Time flies in the business world – the 2020 financial year has begun, and if businesses haven’t started planning how they can improve on 2019, they had better start soon!
External guidance from business advisers is ideal for stepping up your game – let’s see how specialists can help you take advantage of current enterprise conditions.
How will the Federal Budget 2019 affect your financial year ahead?
Medium-sized business asset write-off
April 2 marked a range of tax cuts – chief among them the medium-sized business asset write-off.
Organisations with aggregated annual turnover of $10 million or more but less than $50 million will receive a 12-month extension to write off eligible assets purchased. This applies to anything from new or second-hand enterprise equipment to vehicles and tools. Businesses need to have purchased and first used or installed the assets in question between April 2, 2019 and June 30, 2020 to qualify. Additionally, assets are only eligible if they are worth no more than $30,000.
Why businesses need to know this: The taxation write-off means businesses can more readily invest in the assets needed to advance their organisation without compromising cash flow. Reduced tax liability from a higher deduction also improves long-term financial stability.
The asset write-off can be the incentive medium-sized organisations need to purchase a new business vehicle or equipment.
Additional funding for business regulators
The Federal Budget also made a strong stand to restore trust in Australia’s financial system. Amongst a number of measures, the government has devoted more than $550 million in additional funding to the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA). This will help financial regulators better achieve their compliance and business performance monitoring for all sizes of business.
Why businesses need to know this: Higher budgets for ASIC and APRA equals more resources for checking businesses’ financial records and management reports. As a result, organisational leaders need to ensure all internal compliance checks are thorough.
Federal Training Hubs scheme
Another budget change business leaders should keep an eye on is the Federal Government’s commitment to invest more than $50million in the Training Hubs scheme. This pilot program aims to lower levels of youth unemployment in regional areas by offering scholarships and other opportunities to train in vocational trade work or medicine.
“These Industry Training Hubs and scholarships will provide a pathway for young Australians to gain the skills they need for a successful and rewarding career,” said the Minister for Small and Family Business, Skills and Vocational Education Michaelia Cash.
Why businesses need to know this: Organisations based in regional Australia will have improved access to a skilled workforce and opportunities for strategic growth following increased investment and more interest in working in these areas.
An initiative to increase the number of skilled workers in regional Australia is an opportunity businesses should prepare for.
The benefits of partnering with business advisers
No matter the industry or scale of your organisation, all business leaders can benefit from focusing on three key factors to improve wider enterprise performance:
1) Strategy oversight: It often takes an external view to see which policies work and which don’t. Strategic business advisory offers this outside perspective. Using the insight of experienced professionals, you can adapt business planning and investment strategies to align with core values and ensure long-term aims suits your current team and processes.
2) Management reporting: Assessing your executive framework and activities doesn’t have to be annual – imagine the insight you could gain from assessing management performance more regularly? Management reporting provides data-driven evidence of opportunities and risks in your setup, and aids with compliance monitoring.
3) Executive benchmarking: Business problems often come from the top, stemming from restrictive or outdated board-level processes and structures. Leading positive change requires ongoing assessment of executive performances to determine KPIs or activity-related goals for the C-Suite, ensuring senior management is leading from the front.
Business advisers can help to realign your organisation’s strategic direction and improve business planning.
Business advisers can provide dedicated guidance for achieving the best of each goal. Here’s how advisers can use these skills to address the Budget’s most important changes:
Strategy oversight and the business asset write-off
While the write-off won’t help with short-term cash flow issues, it will mean that organisations can access critical enterprise assets for less in the long term. This value is central to confidently planning for diversifying into a new market (with all the equipment, vehicles or tools needed!), or strategic growth by opening and stocking a new branch or outlet.
Management reporting and increased business regulator funding
If compliance standards becomes more rigorous following ASIC and APRA’s funding increase, businesses will need external guidance to ensure they meet management reporting and other operational compliance requirements. Business advisers provide a fresh set of eyes and an outsider’s view of your management processes to ensure everything is running to maximum efficiency.
Executive benchmarking and the federal Training Hubs
While it will take several years for the effect of the pilot Training Hub programs to take effect, it presents a significant opportunity for regional Australia. Your executive team should be planning how to leverage this future talent pool now. Failure to react quickly to this change could indicate that your C-Suite isn’t functioning to its best!
For more insight from advisers who can help you meet all of your business goals and achieve peace of mind in the 2020 financial year, reach out to DFK Crosbie today.