Let's Talk Business September 2014

SEPTEMBER 2014 Issue

INTRODUCING

Providing Cost Effective and Professional Bookkeeping, Administration and Business Support Services.

Article on Page 2-3 >>

Also inside this issue

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• Australian Agribusiness named a global Super Growth Sector

• CloudForce - Your business in the 21st Century

• How to keep a level head during property negotiations

• Is the cloud unsafe?

• 10 Steps to Financial Security in Your 30s

• The Mining Tax Repeal and the impact on Small Business

• In-House News • Contact us

YOUR BUSINESS IN THE 21ST CENTURY

by Ian Congram Managing Director POWERS FINANCIAL GROUP

Powers Financial Group has recently launched a new division - “CloudForce Business Support” to cater for clients’ bookkeeping requirements and to help clients focus on what they do best.

Cloud Accounting is revolutionising the financial management industry and transforming the companies it supports. Cloud Accounting and Bookkeeping allows clients to focus on their core competencies. Improved efficiencies, cost savings and operational effectiveness are critical priorities of the service. Let’s first understand what Cloud Accounting is.

The ‘Cloud’ is no longer just about storage; it is about the invisible connection between people and information and all the efficiencies and benefits it implies. Essentially, Accounting Software with a Cloud component enables accounting data to be stored securely offsite and accessed remotely by you anywhere, anytime via the internet.

So why might you consider moving to a Cloud-Based Accounting System? Five key benefits that may help you make the decision to switch are: 1. B ETTER DECISION MAKING Paper-based Accounting and Bookkeeping means you are almost always a month behind with updated financials.

The primary advantage of Cloud Accounting is that everything happens in real time which means you have totally updated information on which to base business decisions all of the time.

2. ACCESS, ANYTIME, ANYWHERE When your accounting software is held on a hard drive on a computer, it can only be accessed when that computer is available. For many businesses, this means access is restricted to a single computer and a single location.

When you move to a Cloud solution, you have the flexibility of being able to access your business files anywhere you have access to the internet – on the beach, from home, from your car, anywhere!

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REAL-TIME ACCESS FOR YOU AND YOUR PROFESSIONAL ADVISORS If you choose, you can give your Accountant or Bookkeeper access to your company files via the Cloud so that they have the same information that you do in real-time. This eliminates time consuming file transfers and travel. It also gives you the opportunity to have your Accountant set up Cash Flow Forecasts, or drill down on your sales figures or expenses and gives you the information you need to make better business decisions.

4. TIME AND COST SAVINGS Automated data feeds from bank accounts, credit cards and data links between financial reports mean you only ever need to enter data once, saving you time and money.

CloudForce Bookkeeping Services allows you to focus on your core competencies. Our qualified accountants enable you to improve efficiency, reduce costs and implement operational effectiveness.

5. SECURITY AND PEACE OF MIND Outdated software, expensive upgrades, monthly data backups and multiple standalone files are a thing of the past. Cloud Accounting provides for regularly updated software, so you are always on top of changes in Accounting Practices and Tax rules. With your business information being held on a secure third party server, you always have a secure backup, so that your essential business data is still available if something goes wrong with your office computer.

If you are interested in switching your Accounting over to the Cloud or to find out more about CloudForce Business Support, call Powers today on 07 3906 2881.

Let’s Talk...Words of wisdom “ Let’s go invent tomorrow instead of worrying about what happened yesterday.”

Steve Jobs (1955-2011), Entrepreneur, Marketer & Founder of Apple & Pixar.

IS THE CLOUD UNSAFE?

by Nick Pollins Group Business Improvement Manager POWERS FINANCIAL GROUP

News of hackers gaining access to troves of some major celebrities’ nude photos has rocked the tech world. Does this expose a major flaw in the Cloud?

The simple answer is no. There is no evidence to show that it was a broader breach of iCloud. In fact Apple had spent 40 hours looking into the issue and confirmed that there was no breach of its cloud storage system. “ After more than 40 hours of investigation, we have discovered that certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet,” Apple stated in a press release. “ None of the cases we have investigated has resulted from any breach in any of Apple’s systems including iCloud or Find my iPhone ”.

So you can sleep easy at night, right?

Well technically, no. However it won’t be the Cloud that is to blame; it could well be you or your personal device!

So what should you do about it?

• Change your password regularly and make sure you use secure, unique passwords on your accounts and devices.

• Make sure you update your operating system. Running the latest version will ensure that any bugs or flaws that the developer has found will be fixed.

• I f two-factor authentication is available, use it!

•E nable locks and passwords on all of your computers and devices. Although many of your files are encrypted on, for example, your iPhone, if you do not have a passcode on your device, someone could plug your phone into a computer and access your photos and videos.

•B e careful about what you publicly make available on the Web. Most hackers gain access to your accounts through personal information you have shared on the Internet. Look at your social media privacy settings and make sure you set them to be as secure as possible.

Following these steps will maximise your own personal online security and although it won’t make your data 100% safe, it will make it much harder for hackers to access your accounts.

If you are thinking of moving to Cloud Accounting but have some concerns, find out about the extensive data security measures we have in place to protect your data.

Call us on 07 3906 2881 or request our Client Privacy and Data Security information pack.

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The Mining Tax Repeal and the impact on Small Business

by John Cox Senior Consultant POWERS ACCOUNTANTS

There is a lot of hype at the moment as the legislative calendar gets into full swing in the Senate. Recently the government successfully repealed the Mining Tax, which has come with a series of concessions.

We want to get to the bottom line and let you know how this will affect you.

Mining Tax Repealed The Mining Tax is officially titled the ‘Minerals Resource Rent Tax’ and was passed into law by the previous government in 2012. This Bill was largely controversial due to the Australian economy’s heavy dependence on the mining sector. However, to repeal the tax, the Government has made some compromises.

How will this affect me financially?

1.

Another change in the superannuation guarantee schedule 2. Associated tax measures affected 3. A range of spending measures have been retained for lower income earners What does that mean?

An individual’s superannuation is NOT being frozen. All that is being frozen is the percentage which employers must pay into employee’s superannuation, which is being held at 9.5% until 2021.

As with most Bills that pass through both houses of government, there are often other things linked to it. For example the Mining Tax included loss carry back rules, instant asset write off plus simplified depreciation and accelerated deduction for motor vehicles will be affected.

What does this mean?

In some cases it’s really all a bit complicated, but basically the rules of what can be claimed and in what financial period they can be claimed have changed. Fortunately, the rules aren’t retroactive, meaning you won’t be taxed for 2013 but from 2014 the new rules apply.

Asset Write off and Depreciation Changes From 2012 Small Business Entities (SBEs) could deduct assets costing less than $6,500. As of 1 January 2014 LET’S TALK...BUSINESS Pg. 4

this amount has been reduced to $1,000 for an immediate deduction. Assets costing more than $1,000 will need to be allocated to the SBE’s general pool and depreciated at 15% in the first year and 30% in the years to come.

Motor Vehicle Deductions An immediate deduction of $5,000 for motor vehicles valued over $6,500 has been removed as of 1 January 2014. SBEs that have purchased vehicles prior to 31 December 2013 are eligible for the immediate deduction, however SBEs that have purchased vehicles after this period and have already lodged their 2013/14 tax return will need to have it amended.

Tax Loss Claims These claims are known as ‘loss carry-back’ rules where companies could utilise a current year tax loss against a tax liability paid in a previous year. These loss carry-back rules have been repealed. For companies with a normal accounting period, the loss carry back rules have been repealed from 1 July 2013.

What this means for Employers and Business Owners Simply that your current compulsory superannuation contributions for your staff should remain steady for the next 6 years. This will help with business planning, wages and salary packages. If you’re using commercial accounting packages with payroll, these superannuation rates are changed automatically so you don’t really have to think about them from an administrative point of view.

It is however, important to understand how the depreciation and loss carry back rules affect you and your business. Cash flow is vital in business and effective tax planning is key.

If you are concerned about any of these changes or would like to know how to manage your cash flow more effectively please contact your Powers Accountant.

AUSTRALIAN AGRIBUSINESS NAMED A GLOBAL SUPER-GROWTH SECTOR

by Murray Davis Director POWERS AGRIBUSINESS SEVICES

Agribusiness in Australia has been identified as one of five “super-growth” sectors that could add a quarter of a trillion dollars to the national economy over the next 20 years.

According to a report reviewed by Business Review Weekly (BRW), the agribusiness “super-growth” sector is expected to grow more than 10% faster than global gross domestic product (GGDP) during the next two decades, along with gas, wealth management, tourism and international education.

So how will these sectors grow? The common factor is Asia. As the world’s population expands (by an expected 60 million people in the next 20 years), so does the global food demand. In China, as well as having more mouths to feed, beef has become a status symbol representing your arrival to the middle class. This has understandably resulted in increased international interest in Australian agribusiness.

Despite the occasional panic from some about foreign investment, there is little to be feared if Australian agribusinesses understand the drivers and motivation.

Some investors’ interest may be in preserving capital, some wish to expand their supply chain, while others are focused on food security- in all cases, investors may be more likely to accept lower returns thus are ideal investors for family-operated businesses.

“investment ready”, but it’s also vital that agribusinesses look at their own operation. Although many agribusinesses have made significant leaps forward there are still far too many who focus solely on the “agri” and completely neglect the “business”.

A more professional approach helps these businesses to keep pace and can easily be achieved by involving external experts such as accountants, lawyers and bankers who bring new perspectives, and ensure strategy and performance is constantly being challenged. This is appealing to investors who would expect this from any operating business.

It’s important for agribusinesses to understand that they are not just competing with each other for capital - they are competing with every other asset and business where an investor could potentially put their money. Understanding investor needs and being ready to meet them will keep your business expanding in what is officially the “supergrowth” sector.

To discuss improving your agribusiness, speak with Murray Davis today on 4995 6677.

Understanding these drivers is the first step to becoming

Let’s Talk...Words of wisdom “ A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so.”

Mahatma Gandhi (1869 –1948), the leader of Indian nationalism in British-ruled India

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HOW TO KEEP A LEVEL HEAD DURING PROPERTY NEGOTIATIONS

by Dan McMillan Credit Advisor POWERS INVESTMENT & FINANCE SERVICES

If you are one of the thousands of potential buyers beginning the journey to home ownership this spring, you may be wondering how to keep a level head during this notoriously stressful period.

While a property purchase should be a purely rational decision, the reality is this is not always the case. As a prospective home buyer, you are likely to go through a range of emotions during the purchasing process. You might want to find the ‘perfect home’ for your family, you may fall in love with a property on sight, or you could have a strong vision in your head of what your next home will look like.

There are endless ways your emotions can come into play when you are looking to buy a home. So, are you leaving your emotions at the door?

A research project was undertaken to examine the extent that emotions can influence home buyers. Interestingly, the research found that while 75% of property buyers claim to be rational rather than emotional buyers, in reality, emotions have a significant influence over their final purchasing decision.

The most common emotional characteristics that influence home buyers are: • liking the feel/vibe of the property (37%) • an instant attraction to the property (22%) • suiting the personality of the buyer (21%) What’s also telling are the top three most influential LET’S TALK...BUSINESS Pg. 6

emotional characteristics between different types of buyers: • s ubsequent home buyers are more likely to be influenced by having a vision of what they wanted before they moved in (22%) • fi rst home buyers are more likely to be influenced by the décor (19%) • i nvestors are more likely to be influenced by the place making them feel successful (17%) How to keep your emotions in check While you can’t always exclude emotions from the property purchasing process, it is important to always consider your original objectives and keep in mind your original budget.

Given that buying a property could be one of the biggest financial decisions you’ll ever make, it’s vital the final purchasing decision is ultimately based on a rational judgement – not your emotions. Our Credit Advisors are here to help guide you through this process and can offer advice on how to structure the purchase and also to address long-term goals with the property.

For advice on financing your next property purchase call Powers Mortgage Services today on 4995 6655.

10 STEPS TO FINANCIAL SECURITY IN YOUR 30S

by Ingrid Maddox Paraplanner POWERS INVESTMENT & FINANCE SERVICES

While many baby boomers were married with children by their early to mid twenties, people today are settling down later, taking time in their twenties to establish their careers and explore the world.

While 30-somethings today have more time to establish themselves career-wise, they’re less likely to have stayed in the same job, or to be established in the property market. We’ve put together a list of 10 steps for achieving and keeping financial security in your thirties.

1. Get your super sorted If you’re anything like the majority of people your age, you probably spent much of your 20s switching jobs and your super constitutes a handful of accounts with little to no attention paid. Consolidating your superannuation now will allow for greater growth by pooling your assets.

2. Advance your career You’ve built the skills in your 20s, now put those skills into practice and start moving towards those career goals.

If you are a business owner, now is the time to market your business and put systems in place to improve your efficiency.

3. Save Rainy days are for those with pessimistic views. Put as much as you can away for a sunny future instead.

If you’re planning a family and don’t yet have one, your disposable income is probably at its highest so use it to your advantage and work out a savings plan.

4. Invest for the future When do you want to stop working? What kind of lifestyle do you want and how much will you need? It may seem a long way off but it’s better to plan your goals now.

5. Make a budget Budgeting is like diet and exercise. Don’t pretend that you can live on nothing, the better budget is one that you can stick to long-term.

6. Start climbing the property ladder If buying property is part of your plan then your thirties can be a good time to do so. Do your research and be realistic about what you can afford to pay on a mortgage.

7. Protect yourself Although it’s difficult to think about, life and risk insurance can take the burden off your significant other and children should something happen to you.

8. Pay down debt Whether it’s paying off your HECS debt or finally knocking off that loan from the gap year you took after university, your thirties are the perfect time to focus on clearing any debt that may be left over from your twenties.

9. Learn to be your own advocate Negotiate a raise, a good deal or a better rate – take matters into your own hands and be empowered. Use the confidence and skills that come with having worked your way up in your twenties.

10. Have a plan It doesn’t have to be the plan you had when you graduated university, nor does it have to be the plan your family or society has for you – but it never hurts to be working to a plan.

Financially, your thirties can be the power years for making your dreams come true, but you need to be organised to make the most of it!

Powers are here to help you achieve financial security and achieve the goals you set for yourself. Contact one of our Financial Advisors on 4995 6655.

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Let’s Talk...Words of wisdom “ Letting your customers set your standards is a dangerous game, because the race to the bottom is pretty easy to win. Setting your own standards--and living up to them--is a better way to profit. Not to mention a better way to make your day worth all the effort you put into it.”

Seth Godin (1960-), American author, entrepreneur, marketer, and public speaker.

THE POWERS TEAM - 2014 Powers’ Third Annual Retreat a success In August, the Powers team travelled to Hervey Bay to partake in a weekend of planning, development and recognition as we closed out another financial year. We were proud to have all of our team under one roof and look forward to the 2015 Retreat.

New Team Members Powers have appointed two new team members to the Group. Kim Goodair joins Powers as the Group’s General Manager and has already overseen some large organisational changes in her short time with us. We also welcome Nick Pollins as Business Improvement & Marketing Manager and look forward to seeing many positive changes through both Nick and Kim. Team Members Return We are also pleased to announce the return of Katrina Engel and Kerry Manthey from maternity leave. Katrina will be working with Powers again from our Biloela office and Kerry from Brisbane.

Contact us

Social Media The Powers Financial Group facebook page recently passed a milestone in reaching one hundred and fifty likes. With the introduction of CloudForce and a full calendar of events over the next year, make sure you head to our facebook page facebook.com/powersfinancialgroup to stay up to date on all of the latest news and current events.

For real-time financial updates, make sure to like our Facebook page, connect on LinkedIn and follow us on Twitter.

For further information on any of the articles in this issue contact your local office: ABA WHITE

BRISBANE

BILOELA

ROCKHAMPTON

MONTO

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75 High Street

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Murarrie QLD 4172

Biloela QLD 4715

North Rockhampton QLD 4701

Monto QLD 4630

PO Box 518

PO Box 98

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PO Box 69

Cannon Hill QLD 4170

Biloela QLD 4715

Red Hill Rockhampton Qld 4701

Monto QLD 4630

P 07 3906 2888

P 07 4995 6677

P 07 4928 1555

P 07 4166 1366

F 07 3906 2889

F 07 4992 1787

F 07 4926 1184

F 07 4166 1343

mail@powers.net.au www.powers.net.au

The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional. Limited liability by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees. All financial advice is provided by Authorised Representatives of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558.