The Reserve Bank of Australia is widely tipped to reduce interest rates again to historic lows. Easton Wealth economist Emmanuel Calligeris explores the impact.

Australia and world volatility

The ongoing trade war between the US and China has dominated financial market movements recently. The last two trading months have seen increased market volatility. In July, share markets moved higher because interest rate markets moved lower to reflect lower economic growth thanks to the trade war. There have however been other issues causing market volatility including a negative economic growth reading in Germany in the second quarter and the Bundesbank – the Central Bank - warning of a possible repeat in the third quarter. This is important because two quarters of negative growth in a row is how we define a recession. It could well be that Germany – Europe’s largest economy, has slipped into recession and the question then becomes what will happen to the rest of Europe? As we head into recession, unemployment rises, investment falls and governments are forced to spend money to try to revive the economy as interest rates fall. The good news is that government spending is likely to add 0.7% to growth in the next year which should help the region avoid recession. The risk to Europe is a no-deal Brexit. Brexit has caused great volatility in the European Union. A No-Deal Brexit would likely hurt the exports of France, Germany and Holland.

Japan’s GDP growth is weak as export growth has slowed. In Hong Kong, the unrest has the potential to deteriorate further. The riots have dented consumer spending which is a large component of economic growth for developed countries like Hong Kong. In Australia, economic growth has slowed also as households struggling with record debt and weak wage growth cut back on spending. Two key supports have been high commodity prices and infrastructure investment. The iron ore price remained high because of supply disruptions caused by the tailings dam disaster in Brazil. However, that is now falling away as iron-ore supply disruptions end and the price returns to more normal levels. It means that our export income from iron ore will be less of a driver of growth next year and unless the drought breaks, the slack is unlikely to be picked up by rural exports.

In early August, the further escalation of the trade war saw share markets in Australia and the US weaken and the interest rate on Australian term deposits and bonds fall to their lowest level in history. If interest rates stay low, government spending will gain importance as the driver of future growth.

The slowdown in global growth saw US interest rates adjust quickly. Traditionally, a signal of a high probability of recession in the US occurs when the yield (interest rate) on the 10-year bond, falls below the yield on the 2-year bond. This is also known a negative yield curve. Whilst the probability of recession is not guaranteed, the negative yield curve does suggest that the US Federal Reserve are likely to reduce its interest rate substantially over the course of the next year. In Australia, the Reserve Bank eased the official cash rate twice to an historic low of 1%. The RBA believes that the level of wages growth does not threaten its inflation outlook and the economy can operate at a much lower rate of unemployment. This essentially means that monetary policy (interest rates) can be lower for longer without overheating the economy. That said, the outlook is for interest rates to move even lower in late 2019 and early 2020 with some forecasters suggesting that the rate will reach just 0.50% by that time. Term deposit rates have moved lower to reflect the low cash rate.

The real impact of low interest rates

Low rates have produced a dilemma for savers. As interest rates fall, more and more capital is required to sustain the same level of income. This is illustrated in the table below.

Capital prices and interest rates

Investment amount ($)

Fixed income ($)

Interest rate
















The table shows that at a 10% interest rate, an investor could generate income of $50,000 with a capital or investment amount of $500,000. If the interest rate falls to 6%, the capital required to generate the same $50,000 of income is approximately $833,000 and at a 2% interest rate, an investor would require $2.5 million to generate the same amount of income.

Looking at it another way, if you own an investment that is capable of generating an income of $50,000 per annum, then the lower the interest rate, the more valuable the investment becomes. This has been the case for bonds over the last 30 years and property and shares that have maintained their dividend growth in the last 10 years since the global financial crisis. An investor that has had the same $500,000 invested without capital growth (like a term deposit) will now be generating income of just $10,000 at 2%.

Investing in a low return environment

To date, investors in property and share markets have been happy about the low and declining interest rates. They have paid more attention to the market gains that have resulted from falling rates than the falling future rates of return. We now find ourselves in a situation where future returns are likely to be low and are confronted with the question of where to invest in this low return world. The easiest way to achieve higher returns is to increase investment in those asset classes that traditionally offer them – namely domestic and international shares and property. However, in seeking higher returns, investors must assume higher risk. It is important that the overall portfolio balance is not tilted too far and investors remain disciplined from an asset allocation perspective. If fiscal spending does increase in the future, a bias towards (income generating) infrastructure may be appropriate over the near term.

In terms of stock selection, there has been much press that recent rises in property and share prices has seen these asset classes reach unjustifiable valuations. As a result, some experts in stock selection that have taken this view have underperformed their respective indices - in some cases markedly so. We believe that combining low-cost index funds with carefully selected actively managed funds not only leads to better relative performance, but also reduces costs. Shares and property are fully priced in the short term but should remain part of a well-diversified investment portfolio. Investors should be cautious near term but look to add to exposures into market weakness. Shares and property are likely to provide moderate growth with a good level of dividends over the next few years - lower returns in a low growth low inflation world will likely be the norm.

This information is general information only and hasn’t taken your personal circumstances into account. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on this information.

The Government has resurrected the Superannuation Guarantee (SG) amnesty giving employers that have fallen behind with their SG obligations the ability to “self-correct.” This time however, the incentive of the amnesty is strengthened by harsh penalties for those that fail to take action. 

Originally announced in May 2018 and running between 24 May 2018 until 23 May 2019, the amnesty failed to secure its passage through Parliament after facing a backlash from those that believed the amnesty was too lenient on recalcitrant employers.  

Since the original announcement, the Government reports that over 7,000 employers have come forward to voluntarily disclose historical unpaid super. The SG tax gap is estimated at around $2.85 billion in late or missing SG payments. 

When does the amnesty apply?

Legislation enabling the amnesty is currently before Parliament and if enacted, will apply from the date of the original amnesty announcement, 24 May 2018, until 6 months after the legislation has passed Parliament. Employers will have this period to voluntarily disclose underpaid or unpaid SG payment to the Commissioner of Taxation.

The amnesty applies to historical underpaid or unpaid SG for any period up to the March 2018 quarter.

Qualifying for the amnesty

To qualify for the amnesty, employers must disclose the outstanding SG to the Tax Commissioner. You either pay the full amount owing, or if the business cannot pay the full amount, enter into a payment plan with the ATO. If you agree to a payment plan and do not meet the payments, the amnesty will no longer apply.

Keep in mind that the amnesty only applies to “voluntary” disclosures. The ATO will continue its compliance activities during the amnesty period so if they discover the underpayment first, full penalties apply. The amnesty also does not apply to amounts that have already been identified as owing or where the employer is subject to an ATO audit.

What do employers pay under the amnesty?

Normally, if an employer fails to meet their quarterly SG payment on time, they pay the SG charge (SGC) and lodge a Superannuation Guarantee Statement. The SGC applies even if you pay the outstanding SG soon after the deadline. 

What employers pay for failing to meet SG obligations

No Amnesty


SGC comprised of:

SGC comprised of:

·       The outstanding SG entitlements (this component might be higher than what it would have been had the entitlements been paid on time)

·         The outstanding SG entitlements

·       Interest of 10% per annum

·         Interest of 10% per annum

·       An administration fee of $20 for each employee with a shortfall per quarter

·         No administration fees


Penalties of up to 200% of the amount of the underlying SG charge (minimum 100% for quarters covered by the amnesty)

No penalties

A general interest charge if the SGC or penalties are not paid by the due date

A general interest charge


SGC amount is not deductible - even if you pay the outstanding amount

SGC amount is deductible

Under the quarterly superannuation guarantee, the interest component is calculated on an employer’s quarterly shortfall amount from the first day of the relevant quarter to the date when the SG charge would be payable (not from the date the SG was overdue).

The ability to deduct SGC and the reduction in penalties under the amnesty could be significant for employers that have fallen behind with their SG obligations.

If SG is paid late, special provisions exist within the legislation to automatically protect employees from inadvertently breaching concessional contribution cap limits if the unpaid SG is paid to the Commissioner and then transferred to the employee’s superannuation fund. Where the employer makes the payment directly into the employee’s fund, the individual would need to apply to the Commissioner requesting the exercise of discretion to either disregard the concessional contributions or allocate them to another financial year.

What happens if you do not take advantage of the amnesty?

If an employer fails to take advantage of the amnesty and is found to have underpaid employee SG, they are required to pay the SGC which includes penalties of up to 200%. Outside of the amnesty period, the ATO has the power to reduce the penalty in whole or part. However, the legislation enabling the amnesty imposes tougher penalties on employers that do not voluntarily correct underpaid or unpaid SG by removing the ATO’s capacity to reduce these penalties below 100%. In effect, the Commissioner loses the power for leniency even in cases where an employer has made a genuine mistake.

Where to from here?

Even if you do not believe that your business has an SG underpayment issue, it is worth undertaking a payroll audit to ensure that your payroll calculations are correct, and employees are being paid at a rate that is consistent with their entitlements under workplace laws and awards.

If your business has fallen behind on its SG obligations and is eligible for the amnesty, you need to start working through the issues now or contact us to work through the issues for you. There are several calculations that need to be completed and these may take some time to complete.

If your business has engaged any contractors during the period covered by the amnesty, then the arrangements will need to be reviewed as it is common for workers to be classified as employees under the SG provisions even if the parties have agreed that the worker should be treated as a contractor. You cannot contract out of SG obligations.

If a problem is revealed, you can correct it without excessive penalties applying under the amnesty. If you are uncertain about what award and pay rates apply to employees, the FairWork Ombudsman’s website has a pay calculator or you can contact them online or call them on 13 13 94.

Each year, Xero holds an annual conference called Xerocon that allows those that utilise the accounting software to learn of the game-changing product announcements, invigorate their mindset with inspiring keynote speakers, participate in break out sessions and network with like minded accountants and add-on partners.

This year, Troy, Michael Dance and Gary ventured off to Brisbane. Gary provides us with his insights on the two days below…

Day 1

Day 1 is in full swing. The team strides down to the Brisbane Exhibition Centre with excitement in our hearts, and what a scene it is. There are skateboards flying up and down the halfpipe, a pop-up barber, table tennis and a million donuts nailed to the wall; this is going to be fun. The highlight of the day hands down was by Xero’s Managing Director, Craig Hudson where he opened up on his personal battle with Imposter Syndrome and mental health. It takes a lot of courage to give the world a look behind the curtain, at the moments you’ve lost hope, when you can’t see a future and are right at your breaking point. He served as an example that it’s never too late to turn things around and that with the right support networks and skills, you can bring yourself back on the right path and get through.

Technically, Xero has focused on solving the big issue facing SMEs, cashflow. Most small businesses fail due to running out of money and Xero has partnered with payment processing platform Stripe to help fix this. If your business is struggling to chase up those clients who just won’t pay, this is a must have feature for you. Having the payment function directly embedded in the Xero invoice has led to payments being received up to 15 days faster.

Day 2 

My standout for day 2 was a presentation on leadership by Peter Baines. He gifted us some lessons learnt from his years working at the head natural disaster operations. He mentioned that leaders often have the same technical ability as everyone around them, however what separates them is their ability to act.

He told a story about a young boy and his grandfather running for shelter, desperately trying to find refuge before they would be swept away by the tsunami that hit Thailand in 2004. The grandfather looked toward a building ahead, however knowing that they wouldn’t make it, he made a split-second decision to climb a tree, dragging the young boy with him to the top. 

They made it to the top of the tree, battered, bruised and exhausted… but alive. That split second decision saved his grandson’s life, but what we didn’t know was with the decision to climb the tree, he had to leave the boy’s younger brother behind, knowing the tsunami would take his life.

Through my glassy eyes, Peter’s message was clear; leadership is often difficult, but the best leaders take responsibility, make the best decision they can at the time and live with the consequences and the inner doubt of whether they could have done anything better to improve the outcome. They take on the burden of responsibility.

To finish off the conference, we headed down to the wrap party with all our friends, both old and new. We celebrated a successful week of getting to know the direction of where Xero and the accounting industry are headed, and all the third-party applications we can use to make our clients’ lives easier. 

Xerocon this year showed us what is most important. In this industry, we often focus on performance, efficiency and output so much that we can sometimes lose awareness of how we and those around us are travelling. We could all use a reminder to be kind, helpful and considerate to our colleagues, clients, friends & family.

It’s always worth making five minutes to check in with someone, to make sure they are doing okay or to see if they need any help. To you, it might just be a moment of kindness, to them it may be the moment that saves their life.

Gary Barton

HTA Intermediate Accountant

A quick scan at a study conducted by the Australian Bureau of Statistics gives you an accurate picture of the region’s business exit rates for the 2012 to 2013 financial year. According to reports from ABS, SME exit rates surged from 13.1% to 14.1%. With these figures in mind, the basic assumption is that a steady rate of businesses in the country lacks a strong and cohesive set of business goals.

Quite evidently, the alignment of your business goals can give your business that much-needed boost. But do you know exactly how these goals can impact your business? What are the positive effects of seeking a professional business advisory service for your company? Read on to understand the bigger picture:

Goals define your vision

A clear set of business goals is vital in strategically aligning your critical management decisions. Clearly setting and communicating your business goals with your internal staff makes it easier to eliminate distractions that are not part of the priorities you have set for your business.

Goals strengthen initiatives

Defining your business goals and working towards achieving them are essential in making your internal staff understand and appreciate your business objectives. And with that clear understanding of the goals, they are striving for the strong initiative to perform well and work with minimal supervision.

Goals increase focus

Having adequate focus is an indispensable aspect of a successful business.  When your internal staff has a tight grasp on the priorities they need to concentrate on, getting things done at the speed of light is practically effortless for them. And by far, the easiest and most effective way to achieve focus is to keep your business goals aligned.

Goals improve collaboration

There is no better way to accomplish your business goals faster than to work hand-in-hand with your internal staff. You can improve and ensure effective collaboration by setting your business goals. By having a shared objective, everyone in the organisation will have a clear vision about the targeted business objective.


With the latest technology updates and business trends today, it is easy to get sidetracked from what you want your business to achieve. Fortunately, you can keep your SME on track by putting your business goals in place. Seeking corporate secretarial services can help solve that problem for you.

Now more than ever, you should think about setting your business goals and aligning management decisions with your ideal targets. Need more information about setting business goals? Check out the HTA website here

In the past, keeping your books up to date meant manually inputting data in your accounting software and doing tons of work that cannot be integrated into those systems. With the advent of cloud technology, business accounting made a turn for the better. Now, keeping an eye on your books and ensuring positive cash flow has certainly become more manageable.

The problem, however, is this: how are you supposed to know which cloud accounting software to choose? Is QuickBooks your best bet? How about Sage? Or perhaps switching to Xero will do the trick.

Don't make decisions haphazardly. Read on to find out the best practices in choosing the best cloud accounting tool.

Determine your accounting needs

Take some time to review your business and try to find out how extensive your accounting needs are. The larger your business operations, the more complex your accounting needs will be. By looking into the amount of accounting assistance that your business needs, you will find it easier to choose among the wide variety of accounting software products out in the market.

Look into your own skills and capabilities

Doing hands-on work on business accounting tasks is not just about having enough time to take charge of your critical business numbers. You also need to have a tight grasp of finance and accounting processes. Gauging your accounting skills and capabilities will help you find a more apt cloud accounting solution for your business.

Set a definite budget

When it comes to choosing the suitable cloud accounting tool for your business, the price of the product is one of the things that you should take a look at. If you are eyeing a more generic cloud accounting software, you may purchase these at a significantly lower rate. On the other hand, the more specialised versions are bound to be more expensive.

Be mindful of add-ons

There are cloud accounting tools that come with a couple of very useful add-ons. These additional features will definitely help your business accounting processes significantly. However, since these add-ons come with a price tag, make sure to choose only the add-ons that you will be able to make good use of; otherwise, you will just end up wasting your resources.

Seek advice from your accountant

Choosing a cloud accounting software can be a little tricky. The benefits of choosing Xero over QuickBooks or Sage is filled with a lot of complexities. If you want to make sure about making the right decision, talk to your accountant about it. Your accountant will give you those much-needed updates and additional information to help you choose - and come up with the right cloud accounting tool, of course.


Through a thorough understanding of your business’ cash flow, you will be able to easily choose the perfect cloud accounting software that can ensure more cash inflow and lesser outflow.

Want to keep your books organised to better gauge your financial transactions? Click the button below to download a FREE copy of our cash flow management eBook.

In the last week or so, we have seen an escalation in volatility in the Australian sharemarket. This follows a month of significant volatility in global equity markets, resulting in price declines of between 7% and 10%.

A perfect storm to blame

Elevated geopolitical risk, persistent issues in Europe, US monetary and fiscal policy, slowing growth rates in China, falling commodity prices and large moves in foreign exchange rates have had a marked impact on investor sentiment recently. 

These factors in isolation can affect markets to varying degrees but the recent interaction between all of them has been a strong negative influence on investor sentiment, and has created the recent increase in sharemarket volatility globally.

Geopolitical risks have increased markedly over the past couple of months. 

In particular, the rise of the Islamic State (ISIS), the increased pandemic risk from Ebola and the ongoing tension between Russia and Western Europe over Russia’s active support for the Crimean separatist movement in the Ukraine, have dominated news-flow and soured investor sentiment. 

This perfect storm of negative global events has resulted in a loss of confidence in sharemarkets around the world as investors ask if things will get worse. 

Of course that’s possible, but more bad news has already been factored in to many sharemarkets to some extent. 

In fact, we believe, based on current valuations, that now may be a good buying opportunity both here and selectively overseas.

The positive news is that, globally, inflation is contained and US growth, while modest, remains positive.

And China is still looking at around 7% p.a. growth (albeit that being a little lower than expected).

Further, corporate profitability is strong with balance sheet improvement post the Global Financial Crisis increasing the stability of corporates.

So, looking through this recent volatility, the foundations for a return to more stable sharemarkets are in place.

Impact of US Interest Rates

Global markets have for some time placed significant emphasis on the Federal Reserve (Fed) and the continued wind down of its bond buying program called Quantitative Easing (QE).

The likely timing of the next increase in US official rates continues to be a dominant driver of investment markets.

The QE program is due to end this month after being wound back consistently and predictably over the past year.

With the end of QE the market has speculated that the logical progression for the Fed is to increase official interest rates.

To address this speculation, Fed chairperson Janet Yellen has committed to low interest rates for the time being and has intimated that it will be a considerable time before interest rates rise, making it clear that rate changes will be data dependent rather than calendar based.

Despite these assurances, and US inflation and growth rates remaining subdued, the ending of QE along with a ‘flight to quality’ buying by risk conscious global investors in light of recent events, has seen the $US strengthen against most major currencies.

In Australia’s case the $A has depreciated by approximately 9%. The relative decline in the $A has occurred in part due to the expectation of eventual rising rates in the US which would narrow the difference between their interest rates and ours, which in turn puts downward pressure on the $A.

The $A has also come under pressure as a result of the weaker than expected economic data from China.

Given the strong trade links between China and Australia, particularly given their demand for our iron ore and coal, any weakness in expectations for Chinese growth should result in a poorer outlook for Australia’s export sector which is dominated by resources.

For this reason, offshore investors wishing to maintain their $US purchasing power have sold $A-denominated assets, key among these being Australian listed company shares. 

This created something of a vicious circle as more selling of equities by foreign investors acted to push both the share market and the $A lower.

Europe Continues to Struggle

Elsewhere on the global front, European data over the past month has been far from positive, forcing the European Central Bank (ECB) to cut interest rates to all-time lows of 0.05%, placing pressure on ECB President Mario Draghi to honour his previous commitment to do ‘whatever it takes’. 

Adding to this, sentiment indicators from Germany (Europe’s largest economy) sank into negative territory for the first time since November 2012, lending support to the IMF and World Bank cuts to global growth projections for the remainder of 2014 and 2015. 

In our view, while Europe continues to deal with its economic issues, the valuation of its equity markets remains relatively attractive and should present selective buying opportunities after this recent bout of volatility.

Falling Commodity Prices a Contributing Factor to global volatility

Commodity prices in general have responded to the weaker global growth expectations and fallen. 

And, contrary to the usual situation at times of elevated tension in the Middle East, the oil price has been falling dramatically. 

This has in turn been detrimental for the Russian economy with oil being Russia’s largest export (around 58%). 

This has acted to elevate Russia’s interest in the Ukraine as the majority of the natural gas Russia supplies to Western Europe is transported in pipelines traversing the Ukraine. 

Clearly control of these pipelines is significant in gaining surety of the revenues for natural gas sales. 

This conflict, and the sanctions the EU has imposed on Russia for its active support of the Crimean separatists, further serve to increase geopolitical tensions and global sharemarket volatility. 

Australian Banks and Resource Companies Back to Fair Value

In the Australian sharemarket, we have witnessed a decline of close to 10% over the past few months, which has effectively eroded the gains for calendar 2014 to date. 

Bank shares and mining shares, the two largest sectors in the Australian equity market, have suffered the largest falls for differing reasons. 

The banking sector, which has experienced very strong returns over the past few years, has recently been faced with the prospect of regulatory changes to bolster the strength of Bank balance sheets to bring them in line with higher global standards and strengthen the domestic banking system to withstand shocks in times of crisis. 

The Murray inquiry is currently considering these changes and speculation around the likely outcome has negatively impacted Bank share prices. 

That said, the major banks are trading at valuations as low as 12-13 times current earnings and with fully franked dividend yields between 5.6% and 6.1%. 

With net interest margins remaining steady (or possibly more favourably following reductions in term deposit rates), bad and doubtful debts remaining at very low levels, lending growth at about 5% sector wide and earnings per share expected to be at around 7% p.a., the sector now looks relatively attractive. 

Resource companies have been significantly affected by Chinese economic data released in mid-September. 

The data indicated that Chinese industrial production growth was the lowest since the 2008 global financial crisis, which has increased doubts that China’s 7.5% p.a. target annual growth rate will be reached. 

As China is Australia’s largest export destination, this news was not good for Australian resource companies. 

Over the past few months, there has been a massive increase in export volumes of Australia’s key commodity, iron ore. 

Steep declines in iron ore prices have resulted and these falls coupled with the aforementioned decline in Chinese industrial production, have hurt domestic sentiment. 

As a result, resource companies are also looking more attractive from a valuation perspective for investors than they have for a while.

Australian shares look attractive

Despite these global and domestic issues, from a valuation perspective Australian equities are generally not expensive and are tending toward being attractive relative to the 20 year trend of the price multiple of current earnings.

Interestingly, a declining Australian dollar favours a number of sectors that will aid Australia’s transition from being a mining led economy to a more broadly based economy. 

For example, Australian manufacturers and exporters are more cost competitive under a lower $A.

Tourism operators are likely to experience a boost in profits as Australia becomes a cheaper destination for foreigners. 

Further, the retail sector, which suffered heavily from the high A$ and adapted by reducing costs and providing online offerings, will also be a beneficiary.

A Time to Buy? We think so.

It is important to remember that sharemarkets are bound to go through periods of higher volatility from time to time, and that investment in quality assets is a long term endeavour. 

As a consequence, we believe clients should stay the course during periods of higher volatility. 

Particularly when, as is the case now with current earnings suggesting that sharemarket valuations are attractive, the risk of a major equity sell off is low (in the absence of an unforeseen external shock, of course). 

In fact, at these current valuation levels, it may prove to be opportune to review portfolios in a positive light.

Financial Planning Services are provided by Scott Millson, Authorised Respresentative of Australian Unity Personal Financial Services Ltd AFSL: 234459

In recent years, virtual CFOs have taken their rightful place as a fixture in the contemporary business setting. Globalisation, modern technology and developments in business communications are all major contributors to this phenomenon.

If you are still unsure of the actual impact of virtual CFOs in your business, just take a look at how it affects your cash flow. Here are some of the ways by which virtual CFOs are extremely valuable to your business:

Managing your cash flow

You can rely on a virtual CFO to manage your cash flow effectively. By taking on the role of a cash manager, the virtual CFO takes charge of your business capital and makes sure that your money is growing. This includes determining the specific investment strategy and the asset classes to be considered, among others.

Creating the budget

For small business owners, prioritising the complexities of business financial planning by working out a budget is never easy. Seeking the help of a virtual CFO can help you create a budget and adjust your cash outflows based on your your inflows to keep your company from overspending.

Supervising your critical business numbers

Entrepreneurs who do the math on their own often find it too taxing to interpret their own financial statements. Hiring a virtual CFO can give you the assurance that your critical business numbers are interpreted accurately. More than anything else, it also keeps your business on its feet by establishing certain strategies that ensure a smooth and reliable cash flow.

Collecting debt

A strict debt collection policy is essential for keeping your cash flow in good condition. A virtual CFO can help guarantee that someone is keeping an eye on your receivables. By strictly implementing debt repayment strategies, the virtual CFO also ensures the timely collection of money that is owed to your business.

Exploring financing options

When your business finances slide, seeking financing options can significantly change your financial position. With that much-needed boost in your capital, you can have more resources to fund machineries or raw materials, which can add to your revenues in the long run. With their vast experience and understanding of financing options, a virtual CFO is indispensable in looking for the perfect financing option for your business.


The list of potential benefits for hiring virtual CFOs can be quite expansive, but truth be told, it all boils down to having experts who can work their magic on your cash flow.


Are you interested in virtual CFO services? Click on the button below to download a FREE copy of our virtual CFO eBook.


According to the D&B Global Business Failures Report , the number of small businesses going into liquidation has increased by 48 percent. If these findings are any indication, small business owners have to exert more business financial planning efforts to tighten their belt and mitigate business risks.

As we all know, risks cut across different industries. Fortunately, you can lessen these by predicting possible cash flow challenges before they become a major issue. This is exactly where a cash flow forecast comes in handy. But did you know that these forecasts can do more than just help you anticipate money management challenges? Here are more reasons why your business should prepare a cash flow forecast:

1. It helps you in budgeting.

A cash flow forecast gives you a clearer understanding of how much cash your business owns and how you can use these resources to fund your daily business operations. Managing your business finances through a cash flow forecast also helps you map out the wise use of your money.

2. It showcases your financial viability.

A cash flow forecast is valuable if you are considering a sale of your business or admitting business partners. Since it asserts the financial viability of your business, a cash flow forecast is extremely valuable in proving the worth of your business to your would-be shareholders or purchaser.

3. It measures business performance.

Is your business doing well? A cash flow forecast is vital in measuring business performance. Since these financial statements provide accurate figures for your cash inflows and outflows, you can use it to ensure improvements in business performance.

4. It improves goal-setting initiatives.

At this point, can you name the specific goals that you want your business to focus on? Failing to set your business goals may compromise your business direction. The ideal approach: Use a cash flow forecast to set your targets and have better chances of hitting those targets as accurately as possible.

5. It simplifies your financing options.

When businesses struggle with their cash flow, availing loans becomes essential in keeping your business capital on track. A cash flow forecast helps you determine a) if there is a need for loans as well as b) the frequency of loan repayment.

To say that a cash flow forecast is extremely valuable for your business is an understatement. In a nutshell, you can prepare these financial statements on a monthly or quarterly basis – depending on the phase of your business and its level of stability. The more volatile your business performance is, the more frequent your cash flow forecasts should be.

By closely monitoring the movement of money in your business through a cash flow forecast, you will make more informed business decisions.

Can’t get enough of cash management tips for your business? Click on the button below to download a copy of our FREE cash flow management eBook.

HTA Advisory has a broad spectrum of clients across many industries. Often, it's only the business advisor who gets to hear about the exciting things our clients are doing. Our Client Conversation offers an opportunity for us to present our clients to our readership in a way that shares their passion for what they do.

This month we introduce you to 

Today I had the opportunity to sit down with Matt Knuppel from Pride Athletic Clifton Hill...I think his clients were thankful for the 10 minute breather.

Matt, as a new client of ours I thought this would be a great opportunity for us to learn more about you and how you came about starting this business.

I originally took my PT course when I was waiting to be a fire fighter... by the time I got through to the MFB final interview I had opened up my first CrossFit gym and was loving it too much to stop! Three years on, I've sold out of the first one, which I owned with partners, and opened up Pride Athletic/CrossFit Clifton Hill, which I'm proud to own 100%!

So tell us about your business and the service you provide.

We run (as far as I know) the only CrossFit gym in the world that specialises in women and women's health. While we aren't an exclusively female gym, we currently don't have any male clients and Ben (one of my coaches) and I are the only fellas in the whole place! This has created an amazingly tight-knit female community, which really thrives in and out of the gym. 

We are also starting to run online nutrition and well being programs that focus on the mental side of implementing a quality health and well being program, that can be done either locally or completely remotely! We are getting amazing results with this so far and we think it's going to be a real game-changer for women around the world.

In starting this new business and achieving its growth, what hurdles have you tackled to get where you are today?

When I started, I had no staff and ran the whole show myself. This involved running 9 hours of classes per day, the first at 6am and the last finishing at 8:30pm! I also lived about 40 minutes away (Cheltenham) from the gym, so I moved my bed into the office and slept there quite a lot. It was pretty brutal to begin with, and I'm very relieved to be able to employ three coaches and an admin now!

Wow that's dedication! So to assist with building your business what tools have you put in place to ensure it is profitable?

Facebook marketing has been huge for us, and I have hand-picked amazing staff. What I truly believe has made us profitable is our commitment to service - when this is exceptional, everything else falls into place!

What sets your business apart from other gyms?

  • Exceptional service that truly goes above and beyond
  • One of a kind CrossFit gym that specialises in women's health, fitness, nutrition and happiness!
  • The best staff in the world!

If anyone has questions, they can check out your site, but can they email you too?

Of course! We're closing in on capacity but would love to have more quality members that are committed to their health and fitness. You guys can email me personally at any time.

Thank you so much Matt, is there anything else you'd like to mention?

Even if you aren't near Clifton Hill, we can legitimately help you. We care about our clients and are truly committed to their results. If you're looking for a fitness and nutrition program that is well and truly above the rest, drop us a line and we'll see if it's a good fit!

If you’re an employee, this is a cost effective way to purchase a new (or used) car. You don’t have to pay GST on the purchase price, you can use your car for both business & personal use & your running costs can also be included in your arrangement. Your employer pays the vehicle payments and running costs for you from pre-tax salary, which means you will also pay less tax.

As an employer, the benefits are simple. You get to claim the GST back on the purchase of the car, increased deductions throughout the year including interest on repayments, depreciation & running costs of the car & this arrangement can have a great impact on employee satisfaction. However, please note that a novated lease is considered to be a car benefit & a fringe benefits tax liability may arise.

Finally, a benefit for both parties is that in the event that employement ceases, the obligations and rights under the lease revert back to the (former) employee. This benefits the employee as they get to keep their car (with no tax consequences), but also the employer as they are not left with an extra vehicle or a financial commitment for it.

Specifically, a novated lease is an arrangement where an employee enters into a lease with a finance company & the employer enters into a deed of novation with both the employee & the finance company. Under the deed of novation, the employer may agree with the employee and the finance company to take on all, or some, of the employee’s rights & obligations in the original lease agreement. Under a full novated arrangement, the empoyer is responsible for guaranteeing the risdual value of the vehicle at the end of the lease. As the effective life of a motor vehicle is 8 years, here is a table to guide you in calculating the minimum risidual value for your novated leases’;

Would you like to learn more about how a novated leases could benefit you? Give your accountant at HTA a call to discuss.