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Author: Harris Black

Correctly Terminating An Employee

by Harris Black

Termination is often a complicated and awkward issue for any business owner, but is a situation that needs to be handled thoughtfully and compassionately.

There a number of situations where termination can occur. It is important that each situation is carefully managed to ensure that the process is compliant with employment laws. Often, it may be a good idea to seek legal or HR advice before initiating the termination process.

If a business fails to comply with the provisions of a termination they can be liable for legal action, as well as fines and penalties. Employers should consider the various ways to terminate an employee’s role within the business and the legal requirements that will follow before making any decisions.

Redundancy

Redundancy occurs when an employee’s role within a business is no longer required. This can occur due to a reconstruction of the business, or technology taking the role of an employee. A redundancy is based on the operational needs of the business, not the personal performance of the employee. When an employee is made redundant they are often entitled to compensation and other entitlements. It is important the employer follows the correct protocols when making an employee redundant, which are laid out in the award or enterprise agreement.

Abandonment of employment

This form of dismissal occurs when an employee is absent from work for an extended period of time without providing a reasonable excuse. This could occur if an employee does not return to work after a leave of absence, or for walking off the job without providing an explanation. If an employer wishes to terminate an employee under abandonment of employment they must show that they have taken steps to contact the employee before terminating them.

Summary dismissal

A summary dismissal is when an employee is immediately terminated from employment due to a serious breach or misconduct, such as theft or assault. Generally there is no period of notice or financial compensation in lieu of notice. Although this type of dismissal does occur quickly it is still important that the correct formal process is followed, and that any allegations against the employee are thoroughly investigated before the employee is dismissed.

Dismissal for a cause

A dismissal for a cause is less serious than a summary dismissal. It is used when an employee is terminated for under-performance or other issues such as inappropriate behaviour. Leading up to a dismissal for cause there must be a disciplinary process which can include warnings and performance management in an attempt to correct the employee’s actions.

Termination by notice or agreement

This is when an employee’s role in the business is terminated by one party giving notice to another. This can occur when an employee resigns, or if an employer informs a casual employee or contractor that they wish to terminate their agreement. Termination agreements often come with various provisions that must be complied with, for example, the timeframe for notice. There may also be other steps to follow listed in the relevant award.

Short-Term Vs Long-Term Financing

by Harris Black

Between ongoing expenses and bills, managing a healthy cash flow can be challenging, but understanding the differences between short and long-term financing can help refine an effective cash flow strategy.

There are various sources of financing available, with each being useful for different situations. Choosing the right source and mix is key for good cash flow, with financing options often being classified into two categories based on time period: short-term and long-term. To find the right plan for you, determine your needs and then match a financing option to meet those needs.

Short-term financing

Short term financing, or working capital financing, look at needs that arise in relation to financing current assets – for a period of less than one year. Working capital is the funds that are used in the day-to-day trading operations of a business. Short-term financing can help you to pay suppliers, increase inventory and cover expenses when you do not have sufficient cash on hand. Depending on your business’ requirements you might consider using one of the following options:
Overdraft – extends your cash resources and protects your business’ credit rating.
Line of credit – funding when you need it that is then paid back when you have surplus cash, offering flexibility, value and control.
Business credit card – a convenient, fast payment method.

Long-term financing

Long-term financing options can help you invest in overall improvements to your business, for a period of more than 5 years. Capital expenditures, such as upgrading equipment, buying additional vehicles and renovating are funded using long-term sources of finance. Businesses can consider using the following options;
Leasing – structuring a lease to match the useful life of the asset. This will help to preserve your cash and working capital for other uses.
Term loans – from financial institutions, government and commercial banks. These allow you to accurately forecast your monthly cash flow through regular payments.

Making The Most Of A Business Slowdown

by Harris Black

In a period where business is slow, it can be easy to become discouraged and unmotivated.

A slow period does not have to be a bad thing as it can give businesses the opportunity to reflect on their work, make improvements and come back stronger than ever. Here are some ways you can take advantage of a slowdown:

Assess

Analyse what the causes of the business slowdown could be. Is there a problem with the product or service? A lack of customer engagement? Poor time management? Inadequate marketing strategies? Are there internal or external problems that have been affecting business?

It can be constructive to do research into competing businesses and understand whether or not they are having similar problems. Looking at common factors or differences can indicate what works and what can be improved. It would also be helpful to survey customers and employees based on areas of concern or look at any past feedback.

Revise and Strategise

Learn from feedback and past mistakes. Based on the assessment of the situation take the time to create strategies on how problems could be overcome and how improvements can be made. Revise the strategies implemented in the past and consider whether they still work well or need to be revamped.

Make updates

Take this time to update elements of the company’s service deals, website, emails, or social media pages that may not be working as well as they could. Even something as minor as changing the font or the colour of a button on a website to enhance its appearance can increase consumer appeal.

Seek advice

Don’t be afraid of asking for help or advice from a reliable source. Business owners and employees can benefit from attending networking events to get ideas and advice and to stay inspired.

Keep goals on track

Assess the goals that have been set in place and consider updating or refining them if they are no longer relevant or could be more productive. Ensure that they are realistic with measurable results. Industries are continually evolving and it is important that businesses adapt to new trends and changes that may occur.

Achieving Financial Security In Retirement… Is A Bucket Company The New SMSF?

by Harris Black

Challenge

Many of our clients fit into a similar profile… Do any of these circumstances sound familiar?

The big 5-0 is either looming or just passed you.

You earn a mix of personal and business income.

Your business affairs are well managed however you pay less attention to your day-to-day living costs.

You are at the peak of your earning ability & have a good lifestyle but wonder where all the money actually goes. (Yet you aim for a higher standard of living, want your children to have a good education, want to live in a nicer home, love big annual holidays with family etc).

You are thinking more about your Superannuation (and other investments) and wonder if it will be enough to maintain the retirement lifestyle you desire.

Superannuation no longer has the allure if previously did, with:

– continual rule changes / limits on contributions;
– no scope for succession (it ceases when you die);
– an inability to access it ahead of retirement for personal use; and
– still years until you can access it.

You’re enjoying work, and aren’t sure what retirement looks like. Do you need to retire, or can your role adapt?

Solution

Like many of our clients, you might be realising it’s time for some changes. You too may have a busy personal and business life and are wondering where all the money goes each month.

There is a need for you to create the right circumstance now to ensure you are financially secure in the future (this doesn’t mean retired necessarily). Typically, you will need to be debt-free in retirement and will need investments both inside and outside of superannuation to fund a lifestyle similar to that which you are enjoying now.

With the help of an external bookkeeper, your personal income and expenditure can be put into an online accounting platform so you can start to:

analyse both money going in and out of personal accounts;
identify expenses that will reduce in the future (e.g personal insurance, education etc); and
look for areas of waste.

Outcome

By introducing a platform which allows you to focus also on personal expenses, you will be more able to reduce financial waste and channel the resultant savings into:

debt reduction;
distributions to bucket companies; and
superannuation contributions.

Where investments are made in either a superannuation or bucket company environment, this ensures more of your after-tax money is used for investment and debt reduction.
All of these improve your Net Wealth, ensuring you are on track to being financially secure in the future.

 

Exciting News – Nikki White

by Harris Black

We are pleased to announce the promotion of Nikki White from Senior Manager to the position of Principal.

Nikki has almost 25 years experience in accounting and taxation, superannuation and business advisory. Nikki began working at Harris Black in 1998. After working for several years and becoming a member of the Chartered Accountants Australia and New Zealand, she left in 2001 to work in London for a year. Her experience in London included working with Credit Suisse First Boston. On returning to Australia, she worked briefly in Commerce prior to starting a family and again returning to Harris Black as a Manager.

Nikki has continued to work at Harris Black and has enjoyed maintaining great relationships with her clients. Nikki has worked with many Harris Black clients for over 20 years, and has a particular passion for working directly with them to ensure they achieve their short and long term goals.

She holds a Bachelor of Business (Accounting) QUT and is a member of the Chartered Accountants Australia and New Zealand. She completed a Diploma of Advanced Tax through the Tax Institute of Australia in 2012.

Outside of work, Nikki enjoys spending time with her husband and 3 active children and training and competing in triathlons.

Important Tax Dates

by Harris Black

21 October 2019
Lodge and pay quarter 1, 2019–20 PAYG instalment activity statement for head companies of consolidated groups.
Lodge and pay September 2019 monthly business activity statement.

28 October 2019
Lodge and pay quarter 1, 2019–20 activity statement if lodging by paper. Pay quarter 1, 2019–20 instalment notice (form R, S, or T). Lodge the notice only if you vary the instalment amount.
Make super guarantee contributions for quarter 1, 2019–20 to funds by this date.

31 October 2019
Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June 2019.

21 November 2019
Lodge and pay October 2019 monthly business activity statement.

25 November 2019
Lodge and pay quarter 1, 2019–20 activity statement if you lodge electronically.

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