By David Rose
Welcome to the April edition of VIN-sight – delivering small business advice to our clients on a regular basis that moves beyond the accounting foundations we already provide and focuses on business strategies that help automate, simplify and advance systems, procedures and profits.
In this issue we will:
- Share five tips to help business owners stay in control of their time;
- Examine the types of Fringe Benefits (FBT) that employers may have an obligation to report on for the 15-16 FBT year just ended;
- Explain what direct marketing is and reveal how businesses can improve their customer response rate when compiling their own campaigns; and
- Remind SME’s of the rapidly approaching 30 June SuperStream deadline.
As always, please contact your usual Vincents advisor if you would like more information on any of the issues raised in this edition of VIN-sight.
Work Smarter, Not Harder: Tips for Time Management
As small business owner, you may find you are constantly interrupted or pulled away from the plans you had made for your working day. While it is almost impossible to remove these disruptions completely, you can control how much time you devote to them – leaving more time to spend on the ideas, discussions and actions that will pave the way for your business to succeed.
The following are five tips to help you stay in control of your time:
1. Establish daily and weekly priority goals. Create lists that are marked off as tasks are completed and log the time you have spent on these. Analyse your daily log at the end of each day. Did you achieve what you set out to achieve? Why didn’t you achieve what you set out to do? Use what you learn to adapt the way you work.
2. Control the telephone and email. Do not allow them to control you. Consider having telephone calls taken as messages, turn off your emails and allocate a time to return or reply to them at specific times during the day, e.g. 12.30 – 1.00, 4.30 – 5.00 p.m.
3. Have a quiet period each day. Use this time wisely and concentrate on managing your business while there are no interruptions.
4. Consider and isolate the people or activities that cause you to waste time. Plan to overcome the problem. One suggestion is not to meet with fellow workers in your office. Visit them instead. It is a lot easier for you to walk away when the discussion has concluded.
5. Take control of your internal and external meetings. Always have an agenda that is circulated prior to the meeting (48 hours if possible), set a time limit and try to ensure that the meeting starts and finishes on time. Ensure that someone takes minutes and that they are typed, distributed as soon as possible and followed up at the next meeting. When it comes to external meetings, try to create specific times when you will meet with clients and associates – whether it is for business or socialising and networking. Choose a time that is the least disruptive to your day (for example a breakfast meeting).
Fringe Benefits Tax – Be Prepared and Be Aware
The 31st of March 2016 marks the end of the 2016 Fringe Benefits Tax (FBT) year. If you are an employer that has provided any non-salary benefits to employees, you may have an obligation to prepare and lodge an FBT return with the Australian Taxation Office (ATO).
Types of fringe benefits that you will need to consider are:
- Car fringe benefits
- Car parking fringe benefits
- Entertainment fringe benefits
- Expense payments fringe benefits
- Housing fringe benefits
- Living away from home allowance fringe benefits
- Property fringe benefits
- Board fringe benefits
- Debt waiver fringe benefits
- Loan fringe benefits
- Residual fringe benefits.
Changes for the 2015/2016 Year
- New FBT Rate and Gross-Up Rates
Due to the 2% Temporary Budget Repair Levy, the FBT rate and gross-up rates for the FBT year ended 31 March 2016 have changed. The FBT rate has increased to 49% (previously 47%). The new gross-up rates are 2.1463 for Type 1 benefits (previously 2.0802) and 1.9608 for Type 2 benefits (previously 1.8868). The gross-up rate for reportable fringe benefits is also 1.9608 (previously 1.8868).
- FBT-Exempt and FBT- Rebatable Employers
The caps for concessionally taxed FBT employers have also increased to ensure that their employees are not disadvantaged due to the increase in the FBT rate and gross-up rates. The caps have increased to $17,667 (previously $17,000) and $31,177 (previously $30,000) for the year ended 31 March 2016.
Further, the FBT rebate that can be claimed by FBT-rebatable employers for the year ended 31 March 2016 has increased to 49% (previously 48%).
Changes from the 2016/2017 Year
- Salary Packaged Meal Entertainment Fringe Benefits
There have been significant changes made to the valuation of salary packaged meal entertainment and entertainment facility leasing expenses (EFLEs) that apply from 1 April 2016 (i.e. the 2017 FBT year).
From 1 April 2016, all FBT employers will no longer be able to apply the concessional valuation rules (i.e. 50/50 split method or the 12-week register method) in respect of any salary packaged meal entertainment and EFLEs. All employers will be required to value their salary packaged meal entertainment expenditure and EFLEs under the actual method.
Further, a grossed-up cap of $5,000 for salary sacrificed meal entertainment and EFLEs will apply for employees of FBT-rebatable employers and certain FBT-exempt employers.
The provision of salary sacrificed meal entertainment and EFLEs have also been removed from the definition of excluded fringe benefit for reportable fringe benefits purposes. In other words, where meal entertainment or EFLEs are provided under a salary sacrifice agreement, those amounts will now need to be taken into account in calculating the employees reportable fringe benefits amount to be reported on their PAYG payment summary.
Please note, these changes only apply to meal entertainment or EFLEs provided under a salary packaging arrangement. A salary packaging arrangement is an arrangement between an employer and an employee, whereby the employee agrees to forgo part of their future entitlement to salary or wages in return for their employer providing them with benefits of a similar value.
The 50/50 split method and the 12-week register method for valuing meal entertainment continue to be available for any non-salary packaged meal entertainment fringe benefits. Non-packaged meal entertainment and EFLEs also continue to be treated as excluded fringe benefits for reportable fringe benefits purposes.
- Expansion of FBT Exemption for Work-Related Portable Electronic Devices
From 1 April 2016 (i.e. the 2017 FBT year), the FBT exemption for eligible work-related portable electronic devices (e.g. laptops) that are provided by small business entity employers (employers with annual turnover < $2 million) has been expanded such that these employers will not be limited to providing only one portable electronic device to an employee per FBT year where the items have a substantially identical function. However, any eligible work-related portable electronic devices provided will still need to satisfy the work-related use test to ensure that devices are primarily for use in the employee’s employment.
Should you wish to discuss these changes in further detail, please do not hesitate to contact your Vincents advisor.
Less than 100 Days to Go – Is Your Business SuperStream Ready?
With the 30 June 2016 deadline fast approaching, the Australian Taxation Office (ATO) is urging small businesses to prioritise their move to SuperStream compliance.
Forming part of the Federal Government’s ‘Stronger Super’ legislation, SuperStream necessitates the implementation of data and payment standards. Simply put, this means that employers can no longer send paperwork and cheques to super funds; and must instead submit these details electronically via a special ‘gateway’. This ‘gateway’ hub allows the electronic transfer of data and money between super funds and employers.
The goal is to improve the efficiency of the superannuation system, to improve the timeliness of processing of rollovers and contributions and reduce the number of lost accounts and unclaimed monies.
More than 60% of all Australia’s SME’s are already SuperStream compliant. If your business is not one of them, you’ve got under 100 days remaining to make the move.
Please contact your Vincents advisor if you require assistance on the implementation of SuperStream for your business.
Direct Marketing Campaigns – Improving the Customer Response Rate
Direct marketing is the marketing strategy where a business goes directly to potential customers on a one to one basis, through direct communication with them. By utilising the businesses customer database to target specific needs of its customers, it is an important component of relationship building for all businesses, but in particular SMEs. Various commentators have indicated however that the average response rate for direct marketing is around 2% – so doing it well is essential to improved customer engagement.
The following are 6 tips to help improve the response rate from a direct marketing campaign for your business:
1. Determine the characteristics of the product/service being sold. Before any business can sell a product, there should be a clear understanding of the product/service and where it stands in the market. Who needs it and why? Research the product to find out as much information as possible. Look for interesting angles to promote the product and how you can best draw your customer’s attention.
2. Know what is expected of the product. The majority of small business operators sell manufactured items or products common in the market place. Business operators should determine what the customer expectations are of their product, how well it performs and how it compares to competitors’ products.
3. Step into the customers’ shoes. Many business operators fail to identify a market for their product/service prior to promoting it. They then wonder why they do not achieve business success. Before embarking on any direct marketing campaign, business persons should put themselves in their customers’ shoes and answer these questions:
- Why should I buy it?
- What do I think it’s going to do for me?
- What will it actually do for me?
- What do I really like about the product?
- What do I dislike about the product?
- Who should buy this product?
4. Consider engaging a professional. This professional can hold focus groups before embarking on your direct marketing campaign. It is a great way to find out exactly what your customers think.
5. Decide on a theme to be emphasised. Effective direct marketing campaigns are simple and well-focused. When writing direct marketing campaigns, many people fall into the trap of cramming too much information into their pitch. The best tactic is to highlight one important aspect of the product (price, quality, uniqueness etc.) and use this as a theme throughout the campaign.
6. Plan to keep the person reading – from the opening paragraph to the order form. Once a reader loses interest, it is likely the business will lose a customer. Business operators must practice, practice and practice until they are confident that the campaign will gain and keep the attention it deserves and eventually lead to sales success.
– See more at: https://vincents.com.au/news/article/vin-sight-april-2016/336#sthash.tNmrn4y8.dpuf
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.