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Xero is full of reports, and they’re available for you to download at any time. So why should you publish them too? Seem’s like an added job that’s just going to take up time.

Right? Um … no!

We strongly recommend that you get into the habit of publishing your reports in Xero. They give you a snapshot of how things were at a particular point in time that you can later refer back to. This is particularly important when we’re talking about bank reconciliations.

Scenario:
  • Bank account reconciled @ 31/12/2018.
  • Bank account reconciled @ 31/03/2019 and you realise that something’s happened in a prior period and your reconciliation is now out of balance.
  • If you’ve got a published report you can run your reconciliation reports back to a point when the reconciliation was in balance.
  • Now you can move forward and compare what the reconciliation is now, against the published reconciliation reports. It should be fairly easy to find the discrepancy and correct.
  • If you don’t have published reconciliation reports, you’ll need to find the error by going back through your bank statements – and this could take a lot of time if you don’t know what you’re looking for!

The below video shows you step by step how to publish a report in Xero.

Publishing reports in Xero - YouTube

So don’t spend hours trawling through bank statements to find one rogue transaction, refer back to your published reports to find what you’re looking for in minutes.

Click the link below to book in a Xero demonistration – if you’re thinking about converting to Xero, or if you’re using Xero and would like a refresher or some efficiency tips.

Book a 60 minute Xero demonstration

The post Why you should publish reports in Xero appeared first on Miss Efficiency.

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The world has changed. Work has changed.

The possibilities provided by cloud and mobile technologies are beyond what most people would even have considered possible just a decade ago.

But have you adapted and updated your systems to keep up with — and take advantage of — these exciting and fast-moving changes? Or are you still determined to drive the steam engine?

You may not realise it but if you’re still emailing and Cc-ing and Bcc-ing the whole office in on messages — and this is your main (or only) internal team communication method — then you are still puffing away on the steam engine.

You’re left behind while everyone else is taking fast bullet trains to get to their destinations safely and more effectively; you’re relying on out-dated technology.

The McKinsey 2012 Social Economy report found that:

  • The average corporate user spends about 25% of the workday answering and sending email
  • 25% to 30% of time spent on email could be saved if the main communication channel was switched to a social platform

Most businesses could use a little more time and productivity back in 2012. What about now?
Years later and the bottom line is this: If you run a team of professionals that needs to collaborate on work, you need to start taking advantage of the many tools available beyond simple email, in order to be more productive.

There is an array of project management, collaboration, chat, and email enhancement tools that help your team communicate more efficiently and get work done more effectively.

So what tools are available – and how, specifically, can they help you be more productive?

Chat and messaging tools

Chat tools allow you to securely and privately talk to individual team members or interact with the whole team.

There’s no writing emails, no waiting for emails to be read, no wondering if people have read what you wrote or received attachments…it’s all a lot more direct, real-time, and collaborative.

You attach relevant links and files as you go, virtually rendering email defunct for some organisations in terms of internal communications. Some organisations even use chat tools as the main interface and communication channel with clients.

Below is a brief overview of a few of the most popular ones.

  • Slack

Slack is built for communication between everyone from freelancers to large enterprises. It has customisable real-time messaging, archiving, and also search… from mobile or desktop devices running Windows, Mac, or Android.

It features built-in internal and external sharing options, open channels, file sharing, notifications, and there is flexible file browsing and integration with Google Docs and Dropbox.

Free versions are available, which are great for freelancers.

  • Hipchat

Hipchat is designed specifically for chat amongst team members in small and medium businesses. Available for Windows, Mac, Android, and Linux, it is fully customisable.

The app offers easy screen sharing, secure guest access, SSL encryption for security, simple file sharing, and unlimited chatrooms.

A free version is available; a paid version offers more functionality (such as video calling) for a small monthly charge.

  • Telegram

Telegram is a free app, regardless of the amount of chats stored (unlike Slack). It also offers similar features to Slack but with unlimited search history. It only works off mobile.

A great feature of Telegram is secret chats, by which you can share sensitive information like passwords. Privacy is a big deal. It also offers audio notes – another cool feature.

Being open source, there is a support community to back it up.

Collaboration tools

Collaboration tools go beyond simple chat tools. They may include a chat component to them but their key function is to organise work and to make collaboration on projects and project management easier.

As the nature of work has changed with the mobile and cloud revolution, more people work remotely than ever before.

Nowadays, it’s not just the travelling salespeople who aren’t based in the office. The office itself might not even exist!

Collaboration tools allow remote teams to work together as if they were at adjacent desks in the office – often from opposite sides of the world. This is partly what has enabled the wholesale hiring of freelancers in many businesses.

Below is a brief overview of just a few of the most popular from the many collaboration platforms available.

  • Basecamp

Basecamp is a cloud-hosted project management platform. Created 10 years ago, it is one of the most established and popular online suites available, with many millions of users. It is capable of looking after large enterprises or small businesses.

Simple to learn, reliable, and full-featured, it’s easy to organise people, delegate tasks, and monitor the progress of projects.

  • Trello

This is another of the leading project management tools available but different in design to Basecamp. It uses a ‘kanban’ board set up.

Within these boards (projects), a series of cards represent tasks. These cards can be used to invite team members to, in order to assign tasks and track the progress of a project, and to categorise work in relation to the project. Simple to use and reasonably priced.

  • Wrike

Wrike is another project management tool that allows you to prioritise assignments and monitor updates in real time.

It assists with task management, has an interactive timeline, allows document collaboration and discussions in tasks, and can be used on iPhone and Android as well as desktop.

Wrike can also be integrated with email, Google Docs, and Dropbox.

  • Asana

Asana is another of the most popular project management tools to replace the need for email.

It makes team communication and collaboration easy, with the ability to easily create projects and tasks, and to follow the progress of projects.

Team members can be added to projects and tasks, with files shared and messaging made easy between them. It is compatible from both desktop and mobile devices.

  • Podio

Podio has a dedicated following of over 400,000 teams and makes communication, organisation, and project workflows simple.

This customisable tool is suitable for small and medium business, as well as freelancers. It has a strong social core, with activity streams featuring comments, likes, and status updates. Anyone with a company email address can join and collaborate on a thread.

Email integration tools

Email may still have a place in your business, even with social tools being introduced. But, like with an old car that still gets you from A to B, it may need a few accessories to do its job efficiently.
There are several email tools that can jazz it up and help email to better meet the requirements of a modern business.

Email should no longer be treated as the sole communication tool; instead, it needs to interact with the social tools you introduce.

Email inboxes need to be unified and shared across teams and no longer designed as separate silos of info for individuals: email needs to be integrated into the new reality of a collaborative, information-sharing platform.

Here are just two of the great tools available – a simple search on Google will suggest more:

  • Karbon

Karbon is actually is actually a workflow management application, with a focus on the accounting industry. It helps accounting firms manage client work and email communications.

One of its main features is email triage: This allows all emails to enter into a single repository to be assigned out as work comes in: a much more efficient way of organising emails than the traditional individual account set up.

  • Hiver

Hiver is another tool that helps you manage your email better. Effectively it turns Gmail into a help desk, bringing all the features you need for your help desk right into your Gmail account.

It is able to rapidly delegate emails so that communication becomes more seamless and customers receive better, more streamlined service.

Collaboration: there’s no time like the present

During the 90s and noughties, email became an indispensable business tool. Now, however, it is replaceable.

In fact, in many cases it needs to be replaced as it ends up wasting too much employee time and damaging productivity.

The beauty of most of the chat, collaboration, and email enhancement tools detailed above is that many of your staff will already be familiar with how to use them.

They are probably using similar social apps for chat and messaging in their private lives. This creates a low barrier of entry that should be embraced by businesses: very little training is required!

Of course, you will need to create some usage guidelines but simplicity is key here: Most of these tools are so easy to use that you can literally implement a new system and have people using it to collaborate almost immediately.

If you would like assistance in selecting the right chat or collaboration platforms for your business, one of our qualified professionals can help. Simply contact us here.

The post Team communication tools: how to free up 25-30% more time in your business appeared first on Miss Efficiency.

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Do you have employees? Then you need to be ready for Single Touch Payroll!

By now you may have heard the buzz around Single Touch Payroll. It’s a pretty big deal for any business that has employees. So…what do you need to know and how does it affect you? Keep reading to find out.

What is Single Touch Payroll?

Single Touch Payroll (STP) is a new way to do your payroll reporting. The ATO has made it a legislative requirement that employers report all pay events. That means pay runs, including tax withheld on wages and superannuation amounts, will all be reported as they happen.

Lodging every pay event to the ATO means they’ll have up-to-date information in front of them, which makes data matching a lot easier. The ATO will be able to see if you are meeting your superannuation guarantee and PAYG withholding obligations. Put simply, the ATO will be able to crack down on business owners that aren’t doing the right thing.

Who does it affect?

STP affects every business with employees. If you employ staff, you need to chat with us today. You can book in a time to talk here.

If you are a micro employer (1 – 4 employees) some concessions are available for a limited time, contact us for more information.

When does STP start?

For businesses with less than 20 employees, it comes into effect from 1 July 2019.

For those with 20 or more, reporting started from 1 July 2018.

The time to act is now. There’s not long before STP comes into place and you need to make sure you’re set up and ready to report, and you don’t have to wait until 1 July 2019 to start reporting STP. It’s our recommendation that you get set up for STP before the end of the financial year when you’re already got so much to think about that that time!

What do I need to do?

The first step is to have a chat with us. As a registered BAS agent, we’re in the best position to help you with this.

Electronic payroll software is essential for STP reporting. If you’re not currently using electronic payroll software, now is the time to get started. We recommend Xero and they have some great solutions if you’re a smaller employer. If you’re already a Xero subscriber, read our blog on getting set up.

Learn more: Single Touch Payroll Xero Setup

So what’s next?

Talk to us today, don’t leave it any longer! We can help make the Single Touch Payroll process a whole lot smoother for your business.

We understand just how difficult it can be to employ and manage staff, as well as manage payroll. You don’t need the added stress of not being STP compliant.

Get in touch

Call us on 0402 811 088 or email sarah@missefficiency.com.au to find out more.

The post Are you ready for Single Touch Payroll? appeared first on Miss Efficiency.

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“The cloud” is a phrase that means something very different these days, due to the increasing use of cloud computing. But what exactly is cloud computing? And is it a good option for your small businesses?

First, a quick definition. Without getting lost in ‘geek speak’, cloud computing simply means both the software apps you use and your data are stored on remote servers on the internet, rather than ‘locally’ on your computer’s hard drive or your own servers. That idea—of the data not physically being in the same place as you—used to sound scary to many. What about security? What about the risk of losing your data? Surely it’s best to have your data on a computer you can see and touch on your own premises?

Counter-intuitively, your data is likely to be more secure when stored in a cloud app, compared with storing it yourself on your own computer or server on your premises. Here’s why.

Security

Your own IT security is likely to be far less robust than that of a cloud app provider. If you access the internet and use email, then you’re vulnerable even if you don’t use any cloud-based apps. Hackers can access the data on your computer or local network simply due to the fact that you have internet access. It’s like a door. And they often know how to pick the lock.

Reputable cloud app providers, on the other hand, use solid security measures such as SSL certificates that support—sorry, some geek speak coming up—256-bit SSL (Secure Sockets Layer) encryption. This is the same level of encryption used by online banks. Let’s face it: This bank-grade security protocol is likely to be far more secure than your own computer and IT security protocols.

Theft

Another advantage of having your apps and data stored “in the cloud” is that if your computer, server, smartphone, tablet or other device you use is lost or stolen, your data is safe because it’s not on the device. It’s in the cloud, stored securely behind encrypted passwords. And your data is far more valuable than hardware. Hardware is easily replaced. Data is not.

Disaster

This same “you can relax because your data is in the cloud” factor also applies to disasters such as flood and fire. A business using cloud-based computing could have its premises burn to the ground overnight and continue “business as usual” from another location as long as they had access to the internet. (At least from a customer, financial, accounting, human resources/personnel and other business data perspective. Clearly it does not apply to physical operational aspects of a business.)

Hardware

Computer hard drives are like car engines. It’s not a question of if they will ever break down, but rather when they will break down. That’s why we all diligently do daily data backups, right? And we all take these backups off-site each day, don’t we? And we all do weekly tests where we restore the backups to ensure the backups are working as intended?

No? Really? That’s bad. Shame on you.

And yet it’s precisely what most small businesses fail to do.

That’s another great aspect of cloud computing. No more data backups to do. The cloud app providers back up your data automatically and they simultaneously store your data in multiple locations around the globe. This means that if one of their buildings was subject to, for example, a catastrophic earthquake, your data would be safe because it is also stored in different cities, on different continents.

But even if technology got to a point where computer hard drives never failed, there’s one thing they always do, eventually: fill up. They run out of space.

And that’s a major inconvenience with the old-school approach of storing data locally rather than in the cloud: You have to (or you have to pay IT providers to) move data across to new hard drives or servers, and reinstall the various apps and databases. It’s an expense and a disruption.

With cloud computing that inconvenience is a thing of the past.

Read more: Online Accounting – The Future is Here

Software

For many small businesses, when they fully adopt cloud computing they can reach the “no IT person required” stage. By that, we mean you won’t need an IT contractor to come on site to upgrade servers, maintain databases, fix software conflicts and so on, all of which is the norm when running old-school desktop apps and local servers. Of course there’s still a place for these professionals in the market place, I have an IT company that I rely on from time time, but with cloud-based apps there is no software to install. No software updates or “patches” to install. You just log in to each app and it’s always up to date. Nice!

The one exception

There is one exception here of course. If your business is in a region where you do not have reasonable internet speed (e.g. 5 Mbps or more) with reliable connections, then cloud computing is not for you. Not yet.

Technology continues to evolve in this area, and it won’t be long until every business on the planet has internet speeds that support cloud computing.

Here’s where cloud computing gets exciting…

While the security, risk and convenience aspects of cloud computing are worthwhile, they are not the most exciting and compelling benefits of cloud computing to a business owner.

Let’s look at some of the “wow” aspects of cloud computing.

Efficiency via Data Flows

Every business wants to be more efficient. It saves money. Saves time. And it allows you to provide even better service.

By adopting cloud computing and building an “app ecosystem” for your business you can eliminate a number of inefficiencies where data is being manually re-entered into multiple systems.

Your data can seamlessly flow from one app (area of your business) to the next without the added step of manual data entry. Manual data entry is not only an expense and an inefficiency that slows down your business processes, it introduces the opportunity for error.

Work to eliminate all manual data entry in your business. If you see anyone in your business manually entering data into an app, you should question why it’s being done. Look for ways that data could automatically flow into that system from another app where the data is already stored.

Read more: Managing receipts: 4 apps to save you time

App Ecosystem Example

Imagine your business has fully embraced “the cloud”, and has connected various apps so data flows automatically from one app to the next.

Let’s say someone then searches Google for your type of business, product or service. They find your website. They see something on your site they would like to access, such as a PDF document with helpful information in it. They enter their email address and perhaps their first name in order to receive it.

They are now in your business’ marketing database and Contact Relationship Management (CRM) system. And they did the data entry.

Over the following few weeks this prospective customer or client receives email updates and e-newsletters from your business that gradually educate and build trust with the prospect simply by being helpful and sharing relevant hints and tips  based on what they previously downloaded.

And this happens automatically thanks to your marketing automation app such as Active Campaign.

The prospective customer then clicks on a link in an email and comes back to your business’ website. They’re ready to talk to someone, so they enter their information into the Contact Us web form. This time they enter their last name and their telephone number.

This data also flows straight into your business’ CRM.

Next, you’re speaking with them on the telephone and they like what they hear. They request more information such as a proposal. You use a cloud-based proposal creation app (such as Proposify) that integrates with your CRM to automatically pull in the prospect’s information. You click a few boxes on screen to select the product and service options to include in the proposal.

You click a button and the proposal goes to your prospect via email.

They open the email, click on the link to the electronic proposal and view it online. They decide to go ahead so they click Accept, sign it digitally (on screen) and then enter their credit card details to purchase.

This automatically adds them as a customer to your cloud-based accounting app such as Xero. It also enters their credit card details into your secure eCommerce payment processing platform linked to your marketing automation app. And then your payment processor (e.g. eWAY) processes the credit card transaction.

Xero automatically emails them an invoice marked as Paid, and the live bank feed will bring in the transaction ready to be reconciled (matched) to the invoice within 24 hours. So your bookkeeping and accounting is up to date, and yet no-one in your business had to enter—let alone re-enter—any data.

You have a new customer, the money is in your bank account, and you’re ready to deliver.

The purchase also triggered a fulfillment list and email instructions to your relevant team members, and added the job to your workflow (job tracking) system.

Your business is amazingly efficient. You move with velocity thanks to data flows. You amaze your prospects and customers with your service, and impress them with your tech savvy. You’re saving tens of thousands of dollars a year on old school IT and administration approaches that would require additional staff and contractors.

You’re a modern, cloud-based business. And you’re loving it!

Where to start with ‘going to the cloud’

The process of going to the cloud starts with deciding on your cloud-based accounting and CRM systems. That’s because your financial and customer data are crucial, and will receive and send data to and from your other operational areas.

Your ideal accounting system and CRM platform will depend on your type of business and the apps you already use. Building your business’ app ecosystem is one of the most important areas for any business owner or entrepreneur to focus on.

That’s why we helping businesses move to the cloud.

If you’d like to have a chat about your move to the cloud, get in touch to make a time to chat.

Moving to cloud computing is easier than ever for a successful, modern, competitive business.

The post Why successful businesses need cloud computing appeared first on Miss Efficiency.

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Think back to the days before you started your business, when you were working for a boss. Chances are you were rewarded for your hard work with a regular salary. It may not have always been the same amount, but it came through like clockwork. And for the next week, month or however often you got paid, you’d do your best to make it last.

But now you are the boss, and so you don’t need to be restricted to a set salary, do you? You can simply draw money out of the business whenever you need it, right? Wrong.

7 good reasons to pay yourself a regular salary 

As a business owner, here are seven reasons why you should pay yourself a regular salary instead of treating your business like an automated teller machine.

It’s what you’re used to

When you first started working for someone else, you couldn’t ask the boss for more money whenever you ran out. All you could do was hold out until the next time you got paid. And having a regular income also made it easier to budget for your income and expenses, manage your money, and save up for a mortgage or investment. So why change now?

Much of the money in the business’ bank account is already spoken for 

It’s easy to think all the money sitting in your business’ bank account is yours. After all, it’s your business, isn’t it?

But that money actually belongs to the business—not you personally—and is needed to cover things such as:

  • Salaries and wages
  • Paying contractors and suppliers
  • Stock purchases
  • Equipment
  • Rent and utilities
  • Future tax payments

It doesn’t matter how profitable your business is. If the money isn’t there to pay the bills when they’re due, your business is at risk of becoming insolvent (i.e. you have more commitments and bills to pay than cash or available funding to pay them with).

Having sufficient cash flow is vital for any business. And it’s far easier to manage cash flow when you have predictable expenses you can plan around—including your salary.

You need money to grow your business 

A growing business is a cash-hungry business. As it grows you may need to move it to a larger premises or invest in new staff or technology to grow your capacity. Even if you can keep a lid on your fixed expenses, your business may require an increase in variable inputs such as materials. And all this ties up cash.

So whatever your growth plans, you’ll need enough money in reserve to fund them. And that’s on top of the money you need to keep the business running at its current level.

As you can see, knowing exactly what cash is flowing in and out of your business, and saving as much of your profits as you can to build up your cash reserves, is important for a growing business.

But if you keep ‘raiding the till’ whenever you’re short of cash, you’ll never know how much cash you have in reserve, or when you have enough funds to initiate the next stage in your growth plans.

Read more: Why you should be using 3-way budgets

You won’t be risking ‘lifestyle creep’ 

The lifestyle we lead is largely dictated by the amount of money we have readily available. So if your business does particularly well one week and the bank balance is up, you might be tempted to draw a little extra money and spend it on dinner at a fancy restaurant, a weekend away, a new ‘toy’ or some other indulgence.

It’s okay to spend money in these ways if it’s a bonus for achieving a certain result or milestone in your business. But these bonuses should still be within the planned and documented salary and remuneration package the business pays you.

If you’re not disciplined in this area, it doesn’t take long for these indulgences to become part of what you consider a ‘normal’ part of your lifestyle, and so you start drawing extra cash on a regular basis.

And that’s not good for the health of your business.

By living off a regular salary (and nothing more) instead, you’ll learn to live happily within your means, which is a key to building wealth.

You’re more likely to fly under the taxman’s radar 

The tax department is used to people being paid a regular salary. It’s generally how things work. And by giving yourself a regular salary, you’ll be seen as just another salary earner and be more likely to fly under the radar.

If, on the other hand, you start drawing large amounts from your business at irregular intervals, you may raise a few eyebrows with the governments’ tax auditors. And that’s never a good thing.

You could be creating a tax liability for your business 

When wage and salary earners are paid, the employer must withhold and set aside a portion of their pay as tax, which is periodically paid to the tax office on the employees’ behalf.

When you withdraw money from your business, it’s not ‘free money’ (i.e. tax-free). These amounts, depending on your business structure, need to be properly accounted for as:

  • wages/salaries
  • drawings or a loan from the business
  • dividends (a portion of your profit)

Your actions here could be building up a potential debt that will need to be paid at some point. And that debt could lead to severe cash flow problems down the track, especially when it comes time to sell the business.

You’re much better off accounting for, setting aside and paying taxes as they fall due. It will not only help your business, but also the quality of your sleep.

You’ll more easily qualify for mortgages and other loans from the banks 

When it comes to assessing a person’s ability to service a potential loan, banks much prefer consistently earning wage and salary earners to sporadically earning self-employed business owners.

The bank wants to know you can comfortably service the loan each month, and by paying yourself a regular salary you’ll have the payslips and bank statements to show a steady cash flow history.

So the sooner you set this up in your business, the better.

A successful business is a great way to accumulate wealth. But don’t disadvantage yourself by presenting a poor case to the banks when applying for a mortgage or other type of loan.

How much should you pay yourself? 

As you can see, there are many good reasons to pay yourself a regular salary instead of continually raiding the till. The question is, how much should you pay yourself?

Obviously you need to pay yourself enough money to cover your basic living and lifestyle requirements. The last thing you want is to be stressing about your personal finances, especially when you’re trying to make business decisions.

But it’s not a good idea to pay yourself too much in salary—even if the business can easily afford the cash flow. Depending on your business structure, there could be more tax-effective ways to receive income from your business and this is a discussion you should have with your accountant.

Every business and person’s situation is different in this regard, so it’s important to get one-on-one advice in this area. Don’t view this article as personal advice to you—it’s not. We’re simply opening your eyes to the many benefits of paying yourself a consistent salary as a business owner.

To work out the right amount to pay yourself regularly, you’ll need to consider things such as:

  • What your business’ cash flow can comfortably pay you on a regular basis
  • What you feel you’re worth (e.g. if you were employed by someone else)
  • What will let you achieve your personal and family wealth creation goals, such as paying off your mortgage and building your investment portfolio
  • Tax considerations so you pay yourself the optimum amount to meet your needs without needlessly paying too much personal income tax
  • The business’ projected profitability for the financial year.

As you can see, it makes sense to get professional advice on calculating your salary as a business owner. We’ll help you work it out by taking into account your current business and personal situation. We’ll also set up payroll systems to automatically create and distribute the necessary tax-related paperwork each pay period.

You enjoy being your own boss.

Now it’s time to also enjoy being your own employee.

The post Why business owners should pay themselves a salary appeared first on Miss Efficiency.

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If you’re a small business owner whose company hasn’t gone through hard times, that’s great but it’s likely to happen at some point. As much as we dream about being brilliant enough at business that we’ll never face slow times, there are many things beyond our control that can negatively affect our business.

Here are four tips for getting your business through difficult periods so you can look forward to many more years of business ownership.

Focus on your existing customers

When companies go through tough times, many owners turn their focus to bringing in new business. The downside is that existing customers are often forgotten, but those are the most efficient people to make sales to. You don’t need to stop marketing yourself to new customers, but make sure you give extra focus to the customers you already have, to ensure they remain loyal. Find out what their current needs are, how successful you are at meeting them, and what you can do to maintain an ongoing relationship. Communicate with them, and always provide exceptional customer service.

Reach out to others

Chances are, you aren’t the first person in your industry to experience tough times. Talk to other people who have been in similar situations to learn how they navigated those challenges. Ask them what did and didn’t work for them, and what they learned from the experience. Some—if not all—of their answers could be applicable to your business, or could at least inspire a solution.

Examine your marketing plan

Your marketing plan brings in new customers. Now is the time to consider fresh marketing ideas to bring in new revenue. Is there an area of your business you haven’t promoted before but could bring in clients? Is there a new way to market yourself you haven’t tried?

Examine previous marketing efforts to determine how successful they were. If they weren’t successful, stop wasting your valuable time and money on them. Use your efforts on something new.

Improve your cash flow

Analyse your company’s financial health to see if there are ways to improve cash flow. Can you charge clients a deposit or encourage payment up front to increase cash flow? Are there products you sell or services you provide that bring in revenue more quickly than others? Are there ways to save money that won’t hurt your business in the long run?

It can be tempting to eliminate staff, but when things are good you’ll just need to hire employees again. Doing so costs time and money. See if you can find small ways to save money that won’t negatively affect your business when it starts booming. Cutting overtime, for example, can save you money without losing staff.

Make sure you can account for every dollar your business spends. Don’t hide from creditors, communicate with them to find out if you can restructure your debt or extend your terms. Free up as much money as you can without setting yourself up for failure when things turn around.

Read More: Why you should be using 3-way budgets

Final thoughts

Chances are your business will go through tough times at least once. It’s important you take action to help get you through it, rather than crossing your fingers and hoping the difficulties pass. The steps you take during these challenging periods will help you, but they can also help set you up for increased success in later years.

Change isn’t easy but a little planning, action and accountability will pay off. Understanding the seven ways to grow your business is another key way to improving your business’s performance, maximising your efficiency and increasing your profit. Find our how your business can benefit from attending our 7 Ways to Grow Your Business seminar by clicking the link below.

Check out our next seminar “7 Ways to Grow Your Business”

The post 4 Tips for Getting Your Business Through Tough Times appeared first on Miss Efficiency.

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Think back to the days before you started your business, when you were working for a boss. Chances are you were rewarded for your hard work with a regular salary. It may not have always been the same amount, but it came through like clockwork. And for the next week, month or however often you got paid, you’d do your best to make it last.

But now you are the boss, and so you don’t need to be restricted to a set salary, do you? You can simply draw money out of the business whenever you need it, right?

Wrong.

7 good reasons to pay yourself a regular salary 

As a business owner, here are seven reasons why you should pay yourself a regular salary instead of treating your business like an automated teller machine.

  1. It’s what you’re used to. 

When you first started working for someone else, you couldn’t ask the boss for more money whenever you ran out. All you could do was hold out until the next time you got paid. And having a regular income also made it easier to budget for your income and expenses, manage your money, and save up for a mortgage or investment.

So why change now?

  1. Much of the money in the business’ bank account is already spoken for 

It’s easy to think all the money sitting in your business’ bank account is yours. After all, it’s your business, isn’t it?

But that money actually belongs to the business—not you personally—and is needed to cover things such as:

  • Salaries and wages
  • Paying contractors and suppliers
  • Stock purchases
  • Equipment
  • Rent and utilities
  • Future tax payments

It doesn’t matter how profitable your business is. If the money isn’t there to pay the bills when they’re due, your business is as risk of becoming insolvent (i.e. you have more commitments and bills to pay than cash or available funding to pay them with).

Having sufficient cash flow is vital for any business. And it’s far easier to manage cash flow when you have predictable expenses you can plan around—including your salary.

  1. You need money to grow your business 

A growing business is a cash-hungry business. As it grows you may need to move it to a larger premises or invest in new staff or technology to grow your capacity. Even if you can keep a lid on your fixed expenses, your business may require an increase in variable inputs such as materials.

And all this ties up cash.

So whatever your growth plans, you’ll need enough money in reserve to fund them. And that’s on top of the money you need to keep the business running at its current level.

As you can see, knowing exactly what cash is flowing in and out of your business, and saving as much of your profits as you can to build up your cash reserves, is important for a growing business.

But if you keep ‘raiding the till’ whenever you’re short of cash, you’ll never know how much cash you have in reserve, or when you have enough funds to initiate the next stage in your growth plans.

  1. You won’t be risking ‘lifestyle creep’ 

The lifestyle we lead is largely dictated by the amount of money we have readily available. So if your business does particularly well one week and the bank balance is up, you might be tempted to draw a little extra money and spend it on dinner at a fancy restaurant, a weekend away, a new ‘toy’ or some other indulgence.

It’s okay to spend money in these ways if it’s a bonus for achieving a certain result or milestone in your business. But these bonuses should still be within the planned and documented salary and remuneration package the business pays you.

If you’re not disciplined in this area, it doesn’t take long for these indulgences to become part of what you consider a ‘normal’ part of your lifestyle, and so you start drawing extra cash on a regular basis.

And that’s not good for the health of your business.

By living off a regular salary (and nothing more) instead, you’ll learn to live happily within your means, which is a key to building wealth.

  1. You’re more likely to fly under the taxman’s radar 

Governments’ tax departments are used to people being paid a regular salary. It’s generally how things work. And by giving yourself a regular salary, you’ll be seen as just another salary earner and be more likely to fly under the radar.

If, on the other hand, you start drawing large amounts from your business at irregular intervals, you may raise a few eyebrows with the governments’ tax auditors. And that’s never a good thing.

  1. You could be creating a tax liability for your business 

When wage and salary earners are paid, the employer must withhold and set aside a portion of their pay as tax, which is periodically paid to the government on the employees’ behalf.

When you withdraw money from your business, it’s not ‘free money’ (i.e. tax-free). These amounts, depending on your business structure, need to be properly accounted for as:

  • wages/salaries
  • drawings or a loan from the business
  • dividends (a portion of your profit)

Your actions here could be building up a potential debt that will need to be paid at some point. And that debt could lead to severe cash flow problems down the track, especially when it comes time to sell the business.

You’re much better off accounting for, setting aside and paying taxes as they fall due. It will not only help your business, but also the quality of your sleep.

  1. You’ll more easily qualify for mortgages and other loans from the banks 

When it comes to assessing a person’s ability to service a potential loan, banks much prefer consistently earning wage and salary earners to sporadically earning self-employed business owners.

The bank wants to know you can comfortably service the loan each month, and by paying yourself a regular salary you’ll have the payslips and bank statements to show a steady cash flow history.

So the sooner you set this up in your business, the better.

A successful business is a great way to create creation and accumulate wealth. But don’t disadvantage yourself by presenting a poor case to the banks when applying for a mortgage or other type of loan.

How much should you pay yourself? 

As you can see, there are many good reasons to pay yourself a regular salary instead of continually raiding the till. The question is, how much should you pay yourself?

That’s a question we can help you answer.

Obviously you need to pay yourself enough money to cover your basic living and lifestyle requirements. The last thing you want is to be stressing about your personal finances, especially when you’re trying to make business decisions.

But it’s not a good idea to pay yourself too much in salary—even if the business can easily afford the cash flow. Depending on your business structure, there are probably more tax-effective ways to receive income from your business, such as dividends.

Every business and person’s situation is different in this regard, so it’s important to get one-on-one advice in this area. Don’t view this article as personal advice to you—it’s not. We’re simply opening your eyes to the many benefits of paying yourself a consistent salary as a business owner.

To work out the right amount to pay yourself regularly, you’ll need to consider things such as:

  • What your business’ cash flow can comfortably pay you on a regular basis
  • What you feel you’re worth (e.g. if you were employed by someone else)
  • What will let you achieve your personal and family wealth creation goals, such as paying off your mortgage and building your investment portfolio
  • Tax considerations so you pay yourself the optimum amount to meet your needs without needlessly paying too much personal income tax
  • The business’ projected profitability for the financial year. (Your shareholding percentage and dividend policy on withdrawing profits or retaining and reinvesting profits in the business will determine your projected profit dividend.)

As you can see, it makes sense to get professional advice on calculating your salary as a business owner. We’ll help you work it out by taking into account your current business and personal situation. We’ll also set up payroll systems to automatically create and distribute the necessary tax-related paperwork each pay period.

You enjoy being your own boss.

Now it’s time to also enjoy being your own employee.

The post It Pays Off: 7 reasons business owners should pay themselves a salary appeared first on Miss Efficiency.

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Success in business requires a number of essential ingredients. A sound strategy. A robust business model. Effective planning. Strong financial control and bookkeeping. A good team. Great systems. Measurement. Focus.

But you know what? Even all those elements are not enough without this skill: Execution.

Call it “Getting Things Done”, making things happen, the action habit, extreme focus… call it what you like, for many entrepreneurs it’s what separates mediocre from magic. It’s the difference between a business that plods along from one year to the next, and one that grows, evolves, impresses, enriches.

Execution is a skill. Sadly, we’re not taught it at school. (Gee, but we all use those good ol’ quadratic equations each day!) The good news is that, as adults, we can go out and find the information and principles of effective execution, then apply them. Daily.

To fast track you on your journey towards becoming brilliant at execution, here are some books that we highly recommend that you not only read, but you study, practice, live by:

Read (or listen) to those books, and your mind will be permanently re-wired. Obstacles and frustrations will become Projects, Tasks, or Wildly Important Goals. And you’ll have a pragmatic framework for achievement and creating the change you want in your business.

And in your life. It’s powerful stuff.

We’d love to hear of your favourite books on this ‘execution’ topic. After you read (or if you have already read) any of the books above, please share with us the key principles and practices that have made the biggest difference to you in terms of “getting things done” and executing your ideas.

The post Getting things done: A skill that should be taught in schools appeared first on Miss Efficiency.

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“I get all my business from word-of-mouth marketing.”

“I’m a referral business.”

“I don’t have the budget for marketing.”

“I’m just too busy to market my business!”

If you find yourself saying any of the above, it’s likely that you experience considerable peaks and troughs in your small business.

Why?

Because it means that you are not actively pursuing marketing to generate leads and opportunities for your business. There is no steady flow of new business to help even out the peaks and troughs – so you are either flat-out busy or twiddling your thumbs.

When times are good, it seems like everything is in place and your business is a resounding success.

More often than not, however, the leads dry up and there is nothing churning away in the background to generate new opportunities. No mechanism is in place to bring new prospects in to help you grow.

But the bills still need to be paid.

That’s why EVERY small business should be investing in marketing, regardless of size, turnover, or budget.

There’s nothing wrong with word-of-mouth leads. In fact, they’re wonderful! It’s just that you are reliant upon others. You are not in control of your own destiny. You are essentially playing a game of hope.

Word-of-mouth leads and referrals should be considered the icing on the cake – not the cake itself.  Build a strong ‘base’ from the right ‘ingredients’ and you have a creation that will sustain your business for years to come!

But if you just have the icing, there will be periods when you inevitably go hungry!

Here are five ideas that will help you bake something to create a consistent flow of opportunities to protect your business from famine in the years ahead…

  1. Build a client referral marketing system

Word-of-mouth marketing needs systemising or it is just a game of hope. It’s all well and good waiting for referrals to come to you but you can achieve much more by implementing a simple system

To do that, go through these steps:

  • Get clear on your value proposition – what your business provides that others’ do not and why people should choose your business.
  • Trim your existing client list – you may need to shed some low-value or ‘problem’ clients to focus your time on higher value clients and new business.
  • Segment your database by value, how long they have been with you or what stage of the sales funnel they have reached.
  • Set expectations from day one – when a prospect signs up, set the expectation by telling the client that you will speak with them in the future to request referrals.
  • Ask the question– if you feel awkward asking for referrals, start by asking your closest clients for details of two businesses that would benefit from your services.
  • Get creative – include a line in your email signature or arrange special events for clients – and ask them to bring two business associates along.
  • Show your appreciation with a verbal or emailed ‘thank you’ – or take it a step further and send a card. 
  1. Get smarter with LinkedIn

LinkedIn is the world’s largest database of professionals. Somewhere in the region of 500,000 professionals use the platform. It’s free to use – or low-cost for paid membership.

Depending on your type of business, it’s possible to make LinkedIn the hub of all your marketing activity at very low cost. It will take a bit of time but if you focus on the following areas, you will have a head start on the many other LinkedIn users:

  • Get crystal clear on what’s unique about your business and who exactly you’re serving (your target audience).
  • Optimise your profile to focus on exactly what you do and your value proposition – and include your main keywords. Focus your summary on talking to your target audience.
  • Grow your network by connecting with your target audience
  • Engage with this growing network by liking/commenting/interacting in groups and posting status updates and links to valuable content.

The two mistakes that many business owners make are:

  • Treating LinkedIn as a peer-to-peer network – wasting time talking to other industry professionals rather than potential clients; or
  • Treating it as a sales platform – and losing their network by trying to sell straight off.

LinkedIn is a superb marketing platform for small businesses to generate a steady flow of leads if you get the strategy right as per above.

  1. Put resources into SEO marketing

Search Engine Optimisation (SEO) marketing can be time-consuming – but it is essential for getting found by your target audience.

SEO is the process of optimising your online content for the search engines (Google, Bing, Yahoo etc.) This includes your website’s standard pages, but also its blog posts, and anything else you have published online—such as videos—that can be found through ‘organic search’. (Organic search means ‘free search’, as opposed to paid search such as Google AdWords or Facebook Advertising).

Understand the basics of keywords and SEO – then hire reliable and recommended SEO professionals to look after your campaigns.

It is unlikely that you will have the time or expertise to effectively manage your own campaigns but your SEO professional should be able to guide you with on-page SEO (keyword placements), off-page SEO (link-building etc.), and the content required to improve search rankings.

If you take informed and consistent action, results will come. Think long term with SEO – and if you are largely targeting your local market, be sure to optimise well for local search.

  1. Reach out with email marketing

If you have spent time and resources to connect with prospects online (on LinkedIn, Twitter, etc.), and offline (at various networking events), you will rapidly build a large database of potential clients.

How do you reach out regularly to these prospects and stay top of mind?

As well as through your activity on LinkedIn, you can get your prospects’ permission to include them in your newsletter marketing and in email marketing campaigns for other offers you may present from time to time.

Well-written email marketing campaigns have the power to convert prospects into customers – or at least move them along the sales funnel so they are closer to signing up.

Get professional copywriting assistance here to increase open rates, click-throughs, and conversions.

  1. Build authority with content marketing

Nothing beats regular, original, relevant content for improving the relationships with prospects. And, in the long term, that’s what marketing is all about.

Why?

If you focus on the main questions going through your prospects’ minds, you establish authority status. It builds trust and confidence and you will be top of mind when they are ready to sign up for the types of services you offer.

That may not be today or tomorrow – it could be six months down the track or even longer. But this longer-term marketing activity will pay dividends in the future, as part of a multi-pronged marketing strategy.

The types of content you can focus on include:

  • Articles that answer key questions in clients’ minds
  • Blog posts about industry changes
  • How-to or FAQ videos
  • Infographics that succinctly provide useful data and concepts
Market your small business – no excuses!

There are literally no excuses for not marketing a business.

No time? Make time.

No budget? You don’t need it.

Don’t know how? You do now.

Don’t need it? You will.

Got enough leads? You soon won’t.

Marketing is the key to bringing a steady flow of opportunities in – and leads are the lifeblood of any small business. With a good sales system to convert leads, you have new revenue, healthy cash flow, and growth.

But generating leads can be an awkward subject for accounting and financial professionals with little to no marketing or sales experience. It’s easier to rely on leads coming to you than to go out hunting for them.

Don’t confuse marketing with sales: marketing is the process by which you bring in leads. It doesn’t need to be salesy. Sales is the process of converting leads into revenue.

Remember that your word-of-mouth leads always have the potential to completely dry up. Such passive marketing is dangerous and stressful for any small business owner: suppliers still need to be paid and things can quickly go south if the cash flow dries up.

Get proactive and market your business on multiple fronts and you have a much better chance of not only maintaining a healthy cash flow but growing your business for the future.

If you need assistance with developing marketing for your small business, get in touch with us and we’ll be able to point you in the right direction, as we know a number of marketing specialists in different areas.

The post 5 alternatives to word-of-mouth marketing for small businesses appeared first on Miss Efficiency.

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How’s your filing system?

Paperwork everywhere? A few different filing systems on the go? Okay in theory, terrible in practice? There’s no right or wrong when it comes to filing. As long as you have a filing system that’s going to work for you and stick to it, you should be okay.

You may not consider filing to be that important. After all, it doesn’t earn you any money so shouldn’t you be concentrating on marketing and customer service? Like many administrative tasks that happen behind the scenes, a good filing system can mean good things for your productivity and profitability by keeping your documents organised and easy to find. Here are some reasons why a good filing system is vital to your business:

  •  You need quick and easy access to your financial records in case you have an audit or need to verify some information.
  • A good filing system allows you to see where your finances are including open contracts, and unpaid invoices and bills.
  • Filing will make you more conscious of information that you really may not need to keep, or information that you should definitely keep.
  • Your clients expect you to keep their information secure. A good filing system will allow you to store client information securely.
  • A good filing system will allow you to quickly and easily find information when you need it.

If you can’t decide what filing system is best for you, you’re not the only one, so don’t panic! There are two basic ways to file your records, either paper or electronic.

Paper Filing
  • Lever arch folders with dividers for each month.
  • Manila folder for each month.
  • Handing files.
  • Large envelope for each month.

Ensure your folders and envelopes are labelled so they can be accurately identified. Be consistent in your labeling – use a label printer with the same font size and style, and place the labels in the same spot and direction on each folder.

Filing by date gives a logical sequence, and means that your end of financial year archiving isn’t a big task. This means that you have a folder for each month. Within each monthly folder, file your documentation alphabetically. This means that if you need to locate a document later, it’s a lot easier to find.

Have a folder for your expenses for each month, or each quarter if there’s not much in each month. Also have separate folders for things like bank statements, BAS statements, payroll reports, insurances, etc.

It’s a good idea to have a separate folder for items of capital expenditure that you’ve purchased. This will make it easy to locate information at end of financial year for your accountant. File your original invoice in alphabetical order in your monthly or quarterly folder, and make a copy for you ‘Capital Expenditure’ folder which is one folder, contents filed alphabetically, for the year.

Advantages of paper filing
  • People may find it easier to physically see a file or folder to logically know where a document should be files.
  • Paper filing systems are generally less complex, which means they’re easier for people to use and less training is required.
  • Not easy to send information to others – would need to be copied and mailed, or scanned and emailed.
Disadvantages of paper filing
  • Information isn’t available outside of the physical location of the records.
  • Can take up a lot of physical space.
  • Information can be lost in fires or floods.
  • It can take a long time to access information, particularly if there are a lot of files to go through to find the information you’re looking for.
  • It’s easy to misfile something, making it difficult and time consuming to locate information.
Electronic Filing

Here’s the system that I recommend:

  • Create a folder on your computer for each year, and sub-folders for each month.
  • Think about when you’d file your information into a paper system. In an electronic system, this is when you’d scan your documents and save them into your folders.
  • Don’t forget to scan in your bank and credit card statements into a separate folder. Refer below to ‘Setting up your filing system’ to see how you would file this information.
  • Remember to have your data backed up, preferably remotely.

I recommend getting a good scanner so you’re not waiting a long time for things to scan (I hate waiting for my computer), and set it up so that documents are saved as small files, so they don’t take up too much space on your computer.

Advantages of electronic filing
  • Information can be available from different locations.
  • No physical space is taken up so you can use that space for other things, or not need it at all.
  • Sensitive information can be password protected.
  • Information can be backed up in more than one way which means if one backup is corrupted, you’ve got a further backup.
  • Information can be quick to locate.
  • Information can be easily shared with others.
  • If something has been misfiled, you can do a search of the folders to locate the document and easily move to the correct location.
  • A document could be stored in more than one place and coping the document into two folders is quick and easy.
Disadvantages of electronic filing
  • You will need a good back up system in place to ensure documents don’t get corrupted or lost.
  • Information on a network can be assessable by unauthorised people so protections need to be in place.
  • Data can be compromised by hackers or viruses.
  • Electronic filing systems can be quite complex which requires more training of staff and the potential for things to be filed incorrectly.

Consistency is the key to every good filing system!  Consider all of your paperwork and map out the system on paper first. Then you’ll know where you’d file things so it’s easy to locate things later. If you have other people in the office, use your procedures documents to ensure everyone is filing records using the same system.

Learn more: Paperless office – what are the benefits?

Filing system considerations
  • Decide the format of your filing system – electronic or paper. If paper, decide on folders, envelopes, hanging files, pouches, filing folders, filing cabinets, etc.
  • Analyse your information and decide the best way to sort it – alphabetically, chronologically, by project?
  • For paper filing systems, label your files clearly and in a way that makes sense to you. For example, supplier bills, creditors, accounts payable – they’re all the same thing, so what makes sense to you? Your files could be in separate cabinets, or colour coded for ease of locating.
  • Map out your filing system and separate your files into categories – accounts, administration, human resources. Decide what information will be filed and where. This forms part of your map and will help you in later steps.
  • Be mindful of how you destroy the information that’s been scanned and filed electronically. Some information may need to be shredded.
  • Test your filing system. Make sure you can find everything easily and that it makes sense.
  • Train your staff. Explain how the filing system works and the importance of following the system.
  • For electronic filing systems, ensure you have a good backup in place.
  • Archive information annually around the financial year. This is extra important for paper filing systems due to the space they take up. Electronic files can be archived by creating a folder for the year, and moving all the existing folders for that year into the annual folder. Then start again with folders for the near year so all the current year months are viewable.

Learn more: Business systems help you focus on what you’re good at

A final word on filing …

Consistency is really important and it’s difficult to be consistent if you don’t know the process! I’d recommend you consider all of your paperwork and map out your filing system on paper first. As with any big change, mapping out the process is really important. Now I could rattle off a few apps that will help you with this process, but don’t discount good old paper, pen, post-it notes or a whiteboard! Once you’ve mapped it out, implementation will be a breeze!

Having a good filing system won’t earn you any money, but it can definitely save you time. Want to know how else you can save time in your business? Download our free guide here.

Free Download: The secret to gaining 5 hours a week in your business

The post Filing appeared first on Miss Efficiency.

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