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PMG Pulse


elcome to the March 2019 issue of the PMG Pulse. We hope you are all settling into the grind of the work year and for our clients on the land, our thoughts go out to you. Remember, if we can offer you assistance at this time, please get in touch with one of our team, who can guide you to what is available, taking into account your individual circumstances.

correct distinctions - as Commissioner Hayne has carefully done, when responding to issues raised in the Royal Commission. We want to make sure that these reforms are introduced in such a way so as not to impede access to finance for small and medium enterprises.” he said.

At PMG Finance, we are committed to providing With the media bombarding us with speculation of the very best customer service to our clients, which what will occur in the lending space, now that the includes keeping you informed of any changes which final report into the Banking Royal Commission has occur in the industry, which may impact you. At this been published, we would like to take a moment and stage, we have been advised that our sector is to address this as it relates to our company and the remain unchanged, however, we will inform you if this changes or there are any decisions made as a result equipment and business finance space. of the Royal Commission which could impact you or the services we provide. We hope you enjoy this edition of the PMG Pulse magazine and thank you for your ongoing support and clientele. As proud members of CAFBA (the Commercial and Asset Finance Brokers of Australia, Association), we are pleased that there were no findings of market failure in the commercial broker channel in which we work, and are very thankful for the work CAFBA are doing to protect our area of financial services. We are also very pleased that the Royal Commission has recommended that the National Consumer Credit Protection Act (NCCP Act) should not extend to small business lending, and we also support the controls which have been put in place to ensure that the remedies proposed for the consumer borrower space, do not impact on our ability to deliver workable o u t c o m e s for business borrowers. - David Gandolfo -

“CAFBA members are career professionals.”

CAFBA President, David Gandolfo stated earlier this week that “CAFBA members are career professionals who are interested in the best possible outcomes for their business customers, and they do not want their customers impacted by the new regulations and remedies that are intended for an entirely different area of the financial services sector.” Mr Gandolfo also stated that “regulators, bankers and policy makers need to be careful to make the PMG Pulse March/April 2019


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f you’re looking around for a way to help free up some working capital, then Debtor Finance may have crossed your path. But what is it, and how could it help? TAKE BACK CONTROL OF YOUR FINANCES Waiting for clients to pay invoices can be incredibly frustrating because of how important cash flow is to the running of a business. You need it to pay wages, maintain equipment and clear bills from suppliers, to name just a few expenses, and a month of waiting to be paid for the goods or services your company has amount – a high percentage, already provided is too long. meaning you won’t lose out too much on the total. Fees are taken Dunn and Bradstreet Australia out of the remaining money, so released figures which showed your debts are paid when clients how invoice payment times have pay. Financiers also take charge changed over the past few years. of collecting the money, so you While the average is now at a won’t need to chase clients record-low of 44.1 days, that is again and again to complete the still sitting well above a month transactions. of waiting to be paid for goods or services your company has WHO USES DEBTOR FINANCE? already provided. When your Debtor Finance is more often than company needs an injection of not used by companies who are capital urgently, there aren’t many focused on growth. These are the options out there apart from businesses that need improved waiting for clients to eventually cash flow, so they can receive pay. discounts from suppliers, prepare

“Debtor finance is one of the few solutions.” WHAT DOES THE SERVICE PROVIDE? Debtor Finance involves a financier taking control of any unpaid invoices which your company still needs to be resolved and paying you a percentage of that

their inventory for peak seasons, upgrade equipment, and produce and sell more goods or services.

HOW LONG HAS DEBTOR FINANCE BEEN AVAILABLE? Although the term Debtor Finance may be an unfamiliar term to many, it has been a part of the business world since the 1700s. It’s a financial process that involves a business retaining an agent or company to conduct certain

financial transactions for the business owner. By purchasing the business’s accounts receivable debts, it allows that business to receive immediate cash for monies due to them from their debtors. WHO BENEFITS FROM USING DEBTOR FINANCE SERVICES? While this process can offer substantial financial support for new and growing businesses, it can also offer major advantages for established companies as well (size is of no importance). Considering that many businesses are affected by the financial challenges of the current economic environment, it’s a relief to know that there are ways to avoid the problems resulting from this. Difficulties such as the inability to raise working capital because of restrictive lending policies can be shielded by having a guaranteed cash flow to cover most or all expenses. Utilising a Debtor Finance facility turns credit sales into working capital for business owners. This results in additional PMG Pulse March/April 2019

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WHAT IS DEBTOR FINANCE AND HOW CAN IT HELP YOUR BUSINESS? capital being immediately available to use for: • Reinvestment into the company for increased growth in sales and other business improvements • Tax and creditor payments • Credit history improvement • Purchasing in bulk to receive supplier discounts • Confidently accepting larger contracts because of healthy cash flow leading to larger profits. CONCLUSION Debtor Finance provides businesses with unique financing structures which enable business growth by allowing owners to focus entirely on operating the business while maintaining a sufficient cash flow. Business owners can eliminate the stress resulting from late payments and avoid the resulting adverse effects on their business. Partner source:



id you know that PMG Finance has an active online community and this week, we are proud to have reached a following of 700 followers on Facebook and over 1000 followers on Linkedin Thank you to everyone who has liked or followed us and if and if you are currently not following the PMG Finance social pages, click the links below to find out more.

PMG Pulse March/April 2019

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ongratulations to the following clients who have made purchases with the help of our Broker team during the last two months. It has been a privilege to be able to help you meet your business goals. #weloveourclients

Emma & Charlie


Emma & Charlie



David PMG Pulse March/April 2019

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egislation passed through Parliament last week means employers with 19 or fewer employees will have to report under the Single Touch Payroll (STP) regime by 1 July 2019. Employers with 20 or more employees came under these reporting requirements as at 1 July 2018.

“Public Accountants are in the best position to help small business clients transition to the digital world” - Andrew Conway “While it is appreciated that not all small or micro businesses are digitally ready for STP, their accountant is in the driver’s seat to assist them to meet these new reporting obligations,” said IPA chief executive Andrew Conway. “In fact, some 30 percent of small businesses are still not on a digital platform and while cost may be a factor, some may well be missing out on many efficiency and productivity benefits that could help their business grow.” Conway also acknowledged that for some micro businesses, a nondigital option may be a better fit to manage STP requirements, in the short term. He encouraged accountants to become advisers to assist their clients’ transition to STP with the help of the various tools which are now available. Pulse March/April 2019March 2019

“Public Accountants are in the best position to help small business clients transition to the digital world,” he said.

“Technology is empowering people to take more control over their business, operate with more accuracy, security and efficiency – and by doing so creating a greater The legislation could unlock an impact for themselves, their additional one million hours of community and their economy,” business productivity per week, Innes said. boosting the economy by over $1.3 billion annually, according to BENEFITS OF GOING DIGITAL research by global small-business The research showed small platform Xero. businesses who have gone digital are reaping the benefits, The introduction of STP legislation with one in three (30 percent) of is expected to push more these firms saying profitability businesses towards adopting had increased. Three in four (76 payroll software, and small- percent) businesses surveyed said business owners who have already digitising payroll had freed up taken this step report have saved time and mental space for them an average of 3.1 hours per week, to work on their business rather according to the research, which than in it, while three quarters also reveals that the large-scale (77 percent) reported that it had migration of payroll reporting to reduced payroll errors. digital platforms in Australia is expected to provide a $1.3 billion In a finding that suggests the STP productivity dividend in FY19, in the legislation will flow through to form of one million hours saved improved business productivity per week in payroll processing across Australia, more than half alone. (51 percent) of business owners surveyed by Xero who have already Trent Innes, Managing Director of implemented a digital solution Xero Australia, said that the move said that the change was helping to STP “will usher in a new era of their business save money. digital connectivity for Australian businesses.”

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abitual routines, or the ‘that’s the way we do things around here’ mentality, is one of the most damaging thoughts you can have in your business. And sadly for many tradies, doing things the way they have always done them, means they are not always aware of the solutions available in the market place to help run their businesses better.

However, one in five (21 percent) were still using pen and paper to manage their payroll, likely contributing to the nearly 2 million payroll errors made every year by small businesses. BARRIERS TO DIGITAL ADOPTION Despite the benefits of specialised payroll software, the Xero report shows that two in every ten (19 percent) small businesses with digital payroll systems currently are using software that is not STP-compliant. According to Innes, simply installing a desktop or cloudbased payroll system will not automatically mean a business owner has met their compliance obligations. “Business owners should speak to an advisor or their payroll provider to ensure they’re compliant. If you are an employer, make sure that your payroll software is STP-ready and that its STP reporting function is actually enabled,” he said. Source:

Many business professionals talk about the importance of efficiency, but let’s consider a landscaper, plumber, tiler or electrician, who is on site all day, in sometimes extreme weather conditions, and who then comes home exhausted, to vast amounts of paperwork.

access the same services via an app on their phones. RECEIPT BANK OR HUBDOC We have all seen a tradie pull out a stack of receipts from a folder, so that they could hand them to their bookkeeper. But, with a smartphone, receipts can now be photographed and sent to the bookkeeper, and as an added bonus, there is no longer a need to keep a copy!

QUICKBOOKS ONLINE OR QUICKBOOKS SELF-EMPLOYED APP (QBSE) The QBSE mobile APP comes with a vehicle mileage tracker, which makes it easy for tradies to claim vehicle business running costs. The platform allows your staff The most valuable tool tradies to clock in and out, meaning aren’t using… managers will never have to chase another timesheet again. Knowledge about how your business is performing can also be done on this APP.

Today, one of the most powerful tools a tradie has is a smartphone, and knowing how to use it allows them to earn money and save huge amounts of time. Here are some of the key apps all tradies should be aware of: SERVICEM8, SIMPRO AND TRADIFY These APPS are useful for job scheduling, quoting, invoicing and on-the-spot payments. There is no need to wait until you get back to your office, as your staff can

WHERE TO FROM HERE? Tradies should start to take advantage of technology which business owners in other sectors are utilising, and research has shown that tradies who incorporate a number of these tools into their business, have found the results are truly worth it. Furthermore, these processes can also lend you another level of control over your business, which can and will ultimately allow you to see better financial results in 2019. Source: Lielette Calleja -

PMG Pulse March/April 2019

PMG Pulse

ESSENTIAL KNOWLEDGE HIRE PURCHASE AGREEMENTS WHAT IS A HIRE PURCHASE AGREEMENT? hire purchase agreement can be a substitute for a business loan, whereby the party hiring the equipment pays the financier rent. The financier continues to own the goods until the hirer makes the final payment. Typically, hire purchase agreements have fixed regular payments.


The type of information you may see in such a hire purchase contract may include: • A description of the goods • The rate of hire and interest charges Pulse March/April 2019March 2019

PMG Pulse

HIRE PURCHASE AGREEMENTS • The total price to purchase the goods • Details of the deposit; and • Information on both parties’ rights. HOW DOES IT WORK? Sometimes a hire agreement is not exclusively between the hirer and the owner of the goods or services (financier). A typical example of having a third party involved is when you hire cars or other vehicles.

or company to whom money is owed) until the hirer makes the final payment. IS THERE ANY RISK? Firstly, if you do not understand the terms of your hire, then you are needlessly exposing yourself to risk. It is sensible to speak with a finance professional and review your hire purchase agreement. Secondly, you may also be liable for any damage to goods belonging to another business. Similarly, ensure you understand your responsibilities if you fall behind on your repayments (such as whether the financier can repossess the equipment after an agreed time-frame).

In most vehicle hire agreements, a Finance Company will purchase the car on your behalf, and then give you possession in return for regular payments (including interest). When the agreement terminates or comes to an end, and the total price of the vehicle has been paid, as well as the interest charges, the hirer can take ownership. WHO IS THE LEGAL OWNER? Under a hire purchase agreement, the legal owner of the goods or services is the financier (a person




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