Spring 2022 Newsletter
Innovate for a competitive advantage
In the current economic environment with interest rates and cost-of-living expenses rising, we need to review how we’re operating and where possible, adapt.
In particular, reviewing your business’ systems and cyber security can help to identify opportunities for improvements and cost savings. In this edition of the newsletter, we’ll explore the significant financial benefits of systematising your business and in the next instalment, we’ll look at cybersecurity and how to implement best practices to avoid unnecessary costs.
In this edition we’ve also included important information about government incentives to invest in technology and training, Director IDs, and tax return deadlines.
If you have any questions about any of the content in this newsletter or would like to learn more about any of the topics, please reach out a member of our team. We’d be delighted to speak with you.
From Leo & The Team at Vargiu Accountants
Systematising your business - One of the most effective ways to grow your business and profits
Implementing efficient systems – or systematising your business - is one of the most effective ways to streamline and grow.
Compare a busy McDonalds that runs like clockwork to a small restaurant where the team are running around frantically and struggling to keep up. Has it ever occurred to you that the colossal McDonalds empire is largely run by the same teenagers who likely don’t clean their rooms or want to do their homework?
The difference lies in McDonald’s systems - its procedures and everyone’s roles and responsibilities are clearly laid out.
McDonald’s isn’t the only well-known brand that can largely attribute its success to effective systems, it is a hallmark of almost all household names and Fortune 500 companies.
Another example is Toyota where using standardisation is the foundation for continuous improvement, innovation, consistency and employee growth. Toyota’s philosophy and its experience support the belief that if it focuses on its process and continuous improvement, the financial results will take care of themselves.
There are many compelling reasons to systematise your business, with just some including:
- It clarifies expectations of your people and relieves stress
- It provides a clear direction on how things should be done
- It provides a valuable resource and reference point for training staff
- It helps to highlight if there is a better way of doing things
- It builds consistency and efficiency because there is a process to follow
- Staff are more motivated because there is structure
- It frees the owner from many of the frustrating daily tasks and allows more time to network, strategise and innovate
Without implementing systems and processes, the daily running of your business can become all-consuming and its growth limited. Alternatively, by systematising, you and your team will be released from the daily grind and have more time to think, plan, be creative, and get away, while building a more profitable and saleable business.
The first step in systematising is reviewing your business as a whole and identifying pain points where things aren’t working as well as they could be. From there, bring in the relevant team members (those who have experience with the issue at hand), to come up with a new way of working or process that will alleviate that challenge.
The standards and protocols you design need to be specific enough to be useful guidelines, yet also allow some flexibility. Sometimes the solutions will be simple, other times they will be more complex.
While it can be tempting to think that once a particular process or pain point has been addressed, the work is done, in reality systems are best practice templates to be improved over time. As the business evolves and grows, its systems will likely need to be tweaked and adjusted over time to keep up and remain relevant. This shouldn’t be perceived as a hurdle but as an opportunity to continue to innovate and improve, making your business more resilient and successful in the process.
Written by Sergio Alderuccio of Alderuccio Advisory. Sergio is our Chairman, business mentor and advisor. He has witnessed the benefit of systems firsthand through his many years developing some of Australia’s most successful franchise networks.
Technology investment boost
Small businesses with an aggregated annual turnover of less than $50 million can deduct an additional 20 per cent of costs incurred on business expenses and depreciating assets that support their digital adoption, with a cap of $100,000 each income year of claimable expenses.
What can be claimed?
- Portable payment devices such as ‘Square’
- Cyber security systems
- Subscriptions to cloud-based services such as One Drive, Google Cloud, Salesforce etc.
- Website design and development
For eligible expenditure incurred between 7:30pm AEDT 29 March 2022 until 30 June 2022:
- Claim the expenditure as usual in your 2021–22 tax return, and
- Claim the additional 20% bonus deduction for this period in your 2022–23 tax return
For eligible expenditure incurred from 1 July 2022 until 30 June 2023:
- You can deduct the entire 120% in your 2022–23 tax return
Skills and training boost
Similar to the technology investment boost, small businesses with an aggregated annual turnover of less than $50 million can deduct an additional 20 per cent of expenses incurred on eligible training courses provided to employees while continuing to deduct their usual business expenses.
For eligible expenditure incurred between 7:30pm AEDT 29 March 2022 until 30 June 2022:
- Claim 100% in 2022 FY then 20% in 2023 FY
For eligible expenditure incurred from 1 July 2022 until 30 June 2023
- Claim 120% in the 2023/24 FY
There is no cap for this boost, allowing businesses to implement more staff training and strengthen skills while also being able to claim additional tax deductions.
What is included:
- Courses that are run by an external education provider
- Courses where the training provider is registered in Australia
- Courses that are provided in-person (only in Australia) or online
- In-house and on-the-job training is not eligible, nor is money spent training people who are not employees of the business
Director ID
This year, it has become a requirement for directors to apply for a Director ID – a number that is unique to each director, regardless of how many companies they are a director of. This policy is enforced by new legislation aimed at reducing the incidence of fraud.
The due date for directors appointed on or before 31 October 2021 is 30 November 2022. Many clients have reported difficulties matching their details to complete their application which can be time consuming to fix, so we suggest avoiding leaving this until the last day.
If you were appointed a director after 31 October 2021 but before 4 April 2022, you have 28 days since your appointment to apply for a Director ID.
If you have become or are planning to become a director any time since 5 April 2022, you will need to apply for an ID before you become a director.
You can read more about the application deadlines and how to set up a Director ID here.
Once you have your Director ID, you will need to pass it on to a record holder of any companies which you are the director of. This record holder can be a company secretary, another director, a contact person, or an authorized agent of the company.
If you would like assistance in applying for your Director ID, you can make an appointment with Matt Kondrat from our team who can prepare this for you for a small fee. You can reach Matt at matthew@vargiu.com.au.
2022 tax return due dates
Self-lodgment
If you intend to complete your own 2022 tax return, you are required to lodge this with the ATO by 31 October 2022.
Registered tax agent lodgment
If you have engaged a registered tax agent to support you with your 2022 tax return before 31 October 2022, the lodgment date can be extended to 15 May 2023.
If you are not currently registered with a tax agent but would like to use the extended lodgment date, please contact us and we will add you to our ATO client list.
We are on hand to assist you with your tax returns and any tax queries you may have.
