Realbalance Business Consulting

Bookkeepers to face change due to the Tax Agent Services Act 2009

The bookkeeping industry is facing a period of change with the commencement of the Tax Agents Service Act 2009 on 1 January 2010. The objective of the Act is to ensure that tax agent services (including BAS Service) are provided to the public in accordance with appropriate ethical and professional standards. Whilst this will see little change to the operation of existing Tax Agents it may result in significant changes to some bookkeepers providing BAS services.

Bookkeepers providing BAS services will need to be registered as a BAS Agent. They will need to comply with specific standards relating to their education and experience and also satisfy the fit and proper person test.

The Tax Practitioners Board (TPB) is the new body responsible for administering the Act. The TPB has broad ranging powers to make orders under the Act including (but not limited to) the issue of a written caution, ordering the suspension of a person’s registration or in the case of serious breach applying to the Federal Court to impose a civil penalty, which for an individual may  be a fine of up to $27,500.

It is important that bookkeepers understand their responsibilities under the Act and commit to satisfying the standards to become registered as a BAS Agent.

Business 101, with Andre Rieu.

 

 

Andre Rieu is currently winding up his Australian tour and I was fortunate to go to one of his concerts, a first for me! As far as my musical “pedigree” I am not an aficionado when it comes to classical music, I play guitar but my skills are equivalent to the weekend hacker at golf.

 

Before I start my babble perhaps I should provide a little background information for those of you who don’t know who Andre Rieu is.  Andre Rieu is a classical musician who produces enormous stage shows that have to be seen to be believed. Andre Rieu is the all time highest selling musical act in Australia and has been unfairly labelled by the “stuffy musical elite” as presenting “Classical Music for Dummies”. But he certainly knows his market and what to sell to them!

 

Watching an Andre Rieu concert is an incredible experience. Even my kids love it when the orchestra start playing Bananas in Pyjamas.  But I also watched the concert and saw a unique business perspective, and not in terms of the fact that he has sold millions of DVD’s and CD’s. Andre Rieu currently has 4 DVD’s in the Australian top 20 charts. Pink only has three!

 

When you listen to orchestral music you are confronted with a wall of sound, 50 or more instruments all playing at the same time. It takes great talent to put all this together into a great piece of music. But what I noticed was each instrument played a unique part in the performance and if you listen to each instrument individually many would bare little resemblance musical piece being played. The combination of playing the right note at the right time, at the right tempo produces a result that is truly magnificent.

 

Is your team playing the right note at the right time?

 

What the ... what recession?

 

In March this year “Kevin in Recession” was saying that it was “virtually impossible for Australia to sustain positive economic growth”.  All the economic statistics and leading indicators, all the experts at the department of Finance and Treasury were predicting “gloomy times ahead” for the Australian economy. What a difference six months makes. Now we are all thinking, have we dodged a bullet? Or is there more still to come? Given that Treasury and Finance got it wrong last time ... I don’t know if I will be listening to them this time!

 

It is evident that some indicators are pointing to improvements in the economy. Job advertisements are improving, unemployment has remained stable, business and consumer confidence is improving, this is all good news. But these national statistics can overlook local market conditions. It is still more important than even to keep in touch with you customers, keep your finger on the pulse of what is happening in your market and how it affects you business.

 

As an accounting firm based in Newcastle NSW we spend a lot of time in our clients businesses. Whilst we are an accounting firm we operate very differently to your traditional firm. Our focus is working with our clients on their internal financial control just as if we were an employee in the business. As we work so closely with our clients and we are talking to their customers, suppliers and staff we are in a great position to get a “feel” for what is happening in there market.

 

The bottom line is that even though the media reports are more optimistic, we are still a long way away from the strong conditions we had in 2007. Keep your finger on the pulse and keep an eye on the horizon.

Play ... like the big boys

 

Our role as Newcastle’s leading financial control firm is to help our clients get the most of their business which means looking behind the numbers and asking questions to understand the issues, people and behaviours that impact on their business. Often this will mean crossing over to other disciplines such as sales and marketing but fortunately I know my limitations and once I identify an issue I ask for help from the experts! Once such issue was the power of upselling. 

 

Every time I go to a McDonald’s restaurant and order a meal I am always asked the following question, “would you like to up-size that?”. For the record, I generally say no, but think of how many times that question is asked in every McDonalds restaurant across Australia. More to the point think how many people actually say yes and pay the extra $1 or so. How much extra McDonalds earn every day from simply asking “do you want to upsize that?”, $500,000, $1,000,000, $2,000,000? The bottom line is that it really doesn’t matter, what matters is that McDonalds train their staff to up-sell and it works and it makes a lot of money.

 

Think in terms of how it can work for your business. Using the following assumptions, you sell to 700 customers every week and they spend on average $20 per visit. Simply by increasing the Average Customer Sale by $2.00 will result in an increase in weekly sales of $1,400 and an annual increase of $72,800. There are many strategies you may use to increase the Average Customer Sale, such as “spend $22 and get a widget free” or suggestive Selling “special” products which will increase the Average Customer Sale.

 

Taking the assumption one step further, let’s dare to dream for a moment. Imagine if you increased the Average Customer Sale by $4. The impact is that gross income would increase by $145,600 per annum. This may be an optimistic outlook but before you say it can’t be done, let me say that it is and with great success, just ask McDonalds, KFC or Harvey Norman.

 

But it is not an easy strategy to follow, training your staff to upsell or upsize is not natural to most people and hence may not feel comfortable doing it.  It is important to identify the products that you upsell, training staff to “ask the question” and making sure that the products offered are considered valuable and that you don’t harass your customers in the process. Good luck.

Passion is ... the real difference

A prospective client was checking out our website the other day, www.realbalance.com.au  and she made the following comment, “who cares about passion, everyone has passion”. I must admit I was lost for words, I mean I knew it was important to me, but why? So I asked myself the question, why is passion important to me?

Passion is the difference that makes me go the extra mile. Call it commitment, call it what you want, I call it passion. Passion drives me to continually look for better outcomes, either in life or in business, it is the difference when times get tough and I need to dig a little deeper. Passion is a focus that continually drives me not only to do those things that I like to do but also the things that I need to do. The difference between success and failure is often an accumulation of those 1% moments, those little moments that make the difference between a good job and a great job.  Passion often makes the difference when it comes to those 1% moments.

In essence my response to my client, was, “I’ll tell you why passion is important to me. I love what I do and I am committed to my clients and passionate about my business.   To get the most out of life you need passion, without passion there is no persistence, without persistence there is no performance. Without performance we are all just spectators on the stage of life. I choose not to be a spectator”.

That is why passion is important to me. Why is it important to you?

Can the accounting profession make social media work for them?

 

Members of the accounting profession have long considered themselves in the prime seat when it comes to business, in many businesses the chief financial officer, finance director or financial controller is generally responsible for managing staff, trouble shooting IT issues and coordinating operational issues. But when it comes to marketing, the accounting and marketing professions sit on opposite sides of the boardroom table. In general, marketers want to spend money on big budget campaigns whilst accountants want to bank it.

 

The advertising industry is under intense pressure to demonstrate that traditional media such as television and print are able to produce a satisfactory return on investment whilst the emerging influence of online advertising is forcing the industry to have a long look at itself. Many in the marketing fraternity are struggling to come to terms with concepts like social media and inbound marketing and the impact they are having on mainstream marketing. If the marketing profession cannot get their head around these concepts, what chance does the accounting profession have?

 

If the accounting profession is to remain relevant in this climate it must be responsive to this change. Members of the profession need to consider these changes from two perspectives, first, from the perspective of positioning your firm and secondly small business is looking to their accountant to act as an “external CFO” and provide a broader range of solutions to their business.

 

Perhaps the best way to explain how search engine optimisation works is with an example! If you search Google for keywords such as accounting, accountant, taxation, auditor, cpa firm, chartered firm and then add a geo-targeted search term like Sydney, you will see that last month there were over 150,000 searches for accountants and related services based in Sydney. In simple terms there were over 150,000 potential customers walking past your office. Now, before you say, “I have a website and it is on Google”, let me say, to those firms that show up in the first three search results on the left hand side of a Google search, congratulations. But for the 99.99% of firms that do not appear, read on, your website is clearly not helping you capture these 150,000 potential clients.  A well planned online strategy will get you in front of many of these clients and in many cases for a fraction of the budget of other advertising media. What can you do to capture these clients?

Financial Control not simply Bookkeeping in Newcastle

Real Balance’s financial control service provides the most comprehensive “in-business” financial solution for business people. The key difference between our financial control service and a standard bookkeeper is that bookkeeping is only one part of our total solution.  Our financial control solution includes comprehensive financial reporting and business and strategic planning.  With Real Balance on your team it is just like having a qualified financial controller on staff to help you get the most out of your business.

 

At all times our clients know how their business is performing as we maintain a consistent regime of keeping their accounts up to date, monthly reporting and business planning. The real value add for our clients is that we “get right into” the business and understand what the business is all about and how we can make our contribution.

 

In addition to the standard accounts and payroll functions we provide our clients with detailed analytical support to help with pricing decisions, product/service choice decisions, cash flow management and inventory control. We believe that good financial control goes well beyond entering invoices into an accounting system. Financial control makes sure that those invoices are entered in the right place to start with, and then interpreting that information, assessing and applying it to the business.

 

As a CPA business our clients know that we comply with strict ethical and professional guidelines and as such we are the only financial control firm in Newcastle that is truly accountable for the performance of our work.

 

Real Balance has redefined what business owners should expect from their bookkeeper. Our Financial Control service is focused on working in the business with our clients, we are on hand at all times which takes the pressure off as they know they can call us at any time. Business people should not just settle for a bookkeeper they should demand Financial Control.

Dealing with the loss of a client

It is never easy when a customer decides that they no longer wish to work with you. Unfortunately, it is part of business. Your main aim, over the course of time, is to make sure you gain more than you lose!  

Some of the reasons why customers make “change decisions” are price, quality, availability of goods and in some circumstances simply due to a clash of personality. Regardless of what you think the reason, don’t get angry. Ask the question, why don't you want to buy from us anymore?

Take the time to call the customer by phone or personally visit them with the objective of understanding what it was that persuaded them to leave you. There are two factors at play here, 1. What is the customers need? 2. How did they rate you product/service experience?

It may be that the customer’s needs have changed and your product no longer satisfies there need. This decision may be a cause for concern or it may not. If the customer has chosen to pursue a “low cost” strategy yet your products satisfy a “high quality” strategy, it is evident that the two strategies are no longer aligned and you may need to accept that you are unable to meet the customer’s needs. It is important to understand what segment of the market your products satisfy and to ensure that the delivery of those products meet the customer’s needs.

However, if your product strategy and the customer’s strategy are aligned and yet the customer no longer wishes to work with you, you have a problem and you need to  understand why. The best place to start is with those customers who have dumped you! And this leads to the second question, how did they rate your product experience? Don’t let your ego get in the way, ask the question, and seek to understand why your business was unable to meet the customer’s needs. Was the quality acceptable? Was the pricing competitive? Where your staff pleasant to deal with? Don’t be afraid to ask questions that have have “painful” answers for you.

Your objective is to understand how you can do your job better.

Business Planning in Tough Times.

 

 

 

We are experiencing extraordinary times, interest rates at their lowest in 49 years (and still falling), we are in the midst of a once in a lifetime global financial crisis and we are trading through the first recession in Australia in 18 years. Many businesses are currently being run by managers and proprietors who have never operated in a recession. Many are probably sitting on the outside looking in and thinking to themselves, “if this is a recession it’s not that bad”. But it is becoming evident that the worst is still to come. Unemployment is rising, consumer spending is unreliable and increases in line with the Government’s stimulus payouts but the positive effects are short-lived and first home owners are driving the property market. These policies can’t go on forever and eventually business and consumer spending will need to take up the slack and drive the economy.

 

I feel stimulated, how about you?

 

I have just returned home from doing some Mother’s Day shopping at Westfield Kotara. For those of you outside Newcastle, Westfield Kotara is a large shopping centre located about 10 minutes from the city centre. When I say large, it is not large on a national scale like Pacific Fair on the Gold Coast or Parramatta Westfield in Sydney but it is large for a regional centre. There is over 250 speciality shops and 7 large department stores ... or so the big sign at the front of the complex says!

I have noticed over the last 6 weeks or so that Westfield has been reasonably quite up until recently! The atmosphere tonight was like an under 23’s disco, there were people everywhere.  The food halls were packed and all the eateries had long queues to order.

Where did all these people come from? Any why were they out in such high numbers? There was a real party atmosphere in the place. There were definitely no signs of recession at Westfield Kotara.

When I mentioned this to my friend I received a “duh” type of response because Mothers Day is only 10 days away. All these diligent “kids” buying presents for mum, of course! But then I thought to myself, if these kids are buying Mother’s Day presents, there is going to be a few funky mothers walking around Newcastle. The “kids” were buying funky clothes from ICE and accessories from Diva. Mum will also be wearing platform pink high heels from Pulp and listening to the latest music from The All American Rejects, Flo Rida and Kelly Clarkson.  No disrespect to the funky mums of Newcastle but I began to think to myself, these “kids” are not buying Mother’s Day presents. They are spending big on themselves with the money given to them from Uncle Kevin.