A cash flow forecast is a critical tool that helps our businesses plan for their future financial stability and navigate economic downturns. It provides a comprehensive view of the inflows and outflows of cash and identifies patterns to help make informed decisions about spending, savings, and investments.
Here are some ways preparing a cash flow forecast can help clients plan for their future and navigate a potential downturn:
- Identify potential cash flow shortages
One of the primary benefits of a cash flow forecast is that it can help clients identify potential cash flow shortages before they occur. By projecting future inflows and outflows, clients can see if their cash reserves are going to be sufficient to cover their expenses. This information can help them make adjustments to their spending and invest in initiatives that will increase their cash flow, allowing them to avoid financial difficulties.
- Plan for future expenses
A cash flow forecast can also help clients plan for future expenses, such as investments in new equipment, expansions, or upgrades to existing systems. This information can help them determine how much they need to save each month to meet their goals and avoid dipping into their emergency funds.
- Monitor their financial health
By regularly updating their cash flow forecast, clients can monitor the health of their finances and see how their financial situation is evolving over time. This information can be used to make necessary adjustments to their spending habits and investment strategies, ensuring they remain on track to reach their financial goals.
- Anticipate potential risks
A cash flow forecast can also help clients anticipate potential risks that may impact their financial stability. For example, if a client’s cash flow is heavily dependent on a single customer, a change in that customer’s financial situation could have a significant impact on their own finances. By identifying these potential risks, clients can take steps to diversify their sources of income and reduce their dependence on a single customer.
- Make informed decisions
Finally, a cash flow forecast allows clients to make informed decisions about their finances. By having a comprehensive view of their inflows and outflows, they can prioritize their spending, understand their cash reserves, and make informed decisions about their investments. This information can help them weather economic downturns and ensure they remain financially stable, even in uncertain times.
In conclusion, preparing a cash flow forecast is a critical step in ensuring financial stability and navigating a potential downturn. It provides individuals and businesses with a comprehensive view of their finances, helping them make informed decisions about their spending, savings, and investments.
We regularly assist our clients to understand their current and future cash position using a cashflow forecast, please reach out to us if we can be of any assistance at [email protected] or using 07 5593 6060.
Let’s start with – what is a Chief Financial Officer (CFO)? The CFO is the person responsible for all the financial aspects of your company.
The CFO will oversee those responsible within your company for maintaining accurate and timely books and keeping up with tax implications. The CFO will also provide advice and guidance when it comes to financial objectives such as; budget building, plans for future growth, overall investment strategies, payment terms and the general financial health of your company.
An outsourced CFO will do all the above but instead of being an expensive part of your payroll as a corporate officer, they will contract to you on an hourly or subscription basis.
The outsourced CFO becomes a virtual member of the leadership team and looks to the future as well as reporting on the current company situation.
Why it is good to have an Outsourced CFO.
As touched on above a CFO employed full time by a company is a big payroll expense. For many new companies it is an expense they cannot afford when they are still in early growth days.
The nature of an outsourced CFO means you will be paying for the number of hours worked on a particular project and you will receive the benefits of an experienced financial leader with knowledge in many different areas of business finance. This allows your new company to access knowledge and expertise that perhaps you couldn’t afford on a full time basis.
When to look for an Outsourced CFO.
It is crucial for all companies to have professional financial advisors to guide business decisions in the right direction. It is particularly important when the company founders do not come from a financial background.
What are the advantages of an Outsourced CFO?
As opposed to an inside employee, an outsourced CFO will provide objective advice and information. Because they will also be working with other companies they can provide experienced knowledge achieved in other spheres of business.
Your company’s expenses will be much less with an outsourced CFO. This is an important part of affordable growth for your company in the early days.
Your new company could evolve and grow quickly and you will be able to adjust your needs accordingly with an outsourced CFO.
Will an Outsourced CFO save time?
When you consider that in the early days your company really has a need for expertise in budgeting, fundraising and forecasting, that would be well managed by an outsourced CFO experienced in new business.
Taking on a full time CFO would be time wasting and ineffective.
How do I know that the Outsourced CFO is right for my company?
When it comes to hiring an outsourced CFO the same criteria applies as if you were hiring a new employee. You want to be as sure as possible that they will fit your existing team and ideologies. That they understand what your business is about.
You will look for an outsourced CFO that has the relevant experience in the areas that you need at the time. For example, if you are looking to create more realistic budgets make sure you choose an outsourced CFO with a proven track record in this area.
Consider what your business is and look for an outsourced CFO who has experience in similar businesses.
Be sure in what financial areas you may require advice and communicate those clearly. An outsourced CFO will also offer advice in areas that you may not have considered and be prepared to take on new ideas. You may have problems that need solving and outcomes that you want to achieve. You could be looking for general guidance or specific analyses. Know what questions you will want to ask and what to look for.
Outsourced CFOs can come as a team or as a consultant. Again pricing here is a key factor. You will pay less for a consultant – but you might gain more in less time from a team of consultants who work together giving you the benefit of team effectiveness.
Obtaining the expertise of a Chief Financial Officer does not have to cost your new company a fortune. An outsourced CFO can grow with you as your company grows.
If you are considering taking on the services of an Outsourced CFO please contact us at QC Accountants. Our team of professionals can help you manage all financial aspects of your growing company.
Contact us on 07 5593 6060 – we are here to help you.
2020 has been a year of challenges, but also a year of rethinking. There’s no doubt that lots of new ideas may have passed through your mind. Whether it was rethinking your work-life balance, saving money, or shifting towards a new business plan, there are many ways in which you may have dreamed up new goals for yourself.
Importance of setting goals
Imagine getting into the driver’s seat of a car and starting to drive, with no destination in mind. You may start out with an appreciation of the novelty of the situation, but how long would you drive for, before getting confused, bored, frustrated or lost?
Similarly, in life and business, we need to know what our goals are so we can design our tactics and everyday activities with purpose and direction.
Why is goal-setting important? Other than setting a clear course of action, setting a goal also encourages a new mindset: a mindset that is determined to get where you want to be, to be more organised and mindful about elements that can affect your future goals. Setting up a plan is the very first step of your new journey.
What makes a good goal?
“The trouble with not having a goal is that you can spend your life running up and down the field and never score.” – Bill Copeland
Can you relate to this famous quote? No one wants to work hard, countless hours without getting anywhere. To make your goals reachable, you should know how to design them. Your new goals should be created in a SMART way:
Specific – Try to avoid generalised goals and set a clear direction headed towards where you want to be.
Measurable – Without measuring your progress, you wouldn’t know whether you achieved anything. Include value in your goals where possible, such as reducing your expenses by 10% by the end of 2020.
Attainable – Your goals need to be realistic. Don’t set up easy goals to only brush your ego when achieving them and don’t set goals you don’t believe are achievable.
Relevant – Relevancy is something that should be aligned with your overall vision. Are your goals in line with your personal beliefs or professional life?
Time-Bound – Whether you like it or not, deadlines are crucial to your success. It’s even sweeter when you reach your goals within an allocated time frame.
How to set a goal
Setting a goal can be quite overwhelming and may even feel like an impossible task. The best way to overcome this feeling is to divide your big goals into medium and short term goals. It’s helpful to write down your goals and split them into three categories: short-term goals, medium-term and long term goals.
Short-term goals
Short term goals are goals that can be achieved within a short time. If your big or long term goal is to establish a company by the end of a certain year, think about all the steps that you are missing to close the gap, and that can be done in the near future. It could be anything from getting another part-time job to secure additional funds, doing a training course or researching small business support. Here at QC, we are proud to call ourselves “Solution Providers”, and we offer a full range of business services and advice. Get in touch to learn more.
Medium-term goals
Your medium-term goals take a bit longer to achieve; it can be from a few months to a few years. The medium-term goal is often a result of achieving your short term goals. If you are starting a business and see this as your long term goal, your medium-term goal could be anything from improving your product, to reducing admin costs or starting on your company policies.
Long-term goals
If short and medium-term goals are successful, they compliment the long term goal. Your long term goal should reflect your desired future and be easily adaptable for social, economic and political changes. Your long term goal should also be aligned with your vision for the future. To set up a goal for the next 10-15 years is not an easy task, but keeping in mind the rule of breaking down big plans into small ones is always helpful.
An overall vision or setting up a one-page business plan can also bring more clarity to your goals.
How can QC Accountants Help?
We understand setting goals is not always easy. We’re here to help you understand your options, and take advantage of all the support available to you. Get in touch today.
While some leave it until the last minute, selecting an accountant for your business is an important exercise. It can mean the difference between comprehensive reporting and maximum tax returns and leaving money on the table. It can also ensure you receive timely, accurate advice regarding your business structure, practices, entitlements and more.
Steps to find an accountant
The first consideration is defining what you need an accountant for. It may sound like an obvious factor, but it’s one that many people skip over. While some accountants specialise in individual tax returns, others have vast experience with small business accounting in certain industries or even crypto tax.
Take a moment to clarify what specialties you need your accountant to have, and start from there.
One of the best places to find a good accountant is via personal references. Do you have friends or family with a similar requirement to you, for their accountant? Ask for recommendations.
Be sure your accountant is a member of a professional body, which ensures they have tertiary qualifications and meet regulatory standards:
- Chartered Accountants Australia and New Zealand (CA)
- Institute of Public Accountants (IPA)
- Certified Practising Accountants Australia (CPA Australia)
Do you require your accountant to provide advice about investments or retirement plans? They must have an Australian Financial Services Licence. You can check your accountant’s credentials here.
You can also use the above links to search for accountants.
Questions to ask
Here are some suggested questions when looking for an accountant:
- What are your qualifications and your professional memberships?
- Look for: the above-mentioned organisations
- Do you have any specialities?
- Look for: answers that align with what you need in an accountant
- What do you charge?
- Look for: Pricing that aligns with industry standards (you may need to do some research) and a cost that’s reasonable for you
- Do you have a system for complaint management?
- Look for: a standard plan for dealing with complaints
- How do you gather the necessary paperwork?
- Look for: a practice that suits you, for example, “in-person”, or “via email” or “via mail”
QC Services and Team
At QC Accountants, we specialise in business accounting as well as individual accounting needs.
Our services include:
- Small business packages
- Business startups
- Bookkeeping
- Tax and BAS returns
- Business support and advice
- Superannuation funds
We pride ourselves on our practice of listening carefully to clients’ needs, before making recommendations. Our team comes with a range of experience and specialities.
How can QC Accountants Help?
Knowing how to find a good accountant can be a tricky thing. There are many factors to consider and options to research. If you’d like to chat with QC Accountants about your needs as a business or individual, we’d be happy to discuss them with you.
We are available on email ([email protected]) or telephone (07 5593 6060).
Over the past few months, there have been a range of funds and grants made available for businesses to help with the fallout of COVID-19. While some of these have closed, we’ve researched a few other avenues that may be of interest, if you’re looking for support to help you weather the storm. Indeed, the question of what grants are available for businesses goes beyond the Coronavirus issue.
Queensland-Based Businesses
For businesses with headquarters in Qld, unfortunately some of the grants previously available have now closed, having experienced understandable demand. There is, however, still support available, some of which are listed below (click through for more information):
- Coronavirus SME Guarantee Scheme
- Electricity relief for small business – a $500 energy rebate for eligible businesses
- Coronavirus land tax relief – a range of options for relief
- Payroll tax relief
- Loans for tourism, export and education businesses
There is also an information page available on the Qld Business website, with links to relevant resources.
In big news, the Qld Small Business COVID-19 Adaption Grant Program closed its first round, but is reopening again on July 1, 2020. Act fast to get into this round and contact us for assistance.
New South Wales-Based Businesses
Businesses with headquarters in NSW can apply for a $10k Small Business grant offered by the NSW Government. The structure was established to address challenges presented by the bushfires earlier this year, and adapted to help businesses affected by Coronavirus and the unusual situation in which they find themselves.
There are, of course, criteria that must be met, including the following and more:
- have between 1-19 employees and a turnover of more than $75,000
- a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000
- have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020
Businesses Around Australia
Businesses based around the country can check out the grants page on business.gov.au and run a search based on your business, location, your goals, and other criteria. This is a great way to find grants and programs you may not otherwise have seen. You simply enter your postcode, industry and the things you’d like to achieve and the engine will suggest grants you may wish to consider.
There was also a grant available from Small Business Organisations Australia, which has also now unfortunately closed.
How can QC Accountants Help?
We’re here to help you work through things, for anything related to your finances. As your accountant, we can help you with the financial side of any grant application you make, providing reporting and projections to help your business put its best foot forward.
We are available on email ([email protected]) or telephone (07 5593 6060).
It’s no secret. COVID-19 has thrown most (if not all) businesses a curveball in 2020. Chances are you are either overrun with increased demand or, as is more common, the business has taken a hit and you’re busy pivoting and dealing with employee implications (among many other things).
Either way, it’s not something you could have planned for.
The goalposts have certainly moved from where they were at the start of this year. At this point in the Coronavirus rollercoaster, we still can’t know exactly what will happen – but we have the tools to plan for some things.
Let’s discuss a plan for the next four weeks, to help your business deal with right now.
Week 1: Stay on top of JobKeeper & check your other government subsidies
By now, we have been privileged to assist over 100 of our business clients to obtain the JobKeeper Payments. We estimate that by September 2020 we will have assisted our clients to obtain over $5 million in Government Stimulus.
This week we recommend our clients ensure their bookkeeping is kept up to date so that we/ you are ready to make your monthly declaration by 8 June.
You can find more info on JobKeeper in the guides.
Further, if you have not done so already , we recommend you investigate your eligibility to receive the other Government stimulus packages.
You may want to investigate:
- Boosting cashflow
- Instant asset write-off
- Accelerated depreciation
- Vary your PAYG instalments
- Change your GST Reporting cycle
Week 2: Review your financial position
This week, take some time to review your financial position. This probably isn’t the first time you’ve done this in the past few weeks, but as things are changing so rapidly it’s a good idea to stay close to it.
Are there any business expenses you have right now that could be reduced or eliminated?
Consider whether you could speak to suppliers or creditors about reducing or deferring any of the following:
- Rent
- Loan repayments
- Utilities
- Supplies/ Products/ Services
Have you considered preparing a cashflow report or forecast to assist you to plan the income and expenses of your business?
Week 3: Tax planning and tax minimising strategies
Now is a great time to talk with us to identify tailored strategies to minimise yoru potnetial FY2020 income tax.
There are a number of ways that you can potentially save tax in FY2020, for example: using a home office, keeping a log book for your motor vehicle, depositing into your superannuation fund. The appropriate methods will depend on your personal circumstances.
Week 4: Consider return-to-work procedures
As of mid-May, many Australian services are starting to return towards ‘normal’. The Australian government has outlined a 3 Step Plan to slowly get the economy up and running again. The 3 Step PDF can be found here.
As of the 15th of May both NSW and QLD governments had relaxed some measures – but by the time you get to Week 4 of this plan, things will have changed and we suggest you investigate the most recent formal measures.
As we all know, we still need to practice heightened hygiene and be vigilant about our contact with others. This includes workplaces and there are measures you can put in place to reinforce hygiene in the workplace.
In addition to the physical return to work, employees may also experience emotional challenges when coming back to work. It’s important to consider formalised return-to-work processes. Others are looking at what the workplace will look like in the future. Some employers (such as Twitter) are going to allow employees to work from home forever if they choose to.
What will return-to-work look like for your business?
How can QC Accountants Help?
We understand this is a confusing and potentially alarming time for people and businesses far and wide. We’re here to help you understand your options, and take advantage of all the support available to you.
We are available on email ([email protected]) or telephone (07 5593 6060).
The past 48 hours have seen an escalation of responses to COVID-19, following the World Health Organisation’s categorisation of the spread of the virus as a “pandemic”. Economic impacts are being felt – and the Australian government is implementing urgent measures to support businesses through what may be a difficult time.
Federal Government
At a Federal level, the government has announced some wide-reaching initiatives to support businesses and their employees through the COVID-19 pandemic:
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Providing up to $25k per employer (minimum of $2k) in reductions in the PAYG – withholding obligations. Based on media reports we understand that this is likely to be calculated as being 50% of PAYG-Withholding from 1 January to 30 September 2020;
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Providing cash incentives for employers to continue to use their apprentices of up to $7k per quarter during the affected period; and
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Increasing the Instant tax write-off for asset purchases from $30k to $150k
.
As always the devil is in the detail and the legislation has not yet been passed by parliament, so we encourage our clients to wait until they hear more information.
At this stage, we understand that these initiatives will be automatically processed through the Australian Taxation Office so there is no need to apply.
Australian Tax Office
The ATO is expected to announce that businesses may elect to delay the lodgement and payment of their Business Activity Statements for a period of up to four months (yet to be confirmed).
Where businesses are unable to meet their ATO payment obligations, the ATO is expected to make provisions for low / no interest repayment plans for businesses with existing and ongoing tax liabilities.
With regard to individual taxpayers, the ATO will allow them to vary PAYG instalments to nil during the affected period.
Don’t forget – as a client of QC Accountants, we can liaise with the ATO on your behalf.
Queensland Government
For businesses operating in Queensland, employers with Australia wide wages below $6.5 million, and Queensland Payroll Tax obligations, may be eligible to defer lodgement of their payroll tax obligations until 31 July 2020.
How can QC Accountants Help?
We understand that your cashflow may be impacted by the coronavirus. We recommend our clients tackle the potential cash flow considerations head-on. If you have any questions or concerns, the first step is to have a meeting with us to determine how much you could be affected, and to identify the options available to minimise the impact.
We can also assist to prepare a cash flow forecast for the affected period to assist you to plan how to best manage your cash flow during this time.
Even if our office is forced to close, we will be available on email ([email protected]) or telephone (07 5593 6060) during the affected period.
We understand this is a confusing and potentially alarming time for people and businesses far and wide. We’re here to help your business mitigate and manage the risk as much as possible and take advantage of all the support available to you.
Our clients come to us looking for experienced and passionate Gold Coast accountants who offer a full range of accounting and tax services that suit their business. We can help you demystify your tax and accounting and, ultimately, take your business to the next level. We give you the confidence to make strategic business decisions that will help your business thrive.
