Trading Accounts can be complicated to look at, but having insider tricks can make it work for you. Traders using trading accounts to hold financial assets such as stocks, bonds, foreign exchange, and other investment vehicles need to know these top 5 trading account tips to make the most of a Trading Account.

Definition of a Trading Account

A typical trading account allows the buying and selling of securities, otherwise known as day trading. Your Trading Account can be prepared at any stage during the year and shows sales generated less any variable costs directly associated with those sales. It’s used to calculate your Gross Profit (sometimes referred to as your Gross Margin) which is often also shown as a percentage.

The basic format for your Trading Account is: Sales – Cost of Sales = Gross Profit

Here are our top 5 trading account tips to make the most of a Trading Account.

1. Increasing sales is not the only way to grow your overall profit.

However, growing sales should always be part of your strategy. There are seven ways to grow sales including increasing client retention, leads generated and converted, sales value and frequency, and reducing the cost of sales and overheads.

2. Lifting your Gross Profit Percentage by 1-2% can make a huge difference to your results.

Calculate the impact of lifting your Gross Profit Percentage by 1% by taking 1% of your total sales for the year; that is how much more will hit your overall profit. We can help you employ strategies to increase your margin.

3. Compare your expected Gross Profit Percentage to your actual Gross Profit Percentage.

You can do this by ‘back costing’ a job once you’ve finished it. Calculate all costs associated with a completed job. For example,for a building job, calculate the total material and labour costs for that job, then divide by the selling price to determine the Gross Profit Percentage for that job.

4. Ensure your pricing is up to date.

If your Gross Profit is declining, review your costing to ensure you’re using current costs when pricing a job, product or service. Many businesses use great pricing tools and standard markup formulae, but often have outdated costs in the model or calculation.

5. Consider all costs associated with creating a sale.

Your margin could be slipping because there are costs hidden in overheads that should be measured as variable costs. For example, a mobile ice cream truck will have fuel as a variable cost, but the fuel costs might be lumped in as overhead costs with another business vehicle.

Overall, Trading Accounts can be incredibly beneficial to you in the long term – if you know how to use them well. For more information on how to make your Trading Account more profitable, get in touch with the expert team at QCA today!

Business growth should always be at the forefront of the minds of business owners. However, it can become unclear sometimes just how to achieve that growth. This article seeks to clarify some ways that you can increase the value and size of your business.

1. Increase client retention rate

Most business owners are already aware of the first rule of client work: it is easier to keep existing clients than it is to attract new ones. By putting the right amount of resources and energy into keeping your existing clients happy, you will find yourself with a much more sustainable business model. Be careful not to chase after clients who are not of high value to your business.

2. Increase leads generated\

Just because it’s easier to hold onto existing clients, doesn’t mean you should ignore new leads. On the contrary, driving more potential clients to your website, phone line and premises is another essential step to growing your business. Using effective lead generation techniques is a crucial element to your success.

3. Increase prospect conversion

Don’t leave responding to clients to your auto-responder. Follow up with potential clients who have made enquiries, show genuine interest and build rapport. The more attention prospective clients have, the more likely they are to consider you their best option.

4. Increase transaction value

Upselling and cross-selling is a hidden gem in the business industry and helps to increase the value of your sales. Upsell additional services or bigger volumes to your current clients or customers to bolster the value of the deals that you make with them. Be careful not to overdo it though, clients who feel like they are being pressured into services they didn’t ask for are liable to walk away from your business altogether.

5. Increase transaction frequency

Encouraging clients or customers to buy more frequently is another way to increase your business. This can involve signing clients up for repeat or recurring services and subscriptions. Compared to one-off sales, by increasing transaction frequency you can ensure the longevity of your business.

6. Reduce cost of sales

Another major step to growing your business is to ensure that your processes are as cost efficient as possible to increase the profit margin of sales. Identify ways to save time and resources in order to make more sales, as well as drive efficiency and variable cost reduction.

7. Reduce overheads

Review your overall business costs to identify unnecessary expenditure that can be trimmed. Be careful when undertaking this process to strongly identify the strengths and weaknesses within the business. This will mean you don’t accidentally trim away the proverbial muscle of the business, instead of the fat.

In conclusion, by following these 7 steps for business growth, you can ensure stability, health and expansion of your business for years to come. For a further explanation of any of these steps, or for help actioning them, get in touch with the expert team at QCA today!

Consumers and investors are driving increasing demand for sustainability in the market in response to climate change. Investors are doing so by increasingly seeking accountability and transparency from the businesses they support. As we find new ways to do better business in a sustainability focused environment, now is the time to push for investment in sustainable business practices.

What is a sustainable business practice?

‘Sustainable business practice’ can be a fairly broad, ambiguous, and daunting term. Let’s start by clearly defining what constitutes a sustainable business practice.

A sustainable business practice adheres to, and is driven by a triple bottom line of profit, planet and people. This means that businesses act in a way that equally propagates the economic success of the business, environmental impact mitigation, and ethical treatment of people.

From choosing recyclable materials to electric vehicle fleets, there are many environmentally ethical paths that businesses can choose to invest in. Some innovations to look out for include electric transport, energy efficient lighting, renewable energies, carbon capture and storage, and even hydrogen powered vehicles.

Why is it important for businesses to operate sustainability?

Consumers are said to find brands equally responsible for their impact on the planet as our government. While this might seem like an overstatement, the fact remains that there are a lot more businesses than governments, and thus they must shoulder a fair amount of responsibility for the state of our world today.

In the past, a major roadblock to business sustainability has been the cost. However, by contributing to a push for a greener economy, businesses are able to channel growth and encourage competition in sustainability sectors, thereby driving down the cost of sustainable investments.

How can businesses improve using sustainable business practices?

There are two key ways businesses can improve their sustainability, including the use of digital technologies, and investment in renewable energy.

By utilising digital technology, businesses can reduce paper usage, waste production, and as an added bonus, reduce overhead costs. Digital file management systems are constantly evolving to be more intuitive and reliable than traditional filing systems, so it stands to reason that businesses should be making this move anyway. The environmental benefits of going paperless pair nicely with the economic benefits for your business, reducing the need for paper to be purchased regularly.

Digital files are best stored using cloud based storage systems, which are run using climate neutral servers. Cloud based storage is more preferable, as hard drive systems contribute to e-waste, a waste product which currently makes up about 70% of the planet’s toxic waste.

Renewable energy not only reduces your carbon footprint, it can save you money! By investing in private renewable energy sources such as solar panels, you immediately reduce your spending on energy from power grids. Additionally, having your own source of power means that should the grid go down, your business doesn’t lose money on interrupted operations. Even if you outsource to external renewable energy providers, your energy bill is likely to see a significant decrease.

Conclusion

Accounting for a more sustainable future means striking a balance between economic growth, and environmental impact. Sustainable innovations in terms of product development, delivery and marketing are just a few ways businesses are making a shift towards safeguarding the environment against the effects of climate change.

On December 13, 2021 the Australian government announced it would be extending its SME Recovery Loan Scheme (SMRL) program, which provides small and medium-sized businesses with Government guaranteed loans of up to $5 million to help their business recover from the impacts of the coronavirus pandemic. The SMRL was initially introduced in April 2021 to enable lenders’ to provide cheaper credit to eligible SMEs. This has helped SMEs to get through the pandemic, begin to recover and start investing for the future.

Under the existing SME Recovery Loan Scheme, loans were available from 1 April 2021 until 31 December 2021 with a Government guarantee of 80%. Under the new 2022 Scheme expansion, loans are available from 1 January 2022 until 30 June 2022, with a Government guarantee of 50%. The SMRL has been extended from January 1, 2022, and will be available to eligible businesses until June 30. The Australian government’s

Key features of the new SME Recovery Loan Scheme:

• the expanded Scheme commenced on 1 January 2022 and will close 30 June 2022.
• the Government will guarantee 50% of the loan amount
• borrowers can access up to $5 million in total
• loans can be used for a broad range of business purposes including refinancing any pre‑existing debt of an eligible borrower
• loans are for terms of up to 10 years, with an optional repayment holiday period
• loans can be either unsecured or secured (excluding residential property)
• the interest rates will be determined by lenders, but will be capped at around 7.5% per cent

What can the SME Recovery Loan be used for?

The intended purpose of the SMRL is to assist small to medium sized businesses in getting back to economic stability. Lenders can offer any suitable product to the borrower except credit cards, charge cards, debit cards or business cards. Loans issued under the Scheme may take any other form of credit providing eligibility criteria are met.

The loan can be used to finance existing loans from eligible lenders, including investment support. This may be done as long as the debt is no more than 30 days in arrears, and the lender has not gone into administration. Loans can also be used to purchase non-residential real estate property (such as commercial property) or for the acquisition of another business.

The loan cannot be used for:

• residential property
• purchase financial products
• lend to an associated entity, or
• lease, rent, hire or hire purchase existing assets that are more than half-way into their effective life.

Who is eligible to apply?

The SMRL is available for small to medium sized businesses with a turnover up to $250 million, and adheres to at least one of the following criteria:

• received Jobkeeper payment between January 4 and March 28 of 2021 (a JobKeeper Scheme‑Backed Loan can only be approved under this eligibility prior to the Scheme Expansion date of 1 October 2021)
• affected by the floods in eligible Local Government Areas in March 2021 (a Flood affected loan can only be approved under this eligibility prior to 1 January 2022)
• adversely economically affected by COVID‑19 (a Covid Scheme‑Backed Loan can be approved under this eligibility from the Scheme Expansion Date of 1 October 2021)

Additionally, self-employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the SMRL.

How do I apply for the SME Loan Recovery Scheme?

Loans backed by the SMRL are available through approved commercial lenders, and the decisions to extend credit, and management of the loan, remain with the lender. The Government is not directly participating in the lending process. The process is relatively simple;

• Approach a lender
• Lender makes a decision
• If a lender declines your application or you are not satisfied with the product offer, you can approach other lenders

Businesses are encouraged to shop around and compare products offered by different participating lenders. The interest rate on loans will be determined by lenders, but will be capped at around 7.5%, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time

Participating lenders are:

• Westpac
• ANZ
• Bank of Queensland
• Commonwealth Bank of Australia
• Earlypay
• Fifo Capital Australia
• Get Capital
• Judo Bank
• Liberty Finance
• Marketlend
• Moneytech Finance
• National Australia Bank
• Regional Australia Bank
• Social Enterprise Finance Australia
• South West Credit Union Co-operative
• Suncorp-Metway
• The Mutual Bank
• TrailBlazer Finance
• Unity Bank

Conclusion

The SME Recovery Loan Scheme has helped many businesses so far in managing the impacts of the Covid-19 pandemic. Hopefully this guide gives you the key insights you need to start making the most of the SMRL. However, we recommend getting in touch with an accounting professional before acting, to ensure there are no costly mistakes or misunderstandings along the way. At QCA our team of professionals are dedicated to ensuring your business gets every advantage. We already have the knowledge and experience to make the SMRL work for you. Contact the team for more information.

Minimising your tax requirements is a well known method for improving a business’ financial health. However, not all business owners know how to make the most of thresholds, deductions and smart money management. You could be paying much higher tax than you should be. By the end of this article, you will have a better understanding of how to save on your tax bills this year. Our 8 tips for paying less tax are as follows:

1. Keep Good Tax Records
2. Know your deductions
3. Charitable donations
4. Medicare Levy Surcharge vs Private Health Cover
5. Manage the timing of your tax deductible expenses
6. Smart management – sell an asset that is subject to Capital Gains Tax (CGT)
7. Pay off your mortgage
8. Advice from a Tax Agent

1. Keep GOOD tax records.

By law, you are required to keep written documentation of all business financial activities to ensure you meet your obligations as a business. However, many businesses can find themselves missing out on big deductions from their tax due to poor record keeping. Having receipts to present to the ATO at tax time is crucial to making the most of every deduction you are eligible for. Maintain an organised system of records for all of your income and expenses, and check regularly for discrepancies and issues to prevent having a build up of things to resolve when tax times rolls around. It pays to be prepared.

2. Know your deductions

Tax deductions are invaluable when it comes to reducing the taxes you pay. Most expenses that are related to income generation are tax deductible. This can include operating expenses such as stationery supplies, or even wages.

Your business may also be entitled to concessions, offsets and/or rebates depending on the size and activity of your business. Some business tax concessions include:

• Small business concessions which allow for flexible payment and reporting options
• Primary producer concessions affecting how much income you include in your reporting for the year
• Special professionals, sportspersons and entertainers concessions which can qualify you for income averaging

Businesses may also be eligible to claim tax offsets if they meet certain criteria:

• Small businesses
• Businesses who paid tax on income in foreign countries
• Organisations who underwent eligible, registered research and development (R&D) activities may be entitled to the Research and Development Tax Incentive (R&D Tax Incentive or R&DTI)
• Businesses who reported tax losses in the 2019–20, 2020–21 or 2021–22 income years.

3. Charitable donations

Making donations to charitable organisations not only feels good, it can also help you save on your taxes. In Australia, charitable donations are tax deductible and may be applied to reduce the amount of tax you are required to pay.

Money, property, shares and in some cases Heritage and Cultural gifts are all charitable donations which can be deducted from your taxes. The amount or value of the donation/s is deducted from your taxable income, meaning you will receive a percentage of the donation back at tax time. Donations must have been made to Deductible Gift Recipients (DGRs), registered with the ATO. You must also provide a tax invoice from the DGR in order to claim the deduction. There is no limit or threshold for charitable donations.

4. Medicare vs private health care

If you are earning more than $90K annually as an individual, or more than $180K for families, you are required to pay a minimum of 1% more of your income to the Medicare Levy Surcharge, in addition to the mandatory 2% surcharge already paid by most taxpayers, a total of 3% of your annual gross income.

Comparatively, basic private health cover and insurance can come in at less than 1% of your annual income. This means you pay less annually for private health cover than you are required to pay in Medicare Levy Surcharges, and reduce the taxes you have to pay at the same time.

5. Timing your expenses

If you know ahead of time of expenses that will attract a high tax deduction, you can use the timing of your purchase to help improve your tax situation. You should aim to make more expensive tax deductible purchases in the financial year where you have made the most income, as this will maximise the amount of tax you can claim back with deductions.

In financial years where you have generated less taxable income, you will have a lower deductible income, and so making high value deductible purchases will not result in as much return.

6. Timing your Capital Gains Tax (CGT)

If you have owned an asset for longer than twelve months you may be entitled to a 50% Capital Gains discount. If you haven’t owned the asset for at least twelve months, you will have to pay more CGT.

Does your income fluctuate? If so, you may choose to sell the asset in a year you expect to earn a lower income, as your capital gain won’t have such an impact on your tax liability.

Being strategic about when you sell assets which incur CGT can also help you reduce the annual cost of your taxes. Selling an asset after owning it for longer than 12 months can entitle you to a 50% discount on your Capital Gains, which can mean massive savings. Additionally, it can be beneficial to sell assets in financial years where you expect a lower income. Doing this means the capital gain will be paid in a lower income bracket and threshold, effectively lowering the amount you will be required to pay in CGT.

It is important to speak with professional financial advisors, like our team at QCA, before making decisions in regards to CGT. This will ensure you have a thorough understanding of your legal obligations, and to minimise the tax incurred from your capital gains.

7. Pay off your mortgage

Considering the amount of tax you pay on financial savings each year, there are much better places to put your assets to ensure you hold on to as much of your annual income as possible. Investing your savings into unpaid mortgages not only reduces your loan debt, but keeps your hard earned money safe from incurring savings taxes.

8. Get advice from an expert

Taxes can be complex, and there are so many different ways to increase and decrease your taxes that it can quickly become overwhelming if you can’t dedicate time to understanding it all. Tax professionals like the team at QCA are essential to help you minimise the tax you are required to pay, and make the most of government tax programs.

Conclusion

There are many ways to pay less tax as a business. Some of our recommended methods include keeping good records, knowing your deductions, timing your expenses and asset sales strategically, and getting quality advice and financial management from a qualified professional provider like QCA. Additionally, some proactive financial moves you can make include making charitable donations, considering private health care, and putting savings into mortgage repayments.

If you have more questions about how to reduce your tax liability, or if you’re ready to start working with a professional team, get in touch with QCA today!