5 tips for small businesses to manage soaring inflation

If you run a small business then you know things haven't exactly been smooth sailing over the past few years. You've survived the pandemic, and now you're facing soaring inflation and the possibility of a staff shortage.

According to the Australian Bureau of Statistics, the inflation rate for the March quarter was 5.1%, which was the biggest jump in over two decades. The figure was also higher than the Reserve Bank of Australia’s target inflation rate of 2-3%.

The increase in inflation will affect small businesses. Here are our top tips for how small business owners can prepare themselves for the impact.

1.    Increase your workers’ salaries

Wages aren’t keeping up with inflation, and in a tight labour market, workers will be keen for higher salaries. It puts pressure on businesses to increase wages and benefits. While it’s a challenging period, look at ways to improve your employees’ wages. If that’s not possible, find other ways to reward them, such as offering bonuses, incentives or flexible work arrangements.

2.    Focus on your best-performing goods

To improve your financial position, focus your activity on your best-performing goods and services. Look at reducing or removing anything with a low turnover or low profit as it’ll minimise any waste or additional costs.

3.    Review your expenses

Spend time looking at your regular expenses and see if you can cut or reduce any costs. It’s a quick and easy way to improve your profitability and bring in savings. Some tactics include changing to more affordable suppliers, streamlining processes, and ordering items in bulk.

4.    Consider passing on rising costs

It’s a delicate balancing act knowing when to increase your prices to customers who are also dealing with the rising cost of living. If you need to pass on any costs, the key is to communicate clearly and openly with your customers. Not everyone will be receptive, but your local customers will likely stick by you.  

5.    Speak to your accountant

Lastly, you should speak to your accountant. They can advise on strategies to help you save money and improve your cash flow.

How to protect your small business from a cyberattack

How protected is your small business from a cyberattack?

According to the Australian Cyber Security Centre (ACSC), a cyber security incident is reported every eight minutes, and 62% of small businesses have experienced a cyberattack.

Cybercrime has costly impacts, with the ACSC reporting that Australians lost $33 billion in the 2020-21 financial year due to cybercrime.

If your business has an online presence, you’re at risk of a cyberattack. But fortunately, there are ways to protect yourself.

Assess your risk

Identifying any possible threats will help you find and plug any gaps in your security. The Australian Government’s Cyber Security Assessment Tool is a helpful tool for assessing your cyber security risks. Based on your answers, it will also give you a list of recommendations to implement.

Train your team

Training your staff in good cyber security practices is important in preventing cyberattacks. Educate employees on spotting and avoiding scam messages, what to do if they encounter one, and remind them to use strong passwords. A cyber security policy can also help staff understand their responsibilities.

Secure your networks

You can safeguard your devices and networks by:

Back up your data

Regularly backing up your business’ data will help you recover any information if you lose it due to a cyber incident. Whether you back up your data onto an external drive or to the cloud, make sure you do it regularly, ideally on a weekly basis.

Control access

You should restrict staff access to data, accounts and systems to prevent accidental or malicious changes. Administrative privileges should only be given to a limited number of trusted individuals, and remember to remove access when an employee changes roles or leaves the business.

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Taking these steps will help reduce your business’ risk of a cyberattack. For more detailed tips, you can visit the Australian Cyber Security Centre.

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Get in touch to find out how we can help. We’d love to hear from you.

How small businesses can manage their cash flow

Managing your cash flow is an essential part of running a small business. It will help protect your business’ profitability and minimise the effects of economic changes. Here are our top tips for managing your cash flow.

1.    Stay on top of your accounting

Choose high-quality accounting software to help you manage your cash flow and keep your finances up to date. Good software can automate and streamline administrative processes such as creating invoices, tracking payments and running reports. Many software options are available on mobile, so you can access information wherever you are.

2.    Reduce your costs

Look for ways to reduce your expenses. These include:

3.    Set up a cash reserve

A key step in managing your cash flow is ensuring you have money for an emergency. Your cash reserve should ideally be a separate account. Aim to set aside a small amount regularly and have this automatically paid. It will put your business in a strong position in the long term.

4.    Manage your debtors

Create a system for keeping track of customers who owe you money. It may be helpful to send invoices when jobs are completed, or products are delivered. Make your invoices easy to read by having clear due dates, amount due and payment methods. Email invoices rather than mailing them.

5.    Research small business finance options

Running a business has many expenses, so you may consider finance options such as small business loans and equipment finance. These solutions allow you to buy equipment or access funds for growing your business without impacting your cash flow. We can provide advice on the right solutions for you and your business.

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We've helped many business owners manage their cash flow and understand their finance options. If you require strategic, ethical guidance, contact us today for an appointment.

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What to know when choosing a small business loan

Whether you’re starting your first small business or looking to grow, you may be thinking about getting a business loan. It can be tricky navigating through your options, so here are five things to keep in mind:

1.    Work out your reasons

Before choosing a loan, be clear on why you want to borrow funds. It’ll also be one of the questions a lender will ask you. Common reasons include managing your cash flow, buying new equipment and expanding your business.

2.    Understanding your loan options

There are different financing options available to small business owners, such as:  

When comparing loans, look at interest rates and check for any hidden fees and upfront costs.

3.    Have a business plan

When applying for any financing, lenders require a detailed business plan that shows what you want to achieve and how you’ll do this. It takes time to prepare and research, so don’t rush it and consult a professional if you need help.  

4.    Get your paperwork in order

In addition to your business plan, get your paperwork ready. This includes:

5.    Seek professional advice 

We can take the guesswork out of finding the right finance solution for your small business. We'll get a clear idea of your business’ needs and goals and provide recommendations tailored to your situation.  

As small business owners ourselves, we’re well placed to help you with your financing needs. Give us a call today.

How to smooth out your business’s insurance and workers comp premiums

Getting a bill in the mail is never pleasant, but your annual insurance and workers compensation premiums can be particularly tough lump sums to swallow. There is, however, an affordable financing option that can limit the impact on your business’s cash flow. Let’s take a look.

Most businesses have expensive annual insurance premiums to pay, whether they be for professional indemnity insurance, product liability insurance, public liability insurance, or any other general business insurance policy.

Throw your workers compensation premiums into the mix and these obligations can become quite the annual financial hurdle to overcome.

Fortunately, a financing option exists that can smooth out your cash flow headache and help you become eligible for an early bird discount on your workers compensation premium.

Insurance Premium Funding (IPF)

IPF allows you to split your insurance payments into manageable, affordable, monthly amounts that won’t cripple your cash-flow like an annual lump sum payment can.

Basically, any business that has an insurance premium of more than $5,000 has the ability to use IPF if they need to.

The insurance premiums are normally financed over 8 to 10 months to ensure the premium is fully paid before its renewal, and there is generally no security required with IPF.

Workers comp early bird payment discount due soon

One insurance premium that IPF is commonly used for is workers compensation.

That’s because in some states (including NSWVictoria and Queensland), employers who pay their annual premium in full are entitled to a 3% to 5% early bird discount.

But here’s the catch: workers comp premiums need to be paid in full before the early bird due date (typically around August/September) in order to receive the discount.

By using IPF to make this payment upfront you can secure the early bird discount, which helps to offset the cost of IPF.

Taking this option will also improve your business’s cash flow, allowing you to redirect capital into income-generating investments.

Find out more

If you’d like to find out more about IPF then get in touch today – especially if you want to be eligible for the workers compensation early bird discount. We’re here to help your business any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post How to smooth out your business’s insurance and workers comp premiums appeared first on RB Finance.

Loan deferrals to be extended for customers who need extra breathing space

Home and business owners struggling financially due to COVID-19 will be given another four months to resume paying back their loans.

Extended loan deferrals will be provided to those who genuinely need more than the current six-month timeframe, says the Australian Banking Association (ABA), however, extensions won’t be automatic.

While each bank’s deferral policy differs, it’s important to note that deferring repayments on your loan generally doesn’t stop interest from accruing.

As such, customers who are able to repay their loans will resume doing so, says the ABA, adding that it’s in their best interests to do so and allows banks to direct support to those who need it.

800,000 people have deferred their loan repayments so far during the COVID-19 crisis and the four-month extension aims to help the economy avoid the September ‘cliff’ that you’ve probably heard about.

How do you apply for a home loan deferral extension?

The good news is you won’t have to. If repayments on your home or business loan have already been deferred then your bank will contact you when the end of your six-month deferral period nears.

That’s because they’ll first want to discuss some possible options to restructure or vary your loan, including:

– extending the length of the loan
– switching to interest-only payments for a period of time
– consolidating debt
– a combination of these and other measures.

If you’re financially unable to enter into one of the above arrangements by the end of your six-month deferral period, you’ll be eligible to extend your deferral for up to four months.

Will your credit rating be affected?

Good news. If you recommence repayments on your existing loan or enter into a new repayment arrangement, your credit report will not be impacted, provided you meet the new repayment arrangements.

The same goes for if you’re granted an extended deferral period that’s approved by your bank: your credit report will not be impacted.

Want to find out more? Get in touch

If you’d like more information about the repayment deferral extension, or to discuss some possible options for restructuring or varying your loan before the bank puts you on the spot, then please don’t hesitate to get in touch.

We’re here to help you through these difficult times any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post Loan deferrals to be extended for customers who need extra breathing space appeared first on RB Finance.

Last chance for $150,000 instant asset write-off this financial year

Keen to buy a vehicle or another asset for your business and immediately write off the cost? You’ve got just a few days left to take advantage of the $150,000 instant asset write-off for this financial year.

While the federal government recently extended the scheme to 31 December 2020, those keen to claim the deductions sooner rather than later will want to beat the June 30 EOFY deadline.

What’s this $150,000 instant asset write-off scheme you speak of?

A few months back the federal government increased the instant asset write-off threshold from $30,000 to a whopping $150,000 as part of its coronavirus economic stimulus package.

Under the scheme, businesses with an annual turnover of up to $500 million can immediately write off the cost of assets such as vehicles, tools, equipment and – thanks to the recent $150,000 threshold increase – heavy vehicles, tractors and machinery.

Basically the scheme allows you to immediately claim all the tax deductions you would have claimed over the life of the asset.

This can help with your cash flow, as getting the cash back sooner means you can re-inject it straight back into other parts of your business.

Why the hurry?

As mentioned above, the end-of-financial-year is fast approaching.

The good news is that even if you get the ball rolling on it now, and still miss the deadline by a day or two, you’ll have peace of mind knowing that you’ll qualify next financial year under the 31 December deadline.

So if you’d like help obtaining finance for an asset then please get in touch – we can run you through more details of the scheme and present you with financing options that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The post Last chance for $150,000 instant asset write-off this financial year appeared first on RB Finance.