Running a restaurant is a labor of love, combining culinary creativity with impeccable service. However, amidst the hustle and bustle of the kitchen and the dining area, it's essential not to overlook the financial health of your establishment. 

Effective bookkeeping for restaurants is more than just number-crunching; it's a strategic practice that ensures your business stays profitable. In this guide, specifically crafted for restaurant owners like you, we'll delve into the world of hospitality bookkeeping, offering insights and strategies to help you manage your finances like a pro.

1. The Importance of Bookkeeping for Restaurants

A well-organised bookkeeping system serves as the backbone of your restaurant's financial management. It enables you to track income, monitor expenses, and make informed decisions based on accurate financial data. Not only does this help you maintain profitability, but it also ensures compliance with tax regulations and provides a clear overview of your business's financial health.

2. Setting Up Your Restaurant Bookkeeping System

Before diving into the specifics, establish a reliable bookkeeping system tailored to your restaurant's needs. This involves choosing appropriate accounting software, defining your chart of accounts (e.g., revenue categories, expenses), and implementing a consistent data entry process. Cloud-based accounting software like Xero, can streamline your operations by allowing you to access financial data from anywhere and collaborate with your bookkeeper and accountant seamlessly.

3. Tracking Revenue

Effectively tracking revenue is crucial for understanding the financial pulse of your restaurant. Categorise revenue streams such as dine-in, takeout, delivery, and catering. Implement proper systems to record all transactions accurately, whether through cash, credit cards, or digital payment platforms. If you’re unsure of the systems needed to provide these breakdowns, we can help.  Regularly reconciling your sales with payment processor reports helps identify discrepancies and ensure accuracy.

4. Managing Expenses

Controlling expenses is essential for maintaining profitability. Categorise expenses into fixed (rent, utilities) and variable (ingredients, labor) costs. Implement purchase orders and expense approval processes to manage discretionary spending. Regularly review your expenses to identify areas for cost-cutting or cost optimisation.

5. Inventory Management

Effective inventory management directly impacts your restaurant's bottom line. Keep a close eye on ingredient usage, wastage, and spoilage. Regularly update your inventory records to reflect real-time stock levels. This not only prevents over-ordering but also provides insights into inventory turnover rates, helping you make informed purchasing decisions.

6. Payroll and Labor Costs

Labor costs often constitute a significant portion of a restaurant's expenses. Implement a clear payroll process, accurately tracking employee hours and wages. Factor in additional costs such as taxes, benefits, and overtime. Analyse labor cost percentages to ensure they align with industry benchmarks and your business's financial goals.

7. Financial Reporting and Analysis

Regular financial reports provide insights into your restaurant's performance. Generate income statements, balance sheets, and cash flow statements to assess profitability, assets, liabilities, and cash flow patterns. Analyse these reports to identify trends, make informed decisions, and adjust strategies accordingly.

8. Tax Compliance

Adhering to tax regulations is non-negotiable. Maintain accurate records, including sales tax, employee taxes, and other applicable taxes. Keep abreast of tax deadlines and changes in tax laws that could impact your restaurant.

9. Seek Professional Guidance

If navigating the intricacies of restaurant bookkeeping seems overwhelming, consider enlisting the help of a professional bookkeeper with experience in the hospitality industry. Their expertise can streamline your financial management and help you stay compliant with tax regulations.

In the bustling world of hospitality, meticulous bookkeeping for restaurants is the recipe for financial success. By implementing effective systems to track revenue, manage expenses, optimise inventory, and analyse financial reports, you'll not only ensure your restaurant's profitability but also pave the way for growth and sustainability. Remember, accurate financial data isn't just numbers on a page – it's a guiding light that illuminates your path to success in the world of hospitality. 

Ready to take the first step toward optimising your restaurant's finances? Our experts are here to help! Book a meeting today to discuss your unique restaurant bookkeeping requirements and embark on a journey toward financial excellence.

Businesses are increasingly ultising a wide variety of bookkeeping services to continue to manage and track expenses and provide an easier way to plan and keep records up to date. Through the use of bookkeeping services that include generating invoices and receipts, and keeping track of, and maintaining accounts and spending, employing the use of bookkeeping services would provide innumerable benefits to a small business. 

What is an Online Bookkeeper? 

An online bookkeeper is still able to perform the same type of tasks as on-site bookkeepers, however, has the ability to work for their clients from a remote location, while still using software related to accounting to provide the bookkeeping services. 

Responsible for the financial accounts of their clients, an online bookkeeper is an essential member of a business and its team, with their main duties including receiving payments of outstanding balances and invoices, while also being required to assist with other areas such as payroll and filing tax returns. 

The Benefits of High-Quality Bookkeeping Services 

Enlisting the use of online bookkeepers and bookkeeping services has a whole host of benefits related to putting your business in the best position and have a better outlook for the future. 

Compliance: 

Online bookkeepers can help businesses to stay on top of their finances at all times and develop a routine to correctly set up financial processes and stay organised at all times. As a result, this should reduce the amount of scrutiny and investigation come tax time and your bookkeeper can help you to understand the requirements for compliance from the ATO. 

Reporting and Insights: 

In order to ensure you’re making the correct decisions for your business, having a robust reporting process can help businesses plan and forecast for the future with increased accuracy and timeliness. Key business decisions made with proper decision-making tools will collect the necessary data needed to analyse trends and information relating to financial spending, with constant review. 

Overheads: 

An online bookkeeper will help keep costs down and reduce overheads. With reduced costs as a result of no on-site visits and an overall lower cost of doing business, clients will be able to get great value with valuable time and money able to be spent across other areas of the business. 

Quality: 

Online bookkeepers can deliver exceptional bookkeeping services to their clients, while also being assured of consistent output of resources and assistance in delivering each element of the service provided. Clients can be assured of a trusted service that will allow for one less worry within their businesses and its operations. 

Conclusion 

Online bookkeepers can be an important and useful aid and service to any business to help manage and facilitate the financial records and expenses throughout a business. With the use of bookkeeping services via online bookkeepers, businesses can be assured their own costs will remain low, while still being provided with a service that you can depend on

Australian bookkeeping firm My Accounts has teamed up with WeWork, one of the leading global flexible space providers, to provide its members an exclusive offer to assist with financial recording and reporting. 

My Accounts has established itself as a supportive advisor to small and medium-sized enterprises (SMEs) with offices at WeWork in Sydney, Melbourne, and Brisbane, working primarily with founders, startups, and scaleups directly to provide essential accounting support. 

A WeWork member since 2017, My Accounts has been proactive in engaging with the WeWork community through programming and events, with the objective of supporting businesses, especially SMEs, that can benefit from improving their financial processes. 

According to ASIC, 51% of business failures are the result of inadequate cash flow management. Ensuring that any business’s cash flow is in order, especially ones that are in their early phases, can make a considerable difference to not only survival, but also prosperity. 

Through an exclusive member offer, WeWork members will be able to access workshops on budget and cashflow at reduced rates.

My Accounts’ managing partner Noel Tiufino said that providing first-time founders and entrepreneurs the right financial tools and processes was “critical” to business success.

“As a small business founder, working alongside passionate, enthusiastic business owners that may not have the financial literacy to support their great ideas is really important to us,” Tiufino said.

“Being part of the WeWork community for over five years has provided My Accounts with an incredible opportunity to support growing businesses with practical financial assistance to improve their entire organisational ecosystem and shape their future.”

My Accounts undertakes a range of bookkeeping tasks relating to sales, expenses, payroll, management and compliance, and acting as a “Virtual CFO” for small businesses. Currently, WeWork members can access exclusive offers from My Accounts by accessing the dedicated offer page.

For more information, contact:

-       Amanda Lacey at amanda@popcom.com.au or 0418 448 570

-       Noel Tiufino at noel@myaccounts.com.au or 0415 555 016

Exclusive offer for WeWork members

Xero Setup 

• Activate Appropriate Xero Subscription for your Business 
• Customise Chart of Accounts 
• Setup Bank Feeds 
• Setup Employee Portal (if applicable) – Import active employees and entitlements balance 
• Customise Xero Dashboard and Accounts Watchlist 
• Customise Invoice/Statement/Payslip template 

RRP $720 + GST
Special offer – $360 (Partnership Discount = 50% Off) 

Budget and Cashflow 

• 2-hour pre-planning workshop – We’ll discuss your 2023 revenue targets and expense budgets – Prior to the meeting, we’ll analyse FY22 data as a starting point for our discussions 
• Creation of draft FY23 Budget and Cashflow based on the discussions in the pre-planning workshop 
• 1-hour meeting to go through the draft 
• Post adjustments if any required 
• Send through finalised FY23 Budget and Cashflow 
• Upload into Xero for Budget vs. Actual variance reporting 

RRP $2,320  + GST
Special offer – $1,440 (Partnership Discount = 38% Off) 

All prices exclusive of GST

It is challenging to run a business, whether it’s having those difficult conversations with your employees or running around trying to accomplish your business goals. With online bookkeepers now making it easier than ever to manage  your numbers and key business metrics, you need no longer worry about your books. But what exactly is an online bookkeeper, and what do they do?

Similar to a traditional bookkeeper, an online bookkeeper provides accurate, updated financial information about your business. An online bookkeeper aims to provide you with all the information you need to analyse your business and develop strategies to improve it, as well as remain compliant. 

How will online bookkeepers help you?

Online bookkeeping services can help you keep track of expenses, generate invoices and receipts, and ensure compliance. As most small business owners would agree, running a business requires sacrificing time with your family and social life. Online bookkeeping will allow you to have a more balanced life, leaving you much more refreshed to take on your busy work schedule. 

Having less work on your plate will allow you to concentrate on your strengths, so why not let the bookkeepers handle the finances for you? Online bookkeepers are experts at what they do and in addition to finding every efficiency for you, they'll present data in an easy-to-understand and digestible reporting format. 

Whether you are trying to reduce your liabilities or determine whether you can afford that next piece of equipment, a bookkeeper can help guide you on these important business decisions. 

Tax time can be highly stressful, but thankfully, a fully accredited online bookkeeper will work with you to ensure all your books are up-to-date and that you meet all your obligations. When you hire an experienced bookkeeper, you can be confident you will have the lowest liabilities possible by finding the deductions that will benefit you and your business.

The advantage of online bookkeepers

Many businesses had to pivot their operations to the online space because of the COVID pandemic, one of which was bookkeeping. Thankfully, the pandemic proved that online bookkeeping is not only possible but also an excellent way for businesses and bookkeepers to work together. 

Instead of waiting for the work to be done, you can communicate online in real-time about what you want, when you want it, and how you want it done. Using online bookkeepers also reduces overheads, as you don’t have to manage an in-house bookkeeper, and you don't have to waste time in tedious meetings in a bookkeeper's office. 

No matter what kind of business you own, moving to online bookkeeping gives you the freedom to focus on what you do best while not getting stuck on your budgets, finances, and reporting

This article is a revised extract, taken from the Reckon Blog, of which the complete version can be found here.

The 2015 Reckon Conference kicked off with a keynote address by MD Sam Allert referencing today’s ‘disruptive’ business environment, and greater need for tracking KPI’s and also announcing the strong Reckon profit in first half year of 2015.

This demonstrates the strength of the Reckon brand versus competitors who have been in significant loss situations in same period like MYOB and Xero or declines in revenue/profit by others, like Intuit.

Newly appointed COO, Daniel Rabie followed up nicely with insight to global trends that surround the decisions that Reckon are taking with their deployment of solutions for business. A key focus today, is having the necessary tools in place to provide business analytics as well as compliance reporting. Reckon are addressing this with their agile approach to using API and developing a strong underlying technology base to promptly react with the growing challenges from interfacing to credit organisations, banks, Government agencies and inter-company transactions.

Panelists provided a terrific interactive session for Bookkeepers and Accountants to explore strategies for growing their businesses. These sessions provided invaluable comparison and feedback to the audience with questions relating to value-added services, pricing, marketing and the need for greater IT awareness. Today, there is a growing need for firms to extend their services to provide software advice, goal-seeking/business coaching consulting services, and to consider outsourcing these services to satisfy customer needs. With the increased dependence on Cloud services, there needs to be a parallel increase in providing something tangible to market and demonstrate the reporting services provided. Simple strategies like presenting monthly dashboard KPIs/analytics help keep the firms name up front with key clients.

Reckon continue to openly share their direction with Accredited Partners (AP’s) on not only the end-user products: Reckon Accounts (desktop), and the securely hosted Reckon Accounts Hosted and Reckon ONE products in Amazon’s Data Centres in Australia but also their long standing Practice Management suite of products for Accounting firms.

Key tips, tricks and business efficiency clues were found in many of the sessions, including “Geek Speak” (Jason Hollis / Tony Tran), “Work Tools” (Renee Herbert) and a simple-language overview of building a digital presence using website tools and optimisation strategies that bore out the importance of keeping it simple, and presenting meaningful content to raise interest in one’s business. (Well presented by Matthew Butler – Marketing Manager, Reckon). This information was coupled with presentations by Amazon Web Services, about their secure data centre operations. https://myaccounts.com.au/reckon-conference-2015/This provided an eye-opening examination of how risks of data loss can in fact be decreased by migrating operations to a data centre (Cloud) based environment.

Presentations delivered directly from the Product Managers (Dean Darke, Ed Blackman, Neil Rustige and Simon Hutchison) made a great impact on gaining a clearer direction of the overall roadmap in a time when technology advances and consumer demands are at an all time high. Amongst the many practical messages taken away from the conference, are:

– Future dependence on browsers, not operating systems, and the consideration of software update automation strategies
– Pending legislative changes that will require secure distribution of information
– Increased interest by business of workflow efficiency improvements and the tools that assist this
– The increased need to evaluate inhouse systems compatibility/impact along with internet access before contemplating Cloud solutions
– Mobile devices providing ever increasing solutions for POS, information sharing and data access
– The benefits of bundling a choice of modules in a “Software As A Service” (SaaS) business model for delivering IT solutions
– The opportunities available from integrating solutions from a variety of some 500 Software Developer Partners using API for ie: CRM, ERP, Manufacturing
– The fine print behind the authorisation methods for Bank Data feed interfacing – taking the direct Bank approach rather than just Yodlee
– The changing trends in how website ranking takes place in 2015
The continued interest in personal range of products for investment planning and personal budgeting – ie: Home & Business
– Key articles helping users with planning migrations to new versions of Reckon and operating systems.
– Growing roles where suitably qualified/experienced APs with IT knowledge can assist fellow Accountants and Bookkeepers.
– IDC statistics of the enormous growth in Cloud technology deployment – Presented by Clayton Brown, AWS, and Zack Levy CIO Reckon)
– Valuable tips for improving website presence
– Diplomatic observation of “Issues” versus “It’s You’s” – and the polite pro-active way of sharing the good oil to address any technology queries

Bottom line: The collective skills of AP’s with Accounting, Bookkeeping PLUS Computing/IT experience, can ensure that End-Users and AP’s alike can enjoy the full use of the fine Reckon product range.

Every Saturday morning, I receive a delivery of fresh fruit & veg, red meat & fish, meal recipe cards and a health magazine to top it all off. I’m a Gen-Y business owner that works long hours but also socialises excessively – therefore the most precious commodity to me is time.

When I’m at home, I find that it takes longer for me to decide what I’m going to cook, than it does to cook the dish itself. Pepperleaf, the new subscription based, weekly meal delivery service is an absolute godsend and most importantly, it solves this massive first world problem for me… when I’m not at café, bar or restaurant, that is.

I reached out to the founder and CEO of Pepperleaf and was lucky enough to steal some of his previous time for an interview.

Noel Tiufino: Have you always wanted to run your own business?

Simon Kahil: I think not running my own business has never fit with me. I have had ‘real’ jobs before my early mid-life crisis, but it never suited and I always felt like the work experience kid that didn’t go home.

NT: Do you feel more comfortable now that you’re running your own business?

SK: A lot more, yeah. Much happier. Leaving corporate jobs was a very, very good thing for me. Not to say it’s good for everyone, but I felt an enormous relief from getting out and doing something I love, and in fact, that’s probably the key to it – doing something I love rather than something I’m forced to do.

NT: You were a tennis coach prior to this. Now that you’ve started your own business, tell me – do you feel more like the coach or the student?

SK: The student, actually. I’ve got this very strong sense that you should defer to people that know more on a given subject than you. I give the company direction and I’ve got very strong opinions on everything, but if someone knows more in a given field than me, I defer to them.

NT: We touched on this before, but if you will, tell me a little more about the transition from employee to employer.

SK: Without sounding like a megalomaniac, it’s about having control over your destiny and wanting to pursue a vision rather than implementing someone else’s vision, as good as that vision may be. I’ve had experience working with people where I just didn’t buy into their vision and I think that caused a real internal dissonance. I found it quite stressful, wanting to do one thing; having strong opinions about doing one thing, but having to do another, and that might be a personality flaw but having the ability to author your own vision is a very, very satisfying thing.

NT: Agreed. So now about your business – Pepperleaf, can I please have the elevator pitch?

SK: We are a meal kit delivery service. We’re asking customers to do everything in a whole new way, to shop differently – we are very much a lifestyle product. We try to give back time to people who are time-poor.

You’ve worked long hours, Noel, but you still have answer the question, “what’s for dinner tonight?” and we like to think we help answer that question – we give people back a bit of the time they have to spend planning meals and shopping. We also have a philosophy on supporting artisan food producers. You won’t find anything in your delivery that you can go and find at Coles or Woolworths.

We support small, local producers. It [the food] is not from factory farms, it’s not from enormous dairy companies… Noel, you asked for an elevator pitch, this has turned into a monologue!

NT: Ha ha! That’s alright.

SK: … so we’re trying to do things a bit differently.

NT: I love it – I’m a big fan of the concept. So what is your vision for Pepperleaf?

SK: To be huge! We have ambitious targets but our vision for Pepperleaf is to stay true to our ideals – I’ll give you an example. We have an opportunity. We could expand into Brisbane tomorrow. There is the infrastructure in place to do that. However we won’t because it compromises on the freshness of the produce. It has to spend an extra day in transit. It’ll be capital-intensive but we would rather start up an operation in Queensland, when we can deliver fresh and local.

We can get to Sydney and Adelaide [from Melbourne] overnight, and that’s not a stretch for the produce, but if we start selling to Brisbane customers now, we compromise on freshness. So while we grow, we want to keep revisiting why we’re doing this – stay true to the ideals, use small local producers and all the other things that I’ve spent a lot of time boring you about. Stay true to that while we expand, that’s my vision for it.

NT: That’s a great vision, definitely one to be proud of.  So we’re on to the most fun part of the interview, bookkeeping and accounting.

SK: Right. Stop, Noel.

NT: Ha ha! I recall a conversation we had a while ago about accounting software for your business – why Xero?

SK: I’d seen MYOB in its old incarnation in my wife’s business and I felt like its tentacles were pretty strong [in that] it locked her into some ways of doing things.

I just wanted information to be accessible. We’re not financial experts so we want it to be accessible, easy to understand, and not just spreadsheets. Xero certainly is super accessible. You just check in.

NT: Xero just checks all those boxes for you?

SK: Yeah, absolutely it does, and we can manipulate it however we want and look at reports.

NT: How often do you aim to review your financials?

SK: We like to keep a pretty good eye on it – we look at key metrics every week.

NT: And what are those metrics?

SK: Subscriber numbers, churn, so they’re all revenue measures, and then the cost obviously. What’s the saying? Revenue is vanity and profit is sanity.

NT: … and cash is reality.

SK: Exactly right, and that’s why you’re paying for coffee Noel.

NT: Ha ha, I already did! How important is your relationship with your accountants and why?

SK: Very important. Going back to what I said about deferring to people who are experts, we don’t have that expertise and we’d be foolish to try and do things that we can’t do when they’re that important.

NT: If you were to wind back the clock to the inception of Pepperleaf with the knowledge that you have now, what changes would make, so as to give advice to people who are currently starting out?

SK: What it looks like now is so different. There’s not a thing, apart from the core proposition that it’s going to be food and delivery on a subscription basis that looks the same.

We were willing to make anything change along the way. Not in the ‘whatever way the wind blows’ kind of way but I think if you’re too dogmatic about your idea, you’re going to miss opportunities to learn and change and be armed better information. So, back to your question about my advice – to be open to change and to keep your eyes open for opportunities.

NT: That’s great advice! Anything else for entrepreneurs starting out?

SK: I’m a big fan of gut instincts, and I think we’ve developed those gut instincts over a millennia and to disclaim them now would seem foolish. Going on gut instinct but being open to change and advice, I think that’s a nice blend of skills to have.

NT: Great, well thank you very much for your time and all the best with Pepperleaf!

SK: Thank you, Noel. I appreciate your time.

During the recent Accounting Software Roadshow merry-go-round, I asked myself in a state of exhaustion ‘what is this all for?’ I had momentarily lost sight of the fact that the advancement in technology is ultimately for the benefit of the most important aspect of our businesses – our clients.

Since Xero came along to Australia in 2008 and forced a revolution in the Australian Accounting space, My Accounts along with thousands of accounting professionals have had to learn, adapt and improve our service offerings in order to keep up with what was now available to both us and the clients. At times it has felt like we’ve been on a Hamster-wheel of never-ending changes, improvements and expansions in accounting software that we need to be aware of at least, and be a master of at best.

So with my focus on clients back in check, I reached out to three accounting industry leaders to get their insight on why the recent accounting revolution is important to small business and how it benefits them.

Right at forefront of the revolution delivering news on all the changes across all the platforms is Sholto Macpherson. Without his updates, our job as accountants to keep up would be much more difficult. He had this to say:

“Business owners can look forward to expecting a lot more from their accountants. Accountants often have a negative association because they are associated with paying money for compliance. In the case of the ATO it can be quite a large sum of money, but so can the fees. In both cases it feels worse because the fees and tax paid are variable. So the business owner knows they are going to pay money each time they talk to the accountant but they never know how much. 

And there’s the problem that they never know how well the accountant is doing their job. They just see the number of hours but have no way of knowing whether that reflects a job well done. Should it take that long to do a tax return? Are they just slow and inefficient? Or could they have reduced the tax further if they had spent more time on it? 

This new wave of accounting technology is supporting a better relationship between accountants and business owners. The fees are fixed so the business owner knows exactly what it will cost. And they pay monthly, so there’s no anxiety over paying several grand in one whack. The biggest opportunity to improve the relationship is for the accountant to set KPIs and review them regularly. This is exciting for a business owner because it’s the kind of advice that helps them make decisions about how to improve their business. There are an infinite number of things you can do to increase your revenue or profits, the hard part is committing to one idea and being confident you can tell whether that idea worked or not. To have someone beside you working that out is a huge relief. It makes running a business a little less lonely and hopefully a lot more successful!”

A company revolution within an industry revolution – Reckon have been extremely busy with the release of cloud-based ReckonOne hitting the market at an impressive starting price of $5 per month. One of the driving forces behind this success that has led to a market-leading ~30% share price increase (Jan ’15-Jan’16) is Daniel Rabie who shared the following practical insight for small business:

“There are over 2 million small businesses in Australia and they are a major source of employment (~45%) and contributor to GDP (~35%). Innovation in accounting software is necessary as it helps SMEs add value to their business, which in turn leads to higher employment growth and economic value. Take a practical example for a tradie – the innovative dashboard for ReckonOne gives you a real-time view of cash flow. Having a transparent view of the business means when it’s midyear and business has picked up, a tradie can easily determine whether to buy another work vehicle and put someone on to service additional demand. This innovation could give the tradie a commercial advantage over competitors and help him identify opportunities to grow his business.”

Posting a growth of 81% in subscription revenue in FY2015, Xero continues to lead the cloud accounting space. Managing this explosion of subscriptions across the ACT & NSW is Rob Stone who acts as a conduit between Australian small business, their advisors and Xero. He issued this statement:

“It matters to Australian small business that accounting standards and accounting software move with the times. 

Businesses always face uncertainty when making decisions. They need consistent, accurate and reliable financial information. And that only happens if accounting standards reflect what’s happening in the economy.

Innovative accounting tools help businesses thrive. They benefit – saving time and gaining new insights – when their accounting software becomes simpler yet smarter and more powerful.”

I felt a huge amount of relief after speaking with Sholto, Daniel and Rob about the positive impact of this accounting revolution. Any innovation that drives our industry forward, creating better accountants and better relationships between clients and advisors is alright by me. Sometimes the bottom line isn’t just a red or black number on a page, but also people – our clients. The bottom line is that all of this is for them, and I’m ok with that. Bring on the next roadshow!

I’m sure many of you are familiar with Aesop’s fable ‘The Boy Who Cried Wolf’, but as a refresher, Aesop tells story about a boy who issued repeated warnings about the presence of a wolf near a village, threatening his flock of sheep. Each time this boy issued a warning, the leaders of the village would investigate, but would quickly discern that the boy was telling a lie – there was no wolf. In the end, the boy cried wolf once more and due to his track record of telling lies, no one came to his aid and the boy’s sheep were killed. Traditionally, the moral of the story is concerned with lying – ‘a liar will not be believed, even when telling the truth’, however, I’d like to focus on another aspect on this fable – the repeated warnings.

In December 2015, I shared an article that was written for The Institute of Chartered Accountant’s magazine Acuity called ‘What lies beneath’ about the ATO getting tough on SME debt. To recap, the article shared the following insights and quotes:

• – The Inspector-General of Taxation in Australia, Ali Noroozi CA, reported earlier this year [2015] that small businesses owe about A$12.45b in tax – about 60% of all collectable tax.
• – Noroozi said the ATO had admitted that its previous debt collection approach had been “random and ad hoc” and he made some 40 recommendations to improve tax debt collection procedures.
• – Commissioner Chris Jordan AO FCA has indicated that the ATO had already got the tax debt message. “We will be taking legal action earlier when warranted,” Jordan warned. “This means initiating bankruptcy and wind-up action where there is evidence that a taxpayer is insolvent.”

Admittedly, I shared this article with a slight pinch of salt. Across our networks, there hadn’t been any noticeable increase in ATO action. The small amount of notices, penalties or wind-up applications that we heard of were duly warranted, however, in most instances, you were able to avoid this by making a quick phone call to the ATO to keep the wolves at bay – this was the pleasant village I lived in.

That was until our weekly team meeting on Monday the 21^st of March. After the usual formalities, we opened up the floor to the team for questions or comments and one of our Team Managers – Natalia Daoud, shared some interesting insight about a couple businesses she had encountered over the last week.

The first, a start-up consulting firm who had been on a rolling payment plan with the ATO (and never missed any payments), had the ATO contact them to inform that this was no longer acceptable as they have evidence to suggest that they have the capacity to repay on time, but are electing to continually use the ATO as a bank to smooth out cashflow.

The second runs a vitamins and supplements store. They elected to not lodge multiple BAS’ because 1. They didn’t want to 2. They kept forgetting to and 3. They supposedly lost their accounting data. The ATO subsequently fined them $30,000, which whilst thoroughly deserved, is still quite a hefty fine for an SME.

Our MD Simon Allsop reinforced Natalia’s comments and shared a similar story about a business in his network – a professional services firm in the Sydney CBD. This firm was also regularly on a payment plan and sticking to payments and lodgements, however they missed one IAS lodgement which resulted in an automatic default of the existing payment plan and when contacted, the ATO refused to reinstate it under any circumstances, leading to an immediate demand for a payment in the vicinity of half a million big ones. Ouch! I’m not aware of many SME’s who can afford to pay out that kind of money when not planned for.

I was already taken aback by these actions from the ATO, however no later than half an hour after this meeting and well before my much needed second coffee for the morning, I received some mail from Worrells – it was their Annual Insolvency Report. Given what I had just heard in team meeting, the timing of the arrival of mail and my anxiety from caffeine addiction, I feverishly flicked through the report and sure enough, our boy really had seen and cried wolf.

In the Worrells report, it states that the “The ATO has been active in the latter part of 2015, with unprecedented winding-up applications.” Along with this statement, they showed this graph:

Worryingly, along with the winding-up applications, “there appear to be just as many, if not more, statutory demands being issued that are due to expire, which will underpin the ATO commencing more winding-up applications in the Federal Court of Australia”. Yikes.

The Worrells report doesn’t stop there however – “In addition to these winding up applications and statutory demands, the ATO is using several debt recovery tools including director penalty notices, garnishee notices, and in some cases, seeking third party property as security for repayment agreements”.

I began to think about why these statistics and the recent reports from within our client base were in fact, surprising. If the boy had been crying wolf since just after the GFC, as suggested by this article in the Australian Financial Review in 2010 and many other similar and subsequent reports, why are we surprised at all?

Going back to our good friend Aesop – the writer, not the skin care brand, the villagers in the fable would not have been surprised by the reality that a wolf could attack the sheep – after all, that’s why they appointed a shepherd. They would’ve been surprised that a wolf did attack the sheep after the many false warnings.  Similarly, I don’t believe we’re surprised that the ATO can take action, it’s the fact that they are now taking action, when they previously afforded us some grace.

So is it possible to think that after several warnings over several years about the ATO coming down on us SME’s, but never actually taking a bite, that we’ve become a bit complacent about paying our ATO debt?

I believe the answer is yes and if you too allowed yourself some introversion, you’d most likely discover a laissez-faire attitude towards the ATO as well. So now that the wolf is at the door, what can we do about it?

I asked good friend James Carey – Director at Prime Partners to help me address how to best manage our ATO liabilities.

Most small businesses only know how much they have to pay once they, their bookkeeper or accountant calculates the BAS, but this doesn’t need to be the case.

Tip 1. Know what you paid last time
Unless you’re a rapidly growing (or shrinking) business your ATO liabilities shouldn’t change too much. If your payroll is consistent, your monthly IAS should be roughly the same (subject to the number of pay days in the month). Same goes for superannuation. Always keep that figure in mind and make sure you have the cash available.

Tip 2. Save for it
When you first set up your bank account, your bank probably offered you a linked savings account or GST account. Though I see a lot of people with this, I rarely see it used. Once you have a good estimate for your quarterly BAS and Superannuation liability, divide that figure by 13 which gives you a weekly savings estimate. Set up an automatic transfer to ensure you always have enough cash saved to pay these liabilities.

Tip 3. Pay more often
If you are hopeless at saving (don’t feel bad, most people are) one solution is to pay your BAS and super more frequently – monthly. As long as you or your bookkeeper is keeping your accounts up to date, this will smooth your cash flow and take away the temptation to spend your quarterly BAS payment.

Tip 4. Treat the ATO like any other creditor
Enter the BAS / IAS into your accounts payable ledger as soon as they are prepared.

Tip 5. Look at your balance sheet
The balance sheet is just as important as your P&L. The balance sheet will tell you exactly what you owe to the ATO at any point if you know where to look. There are key accounts to look at:

• – GST
• – PAYGW Payable
• – Superannuation payable.
• – Tax payable – this is used by your accountant to show your next income tax bill after they prepare your accounts.

If your bookkeeping is following tip 4, then any time you look at your balance sheet it should show your current amount owing. 

So even though the old wolf has learnt some new tricks and they are now hunting SME debt, we can learn some new tricks of our own and run healthier and leaner businesses. I believe the moral of this story is that complacency is not often a word associated with successful business. It’s time we listen to the boy’s warning and prepare as best we can by being proactive in managing our liabilities.

I was stopped, frustrated, by a red light at the intersection of Falcon and Miller Street. I was on the last uphill home and wanted to hit it with momentum. When the walking man flashed green I took off. My calves ached and my lungs burned, but there wasn’t long to go – I could afford to exhaust the gas. I remembered tips from short articles I’d read – shorter, quicker strides uphill; focus on pumping your arms to propel forward.  I hit the last incline with pace as I turned left into Ernest Street, gritted my teeth and exhaled hard. I sprinted the last 50m into my cul-de-sac – I had made it.

I had no performance goals when I started running. The basic measurements of time, distance and speed were irrelevant to me at that point. When I began, there was only one metric that was important to me – survival. I also had a vague and hopeful long term goal of a reduction in weight, as well as a gain in health and fitness. Simple.

If we replace the running jargon above with the lexicon of business, it becomes quite a familiar narrative that I hear on a daily basis from business owners.

Most businesses start with a great idea and lots of passion. Success? Well, statistics say that’s a little harder to come by, with 30% of small businesses ceasing in the first 3 years (according to the Australia Bureau of Statistics).

The key metrics that should be measured whilst running a business are, for most start-ups, irrelevant to them at that point in time. There is only one metric going through an entrepreneur’s mind – survival.

HOW DO ADVISERS LIKE ACCOUNTANTS HELP BUSINESS OWNERS BECOME SUCCESSFUL IN BUSINESS?

To answer that question, let’s look at the role of a running coach:

• Help identify the runner’s goal
  • Like me, running may be part of a larger, more holistic goal – general health and fitness. So, for example, a measurable goal may be an ideal weight. For others, a goal may be to be able to run a marathon in under 3 hours. However, one thing is for sure – without a goal, it is hard to measure what success means to you.
• Formulate a plan to help them achieve that goal
  • For general health, this is likely to be a more holistic plan which includes nutrition like reducing the amount of burgers and beer consumed in a week, combined with an activity plan, such as 5-10km’s, 3 times per week. For your more serious runners: both the nutrition and activity plan will be much more specific and intense – metrics like time, distance, speed, pace, cadence and running efficiency; each having an activity based strategy behind them to drive performance, therefore boosting the overall likelihood of success. Zero burgers.
• Keep them accountable to that goal
  • A plan to achieve a goal is only valuable if you’re held accountable to everything within it. A good coach will regularly check in with you and even run with you for parts of the journey.
• Celebrate success when goals are achieved, or learn and adjust when targets are missed
  • Pop the champagne! You’ve run a marathon in under 3 hours! We all subscribe to this easy flow chart of success: Define, plan, action, measure, celebrate – however, as the eloquent boxing legend Mike Tyson once put it ‘Everybody has a plan ’till they get punched in the mouth’. What if during training you develop shin splints or roll your ankle? You need to be able to adjust your strategy when life (or the asphalt) punches you in the mouth (ankle). It might take a little longer to achieve your goal – but that’s ok.

So, back to my original question – how do advisers like Accountants help Business Owners become successful in business?

If we replace the running jargon above with the lexicon of business, it becomes a like for like answer. Your adviser should be able to help you define what success in your business looks like, help you develop a plan with metrics to measure like revenue and profit targets and most importantly, keep you accountable on a regular basis.

Good advisers deliver reporting on a monthly basis at minimum, showing budget (goal / target) vs. actual reports across all your important metrics or KPI’s. The best advisers talk you through these reports as well to see if there’s anything to be learnt or if any of the plan needs to be adjusted for the inevitable punch in the face that always seems to just be around the (red) corner of the boxing ring that is small business.

Through my ongoing journey of learning how to run and running a business, I’ve learnt that the foundations of successful strategies in one, often translates directly to the other… and this is a great thing – I bloody love champagne.

Cheers!

You know when you make those rash decisions based on a flash of inspiration, and then realise the consequences of what you’ve just committed to? Well, I made one of those in June when I noticed a Dry July poster next to the elevator door in Royal North Shore Hospital (RNSH) in St. Leonards, Sydney. My dad recently spent 42 days in the Cardiovascular/Intensive Care ward and I thought, what better way to give back than to raise money for them as tiny token of my appreciation.

As has been the case over the last 9 years, My Accounts had my back. So, the team jumped on board – perhaps also not realising the consequences of their commitment – and together we jumped in (or out) the deep end (of a Martini glass).

Now that we’re half way through July, I’ve learnt some pretty cool things about myself and of course, about business. Here’s what I’ve learnt.

BEING OPEN AND PUBLIC ABOUT YOUR GOALS HELPS WITH ACCOUNTABILITY

If you read through the comments on my donations page (https://www.dryjuly.com/users/noel-tiufino), there are equal amounts of encouragement and tongue-in-cheek doubt and I wasn’t at all surprised. At the risk of sounding like someone in the denial-phase, I don’t necessarily drink regularly because of my love for alcohol, but because of my love (need) for socialisation – yes, I have very real FOMO.

When I became serious about doing Dry-July I told every single person I knew. I spoke to every local café, bar and restaurant owner. I sent massive group emails and posted alerts on social media. It would be easy to mistake me for just being a zealous, philanthropic man with a huge heart, but alas, I am simply a man who also doubts my ability to abstain from the sweet, sweet nectar of a Stone & Wood Pacific Ale, a glorious Henschke Henry’s Seven GSM or a heart-palpitating Espresso Martini, hence my need to let everyone know that I need their support; not just financially, but also morally.

I realised that, with My Accounts, I am also very open with my friends and professional networks about what it is that we’re trying to achieve. Our mission is to empower small businesses by providing them with a valuable, timely and clear picture of their financial performance. I like to be held accountable for this, so having everyone around me on the same page as my business goals is as necessary as having a muzzle across my mouth when I enter a bar in July.

EVERYONE ACTUALLY WANTS YOU TO SUCCEED

At times, I’ve caught myself fearing tall-poppy syndrome – that if I was to stick my head up, it would be lopped off quicker than you can say ‘Who’s got next shout?’

This experience has definitely restored my faith in humanity. Examples like the one from Leigh Dunsford at Waddle above genuinely helped – I really feel like people have my back and want me to succeed.

Perhaps the days of tall-poppy syndrome are fading, or perhaps it’s the network of positive people I surround myself with, but the support I have as a Director of My Accounts is just as uplifting as one of those bad days when someone says ‘stay strong’ rather than providing anecdotal advice like ‘maybe you should try spend less to increase profit’… wow.

In retrospect, that fact that Leigh was sending me encouragement at 7:40am on day 1 is a rather worrying sign.

FOCUSING ON IMPROVING IN ONE AREA OF YOUR LIFE OR BUSINESS WILL HAVE A POSITIVE EFFECT IN OTHER AREAS TOO

Aside from raising money for RNSH and abstaining from alcohol for a month, I’ve found improvement in other key areas of my day to day life. I normally manage to exercise 3 times a week and whilst I’d like that number to be higher – there are just too many distractions*. Since Dry July, I’ve easily managed to increase that number to 5, and the reason why it wasn’t 7 was a conscious decision to have rest days.

In business, I’ve also recently sought out to improve aspects of my leadership. I was given a book called ‘Being The Boss’ by Linda Hill and Kent Lineback and found a huge amount of practical advice and inspiration which truly resonated with some of the challenges I was experiencing.

Whilst focusing on improving my leadership, I also found that other areas that I was responsible for like Business Development improved dramatically. I had a renewed energy and focus and could tangibly feel improvements akin to the ripple effect on a pond across our business.

Whether in your personal life or in business, never underestimate the power that one small positive change can make.

*To be clear, by ‘too many distractions’ I mean there are about 200 different types of alcoholic distractions at my local bar – that’s a lot. By eliminating the primary distractor, I freed up an exorbitant amount of time – particularly on Saturday morning – which is normally my foetal-position-on-the-couch-watching-national-geographic as I manage my dehydration (hangover) time.

MY ATTITUDE SHAPES MY EXPERIENCES, NOT THE BEVERAGE IN HAND

On Thursday the 7^th I had dinner with two of my best mates at a Brazilian restaurant called BAHBQ in Crows Nest. These are the kind of mates that you can’t shake – you’ve just known each other too long, so they aren’t going anywhere, no matter how much you try and remove them from your couch.

I was genuinely curious about how I’d go at this dinner, and so were they. They were acutely aware that I’m normally the one dishing out all the peer-pressure to have just one more drink.

Over dinner, we re-told a story about one of them who had endured one of the most epically failed dating experiences ever. Of course each time it’s retold, superfluous and hyperbolic details are added, but we never let the truth get in the way of a good story. Emotionally, it’s one of those tales where you shout NO!, cringe, laugh, cry, hide, clap, point and laugh multiple times in the space of 3 minutes.

Whilst wiping the laugh tears away before they salted my beef rump cap, I thought in a moment of reflection that this is no different to any other time we’ve had dinner together (or told this story): alcohol has had no effect on me or this evening and I’m genuinely having the best time.

I made the decision that doing Dry July wouldn’t make me a recluse. I made the decision that I could still do all the same things and experience the same euphoric feelings with my mates without a drink. For once, I couldn’t have been more right. It’s not the beer bottle in my hand – it’s my mate on the couch that makes life so damn good.

I’m sure we’ve seen all those inspirational memes flooding our social media pages, heck! we’re even guilty of posting a few ourselves, but since doing Dry July I couldn’t be more convinced that our mindset and attitude is the single-most important factor of the success in business, not the expensive CRM system or how detailed an operations manual is. So please, open up Instragram and don’t stop scrolling until you’re ready to win!

IF YOU’RE AN IDIOT WHEN YOU’RE DRINKING, IT DOESN’T MEAN YOU’RE NOT AN IDIOT SOBER

The morning after I had dinner at Brazilian BBQ, I realised I had lost my car keys. I had a quick look around the house, but it wasn’t in all of my usual spots – so I just booked an uber because I needed to get to the office. I sent a couple texts out to see if anyone had seen then.

Turns out I left them at the restaurant. I guess this isn’t the most stupid place to have left them, but what was really moronic was bringing my car keys in the first place – I didn’t drive.

Dry July has stripped me of the ability to blame silly things like misplacing my car keys on external factors like alcohol, but sober or not, should we be able to continually offset blame prior to pointing back our ourselves?

In both my personal life and business world, I realised there are really are no excuses for doing dumb things (like filming a Facebook live feed sideways), or serious things (like not managing a challenging situation as best we can). We shouldn’t blame external factors like alcohol, the other Manager that was working on the project or Facebook for not correcting the orientation of the video. We should instead, take complete ownership of our actions and not seek to delegate blame on anyone (or anything) else.

I’d say that half-way through Dry July, I’ve managed to learn quite a lot. Most of them positive, some of them challenging, but I’m definitely grateful for this experience and I’m looking forward to riding out the rest of the month stone sober. With any luck, I’ll still have my best mates on my couch, my car keys in my pocket and a huge donation for the Royal North Shore Hospital.

Cheers!