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Thoughts on the year ahead – Tax and Wealth in 2019

Thoughts on the year ahead – Tax and Wealth in 2019

There are a number of tax laws that may change this year as a result of the upcoming 2019 Federal Election…

Individuals could be affected by:

  • Losing franking credit refunds to their Self-Managed Super Funds and to themselves
  • Paying higher capital gains tax
  • Losing tax benefits from negative gearing into investment property

Businesses could be affected by:

  • Changes to the laws for loans from Companies (known as “Div 7A”)
  • Discretionary Trusts (also known as “Family Trusts”) being taxed at 30% of their income

For the moment, we are recommending to our clients a “wait and see” approach before taking any specific action on any of these proposals. An election needs to be won and then legislation needs to be passed before new laws take effect.

But it’s important that you have an understanding of how these tax and other changes will affect you.

There may be an opportunity that opens up soon, to restructure your tax and wealth affairs to ensure you take advantage of any significant tax benefits.

If you have any questions about this, please feel free to make an appointment with one of our Accountants or Advisers today.

Are ‘buy now, pay later’ services beneficial to your business?

Are ‘buy now, pay later’ services beneficial to your business?

Small businesses around Australia are offering ‘buy now, pay later’ options both online & instore at checkout , making purchases seem more affordable. If you’re considering joining the growing trend, there are some things you might want to consider.

What is ‘buy now, pay later’ and how does it work?

‘Buy now, pay later’ offerings are specialised credit lines in consumer finance that works as an incremental payback system – making it easier and more attractive for people to pay for goods and services.

The Australian Securities and Investments Commission (ASIC) lists six third-party providers that offer this kind of service on its Moneysmart website, including the likes of Afterpay and Zip Co.

These third-party providers offer consumers an interest-free loan on the condition that the balance is paid back within a certain time frame. Once that time frame is up, if there is still an outstanding balance, interest rates or late fees begin to apply.

As a retailer, the signup process is quick and relatively simple. When you fill out the enquiry form, a customer service representative will contact you in order to discuss your needs .

If a customer buys something online using the service , they simply select the option at the checkout, and once the customer has received their item, the provider will settle with you and assume any credit or fraud risk. The instalments that the customer pays go to the provider instead of you since the provider will pay the debt that is owed to you initially.

Enabling such payment methods in your business offering comes with a list of pros and cons – so it’s important to fully understand the fine print before taking the plunge.

Here are five things to keep in mind.

1. They help convert browsers into customers

When asked what the primary benefits of integrating such a solution, Larry Diamond, Founder and CEO of Zip Co said the main benefit was a higher rate of conversion.

“Consumer finance is really all about converting browsers into paying customers,” Diamond told The Pulse.

“Retail has always been a very competitive space and whether it be online or at your store front, offering a ‘buy now, pay later’ solution for potential consumers has proven to significantly increase customer acquisition and conversion rates.”

2. They increase your average order value

If a customer walked into a jeans shop with $50 in their pocket with the intention of buying one pair of jeans, the maximum revenue that the jeans shop could receive from that customer was $50 – that was before ‘buy now, pay later’ came along.

By offering these solutions, depending on what it is that you are selling, that original limit of $50 could potentially increase 10-fold.

According to Diamond, another significant benefit of offering this payment option has to do with the “increased revenue that it brings from customers”.

When you make it easier for people to purchase your goods or services, they will be more comfortable with spending.

3. They can improve your customer life cycles

A huge part of retail and professional services marketing comes down to how positive the experience was for the customer when they were spending money on products and services.

Diamond explained that by offering this type of payment solution, your business can set itself apart from others in the sense that customers are satisfied with their experience and become “more likely to come back for more” and “refer your business to others”.

4. They incur higher merchant fees

With all the clear benefits of this innovative payment method, it’s important to be aware of the challenges and considerations that come with integrating the ‘buy now, pay later’ into your offering.

While credit providers make some of their money on the customer side through various fees, they also charge a merchant fee, a cost that’s often included in the overall cost of the goods or services being sold.

“Given that small retail businesses and service providers often have low gross profit margins, it is crucial to consider that the added cost of higher merchant fees might raise the immediate cost of sale.”

5. There can be integration challenges, plus accreditation rules

With the wide variety of e-commerce and point-of-sale platforms available, integrating a ‘buy now, pay later’ solution often “requires specialised customisation tools” that can be “complex and expensive”, according to Diamond, decreasing the overall value that such a solution offers.

Because of this, Diamond suggests that, before a small business locks in a contract with a third party ‘buy now, pay later’ credit provider, the business owner considers factors like “cost, technology, framework for scale and the customer experience”.

We had a specific look at ‘Buy now, Pay later’ service Afterpay, and the process in which to integrate this into your Business.

How does Afterpay integrate with my point of sale?

Afterpay integrates with a variety of point-of-sale platforms as well as ecommerce platforms that you might have used to integrate online sales into your website. Some platforms that Afterpay instantly integrates with include:

  • Commerce Vision
  • Futura4Retail
  • Infinity
  • Island Pacific
  • Neto
  • Shopify
  • Magento

What benefits does Afterpay offer my business?

Some of the features that can benefit your business with a merchant agreement with Afterpay include:

  • Set installments for customers. Afterpay informs you about purchase installment amounts and frequency to make it easier for potential customers to decide whether or not they want an item.
  • New customers. Afterpay gives you the opportunity to benefit from more sales and the possibility of an increased customer base.
  • Rise in repeat purchases. The likelihood of repeat customers to purchase from your business increases, plus they will be more inclined to spend more per transaction.
  • Payment upfront. As soon as the customer receives their item, Afterpay settles with their merchants quickly and automatically. There are no complicated processes or lengthy wait times associated with payment.
  • Name recognition. As Afterpay is currently used by over 1,400 retailers across the country, it’s clear to see that customers from all industries are a fan of it. You are able to benefit from this recognition if you incorporate Afterpay into your business.
  • Zero fraud or credit risk. This is really important. Although it might seem like Afterpay could be high-risk, Afterpay assumes all end-customer non-payment risk for every transaction. This takes you and your business off the hook and you no longer have to chase up defaulting customers.

How much will Afterpay cost my business?

The fees that you can be charged depend on your business’s agreement with Afterpay. However, the fees below are a general guide as to what businesses can expect with an Afterpay agreement.

  • A $0.30 fee per transaction.
  • A commission rate fee that is applied per transaction. This can range from 4-6% based on your agreement.

Although $0.30 per transaction doesn’t seem like a lot when you’re selling your products for much more than that, it’s important to factor in the commission rate fee as well.

How do I start offering Afterpay at my store?

In order to start offering Afterpay at your store, you just need to fill out the online enquiry form that is available on their website. Some of the details that you need include:

  • Your ABN
  • Your Point of Sales (POS) provider
  • Your average order value
  • The total for your annual sales
  • The payment platform you use
  • Personal details, such as your name and address
  • Your industry
  • The type of business you have
  • What sales channels you use and whether they’re online, in-store or both

Once you provide all of this information and more, a representative will get back to you within the next 24-48 hours.

Need more details on ‘Buy Now,Pay later’ services, contact our office today to discuss your options.

What to do when business growth slows.

Four things to do when business growth slows


It happens to everyone; you start a solid business and initially growth is solid. But after that first rush things begin to slow down. How you react to a slow down in business growth may determine your long term viability.

When you first begin a business, there’s usually lots of growth right away, because you’re brand new. But over time, it’s common for this growth to eventually stagnate.

It’s okay for this to happen for a bit while you catch your breath or take some time off, but you will need to find ways to make it pick up again.

Here are four things to do as soon as your growth starts to flag.


Spend more time on sales

One of the best ways to get your venture steaming along again is to spend more time on sales.

Make sales calls or send emails each day to try to build new relationships and generate new business. Think about additional customers you can target or interesting offers you can make to those you’ve approached before.

Also, follow up with previous clients, too. This is something not enough people do, but that can make a huge difference to results.

After all, the people who have already used your services are already interested in your offerings, and were, hopefully, impressed the first time they dealt with you.

Follow up with people to see where they’re at now in their line of work, and if they require your assistance in any way.

It can also pay to attend networking events and to otherwise see people face-to-face where possible, too. While you can certainly forge and cement relationships over the phone and digitally, there’s nothing quite like connecting in person to help kickstart things and remind people what you offer.


Learn something new

Another strategy is to learn something new.

As the leader of a business, regardless of whether or not you’re supporting full-time staff, it’s up to you to keep bringing new things to the table that you can offer current or potential clients.

Take a course, find a mentor, join business clubs and associations, read books and magazines, or do some low-paid work in an area where you need to improve.

Once you have new skills, this will likely lead to new service offerings for customers, and more business as a result.

You might decide you want to learn new things where it comes to being an entrepreneur, too. If your business has stagnated, it may be because you don’t know enough about running a venture to help it keep moving forward.

Learning more about accounting, finance, recruitment, analytics, marketing, creating and streamlining processes can only benefit you in the long run.

Strengthening your abilities will also make it easier for you to spot opportunities for growth, which is another plus.


Stop trying to do everything by yourself

The reason why your business may have slowed down lately may be because you simply don’t have enough hours in the day to take on any more work. If so, remember that you don’t have to do everything by yourself.

Bring on an assistant to help you get more organised and productive, or a staff member who can handle some client work for you.

Alternatively, outsource tasks to contractors who can handle time-consuming administration work while you focus on what you do best, or pay specialists in areas where you don’t have the necessary skills or the time to learn them, such as IT or marketing.

Once you can free up more time for yourself every week, you’ll be better able to cater to your clients, which should lead to more repeat business. You’ll be able to work with more customers each month, too. Plus, additional time can be used for planning and big-picture strategising, which is always important for growth.

Focus on innovation

Having a focus on innovation can help you to grow your business. If you’ve hit a wall when it comes to the people you’re able to target with your services, or the types of offerings you provide, it’s time to get creative.

Come up with a new and exciting offer which will get current customers hiring you again, or enable you to target new people and organisations altogether. You may even want to plan some events to get customers and the media interested.

Be innovative when it comes to the running of your business, too. If you can find ways to cut out annoying tasks, decrease costs significantly, or reach more customers at once, for instance, you will soon boost growth.

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