SMEs target on Increasing Client and Revenue Growth this 2012

A recent survey reflects that among the top priorities of small and medium business this 2012 are customer relationships and increasing business activity in the markets.

This was according to the Business Monitor Survey which was released recently by MYOB, a management service provider. And yes, the customers remain the main focus of small and medium businesses.

"Customers will understandably remain the core focus for Australian SMEs in maintaining and strengthening their business health in 2012, with our research finding more than one third of businesses are set to increase activity around attracting customers' attention and building their loyalty,” said Tim Reed, Executive Chief of MYOB.


"It makes sense for today's business owners, many of whom face increasingly financially conservative consumers, to foster a 'stickier' customer by providing more products or services to whet their appetite," he added. "For many it will be the key to their survival in a two-speed economy,” Reed continued.
It was also seen that about 24 percent of businesses are intending to enter online sales this year.
According to the survey, about a third of the more than 1000 Australian small and medium businesses include in their key strategies for this year attracting and retaining customers, as well as diversifying businesses into new areas or fields.

It is interesting to note that the Australian accounting software, cloud computing, has been seen to have played a vital role in the expansion of businesses offshore. It is said that those firms that have their own website were able to increase their revenue by six percent in the past 12 months. This is in comparison to those who did not have it or used accounting software for business.

According to Mr. Reed, "The key is getting online, being found, communicating well to your online audience and in doing so getting solid access to the digital economy.”

Australian SME Businesses Not Happy with Federal Government

An MYOB report reveals that about half of Australian SMEs are now dissatisfied with the federal government. The rage of these small and medium businesses has reached a three-year high. From just 31 percent during the last three months, the number of dissatisfied SME’s has soared to 56 percent recently.

Only 14 percent of the 1000 surveyed business owners in October say they are happy. This shows a decrease from the 27 percent last August.

According to Tom Reed, MYOB Chief Executive, business owners are a pragmatic group and they may be appeased if the government takes some straightforward measures.


“Business owners... go into business because they are passionate about delivering a product or service better. They don’t tend to have ideological views, but support clear policies that will strengthen the economy and remove red tape,” he added.

The state that has the highest dissatisfaction rating is Queensland at 65 pecent. Last March, this was only at 46 percent. On the other hand, Victoria has the lowest dissatisfaction rating of 41 percent which is still nine percent higher than the previous survey results.

"We call upon all political parties to stop ignoring the SME sector and start developing policies that will genuinely make business life easier," is the call of Mr. Reed.

The MYOB also found out that small business owners want some immediate action in the following:

• A good 69 percent want policies that simplify GST/BAS reporting processes

• Another 66 percent want more government investments in transport infrastructure in cities and states

• 63 percent want more funding for innovation, research, and development

• 61 percent want a “Buy Australian made” policy for procurements in the government

• And 61 percent want the carbon tax abolished.

“It needs to shore up business tax revenue shortfalls if it’s to meet its surplus promise, while at the same time stimulate non-mining sector business investment and growth,” said Reed.

“With the carbon tax legislation off the immediate agenda, the Gillard Government can take back the policy initiative and positively respond to the recent tax forum,” he added.

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Almost Half of SME Businesses are Using Cloud Computing

At present, half of firms are already adapting cloud computing in their business processes after being convinced of the technology’s benefits. According to a new research by Spiceworks, a social business network company, a good 46 percent of the total 1,200 small and medium-sized businesses is already using this online accounting.

In CloudPro’s report, this figure reflects an increase from what only used to be 28 per cent who were using the Australian accounting software earlier in 2011.

"Despite market fluctuations, 2011 proved to be a great year for disruptive technologies as SMBs increasingly adopted tablet computers, cloud services and virtualisation technology," says Jay Hallberg who is the co-founder and vice-president of marketing at the research study.


This development may be attributed to the cloud’s easier IT management with the use of the internet as well as its secure off-site storage of data which are deemed necessary by business enterprises.

Setting cloud computing apart from other hosting services is the fact that data are being stored and handled independently by the service provider. This also further means that the data are kept confidential.

"Cloud computing has been on the business radar for some time and our report proves that we are at the tipping point for mass adoption among small and medium-sized businesses.” This is according to Chris Stening. Managing director of Easynet Connect.

The only concern seen by the same study is that some firms are neglecting to take steps at raising their security levels to cope with the demands of cloud computing.

It may be recalled that there was a prediction by Rob Lovell, Chief Executive at ThinkGrid, that 2010 was going to be a year for cloud computing providers to grow and reassure businesses of the technology’s safety and features.

Cloud Computing Services for SME Businesses

Cloud computing has been considered helpful and efficient by many small businesses. This is because IT functions such as database servers, file servers, document storage, and application development are given an alternative.

There are many advantages that can be achieved by any business that engages in cloud computing. The following is a rundown of these.

1. Savings on infrastructure
Instead of businesses buying additional computers and database servers, they can opt to utilize cloud computing by paying a monthly fee. The savings are enormous considering that one server with OS and applications is tantamount to thousands of dollars.


2. Saving on Set up and Management
Once a new OS or application is purchased, the IT staff will have to know how to install and manage it. This is time-consuming. However, if the small business uses the cloud as its small accounting software, this part of management and maintenance is already taken care of. There are administrators whose main task is just to support specific applications.

3. Saving on Utilities
When a business uses its own data center, it may be under-utilized due to the fact that it is too big for the small operations. This means that the company is paying for something that is not maximized. But when utilizing accounting online through cloud computing, the costs to run the business’ operations are smaller.

4. Better performance
Since cloud providers cater to many small and big businesses, they buy high-performance systems to provide nothing but the best services.

5. Increased agility
Even external contractors, partners and customers may also be served by cloud providers. This feature will allow the small business to respond more quickly and efficiently to changes in the needs of the customers.

6. Increased fault tolerance
When using an in-house server, technical problems are taken care of by the IT people themselves. And sometimes, this gets to be too tough that it would need more time and money to troubleshoot. However, when utilizing the cloud as accounting software, faults are addressed more efficiently such as power outages and nightly backups.

It is no wonder that bookkeeping online is the choice among many small businesses today.

SME Business in Queensland Slammed $7 Billion Charges Annually

As the government red tape is increasing more than 30 per cent over the past five years, a total of $7 billion a year in taxes, fees, and other charges are slugging small businesses in Queensland.

Family businesses in Queensland are struggling through 90,000 pages of regulation that govern the sector.

Burgeoning paperwork and some extra cost of taxes are being blamed by a huge chunk of operators as the reasons behind slumped growth and progress. These paper works include mandatory permits and licenses, calculation methods, audits by payroll tax officials, and the fear of what might be brought about by the carbon tax next year.


An operator feels the pressure and has decided to bring his operations to China.

It has been found that 93 percent of businesses think that Queensland has become a “nanny state” by a report from the Chamber of Commerce and Industry Queensland. Due to regulation, 70 percent of businesses were prevented from investing.

The state government had increased red tape cost by 6.6 percent. This has driven the overall burden growing to 31.6 percent according to the Blueprint for Fighting Over-Regulation Report.

To add to this, the 2011 National CEO Survey by the Australian Industry Group revealed that it is the Queensland businesses that faced the largest direct cost of compliance that averages 6.5 percent in total expenses.

"During a period when there has been concerted effort to reduce the regulatory burden on business and claims by government of regulatory burden targets being achieved, the compliance costs have increased, not decreased. These costs are expected to further increase in the next three years," said the AiGroup.

Queensland has lost its way and that its government is “all talk, no action” on the matter of cost reduction as stated by CCIQ President, David Goodwin.

"We've gone from being the leader to being the cellar dweller from being low cost and low regulation to now being the highest regulated and no longer the lowest cost. We need the Premier to actually find her voice and stand up for Queensland business," he said.

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Shoebooks is a premium provider of Australian accounting software for SME businesses. Check out Shoebooks small accounting software services and experience the advantages of our bookkeeping online software for your business. Shoebooks is located at Unit 12, 118 Church Street, Hawthorn Victoria 3122, Australia. Call Shoebooks at +613-9818-1515 begin_of_the_skype_highlighting              +613-9818-1515      end_of_the_skype_highlighting

SME Business Sales Raise in September, Eurozone Up Bailout Fund

According to the recent ANZ small business sales trends report, small business sales lifted for the fifth consecutive month in September. The report shows small business turnover increased by 5.2% year on year.

Based on ANZ data on the value of credit, debit and Eftpos transactions through its merchant terminals and ANZ card transactions processed through other systems for businesses, at least two-years-old with annual turnover less than $5 million.


ANZ Head of Australian Economics and Property Research, Ivan Colhoun, said year-to-date growth is "fairly flat" at 1.7%. "And with headline inflation running at around 3.5% y/y in 2011, this implies real (inflation-adjusted) small business sales growth is still relatively weak in September," says Colhoun.

The report also shows that it is because services and trade sectors outperformed retailers, with small retailers recorded 2.6% year on year growth versus 6.8% annual growth for non-retail and services small business.

Meanwhile, the Eurozone is set to shore up its bailout fund, with German MPs saying the plan could boost the fund's lending capacity to more than one trillion euro ($A1.34 trillion). A document obtained by The Associated Press shows the currency zone wants to boost the 440 billion euro ($A587.65 billion) bailout fund by offering sovereign bond buyers an insurance against possible losses and by attracting capital from private investors and sovereign wealth funds.

Eurozone governments hope that the enhanced European Financial Stability Fund, or EFSF, will be able to protect countries such as Italy and Spain from being engulfed in the debt crisis. To do that, however, it needs to be bigger or see its lending powers magnified. Leading German opposition MPs, who were briefed earlier on Monday by Chancellor Angela Merkel on the plan, said the fund's lending capacity will be boosted "beyond one trillion" (euros).

But the draft document by the eurozone working group - which Germany's government was sharing with key MPs on Monday - did not provide a headline figure for the bailout fund, stressing "a more precise number on the extent of leverage can only be determined after contacts with potential investors" and rating agencies.

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 Shoebooks is a premium provider of software for accounting for SME businesses in Australia. Check out Shoebooks accounting online software services and experience the advantages of our online invoicing software for your business. Shoebooks is located at Unit 12, 118 Church Street, Hawthorn Victoria 3122, Australia. Call Shoebooks at +613-9818-1515

Auditor-General Could Spell Trouble for SME Businesses

According to the opposition, it could mean disaster for businesses as there is a move to sharpen the teeth of the auditor-general.

The private member’s bill of independent MP Rob Oakeshott that targets to give the auditor-general greater powers to follow money trails and to ensure the government gets its money is being debated by the Senate.

The audits will be extended to government business enterprises such as NBN Co. should the bill be passed.

Furthermore, the bill will also allow the investigation on how federal money has been used by states and territories and assess the performance of contractors such as home insulators.


Due to the risks of audits, many small and medium sized enterprises may already opt to avoid government contracts. This was told to the Chamber by Liberal Senator Mathias Cormann. With this, those who will tender for such contracts are only those companies that have resources that are enough to comply with an investigation.

"It will get rid of the pesky competition from small and medium tier businesses who will just give up because there is so much red tape involved," said Cormann.

On the other hand, Senator Nick Xenophon believes in the importance of improving the scope of the auditor-general particularly in ethics, and effectiveness of government programs.

According to Labor Senator Mark Bishop, the bill contains the appropriate restrictions of the extent of power of the auditor-general.

"It's not a frolic on its own by the auditor-general. It's not able to cavalier and investigate near and far, the audit is limited,” he said.

The Commonwealth is the primary focus of the auditor-general.

For now, debates continue on the Auditor-General Amendment Bill 2011

Source: www.smh.com.au

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Shoebooks is a premium provider of software for accounting for SME businesses in Australia. Check out Shoebooks accounting online software services and experience the advantages of our online invoicing software for your business. Shoebooks is located at Unit 12, 118 Church Street, Hawthorn Victoria 3122, Australia. Call Shoebooks at +613-9818-1515 begin_of_the_skype_highlighting              +613-9818-1515     

Budgeting Basics for SME Businesses

Budgeting lies at the foundation of every SME business’ financial plan. It is the key to a successful and efficient financial management (if done properly). However, it is often overlooked.

On the surface it seems that budgeting is a tedious financial exercise for your small business, especially if you feel your finances are already in good order. However, good budget can really help your small business keep its spending on track and even unearth some hidden cash flow problems that might free up even more money to put toward your other financial goals.

So if you do not want to learn the value of budgeting the hard way, try to learn some tips on budgeting basics for SME business.

Amanda Falconer, the successful proprietor of the Sydney Small Business Centre, offers courses to help enterprises run more efficiently. She advises small business owners to make a five year-plan and a detailed operating plan and budget for the next 12 months. In her experiences, she also advises small business owners to pick a point five years in the future and determined the value they wanted the business to have at that end point and worked back from there.

Furthermore, Falconer also used another important resource in building her budget and five-year plan. Falconer used the Australian Taxation Office statistics on net and gross profit ratios by industry sector which shows broken down average figures that were achieved by start-ups, established businesses and best practice for each sector as well as data such as typical wages to revenue that ratios businesses can use to help them determine an appropriate budget plan.

Falconer also revealed that she also asked a financial management accountant to develop a detailed budget model into which figures such as staff numbers, sales targets and net profit to see how the business would grow could be inputted. Then they put the budget into their accounting software so that at least monthly they can compare actual performance with projected performance.

Source: Budgeting basics for SMEs - The Sydney Morning Herald »

Significance of Carbon Tax for SMEs

The increase to the instant asset tax write-off from $5000 to $6500 was recently imposed by the government to make the companies that belong to the Top 500 most polluting pay a carbon tax of $23 per tonne from July next year.

Last Sunday, Prime Minister Julia Gillard announced one of the biggest changes to the Australian economy since the GST was introduced. This is ensuring that July 10, 2011 will become “Carbon Sunday”. This means that beginning July 1, there will be a new set of rules that will impact the business landscape. Carbon Sunday is believed to have tangible results in reducing emissions and positive effects on the environment.

“The direct impact of the announced policies will be positive for most businesses” is MYOB’s CEO, Tim Reed’s, belief in the new changes. The carbon tax will only be charged to the top 500 emitting businesses. Therefore, it will be business as usual for other small businesses.

This new tax serves as a welcome relief for small businesses as this is the first policy that is implemented in Australia that does not impose any extra paperworks for them.

With the influx of workers into the employment market, it will now be easier for small businesses to employ more workers where the workers may no longer need to pay taxes.

But the question is why small businesses have hit a 15 year low confidence in the federal government with the Carbon tax?

This is because SMEs did not fully understand the Carbon tax and have thought that it would impose negative impacts on them. The proposed change to an emissions trading scheme in 2015 made them also apprehensive.

The retail and travel sector are also moving with caution. Even though there is a threat by off-shore competition, retailers believe that they will have to pass on the higher costs to the customers. Bernie Brookes, Myer chief, suggests that operating costs for the retail giants will be likely increasing by between $3-6 million.

The domestic tourism industry is also facing the same thing. And again, the higher costs will be passed on to the consumers. However, it is also seen that this tax will boost the confidence of consumers that will likely result to spending more.

The government is also being accused by commentators of leaving small businesses to fend for themselves. Very little has been done to assess Australia’s 2 million SME and their impacts.

There are still two years left before the elections. That is why the carbon tax is here to stay. For SME’s, the best thing to do is to understand what carbon tax really means.

Source: DynamicBusiness »

Response for SME Accounting Standards Beyond Expectation

According to Roger Marshall, Accounting Standards Board Chairman, there are more than 200 responses received for the consultation on International Accounting Standards for SMEs. He noted that “this is more than expected, although not much more.”

Marshall added that there were “no huge surprises” because of the level of consultation that was held during the past few months. He continued to say that it will also take some time to digest all the contributions.

The respondents were concerned mainly on the efforts to simplify the FRSME. This can be done by removing some of the options available under the full IFRS. Revaluation and development cost capitalization are included in the options. These are of particular concern to small groups and housing organizations.

According to Marshall, another point of contention involves the distinction between the users of FRSME and the users of the full IFRS. Pension funds, among others, are questioning why they are forced to use the more complex standards. They insist on sticking to the simpler rulebook.

As the ASB shall be working on responses, updates will be posted online. According to Marshall, it may take until autumn to examine all the themes but a full report will be available in late 2011.

News and Image Source: Accountancy Age »

SME Confidence Now Back Despite Worsening Conditions

The National Australia Bank’s SME Quarterly Survey for the March Quarter has shown that the confidence of Small to Medium-sized enterprises is back after the floods that occurred last December and January.

Demand was the only constraint to SME’s that had a significant rise. Borrowing costs, staffing, global economic uncertainty, and cash flow were considered less significant constraints on long-term decision making in the March quarter.

There are signs of optimism that are seen but it is still a challenging time for SME’s. This is according to NAB Business Australia Executive General Manager, Daryl Johnson.

“During the March quarter, SME confidence levels were up from five to eight (index) points, with all SME industries returning to positive territory,” Mr. Johnson added.

He said that “this suggests they are more optimistic about future conditions and are looking forward to the post-flood recovery period. Despite this optimism, SME business conditions have remained on a gradual decline from the post-GFC peak in December 2009, pushed down again by the recent floods that are estimated to have reduced national business revenues by 5 per cent in January.”

Western Australia and Victoria recorded the highest levels of confidence for the second consecutive quarter. Confidence levels are positive across each state. However, business conditions deteriorated in all major states except for South Australia. Queensland, on the other hand, has the largest deterioration while Victoria has the strongest.

“Fifty eight per cent of SMEs report that sales and orders are a more constraining factor on output than finding suitable labour (45 per cent). Regarding profitability, 40 per cent of SMEs surveyed believe demand remains the most significant profitability constraint in the next 12 months, while availability of suitable labour (13), wage costs (11) and interest rates (8) were less significant,” Mr. Johnson said.

The survey revealed that industry-wise, the strongest was business services and finance whilst the weakest was construction and retail.

News and Image from: International Business Times »

SME Feedback Does Not Reflect Accounting Standard Concerns

The SME feedback is said not to contain the housing association’s concern about the dangers of switching to international financial reporting standards.

Chairman of the Accounting Standards Board or ASB, Roger Marshall, is quick to defend that such inconsistency means that there is a need for further discussions. He further revealed his plans of meeting up with the housing association trade bodies after the consultation closes on April 30.

The affordable home providers’ concern is that transferring to IFRS means 100 million Euros in red tape. Furthermore, they told the Financial Times that it could also wipe 1 billion Euros off the current value of assets.

Other concerns include property revaluation. According to the proposed IFRS for SME, this revaluation is not allowed. This has caused fear among landlords that their equity might be slashed which would eventually lead to problems with existing banking covenants.

Another concern presented by housing associations and companies connected to construction is the capitalization of borrowing costs. Companies with properties that are being developed were able to roll the cost of borrowing into the project under the UK GAAP which has kept their balance sheets healthier.

Marshall says that the ASB is still listening to all concerns and is going to take all into consideration. He said that his being a former housing association treasurer makes him fit to deal with relevant issues. He further stated that the ASB will wait for all concerns, responses, and issues to come before it moves on to the next step.

News & Image Source: AccountancyAge.com »

SME Businesses Still Trust Accountants For Advice

SME’s still prefer going to their accountants for advice rather than their bank, lawyer, business coach, or financial partner. This is according to MSI Global Alliance’s March 2011 survey of Australian small business owners. The advice taken predominately relates to business strategy and personal tax structures.

According to Charles Hornor, MSI Global Alliance spokesman, the result of the survey does not come as a surprise. What seems surprising for him is that accountants are also rated highly as a source of retirement advice. It is not an uncommon accounting practice for clients to be referred to their related financial advisers.

Accountants scored 37 per cent in the survey while banks only gained 10 per cent as a trusted source of retirement advice. Hornor says that banks should do better in order to gain better trust of clients.

But Nicholas Hossack, acting CEO of the Australian Bankers' Association, is quick to reply that banks are doing the best they can to cope with the competition. He added that “small businesses are important customers for banks and there is a lot of competition to win their business. Many banks have undertaken extensive advertising campaigns aimed at the small business sector and a number of banks have announced significant expansions in the hiring of business bankers. Compared to the height of the financial crisis, small businesses are now increasing their appetite for taking on new debt and banks are supplying the finance.”

According to ABA’s figures, banks reported strong lending records of $22.1 billion and $20.6 billion, respectively, in the June 2010 and September 2010 quarters.

It has been noted that during the financial crisis, banks charged higher interest rates to small business owners than to households.

“Banks must lend prudently. They must do this to comply with prudential and responsible lending regulations, as well as meeting commercial objectives for their shareholders. Capital required by the Australian Prudential Regulation Authority to be held by banks for small business loans is generally three times higher than for home loans, and can be seven times higher for some products,” Hossack said.

This may be true. But the fact remains that it is not an easy thing for small business owners.

News Source: SMH.com.au »