Christmas Edition 2018

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Christmas Edition … Ho Ho Ho!

Christmas Best Wishes from Blade Bookkeeping.

Just in case you don’t read our whole newsletter filled with important tips and tricks to be a Happy Trade Business owner … we thought we’d better put our Christmas wishes first on the list! We truly enjoy helping our valued clients through the up’s and down’s of running a business and can’t help but get to know you through your numbers and feel like you’re family. From all the team here at Blade Bookkeeping, we wish you a safe and happy time with your families this Christmas and New Year. We know that business owners don’t always get a try to get some rest but enjoy the celebrations. We’re working behind the scenes to release more innovative processes in 2019 all designed to make your business life easier.

Christmas period hours

Like you, we love hanging out with our families so the office will be closed from December 24th 2018 until January 3rd, 2019.   However, we won’t leave you unattended for too long so will check in on emails every few days just in case there’s any ‘business emergencies’! Email [email protected] to make sure the whole team can see your email or call 03 9889 5566 and leave a message.

Here’s a summary of what’s inside our last newsletter for the year 

1.  Surviving Post Christmas Cashflow slow down 2.  Christmas on a budget 3.  Should you be paying yourself a wage? 4.  What’s the cost of lunch? 5.  Surviving family business … 

Plus our team recipe of the month (well most of the team!)

Surviving Post Christmas Cashflow slow down

For many Trade business owners, the weeks leading up to Christmas are filled with last minute expectations of clients wanting everything done yesterday. By the time Christmas actually arrives … you can’t wait for a break. But the down side to your well-earned rest is often Cashflow slow down … even for Christmas decoration stores! So here’s a couple of tips to help reduce the cashflow pain … 1. Invoicing Get your invoices out in a timely manner … a rule of thumb is to have billing up to date by start of December then as quickly as possible throughout December. Clients won’t pay if they don’t have an invoice! 2. Cut Expenditure Reduce or Cut off expenditure completely … defer any purchases to when Cashflow is better. Write a list, prioritize then plan out the purchases for the year. 3. Chase Debtors Chase debtors >90 days 4. Offer or clarify credit card terms Perhaps offer to pay by credit card in affect 3% discount 5. Debt collecting marketing emails A two-step process is a good way to get the result 1st email: How to pay 2nd email (a few days later): Offer a discount to pay full bill prior to Christmas 6. Offer a discount The older the debt gets the less likely you are to be paid so offer 5% discount and better to get 95% of your bill than none 7. Christmas Promotion Christmas promotion book before Christmas for work in January with an offer. Look at what you can offer with low cost to you but high perceived value to your clients. 8. Follow up old leads You probably have old quotes that you never followed up … spend 30 minutes a day this week on the phone and you’d be surprised what will turn up. Even if you got 1 client per 5 phone calls you’d be better off. We often hear our clients fears and worries about cashflow. It’s not rocket science to do something about it, just effort. When you don’t feel like making calls or acting on one of the suggestions above … remember that Cashflow is King! Choose one and act now! 9. Set up a Continuity program There’s nothing better than guaranteed income. You can create an ongoing service to offer your clients which can be billed as a monthly or yearly item with a direct debit. Ideally yearly so you can offer it in December/January to help Cashflow. Each business is different but it could be something like a yearly electrical safety check, a yearly gutter clean or a yearly duct check. The idea is that you don’t have to sell to a client once and that’s it … you can repeat sell. They say that the easiest person to sell to is your existing clients.

Christmas on a budget

It’s hard to avoid the fact that it’s beginning to feel a lot like Christmas. Don’t Christmas decorations seem to be coming out earlier and earlier?! It can be a bit daunting when already cashflow peaks then often slows down AND you’re gearing up to buy presents. Everyone loves giving and receiving however here’s a few tips to make sure Christmas doesn’t send you broke! 1. Exercise the privileges of Kris Kringle Depending on the size of your extended family, a great way to reduce cost is to put everyone’s name in a hat and buy just for the one person. That way everyone gets a better present and saves you money 2. Set a budget If your kids are older, it’s a good idea to give them the budget for their present. We have found that by doing this they actually understand the value of money better and make better decisions. Our teenagers have become experts and searching out great deals online as well as deciding what’s a crucial purchase and what can wait. 3. Plan ahead throughout the year Ok … this one is a stretch, but many people do it and buy when sales are on. 4. Set aside a small amount throughout the year Imagine if you put away $50/week and started doing this 4 weeks after Christmas of the previous year. By December you would have $50 x 48 weeks = $2400 to spend. Even $25/week would make Christmas that little bit easier.

Christmas means different things to different people but at the end of the day it’s really about spending time with family. Try to block out as much of the Christmas marketing hype because it’s designed to make you think that the more you buy the more you love your family. Not true. Time is the best gift of all.

Should be paying yourself wages?

Most business owners start out driven by the excitement of being their own boss, having flexibility and financial freedom. Many are surprised to find that there is way more to running a business than doing a job and getting paid. And a massive issue in more than 90% of new clients that come on board with us is Owners Drawings. If you’re wondering what the big deal is then read on as we have a solution. What we find is that the compliance can sometimes catch business owners by surprise without good guidance. If you’re a client of ours … don’t worry … as we have taken care of this for you. However, we find that about 90% of new clients that come to us have trouble on the horizon and most of them don’t know it. When we onboard new clients, it’s one of the first things we are looking for. Here’s what the problems are … 1. Although you control the bank account, the money in it is not all yours 2. What you withdraw has a consequence Around 15% of what’s in your bank account is GST and taxes that you are just collecting on behalf of the ATO … and Super. Yes, you are the reason that money is in the bank account at all but what needs to be understood is that there is a big picture as to the best way to pay yourself without causing a ripple of unexpected debt. The problem occurs when the Owners Drawings exceed the profit in the business. Even if you innocently create this problem, the ATO tax this situation at the highest tax rate as a slap. The ATO is changing how they treat Owners Drawings and it’s SUPER important that you are set up to protect yourself from surprises. That’s why we set our clients up on wages that you pay to yourself regularly. It’s not exactly like paying an employee, it’s more to do with how we treat it each quarter when we do your BAS. Some business owners are set up to pay themselves weekly/fortnightly which we also encourage as it helps them live to a budget. The advantages are that you won’t accidentally take more than the profit and your obligations to the ATO are clear and paid throughout the year, so you don’t get hit with a massive debt at the end of the year.

It’s called Division 7A which simply means you’re in trouble and will get a tax debt.

If you’re not a client of ours then you’re already ok, BUT if you’re not we urge you to speak to your accountant to make sure that you’re not inadvertently on the ATO’s radar and at risk of a Division 7A finding.

What’s the cost of lunch?

There’s something comforting about a hot lunch on a cold day. For a trade business owner on the go the easiest thing to do is duck into 7-eleven and take advantage of Pie Fridays … BUT we are an accounting business that cares and feel compelled to look at the cost of buying your lunch every day and the long term affect to your bottom line (and potentially the waistline!) This is Part 2 from last month’s newsletter where we showed you how making coffee at home is only 27 cents per cup. We’ve done some research and on average to buy breakfast or lunch on the go is at best $7 for a food item and a drink. So, here’s the numbers based on 5 days per week and 48 weeks at work …

The worst-case scenario is to buy brekky and lunch with a snack and a couple of drinks.

You can potentially save $3360 per year per person. We understand the convenience of getting food on the run and making sure you have energy for the day. We also understand that to be able to take food everyday from home that you need to be organised. Before you say you don’t have time … here’s your advantage … You go home every night … and not all jobs all jobs let you do that. If you’ve got kids, then you just pack your non-perishables the night before and just make the sandwich/wrap quickly in the morning. Get yourself a freezer lunch box and you’re good to go. If you’ve got a big family then you’re even better off because you can buy in bulk. And Aldi are great for lunch box snacks. A school lunch favourite in the Melbourne office is left over dinner from the night before. On many worksites you may even find a microwave to heat it up or just throw the leftover meat sauce on a sandwich and you’ve got yourself a lunch to look forward to. We’re not here to lecture, just to present the facts and offer alternatives. Like we said last month, if you put the savings from taking lunch from home into your home loan each year then you are working towards growing sustainable wealth.

Surviving family business

You know the old movie saying … ‘never work with children or animals’ Sometimes there could be a version for business … ‘never work with family’ We’ve seen it work well … and we’ve seen families in feuds. In our observation, there’s something great when being in business with family works well. It’s a legacy to pass on and a chance to create something together. However we’ve put together a few secrets to the success of family business. In fact, even if you’re not in a family business but are thinking about a business or money partner, these tips also apply to you.

BEFORE you start a business with family or a business partner

1. Memorandum of Understanding Create a simple Memorandum of Understanding which clearly defines roles from the outset. Later you can formalise it in a shareholder’s agreement. Having the understanding definitely avoids he said she said stuff 2. Dispute Resolution Clause Have a Dispute resolution clause. Decide together what you’re all comfortable with in the event of disagreement. It’s better to assume that there will be a disagreement and it not happen than the other way 3. Regular Meetings Have Regular meetings with all parties … AND DOCUMENT IT. Nominate someone who is good at notes and send them all out after the meeting so that if anything was misinterpreted it’s picked up straight away If possible, have an Independent party at meetings (like your accountant depending on your arrangement with your accountant). We have a package where it’s included to present both sides and pros and cons based on numbers. Talk to us or your accountant about this service. 4. Document Document Document Hopefully any agreements can be put in a drawer and never used. Their very existence can be what keeps everyone calm and happy however if there is ever any upset you’ll be glad you had things documented. 5. Have an exit clause

IF ALREADY IN A BUSINESS with family or a business partner

Succession Planning Seek help now for family/business partner Succession planning. What seems to be the biggest issue that comes up is what value is placed on each role within the business. This will definitely be the time you’ll need an independent opinion from your adviser. There is always a solution if everyone gets to have their say. This is the place to find common ground to get numbers around decisions. Then you can step towards the value of the business and work towards clear strategies out of the business where everyone can win.

Tax Office scam alert!

Yes, unfortunately it’s happening again. There’s a scam call going around that we’ve had many clients ask us about.   Here’s what it looks like:

  • The phone rings – it’s a local number.
  • A robotic voice introduces themselves as the ATO.
  • “There’s a lawsuit in your name, if you don’t ring back immediately, we will issue an arrest warrant under your name and get you arrested,” it says.

Hang up immediately and if you’re worried, call or email us to verify.

Remember: If there was any action against you, the ATO will call us regarding any of our clients as your tax agent. We wish we could stop them happening, but the very least we can do is warn you.

The ONE thing you must improve in 2019

Adam Reeves – Principal Accountant

We all should take a minute to stop, breathe and reflect on why we do what we do. For me just doing accounting work has never been enough. In fact, I HAD to be clear as to why I do it 30 years later in the same business. The reason I keep doing it is … You. You the business owner, you the parent, you the partner, you the entrepreneur. YOU are the best redistributor of wealth. You see I figured out that it didn’t matter what I do, just how I show up doing it. So I’m driven to help business owners have a better life. You can understand with my respect for you that I would not give you the one best thing that you can do better in 2019 lightly. The one thing that we all can do better has many benefits …

  1. Clarity on your end game
  2. Direction that you’re heading and confirmation that you’re on track
  3. Confidence to make smarter decisions
  4. Energy to show up each day
  5. Freedom

Wouldn’t you agree that all businesses would be better off with these 5 things?

The one thing that we all can do better on in 2019 is …


As the saying goes … If you fail to plan, you plan to fail. Sorry if you were wanting something more profound but … Improving your planning you WILL change your business life. The great thing about a plan is not only that you effectively have a map to follow but also to know when you’re off it. Accept that life does take you off you plan sometimes however it makes it easy to plug back into the at any time and continue effectively. Having no plan breeds uncertainty. Sometimes just the very fact that you have a plan can be enough to create confidence if things are going wrong or to make something that’s going ok … be a little bit better. My wish is that each of you take some time out over the break to sit down and plan. Make sure you plan WITH your partner even if they are not in the business day to day. They are still part of your life and to be considered. I wish all our valued clients and readers a safe and happy Christmas and New Year and look forward to being of service in 2019. I myself am excited to spend time with my family … Cheers Adam

Perfect Christmas Crackling Recipe

There’s not many people that don’t LOVE some crunchy pork crackling.


There’s a couple of key things to do to make sure it’s perfect for your Christmas feast.

Curtis Stone is the man so we suggest you listen to him!

Check out this quick 3 minute video to ensure you have perfect crackling this Christmas.

Dropping the mike on 2018 …

Blade Bookkeeping over and out!

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