November 26, 2021
Six Member SMSFs – Pros, Cons & Opportunities

From 1 July 2021, the maximum number of members eligible to form part of a self-managed superannuation fund (SMSF) and small AustralianPrudential Regulation Authority (APRA) funds increased from four to six.

But is allowing more members in a fund going to be a case of the more the merrier, or maybe there will be too many cooks in the kitchen? Read on and see how it could potentially work (or not) for you.

There are definitely some major upsides, so let’s dive on in:

The Pros

· Family of Five? You’ve previously been shut out of the SMSF game so now this is a welcome change and bigger families can now share a single fund.

· If two smaller funds can now join as one, the operating costs will proportionately reduce with the additional members onboard.

· Increased capital means more scope in a larger fund to allow for a broader range of investments that were otherwise unattainable.

· Planning on travelling overseas for a prolonged period? Having additional members can put the SMSF in a better position to meet the central management and control criteria necessary to qualify as a complyingAustralian superannuation fund. For the central management and control test to be met at least 50% of members must exercise strategic and high-level decision making in Australia.

· The End Game. The ability for estate planning goals to be achieved will be more manageable with increased balance of assets to draw from. 

Sound pretty good? Before we go too far, here are the downsides:

The Cons

· Always. Check. The. Deed. The governing rules of the SMSF may require an update to cater to the change to allow for additional members over the existing four-member limit.

· Who decides what? Problems can occur when members have different investment needs. For example, parents might be closer to retirement while the children are focused on the longer term. The investment strategy of the fund may not meet everyone’s requirements.

· Disputes. The more members and trustees in the fund, the greater the potential for disputes. The rules around appointment and dismissals of trustees, voting rights and meetings need to be crystal clear.

· Saying Goodbye… the death of a member can be a tricky one and there is potential for disputes when it comes to the distribution of death benefits to nominated beneficiaries. There may be a need to update or make changes to your estate planning documents including your Will and Enduring Power of Attorney because of changes to your SMSF.

The best advice about the six member SMSF is to ‘look before you leap’, make sure you’ve done your homework and have concrete reasons for the final decision. Dot all the I’s and cross all T’s, because if you don’t get it right, you and your 5 members may end up with no safety net and a big mess.

If you’d like strategic advice for your SMSF, our expertise has you covered. Speak with one of the Attune team on 1300 866 113 or click here to start the conversation on email.

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October 29, 2021
A comparison from the cloud.

You might be using one or the other, but what do you know of the other side of the fence? Is the grass greener? We break down some of the features of two cloud accounting big-guns and make a call we think you might find interesting …

 

Here is our comparison of two of the heaviest hitters, Xero and MYOB – let’s get ready to ruuuummmbbllee!!

 

Xero VS. MYOB Essentials

 

Xero

MYOB Essentials

Winner

Price

Starter: $27pm
Standard: $54pm
Premium: $70pm (which covers 5 employees for payroll; higher cost for more employees)

MYOB Essentials:
Lite: $24pm
Pro: $50pm
Plus: $120pm (unlimited payroll)

MYOB AccountRight
Plus: $120pm
Premier: $150pm
(both unlimited payroll)

Xero

Whilst MYOB may be more cost effective for more employees, Xero has only the one pricing structure and is easier to follow

Setup

Simple and intuitive

Simple and intuitive, however some of the more advanced features in AccountRight such as inventory and job management are only compatible with Windows

Xero

Accessibility

Both PC and Mac

AccountRight is designed for use with Windows only.
MYOB Essentials is compatible with both PC and Mac

Xero

Payroll

The Standard package covers only 2 employees. The highest you can go is “Premium 100” for $163 pm and 100 employees. $2 per person after that with a maximum of 200 people

Essentials ‘Pro’ offers employees for $1.50 per person per month. Plus offers unlimited.

AccountRight offers unlimited payroll across both packages.

MYOB

There is no unlimited payroll option in Xero

Invoicing

Invoices can be customised.
Ability to track when recipients open invoices

Invoices can be customised.
Ability to track when recipients open invoices.
Advanced customisation only available using MYOB AccountRight

Xero. Slightly better customisation options for sending and tracking invoices

Inventory

All plans include basic inventory management. Integrates well with many third-party add-ons

MYOB Essentials contains basic inventory tracking.
AccountRight offers advanced inventory management

Xero. Their add-on integration allows more complex inventory management

Mobile App

iPhone and Android

iPhone and Android

Xero. Easier to use interface

Foreign Currency

Available on the Premium plan. Multi-currency bank accounts, sales, purchases and transactions

Available with AccountRight Premier for use with purchases and sales only

Xero

Data Storage

Get copies of original documents and key data into Xero automatically without manual data entry using Hubdoc

Use the MYOB Capture app to photograph and upload paper receipts straight to your account

It’s a tie. Both provide free access to their data storage options with any plan you choose

Add-Ons

There are more than 700 Xero addons available for businesses, to name a few: Direct Debit, POS, HR, Construction, Hospitality, Quotes, Cashflow

MYOB offers hundreds of addons focused primarily on reporting, cash flow and industry specific

Xero

Online Support

Community forums, online documentation, and training videos

Community forums, online documentation, and training videos

Xero. As they only offer one tier of plans it is generally easier to find the information you need

Phone Support

Not available

Mon to Fri: 7am to 7pm
Sat to Sun: 9am to 5pm

MYOB

 

With that under our belt, there seems a clear winner (in our humble opinion…):

Xero – 7 to MYOB – 2

 

Now, although the scores from our assessment here may seem one-sided, we do have the skills to operate across the various cloud accounting applications available. Depending on your business needs and strategy, we tailor our service to suit you.

 

If you’d like to discuss the software you’re using and look at what might work better, we’d love to chat. Speak with one of the Attune team on 1300 866 113 or click here to start the conversation on email.

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October 26, 2021
How To: Set Goals and Achieve Them

We don’t claim to be all-knowing self-help types, but we do know a thing or two about setting goals and how to achieve them. Thanks to our experience, we thought we’d share a few insights that could make a real difference to your process and help you improve the strategy you have in place to achieve your goals.

Having goals and working towards them is an important part of being human. The path towards our goals may not always be smooth or easy, but having goals gives us a sense of meaning and purpose, points us in the right direction and keeps us interested and engaged, all of which are good for our overall happiness (this is scientifically proven).

But setting goals can be hard; sometimes it is hard to differentiate between a dream, hope or a clear, specific goal. If you fail to plan, well, you plan to fail! So here are 5 tips for setting goals and achieving them successfully.

 

1. Workout the Why

Motivation is key to achieving your goals, so set goals that relate to the high priorities in your life. Work out what is important to you and make sure that there is value in achieving this goal. It helps to have this type of focus, so you stay committed and feel the sense of urgency.

Sometimes it is easier to get going with something small and have a few mini short-term“wins” which can keep you motivated and believing in yourself.

Let’s user home ownership as an example … Your first goal to help you buy your home could be to save an additional $1,000 every three months. This will feel more achievable than just setting your goal as “saving $50,000 for my home deposit”.After you achieve this ‘mini-goal’ in three months (go you!) you will feel a massive sense of achievement, and this will keep you going for the next three and so on until your ultimate $50K goal is reached.

To make sure your goal is motivating write down WHY it is important and what you would tell someone about your goal if they asked. That mini-goal is important because it means you have taken the first steps to your ultimate goal, and you are learning how to be disciplined with your finances.

 

2. BeSpecific

 We cannot emphasise how important this step is! We are all guilty of using the phrases “I wish I was skinnier” or “I wish I had more money”. News flash – these aren’t achievable goals. Let’s try and rephrase these into specific, achievable goals:

 

· My goal is to lose 5kg over the next five months.

· My goal is to attract 5 new customers each month for three months

 

These goals are specific, measurable and time-bound. You can write progress in your diary and track it each month to keep you engaged. They aren’t too far in the future, yet also far enough that you will change your habits and still be required to work hard to achieve them.

 

3. Write it down

Everywhere!

The fridge, your bathroom mirror, your calendar. Share the news! Tell your friends and family and ask them to hold you accountable. Writing it down and getting it out there makes your goal real and tangible and increases your chances of sticking to it. Phrase your words positively rather than negatively. Rather than saying“I need to procrastinate less”, phrase it like “I will work 4 hours per day on customer attracting activities” which is more motivating and focuses on what you should be doing instead of what you shouldn’t.

 

4. Workout the How

Now for the fun part… (especially if you like budgets like we do!) Breaking down your goal and working out how you will achieve it. What changes can you make in your day-to-day life that will help you reach your goal? If your goal is savings, work out your weekly income and expenses, and where you can spend less. If it’s gaining customers, work out where they spend time and how you can best engage with them.

If we revisit the above examples, let’s give them some “how”:

 ·     My goal is to lose 5kg over the next five months.
I will achieve this by exercising five days a week, and limiting my chocolate to once a day.

·     My goal is to attract 5 new customers each month for three months
I will achieve this by spending 2 hours per day, first profiling what my new customers look like, why my business is attractive to them. Then I’ll lock down how I will get my brand in front of them and create a clear method to convert them.

 Now these goals are also attainable. We’re not just going to cut carbs out completely and drink only juice for one week. We also aren’t being unrealistic about how much time we spend on the second goal. We have set some clear mini-goals we can follow each week which will give us a feeling of success along the way. All of these things will help us stay on track towards the bigger goal.

 

5. Stick with it!

Life is always going to throw us curveballs and it is best to be as prepared as you can be. Try and think of some potential options you could try if something gets in your way. If you think other work might get in the way of your 2 hours scheduled for new customer attraction, you could outsource or automate some of your processes.

Use phone or calendar reminders to keep yourself on track, and make the time to review your goals. You may need to tweak your action plan slightly as you go, and this is totally fine! Your end goal will likely remain the same, but how you get there may change as you go. By making sure the relevance, value, and necessity remain high, the purpose and motivation will always be there.

Above all, believe in yourself and your capabilities. You can do this!

 

If you’d like to discuss your business goals and build strategies to get there, we’d love to chat. Speak with one of the Attune team on 1300 866 113 or click here to start the conversation on email.

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October 15, 2021
Starting up? To Bootstrap or Dilute That is the Question…

Got a killer idea that you’re ready to turn into a potential new business? Has your new business kicked off and you’re in those early days of late nights and seemingly endless costs? No doubt you all have one major item on your mind… Money. Funding. Capital. Cashflow. Whatever you want to call it, we all need it.

 

What we want to look at are the questions about money. Will it come from your projected sales? Will you get your business proposal together for the bank and hope for a loan? Or will you rely on your own savings? Or critically, dilute your shareholding and reach out for some investor funding?

 

Here we talk the pros and cons of bootstrapping versus investor funding to kick-start your new startup and get the best bang for your buck.

 

Bootstrapping

 

The term bootstrapping comes from that very famous legend ofBaron Münchhausen who pulled himself out of the water with the help of his own bootstraps, becoming a metaphor for achieving success with no outside assistance.

 

It is building a company from the ground up with nothing but personal savings, and with a little luck, the cash coming in from the first sales.

 

Studies show that more than 80% of startup operations are funded by the founders' personal finances, with the median in start-up capital being about $10,000. Some of the most famous and most successful companies in the world started off this way – Apple, Microsoft and DellComputers to name a few!

 

Advantages and Disadvantages

 

As all of the financial risk is placed on you as the business owner, bootstrapping can be a tough way to go. Limited resources can inhibit growth and even undermine the quality and integrity of the business envisioned. Not to mention cause a few headaches. On the other hand, you are able to maintain full control over all decisions and the business itself. And, all the energy goes into the product or service itself, not into pitching venture capitalists and other potential sources of capital investment.

 

Bootstrapping allows you to experiment more with the brand, as there is no pressure from investors who may have their own ideas. There is another kind of pressure though – you may have personal or family assets on the line.

 

It might not be the quickest way to turn a profit, but bootstrapping can be a way to start slowly bringing in revenue and establishing a safety net that enables you to maintain total control of the business.

 

It must be said, there’s no definitive number in terms of how much you need to bootstrap a business, that all depends on the business.

 

Investment Funding

 

This is all about selling your idea to an investor, who is interested in getting some form of profit or return out of your business idea in the future. They finance or help you finance your business for some ownership equity in return. They usually closely evaluate the business and projections before hand and may have some say in decision making and goal setting. The most popular investors are generally angel investors or venture capital investment funds, but they’re generally not easy to get involved with.

 

Ø Angel Investors

 

An angel investor is generally a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. They can often be found amongst your family, friends or colleagues. The funds that angel investors provide may be a one-time investment to help your business get off the ground or an ongoing injection to support and carry the company through it's difficult early stages. In addition to cash, they usually bring along with them a range of expertise, connections, knowledge, experience and advice.

 

Ø Venture Capital Investors

 

Venture capital generally comes from well-off investors, investment banks, and any other financial institutions who see a lot of potential in your business. For new companies or ventures that have a limited operating history (under two years), venture capital is becoming a popular way of raising money, especially if they lack access to capital markets, bank loans, or other debt instruments.

 

Advantages and Disadvantages of attracting investment

 

In short form here’s the quick potential pros & cons list depending on your needs:

 

PROS:

• Money in the door for growth

• Ongoing access to business experience and advice that comes with the right investor

• Less personal financial risk

 

CONS:

• Loss of equity in your own business

• Potential loss of some control depending on your agreement

• Potential extra pressure for the business to perform

 

Let’s look at these in a bit of detail before we wrap up…

 

Bringing in an external investor is a great way to get money and get it fast. Sometimes it’s enough to really make or break your business and if you’ve exhausted your personal savings (and then some!) this may be your last option. The cash comes at a cost though as the investor will always take their slice of the pie.  

Some investors may be happy to sit back and leave the decision making to you however some may choose to get really involved. This may bring some misunderstandings and a misalignment of goals for the future. On the other hand, it may also bring another perspective and a new set of skills.

Similarly, selecting the right investor for your business can often be dictated by the input you’re looking for. As an example, you maybe missing a certain skillset that your business needs that could be filled by the investor, or perhaps would like an investor to bring their network of contacts and knowledge with them.

Ultimately, making the decision to bring on an investor (and what kind) shouldn’t be done completely on a financial basis, but with your entire business and goals in mind alongside the money factor.

If you’d like to discuss your business strategy, what investment might look like for you alongside other accounting implications, we’d love to chat. Speak with one of the Attune team on 1300 866 113 or click here to start the conversation on email.

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