The government makes us all do tax returns every year which often brings on the need for an accountant. But be warned there is a big difference between a tax agent and a great accountant.  A tax agent will give you the rubber stamp treatment and pay attention to your taxes and compliance quickly and cheaply.  A great accountant actually considers your affairs and provides you with advice and so much more.  Here is what a great accountant looks at as opposed to just churning out tax returns:

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1.        Maximise earnings

We have hundreds of strategies here to help improve income and profitability.  By reviewing the trading result for the financial year, we can identify the areas of the business to focus on for that improvement and how to go about it.

Example – trade based business frustrated by inability to grow and the profit margin being realised for the size of their team.  When we broke it down we found inefficiencies in the way the business and the team were operating resulting in plenty of time in each employee’s day that wasn’t being charged to customers.  By putting strategies in around this we were able to get a $20K improvement profitability in the numbers.  This meant more jobs could be fit in meaning the service and turnaround time improved with customers which significantly helped with quoting and pricing moving forward too.

2.        Minimise the tax on those earnings

There is so much more that can be done before June to change the tax outcome as opposed to once the financial year is over.  So we can again focus on the areas that prove best bang for buck and actually suit your situation and your plans moving forward.

Example – business operating out of a trust structure and off the back of a good 9 months so far was staring down the barrel of a big tax bill as all profits must be distributed out of a trust.  We developed a strategy to utilise a company and then restructure the business to that company to stop this being a problem moving forward.  This resulted in a tax saving of $20K for that year and ongoing we expected the same tax saving year on year as a result of the restructure.

3.        Maximise the use of the after-tax earnings

Its hard enough to make the money let alone to keep it from the tax man and then use it well.  We feel it is so important to allocate your money effectively covering the various facets of your life. Think business improvement, investment, retirement planning, debt reduction, education for the kids, living and still enjoying a good lifestyle.  It isn’t about being the fun police but we know how you can set yourselves up for the long-term by just showing a bit of discipline and managing these various areas consistently over the years.

Example – combining a few strategies meant big improvements across a client’s lifetime plus the client was much more comfortable knowing that they were managing these different areas.  We set a superannuation contribution goal via a lump sum which saved $4K and meant money invested as a higher rate of return in a low tax environment compounding over the years.  We also set a plan to utilise an offset account on the home loan and make additional repayments moving forward.  Each of these strategies we set a monthly target for over the next 12 months so as not to impact cash flow too much.  The compounding effect of these strategies resulted in tens of thousands if not hundreds of thousands of dollars difference to that clients financial position over their lifetime.

4.        Help realise business and personal goals

The thing we see get lost so often is the reason why.  Why did you get into business?  Why are you doing what you are doing financially?  All too often we hear answers such to get flexibility to be present for the family only to find that the business is actually giving the owners less freedom than if they were on wages… and sometimes less income too!

Example – business owner is happy with above profit and strategies but is burning out quick as they haven’t had a decent break from the business.  We agreed that the profitability and above strategies meant they could afford a camper trailer so the strategy became get the trailer and every quarter get away for a few days or a week or 2.  We helped identify times where this could be facilitated with minimal disruption to the business and critically how to re-organise the team to allow the owner to take a break without being disturbed.  This lead to a way stronger business as the team was taught how to take on more responsibility which ironically made them and the owner much happier.  The next year the conversation then turned to one key employee who really proved themselves as a leader within the business so how do we continue to elevate them and even put a performance based incentive around them to get them to help grow the business and help retain them within the business.

We here at Inspire are looking to be great accountants not just tax agents and that is the relationship we are aiming to create with you.

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