From Craig’s desk

Happy New Year and welcome to 2023.

The Team at Vault have returned refreshed and looking forward to helping you in 2023. For me it was a 6,500km roadtrip through the Outback, ending up in Adelaide before meandering through villages stuck in time in outback NSW. Having completed the trip during the 2019 bushfires and drought, to see roads closed due to flooding was an incredible experience.

We have events starting this week and the calendar for the of the quarter has been released here.

2023 has started with a flourish as we have added another three team members, Valerie and Mark have joined Vault Accountants and Business Advisors and Adam has joined Vault Financial Group. Valerie joins the Brisbane Team and will be working closely with me, Mark is joining the offshore accounting team. Adam has also joined the financial planning team and will be working with Craig.

Our good friend Jim Bryant has retired and his firm will be merging into Vault. Jim has been in practice for the last forty years, and we welcome Valerie into the Vault team.

As we continue to develop our team we are proud to have promoted Len to our Bookkeeping Team Leader. Our offshore Team is continuing to develop and we have two trips planned for the year ahead.

We have moved into our new city office at Lobby 1 Level 2 Gasworks/76 Skyring Terrace, Newstead QLD 4006, sharing with three other businesses, we will retaining the Newstead visiting office. We have also opened our new office at Suite 4, 79-81 Otho Street Inverell.  Feel free to drop into the office for a coffee and a chat.

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During our review in November and December we identified that it would be helpful to be able to contact our team via a dedicated chat facility, during January and February we will be testing the system with a rollout in March, when you will be able to directly chat with the Team in real time. The chatbot facility will operate in parallel with our normal communication mechanisms, you are still welcome to call the office or use email. The chatbot will be available both by computer and mobile devices. Each of our Team Members will have a dedicated chatbot, as well as a Team chatbot for when they are unavailable. We will be beta testing the system over the next two months, and welcome any feedback.

We look forward to assisting you in 2023 and as always we are here to help.

sOur First Quarter Events

Tax Planning Tips for 2023 – Individuals

We are in the run up into the 2023 financial year so now is the time to plan for your return and maximising your refund. As always we recommend making sure that the expense is a valid deduction and that you are not spending simply to claim.

As always make sure you keep your receipts.

Some simple things to remember;

You can’t double claim! If your employer has reimbursed you for an expense, they are claiming the deduction, not you.

Keep receipts. A photo is sufficient and it is good to get in the habit of always taking a photo of your receipt at the time of purchase.

Not everything is claimable. Just because it might be related to work does not mean it is claimable, it’s always worth checking.

Working from Home. You’ll need to keep a diary to demonstrate the time that you have been working from home during the year. If there is a work policy or agreement this may also be sufficient to claim it.

Motor Vehicles. You need a logbook, there are plenty of tracking apps available, so make sure you do it.

Self education. Is a lot more refined and needs to be directly related to your current employment. Undertaking study for a future career is not going to cut it.

Income protection can be a problem. The ownership of the income protection policy is critical and if you hold it via superannuation you are unlikely to be able to claim the premiums as an expense. 

Don’t buy a tax refund! We have assisted a lot of people who “invested” into tax structures and we are seeing a lot more arise as tax season starts off. Look at the underlying structure before deciding if the tax refund is work it.

Can I claim it? Not everything is claimable, and whatever you do don’t get your advice from a taxi or uber driver, a BBQ or a workmate.

What records do I need to keep? As many as possible, use your phone to take a photo to make sure you don’t lose the receipt.

I’ve lost my receipts, what can I do? We can work with you to ensure that we can prove a claim, depending on the claim some things can be proved into other ways.

We will start rolling out our 2023 portal for uploading your return details. You’ll receive an email in March or April with your 2023 tax link.

The legacy of Buy Now Pay Later

See it, love it, buy it now… pay for it later. The catchcry of the industry.

With the difficulties facing the Buy Now Pay Later (BNPL) industry we are starting to see the first round of impacts for personal lending.

BNPL can impact your credit rating. A little understood consequence of a BNPL facility is that it has an adverse impact on your credit rating and can be a concern for a lender. This is especially the case for first home buyers where the lender may be looking closer at your borrowing history and your ability to manage debt. Where you have more than one BNPL facility it can be the difference between getting a home loan or not.

BNPL is a credit product. It is often misunderstood that there is a credit assessment at the time that you obtain a product, if you end up with multiple products, this is often a red flag to a future lender. It is especially the case if you are juggling multiple facilities.

Understanding the long term impact of using BNPL as a core part of your financial and cash flow is critical, and if you are thinking of buying a home or changing your mortgage make sure that the BNPL is not part of your financial landscape.

If you need some help with budgeting we are running a session in March covering the Basics of Budgeting, this session is interactive and will cover all aspects of making a personal budget and how to make it achievable.

Business Check List

As we start the new year, now is the best time to check how your business is doing and where you are sitting. As the business conditions for 2023 look to continue to be challenging, a quick business health check may be the thing to help you refine your business.

Your business should be able to give you the three freedoms, time, mind and financial freedom, if they are not it’s time to talk.

Do you understand your market?

A first step for all business owners should be to understand your market and determine if things are changing. Take a step away from your business and have a look at what others are doing, whether good or bad, understanding the competition is a great start.

January is a great time to explore pricing, product mix and what you are offering consumers.

What are the changes your business will face?

Covid was something out of a science fiction text but practically what it did for businesses was help them adapt. With 2023 already here what are some of the changes that your business will face and how will you best ensure that handle these changes. Some things to check include;

• Available staffing
• Technology changes
• Availability of supplies
• Equipment and access to replacement parts.

How is your business operating?

Business efficiency is critical and rarely is this just a cost saving process. Finding technology that assists you to better run your business is critical. Have a look at what products are available and how they can assist you run a better business.

Use the time to ask your staff how things are going, look at your systems and processes and see if there are changes that can be made.

We spend a lot of time exploring product and service lines to make sure that they are viable for a business, some times being smaller can be more profitable.

How are your finances?

Now is the time to run your margins and make a budget. A budget is not a static document and should be reviewed on a regular basis. Look at your cash flow at the same time and understand where you stand financially.

In Xero there are a lot of underutilised tools, if you want to explore some of the modelling software reach out to to the team to find out what is available.

What’s your marketing plan?

Are you growing, static or declining and where do you want to be. There is no right or wrong aspect to marketing, but understanding it is critical. Have a look at what is happening in your marketplace and make sure that you are not being left behind.

Need some help, our complimentary client review is for you!

If you want to understand where your business is sitting we offer a complimentary review meeting, this session will have a look at your cash flow, where your business is tracking and what are some opportunities for simple wins.

Why we developed this service.

It’s extremely important to work on your business, not just in it.  Taking time out to discuss what’s happening in your business is essential to give you clarity about your future and vision to enable us to support you in the most appropriate ways.

A Complimentary Client Review is an ideal opportunity to meet us on a complimentary, obligation free basis to discuss any of the following:

• Your goals for your business and how you plan to achieve them
• How your business goals tie in with your personal and lifestyle goals
• Issues and challenges you’re facing in your business, e.g. growth, profitability, cashflow, succession, etc.
• How you can work with us to address these

Who should have a review?

If you want to improve your business performance and financial results, and minimise any risk in your investments, schedule a Complimentary Client Review.  We’re not just advisors on your rear-facing tax matters – we want to help you achieve your future business goals.

We’ll review and discuss your current situation at no cost.  It’s an opportunity for us to check in with you to ensure that we are giving you all the assistance that you need.  For example, we might be able to help you with some strategies to help you grow and protect your assets or improve your efficiency and effectiveness.

What is involved?

You’ll meet with a senior team member for a 60 minute session, reviewing your current situation and discussing how we can support you to resolve your burning issues.  We will send you a copy of the Meeting Minutes documenting your business and lifestyle goals and all agreed actions.

If required, we will also prepare a proposal for you including upfront prices of our services for any additional support work that we identify during the meeting.

When should I get a review?

We want to stay in touch regularly to ensure your business and personal goals are being met.  We have set aside time for this meeting to happen after your financial statements have been completed.  Of course, you don’t have to wait until then; you can contact us any time to arrange a catch up.

Benefits of a Complimentary Client Review

• Clearly discuss and document your business and lifestyle goals
• Gain clarity of the actions you need to take to achieve your goals
• Stimulate strategic discussion around the current and future direction of your business and investments
• Identify your burning issues, opportunities and challenges so you can respond effectively
• Gain a better understanding of your business
• Access the collective wisdom of our firm
• Assess the current structure of your business
• Potentially identify greater tax efficiencies
• Gain a better understanding of the ways we can support you

Call us now on (07) 3012 6724 or email hello@vaultbusiness.au discuss the preparation of your Complimentary Client Review. For those interested in business planning and what a CCR can do to assist you. We are running an information session on 12 January 2023, click here to join us.

A Spotlight on Restructuring

We have seen an increase in restructuring, it is often described as the dark arts, but restructuring is often the circuit breaker that a struggling business needs to turn things around.

There are two types of restructuring, a legal one, and an illegal one; known as a phoenix.

A traditional restructure is one that has the support of the creditors of the business and is either completed with the assistance of an insolvency profession or through an agreement with creditors without needing insolvency. This process involves firstly understanding the business and why it is in the position that it is, this could be through an event or through business practices that have lead to fundamental financial difficulties.

The review process examines if there is a viable business at the end of the road, this stage is often pretty brutal and at least half of the time it is a better option to shut the doors.

If the approach is to work collaboratively with creditors to find an outcome this is where it can be working with an insolvency practitioner or negotiating directly. A lot depends on the creditors and their willingness to support the business. Often times we find that communication is the key, and where there has been a lack of communication it can be harder to find a resolution that works for everyone.

Finding a commercial outcome is where the dark arts come in, whilst a creditor may be unwilling to initially engage, where there is a long term commercial outcome this might outweigh the alternative (which could be insolvency) or in the case of a landlord a long term vacant site.

No restructure is the same and there are a lot of variables that go into the mix to find a solution. Often times it is a lot of discussion and a bit of magic to find something that everyone is willing to accept.

Want to know more? I am running a session on what a restructure is, how it works and what can go wrong or right in March. If you need to have a chat about your business, my calendar link is here.