Hi there. Welcome to another episode of Better Business Insights. I'm Liz Jarvis and in our business, we help take the stress out of all things, numbers and accounting for Business Owners like you. Today's topic, whose job is it to do this, that, or the other thing in accounting, it can be a bit of a minefield. So, whose job is it? Whose job is it to decide what my profit and loss statement is going to look like? Whose job is it to decide what bank accounts I'm going to use? Whose job is it to process the accounting information as it comes from the bank? Whose job is it to decide what my taxable income is? Or my companies or my trusts or my, or my anything. Whose job is it to decide whether I should invest in a new asset? Whose job is it to decide how much stock I need - or whether we should spend extra money before the end of the year? The truth is, it's your job. It's your job as the Business Owner to cover your own ‘ass’ and understand just enough, I call it functional literacy. Just enough you need to understand, just enough to make the right decisions. But more importantly, if you understand just enough, you can seek collaboration from professionals that do know. You can't afford to be left in the dark and leave it all to somebody else. As a Business Owner, you are so vulnerable to incorrect decisions about your business without the right information in front of you. And if you're not involved in the setup of your financial system, then you won't want to read the reports, but the reports are really useful. The reports are actually really easy to read, if you've been involved in how they’re set up. Because the profit and loss statement of your business is the story of your business. What came in, what went out, what you spent money on and the categories that it should go into, need to make sense to you. Not to the Accountant. Not to the Bookkeeper that does bookkeeping for 10 different businesses in different industries. It needs to make sense to you and your engagement in that will allow you to be engaged in the reporting and results of your business. And you’ll be much more inclined to read those financial statements regularly, to question the professionals that are helping you, whether it's your Bookkeeper or maybe your wife's doing the books - you still need to read them. You still need to have a look. So, whose job is it when it comes to tracking the profitability of your business? It's your job, but we can help you. So can your Accountant, so can your Bookkeepers, but be careful about where they fit in the spectrum too. The Bookkeeper's job is to process the information that comes in from the bank, etc. And to reconcile that information against other things. Some untrained bookkeepers don't really realise that they also should be reconciling your balance sheet items against external documents. Whose job is it to lodge the tax return or lodge the BAS return? Sometimes Accountants just package all of that up - say “Don't worry, we'll look after it. We'll do it all for you.”. And because the Business Owner has felt that's all looked after, they feel away from that process, it's not their job. And sometimes it can be quite disastrous not realising just where your business is at. Or sometimes you can miss opportunities, because you're just not focused in or thinking about your numbers. So, hope that helps. I hope it didn't scare you. But as a Business Owner, please take responsibility for understanding what's going on in your business at the financial end. Take time to review your financial statements on a regular basis and to ask your professionals - “What does this mean? Why is this so?”. Because after all, you know your business better than anyone, you know the ins and outs, you know what your intentions were. You will know whether or not the information has been processed correctly. I believe in you. Maybe I'll get to meet you one day. Thanks for joining in on our Better Business Insights today. Have a great day.
Are you a business owner? How involved are you in your financial information ? Business will be better if you engage with your financial information and use it to make informed decisions. In this video I explain where you fit in with your accountant and bookkeeper. Don't be deprived of the ability to use your financial information to make more profits.
Hi there. Welcome to Better Business Insights. My name's Liz Jarvis and today we're going to be talking about how often should I look at my financial information? Now as a business owner, it's a big question because sometimes we're scared of it. Sometimes we think we don't understand it, anyway. And it's somebody else's job, we’ve abdicated that to the Bookkeeper, the Accountant, whatever. But I'm here to encourage you to take a bigger interest in what's happening, because I believe that accounting is kind of broken. We've all been doing it ourselves for a while and we haven't been getting the input that we need from other professionals. But I think it's really important that business owners re-imagine how they engage with their numbers. So how often should you look at your financial statements? Well, I would encourage you to do it as often as you can. You might at least want to do it monthly. In the old days, accounting systems didn't have as much computer space as they have now. You had to print everything off every month and that encouraged the business owner to look at it all and to get a good feel for what was going on. And then those printouts were stored away. They might have had your scribble on them from last month about what didn't seem right. What customers hadn't paid you and why they weren't paying you yet, some notes to follow things up. Now that we've got everything inside the black box, behind the screen, we can drill into whatever we like, but we're not sure what we're doing. Unfortunately, business owners have stepped back. And they look at those things less and less because they're kind of under control. Somebody else is doing it. You know, they must be right. I go to the Accountant, he didn't say anything, I guess it's okay. It's not good enough. You can do so much better in your business, if you do look at those financials regularly. One of the things we do is help you to understand what they mean. As the story of your business, it's not actually that frightening. It's actually very empowering. So how often should you look at your financial statements? At least once a quarter with the BAS, if that's how often you're doing your BAS. Preferably once a month, but if you're a really small business, you might be wanting to do your own work at least once a week. When you stay on top of things then you can interpret data that's coming together about your business and you can make better decisions. I heard a great story from someone that now runs a bookkeeping business that back in the seventies as a, school kid, he was so good at numbers that he used to do his grandpa's books and he could get them done really fast. But the value in the grandson doing that work fast, wasn't just about paying less for that work to get done, it was about the advantage that his grandfather had. The next day, each month after the bank statements arrived, those figures were ready and that meant Grandpa in his manufacturing business, could make decisions quickly. He could get to the suppliers of meat products and so on, ahead of his competitors. He knew what he needed straight away. There are so many insights in your figures. I really encourage you to look at them more often. And if you want help with that, reach out to us, we'd be more than happy to help you. No judgment. Just curiosity. See you next time.
Your financial information tells the story of your business! When you apply your curious mind to it regularly you can really improve your business. This video gives some insight as to why engaging with your numbers regularly will get you ahead in the game, improve your decisions and ultimately lead to a more profitable business.
Welcome to Better Business Insights. I'm Liz Jarvis and today we're going to talk about assumptions. You know, you've heard the saying, “Don't assume, it will make an ass out of you and me.”. Wish I had my whiteboard. A S S U M E assume. Sometimes in accounting, we have to assume. When we're setting up budgets and projections, we have to assume. When we're making models of your expected profits or whether or not a business is viable, we assume a number of things. Those assumptions should be carefully documented. And you as the Business Owner, should have an idea of what's been assumed in any of the financial information that's given to you about your business. You cannot leave it to others, because others can really get it wrong. They don't know your business as well as you do. It needs to be collaboration. Collaboration between the Business Owner and the person doing the books and building the model. All that sort of thing. Another area that it's important not to assume, is the relationship between you and your Accountant. I'm not a tax agent anymore, I don't do tax returns and all that sort of thing. We help Business Owners as an additional service to what their Tax Agents do. But don't assume that they're going to tell you if you're doing badly or if you can do better. Let's face it, they're human. I've seen examples where business is going downhill fast, but the Accountant didn't mention anything. So the Business Owner was left thinking “Well, he didn't say anything, I must be going, okay. I'll just keep doing what I'm doing.”. They won't always reach out to you. The modern accounting process is often that you're uploading information, somebody behind the scenes is processing that information. The tax return comes out. And particularly if you're not doing well, they won't go much further than that, because if you're below the tax threshold and you're not going to pay any tax, they don't feel like they’ve got to look that hard and they'll produce your tax return. This might be okay in your first year of business, but if you're not even making enough money to meet the tax-free threshold, it's not worth the effort. So, don't assume that they're going to tell you how you're doing unless you ask. It's important that you get a relationship with your Accountant, the person that's doing your taxes, or if that doesn't work out for you, then reach out to someone like myself and add that relationship into the mix. They can still do your tax and your accounting and all of that stuff. We'll help you interpret and we'll help you make better business decisions. As you interpret that information, we'll help you work out, whether there's garbage in / garbage out, or whether you're on track. I hope, this helps. Remember, ‘don't assume it'll make an ass out of you and me’. Come and visit me next time. Have a fantastic day.
Every human is prone to assuming! In the whirlwind of everyday business it's easy to assume your accountant has got your back. But have they? Watch this video for some insights on what's important to discuss with your accountant - especially if your want them to provide forecasting for you.
Hi there. Welcome to today's episode of Better Business Insights. I'm Liz Jarvis and in my business, I take the stress out of numbers for business owners. Today's topic is Owner's wages. There is so much confusion around what wages an Owner should take out of the business. And the reason for some of that confusion is because there are so many different ways to structure your business. You might be a Sole Trader or you might be a Partnership, or you might be a Company, or you might be a Trust, or you might be some combination of all of those things. You might be a Director of a company. So all of those different ways of relating to your business actually end up with slightly different results as to what your wages are and how they're treated. Are they treated as drawings? Are they treated as Director's fees? Are they treated as straight up and down wages with everybody else? Are they Salesman's commission? There is no one right solution. But it is important that you're taking out of your business, some money for you and your time for running that business and that you structure that so that you can pay your own costs without complicating the cashflow of the business. Now, if your business is not making enough yet for you to draw from it, that's okay. You can do it without any Owner's wages. But I would say to you - be careful about that. What is the model you're setting up for yourself in terms of not being able to pay yourself? Is it really going to be worth it in the long run? So, as I said, Owner’s wages can be a little bit murky. But it's important that you get benefit from your business. So if you'd like to discuss the Owner’s wages in your business, reach out to us through our Facebook page or email, but reach out and ask questions. Like I always say, get curious and enjoy your numbers. Because we want your business to do well. And if it's not doing well, we want to solve that as quickly as we can. Have a fantastic day. We'll Ssee you next time.
There is so much confusion about what an owner should get from a business - so I have put together some tips for you in this video. Whilst business should be separate from personal when it comes to your spending , they should not be treated as completely separate silos! Your revenue, your expenses, your trajectory, your lifestyle and your financial goals at home or at work should be linked together intelligently especially when it comes to minimizing taxes and maximizing borrowing capacity! Want to know more ? Book a quick Chat with Liz
Hi there. Welcome to Better Business Insights. I'm Liz Jarvis. Today we’re going to talk about the ripples decisions can make into your business. Now there are good decisions and there are not so good decisions. So today let's talk about the not so good decisions. I'll give you a couple of examples of things that were unexpectedly damaging to business. One is in relation to a dairy farm I worked with once, where the owner was able to observe the staff around the place. You know, it's a big farm, there's lots of things to be done. And at one stage he observed the drovers. They're the guys who ride around on the bikes and get the cows up to get milked. He observed that on a few different occasions they seem to be, you know, that person or that whoever was rostered at that time, seemed to not be doing anything, so surely that means that there's a cost that could be cut. So after much discussion, it was agreed that the hours for the drover would get reduced. Now, it was sunny and fine and everything seemed to be going well. But then the weather changed, and with the weather change comes a whole lot of other things. Those unexpected ripples of things that go on. And without the extra time that had appeared to be wasted, those drovers weren't able to get the cows up correctly or to get them all in. I'm not sure of the exact details that happened, but in dairy farming that actually has long consequences, complex consequences because the cows have a certain amount of milk to give, but if they [00:02:00] get unwell, if they don't get milked on time, if they get upset, all those things, that amount of milk drops off. If they get sick, that milk gets infected. That affects the statistics of the milk, and that can affect the price that the farmer is paid for the milk. So, it's a perfect example of where a cost-cutting measure can actually backfire. Another example that I've heard of recently, was in a retail environment where there was a lot of actual interaction between the sales people and the clients. There was a lot of upselling that happened, but the accountant at tax time looked at the statistics and looked at benchmarks. And said “Look, your wages are too high. You need to cut your wages.” So a number of the workers within that retail business were asked to cut their hours and there was less overlap on the floor. And there was a bit of animosity then with the employees. But at the end of the day, what happened was that sales went down. Because there wasn't enough time for the person on the floor to manage, to upsell, to really serve the customer so that they could get what they needed. Perhaps some customers didn't come back. Perhaps some customers didn't like that they were rushed in their purchases. Either way, that person later on, put the staff back on. But it's very hard to claw back those sales. Once you've missed them, they're gone forever. So, I hope these couple of examples of the ripples that can happen when you make decisions, without considering all the consequences, will help you in your decision-making in your business. Join me next time.
It's important to think through decisions about saving money in your business - I n this episode I share some insights into unintended consequences of cost-cutting - Those savings cost the businesses in question so much more than the money being spent in the first place. It always helps to talk through the consequences of your plans with an experienced professional - but don't be afraid to stand your ground as you unpack ideas. Reach for a free strategy session and I can look over it with you.
Hi there. Welcome to Better Business Insights. I'm Liz, Jarvis. And today we're going to talk about financial advice. Now you may know that I believe accounting is broken and I feel that it's our job, here in our business to help business owners re-imagine how they can engage with their numbers. Now, financial advice is a complex area. It's an area that has become legislated and it unfortunately is much less broad than most people realise. So in my business, although I'm a qualified Chartered Accountant for nearly 30 years now, I'm not allowed to get financial advice. We instead - we support, we educate and we guide you. If you need specific financial advice around superannuation or around investments, that is the job of a Financial Planner. If you need specific tax advice around tax planning, that is the job of your Tax Accountant. But somewhere in the middle, there's a whole other big pool of information that you need to understand that most people think is also financial advice. How do I set the bank accounts up for my business? How do save for my GST, for my employees’ entitlements? How do I set up my chart of accounts so that I can understand what's happening in my business? A lot of these things fall under the bigger picture of financial advice, but you won't get that advice from a Financial Planner or a Financial Advisor. That advice comes through collaboration. Collaboration between you and an accountant, who understands the business information that you need to collect in order to make really good decisions about your business. Decisions that take your business to where you want it to go. Not to the generic thing of how things should be done, but your ideas about where you want to go, where you want to take your business. Those things are what we deal with here at Better Business Decisions. We have a non-judgmental curiosity towards you and your business about what you want to achieve, and we help you get there through supporting you, educating you and guiding you in relation to your accounting systems, your accounting processes, your accounting words and so on. So financial advice is a big kind of conglomerate, but don't be confused by it. Explore and be curious as we always recommend and get all of the different types of financial advice and financial support and financial guidance that you need. Reach out if you've got any questions. See you next time.
Financial advice means different things to different people. It is also very regulated. Business owners need help to understand many financial aspects of their businesses but rarely know what questions to ask. This video gives some insight as to what you might ask your professional.
Hi, welcome to Better Business Insights. I'm Liz Jarvis and today we're going to be talking about reconciliations. Why do we do them? This is an important area for Business Owners to understand, because even if you don't do reconciliations yourself, whether that's bank reconciliations or reconciling the tax that you owe the Tax Office or the Super that you owe or various other things, it's important that you know where you stand and that you know that your data is accurate. So, reconciliation is really - I guess it's a word that's about comparing one thing to another thing and making sure that they agree. The best-known reconciliation in accounting is the bank reconciliation. Now the bank reconciliation, once upon a time, was a pretty straightforward process. You got your bank statement in the mail, eventually, and you've compared it, to your hand-written books where you’ve recorded what you've been doing, what your cheques have been, and so on. Then you got your bank statement out and you worked your way through the transactions to make sure they were right. And as you went along, you might discover that this cheque was presented for $110, but you wrote it in your book as $100. So, you get the rubber out, fix the book. That's how it used to be. And you kept going until you got to the bottom of what you've been recording. And then you had your bank balance, compared to the bank balance in your records. Now back then, cheques were in the mail. So often there were some outstanding cheques, maybe some outstanding deposits because when you took the money to the bank, believe it or not, with your cheques and everything else - this is for the young people - it could be three or four days before it turned up on your bank statement. Now, today it's very different. Today, we have immediate access to the information going through our bank, and we don't even write up that handwritten stuff anymore. We rely on the information coming in from the bank and our software helps us to allocate all of those things. And the bank rec. should be…. should be very straight forward. But it's not. You need to be careful. The reconciliation should not have any outstanding deposits or outstanding payments, because it's pretty much straight up and down happening on the day. So, we reconcile our bank statement, we reconcile our bank in whatever software that we have, to make sure that the balance per the bank is the same as the balance in our software. If there are any excess transactions, we need to remove them. They can arise in a number of different ways, depending on how you are preparing your accounting information, there's all sorts of ways they can arise. But for today, be aware that looking at your bank reconciliation there should be no outstandings. Unless some of those some of the softwares will show future transactions that are dated after the day of the bank statement. And that's okay. I hope that hasn't confused you too much. Other reconciliations that are really important are everything on your balance sheet - should be able to be reconciled to something. We should really know what those balances are and where they've come from. But that's a topic for another day. So, thanks for joining me here on Better Business Insights. If we can help with anything, reach out, and I hope this idea of reconciliation is more clear to you now. Have a fantastic day.
Reconciliation is an essential tool in accounting. We should regularly check our records to the source to be sure our financial statements are correct. Unless they are correct we are deprived of making appropriate decisions.
Hi there. I'm Liz Jarvis, and this is Better Business Insights. Today we're going to be talking about why it's important to read your balance sheet and reconcile the items on it. If you're a very small business, you might have not much at all on your balance sheet. But you're at least likely to have your bank and you need to do a bank reconciliation between your bank account and your bank statement, what the bank thinks you have in your account. And if you have an employee, you'll be withholding some, pay as you go withholding tax. That should be sitting there on your balance sheet, showing that it's waiting to be paid to the tax office at the end of a month or a quarter or a year. You might have some superannuation sitting on your balance sheet, waiting to be sent off. Perhaps you have customers that don't pay immediately. That would mean you have debtors or sometimes it's called accounts receivable. There would be a balance there for those. And you need to reconcile that with the list of what people owe you. They should agree. If they don't, you need to go looking for why they don't. Likewise, with accounts payable or creditors, there will be a balance of what you owe to other people and your list from your, what we call sub-ledger, your accounts payable or creditors ledger, depending on what software you're using- should be able to add up to what's there. If you are withholding GST, if you're registered for GST, that's also there, showing the amount that you have yet to settle with the tax office. Now, all of these numbers can get really messed up. Particularly if so many businesses, things will go off the rails, occasionally, let's face it, and you might get behind. And those balances might grow bigger and bigger and get harder to reconcile. But the truth is, when there's something on your balance sheet, you need to know what it is and what it's made up of. So, I encourage you to read your balance sheet, to reach out to someone else if you need to - to explain to you what the numbers are. And to prove or reconcile, to prove those numbers with the other information in the accounting system. I hope that's helped. There's a lot more to it than meets the eye. But as a Business Owner, you really need to be sure that those things on the balance sheet are correct. Someone could be ripping you off, or you might not realise just what you owe. It's very important that your balance sheet is reviewed on a very regular basis. Don't let that scare you. Reach out if you need help and have a fantastic day. See you on our next episode.
Your Balance sheet is an important source of information for the business owner and it may in fact be quite incorrect. If it's incorrect so is the Profit you are reporting. This video gives a quick overview of the things you should expect to find on a balance sheet and the importance of checking the details of the balance shown for those things. If you need help with getting your balance sheet in shape - reach out to us. No need to change accountants or bookkeepers because we are here to Educate, Support and Guide business owners everywhere.
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