Advantages and Disadvantages of Credit Cards

Credit cards can often be a tricky thing.

Do I get one?

Do I need one?

What can I get out of it?

How much is it going to cost me?

We’ve tried to simplify the whole concept that is the credit card.

Below we have listed the advantages and disadvantages of owning a credit card, to help you establish if it’s the right move for you.

 

Advantages:

Free travel insurance

This is an incentive that a lot of people are looking for when applying for a credit card. Many companies offer this on condition, such as holding a gold or platinum credit card.

Frequent flyer points

A lot of credit cards offer this as an incentive. It may be a lump sum for signing up for a credit card, or per purchase. Be aware that these can add up, and they do hold financial value.

Cash back

Some credit cards are cash back credit cards. This means that for every purchase you make (inclusive of other limitations and conditions, such as number of purchases, to a particular spending amount or time restraint) they may offer a percentage of the amount for those purchases back.

Discounts on products

Some credit cards have associations with other businesses. This means they can offer discounts on particular goods and services.

Reward points

Similar to frequent flyer points, however rewards points may be used to purchase limited items or attain discounts.

Convenient

For daily purchases and online shopping it also allows you to have access to another stream of income. If there is something that needs to be paid, eg. Bills or an important purchase and you don’t have sufficient funds, than a credit card is an option that will allow you to pay these necessities without receiving insufficient funds fees from your bank on your debit card.

Safe

Credit cards are a safer option than cash. They also come with several levels of protection. They often provide insurance for the purchase of some goods and have fraud protection for stolen cards. It is also very easy to cancel a card.

Good credit rating

It can help improve your credit rating or establish a good one if you continuously make your payments and not miss them.

Pay off monthly balance in full = no interest

 

 

Disadvantages:

High interest rates

Credit cards often have the highest interest rates on loans. The average in Australia can often range from 15-22%. This means that if you can’t repay your credit card balance in full by the end of the month than you are open to these high interest rates. This often means that you are going to be paying more for your product or service than what you originally would have.

Overspending

Spending money that you don’t have gets you into deep water. If you have a regular and stable income, and budget right, then paying off your credit card balance won’t prove to be too much of an issue. However, when your debt is larger than your income after expenses, then it can lead into a slippery slope.

Impacting credit score

If you miss a repayment or cannot meet the minimum repayment requirements then this can negatively impact your credit rating. This can therefore effect your ability to apply for a loan in the future.

Credit card surcharge

This is a fee that business have to pay to their banks for the benefit of allowing customers to pay with their credit cards. Many business these days are choosing to pass this surcharge onto customers. This means that you may end up paying anywhere from 1-3% of the purchase price.

Annual fees

Many credit cards will offer a ‘no annual fee for the first year’ as an incentive, however these prices can often increase quite rapidly. Some credit cards may offer a lower annual fee for a higher interest rate and vice versa. This annual fee however means that you can end up paying an additional $500+ per annum just for the convenience of owning and using a credit card.

 

So now the decision is up to you! And don’t forget to do your homework and shop around first.

 

Note: This is only advice, for specific information please contact your bank or financial adviser.

 

How to create a Business Budget (and why it’s so important!)

A budget compares your expected revenue to your expenses, and breaks it down to see where your expenses are coming from.

A successful budget will allow you to plan, forecast, measure your success and take control of your money with no surprises.

It can also help you to:

  • Work towards your goals.
  • Assist you when asking for a loan
  • Minimise risk when making large purchases by knowing the financial ability and stability of your business

 

You can also use your budget to:

  • To establish the costs of labour and materials
  • Understand your cost of operations
  • Set goals
  • Know where your profit margin is

 

A budget begins to give you an understanding of the profitability of your business, and obviously the bigger the number the better right?

It gives a numerical value to your expenses and gives you an understanding of where these expenses are going, and when positioned with your expected income, then you can understand why you are/are not meeting your targets.

It shows you just where that line is between the red, the black and the blue. This includes how many sales are required to cover your costs to get back in the black, and from which point on you can begin to see a profit (cha-ching!).

From there it can help you create a plan, create a goal, and find out your potential for expansion and growth of your business. It can also assist you in establishing just how much you can re-invest into your business.

 

Now let’s have a look at how to create a successful budget.

 

  1. Establish a time frame

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Our suggestion is to make it either quarterly or annually.

 

  1. Create a profit and Loss Report

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How to create a Profit and Loss Report:

a) Calculate expected income

i. Sales of product and services

 

b) Calculate expected expenses

i. Fixed costs:

  • Rent
  • Insurance
  • Payroll

ii. Variable costs:

  • Bills
  • Office supplies
  • Upgrades
  • Client entertainment
  • Fees

iii. Depreciation

  • Business assets
  • Equipment
  • Technology
  • Furnishings

 

*Tip

Record your actual income and expenses during your budget period to help keep you on track and measure the accuracy of your budget for future purposes. It will also help you to assess where costs may be too high.

 

  1. Create a Balance Sheet

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This measures the value of your business and helps establish the difference between what you own and what you owe.

 

 

By doing the above it sets you up in a position to know exactly where your business is at. Because at the end of that day, a lot of it comes down to that bottom line. And we need to make sure we’re making a profit, and we need to know and find out how to boost and improve that. Budgeting allows you to see exactly where your finances are coming and going from and where the best places are in your business are to re-invest them.

 

So if you haven’t already, get on the bandwagon! Because if not its going to be one bumpy ride!

And if have a budget already in place, make sure you revisit it, because this little baby loves [needs] constant attention!

 

 

Business Goal Setting

Set Goals, and write them down!

Without a goal or objective, you’re just running through the motions day to day, which works fine, but we’re looking at the big picture here.

To achieve, to grow, to expand, you need a goal. And this may be the goal, but there’s other steps that go into that process. This includes:

 

How are you going to get there?

What do you need to achieve first to get there?

How are you going to achieve it?

Who and what is going to help you achieve it?

 

When we speak about goals, and when we plan for goals, it’s best to look at it this way.

You need a short, medium and long term goal.

(Short term = weeks/months, medium = end of year, long term = 5-10 years)

It’s the little wins (or the short term goals) that keep you on track and keep your motivation going.

 

How to achieve it?

Make people aware of it. You can’t do it alone, so make sure your employees are working towards the same goal as you, if they don’t know about it, then it’s going to make it a lot harder.

Your goals should be aligned with you mission statement. Your mission statement is the overall purpose of the company, so henceforth your goals should be set in accordance with this.

 

Before you start goal setting here are some steps to undertake.

 

SWOT Analysis.

  • This will help you to identify your businesses Strengths, Weaknesses, Opportunities and Threats.

Strengths and Weaknesses tend to be internal factors, whilst Opportunities and Threats are external factors.

 

Bench marking

  • By researching similar business in your industry and area, it will give you an idea of what to expect, and a way in which to measure your performance

 

Goal Setting:

  1. Reflect
  • What worked well in the past year?
  • What improvements would you like to make?
  • What could be made more effective?
  1. Pick a theme
  • Organisation
  • Productivity
  • Profit margins
  • Work life balance
  • Employee satisfaction
  • Work place culture
  1. Create an action list
  • These are the actions required for you to achieve your goal, in regards to both your long term, and short terms goals.
  • What needs to get done in order for you to achieve you goal?
  1. Commit
  • Write it down
  • Check items off a list.
  • Make yourself and your employees accountable to the development and progress of your goal.

 

Don’t forget to break your goal down to more achievable steps, and celebrate the wins.

 

Let’s be SMART about it

 

Specific

What EXACTLY is it that you want to achieve? It’s great to have a topic or a theme, but that then needs to be broken down into exactly what it is and what part of that are you going to achieve.

Eg. To become more organised is a theme, not a specific goal

A specific goal would be to have all of your meetings scheduled in your diary and calendar at least a week in advance.

 

Measurable

In order to see progress, we need to be able to measure it. This could be in amount of hours, weeks, costs, complaints, reviews etc. Otherwise one person’s definition of achieving it can be different to that of another’s.

 

Attainable

Now let’s get some perspective. Let’s make sure that we can actually achieve the goals we set. I mean let’s be real, if my goal was to be Iron Man, welllllllll, the probability of me being able to attain that goal probably isn’t going to be all that high.

 

Relevant

Again, why would I make my goal wanting to be Iron Man when I work in finance? Whilst it would be pretty damn cool, is it relevant to me, my business and improving it? Maybe not.

 

Time-Based`

Have a date. Make yourself accountable. Stay on track to achieving your goal and achieving it by the set date. Are the steps to your goal being met by the specified time? If not either your efficiency or dates need to be re-assed. Understand why you’re not reaching these short terms goals in time and how to fix it.

 

To set an effective goal takes time. And it takes effort to monitor it, however monitoring it allows you to continuously asses the productivity of your business, and at the end of the day to reach your long term goal you need to be meeting and smashing out these short term ones.

 

Re-asses, re-evaluate, reveal in the reward.

 

TAKE THE FIRST STEP AND ACCESS A FREE BUSINESS GOAL SETTING TEMPLATE, CLICK HERE!

 

KICK-START the New Financial Year!

KICKSTART the New Financial Year!

Our top 10 steps to make the most of this financial year, and how to start off on the right foot.

 

For a lot of businesses, the end of the financial year means they’ve handed over all of their financials (or about to) to their accountant and have left them to it.

Well I hate to be the bearer of bad news, but your job doesn’t end there. Take advantage of the new financial year, and get on top of your business. By starting to plan for the end of the financial year, at the start, you can ensure that you are going to be taking advantage of all the opportunities this year has to offer! Make your business flourish, and make improvements from the previous year. It may sound long and boring, but it’s totally worth it. Now let’s get this stuff done!

 

  1. Review your business strategy

This will allow you to identify areas for improvement. An overall look at the business to see what can be made more efficient, or if processes need to be changed. Is this strategy going to lead you and your business to where you want to be? Is it still effective? Decide and then move forward.

 

  1. Review your business plan

Did you achieve the previous year’s goals? This can be financially related, customer or employee satisfaction related, product quality or efficiency, brand management and reputation etc. By analysing these goals you can establish whether or not they were met, and if not, why not? This can then put you on a path to discovering what needs to change, and implementing this change.

 

  1. Goal setting

The answers to the above questions become the basis for your goal setting. You need to understand what it is you would like to achieve this coming year. And this means writing it down! This allows you to develop a new business strategy that will work towards achieving these goals and objectives.

 

  1. Review your business structure

Does your current structure meet the requirements of your businesses present or foreseeable needs? Is expansion a possibility? Why we ask these questions and why you need to come up with an answer, is because if a re-structure is required, then different compliance and taxation regulations may be applied.

 

  1. Review your finances

Establish if you are meeting your targets, and if not understand why. Is it through material/manufacturing costs, labour costs, efficiency, not meeting sales targets or does the price point needs to be adjusted? Find out what room you have to move and where, and then proceed accordingly.

 

  1. Review your insurance

It’s such an important part of running a business, from small to large and everywhere in between. Whilst there are legal obligations, it’s also important to do a risk assessment and look at other potential risks to the safety of your employees and your business. This review should be taken out not only to protect yourself, but to also make sure you are fulfilling your legal requirements.

 

  1. Asset protection

Speaking of legalities, your assets are what you’ve acquired with all your hard earned time and money, so make sure you look after them, and making sure their value is registered. If you’re unsure about how to go about it, the best thing is to speak to a professional. They know what they’re talking about.

 

  1. Establish a budget

Now that you know what you want to achieve, what improvements you would like to make, and how to go about it, you need to budget. I know it’s the scary B word, but it’s important and if you stick to it, it works! By knowing just how much you are going to commit to which areas of your business, you can put both you and your business in a much more stable financial position for the future.

 

  1. Use financial management tools

Trust me, they will make your life a lot easier, and make your finances a lot easier to manage as well. Cloud accounting software such as Xero keeps everything in one place. By starting to use these systems from the beginning of the financial year, come tax time for the following year, it will make both yours and your accountants lives a lot easier. Xero stores your documents and receipts meaning that everything is there for you when you want it, no wasting your time searching for it all. Time which you could spend any other way you would like (early knock off to the pub anyone?). It also allows you to create and send quotes and invoices and keep track of debtor payments. It also has all traditional payroll functions, such as the ability to file new employee details directly with the ATO, automatically pay Superannuation and allow employees to enter their timesheets.

 

  1. Manage and review your superannuation

Because after all, we’re not all going to work forever right? Knowing what kind of condition your super is in can allow you to take action, and get advice to improve the situation. Even if it’s already in great condition, it can always be better right? I mean think of the size of the caravan you can get to travel across Australia in. Talking to professionals will also help you to establish as a business owner what kind of opportunities this may present you with. It’s worth a look isn’t it?

 

 

And here’s a bonus tip (mainly because the list looks so much better finishing at 10 rather then 11), back it on up! Get all those important files backed up, and store it off site. We talk about insurance as a precaution, well here’s another one for you. If you have insurance as a ‘just in case’, then why not back up your files for the same ‘just in case’ as well. Because if that ‘just in case’ became a, ‘thank god I did’ then you are going to be very thankful indeed that you chose to backup, because imagine the paperwork then!

 

 

So follow all or even at least some of these steps, to get in shape for the new financial year! Financial stability gives you the ability to plan and execute, and grow and improve. It allows you to know the direction that your business is heading in, and make sure it’s the right one!

You don’t want to be another year behind, so get sorted and get started!

 

July 1st Changes

With the New Financial Year upon us, it’s time to have a look at just what it is that’s happening.

With quite a few tax breaks for business, it’s a great time to find out what you can take advantage of!

 

Tax cuts

For those of you earning more than $87,000 per annum, then you’ll be happy as the government have increased the threshold of the 32.5 per cent tax bracket to $90,000. There are also rebates that will come in for people earning up to $125,000 a year.

There are also tax breaks for the low to middle incomes earners, who can receive tax back for the 2018/19 financial year between $200 and $530 depending on their earnings.

There’s also a little something in there for big business. Companies with an annual turnover between $25 million and $50 million will pay a lower corporate tax to the amount of 27.5%, down from 30%.

Regional Victorian businesses will also find they will receive a payroll tax cut bringing their rate down to 2.425%, from 3.65% to help encourage and boost the regional industries.

 

Wage changes

The Fair Work commission have announced a 3.5% increase to the minimum wage. This will make the weekly minimum wage $719.20 and the minimum hourly rate $18.93. This equates to a rise of $24.30 a week for minimum wage workers.

Alongside this however we see cuts to Sunday penalty rates for the fast food, hospitality, retail and pharmaceutical industries. It is the part time and full time employees that will get hit the hardest from this, with cuts between 10%-15% occurring. Casual employees remain almost unaffected, except in the retail sector where their penalty rates drop by an extra 5%.

 

GST

Overseas retailers that are selling goods under the price of $1,000 are now subject to GST.

This means at this stage we say goodbye to ordering off the U.S Amazon site, as they no longer deliver to Australian addresses, and instead will re-direct you to their newly founded Australian version.

In regards to housing and real estate, the purchasers of newly constructed residential property, land or subdivisions must now withhold the amount of the GST from the contract price. Whilst the amount of GST will not change they will now have to pay the amount directly to the ATO.

 

Child Care Subsidy

The Child Care Subsidy will replace the current Child Care Benefit and Child Care Rebate.

The lowest income families (under $66,958) will be paid the most, with 85% of their child care costs being covered. This then tappers down as the income increases. If a family earns more than $351,248 they will not receive a subsidy, with the lowest rate being 20%.

The cap that was previously in place has now been removed for families earning less than $186,000, and lifted from a $7,600 cap to $10,000 for families earning between $186,000 and $351,000 a year.

Eligibility requirements still remain.

 

Plastic Bags

Whilst Victoria have only just began to see the plastic bag ban introduced into major shops such as Woolworths and Coles, across the nation more bans are being seen to be put in place. Queensland and Western Australia will ban the use of single use, light weight plastic bags from major retailers, following in the steps of the ACT and Tasmania.

 

So welcome to the new year and best of luck!

For advice on how to make the most of it, stay tuned to our next blog!

 

7 Reasons why your bookkeeper is your business’ best friend!

  1. Expertise – Now we’ve all heard of a ‘jack of all trades’, knows a bit of everything, is an expert in nothing, well why would you not hire an expert of their field. They know their numbers and they know them well. Because of this expertise they have when it comes to recording and managing your finances it consequently makes you look good right? Along with all of the advice they can give you regarding paying off debts and probability of future investment. Besides who doesn’t love a friend that does stuff for you?

office-pen-calculator-computation-163032 matrix-3109378_12802. Peace of mind for all you busy business men and women out there, from large to small and everywhere in between there is a lot going on in your mind. Even as you read through this you are thinking of that never ending list that continues to demand your attention. Well the beauty of a bookkeeper? There is one, very large box that can be ticked off on that weekly to do list for you!

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  1. Clarity – it’s realising that for the last 20 years you’ve needed glasses and you FINALLY get them and everything once again becomes clear. You know your books are up to date with everything recorded and in the one place and not strewn everywhere. It no longer becomes a maze or as difficult to navigate like Sydney, yet more similar to Melbourne, straight, easy and direct.

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  1. Because of the money of course! Taking the stress out of making sure everybody is paid on time. And oh the weight that is lifted off your shoulders knowing full well that it is taken care of by people who LOVE to be organised! Everybody has a thing and numbers and organisation is theirs! For some of your employees it is really important that they can rely on their pay to be processed on particular days, therefore knowing they get paid on time ALL the time makes them happy with you! Because we all know disgruntled employees do not make it an easy or happy workplace

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  1. The dreaded tax time. That knock on the door from the tax man. A time of year, unlike those part-time uni students and Foxtel (who love their annoying EOFYS ads), the rest of us tend to fear. Just imagine that feeling of being stress free as you hear all these ads bombard you TV and radio, knowing the only thing that concerns you at this time of year is when to get your Foxtel installed.
  1. KPI’s. Targets. Objectives. Accurate books in combination with your new best friend makes for the best tools to measure your finances. Used to compare to your goals and objectives of your business to have an understanding of how financially successful your business has been over a period of time. Your bookkeeper can provide clear numbers of all transitions, making it a simple task to compare inputs to outputs and easier to make predictions regarding the financial future of your business.

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  1. Because who wouldn’t love another best friend!

LET US MAKE YOUR LIFE EASIER!

Call Superior Accounting to make your life less stressful, and leave your books in the hand of experts.

Let us show you what best friends are made of!

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The Bit Coin Breakdown

Bit Coin

Because why have a whole coin when you have a ‘bit’ of it?

So for those of you out there who may have been living under a rock and have never heard of the term ‘Bit Coin’, or simply have no clue what it is, I’m here to help.

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Bit Coin is the world’s first decentralized cryptocurrency.

But if you’re like me and that sentence just confused you more, lets break that down a little.

So cryptocurrency isn’t a bank, cryptocurrency is an exchange.

It refers to the digital information that is exchanged in return for goods and services.

You remain anonymous. You are nominated an address, but when we say address we actually mean close to 30 characters that is you.

Its global, none of this snail mail. Location is no problem.

They say that the public key cryptography system they use to secure your information is more secure than Fort Knox, but if any of you have ever seen Die Hard with a Vengeance (debatably the best of the Die Hard franchise, I dare you to convince me otherwise) then I don’t know whether you’d call it impossible, (just ask Tom Cruise). But only you have the key. You as the owner of the private key of your address can send cryptocurrency.

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Bit Coin is only one of many different types of Cryptocurrency’s around on the big bad web. But it’s free for the taking, anybody can download it and start using it to exchange cryptocurrencies.

Once it’s gone its gone. Just like that text message you send to the wrong person. Once a transaction is confirmed there’s nothing anybody can do to save you. Not even Bruce Willis. And that says a lot.

The decentralised part of this cryptocurrency becomes important when we look at making international deals. There’s no fuss in regards to working out exchange rates and extra charges. Not to mention those pesky politicians don’t have a say in it. No interference on their part, no crazy hiking of interest rates. It’s independent and transparent.

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The block chain is what Bit Coin uses to store and track its transactions – a digital ledger of transactions if you will. It distributes digital information without copying it. No one single body can control it, and everyone can edit it. It’s your cryptographic key that keeps you safe! The block chain is like your wallet, and with it being decentralised you are the only one in charge of your funds.

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Talk about a big database! It continually updates and is completely public. There is no central information to target to get access. It’s allowing all parties to view and edit the transaction without locking anything.

So what do you think?

Is it worth the investment?

Is this the way of the future?

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5 simple tips on how to save your money!

Here are some simple tips on how you can manage your money and achieve your financial goals.

  • Learn how to cope with stress without spending

You’re not alone, many of us spend more in stressful periods of our life! This may temporarily cause you to relax and focus on something else for a short period of time, however it doesn’t relieve stress in the long term. We know that reducing your stress levels is easier said than done, however little effort can be used in relieving your stress. Try starting a new hobby, research breathing techniques and in serious cases talk to a professional.

  • Say no to peer pressure

Don’t spend money that you don’t have just because the people around you are! A simple yet hardly completed task by most of us involves bringing your lunch to work, yes eating out can be a tastier and easier, buts it’s not the best option for your wallet. Always remember it’s okay to eat out and have fun here and there but if you’re struggling with money it’s okay to say no to an expensive night out and going out for lunch. If you find it hard to believe that eating out is causing you to be in a bad financial position, keep your receipts and add up the costs at the end of the week so you can find out how much one meal a day is really costing you.

Unfortunately now we will be getting into the serious stuff, as saving money can be a little more time consuming than just completing the above.

  • Make a budget

Look through receipts and bank statements to identify all your regular expenses and then deduct these from your income. Once you see the amount that you are actually left with after being paid, you will have a better understanding of how well you are doing financially. With the money that’s left over after you pay your bills, home loan etc. give yourself a goal of what you need to save each time as your pay check comes in, and transfer this amount into your savings. And always remember, don’t take this money out of your savings account unless it is absolutely necessary! After all it’s called your savings for a reason.

  • Don’t let your credit card control you!

Australia’s credit card debt is around $32 billion, and the interest you pay on these cards isn’t getting this number any lower. Rather than give you the obvious tip which is reducing the amount of purchases you make on your credit card, which we know is very difficult! Set up direct bank account and start paying of that debt, the quicker you pay it off the more at ease you will be and the less interest you will have to pay in the future.

  • Set goals for yourself!

Tell yourself that by the end of the year you want to have saved enough to a buy a new car, a house or even to be debt free from your credit card. Stick it on your wall or in your diary, basically anywhere that is visible to you because let’s be honest sticking to a budget isn’t easy and there will always be temptations out there. So it’s important to focus on that end goal!

Remember goals must be SMART!

Be Specific! Why do you want to save that specific amount and how you will save that amount?

Make sure your goal is Measurable! It’s as simple as attaching a number to your goal.

This flows through to ensuring your goals are Achievable! After having a look at your budget set a reasonable amount of what you want to save.

Are your goals Relevant! These are your financial goals, they should fit into your long term plan take your circumstances into consideration, such as if you are a caregiver or parent or soon to become one. It’s very important to be financially prepared for anything.

And lastly make sure your goal is Timely! Have an exact date of when you want to achieve your goal.

Thanks for reading!

 

 

 

 

 

7 signs of a good accountant

Communication 

It’s obvious when someone is handling your money you need to stay in the loop! A basic but tedious task for some but not all accountants, is answering their clients questions no matter how basic or long they are. A good accountant will not only ensure that they answer your queries within a short amount of time, they will also keep an eye out on your business and check on you to ensure all the questions and worries you might have are solved.

Strategic Planning

A reliable accountant will be one that keeps track of your financial position throughout the year.

You yourself may be one of those people that leave things to the last minute when it comes to lodging your tax return or other financial information, but that shouldn’t be your accountant. Think about it that’s someone you’re paying to be on top of your finances which means they need to be organised and on top of things!

Passing down key knowledge to you

Many of us never really learnt how to effectively budget, there was never an exam for it so it never really was on the top of our ‘to do’ list. However, this is an essential skill for everyone not only business owners. As someone who pays an accountant to aid in your business’s finances, it is expected of your accountant that they teach you and work together with you on how to develop an effective budget.

Keeping up with the times!

From time to time tax laws change and new and effective ways of using financial information are developed, for example we at Superior Accounting Group adopted the cloud some time ago so we could improve our service for our clients. So, in saying this you should expect that your accountants are proactive in keeping up to date with the latest laws and technology.

Time management pro

Meeting deadlines is imperative in the accounting world, they not only have to meet your deadlines as a client but your accountant also must abide by the deadlines set out by the ATO.

Trust

Focusing on getting a ‘smart’ accountant can often lead to forgetting the importance of choosing an accountant that is trust worthy. After all they are dealing with your money! Like any good relationship having trust is vital.

Proactive 

There will always be better ways of completing tasks and an accountant that thinks outside of the box will ensure that they are continually coming up with new solutions to the everlasting problems you face.

Thanks for reading!

 

Thinking about expanding your child’s investment knowledge?

Saving money is great and teaches teens important traits such as self-control, responsibility and independence. However, in this day and age where there is so much opportunity to make good and bad investment decisions online and offline the key to a successful financial future depends on one’s ability to ‘grow their money’.

Forbes magazine found that children are more than capable of understanding investing concepts.

One tip in particular which is quite a simple one is to speak their language! Investing can be tricky in itself so there’s no need to over complicate it, start basic and build their knowledge from there. This can be done by using simple and current topics, for example, explain how and why the same house valued 15 years ago is worth much more now, these basic steps can be a building block for a wealth of knowledge anyone can acquire.

A good way to motivate children is to explain the difference between saving and investing, we all know that the interest you earn in your bank account is not much compared to your potential earnings through investments. However, it is also very important to address the risks and costs associated with any investment and that thorough research and planning is vital before investing.

Although the above information mentioned does sound a bit technical it is necessary, but it’s also important to make investing sound fun! This can be done by through games that are concerned with the stock market, these games can be downloaded on your phone and computer.

Even though these are just a few ideas, there really is no harm in introducing this topic to your children. There’s a world full of knowledge, get kids to embrace it!

Thanks for reading!