Thursday, June 30, 2011

Tecala Says Cloud Computing Helps Lower Costs for Australian Business

A whopping seventy per cent of Australian organizations have recorded cost-savings after utilizing cloud computing. This was found out by Tecala, an ICT infrastructure and solutions provider.

95 per cent of 113 IT decision makers that were surveyed for the study felt that the advantages of using cloud computing surpassed any potential risks. 26 per cent of businesses are looking at migrating to the cloud by the middle of next year.

“It’s clear that organizations are increasingly highlighting cloud computing as a major lever for IT change and investigating its ability to maximize core infrastructure, improve service levels, lower ongoing IT costs, increase agility and enhance user experience and employee profitability,” said Gleuto Serafim, CEO of Tecala.

The survey also emphasized the importance of having the right people and processes in order to ensure efficiency and collaboration. 69 per cent of professionals are expecting that they will either maintain or increase their cloud computing budget by 2012.

Chris Moyle, EMC Australia’s Channel Manager, thinks that Australian businesses will continue to adopt cloud computing. He also feels that trust is a key factor to determine which data goes into the public cloud and which ones remain in the private cloud.

There were issues related to cloud computing that were tackled in the survey. These include risks in potential bandwidth consumption with 32 per cent, the possibility for latency and poor user experience with 25 per cent, security concerns with 18 per cent, and a belief by organizations that clouds are less secure than private clouds with 37 per cent.

News Source: »

Friday, June 24, 2011

Tax Worries for Small Business Owners

Tax Worries for Small Business Owners
New figures indicate small business owners are anxious about tax time.

A massive 91 per cent of new small business owners have very little understanding of their annual tax obligations, while 84 per cent are unsure of the things they can claim as a business expense. This was revealed by the American Express Tax Time Survey.

According to Jason Fryer, head of small business services at American Express, understanding GST and the consequences of making a mistake cause a lot of worry amongst small business owners.

“Setting up your own business can be like jumping into the unknown. Our Tax Time Survey shows that completing the business tax return for the first time is often fraught with anxiety,” he said.

“The research shows that almost all new business owners wonder at some stage if they have complied with the latest tax legislation and whether they will fall foul of the tax office if they make a mistake,” Fryer added.

From the more than 500 Australian businesses that were surveyed by Galaxy Research, it was found out that 74 per cent of operators find it a burden to complete their business activity statements. The results further revealed that aside from cash flow management, tax related issues are also considered stressful for many business owners.

Taxation expert and author Adrian Raftery says, “The American Express research reveals considerable uncertainty among small business owners about tax reporting and what they can and can’t claim, which contributes to negative feelings about completing tax returns.”

“In fact, the two most common questions I am asked by small business owners at tax time are, ‘what is the likelihood of my business being audited?’ and ‘who are the ATO targeting this year?’ – demonstrating the level of concern among business owners,” he added.

American Express suggested to help relieve taxation stress of business owners that they should keep receipts and use one business card in order to keep personal and office spending organized.

Source: The Shout »

Thursday, June 23, 2011

Cash Flow Problems of Small Businesses in Australia

Research has shown that the biggest challenge of small businesses today is cash flow. Delinquent accounts increased by 20 per cent in the March quarter with payments over 90 days late.

This problem has been caused by customers delaying payments. The situation is compounded as the government incentives of 2009-2010 have already ended before the economy has reached the level required by small businesses to survive. To add to the problem, the natural disasters in Queensland and Victoria had adverse effects on small businesses in parts of Australia.

On a national perspective, the difficulty of small businesses is not reflected as it is heavily influenced by the mining industry’s momentum.

Here are possible solutions for small business owners.

Mark O’Donoghue, Finlease Finance Broker, said that it would help to talk to a specialist business broker. The advice of a specialist is free and offers practical solutions.

“One readymade solution is debtor finance. This is a facility that can fund your receivables which you may not otherwise be able to recoup from your customers for weeks or months. In other words, the finance pays your bills so that you can meet your ongoing commitments to keep running your business efficiently. You’ll receive up to 80 percent of your invoice, eliminate the immediate hassle of collecting payments and will be able to fund current operations without incurring further debt,” he added.

Another practical solution is to encourage customers to pay in advance and then give them discounts when they do so. And for those customers who are the worst payers offering them a big discount to pay promptly can help ease the situation.

Source: »

Thursday, June 16, 2011

Comparing Planning and Accounting - Why is it Important?

Planning vs. Accounting
The 1994 movie, Stargate, represented a gate that led to two dimensions. In today’s time, the stargate opens to accounting on one end and planning on the other.

Accounting starts today and goes back to records of the past with increasing detail. Planning, on the other hand, starts today and heads straight to the future with increasing summary and aggregation.

However, many find the two to have similar looking tables. The accounting system has an income statement, a balance sheet, and a Cash Flow statement. The business plan has these three statements “proforma” or projected results. Although these three statements are almost identical in form, presentation, and order of appearance, the information they carry are not the same.

This conceptual difference is important as they don’t mix well. Planning approached from an accounting point of view is not good. Accounting is done by reporting from a database of transactions.

Planning is steering the business to a future direction. Planning is concerned with decision-making, progress tracking and change management. Though accounting is also about information and management, there are legal considerations related to it. Accounting also has to go into very deep into detailing while planning requires balance between concept and detail. There are times when too much detail is not productive.

Accounting has to be accurate. There is no room for mistakes and errors. This is because taxes and dues to the government are derived from the figures. Planning, however, can be wrong. In fact, it is often wrong. There is always room and chance for corrections. This is because it deals with assumptions that aim to steer the company to a certain direction. And assumptions need constant reconstruction until the best direction is achieved by a company.

Article Source: Business Insider - Planning vs. Accounting: 2 Different Dimensions. And Why You Care »

Tuesday, June 14, 2011

Pay for Finance and Accounting Practitioners Rises

Higher pay rises for finance and accounting practitioners
One of the highest pay increases across the board of 4.1 per cent has been taken by practitioners of finance and accounting.

However, it has been found that while finance and accounting job families enjoy being on the high end of the pay increase spectrum, the wider finance, banking and insurance industry have been seen to have underperformed during the last financial year. This was according to the Australian Institute of Management’s National Salary of 2011.

Compared to the Australian average of 4 per cent in increase, the industry sector only managed an average pay increase of 3.62 per cent in 2010-2011. It is also the only industry sectors that recorded lower salary movements.

However, it is seen that this will rise to 3.79 per cent in the coming financial year. This will bring the industry back in line with other sectors.

Large companies have also been found out to be willing to hire staff from overseas to overcome skills shortages.

In large companies, migrant workers are currently being recruited for 12.9 per cent for finance and accounting jobs. Small companies, on the other recruit 15.2 per cent migrant workers.

The voluntary staff turnover for large companies has increased from 10.3 to 12.6 per cent. This shows that workers are already willing to risk changing employers.

News Source: »

Sunday, June 12, 2011

COSBOA Warns Minimum Wage Increase Will Hurt Small Business

Minimum Wage Hike and its effect on Small Businesses
COSBOA, or the Council of Small Business of Australia, has given a warning that the upcoming minimum wage increase will definitely hurt small businesses.

Fair Work Australia has lifted the minimum wage from $569.90 to $589.30 per week last Friday (3rd June). The increase of $19.40 per week has come midway between the union’s call for a $28-rise per week and the business bodies’ call of a $10 increase. COSBOA is among the business bodies.

According to COSBOA executive director Peter Strong, the ruling is a pay decrease for small businesses even if employees are a getting a pay increase.

“People need more money and we understand that, but small businesses don't get a lot of money,” said Strong. “At the moment, small business is a lot of hard work. We're just here to make a living and it impacts on small business owners' family income,” he added.

COSBOA (Council of Small Business of Australia)
It was also said that the government cannot give any more money to small businesses. However, it can help them by giving them more tax breaks. The government can also help by removing red tape. GST and superannuation payments should also be looked at.

Around 1.4 million workers will be affected by the Fair Work ruling that will take effect on July. This ruling amounts to 3.4% rise above inflation.

After the Australian Chamber of Commerce and Industry (ACCI) initially lobbied for a $9.50 weekly increase, it said that the ruling is excessive.

The wage increase will add another $3 billion to the wages bill of small businesses of Australia, according to ACCI Chief Executive, Heather Ridout.

“While not wanting to overstate the risks, it has to be said that in the current circumstances faced by non-mining, trade-exposed sectors such as manufacturing and tourism, the decision is sure to further erode margins and will weigh against decisions over retentions and new hiring,” she added.

News Source: »

Wednesday, June 8, 2011

Super Coalition Plan Welcomed by Small Business

The Coalition’s plans for the tax office to process superannuation payments on behalf of small business have been welcome by the Council of Small Business Organizations of Australia (COSBOA). This proposal has been dubbed as the “first real removal of red tape for the sector in memory.”

The coalition proposes that small businesses will be allowed to transfer its total employee entitlements to the Australian Taxation office and the Taxation Office will distribute the payments to the relevant super funds.

According to COSBOA Executive Director, Peter Strong, this proposal will save time, effort and money for SME’s.

“It's so sensible; there are no losers. We've been pushing this for years,” says Strong.

Furthermore, Strong says that the government’s current superannuation clearing house is a “good thing”. However, it is not easy to engage and the businesses that are best suited to it are just too busy to try it.

The system, according to the government, is simple, free, and available to companies with less than 20 employees. There have already been 4,356 who have signed up with the clearing house as of June 3. Around 28,855 employees have been added to the system while 84,025 employee payments have been made.

“People would say that's not much, but it's my time,” says Strong.

“Super is one of the biggest problems when employing somebody: who are they a member of and becoming a kind of financial adviser by having a default fund in place,” Strong adds.

Small Business Minister, Nick Sherry, says that the Coalition would stop mindlessly opposing their tax cuts for two million small businesses if it truly cared for them.

“Today's announcement by Tony Abbott is just more empty and hollow words, which can't be believed,” said Sherry.

News Source: Smart Company »

Wednesday, June 1, 2011

Small Businesses Now More Willing To Borrow

Small Businesses are more eager to loan from banks
There is more willingness on the part of small businesses to borrow. This is due to increased competition amongst the banks. A significant boost to the big four’s loan books may not show for a few months yet.

Businesses of all sizes have shown their willingness to borrow over a 12-month horizon since November 2010. However, research firm, DBM consultants reported on Tuesday that expectations declined in April for all except for the smallest micro-sized enterprises.

These micro-sized enterprises represent 89 per cent of all Australian businesses of which 39 per cent of them do not have loans. Furthermore, they have annual leftovers of less than $1 million. Those with annual turnovers of around $200,000 are expecting to change their debt levels over the next 12 months.

Sentiment was assessed and found to be strongest amongst miners, insurers, and other financial services firms. The weakest, on the other hand, is among those in retail, agriculture, tourism and construction sectors.

DBM has been commissioned by the four banks to conduct surveys. Among the top concerns listed by all businesses are rising interest rates and business costs.

John Hinchy, DBM’s Chief Statistician, describes the mismatch between borrowing expectations and business sentiment for micro-sized businesses as a conundrum.

However, Colin Whitehead of Fat Prophet says this observation is probably because businesses want to borrow in order to plug their cash flow problems.

He also stated that the competition among lenders to win business loans is driving these small businesses to increase their borrowings. “The banks are competing more actively in that space, therefore they are likely to improve the terms,” said Whitehead.

The top end of town only represents 0.3 per cent of Australian businesses, but it covers about 40 per cent of all Australian borrowings. Meanwhile, small businesses only account for 15 per cent of all Australian borrowings.