge and resources to navigate the labyrinth of superannuation after death, individuals can approach this critical aspect of financial planning with confidence and clarity, ultimately shaping a secure future for their be

🔒 Customer Retention Engagement Strategies . Lets explore Unlocking the Secret to Keeping Your Customers Engaged in a competitive market 🔒

🚀 Small businesses are facing unprecedented challenges in today’s competitive market. With rising interest rates and soaring fuel costs, it’s more important than ever to focus on customer retention strategies that will keep your business thriving. With another interest rate just hitting small businesses we need to start to put strategies in place as we progress into 2024.

Ideas to start customer engagement

💡 But how do you keep your customers engaged in times of uncertainty and into 2024? Let’s explore some actionable steps that can help you strengthen your bond with customers and boost your bottom line.

1️⃣ Show Genuine Appreciation: 💙 Take the time to show your customers that you genuinely appreciate their business. Personalized thank-you messages, exclusive discounts, and surprise gifts can go a long way in making them feel valued and important.

2️⃣ Stay Connected: 📲 In today’s digital age, staying connected with your customers is easier than ever. Utilize social media platforms, email newsletters, and customer loyalty programs to keep them engaged and informed about your latest offerings and updates.

3️⃣ Offer Exceptional Customer Service: 🌟 In a competitive market, outstanding customer service is a game-changer. Go above and beyond to resolve any issues promptly, listen to their feedback, and provide personalized solutions. Remember, happy customers are more likely to spread positive word-of-mouth recommendations.

4️⃣ Tailor Your Offerings: 🛍️ Understanding your customers’ needs and preferences is crucial. Regularly analyze their buying patterns and tailor your products or services to meet their evolving demands. This shows that you value their feedback and are committed to providing them with the best possible experience.

5️⃣ Create a Sense of Community: 🤝 Build a community around your brand by organizing events, webinars, or online forums where customers can share their experiences and engage with each other. This not only fosters a sense of loyalty but also provides valuable insights into their needs and desires.

Take action and make it happen

💥 Remember, customer retention is not just about keeping your existing customers happy; it’s about turning them into brand advocates who will spread the word and bring in new business. sustainability and Corporate Social Responsibility.

Consumers are increasingly concerned about the impact of businesses on the environment and society. Small businesses just as big business does need to demonstrate their commitment to sustainability. They can do this by showing their corporate social responsibility by implementing eco-friendly practices, reducing waste, and supporting local communities. Failure to do so could result in reputational damage and loss of customer loyalty.

Let’s navigate these challenging times together by implementing customer retention strategies that work By showing genuine appreciation, staying connected, providing exceptional service, tailoring your offerings, and creating a sense of community, you’ll position your small business for long-term success.

So now you have read this, what are you going to do to keep clients happy in 2024? Act today , set a sales target to enable you to achieve your results in 2024.

📢 Share this post to help other small businesses thrive in a competitive market. Let’s empower each other to overcome challenges and celebrate the power of customer loyalty! 🙌

Need an accountant who can help talk to Geoff and his team we understand small business

#CustomerRetentionStrategies #SmallBusinessSuccess #EngagedCustomers #BusinessGrowth #ThrivingInACompetitiveMarket

5 Startup Mindset Shifts You Must Make as you launch your New Business.

Starting out. Grab that winning mindset from day one to conquer challenges and thrive in the competitive business world.

Starting a new business is an exhilarating experience requiring a unique mindset.
Business owners are like modern-day supermen/women, equipped with the determination and courage to face any challenge head-on. The excitement of embarking on a new small business venture is unparalleled, as the possibilities are endless, and the potential for success is immense.

Get the right startup mindset from day one!

With the right startup mindset, you as a small business owner, can conquer any obstacle that comes your way. When starting out in a new business, having the right mindset is crucial for success.
It is important to approach every task with a positive attitude and unwavering belief in oneself. A business owner must be confident to take risks and make bold decisions, even in the face of uncertainty.
This mindset of fearlessness and optimism sets entrepreneurs apart from the rest and fuels their drive to succeed.

The mindset of a business owner starting out in a new venture is akin to that of a superhero. Like Superman, they possess extraordinary powers to overcome challenges and achieve greatness.
Don’t be afraid to step out of your comfort zone and push the boundaries of what is possible. Their unwavering determination and resilience will enable you to navigate the ups and downs of business.
Starting out in a new business requires a mindset that embraces failure as a stepping stone towards success. Every setback becomes an opportunity to learn and grow, allowing business owners to improve their strategies and approaches continuously. With this mindset, entrepreneurs can turn obstacles into stepping stones towards achieving their goals.

Most people assume starting a successful business requires a great idea and a substantial cash injection. Both are correct, but to truly make your dreams a reality, the truth is your transition to being a business owner begins with a new mindset.
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If you really want to be a successful business owner, you need to shift how you think about yourself, the world, and your business!

So, where do you get started to get your startup mindset mojo?

Here are some of the most valuable mindset shifts you should make before you begin your small business journey

1. Embrace The “Growth” Startup Mindset

If you’re thinking of starting your own company, do yourself a favor and read the book Mindset by Dr. Carol Dweck. Dr. Dweck has inspired countless business leaders and entrepreneurs because she teaches what it means to abandon the “fixed” mindset.

Premiership winning Coach at Collingwood, Craig Mc Crae, recommended it, and so do I. It helps keep you in the mindset zone.

Most of us have a “fixed” mindset. This is the belief that there’s a limit to your skills, what you can do, and what you can achieve at any given time. While that might seem like a humble position, it can be detrimental. Why it place limitations on you and your company from day one?

Shifting to a “growth” mindset means embracing the belief that you can improve anything, including your company, skills, and future, whenever you choose.

Focusing on constant growth ensures you’ll always work to make your business bigger and better.

2. Stop Prioritizing Quantity Over Quality

We’ve all heard that quality matters more than quantity, but many of us are still hardwired to seek out volume instead of value.

Prioritising quality over quantity means using your resources and people as effectively as possible to generate the best results. In the same way, prioritising quality over quantity as a business owner means you’re more cautious about which projects you take on and which clients you work with.

This can save you from making expensive mistakes. Don’t take on a contract or a sale if it leaves you potentially out of pocket to get work in the door.

3. Learn to Value Yourself

You may find that being a business owner brings a fair share of impostor syndrome. This is the belief that you’ve come to a place where you don’t deserve to be.

Without delay you need to remove that thought if you want to thrive.

Above all ,everyone feels this way occasionally, but never undervalue yourself,

You need to understand what your value is and be confident in yourself.

As can be seen take the time to regularly remind yourself what you’re good at and what you’ve accomplished so far. Tell yourself you deserve to be where you are and act like a small business champion.

4. Commit to Being a Lifelong Learner

There will always be new trends and technology to understand. Learn, embrace and grow you and the productivity of your business.

You need to be willing to keep up with the changes. Committing to a mindset of lifelong learning can help with that.

If you cultivate a constant curiosity and development attitude, you’ll be more likely to seek ways to improve your business. Being a lifelong learner makes you more agile, adaptable, and willing to evolve as your business grows.

A learning startup mindset requires shifting from seeing failure as an opportunity to learn. Take your mistakes as the lessons they are and use them to help you grow.

5. Have the tools and the fan club to support you

Confidence in yourself is a big mindset tool. With this in mind, your Mindset is best when you have the tools and people behind you to make it a success when you launch. This includes people who will provide direction, support, encouragement, and objectivity.

Without delay the tools are in the form of your documented plan, the 90-day launch and the financial targets to hit need to be implemented.

The most compelling evidence is that mindset medicine helps keep you focused.

Start Shifting Your Startup Mindset

Without a doubt any great business owner will tell you passion and money will only get you so far.

Take your, mindset, attitude and mental framework to keep pushing forward and achieving your goals. Shifting your mindset in the five ways mentioned above will prepare you to thrive.
Business owners possess the superhuman qualities of determination, fearlessness, and resilience. With the right mindset, you can overcome any challenge that comes their way and achieve phenomenal success. So gear up, put on your entrepreneurial cape, and embrace the adventure of starting your own business!

How to Build a Business You Love, A Business With Purpose: 7 Steps To Help You Find Your Passion And Grow Profits

Creating a business you love is not something that can be done overnight. It requires a lot of introspection, creativity and planning. You can do many small things to ensure your business has a purpose and that it aligns with your values. The key lies in breaking the cycle of doing things just for the sake of it. Instead, create an atmosphere where you’re creating a business for the pure joy of it. The rewards will follow and grow with your passion. In this blog post, we will discuss seven practical steps you can take to help you find your passion, and grow with purpose as a business owner:

Assessing your values

Do you have love and passion for your business? When you first start to consider building a business, the first thing you should do is assess your values. This will help you identify the values that are important for your business, and for you as a person. There are many ways you can go about this; one way is to identify the core values that form the basis of your personality. You can also look at the core values of your industry, and choose those that feel most aligned with your values. Once you have identified your core values, you can also look at how they align with your business. This is important, as you want to ensure your business is aligned with your values.

Define your business’s purpose.

When assessing your values, you must consider why you do certain things. This will help you to decide on a purpose for your business. Purposes are important in business and can help businesses align with their core values, and best fit their customer’s needs. A business with a purpose will generally align more with customers’ needs and have a higher success rate.

Decide on a growth path for your company.

Another important step is deciding on the growth path for your business. This can help you to start aligning your actions to your values. It is important to start with a growth path that fits your values and is feasible. This can help you avoid wasting months or years of your life on a growth path that does not align with your values or business goals.

Develop the practices you can rely on

As you build your business, you will find that much of your time will be spent on practices. These practices can be for your staff members or your own business. Some of the practices you will find yourself investing a lot of your time in are: – Training. Businesses thrive on people who are fully trained and know how to do the job. You will need to invest time in training your staff members on best practices and make them fully aware of your values and purpose. – Managing expectations. In any business, people will have expectations. You must manage expectations by setting realistic expectations and aligning actions with values. –

Planning and forecasting. Businesses thrive on planning and forecasting for profit growth. Again, you will be on a constant planning and forecasting cycle if you get excited about your plan. Planning and forecasting will help you to make well-informed decisions and align your company’s growth path with its purpose. – Day-to-day operations. As an owner, you must monitor day-to-day operations and ensure your practices run smoothly. Practices must be well organized and managed. – Communication. Businesses thrive on communication and must ensure they communicate with their staff members and clients. Communication is a two-way process.

Build a team that reflects your philosophy.

Many small businesses struggle with hiring the right team members. This can be because they did not plan well for their company’s growth. They might not have planned for their hiring, or they might have hired the wrong people. Hiring a team that reflects your philosophy and values can help you avoid many of the struggles businesses face when hiring the right team members. It is important to note that you should hire for fit, and not just for skills. You should hire for values. This does not mean you should hire people with the same values as you, but it means you hire for a values fit. You can hire for values like passion, tenacity, creativity, etc. You can hire for less obvious values, like how people approach work. You can hire for values like high integrity or kindness.

Get out there and just do it!

Businesses thrive when profits grow when they have a purpose; you must align values. It is important to assess your values and those of the industry that you play in. This will help you identify the core values that are important to you and most aligned with your industry. When you have identified these values, you can start working towards creating a business with a purpose and a growth path aligned with these values. One of the practices that you can employ is building a team that reflects your philosophy. This will help you to avoid hiring team members who do not align with your philosophy and help you to get team members who reflect your philosophy.

Self-Managed Super Funds (SMSFs) allow individuals to take control of their retirement savings and invest in assets they have confidence will be right for their retirement strategy.

Property investment is a popular choice for many SMSF trustees. However, it’s crucial to understand the rules and regulations surrounding this investment strategy.

Understanding the rules

Let’s explore the golden SMSF property rules of holding property by your SMSF!

The Importance of your role as a Trustee of your SMSF

Before delving into the specifics of property investment, it’s essential to emphasise the importance of responsible SMSF management. As an SMSF trustee of your Fund, you have a fiduciary duty to act in the best interests of your members and beneficiaries. This is fundamental behind the SMSF property rules.

This means prioritising the maximisation of retirement savings as the sole purpose of your SMSF. All members in an SMSF need to be Trustees. They must understand the rules and regulations, and understanding your obligations is crucial to ensure compliance and protect your members’ financial well-being.

Common Property Investment Misunderstandings when it comes to SMSF property rules.

Investing property through an SMSF can be more complex than many trustees initially assume. T
To help you navigate this investment strategy successfully, let’s address some common property investment misunderstandings and provide valuable insights into the rules and regulations.
Location and careful planning is the key, but SMSF Rules Apply.

Selecting a property that has a return and can be sold when it is right is important. Buying and trying to borrow for an SMSF purchase in Humpy Doo won’t get Bank support. It also may be hard to sell down the track when it comes to realising assets for retirement. Property investment for retirement needs clear objectives, and using emotion and ideas of holiday thoughts is the wrong approach.

It’s important to note that the SMSF property rules and regulations significantly impact structuring the SMSF property purchase. While you may have extensive knowledge about property investment, you must familiarise yourself with the specific rules that apply to SMSFs.

The Superannuation Industry (Supervision) Act (SIS Act) governs how you, as a Trustee, can operate your SMSF. It’s crucial to understand the rules and regulations it entails. Interactions between different sections of the SIS Act can make navigating SMSF property investment complex.

Limitations on Property Ownership

When it comes to property ownership within an SMSF, certain limitations apply. If you get them wrong, it can be disastrous and costly. General rules you need to understand before committing to a property contract for your SMSF.

1. You cannot purchase a residential investment property owned by you, any related individuals, or any companies or trusts you, including any related individuals, control. It’s essential to be aware of this restriction and avoid any schemes or attempts to circumvent the rules.

The SIS Act includes an anti-avoidance provision that imposes significant fines and potential imprisonment for those caught trying to bypass the regulations.

2. You can buy a commercial property you own, but proper valuations etc. apply. Please seek our advice advice in this area.

3. You should never buy a residential property for an SMSF borrowing situation where there are two contracts i.e. one for the land and one for the build

What are the consequences of circumventing the SMSF property rules and regulations?

It could be costly to get it wrong. This could include fines, making your fund non-compliant or worse still trying and reverse the transaction.

Restrictions on Personal Use of SMSF-Owned Property

Note any property owned by your SMSF, including beach houses or apartments, etc. cannot be used by you or any of your relatives. Even renting the property to relatives at market rates is not permissible. Some attempt to circumvent the rules and this could lead to severe penalties. It’s essential to prioritise compliance and act responsibly to protect your SMSF and its members.

Limited Recourse Borrowing Arrangements (LRBAs) and Property Investment

LRBAs can be a valuable tool for funding property investments within an SMSF. You cannot Cross-collateralise SMSF properties. Therefore, this means multiple properties are used as security for a single loan. Each property needs to have its own bare trust and loan arrangement. It’s important to seek professional advice when considering LRBAs to ensure compliance with the regulations.

The Character of the Asset and LRBA Limitations

When using an LRBA to fund your SMSF property investment, it’s important to consider the character of the asset. This means the loan proceeds must only be used to acquire a single asset.
The fund cannot change the character of the asset while the loan is in place. I.e. cannot split the property or convert a property into a commercial space or enterprise.
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Purchasing a property investment within an SMSF can be a complex undertaking. We offer advice as a Superannuation accountant, and as a licensed financial accountant in SMSF, we can help you make informed decisions. Plan your property purchase and ensure it is done correctly to meet your investment strategy and long-term retirement planning needs.

Cheating in business happens more than we like to realise.

Trust in business is the foundation upon which successful partnerships are built. Without trust, a business partnership is like a house of cards that is vulnerable to collapse at any moment. As a business owner, it is crucial to understand the significance of trust. Cheating in business has detrimental consequences when your business partner isn’t on doing the right thing!

In business, we see Trust in business as believing that your partner will act in your best interest with integrity and honesty. It means relying on their actions and knowing that they will follow through on their commitments. It’s a partnership like a marriage.

When you suspect that your business partner is cheating you and your business! It’s time to act! Recognizing the signs of potential cheating or betrayal is crucial in protecting your business, your ownership share, and profits and preserving your own well-being.

When things are wrong at worst, It may indicate that the business relationship is over. You will need to determine the extent of business cheating and organise a business exit plan.
Warning signs that indicate that things are not right include sudden changes in behaviors or attitude. Your business partner may have unexplained secretive actions, excessive control or manipulation, frequent and unexplained financial discrepancies. There also be a lack of transparency or accountability.
If you notice any of these signs, addressing them promptly and openly is important. Ignoring these red flags can damage your business and personal life irreparably.

What drives people to cheat?

You might be aware why things are right such, but leads people to undertake to cheat against you maybe reasons such as:

+ A feeling of being undervalued.
+ Greed
+ Marriage and other personal problems
+ Addiction such as gambling or drug and need to make extra.
+ Other influences such as offers of a better deal.

Trust your instincts and gather evidence before confronting your partner about your suspicions. It then means you can have a clear, evidence-based conversation rather than relying purely on emotions or assumptions.

3 tell-tale things that may mean things are right!

Be diligent and watch for hidden business relationships.

Discovering that your partner is working with competitors or starting side businesses without your knowledge can be common for those looking at going out alone.

· The decline in business performance: A sudden drop in business performance without any valid explanation could signify mismanagement or unethical practices.
· Lack of commitment or interest: If your partner appears to be less involved or engaged in the business, it may indicate that their attention is focused elsewhere.
· Unavailability or avoidance: Difficulty reaching your partner or constant avoidance of meetings and discussions might indicate they are hiding something.

Ways to detect cheating or fraud in your partnership.

Detecting cheating or fraud in a partnership requires a combination of vigilance, attention to detail, and a proactive approach.

Approaches to deal with business cheating may include:

– Regular financial review of the records may uncover discrepancies or irregularities.
– Monitoring cash flows, expenses, and financial records is essential to detect any signs of embezzlement or misappropriation of funds.
– Implementing robust internal controls, such as segregation of duties and regular reconciliations, can deter fraudulent activities.
– Understanding all aspects of your business, not just your area of control
– Be curious and ask questions.

Do you have open lines of communication with your partner? These should include regularly discussing the state of the business, sharing financial information. You must ensure transparency which can help identify any inconsistencies or discrepancies. Being vigilant about changes in behavior or attitude by conducting background checks on potential partners can also provide valuable insights into their integrity and trustworthiness.

If your business partner stops talking about their life outside of business, it could be a sign they are becoming secretive.

The impact of cheating on your business

Cheating or betrayal in a business partnership can have severe consequences for your business, both financially and emotionally. It can lead to financial losses, reputational damage, and the erosion of client trust. The fallout from a cheating partner can disrupt operations. It will strain relationships with employees, suppliers, and customers, and even result in legal battles. The emotional toll of betrayal can be equally devastating, causing stress, anxiety, and a loss of confidence in future partnerships.

The impact of cheating extends beyond the immediate fallout. It can create a culture of mistrust within your organization and make attracting and retaining talented employees and clients more challenging. Rebuilding trust after a betrayal takes time, effort, and a commitment to change. It requires acknowledging the pain caused, taking responsibility for one’s actions, and implementing measures to prevent a recurrence.

Steps to prevent cheating or betrayal in business.

Preventing cheating or betrayal in future partnerships starts with due diligence and careful partner selection. Thoroughly vetting potential partners, conducting background checks, and seeking references can help identify any red flags or warning signs. Choosing partners who share your values, have a track record of integrity, and are committed to open and transparent communication is essential.

Establishing clear boundaries from the outset and a robust shareholders agreement are crucial in preventing cheating or betrayal. This includes defining roles and responsibilities, setting up internal controls, and regularly reviewing and discussing the state of the business. Implementing checks and balances, such as regular audits, can deter fraudulent activities and provide peace of mind for both partners.

The role of communication and transparency in maintaining trust

Communication and transparency are the cornerstones of maintaining trust in a business partnership. Regular and open communication allows for sharing of information, ideas, and concerns. It fosters a collaborative environment where both partners feel heard and valued. Transparent communication involves being honest and forthcoming about the state of the business, financial matters, and any challenges or concerns that may arise.

Transparency also extends to decision-making processes. Ensure that both partners have an equal say and are informed about important decisions in the business. This includes sharing financial information, including revenue, expenses, and profitability, to build a shared understanding and ensure accountability. By fostering an open communication and transparency culture, partners can build trust and strengthen their partnerships over time.

Before pursuing legal action, it is important to gather evidence and document any instances of cheating or fraud. This may include financial records, emails, contracts, or witness statements. Presenting a strong case will increase the likelihood of a favorable outcome and hold the offending party accountable for their actions. Legal action should be considered as a last resort after all other avenues of resolution have been exhausted.

Addressing cheating or fraud in a partnership can be emotionally and legally complex. Professional help can also provide an objective perspective and help navigate the legal aspects of addressing cheating or fraud. Advisers can offer insights into the best course of action, potential risks, and the likelihood of success.

Professionals can see things that may not be obvious to you. Engaging the services of professionals with expertise in business partnership issues early can greatly assist in achieving a fair and satisfactory resolution.

Call to Action:

Protect your business and partnership by prioritizing trust and vigilance. Regularly communicate with your partner, If you suspect your business partner of cheating or unethical behaviour, addressing your concerns openly and honestly is crucial. In many cases, denials will be the first reaction Consider discussing the matter with them directly but have your ducks lined up so that you understand that if your business partner has been undertaking actions that are detrimental to you, you have a plan as to what to do next.

Invariably cheating in a partnership is irreparable, and a solid exit plan for you to salvage any undermining or financial loss is imperative for a successful outcome. As a small business accountant we can assist you in developing a plan with an outcome that protects your interests and sanity.

#cheating #trustinbusiness #businessowners #exitplanning #businessdisputes

Lodging a final Deceased Estates Tax Return is one of the important things to do when managing someone’s final affairs. Dealing with the loss of a loved one is a deeply emotional and challenging time. Beyond grief and sorrow, there are often a number of administrative tasks to navigate. One of these tasks is managing the deceased person’s tax return. It’s a task that can seem daunting, especially if you’re unfamiliar with the tax system. However, understanding the process can make it less overwhelming. We as Accountants that specialise in this area can help.

In the Australian context, the taxation obligations of a deceased person don’t simply disappear upon their death. These obligations can transfer to their legal representative or the executor of their will.
. It is a crucial step in finalising the deceased’s affairs and ensuring compliance with the Australian Taxation Office (ATO).

Understanding a Deceased Person’s Tax Return in Australia

When a person dies their tax obligations do not automatically cease. Rather, these obligations transition to their deceased estate. This means that any income earned from the day after the person’s death until the end of the financial year must be declared in the deceased person’s tax return.
In general, a deceased person’s tax return is prepared in the same way as a living person’s tax return. This includes all forms of income, deductions, and tax offsets until the date of death. However, there are some specific rules and regulations related to the taxation of deceased estates. These include the treatment of superannuation death benefits, capital gains tax, and the taxation of testamentary trusts.

Legal responsibilities for managing a deceased affairs

The responsibility for managing a deceased estate’s tax falls primarily to the legal representative. This can be the executor of the will, an administrator appointed by the court, or a trustee.
The legal representative is responsible for lodging the deceased person’s tax return from the start of the income year until the date of death. They must also lodge a tax return for the deceased estate for any income earned after the date of death by the estate.

In addition to lodging tax returns, the legal representative must also pay any tax owed. They may use the assets of the deceased estate to do this. It’s important to understand that as a legal representative, its your role to ensure that all tax obligations are met.

Who is responsible for filing a final tax return for someone who has died?

The executor of the will, the court-appointed administrator, or the trustee is responsible for filing the final tax return for someone who has died. This individual is often referred to as the legal personal representative (LPR), . Their role is to manage the deceased’s tax affairs.


The LPR’s tasks include notifying the ATO about the person’s death. It also involves gathering all necessary financial information, preparing, and lodging the deceased person’s tax return, and paying any outstanding tax from the estate’s assets.

We recommend working slowly through the issues. Don’t be pressured by beneficiaries keen to get their hands on the money.

Steps in filing a deceased person’s tax return

Filing a deceased person’s tax return involves several steps.

First, the legal representative should notify the ATO about the death.

This can be done by sending a copy of the death certificate, along with a written notice, to the ATO. Though often the ATO gets notified by other sources such as birth death and marriages.

Next, the representative should gather all necessary financial information. This will likely include bank statements, investment reports, and details of any superannuation funds. The data will be used to prepare the deceased person’s tax return.

The third step involves completing the tax return. Therefore after the tax return has been lodged, the representative must then pay any outstanding tax before making final distributions


Remember, these steps can take time and require attention to detail. It’s crucial to stay organised and keep accurate records throughout the process.

Common issues in managing a deceased estate’s tax return

Managing a deceased person’s tax return is not always straightforward. Various issues can arise, complicating the process.


One common issue is incomplete or missing financial records. This can make it difficult to accurately complete the tax return. In such cases, the legal representative may need to contact banks, investment companies, and other institutions to obtain the necessary information. Always plan by actively undertaking Estate planning so that when you die some of the complexity is ironed out.


Another common issue is the complexity of the deceased’s financial affairs. If the deceased had multiple income sources, substantial investments, or owned a business, the tax return could become quite complicated. In these situations, it might be necessary to engage professional help.

Being an executor can be a big responsibility. However, with a basic understanding, organisation, and patience, it can be managed effectively. Take time to work through the processes and reach out if you need guidance along the way.

When do you need a Capital Gains Valuation. Selling your home or acquired property through inheritance, demolishing a home or rental for property development gst matters, you may need to obtain a retrospective valuation capital gains property report.

The capital gains report may be referred to as backdated property valuation or a capital gains valuation.

The property valuation will outline the property market value at a specific time in the past by a certified valuer. This assists you with helping you work out your capital gains tax liability by providing a market value at a specific date required.

The Tax Office will require the taxpayer to have acquired a capital gains tax property valuation report to establish the correct capital gain made on the sale of their property in some circumstances. This Valuation, in many cases, forms the basis for the cost base of the property.

A Valuer, using historical data, knowledge, and historical facts will be able to provide you with a valuation that can be used on a specified date. Failing to provide such evidence may result in the ATO using their own Valuation methodology and not necessarily coming up with the expected result you desire.

Many years ago, the ATO would accept a one-liner on a real estate agents letterhead. This now is not the case, and the Valuation must be substantiated to provide an accurate figure.

Check with us to determine what date you require and why before engaging with a valuer. We have no alliance with the following Valuers, but we are aware our clients have used these businesses in the past:

http://www.insightproperty.com.au
http://www.duotax.com.au/property-valuations

Identifying and recording obsolete trading stock write-offs for a small business involves several steps.

Its that time of year, when you should undertake you annual stock take. We suggest to be practical in your approach. Use scales and estimates for small items such as screws , widgets and small items.

A practical approach – obsolete items.

Here’s a general guide on how to approach this process:

1. Identify the stock items: Begin by reviewing your inventory records and identifying any old trading stock that needs to be written off. Look for items that are damaged, expired, obsolete, or unsellable due to other reasons.
2. When doing a stocktake, use round stickers (i.e. red dots) or straws to identify those items that you have counted.
3. Assess the value: Determine the value of the stock items that need to be written off. This can be done by assessing their original purchase cost, current market value (if applicable), or any other relevant valuation method.
4. Document the write-off: Maintain proper documentation for the write-off. This should include details such as the date, description, quantity, unit cost, and total value of the stock items being written off. Store this information for future reference, especially for tax and audit purposes.
5. Update inventory records: Adjust your inventory records to reflect the write-off. This helps ensure accurate reporting and tracking of your remaining stock items.
6. Tax considerations: See Geoff and his team

Remember, if need help contact us .

You should combine your stocktake with a sales budget that should be done for coming year

Once you have undertaken your list let us know and we will help you record it in your accounting system. Happy new financial year.

GST at property settlement is a tax that needs to be deducted at settlement. It continues to catch out Mum and Dad developers walking the cashflow-type rope. Many are not aware that they will only have effectively 90% of the sale at settlement to play with. This can cause pain as interest rates bite and property prices decline in some areas.

Since July 2018, you may need to pay GST at settlement if you are selling or buying new residential premises or potential residential land. How GST is paid for certain property transactions affects purchasers, suppliers, and their financiers. For those non-residents, there is a further hit of non-resident withholding tax.

What is remitted at gst at property settlement

In essence, the purchaser must remit 10% (being GST) or 7% withholding GST margin scheme to MR ATO at settlement. This is regardless of if there is a first mortgage on the property.

A reconciliation of the final GST is done in the vendor’s next BAS and any amount payable or refundable is collected then. This puts the ATO squarely in the front of the cash handouts and leaves the balance scrambling. Those who rely on making a deal with the ATO for a repayment plan are unable to do so, and potentially if things a tight, a vendor could come out short.

Some penalties will apply if the Vendor fails to provide the required Notice or fails to notify the Purchaser of the required details.  If either occurs, a penalty of $21,000 would be payable. This assumes the Vendor is an individual and maybe five times that if a corporate entity is involved.  The ATO can catch up with people using its data-matching systems.

There is no requirement for Purchasers to be registered for GST.

GST withholding notification.

Before the settlement of GST property settlement, a GST property settlement withholding notification needs to be completed. This needs to be lodged online to the ATO; a conveyancer or legal representative can do this on the Purchaser’s behalf. This Form needs to be completed as soon as possible, and the ATO will provide a unique payment reference number (PRN) and lodgement reference number (LRN).

Once settlement has occurred, the GST property settlement date confirmation. The form must be completed with the unique PRN and LRN provided by the ATO.

Don’t panic a purchaser does not have to pay a GST withholding amount at the time when they deliver a genuine deposit on the property paid or the deposit is forfeited.

GST complications

Should it be found that the deposit is not a genuine deposit, it will be treated as part of the consideration for the supply. This means the purchaser may be required to pay a GST withholding amount on or before paying the vendor’s deposit.

Some developers think we can avoid the 10% withholding regime. They try this using an instalment contract. Under this arrangement, when the purchaser pays the purchase price balance. Instalment contracts mean that the first payment under an instalment contract is the first day the purchaser pays any of the consideration for the supply. Therefore, the purchaser must pay the GST withholding amount on, or before, the day they provide this first instalment payment. GST withholding amount to be paid.

Again, if instalments extend over 12 months, the ATO gets their money well before full settlement.

Under these rules, the ATO gets paid first. If liquidation occurs, the Bank may be short of its loan as the ATO has snaffled the first 10%. Effectively, the Bank will argue that the ATO has received a preferred payment. Then the Bank will chase the 10% from the Vendor who, in most cases, guaranteed the loan. This is important to note if the development goes into liquidation. It also may delay settlement as the Bank will not release a clear title.

Be ready to remit gst at property settlement.

As a seller, get your ducks lined up early. This will ensure you can proceed smoothly toward settlement. Make sure you have enough money to clear the title. If not, consider delaying the settlement and finding the potential shortfall or consulting a professional insolvency expert for advice on your actions.

Regulatory Changes: The Australian government frequently reviews and updates regulations related to SMSFs. SMSF trustees must stay informed about changes to compliance requirements, reporting obligations, investment restrictions, or contribution caps.

What we will cover
• New Labour Government – whats changing after the May 2023 Budget

• Investment Strategy Compliance: SMSFs must have an investment strategy that aligns with the retirement goals and risk profile of the fund’s members

• Limited Recourse Borrowing Arrangements (LRBAs): LRBAs allow SMSFs to borrow funds to invest in property or other assets. However, there are specific rules and restrictions around LRBAs, and trustees must ensure they comply with these regulations to avoid penalties or possible disqualification of the fund. Review

• Contributions and caps – what can I contribute and the work test

• Valuation of Assets: SMSFs must report their assets’ market value each financial year. What Trustees need to do.

• What the Super Fund auditor looks for

• Cybersecurity and Data Protection: With the increasing reliance on technology, SMSFs are exposed to cybersecurity risks. Trustees should implement robust security measures – discussion scams and how to protect your data.

• When a Self-Managed Superannuation Fund (SMSF) member passes away, several important considerations exist for the fund and its trustees. Here are some critical points regarding SMSFs and death:

• Trust Deed and Member’s Will – is your aligned

• Taxation of Death Benefits: Depending on various factors, including the age of the deceased member and the recipient, death benefit payments from an SMSF may be subject to taxation. Tax treatment may differ between dependents and non-dependents, and it is crucial to understand the applicable tax rules and seek professional advice. – let’s discuss

• Reversionary Pensions: If the deceased member passes, does this help in the estate planning process

• Death Benefit Nominations: SMSF members can make binding or non-binding death benefit nominations. Should I do one?

• Trustee Succession Planning: SMSF trustees need to have a succession plan in place in case of the death or incapacity of a member/trustee.

• Downsider strategy – how it can help me?

• Super above 3 million balance, or if one partner dies and it pushes you over – what should you do?

Let us know if you can join us either in person or online via zoom !
Essential for all those who run and operate an SMSF, both using our services or other professionals. All welcome!
Please RSVP to Chris @ chris@gartlyadvisory.com.au

Estate planning and SMSF can play a large role when it comes to Estate planning, which is an often-overlooked aspect of financial planning when executing your Will, superannuation, and wishes.

Estate planning determines how your assets will be distributed once you pass away. However, estate planning can be complicated and overwhelming, which is why Self-Managed Super Funds (SMSFs) have become popular.

SMSFs are a powerful tool for estate planning and managing your retirement savings.
Whether you’re new to estate planning or simply looking for a more efficient way to manage your assets, leveraging the power of SMSF can help you achieve your financial goals and ensure that your assets are distributed according to your wishes.

Understanding SMSF and its benefits for estate planning

SMSF is a type of super fund that is managed by its members. It provides more flexibility and control over your retirement savings compared to the public APRA super funds. SMSFs can invest in a wide range of assets, including property, shares, and managed funds. This makes them a popular choice for those who want to take a more active role in managing their retirement savings and buy property direct.

Estate planning and SMSF provide benefits for estate planning that should not be overlooked. Unlike other super funds, SMSF members have more control over how their assets are distributed after their passing. With an SMSF, you can nominate who receives your benefits and how they are distributed. This means your assets can be distributed according to your wishes, which can provide peace of mind for you.

SMSF vs. other estate planning options

An SMSF forms part of a structure to manage your estate planning wishes. This, combined with your wills, a family trust and other measures, ensure the correct outcome.

SMSFs also provide tax benefits for estate planning. For example, assets held in an SMSF are not subject to capital gains tax (CGT) when they are sold after the member’s death. This can provide significant tax savings for your beneficiaries.

Creating an estate plan using SMSF

Creating an estate plan using SMSF involves several steps.

We first must look at the Fund’s assets and the members’ wishes. Look at the age and composition of your SMSF . Are there others in the Fund that may continue after your death?

Those in pension mode may choose to allow the Death Benefits to be rolled over to a remaining dependent in the fund via the use of a reversionary pension. The advantage to this is that the benefit does need to come out of Super.

Other members may choose to prepare a binding death benefit nomination (BDBN). This legal document specifies who will receive your benefits and how they will be distributed after your passing.
When creating a BDBN, it’s important to consider the needs of your beneficiaries. For example, you may want to provide for your spouse’s retirement needs or ensure that your children receive an education. You should also consider the tax implications of your estate plan and how they will affect your beneficiaries.
Once you have created a BDBN, you should review it regularly to ensure it still reflects your wishes. You should also keep your beneficiaries informed of your estate plan so they know what to expect after your passing.

Understanding who is a dependent for Superannuation purposes

Under the Superannuation Industry (Supervision) Act 1993 (SIS), benefits may be paid to one or more of the member’s dependants or their legal personal representative (LPR), i.e. the estate, subject to the fund’s governing rules.(check Trust Deed)

A dependant for these purposes (known as an SIS dependant) includes:
• the member’s spouse – legally and de facto
• the member’s child (of any age), and
• someone with whom the member has an interdependency relationship (generally someone with whom the member has a close personal relationship and lives, and where one or each of them provides the other with domestic support and personal care).

A “SIS dependant “also includes someone who is a dependant within the ordinary meaning of that term (an ‘ordinary meaning’ dependant), such as a person who may not be a spouse or child but who depends on the member financially. If an individual is not an SIS dependant, they can only receive a member’s death benefits via the deceased member’s estate.

Common mistakes to avoid in SMSF estate planning

There are several common mistakes to avoid when creating an estate plan using SMSF.

These mistakes include:
• Failing to create a BDBN: Without a BDBN, your benefits may not be distributed according to your wishes.
• Failing to understand who may control your SMSF after your death.
• Failing to have your Trust Deed updated regularly and referring to this in the Estate planning process.
• Best practice is to have a corporate trustee
• Failing to set up the right pension and the conflict between DBBN and reversionary pension.
• Failing to recognize who is dependent vs nondependent.
• Failing to review your estate plan regularly: Your circumstances may change over time, so it’s important to review your estate plan regularly to ensure it still reflects your wishes.
• Failing to keep your beneficiaries informed: Your beneficiaries should be informed of your estate plan, so they know what to expect after your passing.

Choosing the Right Accountant for estate planning

Choosing the right SMSF provider is important for estate planning. You should look for a provider that has experience in estate planning and can provide professional advice.
Our role at Gartly Advisory is to help advise Trustees in the Estate Planning process.
In many cases, we will assist the Trustee in the decision process of whether it is appropriate to wind up the SMSF and to be strategic about their estate planning and smsf.

SMSF estate planning checklist

To help you create an estate plan using SMSF, here’s a checklist of things to consider:
• Create a BDBN and make sure your will works in conjunction with your super strategy
• Review your estate plan regularly.
• Brief your POA and appointer legal representative of your wishes post death as they should be appointed to your SMSF to act post death
• Keep your Deed up to date.• Keep your beneficiaries informed.
• Consider the tax implications of your estate plan
• Choose the right SMSF provider
Estate planning should not be overlooked.

By leveraging the power of SMSF, estate planning can give estate planning control over your retirement savings and can be used to create a tax-efficient estate plan. Peace of mind knowing that your superannuation ends up with the right loved ones is a powerful aspect of having an estate plan.

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Dividend vs keeping the profits in retained earnings

Should I pay a dividend from my company? When it comes to running a successful business, one of the most important decisions you’ll have to make is what to do with your profits. Should you pay a dividend to yourself as the business owner, or reinvest the money back into the company? It’s a question that many business owners struggle with, and there’s no one-size-fits-all answer.

We argue that paying dividends is a great way to reward the owners.

Others believe that reinvesting profits is the key to long-term growth and success. In this article, we’ll explore the pros and cons of both options, so you can make an informed decision that’s right for your business.

Understanding Dividends and How They Work

First, let’s define what a dividend is. A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares or allocated to the loan account. Dividends are paid out of a company’s profits and are distributed on a regular basis, such as quarterly or annually.

There are different types of dividends, such as regular dividends, and special dividends.

Regular dividends are the most common type and are paid out on a regular basis. Special dividends are a one-time payment made by the company, usually when the company has extra profits. Stock dividends are paid in the form of additional shares of stock instead of cash.

Pros and Cons of Paying Dividends to Shareholders

Now that we know what dividends are, let’s explore the advantages and disadvantages of paying dividends to shareholders.

Advantages of Paying Dividends

One of the main advantages of paying dividends is that it can be a great way to reward you as the owner. Shareholders receive a share of the company’s profits, and this can help to attract new investors and retain existing ones.

Importantly paying dividends reduces Retained Earnings. This reduction in retained earnings for a small business helps :

• The flow of profits for tax purposes
• The impact of holding too much capital that exposed if there is a legal claim against the company.

Disadvantages of Paying Dividends

One of the main disadvantages of paying dividends is that it can limit the company’s ability to reinvest in the business. When a company pays a dividend, it’s taking money out of the company that could be used to fund growth initiatives or invest in new projects. If the company doesn’t have enough cash to fund these initiatives, it may need to raise additional capital through debt or the owners lending money back

Another disadvantage of paying dividends is that it can create expectations among shareholders. If a company pays a dividend, shareholders may expect the company to continue paying dividends in the future.

Advantages and Disadvantages of Keeping Profits in the Company

Now, let’s explore the advantages and disadvantages of keeping profits in the company, rather than paying dividends.

Advantages of Keeping Profits in the Company

One of the main advantages of keeping profits in the company is that it allows the company to reinvest in the business. By reinvesting profits, the company can fund growth initiatives, invest in new projects, and improve its products or services. This can help to increase the value of the company over time and attract new investors.

Keeping profits in the company can also help to reduce the company’s reliance on external financing. If the company has enough cash to fund its growth initiatives, it may not need to raise additional capital through debt or equity financing. This can help to reduce the company’s debt load and improve its financial health.

Disadvantages of Keeping Profits in the Company

One of the main disadvantages of keeping profits in the company is that it can inhibit profit reward and extraction. If the company doesn’t pay a dividend, shareholders won’t receive a share of the profits in the short term.

As the owner this has 2 serious disadvantages

• NO reward in short term for your hard work
• Taxation – distributing in a regular method allow better tax planning
• Not declaring a divided but still taking the money may create a DIV 7a loan – not advisable

Another disadvantage of keeping profits in the company is that it can create excess cash that isn’t being used effectively. A business owner should have a clear plan for how to reinvest its profits. If not, it may be better to distribute the profits to shareholders in the form of a dividend.

Finally take profits as you go and dont leave it for someone else if something goes wrong ie liquidation or legal action . Paying out dividends is like passing the gate way of no return. Be careful though as declaring a dividend with poor trading can lead to insolvent trading!

Criteria for Deciding Whether to Pay Dividends or Keep Profits

Let’s look at some criteria for deciding which option is best for your business.

Analyzing the Financial Health of the Company

One important criterion for deciding whether to pay dividends or keep profits in the company is the financial health of the business. If the company is financially stable and has excess cash, it may be a good idea to pay a dividend. However, if the company is in a growth phase and needs to reinvest profits to fund growth initiatives, it may be better to keep the profits in the company.

Considering the Company’s Growth Potential

Another important criterion is the company’s growth potential. If the company has a high growth potential, it may be better to reinvest profits in the business. Thereby funding growth. However, if the company doesn’t have many growth opportunities, it may be better to pay a dividend . Reward shareholders and extract the excess cash from the business.

Evaluating the Shareholder’s Preferences

Finally, it’s important to consider the preferences of the company’s shareholders. Some shareholders may prefer to receive a dividend, yet the other business owner may prefer to see the company reinvest profits in the business. It’s important to understand the preferences of the company’s shareholders and make a decision that’s in their best interests.

Look at the Franking account as a small business and see how this may impact your future tax liability personally. Remember declaring a franked dividend have credits attached. However, while tax is paid with the lowering of the company tax rate there may be top-up tax payable

Top-up tax is effectively the shortfall of tax that may be incurred in the event that a shareholder is on a higher tax rate ie tax credits typically for small business is @ 25% but you may have taxpayers on higher rates such as 32.5% and beyond

Conclusion and Final Thoughts on the Dividend vs. Profit Debate

In conclusion, the decision to pay a dividend or keep profits in the company is a complex one that requires careful consideration of the company’s financial health, growth potential, and shareholder preferences. While paying dividends can be a great way to reward shareholders and attract new investors, reinvesting profits can be the key to long-term growth and success. Ultimately, the decision will depend on the unique circumstances of each business. By weighing the pros and cons of each option and considering the criteria outlined in this article, business owners can make an informed decision that’s right for their company.

Unveiling the Power of a simple Business Plan for small business is Your Blueprint to Success

A Simple business plan for small business helps you dream big! Are you an entrepreneur or business owner aiming to achieve success in your ventures?

Do you find yourself constantly facing setbacks and challenges that just make it a little harder hinder your growth? The solution is in the power of a well-crafted simple business plan that kicks goals. A small business action plan is a blueprint that outlines your goals, strategies, and tactics to achieve success. It is your roadmap to success and helps you stay on track towards achieving your objectives.

A well-written and EXECUTED business plan not only helps you secure funding but also provides clarity and direction for your team.

So, let’s dive in and discover how a business plan can be your key to unlocking success in your business.

4 reasons Why every small business needs a simple business plan

A simple business plan is essential for every business, no matter how big or small. It provides a clear understanding of your business goals and objectives, outlines the strategies you will use to achieve them, and helps you identify potential obstacles and solutions. Without a plan, you risk losing focus and direction, making it difficult to achieve your goals.
You need a business plan for several reasons:

1. Setting goals and objectives: A business plan allows a small business to establish clear goals and objectives for the company, including financial targets, growth milestones, and other key performance indicators. This helps the business owner to focus on what needs to be achieved and how to get there.
2. Attracting funding: If a small business needs external funding, such as a loan or investment, a business plan is essential. It provides potential investors or lenders with a clear understanding of the business’s goals, strategies, and financial projections, which helps them determine whether or not to invest in the company.
3. Identifying potential challenges: A business plan forces the business owner to think about potential challenges that the company may face and how to address them. This helps the business owner to be prepared and to have contingency plans in place.
4. Making informed decisions: A business plan helps the business owner to make informed decisions about how to allocate resources, such as time and money. By having a clear understanding of the company’s goals and objectives, the business owner can prioritize tasks and investments more effectively.

You plan is a communication tool that helps share the your vision, mission, and values with employees, customers, suppliers, and other stakeholders.

Its your roadmap for the business future and helps everyone involved to understand their role in achieving the your set goals

The process of planning will help you identify your target audience! For you to know your competition, and develop a comprehensive marketing strategy. It is a tool that provides a roadmap for your team to follow. Action by setting realistic goals, measure your progress, and make adjustments as needed to ensure your success.

In short, a business plan is the foundation of your business. It provides a clear understanding of your business goals, identifies potential obstacles, and outlines the strategies you will use to achieve success.

Different types of business plans

There are several different types of business plans, each with its own purpose and audience.

Traditional Business Plan
A traditional business plan is a comprehensive document that outlines every aspect of your business, from your mission statement to your financial projections. It is typically used to secure funding, but it can also be used as a tool to guide your business operations.

Lean Startup Plan – recommended – keep it simple but actionable
A lean startup plan is a simplified version of a traditional business plan. It focuses on the essential elements of your business, such as your target market, value proposition, and key metrics. It is typically used by startups that are looking to test their business concept quickly and efficiently.

Internal Business Plan
An internal business plan is a document that is used to guide the operations of your business. It is typically not shared with external stakeholders and is used to keep your team focused and aligned with your business goals.

Strategic Business Plan
A strategic business plan is a long-term plan that outlines your business goals and objectives over a period of several years. It is typically used by established businesses that are looking to grow and expand their operations.

Key components of a business plan:

Executive Summary
The executive summary is the first section of your business plan and provides an overview of your business. It should be concise and compelling, outlining your business concept, target market, and competitive advantage.

Company Description
The company description provides a detailed overview of your business, including your mission statement, history, and ownership structure.

Market Analysis
The market analysis section outlines your target market and identifies potential opportunities and challenges. It should include information on your competitors, market size, and trends.

Products and Services
The products and services section provides a detailed description of your offerings, including their features, benefits, and pricing.

Marketing and Sales Strategy
The marketing and sales strategy outlines how you plan to reach and sell to your target market. It should include information on your advertising, sales, and distribution channels.

Financial Projections
The financial projections section provides an overview of your projected revenue, expenses, and profits over a period of several years. It should also include information on your funding needs and sources.

Management and Operations
The management and operations section provides an overview of your team and their roles, as well as your business operations and processes.

Including these key components in your business plan can help you create a comprehensive and effective document that will guide your business towards success.

YOUR marketing plan

A marketing plan is essential for small business It outlines how to reach and sell to your target market,. It provides a roadmap for your marketing activities. A well-crafted marketing plan can help you to identify your target audience, develop compelling messaging, and choose the right marketing channels to reach your audience.

To create a marketing plan start by identifying your target market. This should include a detailed description of your ideal customer, including their demographics, psychographics, and buying behavior.

Developing financial projections and budgets

Financial projections and budgets are essential. They provide an overview of your projected revenue, expenses, and profits over a period of several years, as well as your funding needs and sources.

To develop financial projections and budgets, start by estimating your revenue and expenses for the coming year. This should include a detailed breakdown of your costs, including fixed and variable expenses.

Next, project your revenue growth over a period of several years. This should be based on your market analysis and sales projections.

Finally, identify your funding needs and sources. This may include loans, investments, or crowdfunding.
By developing financial projections and budgets, you can ensure that your business is financially sustainable and that you have the resources you need to achieve your goals.

We help local businesses in surrounding areas of Ormond, Bentleigh and Brighton to action their projections

Common mistakes to avoid when creating a simple business plan

Creating a business plan can be a daunting task, and it’s easy to make mistakes along the way. Some common mistakes to avoid include:

Focusing too much on the product or service

While your product or service is important, it’s not the only factor that will determine your success. Be sure to focus on other key components of your business plan, such as your target market, marketing strategy, and financial projections.

Ignoring your competition

Understanding your competition is essential to developing a successful business. Be sure to include a detailed analysis of your competitors in your market analysis section.

Overestimating your revenue projections

While it’s important to be optimistic about your business’s potential, it’s also important to be realistic. Be sure to base your revenue projections on market research and sales data, rather than wishful thinking

Neglecting to update your business plan

Your business plan should be a living document that evolves and changes as your business grows. Be sure to update it regularly to reflect changes in your market, competition, and business operations.
Avoid common mistakes, you can create a comprehensive and effective business plan that will guide your business towards success.

Resources and tools to help you on your way

Here are some useful resources and tools include:

Small Business Administration (SBA)
The SBA provides a wealth of resources and tools for small business owners, including business plan templates, financial calculators, and market research tools.

SCORE
SCORE is a nonprofit organization that provides free mentoring and coaching services to small business owners. They offer a variety of resources and tools, including business plan templates and financial planning tools.

LivePlan
LivePlan is a cloud-based business planning software that provides a variety of tools and resources to help you create a comprehensive and effective business plan.

By utilizing these resources and tools, you can streamline the process of creating ensuring that your plan is comprehensive and effective. Get out there and follow your dreams

Renovating and flipping your home can be an exciting and rewarding experience as a homeowner. However, before you embark on a renovation project to sell your home for profit, it’s essential to understand the tax implications involved.

After watching TV shows like the Block, are you inspired to become a property flipper?
In this article, I will explore the basics of renovating and flipping your home, the ATO tax implications, and offer tips to help you maximize your profit while avoiding common mistakes.

The Basics: What is Renovation and Flipping your home?

Renovation is improving or updating your home, either for your enjoyment or to increase its value. This can involve anything from cosmetic changes, such as painting and decorating, to more substantial alterations, such as adding an extension or converting a garage.

Flipping, on the other hand, refers to buying a property to renovate it quickly and resell it for a profit. Flipping can be a lucrative business, but it does come with risk and requires careful planning and execution.

Understanding the ATO Tax Implications for Renovating and flipping your Home for Profit

Renovating and flipping your home is something that can be financially rewarding . When renovating your home for profit, there are several tax implications to consider. Firstly, it’s essential to understand the concept of your main residence and how it affects your tax obligations.

Your main residence is the home you live in. In many cases it is exempt from capital gains tax (CGT) when you sell it. However, suppose you renovate your main residence with the intention of selling it for profit systematically. In that case, you may be liable for tax . This is occurs when it was treated as trading stock due to the renovation business. This can be a complex area, so contact Geoff for professional advice.

What is Main Residence and Why it Matters for Tax Purposes?

As mentioned, your main residence is the home you live. It’s important to note that you can only have one main residence at a time. You must use it as your main residence to be eligible for the CGT exemption.

If you own more than one property, you may choose which one is your main residence. But you must nominate this in writing to the ATO. It’s also worth noting that if you rent out part of your main residence, such as a spare room, you may be liable for CGT on a portion of the sale price.

Renovating and flipping your Home can change you home from tax free to being subject to income tax.

Claiming Tax Deductions for Renovation Expenses

When renovating your home for profit, you may be able to claim tax deductions for certain expenses. These include materials, labour, and professional fees such as architect or engineer costs. However, keeping accurate records of all expenses and seeking professional advice to ensure you are claiming correctly is essential. It’s also worth noting that you cannot claim deductions for expenses that are not directly related to the renovation, such as general maintenance or repairs.

Tax Implications for Selling Your Home After Renovation

When you sell your home after renovation, you may be liable for CGT or income tax on the profit derived. The ATO may treat your activity as a business, and it becomes income of an ordinary nature classified as a business renovation business

Additionally, if you sell your principal residence and meet specific criteria, you may be eligible for the principal residence exemption.

The profit-making activity of property renovations – per ATO
If you’re carrying out a profit-making activity of property renovations, also known as ‘property flipping’, you:
• Must report your net profit or loss from the renovation in your income tax return
• You are entitled to an Australian business number (ABN)
• You may be required to register for GST if the renovations are substantial.

We can assist you here if you unsure what to do next. Call Geoff on 95979966 for a confidential discussion.

You may live in the property as your home for all or part of the ownership period, BUT it does not automatically mean that the profits from the sale are exempt from income tax. The main CGT residence exemption only applies to reduce capital gains; it cannot reduce amounts taxed on the revenue account if the ATO deems you in the property flipping business.

Examples of flipping vs home renos

Jock and Jill buy a house that needs renovation, move in and, over the next six months, renovate it, landscape it and then place it on the market. This is renovating your home to flipping. In the meantime, they acquire their next one and start the same process. The ATO may deem them in the property development business based on the actions and facts.

But on the other hand, the ATO may deem the profit as income as a property flipping business.
Whereas Freddy and his wife buy a house and move in. They slowly renovate and enjoy it as their home. Freddy decides after a few years to sell and buy a bigger one. Provided they meet the CgT exemptions as their principal residence, then the gain on the sale would be exempt

Tips to Maximize Your Profit While Renovating Your Home

To maximize your profit while renovating your home, planning carefully and making informed decisions is essential. Firstly, consider the location and market demand for your property. Renovations well-suited to the local market and adding value to the property are more likely to result in a higher sale price. Setting a realistic budget and sticking to it is essential, as overspending can eat into your profit margin. Finally, consider enlisting the help of real estate agents, builders, and tax experts to ensure you are making the most of your renovation project.

Action – tread carefully when flipping your homes!

Renovating your home for profit can be lucrative, but it’s essential to understand the tax implications involved. By understanding the concept of your principal residence, claiming tax deductions correctly, and seeking professional advice, you can maximize your profit while avoiding common tax mistakes of being a flipper

Cost reduction by reducing expenses means great profits, right or wrong?

What is Cost Reduction & Why Is It Important for Business Owners?

Cost reduction is one of the most important aspects of running a successful business. It can help businesses save money and increase their profits. But doing it correctly will achieve great results for your bottom line. Expenses slashed for the sake of it may be detrimental. As a business owner, you need to be aware of different cost reduction strategies and how they can help you achieve your goals. By understanding the basics of cost reduction, you will be able to make better decisions when it comes to managing your finances. So let’s look at cost reduction and why it is essential for business owners.

Cost reduction must be done systematically. As the saying goes, you need to spend money to make money. Therefore, cost reduction should be evaluated with what the end game is to achieve profit improvement and efficiency.

Easy ways to Reduce Costs in Your Business

Are you looking for ways to reduce costs in your business? Well, look no further! From taking advantage of new technologies and automation to cutting unnecessary expenses! First of all, a cash budget is an important tool to use. This helps you monitor expenses against actual.

Our latest Value Builder email that we have engaged with our business clients this month looked at a simple way to help work out which costs could be reduced. (if you want to join this email list call our office on 95979966)

Let me introduce you to Derek Morin.

Morin founded Tabarnapp to create after-market sales applications for Shopify website owners.

The business was a success, but when his partner, who handled the company finances, left the company, Morin was forced to look closely at his profit & loss (P&L) statement. Morin saw potential improvements, so he made notes in the margin next to each line item he wanted to change as part of his cost reduction strategy.

To save time, he started using a single letter beside each entry to represent the action he wanted to take:

P stood for “Plus,” something profitable, and he wanted more.

U stood for “Unnecessary,” an expense he could eliminate.

R stood for “Replaceable,” a cost that could be replaced with a better or cheaper option.

E = equal no change required

Simply known as the “PURE.” method!

Morin treated the PURE method like a game.

Every month he scrutinized his P&L with the same four-letter system. Morin engaged his team to act on each item that needed improvement. He became obsessed with squeezing out a few more dollars of profit every month.

Tools & Services That Can Help You Reduce Costs

Are you looking for ways to reduce costs without sacrificing quality? Cash budgets and reviewing the cost drivers in your business are essential. Typically wage costs are high ticket cost items. Look how you can get the most out of this resource by increasing productivity.

Look for Profit leaks that are a reality for many small businesses and can significantly impact their bottom line. Therefore, it is crucial to identify and repair these leaks as soon as possible to maximize profits.

Profit leaks can occur from both Revenue and Expenses.

Common Causes of Profit Leaks in Small Businesses, so start reducing unnecessary costs.

Small businesses often face a lot of challenges when it comes to managing their finances. For example, profit leaks can be a huge source of lost income and can cause severe damage to the company’s bottom line.

Cost reduction strategies are essential for small businesses to remain competitive and increase their profits. Implementing cost-saving measures can help companies reduce expenses, increase efficiency, and maximize profits. In this article, we will discuss various strategies that can be used to reduce costs and increase profits for small businesses. These strategies include streamlining processes, lowering overhead costs, outsourcing non-core activities, leveraging technology and automation, improving employee productivity, and taking advantage of tax incentives.

As the economy faces a potential recession or, at the very least, interest rates bite, now is the time to take proactive action on those costs that may now not be adding value to the bottom line.

Is your business sale ready for that next opportunity? Selling a business is a complex process, but it doesn’t have to be overwhelming. With the right strategies and preparation, you can maximize the value of your business and make it sale ready.

Selling a small business can be a daunting task, but with the right exit plan and growth strategies, you can make sure that you get the best deal possible. Retirement may seem like a distant goal, but with careful planning and the right resources, it can become a reality.

Let’s explore how to get your small business sale ready by understanding the basics of exit planning, growth strategies, and retirement options. With this knowledge, you can start your exit plan strategy today.

Here are five steps to help you do just that. By following these steps, you will be able to increase your business’s value and attract potential buyers with ease.

Introduction: What Does it Mean for a Business to be Sale Ready?

Being sale ready is an important step for businesses that are planning to enter the market. It involves preparing the company and its assets to be attractive to potential buyers. This includes creating a clear financial structure, developing a business plan, and ensuring that all legal items are met. It also means having an understanding of the company’s value. But where you may have an opportunity to improve on that value before going to the market. You need a good understanding of the business value and being able to communicate it effectively to potential buyers. Being sale ready is essential for businesses that want to maximize their return on investment. Ultimately it also ensures a successful sale transaction.

Step 1: Analyze Your Current Financials & Identify Areas of Opportunity

Financial analysis is an important part of any business strategy. It helps identify areas of opportunity and improvement to make the most of available resources. By analyzing your current financials, it is possible to identify areas where changes can be made . This can maximize profits and look at reduce costs. This Analysis also helps measure the performance of the company in terms of its financial health.

We offer a ValueBuilder Asssessment that can provide valuable insights into potential future strategies to work on your business value.

Step 2: Review & Update Your Internal Processes

Keeping your internal processes up to date is essential for any business. It helps ensure that your team is working efficiently and effectively and that tasks are completed on time. Regularly improving your internal processes can help you stay ahead of the competition, save money, and improve customer satisfaction. In this article, we will discuss the importance of reviewing and updating your internal processes, as well as some tips on how to do it effectively.

Step 3: Invest in New Technology & Innovations

As businesses move towards digitization, investing in new technology and innovations is becoming increasingly important. Investing in the right technology can help businesses stay competitive and increase their productivity. It can also help them save time and money, as well as improve customer experience.

In this step, we will explore how businesses can use the latest technology and innovations to their advantage. We will look at different types of technologies. And how they can help businesses streamline their operations, automate tasks, and generate more revenue. We will also discuss how to evaluate the potential of new technologies before investing in them.

Step 4: Build Strong Relationships with Strategic Partners

Building strong relationships with strategic partners is an essential part of any successful business. By forming strategic partnerships, businesses can leverage the resources and expertise of other organizations. The aim is to create more value for their customers. Through collaboration, businesses can gain access to new markets. From here thet can develop innovative products and services, and increase their competitive advantage in the marketplace. Strategic partnerships also provide an opportunity for businesses to share knowledge and expertise, helping them stay ahead of the competition.

The next step for getting your business sale ready.

There are many areas in which you can improve your business to make it sale ready. We offer you the opportunity to complete a detailed review of your business. Let us help you find those hidden gems. You can undertake a free Valuebuilder assessment here,

Being sale-ready means you can be ready to for any potential offers and be confident in selling at the maximum value achievable. This is called business freedom and allows you to be ready for Mr. Right who will love your business as much as you do.

Effective Sales Tools for the small business smart checklist

Do you use tools that help grow sales in your business? Sales are the lifeblood of any business. Yet how many of us have had training in closing a sales deal as small business owner? With a new year about to start, it’s time to review your sales process and help your business grow.

Set a budget that you and the team can aim for in 2023

Working with your customer

The art of selling is to focus on the prosperity and happiness of your customers!

“Don’t bother telling the world you are ready. Show it. Do it.” – Peter Dinklage

Setting up an effective CRM system lets you manage your customers and their relationship with you. Are your customers frequent users of your business that need weekly or monthly sales follow-ups? Not only about purchasing but post-sale follow-ups. These measures all drive sales. You can plan as sales intelligence allows you to understand your customer’s future needs.

For more information about factors like occupancy rates etc, see our other article keeping customers coming back.

The more touch points you have with a customer, the more chances they will remain with you. The longer they remain with you, the more valuable they become, leading to business value. Business value is what will deliver you business freedom

Take a moment and ask yourself how much in terms of revenue my business has done:
– For This week
– For This year
– Compared to this time last year

Are you having the best year ever? Are you monitoring these vital statistics?

After you have addressed these vital questions, now look at the trends. Data in your accounting system is your friend. Look at:
– Trends of turnover
– Forward orders
– What sells when, how and why
– What doesn’t generate a large margin
– What stock gathers dust, and why

So your XERO, Quickbooks or MYOB will be able to produce some of these valuable sales reports. Accountants like us can help you work out what is profitable and what should become a runt or no longer stocked product or service.

Your sales department should be focused machine on the yearly budget. What I hear you say “ I don’t have a sales department “ If you don’t, then adopt one, even if is you.

Your sales checklist to create effective sales tools

Check if any of the statements apply to you.

• I do not waste time training people who are not trainable in sales.
• I manage the company’s daily sales quota.
• I always keep sales brochures available for potential customers.
• I keep a written copy on just in case.
• I know how to close a sale so that the customer benefits and I make money.
• The company supports my sales effort wholeheartedly from concept to close.
• I have a multifaceted system of referrals and word-of-mouth.
• I am fully aware of what customers need and want and adapt to them.
• I keep sales and marketing costs low, even if it means lost sales from time to time.
• I make my appearance, company, and product as attractive as possible.
• I create focus groups and record responses and reactions for my evolving action plan.
• I involve every staff member in various aspects of strategy development, allowing each the opportunity to contribute.

Look at where you are taking your business’s sales.

In small businesses, effort = reward. Small leads to large, and smart sales plans lead to profit and adding value to your business.

Ignore your accounting system at your own peril. Make sure you monitor your sales, follow the trends and focus on the end game. A healthy sales result for 2023!