Nearly all small businesses have a bookkeeper, be that a qualified external contractor or a family member doubling in the role part-time.

But if the only reason you do your bookkeeping is for compliance and BAS you are missing out on a big piece of the puzzle!

With the existing services that Your finance Department currently offer it was clear to us that the timeliness and accuracy of the base numbers from the bookkeeper are all important.

To bolster our resources in this key area and expand our Outsourced Finance Dept. offering, we sought bookkeeping companies with a similar desire to assist small business in achieving a more clear and cost effective understanding of their finances.

It is with great pleasure that I announce the acquisition ofBeyond the Cloud bookkeeping Services. Beyond the Cloud have built a reputation second to none, with their origins in the Sunshine Coast business community and now helping clients across QLD, NSW and NZ.

Their approach to service and solution finding are core to their underlying values as they play a pivotal role in helping many small businesses continue to thrive. As a Xero Gold partner and with experience also across MYOB and Quickbooks I have no doubt that together we can give all of our clients access to more accurate bookkeeping & better financial visibility; access to a customised and cost effective outsourced finance solution from Bookkeeping & Payroll all the way though to higher level accounting and commercial support.

To find out more about how you can outsource all or a part of your finance function contact us today or email me on steve@yourfinancedept.com.au.

Top 5 - Cash Flow Management Tips

for SMEs

It’s important to understand that cash isn’t a representation of a business’ value, nor a measure of success; but it is the life blood of any business. For small to medium sized businesses, not maintaining control of cash flow can be one of, if not the most critical component as to whether a business fails or thrives. Poor cash flow management can rapidly impact the operation of a business, creating severe issues like not having the ability to purchase new inventory, paying back loans, or even worse, not being able to pay employee wages - even if you are making a profit.

The reality is that smaller businesses often need to adapt to the strict terms enforced by the larger organisations in order to maintain business, which means a greater visibility and control over cash flow is required.

Our top 5 cash flow management tips to help small business manage their cash flow and improve their current financial position.

1. Budgeting vs Cash Flow Forecast

Don't just budget your P&L. The way money flows through a business does not necessarily reflect operations. For example, your expenditure happens in month one, you make the sales and must pay your creditors in month two, but your debtors do not pay you until month three. Producing a cash flow forecast enables you to anticipate peaks and troughs, enabling you to plan purchases and production.

2. Know your customer

Always check the credit worthiness of your customers. Obviously, this is limited, but can help you tailor payment terms and expectation. There is no requirement that each customer to have the same credit terms. Establishing clear payment terms is a cornerstone of good cash flow management.

3. Have a clear credit control process

Squeaky Wheel! Chances are you don’t have a large credit control department, but you should still act like you do with a formalised credit control process. A clear process to manage bad debt at different steps...and a will to stick to them. At the very minimum, document your interactions so you can see which stage the debt process has reached and ideally assign actions for each stage.

4. Incentivise payments

If a consistent inflow of operating cash is vital to the business’s growth and survival, you may want to incentivise your debtors with early settlement discounts. This is where the customer receives their goods at a reduced price for early payments, minimising the chances of slow payers or bad debt, whilst maintaining a steady level of cash flow to support day to day business operations.

5. Outsource to Professionals

Whilst it is fairly easy in 2019 to automate a large part of your collections process, good cash flow management requires regularly update of your cash flow forecast and a solid understanding of your cash conversion rate. Like every commercial business decision, the return on investment needs to be examined, and the main question you need to ask is do you have the skills and time or are those more suited to tasks other than collections and cash flow management.

If you do not have a clear picture of your cash position, both now and into the future, contact us to discuss how we may be able to help enquiries@yourfinancedept.com.au or call 07 3123 6176 to speak with one of our accounting specialists.

The Dashboard is an often overlooked, simple tool, that can provide a wealth of information.

But why do I need Dashboards...? I know my business inside out...?

Ask yourself, would you drive a car with no dashboard? Would you fly a plane with no dashboard?

Well, you might...but how long would it be before your intuition began to let you down? How long until you begin to lose control of what was happening around you? Until you can't keep a check of all the variables?

So what information do you need to monitor to run your business? That's often specific to the individual and the business. But implementing a daily/weekly Executive [Business] Dashboard gives you both a daily pulse on the key metrics that matter to your business and a wider appreciation of other key levers. They act as beacons and indicators of trends good and bad.

The Executive/Business Dashboard provides numerous benefits including the following:

What is your No.1 business metric that sets the pulse of your organisation?

At Your Finance Dept we can give you the financial visibility and understanding you need to maintain and grow your business. Call us now for a confidential and obligation free discussion.

The QLD Government is currently offering grants up to $50,000 representing a 50% contribution to the cost of engaging a business mentor, CFO, Financial consultant or Advisory Board member to help you grow your business.

If you have always wanted to engage a business mentor or senior financial consultant to help you in your business, the Queensland Government has just made it a whole lot cheaper. Having recently released another round of funding to help small and medium sized businesses engage the services of Business Consultants to help their businesses grow.

Funding of up to $50,000 is available for eligible businesses, with a co-contribution of up to 50% from the applicant so, you’re effectively getting a Business Consultant for HALF PRICE!

The Business Consultant is to be used to provide high level expertise and strategic advice to encourage revenue growth and job creation to take place within the business.

To qualify for this funding, your business must have:-

A minimum trading history of 3 yearsA minimum turnover of $500,000 for the last financial yearFewer than 50 employeesAn Australian Business NumberQueensland headquartersCompetitive opportunities in domestic or international marketsBe experiencing growth and have clearly defined high-growth and employment opportunities in QueenslandNot be insolvent or have owners/directors that are an undischarged bankrupt.

In return, the Queensland Government is looking for businesses with potential for a minimum of 20% growth in turnover or employment over the next two years.

If you think your business has the ability to achieve this growth but you’re not quite sure how to get there, why not engage the services of an experienced CEO/CFO to help.

For further information on the funding, or to find out how we can help you, please contact Phil Quinn on 0419 677 968 phil@yourfinancedept.com.au or Steve Thomas on 0419 726 068 steve@yourfinancedept.com.au or visit our website www.yourfinancedept.com.au

Once upon a time, Paul McCartney sang: “Yesterday, love was such an easy game to play.” But he may as well have been crooning about trying to thrive in business in 2017. Because in contrast to the business world of yesterday, the economy is no longer predictable, competition is higher than ever, and technology is making things paradoxically simpler and more complex.

So as the global economy grows more erratically, China slows down, monetary conditions tighten and capital gets harder to come by, the savvy CEO/CFO has some tough financial choices to make. Luckily, it’s 2017 and there are several ways to cut costs that make the most of these challenging and yet exciting times we live in. CFO cost cutting – here’s how to do it in 2017:

1. Slash energy

Oil prices may be down, but in our current ‘green’ transition, energy prices are most definitely on the rise. The good news is that a huge chunk – up to 30 per cent – of your energy bills are actually wasted, so if as CFO you aren’t looking to keep those dollars and help the planet at the same time, you’re simply missing the mark.

It is mostly very big companies that do energy audits, but the cost of looking into this practice – where an auditor assesses energy use and advises how it could be done more efficiently going forward – could easily be offset by the big potential savings.

2. Soar into the cloud

If this second decade of the 21st century has been all about the digital revolution, then what is the headline digital technology of the past couple of years? Without a doubt, it’s the cloud.

The fast-moving pace of modern technology may be exciting, but it also requires a CFO who is willing to move just as quickly in embracing the benefits – and one of the main advantages of the cloud is undoubtedly the slashing of costs.

It’s not just capital expenditure bills that are lower via the cloud, but also reduced energy and storage bills, lower staff costs and the cheaper outsourcing of disaster recovery.

Top tip! When reviewing different cloud services make sure you look out for their partner programs which link you up to qualified, vetted experts in that software. Some of these even have different tiers for the partner’s experience with the software. Xero, for instance, has a strong partnership program with levels from bronze right through to platinum.

3. Get smart about travel

Luckily, unlike power, the cost of business travel hasn’t skyrocketed in recent years. But for the smart CFO in 2017, just because those bills are spiking doesn’t mean there aren’t easy ways to reduce travel spending by planning better.

Perhaps yours is an organisation that doesn’t do a lot of travel – in which case you probably don’t have an official policy document that regulates it. But if you create one and those rules are stuck to, staff will be limited to the sort of fares, hotels, daily allowances and travel expense claims they can use along the way. Also, by planning ahead, you’ll get access to the sort of cheaper fares that ‘last minute planners’ can only dream of in their frantic rush.

Think about ‘your organisation’. Did you envisage your physical headquarters? Studies into the world’s most successful businesses show that in 2017, successful employers are no longer sitting at a fixed desk at a fixed address all of the time, nor requiring their staff to do so.

That’s because a big chunk of the business workforce can actually work from home – or somewhere else other than ‘work’. This is made possible by technological advances like high quality video conferencing and remote connectivity, and the cost benefits are obvious. Demands on office space, energy, transport, utilities, supplies, parking and more all head south, and the savings for the CFO race into the thousands per employee over the longer term. And the best thing? Your best staff absolutely love those flexible hours.

5. Outsource your bookkeeping

Businesses have always outsourced, but in 2017 it has become one of the headline ways CEOs and CFOs can slash costs. In the past, outsourcing was often done mainly to offload an area your business doesn’t love doing – like bookkeeping. But outsourced bookkeeping is now an easy way to cut costs while not compromising at all on quality, whether you’re a small or a big business.

Today’s best bookkeeping services use actual accountants that can help steer a path to success and prosperity – and that’s where the cost savings only begin. There’s no training of staff, no employee benefits to pay, no hardware or office space required, no constantly keeping up with best practice – and that’s still not the end of it. Your outsourced bookkeeper will upgrade their own equipment and resources, hone their own skills, and never miss something that could mess up your books and cost you a fortune. At the same time, you keep your eye on what makes the most money for your business rather than worrying about managing your in-house bookkeeper.

At the end of the day, all of these cost cutting tips have a single thing in common – they’re the brainchildren of a smart, savvy and modern CEO or CEO in 2017. Make sure it’s you.

A functional Board contributes to the overall productivity of the organisation and staff often look to the Board of Directors for guidance, regulations, support, and the tools and resources to do the work that is expected of them.

When a Board is lax or negligent, or does not take care of tasks and responsibilities, it doesn’t take long before staff and the daily operations of the organisation are affected.

The challenge is to structure the business to run like a medium-large corporate operation. It is the mindset of the Director/s that makes all the difference and the process of re-educating yourself and other Executives to think strategically and not get caught up in the detail of the business.

As a start, it is imperative that you have:

Corporate structure and position definitions;Executive Management who have accountability;Board Meetings; andStrategic ideas generation.

Corporate structure

CEO’s, CFO’s, Chairman and Directors: what’s the difference? For a large organisation, corporate governance has changed the way these businesses operate, which has created a separation between ownership and management.

For a small-medium business the corporate structure does not need to be complicated, but roles and responsibilities involving the Executive Team need to be clearly defined so that you have a structure which works best for your business.

It is extremely important that your responsibilities differ from that of your partner/s and it is really important that Directors are being accountable for their business’ success.

If you streamline how your business operates and create corporate structure within each director’s role and responsibilities, then you are able to establish Key Performance Indicators (KPIs) for each division.

The easiest way to grow a business is to have a clear direction and focus for the year ahead and beyond.

Ensuring your Executive team is accountable for their KPI’s and is responsible for reporting back each month on their team’s success/failure will help create a culture of ‘accountability’.

Board meetings

For your business to grow, you need to understand how it is doing each month, both operationally and financially. By holding a well-structured formal Board meeting, with attendance by your CFO, Board of Directors and/or Senior Executives you will be able to see clearly which areas require attention.

This is where a CFO can add real value to your business.

It is recommended that you develop well- structured Board meetings which include:

Board reportsSomeone to run the Board meetings – for example a Chairman

Each Board meeting should cover:

Financial reportsMarketing reportsIT reportsOperations reports for business activitiesHuman Resources

Each Board meeting should end with:

Minutes of meetingsAction items to be addressed prior to next Board meeting

Director’s responsibilities

It is essential for the Director to be involved in the business in order for him or her to understand the direction that it requires. This becomes impossible, however, if the Director is lacking direction themselves.

A Director must foster corporate structure by defining employee’s positions and responsibilities. This should include addressing the tasks for which Executive management are responsible - thereby promoting accountability.

A Director must initiate and facilitate structured Board meetings which address the contemporary issues of the Business and also allow for the generation of Strategic Ideas.

A final tip

Take some time over the next month to properly analyse the corporate structure of your business. Promote accountability throughout your team, focusing on KPIs. At the next board meeting, take the time to observe the function of the business, and allow for the generation of strategic Ideas.

Lacking the expertise to develop a corporate structure or put in place sound monthly board reporting. Speak to us about how we can assist with appointing the right executive team to support your needs.

For businesses to function optimally, all facets of operations should be in good shape. This means that not only are the staff productive and well-suited to their roles and responsibilities, but that the Board of Directors is also doing its job as well. While Board members may not see and understand all the ways their role influences the overall health of the organisation, it is important for the Board to realise that they do have a role to motivate staff.

If you need help, please contact one of our experienced CFO’s at enquiries@yourfinancedept.com.au or visit www.yourfinancedept.com.au

If you want to grow your business, it pays dividends to do it in an organized way. Growth without planning has seen the downfall of many a good business.

A great way to start planning is to do a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats). It’s a great opportunity to get your team together and have a brainstorming session.

Your objective is to determine:

Strengths – what are they and how can you leverage on them and make them visible to the market?

Weaknesses – what are they and how can you improve them and create a culture of constant improvement?

Opportunities – consider what they are and how you can realistically take advantage of them.

Threats – consider what they are, their impact in the long and short term and how you can mitigate them.

Here are some questions to kick off with:

Product/Service

Is yours a product/service of today and tomorrow or yesterday? i.e. are there threats to your business, such as government legislation changes or ‘Digital Disruption’.Who are your competitors and how are they changing?Does your product/service provide a solution to a problem that has limited lifespan?Is it a luxury item that is affected by consumer confidence in a particular market?Is it a necessity item or grudge purchase?Are there opportunities for your team to have input into product/service development?Are there opportunities for you to offer new products/services using your current resources e.g. people, know-how, equipment, real estate etc.

Marketing and Sales

Does your team understand the business Vision, Mission and Customer Proposition?What is your market position e.g. cheap and cheerful or best quality with appropriate price tag?Who/where is the market for your product/service?Where do they ‘hang out’? e.g. physical places or online?What is the most cost effective way of engaging with customers?Do you have an opportunity to sell other items to existing customers?Do you have opportunities to open in new markets/regions?Do you know how to engage with customers and how to explain your ‘value proposition’?Do you know what your ‘Unique Selling Proposition’ is and how to differentiate yourself from competitors? e.g. do you ‘make the invisible visible’?How much competition do you have and how does that affect your sales price?Can you leverage off existing customers to get more like them e.g. testimonials/referrals?Do you have a formal sales process and is it understood by those in sales?Does your sales team meet and share ideas?Do you measure effectiveness of marketing methods and ‘return on investment’ of marketing spend?Do you measure sales conversion rates – by salesperson, lead source etc?

Operations and Finance

Do you have well defined operating procedures that are transparent to all staff? To eliminate risk of employee absence/departure impact on operations.Are your systems well documented and backed up to avoid loss and business interruption in the event of adverse occurrence? Could ‘cloud commerce’ help you to achieve cost savings and efficiencies?Are avenues in place for staff to offer input into improvements? E.g. suggestions box/team meetings?Do you have a budget and cash flow projection?Do you know your ‘break-even- sales figure?Do you regularly and accurately report on net profit?Could you achieve better prices from suppliers?Is your business able to meet its short-term financial commitments?Do you analyse your business financial performance regularly and take appropriate action?Are you accessing the best finance options?Do you measure and report on Key Performance Indicators (KPIs) for all areas of business performance?Do you have a Quality Assurance system?Are your tax, superannuation and ASIC obligations up to date?Is there government assistance you could take advantage of e.g. Grants, R&D Incentives?Is your corporate structure set up right? e.g. should you consider setting up a company, partnership, trust?Are your business premises secure e.g. do you have a current lease in place?

Human Resources

Do you have an ‘Organisational Chart’ setting out all major tasks within the organization and who is responsible for them?Does each team member have a properly documented ‘Job Description’, covering all the tasks in your ‘Organisational Chart’?Do you have a system for effectively hiring, managing and firing team members?Do you have a compliant WH&S management system and are you aware of the penalties for non-compliance?

Customer Service

Do you measure customer satisfaction?Do you have an effective Customer Relationship Management system in place?Do you categorise your customers e.g. A, B and C and focus attention on the A’s and upgrade or ‘move on’ B’s and C’s?Do you have a complaints handling policy/process in place?

The next step is to prioritise your actions based on your answers in line with ‘return on investment’ of projects and your capacity to implement them.

Learning how to grow your business isn’t just a worthy goal; growing your business is often a necessity for your business’s survival and your economic well-being. What can you do to get your business beyond the bare sustenance level? What can you do to turn it into the income-generating powerhouse you envision? Try one or more of these growth strategies. All have been successfully used by other businesses and, with some planning and investment, will work for you.

1. Penetrate your existing market.

When you think about how to grow your business, the first thing that probably comes to mind is getting new customers. But the customers you already have are your best bet for increasing your sales; it’s easier and more cost-effective to get people who are already buying from you to buy more than to find new customers and persuade them to buy from you. See 6 Sure Ways to Increase Sales and 10 Low-Cost Ways to Promote Your Business for more.

2. Ask for referrals.

That's not to say that getting new customers is a bad approach. One of the easiest ways to do this is to ask your current customers for referrals. But notice the verb. Having good products and great customer service and just assuming that your customers are passing the word about your business isn’t going to do much to increase your customer base; you have to actively seek referrals. During or after every job or sale, ask your satisfied customer if he knows anyone else who would be interested in your products or services.

3. Innovate your product or service.

Discovering and promoting new uses for your products or services is a great way to both get existing customers to buy more and attract new customers. Think petroleum jelly and duct tape—and how few of these would actually be sold if they only had one use!

4. Extend your market reach.

There are several ways of growing your business by making your product or service available to a new pool of customers.

The most obvious is to open stores in new locations, such as opening a store or kiosk in a new town. New locations can also be virtual, such as a website with an online store. Another approach is to extend your reach through advertising. Once you’ve identified a new market, you might advertise in select media that targets that market. If your new market consists of a younger demographic, you may want to use social media for advertising.

5. Participate in trade shows.

Trade shows can be a great way to grow too. Because trade shows draw people who are already interested in the type of product or service you offer, they can powerfully improve your bottom line. The trick is to select the trade shows you participate in carefully, seeking the right match for your product or service. Trade Show Tips will help you get the best return on your investment.

6. Conquer a niche market.

Remember the analogy of the big fish in the small pond? That’s essentially how this strategy for growing your business works. The niche market is the pond; a narrowly defined group of customers. Think of them as a subset whose needs are not being met and concentrate on meeting those unmet needs.

A nursery, for instance, might specialize in roses while a home design business might focus on window treatments.

7. Contain your costs.

Surprised? Bear in mind that when we’re talking about growing your business, we’re actually talking about growing your business’s bottom line. And the difference between pre-tax and post-tax money can make this a very effective growth strategy. There are two main approaches to cutting costs; liquidating your “loser” products and improving your inventory turnover. 10 Ways to Cut Business Costs provides details on these two strategies and more.

8. Diversify your products or services.

The key to successful growth through diversification is similarity. You want to focus on the related needs of your already established market or on market segments with similar needs and characteristics.

An artist might also sell frames and framing services, for instance. Or a mountain bike rental business might switch to renting skis and snowshoes in the winter season.

9. Franchising

The stories of entrepreneurs who have become both well known and well heeled due to franchising their small businesses are legion - and not just stories. If you have a successful business and can develop a system that ensures that others can duplicate your success, franchising may be the fast track for growing your business. Is Franchising the Business for You?

10. Exporting

Expanding into international markets can also be a powerful boost to your business’s bottom line. Like franchising, this is a way of growing your business that requires quite a commitment of time and resources, but can be extremely rewarding. How to Develop an Export Marketing Plan outlines the process of getting into exporting if this way of growing your business interests you.

Time to Grow

There you have it; how to grow your business. Don’t let this list overwhelm you; pick one or two of these ideas that are suitable to your business and your circumstances and get your plan for growing your business underway. Quick-Start Business Planning will get you started.

While you probably won’t experience growth right away, whichever way of expanding your business you choose, you will see progress if you keep at it, and will successfully transform your business into all you want it to be.

If you need help, please contact one of our experienced CFO’s at enquiries@yourfinancedept.com.au or visit www.yourfinancedept.com.au