Survey Indicates Good Times Ahead for Businesses

Tough weather and economic conditions may have hit Queensland earlier this year, but a recent survey says Queensland’s businesses remain upbeat.

Although Queensland was found to be below the national average in terms of “happiness”, its outlook is positive. This was according to Westpac’s Local Business Sentiment Survey.

“What we found interesting was that even though Queensland is doing it especially tough it registered a happiness score of 58, just under the national average,” said Westpac General Manager SME Segment Sian Lewis. “This shows a particular resilience in the Queensland business community – I would have expected them to be a little more off the pace,” he added.

Queensland, Tasmania, and the Northern Territory all ranked under the national level but small businesses in Victoria, Western Australia, and the ACT ranked more than 60 in the “happiness index” of businesses in Australia.

Another result from the survey was that 2 out of 3 Australian businesses indicated that “business is good” and that 57 per cent of those surveyed say that a stronger performance may be expected in the next six months.

While the biggest headaches of small businesses are managing business costs, driving sales, and employee performance, the positive factors included positive customer relationships, meeting personal goals, and strong operational performance.

Local business forecasts remain positive even with the recent financial and natural disasters that hit Australia.

Profit targets are expected to be met by more than half of all small businesses in Australia and 25 per cent thought their businesses were likely to do better than expected.

There were 2500 answers from respondents coming from Westpac’s business customers that were collated for the survey.

News Source: Queensland Business Review »

$5000 Tax Write-off For Australian Small Businesses

Realizing that small business operators are going through tough times with this current economy, the Australian government is giving an instant tax write-off of the first $5000 of any motor vehicle purchased from 2012 to 2013. This offer is intended for small business operators. This is because small businesses comprise 96 per cent of Australian businesses and are the backbone of the Australian economy as stated by Treasurer Wayne Swan.

Of Australia’s 2.7 million small businesses, it is the motor vehicle that is the main capital item. This offer will certainly improve cash flow and help business owners expand and reinvest.

This measure is seen as a part of the government’s tax reform programs that are to be introduced in 2012 to 2013 that will provide a write off on all assets that are valued at below $5000. The measure is estimated to cost $1.7 billion over the forward estimates.

Currently there are two depreciation pools with different depreciation rates. There is also planned a reduction in company tax rate to 29 per cent for small businesses.

These tax reforms will be available to all types of small businesses including sole traders. Businesses operating through trusts, partnerships, and companies are also eligible.

This new measure replaces the Entrepreneurs Tax Offset. It was recommended to be abolished by Australia’s Future Tax System Review (AFTSR) due to its high compliance cost and poor targeting. It concluded that the ETO is a disincentive for small businesses.

Since the ETO was only available to small business with turnover of less than $75000, there are 2.3 million small businesses that were not able to utilize the of benefit.

News and Image from: International Business Times »

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 »

Accounting Software: Essential For Every Business

Accounting Software plays a vital role in business owner’s ability to stay on top of their companies finances.

The Planning Shop President, Rhonda Abrams, shared with USA Today that managing money should be viewed by entrepreneurs as just as important as making profits. She emphasized that the use of accounting software will assist greatly in achieving this. Accounting systems keep track of accounting records far better and much easier than manual methods.

Accounting software also allows businesses to examine trends and make projections. Abrams also advised the importance that bills and invoices are dealt with on time, to keep a reserve of money from major deals and to limit the credit offered to individual clients.

Ms Abrams added that, “A few simple steps and you'll be on your way to an excellent credit rating, a great relationship with a bank and a good night's sleep.”

It can also be noted that last month, accountancy expert and author, Karla Dennis, told Entrepreneur Magazine that accounting software helps eliminate avoidable tax errors.

News and Image Source: CodeStone.net »

Why You Should Learn Accounting

Every business is started with money, time, and effort. Therefore, like a flower, it needs to be nurtured, cared for, and showered with attention. Everything has to be done in order to ensure that it grows and matures and eventually, bloom and bear fruit. If the opposite is done, the business will go down the drain.

That is why it is very important for a business owner to take matters seriously and understand the reasons why one has to be familiar of the business. Here are a few tips of what the business owner must do in order to ensure the life of the business.

First thing is that the owner should really learn the basics of accounting. Terms such as accounts receivable and accounts payable, accrual and cash basis, and others have to be familiar to the business owner.

Another thing to remember is that the owner should deal with the situation of the business at face value. Issues and problems should not be set aside or just assigned to any employee. By not doing so, the owner will not only see the problems but also the advantages and potentials for growth of the business. The fear of not being able to comprehend the figures is only going to last the first few days. When you’ve gotten the feel of the business, everything will fall into place.

Money matters should not just be put on the shoulders of the company’s accountant. If there is one who should know everything, it should be the owner. Letting the accountant have the key to everything could promote or encourage conspiracy and put your business in jeopardy. That is the reason why there are celebrities and professionals who end up crying in public because their accountants have fled with their money. Also, when there are discrepancies in the taxes paid to the government, it is the business owner who is chased and not the accountant.

CBA: Business Credit Not Yet Seen To Go Up

This year is not the time for business credit to surge. This has been seen especially with the country’s biggest lender stating that the “engine drivers” of economic growth are not borrowing cash but are holding on to it.

The major banks’ prediction of a sizeable rebound in lending to small and medium sized enterprises, and the pickup of the number of loans given to companies in the 2 million or less category in September 2010 gave the industry hope of a sustained recovery especially with the increased demand from small businesses. However, these hopes have been stalled by a subdued retail sector and the natural disasters in Queensland, New South Wales, and Victoria.

Business lending in February, according to APRA, increased by 0.6 per cent which worked out at an annual growth rate of 7.2 per cent. This was considered by Deutsche Bank analyst, James Freeman, as a significant rebound.

National Australia Bank leads the charge followed by ANZ and CommBank. Behind them is Westpac. In the regional sector, Bendigo takes the lead. BoQ declared that its lending to the SME sector for the six months up to the 28th of February increased slightly from $100 million to $5.3 billion.

While Deutsche Bank suggests on not dwelling too much on February lending figures, CommBank also said that there had been a slow start to business lending in the first three months of the year 2011.

The bank said that “while there has been some pick-up in activity, we don't expect a boom. This is largely due to the number of businesses sitting on more cash. Instead, we expect growth levels to be steady over the remainder of the year.”

News Source: Sydney Morning Herald »
Image: Travel-Australia.org »