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Getting your money back from late-paying customers

Posted on July 30, 2020 by admin

Businesses can be heavily impacted by customers who cannot, or simply will not pay when payment is due. A single unpaid invoice can cause issues, and the longer this debt is left uncollected, your chances of getting your money back become slim. Consider these tips to avoid and manage debt recovery to save your business from major losses. Reduce credit termsIf late payments and managing bad debt is a regular occurrence, consider reducing your credit terms. You may want to remove your credit terms entirely, but it is important to look at your customer base, the services you offer, and whether there is an average credit term that is expected by your clients. If you offer credit terms shorter than your competitors, you may end up losing valuable customers. However, if your credit terms are too spacious, your cash flow will be slow, putting you at financial risk. Encourage timely paymentsYour business might require a set credit term to meet the industry average. In these situations, consider offering discounts on payments made early or within a set date from invoicing. An alternative is to charge a late fee to encourage your clients to pay on time. In these situations, it […]

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How can you fund your business?

Posted on July 16, 2020 by admin

Turning an idea into a business requires money, and securing this stable funding is not easy. Businesses have a variety of innovative funding options today, but before you pick one, you may want to consider how well some of these methods fit your business model and if you can really benefit from them. Peer-to-peer lendingThis is a form of financing that pairs you up with people online that are willing to lend money to your business, without going through a financial institution like a bank. It involves filling in an application on a peer-to-peer lending website, where your risk rating is determined based on your security, creditworthiness and revenue projections. Once approved, other members on this platform can see your request and may decide to lend you money. If you are looking for a smaller loan, P2P might be ideal for you. Despite the cap on the maximum loan amount, its easy online application and competitive interest rates make P2P a great way to finance your transactions. CrowdfundingMore business owners are turning to the internet to grow their business. Crowdfunding is a way to gain finances without going into debt. These platforms involve business owners pitching their business and asking […]

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What are the different types of cashless payment methods?

Posted on July 2, 2020 by admin

In an effort to minimise physical contact during the global pandemic, most businesses are making the switch to cashless payments. While contactless credit cards and mobile wallet applications remain the most common type of cashless payments, many other methods have emerged in recent times. In the event that your business is also looking to make the switch, here are a few cashless payment types to be aware of. Radio-frequency identification (RFID): RFID uses radio technology to track tags containing electronic payment and banking information. RFID tags are most commonly attached to wristbands, watches or badges and can be scanned using mobile phones and RFID system technologies. RFID tags can also be used at business events or service-providing organisations to keep track of clients while also acting as their digital wallet. Unstructured Supplementary Service Data (USSD): USSD services are another real-time cashless payment method which require a mobile network. With the USSD method, clients must dial a USSD code on an interactive menu provided by the business (could be a mobile phone), which will then allow clients to make payments to chosen recipients. The USSD code is dependent on a client’s mobile network and in order to make successful payments, clients […]

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Avoiding bad debts from your clients

Posted on June 18, 2020 by admin

Running a business is challenging enough, and having to deal with bad debts can add an unneeded layer of stress for you and your team. The easiest way to handle bad debts is to avoid them in the first place – here’s how. Do a background check:Before you enter into an agreement with a client or other businesses, make sure that you know who you’re dealing with and do some research. Make sure they are legitimate, still in operation and look for any bad reviews and feedback concerning other people’s experiences with them. Take into consideration whether they ask you for discounts or complain that your fees are too high. If you get the idea that the client may not pay, it might be safer to avoid the job instead. Have clear payment terms:In your client agreement or contract, include payment terms that clearly state payment dates penalties for late payments. Both parties should agree on these payment terms prior to entering into a contract. Conditions for late payments could include interest fees, fines, or the cessation of supplying your goods and services to them within a specified time period. Ask for a deposit:When you ask for a deposit and […]

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Creating a business cash flow forecast

Posted on June 2, 2020 by admin

Small business owners are often faced with stressful financial decisions and periods of uncertainty. Having a cash flow forecast can help your business avoid cash shortages by allowing you to track whether your spending is on target, prepare for business expansion, plan for upcoming cash gaps and plan budgets. Here are some tips on cash flow forecasting to help your business be in control of its finances. Prepare a sales forecastExisting businesses can look at past years’ sales figures, taking note of busy and quiet periods, and prepare an income prediction based on historical trends. If you’re a new business, you can start by making cash outflow estimates. This can help you plan for what sales you should aim for to cover this and make estimates of predicted sales. Knowing how much money you’ll have in a week or a month is central to being able to budget and know when to pay your expenses. Whether you receive customer payments at the time of sale, or you receive payments based on a subscription or service, you can schedule expenses and budget based on payment periods. Account for other income formsYour business may generate income from sources other than customers. Having […]

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Managing money on a low income

Posted on May 4, 2020 by admin

Increasing living expenses and commitments can make it challenging to manage and save money, especially for low income earners. Here are some tips that may help you reduce financial pressures on a low income… Prioritise high-interest debts:If you have a lot of different debts to pay off, prioritise them by their interest rates. Paying off high-interest debts first can prevent you from unnecessarily losing money from interest fees. Track your income:Keeping track of all your income, whether it’s wages, government support or investments, can help you get a good sense of how much you’re able to spend and at what time. This can prevent you from spending too much too soon before your next income payment, and plan out the best time to pay major expenses without running out of money. Budget:Creating a spreadsheet with your expenses and income can help you maintain an appropriate amount of spending and tell you if you’re overspending. It may take a few tries to develop a budget that suits your lifestyle, but trial and error will provide you with an accurate estimate of how much you need to set aside for different expenses. Sticking to your budget will help you grow your savings […]

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BAS lodging and government funding eligibility

Posted on April 2, 2020 by admin

As part of the second $66 billion support package in response to COVID-19 and its negative effects on the Australian economy, the Federal Government has expanded tax-free cash payments to small and medium businesses with a minimum payment of $20,000 and maximum of $100,000, up from the previous $2000 to $25,000 range. However, it is important to note that payments are only given to eligible businesses after they lodge their BAS (business activity statements) by the 28 July and 28 October 2020 due dates. The new enhanced scheme will be delivered in two phases: Employers are set to receive a first payment equal to 100% of their salary and wages withheld (a maximum of $50,000) when lodging their activity statements at quarterly due dates. An additional payment equal to the first payment made after businesses lodge their BAS by 28 July and 28 October 2020. Businesses will receive payments based on their BAS lodgement schedules. For example, a business that receives a payment for the period up until June 2020 will receive the same amount for the period up until September 2020 upon the lodgement of their BAS in two separate occasions. For monthly BAS lodgers, businesses will receive their […]

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What to consider before taking out a business bank loan

Posted on March 19, 2020 by admin

Many businesses, whether they are only just starting up or have been in the market for a number of years, will need a bank loan at one time or another. However, before you apply for a bank loan, it is important to think things through to ensure that you know if you should get one, if you are getting it at the right time and how you can make the most out of a loan. Here are some questions business owners should ask themselves before beginning their bank loan application: How likely is it that I qualify for the loan?If you believe that your business won’t qualify for a bank loan, then you will only hurt your credit rating if you apply for a loan you won’t get. Being rejected for a loan can also make it more difficult for a business to borrow in the future. Will the loan help the business grow?Instead of using the loan for aspects like routine operating expenses that don’t generate much revenue, owners should consider putting the borrowed money into parts of the business that will generate more revenue and help reduce future borrowing needs. How much do I need?Before making requests of […]

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When do you have to pay tax on shares?

Posted on February 21, 2020 by admin

Investing in shares is a popular method of growing your wealth, however, there are tax obligations you need to be aware of to get an accurate sense of how much you’ll need to put aside for your investments. When you own shares, you need to declare all your dividend income on your tax return. It is possible to claim tax deductions for certain expenses you pay to receive income from your shares. The deductions you are eligible for will depend on if you are carrying on a business of share trading or if you are an individual share investor, but they can include: Management fees: the payment of ongoing fees or retainers to investment advisers are tax-deductible. Borrowing expenses: the expenses of borrowing money for shares may be tax-deductible. This can include establishment fees, legal expenses and stamp duty on the loan. Interest: if you received a loan to buy shares, you can claim a deduction for the interest incurred on the loan if it is expected that assessable dividends will be derived from your shares. Travel expenses: if you need to travel for the sole purpose of working on your share investment, such as travelling to consult with a […]

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What to know about reverse mortgages

Posted on February 6, 2020 by admin

A financial dilemma that is becoming increasingly common is finding a way to fund a comfortable retirement lifestyle without having to sell the family home. One solution to this is a reverse mortgage; a loan that allows homeowners to convert part of the equity in their home into cash. Money from a reverse mortgage can then be received as a regular income stream, line of credit, lump sum, or a combination of these options. No income is required to qualify for a reverse mortgage, which makes them ideal for those who have retired from the workforce. Given the nature of this type of loan, it is important that homeowners understand the risks involved and consider how they can protect themselves as much as possible. Risks associated with reverse mortgages include: The interest rates are usually higher than average home loans. Variable interest rates mean that there will be changes to what you are charged over time. Debt can rise quickly since the interest compounds over the loan term. The loan can affect your pension eligibility. Drawing funds from your property can reduce what you could potentially access later on, leaving little left for aged care or other future needs. For […]

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