What has this to do with business?

For some people Tax and being taxed is an intractable problem. At Cornerstone Consulting we like to think outside the box a bring to you great solutions to seemingly intractable problems.

Also when it comes to business problems, there isn’t a business issue that we haven’t seen before and we have great solutions to business problems.

We’re happy to solve your business issues if you want to email us any questions you have. Alternatively you can attend one of our workshop sessions where within a group setting you can pose any question you like to do with business and Andrew McCombie the director of Cornerstone Consulting will answer all questions.

Business owners have asked questions like;

• When to hire a new staff member?
• What roles within the business do I need to fill next eg do I want a technical person or an admin person?
• How does a trust work?
• Should I have a trust structure?
• What is the value of my business?
• What is succession planning?

We really do welcome your questions and asking them is free, so are our workshops.

The first thing to know about a balance sheet is that it should be balanced; assets less liabilities should equal your equity (basically share capital plus retained profits).

The best way to tell if a balance sheet is balanced is;

• Add up the assets subtract the liabilities and see if the total agrees to equity.
• Check to see if your bank accounts are reconciled ie your balance sheet total equals your bank statement total on a particular day.

In 99.9% of cases, if you check these two things then your balance sheet is usually alright. If it still isn’t alright then you need to start checking each balance sheet item (you should actually do this anyway).

Checking each balance sheet item can be a tricky task. The reason it’s tricky is because the balance sheet tells a story of the business which is basically as old as the business is. Sometimes an error in the first year of operations can remain an error on the balance sheet for 10 years or more because it’s never been checked. When this happens I’d advise you to seek help in fixing the problem. It doesn’t have to cost you thousands in advisory fees but could save you thousands because after it’s done you can rely on your financial reports so much more.

If you want to fix it yourself…….

The beauty of a balance sheet is that each line item should actually represent something your business either owns or owes and this is something you can actually check and ask yourself. Once you’ve been through that exercise, then you just need to know what to do with the error or new balance.With fixing this I strongly recommend you speak to your bookkeeper or accountant.

If you would like to talk to us about checking your balance sheet and advising what needs to done then please email us at info@cornerstoneconsulting.com.au

• Spend more money.
• Earn less money.
• Transfer all your profits overseas.
• Set-up a complicated tax structure.
• Pay your children up to the income tax free threshold.
• Pay some super into your parents tax free super fund.
• Keep earning a profit on selling your principal place of residence.
• Get divorced and married every couple of years.
• Have significant stock “loss” or “wastage”.
• Deal only in cash (except when paying expenses, have a record of that).
• Build up big tax debts in your company, liquidate it and start the business again before the lights are out on the old business.
• Run your private car through the company but “do” lots of business kilometer (ie reduce fringe benefits and get a big deduction).

These are the many ways business people try to save on tax each year, some with varying degrees of success or legal legitimacy. At Cornerstone Consulting we do not advocate breaking the law when it comes to tax. We have four guiding principles when it comes to saving tax for our clients.

1. Keep our clients on the right side of the tax law (it means we all sleep better and can live in a more prosperous country).
2. Defer the payment of tax for as long as possible (why pay today when you can pay tomorrow or never in some cases).
3. Understand tax law very very well so we can really help our clients.
4. Help our clients to not pay one more cent of tax than they legally must.

Apply these 4 guiding principles and you are in the best possible position to save on tax.

We’ve totally enjoyed working in Annandale these past 3 years but we are now leaving and moving our office to Ashfield. See our contact page for details.

As everyone knows, technology is advancing all the time and the great news for us is that because of technology we can use less physical space and continue to visit our clients at their business premises. However, when privacy for important business discussions is required our clients are always welcome to use our new meeting space.

Business 1

is involved in a professional services industry.

The owners of the business had a really good vision regarding what they wanted from the business. They felt there was an opportunity in the industry to create something different from the competition. The strongest vision was probably around how they wanted the organisation to be for staff, essentially they wanted to create an environment which was great to work in and brought the best out in people.

On their own admission they felt their biggest weakness was sales and marketing. Some money had been spent on a really clear and well designed website and there had been some early investment in a brand strategy. The brand strategy was aimed at defining the focus and positioning of the business in the market.

The first 12 months

It was a start-up business with very little revenue at first, so they were bootstrapping.

Financials – they took a fairly minimal approach to financial statements and documenting transactions. What they did do well was create a working budget which was updated as new expenses and clients became known. The owners had a good handle on the budget.

People – Even though they were boostrapping and saving where they could, they did employ an office assistant, their key duties were to deal with all correspondence but more  importantly to start an office manual and procedures manual, parts of which are still being used 4 years later.

Knowledge – they had a great technical knowledge as well as a good sense of where the market was heading in the industry. The key skills they were acquiring during the early phases were dealing with clients in a business development capacity rather than a technical capacity. This may sound strange but a lot of technical people start a business because they’re good at what they do but they don’t know how to sell themselves and deal with clients effectively.

Systems and delivery – as mentioned before, the admin person developed some early systems which held them in good stead for 2 to 3 years.

Sales and marketing – by their own admission this was an area of weakness in the business. The problem they faced was that they actually had no idea what these things were. In reality though they were doing some limited marketing via networking and the branding work which had been undertaken had given them a flatform to start from. Admittedly their sales techniques once the lead or prospect had come in were awful. The rationale or justification for being bad at sales was that they needed every dollar in door. About 3 years after starting they came to realise that the cost of this attitude was huge and significantly held back the business.

We will be charting the progress of three businesses. We will recap the progress so far; what they do, where they have come from and where they hope to be in the future.

The Cornerstones of business are;

• Financial (recording, reporting, using)
• People (staff)
• Knowledge and learning (what we know and need to know)
• Sales and Marketing (driving revenue)
• Systems and delivery of service (how well we do it)

And then after you have spent that money are you getting the best value from your accounts, do you get all the reports you need to drive strategy, cut costs, improve sales, improve productivity and so on?

A good CFO Service is a one stop shop to get all your accounting done, get better reports, and take the stress out of doing the accounts.

At Cornerstone Consulting we deliver all of these benefits as part of our CFO service and we also wrap all the tax and advisory services in as well.

The synergy you get as a client is that everything is taken care of and we as an advisor can also offer strategic help where it wasn’t possible before.

The beauty of all this from our experience is that it actually costs you less than what you have in place already. When we started this service we were surprised that a fully integrated CFO Service was going to cost less for out clients but we’ve proved it’s easy.

The key elements to being great at tax and therefore great for our clients are;

• A brain.
• Experience.
• Knowledge.
• Tenacity to get the best result.
• Ability to apply all the above to a problem.
• Communicate in simple language.
• Take the stress out of dealing with tax stuff.

For a local boutique firm, we help many clients with their R&D needs. We know from experience that our level of expertise when it comes to R&D rivals that (and arguably exceeds ) specialist and international firms R&D firms.

When coupled with our CFO Services we obtain even greater results for our clients.

Over the past 8 years, we have been offering Outsourced CFO services to our clients.

What we know about outsourcing the CFO or finance dept is that your business can enjoy some of the following benefits.

• Save money (by structuring the position you can save money and get much better results).
• Save time (we are very efficient at what we do).
• No staffing issues (we offer seamless staffing solutions via our team).
• Greater management reporting.
• Greater management of key areas of your business (debtors, stock and so on).
• Greater flexibility.
• No down time.