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Posted: 27 June 2016

Happy New Financial Year

Issue 0049

Welcome to 2016/17!

A new financial year – what are you going to try to achieve this year?

Are you happy with your financial performance?  Are you happy with the support that you’re receiving from your accounting/advisory firm?  Are you getting feedback?

I’m going to ask you six questions to undertake a review of your preparation to be an outstanding business during 2016/17.  If you would like some further advice on the questions that I’m going to raise, I will have suggestions on where you can turn to for support.

Debtors’ Days Outstanding

“Is the debtors’ days outstanding in your business less than 40 days?  If not, my recommendation is that you have a debtors’ due diligence system review undertaken for your business.”

Personal Property Securities Register (PPSR)

“Are you aware of the PPSR?  Do you know that approximately $300M has been lost by businesses in Australia since this legislation commenced about 3 years ago?  Have you considered the risks that you’re running by not registering assets?”

“If you’re registering assets on the PPSR, have you asked your accountant/adviser to conduct a review?  Recently, I was told by a solicitor of a problem that had occurred to one of their clients that, inadvertently, there had been a mix-up on terminology between “grantor” and “grantee”.  This caused the business to lose around $400,000.  Perhaps that could’ve been avoided if there had been a follow-up review of their systems.”

Succession Planning

“Do you have succession planning operational within your business?”“Succession planning isn’t just for the owners or CEOs but can apply to all positions within a business.  An accountant/adviser who is offering business advisory services can undertake a review for you.”

Business Plan

“Do you have a business plan?  If so, is it up to date?  Are you using it?  Should you have a business plan?”“Business plans are like maps for tourists.  If you haven’t got a written plan, how are you going to know where are you proposing to go?  More importantly, how do you compare your current performance against your predetermined strategy?”

Financial Position

“Do you understand your financial position?  Do you understand the terminology that is used in financial accounts?  Are you receiving accurate monthly, departmentalised management accounts that you and your team of managers can use to really understand what’s going on within your business?  Are the KPIs that you’re receiving appropriate?  Do they help you run the business or could you think of some better KPIs that might serve your purposes better?”

Early Stage Innovation Companies (ESIC)

“Have you developed a new product, process, service, marketing or organisation method?  Are you interested in raising capital to help you with this new venture?”

“If so, I’ve got some great news for you.”

“The Federal government has finalised the legislation for the ESIC.  By the time you listen to this podcast, that legislation will be operational so you could form a company and, as long as it complies with the requirements to be called an ESIC, you could raise capital in excess of $2M if you wish.  This would probably make you happy and would also make the investors happy because they can receive some significant taxation benefits by investing in an ESIC.”

“Accountants/advisers who are committed to offering business advisory services for clients can assist you in these processes of, not only confirming that you’re potentially eligible to be deemed to be an ESIC, but then assisting you to get investment ready.”

Happy New Financial Year

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