Business Advisory FAQ's

It is the process of assessing the current state of a business. This includes looking at crucial business areas including finance, sales, team, systems, and risk factors.

With Australian Debt Solvers you can conduct a Free Business Health Check. Simply sign up and log in to our easy-to-use platform. You will be asked a series of questions relating to your business and provided with a comprehensive report. The report will provide an overall health score, as well as individual departmental scores and advice.

From a business perspective, financial health is a holistic look at key aspects of a business including profitability, cash management, liquidity management, and future growth prospects. By looking closely at financial statement and applying a range of financial ratios, one is then able to measure a company’s performance and financial position.

A company that can pay debts easily and has good prospects of growth is considered to be in a healthy position. In contrast, a company that is consistently unable to meet its financial requirements could be facing insolvency. Trading insolvent is illegal, and directors may be held liable for doing so. For more information, read out complete guide to insolvency.

Is the process of examining the financial state of an individual or organisation. It determines the capacity of an entity to meet its financial obligations and ability to deal with any potential unexpected events that may cause financial distress.

Any entity that is not able to meet its financial obligation may at risk of trading insolvent. If you feel that this may apply to you, read our Insolvency Guides for more information or Contact Us for a free consultation.

The most appropriate wat to manage business finances is by employing an expert which in this case is an accountant. Below is a list of the reasons Why Your Business Needs An Accountant:

• Optimal structure
• Minimise you tax bill
• Best accounting software
• Smarter cash flow management
• Budgeting and spending
• Review, forecast and plan
• Revenue Growth
• Set goals and benchmarks

The most effective way to check the financial health of a business is to seek the services of financial experts such as Australian Debt Solvers. A team of experts will assess all aspects of your business, provide a detailed report and a list of recommendations which should be implemented.

For a preliminary assessment feel free to conduct a Free Business Health Check. Simply sign up and log in to our easy-to-use platform. You will be asked a series of questions relating to your business and provided an overall health score, as well as individual departmental scores and advice.

Keeping track of your business finances is critical as it enables you to know exactly what is going on with your sales and expenses which consequently allows you to make smarter business decisions. Staying on top of your finances makes tax reporting easy, could help you avoid disaster, and will make your business more profitable.

Check out our top tips on how to stay on top of your business finances.

Whether you have an accountant or not, all small business owners need to have a system in place that helps them track their income and expenses. Some simple steps include:

• Create digital receipts
• Have a dedicated business bank account
• Use accounting software and sync it with your bank account

We urge people to take advantage of technological advancements with a large range of invoicing apps out there to help people with small businesses.

The 3 main financial statements are:

1) Balance Sheets: Provide information on what the company is worth considering assets, liabilities, and equity. You will often see the see the simple formula of (Assets = Liabilities + Equity).

2) Income Statements: Record economic details with respect to the revenue and expenses of a company. These expenses are often categorised as direct, indirect, and capital expenses.

3) Cash Flow Statements: Made up of three distinct parts; operating, investing, and financing. The purpose of cash flow statements is to record the movement of funds coming in and out of a business over a specified accounting period.

A business advisor does more than just look at financial records. As part of our business advisory service, an expert will analyse all aspects of an organisation to identify problems, recognise potential risks, and capitalise on opportunities. This includes strategy, marketing, human resource, technology, and operations.

Once completed, we will provide you with a specific set of recommendations and how to best implement them. Moreover, we will work alongside you to monitor, review, and make any necessary changes to help secure your financial future. Speak to one of our experts today.

If you are facing financial difficulties or looking for ways to improve your business, Australian Debt Solvers can help. Our team members have more than two decades of experience across an array of industries including insolvency, advisory, accounting, financial management, business planning and operations. You can also obtain free business advice in one of the following ways:

• Contact us for a free consultation,
• Conduct a free business health check online that will include a detailed report that addresses key areas of your business, or
• Utilise out resource centre which provides detailed information from industry professionals including real life case studies.

When establishing a business, it is important to create a structure that is most suited to your needs. Once established and operating, you can pay yourself in one of the following four ways:

• Formal wage as employee of the business: You would be a PAYG employee where the company would withhold the required tax and superannuation contributions before transferring the net amount to your bank account.
• Contractor: Using this method, the company would have your ABN and transfer you a gross amount that would then require you to pay the tax. This method is quick and easy, but you would not have any entitlements such as superannuation and annual leave.
• Dividend: Depending on the setup, you may be able to pay yourself a dividend using after tax company profits.
• Drawings: A common method is for business owners to pay themselves back any money they contributed to setup the business once it becomes profitable.

Irrespective of the method used, it is important to be familiar with common business mistakes picked up by the ATO during tax audits.

Follow a simple 5 step plan.

• Open a separate business bank account
• Set up and maintain a bookkeeping system
• Have an annual budget
• Create a company invoice template that outline specific payment terms
• Monitor your cash flow

The importance of finance management should not be underestimated. Depending on the size and turnover of your business, it may be best to employ the services of a professional accountant.

As a result of rapid technological progression, there is now an abundance of options when it comes to accounting software for small businesses. The easiest and most suitable will depend on a number of factors including the industry which you are in, the size of your business, and business needs. Consider the following accounting software options: Xero, MYOB, Saasu, and QuickBooks.

One field that has not adapted as well to the use of accounting software its tradespersons. To address this issue, we have compiled a list of the best invoicing apps for tradies.

Use the following 10 steps as a reference when starting your own business:

• Key business decisions: Decide on a business structure, location, and organisational chart.
• Create a business plan: Develop an in-depth plan that addresses key aspects of the proposed business including target market, marketing, and sales strategy along with the products and services that you intend to provide.
• Financial advice and funding: Where necessary, employ business advisory services to help make key decisions and obtain funding from an applicable financial institution.
• Register your business: All Australian businesses are required to have an Australian Business Number (ABN). You can register here.
• Be financially prepared: Failing to effectively manage your finances can prevent your business from succeeding. You should learn to utilise the appropriate software or employ the appropriate professionals that will assist you I this process.
• Understand the law: Speak to a legal professional where required to get an understanding of any legal implications that may impact your business.
• Have safeguards: It is important to protect your business. This includes taking out the necessary business insurance required and complying with any workplace health and safety regulations.
• Tax, tax, tax: This is repeated to emphasise its importance. Many businesses fail to prepare properly for tax which results in failure to pay on time and subsequent fines. Director penalty notices are often handed out to those who fail to carry out their legal obligations.
• Business operations: It is now time to find the employees that will help your organisation success and the suppliers who will provide you with the inventory required to operate effectively.
• Prepare for success: Implement you marketing and sales strategy with the intention to continuously monitor and improve them.

There are two main sources of business finance for new businesses. They are:

• Debt Finance: money provided by a financial institution such as an external lender. This may include a bank, credit union, or alternative financing institution such as Simply Funds.
• Equity Finance: may include self-funding, family, friends, or private investors. With respect to self-funding, those who have a real estate asset with equity available can obtain fast business loans in less than 48 hours.

Involves receiving accounting and financial reporting advice from qualified experts. This is particularly useful for new businesses or those looking to go expand their operations and subsequently increase their number of employees.

Australian Debt Solvers also provides forensic accounting services for the purposes of investigation, due diligence, and company valuation for any sale, merger, or acquisition.

This is something that should be outlined in depth in your business plan. Prior to starting a business, you should identify your target market and how you intend to reach, attract, and convert them into clients. There should be a dedicated marketing budget that can be utilised to execute the strategies.

If you are not attracting as many customers as you anticipated, take an objective approach, and consider what others have done to achieve success. Read some of our case studies on business improvement and business restructuring.

In Australia, the 4 types of business structure are:

• Sole Trade
• Partnerships
• Company
• Trust

Prior to deciding on a structure, you should become familiar with the responsibilities of each structure, particularly those relating to taxation and costs.

There is no limit or barrier when it comes to being successful as a small business. Whether you are a tradesperson, marketing specialist, finance professional, medical expert, or personal trainer, the prospects of success are real.

The focus should be on increasing the chances of success and capitalising on any opportunities that may arise. This is done by having a definitive business plan, being financially prepared, and seeking assistance if you recognise that things are not going as anticipated. Addressing issues in a timely is critical as it increases the chances of returning to financial prosperity. Contact us today for expert advice across all business-related areas.

Many businesses are guilty of treading water. This includes failing to capitalise on opportunities and ignoring matters of concern. The first could prevent a business from securing its financial future while the other may jeopardise the business altogether. Here are a few tops which can help improve your financial situation:

• Seek professional advice: There are a host of business advisory services available which will provide an accurate assessment of your business and recommendations on how it can be improved.
• Capitalise on opportunities: Smart business is good business and that includes being proactive. Many small businesses are reluctant to take calculated risks. In many instances, this may include exploring small business loan options which may help you overcome financial distress, increase business operations, or improve and expand to capitalise on new business opportunities.
• Assess and rectify any accounting issues: This may include a range of issues such as bookkeeping and a failure to collect any outstanding debt. Having consistent and clear financial records will allow you to make better decisions and improve your financial position.
• Improve efficiency: Take the time to explore ways to improve your business. There are always ways to control overhead costs and improve operational efficiency.
• Ensure tax responsibilities are being met: A failure to do so may result in fines and place unnecessary pressure on your business.
• Be aware of the changing landscape: As a business owner you should always be up to date with any changes that may impact your business. This may include legislative changes that may increase your responsibilities or provide areas of relief which can be utilised. Recent examples include the creation of a simplified liquidation process and small business restructuring. An easy way to do this is by reading our latest news section.

A balance sheet reveals the financial position of a business at a specific point in time. It outlines the assets and liabilities in depth which are then used to calculate the business equity. Balance sheets are used for several reasons including:

• Provide key financial information to key stakeholders including business owners, management, and potential investors.
• Used by banks and other financial institutions to assess the financial viability of a business and its ability to service debt.
• Suppliers and creditors may like to view the balance sheet before entering a business relationship for reasons including trust and comfort.
• Government agencies such as the Australian Tax Office (ATO) require businesses to keep detailed financial record such as balance sheets.
• Balance sheets are also useful when conducting financial analysis and determining financial ratios which are in turn used to make future financial decisions.