QUESTIONS TO ASK YOUR ACCOUNTANT - 10 WEEK SERIES

WEEK 4 - How can I reduce my expenses without adversely affecting my service standard?

Ask yourself - will my business run just as well if I reduce this expense or cut it completely?

Instead of only glancing at the bottom line of the Profit and Loss Statement, regularly review each expense item to maintain control over your spending.

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

 

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

QUESTIONS TO ASK YOUR ACCOUNTANT - 10 WEEK SERIES

WEEK 3 - What is my gross profit (gross margin) and what affects it?

 

Gross profit is the difference between sales income and “cost of sales” expenses. 

 

Aim to increase your gross profit margin by either increasing the selling price or decreasing your cost of sales. What could you do to increase your gross profit margin?

 

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

 

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

 

 



QUESTIONS TO ASK YOUR ACCOUNTANT - 10 WEEK SERIES

WEEK 2 - What is Cost of Goods Sold and what does it include?

 

 

Cost of Goods Sold (COGS) are all costs that can be directly attributed to producing finished goods. COGS is affected by the amount of activity or production during the period and can include direct materials and direct labour costs although will vary between industries.

 

Minimising your COGS where possible will lead to a higher gross profit.

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

QUESTIONS TO ASK YOUR ACCOUNTANT - 10 WEEK SERIES

WEEK 1 - How does my business compare with my competitors?

Benchmarks can be used to provide a comparison of your business against the performance of other businesses in your industry. Benchmarks can assist in highlighting areas that you may be overspending or if your business incomes compare favourably to your competitors. 
 
Ask us about benchmarks relevant to your business!

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

Why am I making profit but have no cash?

 

 

We assist our clients by providing direction in the management of their cash flow - a key factor in the success of a small business.

 

http://myob.com.au/blog/why-am-i-making-profit-but-have-no-cash/

 

 

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

Investment Property Taxation

John is intending to negatively gear the purchase of a residential investment property. The property will be rented out and hopefully achieve some capital growth in the longer term. John has identified a potential property for purchase which is immediately rentable but could do with some work to gain better returns. John would like to ensure the most tax effective outcome of his investment.    Repairs to the property incurred immediately after purchase are considered capital works and must be depreciated. Significant structural changes and improvements can be claimed at a rate of 2.5% per year over 40 years. Costs to repair or maintain the property during the term of the lease can be claimed as an immediate deduction. If John arranged for a Depreciation Schedule from a Quantity Surveyor additional depreciation can be claimed on the chattels of the property.     Property investors can also claim many of the initial costs of investment such as those incurred when drawing up a lease, broker fees, advertising and the like. Certain borrowing costs such as loan establishment fees are generally deducted over 5 years. Other acquisition costs are not claimable as a deduction and must be added to the cost base of the property, these can include legal costs, stamp duty and agent commission. If John takes out a loan to fund the purchase of this property, he can claim deductions for the interest paid in the year the property becomes available to rent. For deductibility purposes, it is imperative that a separate loan is taken out for the investment as compared to redrawing on private finance such as your principal place of residence home loan.    If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation. We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

Life Interests – Testamentary Trusts

A dilemma that many people face is how to provide for their spouse in their will while still ensuring their children receive their inheritance.

For example Joe has three adult children. He separated from their mother 15 years ago. He wishes to leave his assets to his children however wants to provide a home for his second wife Jane. Joe creates a testamentary trust over the home he shares with Jane to hold it for his children whilst granting Jane a life interest allowing her to live in the home for the rest of her life. Followings Joe’s death Jane decides she wants to live closer to her sister and the trust sells the house and buys a new house. There are no Capital Gains Tax (CGT) consequences on this transaction. However on Jane’s death the new house passes to Joe’s children and the transfer will be subject to CGT even if the property is not sold. Had Jane remained in the original home, rollover relief would be available.

The disposal of assets within a testamentary trust should be approached with caution as there may be unintended taxation consequences upon eventual transfer to the beneficiaries. Such outcomes can apply to other assets such as shares and investments as well as physical property.

While there are advantages of creating life interests and testamentary trusts via wills such as the creation of flexibility for the primary beneficiary, protection of assets and potential tax planning benefits, such endeavours should be discussed with legal and tax experts to ensure that the ultimate outcome is understood and planned for.

If you have questions please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 for an initial consultation.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.