Developing a positive and productive business culture

Business culture is not often acknowledged in our everyday conversations. Rather, it is ingrained in our daily workplace habits and routines.

Business culture is usually fostered by senior management to employees through communication styles, workplace structure and environment, as well as employee responsibilities and expectations. Businesses with a healthy culture usually benefit from high levels of productivity and employee satisfaction. Some characteristics of strong workplace cultures include:

Communication at the forefront
Strong communication skills are necessary to develop a healthy business culture. Good communication often results in efficient and effective work, relationship building and decreased task ambiguity, leading to higher performance levels. Honest and clear directions can provide employees with greater task clarity and overall expectations to consider.

Strong diversification of employee qualities
A diverse team can offer a range of perspectives and attitudes towards areas such as problem-solving, decision-making and approaches to creativity and innovation. Although sharing similar viewpoints is important to maintain vision; incorporating differing personalities helps to develop a culture that is open to new ideas and hence greater innovation.

Advocacy of employee feedback
Listening to the opinions and needs of staff can help generate a positive and highly productive workplace. Using two-way feedback is a great way to involve the employees opinions, gaining further insight into what is and isn’t working. Employee involvement leads to healthy workplace culture and higher chances of long-term employee retainment.

Shares vs property in SMSFs

Shares and property are two very good investment options for those with a self-managed super fund. However, since they both have very different attributes, choosing the one that will achieve the best outcome for an SMSF depends on what the trustee wants to achieve.

The advantages of investing in property include:

• property prices are negotiable

• undercapitalised properties can be renovated for profit

• property prices are less volatile since it can take months to advertise, sell and settle a property purchase in Australia.

However, returns from property rentals are usually low due to factors such as land tax, utilities and rates, maintenance and tenancy vacancies.

Shares are more liquid, dynamic and volatile than property. Maintaining a portfolio of quality shares that pay tax-effective dividends may be a good way to fund retirement. With the right portfolio allocation, shares also have the potential to provide a better, stronger income than property rentals, as long as that income is sustainable and increasing.

Property can generally be used as a wealth-creation tool, while shares can create a reliable retirement income. For those who can afford it, it may be a good idea to invest and diversify in both. For those who remain unsure about which investment option to pick, seeking financial advice may the best option.

Avoiding tax scams

If a tax refund or promise sounds too good to be true, then it probably is. Tax scams can take many forms, such as false emails and text messages, but phone scams are the number one threat in Australia.

Phone scammers usually impersonate an ATO employee and tell the receiver that they owe a tax debt. The scammers may intimidate or threaten the receiver with severe penalties if they don’t pay.

Some scammers will even try to go beyond stealing your money, and will try to steal your identity instead. These scammers are more interested in accessing personal identification data, such as a person’s tax file number, bank account details, drivers licence, or passport number.

The scammer can then use these private details to lodge fake tax returns and keep the refunds for themselves or claim government benefits while pretending to be that person.

Individuals can protect themselves from such scams by simply being aware of what the tax office does to collect information from taxpayers.

The ATO will never ask for an individual’s confidential details or threaten a person over the phone.  The ATO will also never send text messages and emails asking you to enter personal details online.

However, if a call, email or text message seems genuine, it is best to contact the ATO to check whether the correspondence is valid and true.

Interview questions to find the perfect employee

Picking the wrong employee after a long interview process ultimately results in wasted time and lost money for a business.

To avoid this kind of situation, below are three kinds of questions employers should consider asking during the interviewing process to help identify and distinguish the best person for the job amongst a range of potential candidates.

Fact-based questions
These questions helps the interviewer confirm whether or not the potential candidate has the skills required for the job, as well as provide information that can be cross-checked against their resume to verify accuracy. Some fact-based questions include:

• How long did you work for at your last job?

• How long have you worked in the industry?

• What university did you go to?

Situational questions
These questions are a bit different to the fact-based questions. While fact-based questions provide the interviewer with valuable information, they don’t provide any insight into how the candidate would handle situations that may arise in the business. Some situational questions include:

• You’ve received a call from a customer who claims that she hasn’t received her shipment, even though the business confirms it was delivered. What do you do?

• A customer has posted a negative review to the business’s Facebook page. Since you are in charge of responding, how would you reply?

Behavioral questions
Knowing how a person behaves will help determine whether or not they will work well with others and be a good fit for a business. A person’s past behavior also tends to be an accurate predictor of how they will act and react to situations in the future. Some behavioural questions include:

• Tell me about how you handled working with a colleague who was different from you or difficult to work with?

• Tell me about a time when you received criticism and how you reacted to it.

Questions to ask before applying for a bank loan

The majority of businesses, whether they are only just starting up or have been in the market for a number of years, will need a bank loan at one time or another. However, actually applying for a bank loan requires more than just filling out the paperwork.

Here are some questions business owners should ask themselves before beginning their bank loan application:

Is it probable that I will qualify for the loan?
If you believe that your business won’t qualify for a bank loan, then you will only hurt your credit rating if you apply for a loan you won’t get. Being rejected for a loan can also make it more difficult for a business to borrow in the future.

Will the loan help the business grow?
Instead of using the loan for aspects like routine operating expenses that don’t generate much revenue, owners should consider putting the borrowed money into parts of the business that will generate more revenue and help reduce future borrowing needs.

Are my personal finances in order?
Until a business reaches a substantial size, many banks will rely heavily on the owner’s personal financial statements and credit scores to determine the business’s creditworthiness. This may involve bankers looking at an owner’s personal information like student loans, personal credit card debt and mortgage payments.

Do I have adequate documentation for the loan?
When applying for a business loan, you will need a lot of documentation. Requesting a loan when an owner is not fully prepared makes the business look unprofessional.

Do I have adequate cash flow to repay the loan?
When a business owner applies for a loan, their banker will require the owner’s estimated financial projections for the business. It is important for owners to include their debt repayment plan in those projections.

SMSFs: Getting SuperStream right

Although the new SuperStream standard for superannuation payments can provide SMSF trustees with a number of benefits, around five per cent of SMSFs fail to comply with the SuperStream requirements.

Under the new SuperStream system, a non-related employer must send superannuation contributions to an SMSF electronically, using an electronic service address (ESA). For this to happen, an SMSF must first be registered with a messaging provider to obtain an ESA.

One an SMSF has been registered, the messaging provider will link the SMSF to an ESA. The employer cannot send SuperStream contributions electronically to the SMSF until this is done.

It is important that SMSF trustees check with the service provider that their ESA is active and is linked to their SMSF. If the ESA is inactive, the super contributions submitted by the employer will be rejected. SMSF trustees must also ensure that their employer has their Australian Business Number and bank account details. Employers who do not have this mandatory information may accidentally direct the employee’s super contributions to a default super fund, instead of to the employee’s SMSF.

The new SuperStream system helps ensure that employer contributions are paid in a consistent, timely and efficient manner to member accounts. It also provides a reliable flow of payments and information on contributions and achieves fewer data and payment errors due to the better integration of employers’ payroll systems.

Avoid these common tax mistakes

Many small businesses fail each year simply because they don’t plan or dedicate enough time to taking care of their taxation responsibilities.

Bad habits, such as putting obligations like GST, payroll tax and super guarantee contributions on hold are often the biggest contributors to a business’s financial downfall.

Below are three common tax mistakes that can limit a business’s chance of success that should be avoided at all costs:

Failing to keep good records
Keeping good records increases the chances of maintaining good business. Neglecting to record or keep track of business costs and therefore, relying on estimations means it is more likely a business will miss out on valuable tax claims.

Not paying the superannuation guarantee
Businesses who want to avoid harsh penalties from the ATO must ensure that their employees are paid superannuation when it needs to be paid. Unfortunately, many businesses put off making superannuation guarantee payments when cash flow becomes an issue.

Not keeping track of tax law changes
Not following tax law closely means a business is more than likely to miss important changes that affect them. Changes to payroll tax rates, for example, are important for business owners to be aware of since they may need to withhold more to cover any rate increases. Failure to keep correct books usually results in hefty tax fines.

Tax implications for overseas workers

Australians who work overseas for an extended period of time should be wary of the tax implications that can arise from taking up such offshore opportunities.

The tax residency status of an Australian who move overseas for employment plays a key role in determining how much tax that person is required to pay in Australia.

Individuals who are “residents” of Australia for Australian tax purposes are taxed on both their Australian sourced and worldwide income. Individuals who are classified as “non-residents” are taxed only on their Australian-sourced income. Non-residential individuals are also ineligible for the $18,200 tax-free threshold, and therefore, all of their assessable income is taxed from the very first dollar.

Foreign employment income is any income that an individual receives from working outside Australia. It includes any salary, wages, commissions, bonuses or allowances. For Australian tax residents, this foreign employment income is taxable in Australia and must be included in an Australian tax return.

However, individuals who pay tax on that employment income overseas can claim the foreign tax as ‘credit’ against their Australian tax obligations. To make this claim, an individual must pay (or be believed to have paid) the foreign income tax, and the foreign income tax must be included in their assessable income for Australian income tax purposes.

Non-residents only need to submit an income tax return if they receive Australian-sourced income. However, there is no need to lodge a return if the only Australian-source income received is interest, dividends or royalties that have had the correct amount of non-resident withholding tax deducted and remitted.

Top five benefits of using social media

While many continue to embrace social media in their online marketing strategies, there are still a number of businesses who remain wary of using such a vehicle for networking or marketing purposes.

Social media is has become a fundamental element of online marketing. It can make other online marketing systems work more effectively while also boosting a business’s reputation and visibility.

If your business hasn’t integrated social media into your online marketing strategies, here are five benefits of using social media to help convince you otherwise.

It is an online version of networking
Social media has ultimately created a new way to connect with other industry professionals and customers (both potential and current). Businesses who use social media as a networking tool can achieve much of the same goals a business may aim for with networking in-person minus the restrictions of schedule, geography or travel arrangements and costs.

People use social media before making a purchase
The way potential customers now learn about a business before making a commitment to that business is seeking information from online sources of information, which includes social media platforms. For businesses to remain relevant and competitive, they need to go where potential customers seek information, which ultimately means participating on social media.

It helps deliver business content to a wider audience
Social media provides an easy and cheap way to promote your business’s online content to a larger audience. An additional benefit is that if a business publishes content that their target audience finds relevant and helpful, the audience is likely to share it with their own network, which in turn can attract new visitors to the business’s online profile.

It can drive traffic to a business’s website
Social media can be a significant source of traffic to a business’s website. With so many people using social media, new visitors may discover a business through the content the business publishes on social media, or any conversations they are participating in on a social platform. And if new visitors like what they see on your social platforms, they are likely to visit your website to find out more.

It can influence SEO
While social media isn’t a known factor in Google’s algorithm, sharing business content with a wide audience through social media creates opportunities for people to link to and engage with a business’s content. Links contribute to a business’s website page ranking, and social media can help this factor by connecting more people to business content and signaling to search engines, like Google, that the content is relevant.

Navigating through a crisis

No matter how hard a business works to avoid them, disasters can happen. When it comes to managing them, some businesses may simply bury their heads in the sand and hope that nothing bad will happen.

However, it is crucial that businesses are able to steer themselves through a crisis and be able to come out on top. Here’s a brief guide on how to to this:

Look and listen
Regularly reviewing your business’s environment and listening to what employees, customers and clients say about the business will help keep owners in the loop regarding their business’s internal and external systems. This can help identify and solve problems or consequences before they intensify.

Create an action plan
Preparation alone does not guarantee crisis prevention. Creating a crisis action plan can help address possible crisis scenarios, how situations might evolve and identify a business’s response options.

Choose a crisis management team
Businesses can address problems early if they have a team ready to respond when disaster strikes. These people should be responsible for gathering information to define any underlying problems or assess who the crisis will affect.

Notify people
One of the worst things a person can do during a crisis is to keep their stakeholders in the dark. Putting off communicating with others will only contribute to growing speculation or even imply that an owner is unable to control the situation. The quicker the response time, the better.

Remain accountable
If a crisis is a result of your fault, it is best to assume full responsibility for your actions, apologise and provide corrective initiatives. While crises may damage your image in the short-term, acknowledging that you are at fault and fixing the problem shows that have your business’s and customers’ best interests at heart.