Month: October 2020

Choosing a super fund

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Choosing a super fund requires taking multiple things into consideration. Such as its performance, the fees you will be required to pay, details of the insurance, and different investment options that are available. 

Performance

Performance is one of the most important things to consider when choosing a super fund. Take a look at how the super has been performing over the years. Compare how one super compared to others, but remember to compare within categories. 

Low fees

All funds will charge a fee – this could be amount or percentage or even both. Checking to make sure that you aren’t paying excessively high fees when there are lower cost options is integral. Fees will usually be charged at the end of every month, or actions such as switching investments. 

Insurance

Super funds will have three different types of insurance for members: Life (or death cover), total and permanent disability (TPD), income protection. When selecting a super, you should check the premium rates, the amount of cover and any exclusions or definitions that might affect you in the future. 

Investment options

Funds will provide you with a range of options as to how you would like to conduct investment. Such as: growth, balanced, conservative, ethical, etc. Some funds may also allow you to choose the weighting of different asset types or direct investments. 

Taking all of these factors into account is difficult. Comparison websites for superfunds make this process a bit easier. These websites may have vested interests, so you should take this account before making a decision based purely on one website.

The 2020 Budget also announced provision of ‘YourSuper’ which will be a tool the government creates to compare super products. This might further help in comparing and deciding which super fund you choose or change to.

Best practices in business management

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Engage employees in the company vision

It is important to share the business vision with employees so that they feel more motivated and enthusiastic. This will not only develop an interest in the work being completed, but also increase productivity. Further, engaged workers are more likely to bring in ideas and contribute  to the growth of the company. 

Reward Effort

Continually recognising and rewarding effort will encourage employees to continue putting in the effort. It lets employees know that they are appreciated and builds company loyalty. 

Being Vulnerable

Upholding a stoic demeanour rather than being vulnerable prevents teams from developing strong professional relationships that are effective. Instead, vulnerability assists in team building and allows employees to feel comfortable with making suggestions that could be extremely promising. 

Encourage differing opinions

Businesses should steer clear from creating an atmosphere where people avoid making suggestions because they are in conflict with other ideas. An environment where conflict is welcomed can lead to productive discussions and the generation of good ideas. 

Company culture

Determining the core values that your business holds and sharing them with employees can help with creating a strong team. The dynamic between team members is important in ensuring productivity and efficiency. Identifying a company culture will assist the hiring process as well as team dynamics later on. 

Protecting your business from cybercrime

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Having a digital presence nowadays is crucial to getting the most out of marketing your business. However, being online puts you at risk of being a target for cybercrime, which means that you and your customers are at risk of being scammed, hacked, harassed or stalked. Business owners have legal responsibilities to ensure that their business and customer information is safe. For this reason, it is vital that you take precautions when putting anything online.

While social media platforms such as Facebook and Instagram have policies in place to prevent people being victim to cybercrime, it is still possible for hackers to dodge these measures and attack your business. It is therefore important that you implement your own safety measures to reduce the risk of being targeted.

Many cybercriminals target business’ social media accounts to get access to a large following of people they can trick or manipulate. It is crucial that your business account has a strong password consisting of at least 8 characters, with a mix of upper and lower case letters, numbers and symbols. Ensure that only authorised users have access to the business’ social media accounts. 

Create a social media use policy for your staff to ensure that they are aware of the consequences and risks of sharing account information and being careless with social media handling to reduce the risk of misuse and security breaches. It is also useful to provide a cybersecurity incident response management plan to help your business prepare for security breaches and know how to respond to them quickly and effectively to prevent them from escalating. 

When planning a social media campaign, think about ways you can prevent your campaign from being hijacked by hackers to keep you and your followers safe. For example, if your campaign is a competition that involves participation from your followers such as them uploading a photo, think about ways to keep them safe from hackers. Perhaps you can provide guidelines for entering the social media competition, such as discouraging them from geotagging their location and ensuring they don’t have their house or any other personal details evident in the picture.

Speeding up invoice payments

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Taking care of invoice and billing payments can often be an onerous task for many small businesses. However, very few things are more important in the business industry than getting paid on time, since delays in payments can disrupt a business’s cash flow quite seriously.

Business owners looking for best practice tips to get paid on time should keep in mind that often the most effective solutions are usually the most simple. Owners should make sure that their invoices are accurate, easy to read and include information such as:

  • How to pay the invoice
  • A clear description of goods or services provided
  • The details of any discounts and how they were determined
  • Information about any outstanding payments
  • Delivery charges if applicable

If any queries should arise about the invoice or payment, owners should handle them fairly and quickly.

Making only a few simple adjustments to invoices can speed payment from customers so owners can focus more of their time on their business than on their bills. Some techniques to speed up payments include:

  • Confirming the correct location and contact details so the invoices reach the right person.
  • Clearly stating on your invoice that you reserve the right to charge a set late fee for overdue invoices.
  • Contacting customers to tell them what corrections or adjustments are being made to their invoice before sending the amended invoice
  • Quoting any relevant customer reference number customers have provided.
  • Including a credit card or online payment option.

Making employees feel valued

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Statistics have shown that employees who feel valued are more motivated to perform their best. But how can a business make employees feel valued so that they can encourage this behaviour?

Recognition

It can be as simple as letting employees know that they are valued. This can occur one-on-one or in group settings. Vocalising appreciation of an employee’s work, as well as giving raises and bonuses are effective methods.

Feedback

Giving employees positive feedback (more than negative feedback) is a great way not just to show appreciation, but also to foster an environment that allows constructive feedback as opposed to criticism.

Communication

Keep open lines of communication with your employees, and let them know what the plans for the organisation are, when and if, possible. This improves transparency, and lets employees know that they are trusted members of the business.

Right level of challenge

Designate tasks which show trust in an employee’s capabilities. These tasks can build on employee’s skills and encourage growth and development in areas where needed.

Attending to employee’s and their needs is important in letting them know that they are valuable members. This will not only improve their morale, but in the end generate productivity.

What is Organisational Culture?

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Understanding what organisational structure is can help with making decisions about your business in all areas. Organisational culture is multifaceted, it consists of the shared values, beliefs and norms in the workplace, and determines employee interactions as well as customer interactions.

There are four types of organisational cultures.

  • Clan Culture: Focussed on collaboration between teams to form a family-like relationship.
  • Adhocracy Culture: Focussed on creativity and innovation and open to continual change.
  • Market Culture: Focussed on achieving goals through competitive drive amongst employees.
  • Hierarchy Culture: Focussed on formal procedures and guidelines and maintaining power structures.

The organisational culture reflects in all aspects of the business. It can help with determining which potential employees may be more suitable than others and the way that those in leadership positions communicate with employees.

The way a business communicates and interacts with their customers is also influenced by organisational culture. Businesses may desire friendly and informal relationships, or formal and reserved relationships. Communication methods may also change, such as preferring email interaction as opposed to utilising chat functions.

Of course, the culture of an organisation can have overlap of the different types. More important than focussing on one type of culture, is recognising what works best for your business and trying to foster values and norms that embody that.

What to look out for in an employment contract

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Reading any contract before you sign it is essential, but there are some things you should keep a special eye out for when signing an employment contract.

Award Coverage

You should always check that the salary you have agreed upon with your employer is on par with the award rates and no less. Double check what rates are associated with your position and clarify any concerns with your employer.

Restraint of trade

An employer may add a ‘restraint of trade’ clause to your contract. This may impact whether you can work in the same industry later on, so make sure that the employer hasn’t done this without first discussing the details with them first.

Changing terms of contract

Your employer may have added a clause which gives them the sole right to make any changes to the contract (such as duties, pay, seniority or location of work). Although employers should not be changing any terms and conditions in the contract without first notifying you, having this clause in the contract will make it more difficult for you to argue any changes. Check to make sure the employer doesn’t have sole ability.

Carefully read all aspects of the contract to make sure that they reflect national standards and any specific agreements you had made with your employer.

Insuring your super

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Most super funds offer insurance as part of their super plan. It is important to be aware of what types of insurance you are covered by through your super fund to help you determine if you need extra cover outside your super and if you have adequate support in the event that you cannot work. There are three types of insurance that can be available through super funds:

Life insurance (also known as death cover):

This is the most common of all personal super insurances and is part of the benefits your beneficiaries will receive when you die. Life insurance is typically applied to your super account by default. It is not compulsory with your super, however, if you have a self-managed super fund (SMSF), then you are required to consider insurance as part of your investment strategy.

Total and permanent disability (TPD) cover:

This insurance pays a lump sum if you become permanently disabled and are unable to work again, protecting you against the risk that your retirement income is cut unexpectedly short. TPD cover is often automatically joined with life insurance as a default cover.

Income protection (IP) cover:

This pays you an income stream for a period of time that you are not able to work due to temporary disability or illness. It is only available as a default cover in about one-third of super funds. It may be particularly useful if you are self-employed or have debts.

You can check what insurance you have with your super fund on your annual super statement, your online super account or by contacting them. Through these you can see the type and amount of cover you have, and how much you are paying for it.

JobMaker Hiring Credit

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Job losses have been extensive during the COVID-19 pandemic and the JobMaker Hiring Credit will give businesses incentives to take on additional employees aged between 16 and 35 years old.

Eligible employers will receive $200 a week for each new employee aged between 16 and 29. For new eligible employees aged 30 to 35, they’ll receive $100 a week. Businesses and employees will need to satisfy specific eligibility requirements.

For an employer to be eligible they must have an Australian Business Number and be up to date with their tax lodgement obligations, registered for Pay As You Go (PAYG), and be reporting through Single Touch Payroll. Employers will not be eligible if they are also claiming JobKeeper Payment.

To receive the JobMaker Hiring Credit, employers must also meet additionality criteria, requiring an increase in the:

  • business’ total employee headcount from 30 September 2020; and
  • payroll of the business for the reporting period, as compared to the three months to 30 September 2020.

The JobMaker Hiring Credit will be available to employers for each new job they create over the next 12 months for which they hire an eligible young person. The employee must work at least 20 paid hours per week on average and may be employed on a permanent, casual or fixed term basis. The employee must also have received the JobSeeker Payment, Youth Allowance or Parenting Payment for at least one of the three months preceding the time of hiring.

The JobMaker Hiring Credit will start on 7 October 2020. The Hiring Credit will be claimed quarterly in arrears by the employer from the Australian Tax Office (ATO) from 1 February 2021. Employers will need to report to the ATO quarterly that they meet the eligibility criteria.

Registrations will be open for eligible employers through ATO online services from 7 December 2020.

Insolvency reforms to support small business

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The government recognises that despite support to get through the COVID-19 outbreak, not all businesses are going to remain viable.

Many small businesses will have significantly increased levels of debt in order to remain in business during the COVID-19 pandemic. The government is introducing a number of permanent and temporary measures to expand the availability of insolvency practitioners to deal with this expected increase in the number of businesses seeking to restructure or liquidate.

The package of reforms features three key elements:

Debt Restructuring

Currently, requirements around voluntary administration in Australia are more suited to large, complex company insolvencies. The new debt restructuring process will adopt a ‘debtor possession model’ where the business can continue to trade under the control of its owners, while a debt restructuring plan is developed and voted on by creditors.

Liquidation Pathway

The costs of liquidation can consume all or almost all of the remaining value of a small business, leaving little for creditors. Under the government’s new process, regulatory obligations will be simplified, so that they are commensurate to the asset base, complexity and risk profile of an eligible small business.

Temporary Relief Measures Extended

The government announced a further extension of relief measures to 31 December 2020. The

temporary increase in the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000; and a temporary increase in the time companies have to respond to statutory demands they receive from 21 days to 6 months. In addition there is a temporary relief for directors from any personal liability for trading while insolvent, with respect to any debts incurred in the ordinary course of the companies business.

The temporary gives businesses needed breathing space to and highlights the importance of working with financial professionals as soon as required, ensuring that your small business has the best chance of success.