Rochdale Accounting & Business Advisory :: Accountants, Business, Planning, Cash flow, Taxation, Audit, Superannuation

All You Need to Know Before You Pitch Your Startup Business

2016-02-03T09:00:00+11:00

Starting your own business requires not only a hefty sum of money, but a lot of diligence and hard work too. Besides a resilient working attitude, there are more things to ponder upon even before your start-up business becomes a real success.

As Business Advisors, one of our services at Rochdale is to help out clients create strategic plans to maximise every amount of investment they put into their startup. Here is a glimpse of how we can help you succeed your operations before business day one.

Financial Position

Identifying the amount of money you are willing to spend for your startup matters before you can even start with the execution of your plans. Your visions for your startup must be accompanied and supported by your available resources. Once your financial position is established, you will be able to execute your action plans based from a more realistic perspective.

Target Market

Although you have established your startup for a certain purpose, there has to be a specific group of profiles to target as your market. By doing this, you enable yourself to tailor your actions and strategies based from facts and not from hunches. Moreover, a research of your market will be helpful in providing you comprehensive statistics and data to get yourself acquainted with your customers-to-be.

Budget for Expenses

Budgeting is the key to turn your business vision into a reality. It is rooted from the need to identify how much money you have, how much you will have to spend, and how much you will need to achieve. For starters, budgets are usually drafted annually that comprise of the revenue, expenses or costs, and profits and cash flows. It often answers the question as to how you should allocate your money for your investments in marketing, recruitment, equipment, licenses, operational expenses among others. It is appropriate also for entrepreneurs to perform cost-benefit analysis before spending, and invest only in activities that may produce a high return on investment.

Forecasted Targets

Your business targets define the path where you want to direct your startup. Foremost, your sales targets must be achievable and realistic. Keep in mind that yearly targets must come on an upward trend. So if you set idealistic targets and even if you achieve them, you will end up distressing about the succeeding year's goals (because they are expected to come higher) so cut yourself some slack with optimistic forecasts yet not very high ones. But apart from sales, you will also have to forecast your business performance as far as operations and systems go. What is the end in mind of your business? How do you identify if your business processes have been successful--is it through sales target achievement? Through audits from outside entities, government organisations or some accredited groups? Through successful customer or client feedback campaigns? You decide. In the end, what matters most is for you to determine a set of healthy targets for your business existence at year one.

Action Plans

As a business starter, you have high hopes and visions for your company, but none of them makes sense until you put them into action. After you have completed your goals for your startup, you have to translate them into strategies. Your strategies must aim to answer the following questions: Who is your target market? Who are your competitions and how do you go above them? What is your timetable for your strategies? Who are the key persons involved? Your action plans must detail your strategies for sales, marketing, recruitment, operational processes, and financial aspects respectively. It is also important that you develop an efficient accounting system to help you deal with your accounting, payroll, invoicing, bills management, and others. To help you better manage your accounts, we recommend using Xero, a cloud-based accounting software trusted by more than 500,000 customers worldwide.

Your Method of Evaluation

Action plans are indeed futile without results, so make sure to seek your Business Advisor's expertise in monitoring your business as you progress toward your goals. Your performance evaluation, regardless of the results would serve as your benchmark for your next business planning. Aside from your numerical performance like profit margins or sales, you also have to measure your business' efficiency on several factors, depending on your business goals. Your preferred method or format for evaluation must be finalised during your planning.

Once you have identified these pertinent factors in your goal setting, you will finally be able to pitch your startup business. If you are planning to start your own business, go make that first move-seek the help and advice from experts at Rochdale Accounting & Business Advisory.

5 Misconceptions for Not Hiring An Accountant for Your Business

2016-01-14T09:00:00+11:00

Hiring someone to take charge of certain roles and tasks is one of the biggest challenges that every entrepreneur might face. As an entrepreneur, you will certainly need a helping hand to handle your accounting - yet for some business owners, they do not agree that hiring an accountant is a necessity to achieve business success. Here are five possible reasons why:

I Can't Afford It! Nothing more is worth spending a good amount of money over a qualified and capable accountant. For small businesses, it may not be practical to hire a full-timer who merely manages your accounts, tax returns, and basic accounting functions. Rather than pooling for such, you may instead eye on hiring a skilled Financial Controller or now called the virtual CFO on a part-time basis. Having one virtual CFO in your team is a cost-effective strategy for your business because this person could perform more than the functions of an accountant; they work closely with businessmen as part of the organisation dealing also with the business plans. Professional fees are certainly components of your business expenses, but if hiring your accounting companions provide you the edge of having a cost-saving guru by your side, consider it a necessary investment you will need in the long run.

An Accountant Is Not Necessary. If you think your business is too small to hire an accountant, think again. Regardless of the size of your business, you'll eventually need the professional aides of an accounting specialist or an accounting firm. Unless you know someone capable who can assist you with your accounting needs, or if you are personally capable to do the function, having an accountant is crucial. Needless to say though, it is safe to note that even if you have the capabilities to run the function, you have to focus on spending your time wisely by working on bigger things to achieve the growth of your business.

I Can Do It Myself. No man is an island, says Author John Donne. In relevance to business-one person, no matter how skilled or great he is in his craft, will eventually need to rely on another person's ideas, skills and expertise. Some entrepreneurs overstate their capabilities by taking all the responsibilities and duties in monopoly. In effect, undervalued turn outs- the output may not be as good as it could be if someone of his expertise performed the job. The roles of an accountant is often branched-out to various tasks like keeping track of figures, timely submission of tax returns, bookkeeping, auditing pertinent documents, payroll processing, and giving advice on saving costs. Indeed, it could be very difficult to picture a business owner who juggles between managing his business at the same time doing accounting chores. Delegating tasks to an accountant is the answer to stay focused towards the more important errands. Your best chance of success in a small business is to delegate workload to others, but of course it will incur corresponding costs. Doing this could become extensively critical to the business owner as having an extra expenditure for business operations quite requires good decision making skills to come up with the right choice.

I Don't Feel Secured With Another Person Managing My Account. At times, some business owners are reluctant to entrust their business' financial data to a third party. But be reminded that trust is built on experience, not on familiarity. Like other recruitment structures, hiring the accountant that best represents your needs is a trial-and-error method. Unless you find someone you've worked with and you can really give your full trust in, you must find that person to handle your accounting needs. After all, if you hesitate to hire an accountant for security reasons, remember that you are hiring an accountant for your company's fiscal well-being and security as well.

They Just Do Taxes. A popular misconception about the function of accountants is often boxed into filing and planning taxes. If you see your accountants as mere tax filers, you might not be able to maximise their services. But more than that, the importance of accountants in every business lies not only in tax duties, but on their capability to perform a variety of analysis and to help you reach your financial targets. As partners for achieving your business success, accountants work hand-in-hand with you to manage your finances and provide significant assistance in budgeting and analysis.

There are more misconceptions out there why businesses don't hire accountants that we need to debunk. Admit it or not, accountants play an integral part to the success of every business in their drive to meet their goals. But for now, if you have decided to look for an internal accountant or a financial controller to reach the full potentials of your business, you may contact our representatives at Rochdale Accounting & Business Advisory .

Why Xero May Be the Best Cloud Software Out There

2015-08-24T09:00:00+10:00

After the rise of accounting software programs, cloud-based accounting has become a better solution to conveniently work faster and smarter on accounts bringing you a better overview of your finances. And then comes Xero, an online accounting software designed to help accountants and bookkeepers complete tasks quickly and more efficiently, while enabling entrepreneurs to have a real-time view of their business performance. Given the outstanding reviews, Xero is currently trusted by more than 500,000 customers worldwide. Learn the exclusive features that make Xero the best cloud software out there:

Free and Auto-Updates

Unlike the traditional accounting software, updates for Xero are automatically scheduled as you use it. You don't have to worry about getting outdated features or forgetting to schedule your updates because Xero will do it for you. Plus, you don't have to pay anything-it's completely free.

Everything is Handy

How do you feel about putting your bank account in your pockets? Xero is optimised for PC, Mac, tablet and mobile phone devices. This enables users to check and manage their bank accounts, credit cards, and PayPal accounts real-time no matter where they are, anytime of the day. So whether you just woke up in the morning, took your favourites in a coffee shop, or while you wait in the car to pick up your kid at school, you can access your accounts even outside the boundaries of your office. Aside from this, taking care of receipts is one of the handies of Xero as you are able to compile them through capturing a photo or uploading scanned files, truly managing documents on the go.

Easier Reconciliation

Another good news for accountants and bookkeepers is that Xero provides a stress-relieving solution to the tedious task of reconciling bank accounts, credit cards, and PayPal, supporting over 160 foreign currencies. Basically, you have to connect your bank accounts to Xero to be able to import and categorise your bank statements automatically. Reconciling is simply clicking OK if you find a match between the statement lines from your bank account and the transactions that you created in Xero. Through the Xero mobile app, you may even develop reconciling bank accounts as a morning ritual since doing it requires nothing less than tapping screens, anytime of the day, anywhere you go.

Quick and Hassle-Free Overview

Get the significant data right when you need it with the Xero dashboard. Instantly see bank balances, invoices, bills and expense claims, and "add new transactions" as you take the first glance in your screen. The dashboard quickly allows you to take an accurate overview of real-time cashflow and monitor the performance of your multiple accounts.

Easy and Personalised Invoicing

Online invoicing does not only let you connect with your customers, but helps you improve your cashflow by enabling quick online payments in one click and easily send online invoices. Aside from providing you a platform toward collecting quick payments, Xero gives you the access to customise your online invoice with design templates plus uploading your logo to complete that professional look your brand will be needing.

Easy Bills Management

Paper bills just get easily messed up especially without proper organisation. You might end up racing through your dues as you forget which one requires higher priority level. The paperless bills management in cloud accounting answers this growing chaos of accountants and bookkeepers! With Xero, you can easily manage your cashflow by scheduling payments to suppliers, and suppliers can send their invoices directly into your accounts payable saving you time and costs for more productive activities. Also, it gives you a better view of your planned payments and recurring payments.

No Installation Required

Unlike the old accounting software, Xero does not require installation to your PCs, Mac, tablets, or mobile phones-it's available right there in the cloud! The traditional accounting software that you've probably installed through discs may not only give you headaches through manually transferring data from one device to another, it may not be accessible to multiple devices and may also risk your computer from unwanted threats, or worse, even your own security.

World-Class Security

One of the remarkable promises of Xero includes reliability on a world-class security for all your information. Xero invested in a bank level-security to safeguard your data no matter if your device gets lost or stolen, so there's no need to fret because your data is always available across devices.

Collaborate With People

Xero lets you and your team work together on accounts by granting access of different levels to multiple users in your network or staff members. This feature also enables you to invite your accountants or bookkeepers to view your accounts and provide you with professional advice right there on.

Inventory Control

Ensuring the accuracy of your inventory does not need to become tedious anymore. Xero helps you systematise your inventory control with a simple yet efficient inventory management feature that also lets you access a handful of third-party applications for an advanced inventory control and stock & order management.

So whether it's real-time access, high-leveled security, increased collaboration, convenient user interface or easy accounts management that you are after, Xero encompasses them all. It's no doubt that Xero is a mixture of sophistication, simplicity, and reliability, helping you achieve your accounting goals faster at a reasonable cost. With Xero, you can simply outperform your scheduled tasks in the best, possible way.

7 Red Flags That Your Accounting Isn't Right for Your Small Business Needs

2015-08-13T09:00:00+10:00

According to Forbes, about 50 percent of the entire working population are individuals working for small businesses. This growing rate results in a tighter market among industries whether they belong to the small or big enterprises. Small business owners face challenges like introducing their businesses to the market, growing their customer base, beating the competition, and eventually being profitable. But to achieve this, they must work side by side with strong and competent accounting partners. Here are 7 red flags why the accountant you hired and its services might not be the one you need for your small business:

You Assume That Profit is same as Cash Flow. Among the common accounting misconception is the similarity of profit and cash flow. If you think that profit and cash flow are the same, think again… what is your accountant teaching you? Small business owners rely on accounting professionals to ensure the fiscal well-being of their businesses. They hire accountants so that someone may coach them how money moves around the business. Cash flow is the money that flows in and out of the business from investments, office expenses, activities that need funding, etc. Profit, on the other hand is what is left of from your sales revenue minus your business's expenses. If your accountant fails to share with you the basics, then you need to do something about that.
Insider Accountant vs. Accounting Firm: Which Do You Really Need? The accounting profile you hire for your business depends on your company's profile too. For big companies, there is no doubt that the services of a trusted internal accountant is the answer to reconciling your accounts. But for small-scale enterprises, what matches your accounting needs depend on how you see the growth and development of your business. On a financial perspective, big accounting firms may not be practical for small businesses as you are paying for the services of credible and established names in the industry. Hiring individuals who can multi-task works for some small businesses. They hire accounting professionals who are capable of juggling different accounting tasks such as bookkeeping, payroll processing, drafting of financial statement, balancing accounts, and even administrative tasks. Alternatively small business' who may have all the other functions catered for except the accounting areas, particularly the high end analysis capabilities, may fine better value in engaging your Accountant to provide more than just the year end compliance work. This seems to be a trend of late and so you need to ensure your Accountant has the capacity and structure to be freed up for high end consulting work. As your business grows, your accounting preferences must grow too.
Growing Questions about Financial Statements. One of the crucial roles of your accountants is to ensure that you understand the accounting processes that they apply into your business so that in the next months, the questions in your head begin to shrink. Through time, you must develop minimal questions about your financial statements as you are educated enough to analyse your business performance on a monthly basis. If your accountant presents you a financial statement for last month and you ask questions about your Profit and Loss Statements and Balance Sheets, this normally happens. What's not normal is when you have those questions stacked in your head until you reach the point of distrusting your accountant's propositions on financial matters. This way, you don't only distrust your accountant, but question his knowledge and competence on the subject matter.
No Cost-Efficient Tips. You and your accountant/s must work together in realising your business targets. If your accountant does not regularly appear on your meetings and does not offer simple to intricate advice to fight bleed on your bottom line, you must be with the wrong accountant. As a small business, every amount of money spent matters. Accountants are your helping hands in coming up with your budgets. They are also your financial analysts - they analyse your financial data to come up with recommendations to help you make better business decisions. The key is to have the data available in real time.
Your Accountant Cost is Apparently High. As a small business, you've got to ensure that your expenses, whether fixed or variables are consistently monitored and your targets are being met. The charges you pay for your accountant is something that you must also keep track of, to ensure you are getting real value. If your accountant charges you every time you make phone calls for consultation or requests or schedule meetings with them, it's time to look for alternatives that can provide the service you need at a reasonable cost but with real value.
Lack of Experience In Your Market. Your accountants do not have to know everything about the operational side of your business, but understanding the foundations of all business' may help them perform their duties quicker and more efficient. Also consider scheduling them for ocular visits at the core of your business areas or have them attend basic trainings about the work that your business is involved with. If they just don't appear on scheduled activities and show lack of interest in doing this, you might want to invest your money and time to another accounting service provider who has familiarity with your business. The closer they are to your business the better the ideas of improvements will come.
No Light at the End of the Tunnel. For some reason, maybe you don't see a long-term working relationship with your current accountant, or maybe you have been struggling to put your overall financial systems in place in spite of his presence. Either way, it may be time to look for replacements. Good Accountants help you improve your system and look for available technology solutions to help your business run more efficiently. They are hired for their expertise in the financial aspects of your business and play significant roles in your organisation. Your role as the business owner is to focus in doing the bigger things for your small business. If you feel your current accountant cannot provide real solutions to achieve your business goals, you may want to consider another path.

Haven't yet decided which accounting services match your small to medium business needs? Do you need help with your business for growth, profitability and strategy? Rochdale Accounting & Business Advisory can help you figure out. Click here for inquiries.

Abbott Government's Budget 2015 – what’s it really mean for small business

2015-05-13T00:00:00+10:00

So budget night, been and gone, always a highlight of the year, just to sit down and see what they throw at us for the upcoming tax season and they probably disappointed us a little. A few new small business measures to complicate things for us, but it's all good, we just hope it gets the outcome it is designed for, which is economic stimulation. This is where I am not quite sure.

Yes Small Business (SB) can go out and buy new equipment etc., and get an immediate write off, that is great, but is it the right thing for the business to do if cash is tight and profits are down. Probably not! Now the fact it is for 2 years at least we have some certainty – we can plan, so I think what will happen here is those businesses with the cash will spend, let's hope that stimulates the economy enough to create more demand for goods and services for those business struggling due to lack of confidence in the economy from last year's doom and gloom budget. I don't see the change in position from the government will have everyone just become more confident. It is difficult I know, to try and balance a country's books, and I certainly think anything is worth trying.

I personally don't think the budget went far enough with reforms, but I would agree with the experts in that this was a budget for an election. I only hope both parties go to the election with clearly laid out plans for tax reforms and their plan for debt and deficits.

An interesting announcement was the 1.5% tax cut for small companies and the 5% tax discount up to $1,000 per individual for unincorporated small business entities. I am not sure they have nailed this one. Some things to consider – firstly over the last few years, companies have not been the structure of choice and so how many businesses will this affect? Before you think about restructuring, what are the ramifications of having your business operating within a company? Trusts seem to still be the structure of choice and I would think afford small business owners a better tax saving than the 1.5% or the capped $1,000 tax offset.

One downside is if you wish to sell the business the capital gains tax can be worse for a company than any other structure, maybe this is their plan all along. Yes they have offered some CGT concessions for restructuring, but here in NSW we still have to deal with stamp duty on a business transfer, because the NSW Government won't abolish that duty, they need the money. We also need to remember that business owners will want to get their profits out, so at some point that income will be tax at the usual marginal rates. So we need to be wary, this is just a timing thing for now. My advice here is understand how your structure works and where the income flows before you go spending on the back of some government handouts.

We keep getting told we need to move forward from the mining boom and become an innovating nation to develop goods, services and skills we can export to the rest of the world, I would have like to see more around that in the budget, because it is now not big business doing all the R&D there are micro businesses getting in and having a go. There are some very bright young people moving into the Entrepreneurial space and we need to encourage more and back them.

So I don't want to come across as negative here, I believe we have to do something and so the government is trying to do something, time will tell if it works. I agree if the small business is in a position to do the spending and the spending will improve the business for its people, we should do it. We need to keep in mind we should be striving to improve the bottom line of the business which in turn will create jobs. I say this because I work with a lot of small business owners and I know the more profits they make the more they will spend as consumers. They will also employ more people if that improves their overall position. However they won't do it if the demand for their goods and services are not there and nor should they.

We will wait and see how this budget is received over time, what changes will get made to it, and then what happens at a political level. As I said I hope both parties outline some serious reforms leading into the next election, so we have a more up to date tax system and a clear choice.

Best wishes.
Troy

Last Budget for our Treasurer

2013-05-15T00:00:00+10:00

As you can imagine it's my annual TV night where the kids have no interest in sitting with me for that hour or so. Very boring Dad! Although I did mention to my son that all my staff were asked to watch the TV on budget night. He was most pleased that we are happy with our staff watching TV for work purposes and thinks it would be great to work for our firm.....the simple things hey?

I will start by saying that there were some good initiatives in this budget for which I am happy to pay for. I am not going to comment on individual policies or political strategies embedded in the budget. Fundamentally it is the process I believe is flawed.

So, we all know the numbers now and have been told it is a 1 in 50-year event. I can't help but think that if our economy was a publicly listed company and the government was the Board of Directors (its custodians), how would this have played out at last night's AGM? We, the shareholders, attended and listened intently to the forward thinking strategy for a sustainable future of our investment, both financially and socially........mmmmmm...could not get on the phone to my stock broker quick enough.

Don't get me wrong, I understand the need for a deficit and you don't want a surplus for surplus' sake, if there is a real sustainable plan underpinning the deficit. Whether you have a surplus or a deficit will be the outcome of the strategy you are about to embark on: Did we receive a plan for our long term future? Is there a plan for improved efficiency or productivity? Was there a plan to gain a competitive advantage? In my opinion all I heard was how well we have done over the last five years, how we have a bigger economy than we did pre-GFC (normal growth will do that), how we are making more investment...however it is for the future board to work out how to pay for it.

So where did it go wrong? Clearly last year's budgeting process got it wrong. That's the responsibility of the finance department and they report to the CFO who reports to the CEO. So if we got it so wrong last year how is this year any better? Yes you need a budget but it needs to be based on real estimates and factor in contingencies where reasonable. Yes, there will also be events that are unforseen, which we cannot take into account, however if you have set a spending plan and a strategy to fit within that budget, then you still need to spend within your means and/or adjust your strategy.

In the corporate world and in our own personal finances, we have limited access to resources and need to make it work. There appears to be no limitation with this government business - we just make a huge loss and extend borrowings to fund it. A very dangerous proposition if you cannot guarantee future profits/income to pay that back. You can estimate future income based on loose assumptions all you like, but will they be there? I might also add spending cuts are not the best way to go for a sustainable approach.

How about the 10 year plan? I can't see the point of that. There are so many variables that anything longer than 3 or 5 years seems difficult. Don't you think? Or in the case of this Board of Directors ÃƒÂ¢Ã¢â€šÂ¬" 4 months.

I am hoping there are smarter people than I, doing this budget. That's the only hope I have of this business not going pear-shaped. From my understanding we have been growing our revenue in a healthy manner over the last 3 years and any ordinary person would be happy with that in today's climate, so why the write downs?.............Oh it was the estimate that was overinflated and based on some very ordinary assumptions on the different revenue streams and what they would yield. So we can expect the market to punish us for that. We would normally expect to be held accountable for poor forecasting, because investors have invested based on those forecasts.

So the question begs - if we got our revenue estimates so wrong, how are we comfortable our spending is at the right level, for a sustainable future? In fact how are we comfortable any of the numbers are right?

To be fair, it is hard to expect a sustainable strategy moving forward when there is the election cycle to contend with. Is this process in general fundamentally flawed because there are so many competing factors and self-interested parties? The good Boards work within a 12 month cycle as they stand up at every AGM to be held accountable.

What I can say is that as a stakeholder I would like the opportunity to hold this Board of Directors accountable. I only hope the fund managers see it my way and use their voting power to remove the Board from the leadership team. It is time this CEO and CFO moved on!

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Spend an hour with me

2012-09-06T00:00:00+10:00

I am spending more and more time with clients discussing the challenges they face with their businesses. Initially many believe there is not much they can do to improve their position...until they have spent time with me. Generally it starts with challenging clients on their current beliefs and asking all the right questions which have not been asked of them before.

It turns out that the small amount of time we spend together creates an awareness that the business and their life can be much better - they simply need to remove themselves from the day-to-day grind and look at their business from a different perspective.

By this process we establish a need for planning, for key strategies to be implemented. By being held accountable to the plan, business owners are much more committed to the process, which generally yields the improvements they were after. While we may not stick to the original plan, the process of working together on the business ensures business owners are prepared to make all the necessary changes and adapt as required.

I want to share with you some of the processes I use at our next seminar. If you find you don't have the time to work on your business or commit to a complete process, do yourself a favour and spend this hour with me. You won't regret it. Watch out for the next seminar update for our special offer.

Register now for our seminar - Map, Measure Move! - on Thursday September 20.

Until next time,

Troy

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Becoming Competitive

2012-08-03T00:00:00+10:00

Now, where were we? That's right, A Vision also Needs a Plan: my experience with business. And here is instalment two: Becoming Competitive

For a recap please refer to my blog post of 11 November, A vision also needs a Plan.

So I am beginning to find my feet in the business and trying to work out what my role should be. (A reminder for those who missed my first blog that I was managing the family wholesale food and beverage business, servicing the offshore oil and gas industry from Darwin.)

A significant amount of hands-on work was required, which I was expecting, however I soon became bored and realised my skills were being wasted: I needed to become more involved in the strategic side of the business.

The first issue was the immediate future of the business and of course the welfare of my family. My partner and I determined we had three years in us to make a go of it so we set a three-year plan. In short we had to become more competitive.

We did not pay a big price for the business as Dad had bought out his partner just a year or so prior. We had a turnover of $2M but operated on a very small profit. There was not a lot of reserve in the company for reinvestment. It was one of those partnerships that if one partner needed funds for something, the other partner needed to match. The company was not operated with a future in mind or any desire to build for potential sale. The first question was what was the legacy my parents wanted to leave?

By this time I had convinced my parents that any business could have a value, certainly more than what they saw in it - merely a living.

This was during the period 1998 to 1999 before the impact and advantages of technology were really felt in a business of this size: we only had one computer; all orders were received from clients by fax (and that was advanced); all sales orders and purchase orders were hand written. Our stock system was manual at this point, ie. when filling an order we would literally walk around the warehouse and tick off what we had in stock so we would order the rest in.

The competition was increasing in number, as several new players were entering the market. There were no barriers to entry - in fact businesses could enter without even using a warehouse, simply by sourcing a number of suppliers and having them all arrive at the docks and loading orders directly on board the vessels.

Our opposition became innovative and introduced a man-day rate, a service where they put together the orders for the clients, based on meeting a budget, rather than what the cooks ordered. Some clients went for it and some stuck to the traditional way, thereby segmenting the market for both of us.

I could see the way of our rivals was going to be the way of the future and we needed to smarten up our act immensely if we were to keep pace with our industry.

But we had time on our side. The unions disliked the new way and whilst they were resisting we had time to watch what was happening and change our practices in a strategic way.

The lessons here were to know the industry, be aware of the changes that were taking place and determine the best way to play to the strengths of our company. So over 18 months we overhauled the internal structure of the business, working "on" it more than working "in" it, and this is where I developed a knack for improving internal systems. More about that in the next post.

Until next time,

Troy

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Is a cash flow worth the paper it's written on?

2011-12-20T00:00:00+11:00

We all know that cash is king. Knowing you have cash is one thing but to know how it will be impacted by key strategic decisions is another.

I talk to many clients and ask how versed they are with their cash position i.e. do you know where you are at financially at any point in time? Most clients are aware of how much they have by information provided by their bookkeeper or knowing what is in the bank.

While I understand this is the most accessible form of information, if you have growth plans or strategic changes underway, it is imperative you know how these impact your cash position. More importantly do you have the cash in the business or access to cash (working capital) to implement these strategies?

This is where I use and recommend ongoing cash flow forecasting. I live by it and always have because of its value in helping you prepare for anything that may happen in your business.

For example, if you decide on a 20% growth plan and you have debtors days of 60 days and creditors of 45 days, you need to see how your cash flow is impacted, i.e. if you then start invoicing 20% more and wait the same number of days to receive payment, coupled with purchasing 20% more in goods and services and pay in your usual terms, the above scenario could cause a cash drain on the business. Now depending on the changes in dollar terms, whilst this 20% growth target sounds like a great idea, it could be catastrophic to the business if you cannot cover that cash flow drain. This is what's referred to as your working capital requirements.

This is a simple example, however one I come across all the time. That is why I do believe a cash flow forecast is worth the paper it is written on, and a very important step in knowing the numbers for your business.

If you need a cash flow forecast prepared or would like to discuss the cash flow requirements of your business, please feel free to contact one of our team here at Rochdale on 6620 0300.

On behalf of the team at Rochdale Accounting & Financial Services, I would like to wish our valued clients and friends all the best for the festive season and a happy and healthy 2012. Our office will close at 12.00pm on Thursday 22^nd December and re-open at 8.30am on Monday 9^th January.

Until next time,

Troy

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A vision also needs a plan

2011-11-11T00:00:00+11:00

Over a series of Blogs I thought I would share some of the experiences I have had in my career. Although my specific commercial time only spans a period of 7 years: it was certainly action packed and has taught me some valuable lessons. Lessons, which I continue to draw back on when helping clients through their own journey's in business.

My career started in 1991 when I started Uni and shortly afterwards decided to work in my chosen field of Accounting and continue my Uni study part time. I could not see myself sticking at the theoretical side of my chosen career and wanted to start applying it practically as soon as I could. It is interesting my first choice as a career was a fighter pilot, however colour blindness prevented me from doing that. I have no regrets because as it turns out my business career had me dealing with the defence force in a major way, which was the next best thing really (more on that later).

I had some great mentors and got to work in some very reputable second tier firms in Brisbane. Having worked with BDO Nelson Parkhill (as it was formerly known) and Grant Thornton I was 7 years into my career and making good progress, however I found that whilst I was advising my clients on all aspects of their business I really did not know what it was like to be in business. Our training to this point was very technical and I could not effectively advise on all facets of business. My audit training to date did provide me some insight however I wasn't quite sure.

My family had their own business in Darwin and I was their Accountant (thankfully they had made that decision) and it was getting to a point where Dad needed more help. My two brothers and Mother worked in the business, However none of them had any formal training just a good work ethic and an opportunity to be involved in a business. So in 1997 I make the decision to leave the public practice arena to try my hand at commerce. I had no idea what impact that would have but have never regretted it.

So I turn up to work in January of '98 and as can be the case in many family owned businesses, communication is not always the best and my role had not really been explained to my brothers. Without that communication at the outset we were now working in a world of perception, which is never good. Suffice to say one of my brothers did not stick around too long and is very sad as he has never spoken to me since, nor my Mum and Dad. The man can hold a grudge!

My mandate (my objective) was to establish what we should be doing with a strategy for the business, i.e sell, close the doors, or try and set up the business to trade its way into a good position to provide Mum and Dad for retirement. They had lost virtually everything when they owned pubs in Warwick Qld. I was 26 at the time and naively thought this would be easy.

The business was essentially a wholesale business of food and grocery items, and we were what was called a Ships' Providore. We supplied all grocery and catering needs to the offshore oil and gas industry and general shipping. I soon established our market place and our competitors. A couple of small players and our major competitor "Sealanes", which was quite significant in size and operations in Darwin and on the west coast, and based in Fremantle. The way the staff talked about them and particularly my Dad, it was like two rivaling footy teams and it does not matter what they do, you just hate them. If a ship pulled into Port and you did not have the contract already in place, you had to be first onboard to get the gig. I likened this to tow truck operators are at the scene of an accident. Very cut-throat.

Anyhow I felt I had something to work with, with this business and could see potential, so in my mind just closing the doors or just selling seemed a waste. After lengthy discussions with my parents, they knew they could not retire anytime soon and on the basis the company was worth nothing at that time, trading their way forward was the best way to go with a sale some time in the future, and yes you guessed it, my view was that our rival footy team was their ticket to retirement.

So that was my plan, I set a three-year timeframe and away we went. I did not know this at the time, but that essentially was the business plan. It was not very well thought out and the implementation of the plan was not established yet but a vision was there. In hindsight l learnt that this is where all successful businesses start - with a vision. However that will never be enough. What I have learnt through my own mistakes is that you need to take that vision and break it down into a well thought-out plan and this is where my advisors should have come in. They knew what my plan was however offered no assistance or even a sounding board. This is common with a lot of Accounting firms and business advisors. I have taken this lesson into my role as a business advisor now. When I become aware a client is about to embark on a new venture, I will insist I be there in some capacity to play devils advocate.

To be continued...the next chapter is about the next phase in the plan: "becoming competitive"

Regards

Troy Furness

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Why you need a Proactive Accountant

2011-10-27T00:00:00+11:00

Rochdale Accounting and Financial Services is part of a network of accountants that is ranked in the top 10 accounting firms across Australia. BRW magazine has just released the annual Top 100 Accounting Firms, ranked by Revenue for the 2010- 2011 period.

Newcomer to the list, the Proactive Accountants Network has come in to the top 10 as firm number 9 ranking alongside industry heavyweights such as PwC, KPMG, Ernst & Young and Deloitte. Rochdale Accounting and Financial Services is a member of this network, made up of firms from across Australia and New Zealand.

Interestingly, Proactive Accountants Network only launched as an official network in May 2011 with 65 members. In only 5 months it is now over 80 members strong generating $135 million in revenue each year.

But what does that mean for you?

A proactive firm will focus on long-term interests and overall business success rather than being an accountant that just offers compliance and tax related services.

By becoming a member of this network, we have committed ourselves to being proactive and setting ourselves apart from the rest. It allows us to broaden our expertise by being a part of a network but still remain independently owned to service our clients within our region with the same personalised service we pride ourselves on.

Here at Rochdale we offer advice to help your business reach its potential such as:

How to grow your business
How to improve cash flow
Increasing profitability
Advising on succession planning or sale
Ensuring your assets are properly protected
Doing everything legally possible to minimise tax
Planning for financial retirement

When I am working with a client I go through a process to establish their real objectives. Out of that we develop a targeted action plan to follow. Our involvement can be at varying degrees, from providing tools to implement the plan themselves to working side by side to see the plan through. I encourage a quarterly catch up to ensure the focus remains and the business owners stay accountable to the implementation of the plan. I have found over the years it is quite easy to come up with the ideas but very hard to be disciplined enough to work on your business and see the implementation through within the desired timeframe. The role probably becomes more of a business coach and mentor rather than an advisor. As quoted by well known business coach Michael Sheargold…"the power of an idea is in its implementation."

Over the next few months I will be sharing some of my own stories in business, which will provide the readers an insight to my experience and history. I will point out the lessons I have learned by the old school of hard knocks, with the aim to save my clients the same mistakes. Look forward to sharing it with you and any comments, questions or feedback you may have.

Signing off until next Blog.

Troy

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Hello and welcome to my Blog

2011-08-30T00:00:00+10:00

I've created this blog for my clients and anyone else who is interested. So if you find this interesting or useful please post comments, tweet, post on facebook or linkedin or email the link.

The purpose of my blog is to reach a wider audience and provide information and my ideas. I have spent the last 15 years working with small business owners including 7 years owning my own business. I have learnt a lot from that experience and most of it from mistakes I have made first hand. My aim is to work closely with my clients and provide my expertise to improve your business and thus your quality of life. Check out our website for the key areas I like to focus on Growth, Profits, Cash, Asset Protection and Plan My Future

My blog will always be a work in progress so I would appreciate your feedback, or if you require any more information please post a comment or email me at troysblog@rochdalehouse.com.au and I'll respond as soon as possible.

Of course, nothing beats direct contact so please feel free to call my office on 02 6620 0300 or email me to arrange a meeting.