Avoiding fake advertising

Any advert that contains misleading information or a statement that is untrue can lead your business into serious legal problems. There are both federal and state laws in place to regulate false advertising, and the penalties can be severe. Businesses can be held responsible for false advertising, regardless of whether or not they were aware that the information they presented was incorrect and/or misleading.

The importance of reference checks

A recent high-profile scandal, involving Myer executive recruit Andrew Flanagan and his fictionalised CV, has drawn attention to the importance of checking the references of prospective employees. Mr. Flanagan was dismissed on his first day after it was revealed that his impressive career history was almost entirely fabricated.

The first step you should take when checking references is to confirm the concrete facts presented on the prospective employee’s resume, for example dates of employment, job title, level of responsibility and level of reporting. Wherever it is possible, you should try to get the referee to give you concrete examples to back up their claims about the employee. It can also be helpful to ask them to provide examples of the employee’s performance and behaviour in stressful situations.You should contact multiple referees whenever possible, and attempt to construct an image of any patterns of behaviour that the prospective employee might display.

Be aware that many referees will be cautious in giving their responses, especially to questions that are primarily subjective. Many people will also be reluctant to devote a significant amount of time to answering your questions, so you should carefully consider which questions are the most crucial to shaping your opinion, and be time efficient in the way you present them.

Warning issued over tax avoidance schemes

The ATO has recently advised taxpayers to seek a second opinion on before entering into any tax avoidance schemes.

According to the ATO tax avoidance schemes are designed to appear legitimate, even to savvy investors. In particular taxpayers should be wary of complex financing schemes that rely heavily upon round robin financing schemes and non-recourse loans. Essentially, if the scheme involves reducing you’re your taxable income by declaring deductions that you are not entitled to, it is likely to be illegal.

If a provider tries to dissuade you from telling people about the scheme, or discourages you from seeking a second opinion, you should take this as a warning sign. Claims of ‘risk free’ or ‘zero risk’ tax avoidance schemes should also be treated with suspicion.

Entering into an illegal tax avoidance scheme, even if you were unaware that it was illegal, can result in a hefty tax burden.

Choosing the right bank account for your business

There are many advantages associated with having a specialised business banking account. It allows you to keep track of your cash flow accurately, easily produce proof of expenses in the event of an audit and can be helpful when making business decisions.

Unfortunately, it is hard to avoid fees on small business banking accounts. It is often worth taking a close look at the business banking products on offer and considering whether it might be in your best interests to pay slightly higher fees to ensure that you have all of the functionality that you require.

Generally speaking there is a trade-off between a high interest rate and low fees, you cannot have both. High interest accounts tend to have a cap on the number of transactions that can be made, with additional fees being charged if you need to make additional transactions.

If you are diligent enough to keep separate business banking accounts then the best strategy can be to have two accounts. One can be used for day to day transactions and will attract little interest. The other can be a high interest account in which you put aside larger sums of money, for example, your PAYG or super contributions.

Take the time to examine the fee schedule associated with the account you are considering. Many banks do have hidden fees, such as a charge for a teller operation or annual business credit card fees.

Appointing a social media officer

Even small businesses who are seeking to enhance their online presence should have a dedicated social media officer. While this may sound like overkill, there are many advantages to having a single person overseeing your social media strategy.

It will ensure that the tone of your social media updates is consistent, and will also mean that your different social media platforms are not repeating and/or contradicting each other. Most importantly, having a dedicated social media manager will mean that your social media activity is a well-thought out strategy, as opposed to a series of disjointed posts.

This may be a responsibility that you choose to take on yourself; after all you know your business the best. However, if social media is not your forte, or you simply don’t have time to commit to such an undertaking, it can be an excellent opportunity for one of your employees to take on some new responsibilities, and hopefully achieve some impressive results.

Etiquette tips for business lunches

Having lunch with a potential client, investor or employee can be a great way to make a good impression while taking care of business matters at the same time. However, there are a lot of etiquette considerations, some of them extremely subtle, that you should be aware of. Here are some tips for conducting yourself at a business lunch:

-When extending the invitation you should always offer your guest a couple of different options for time and location

-Arrive a little early to make sure that your table isn’t in an overly crowded or busy area; this can inhibit productive conversations

-Always allow your guest to order first so that your choices don’t impede their decision

-Either organise payment prior to the lunch or be quick and confident in laying down your card

-Refrain from checking your phone throughout the meal

Claiming a computer as a tax deduction

If you use a piece of equipment, such as a computer, for work related activities then you may be able to claim it as a tax deduction. If the item is valued at over $300 then you cannot claim the entire cost in the year of purchase. Instead, you will need to calculate the depreciation in value each year.

When equipment is used for both professional and personal use, as computers so often are, then you can only claim a tax deduction for the equivalent portion that is used for professional purposes. For example, if you use the computer half for work and half for leisure then you may only claim half of the value of the depreciation of the computer as a tax deduction.

The ATO has indicated that it will be focusing on tech related expenses this year, with a particular focus on ensuring that individuals accurately report the work/personal breakdown of use. It is advisable to retain all documentation, including diary entries if necessary, relating to the use of a computer you are claiming as a tax deduction.

There are also other costs associated with a computer used for work purposes that can be used as tax deductions, such as the interest paid on a loan for a computer or the cost of repairs. Upgrades cannot be claimed as repairs and, if they cost over $300, should be included as a separate depreciating expense.

Changes to self managed super funds in 2014

From July 2014 there will be a new range of penalties that will apply to SMSF trustees in breach of superannuation rules. Currently, the only significant financial penalty that has applied to non-compliant SMSF trustees is the penalty tax that allows the ATO to confiscate half of your assets.

However, from July11 2014 the ATO will be able to impose a range of financial, administrative and educational penalties. One feature of the new regulations will prohibit trustees from paying fines from their SMSF assets. As an SMSF trustee, it is your responsibility to make sure that you are aware of all changes to legislation.

Commercial leases

There are several issues that you should always be addressed before signing a commercial lease. If there is a right or obligation that is not detailed in the lease then it may lead to conflict between your business and your landlord. Some checkpoints include:
-How much signage you’re allowed to put up and where
-Use of facilities such as toilets that may be shared with other businesses (if your lease is in a complex)
-Car parking for both staff and visitors
-Access to the premises outside of business hours
-An exclusivity of trade clause. This will protect you against having a direct competitor set up within your immediate vicinity.
-An option for renewal at the end of your commercial lease

Offering staff career development

One of the most common reasons for job dissatisfaction is staff feeling that their current role does not offer any options for career progression. This can lead to poor motivation that in turn can bring about underperformance.

For larger organisations, it is easy to offer people promotions and options for career development, whereas smaller businesses may not have the structural capacity to offer such incentives. There are, however, still a number of things you can do to allow your staff to learn new skills and take on additional responsibilities.

You can assign a staff member a specific project that will be their sole responsibility. It is important that when you give them this job you make the advantages clear. You can outline the different skills and achievements that they will be able to add to their resume. Emphasise that you have chosen them for this role because you have faith that they will be capable of completing it with flying colours.