Employers  – Super Choice Rules will change from 1 November 2021

If you are an employer, you’ll have an extra step to take if you have new employees who start from 1 November 2021 and they don’t choose a super fund.

You may now need to request their ‘stapled super fund’ details from the Australian Tax office (ATO).

A stapled super fund is an existing super account of an employee that follows them as they change jobs.

This change aims to stop your new employees paying extra account fees for unintended super accounts set up when they start a new job.

What you need to know

You may need to request stapled super fund details when:

• your new employee starts on or after 1 November 2021
• you need to make super guarantee payments for that employee, and
• your employee is eligible to choose a super fund but doesn’t

You may still need to request stapled super fund details for some employees even though you don’t need to offer them a choice of super fund. This includes if your employees are temporary residents or they’re covered by an Enterprise Agreement or Workplace Determination made before 1 January 2021.

You and your representatives can request stapled super fund details for your employees if you have full access to ATO Online services for business (previously called the Business portal) or contact us to complete this step for you.   It is important that if you are accessing the information via online services, that you review and update any online accesses to protect the privacy and safety of your employees’ personal information.

You must meet your choice of super fund requirements and any stapled super fund obligations by the quarterly due date or you may face penalties.

What you need to do from 1 November 2021

Step 1: Offer your eligible employees a choice of super fund

You need to give your eligible new employees a Super standard choice form and pay their super into the account they tell you on the form. Most employees are eligible to choose what fund their super goes into.

There is no change to this step of your super obligations.

Step 2: Request stapled super fund details

If your employee doesn’t choose a super fund, you may need to log into the ATO Online services for businesses and go to ‘Employee Super Accounts’ to request their stapled super fund details or contact us to complete this step for you.

The ATO will provide your employee’s stapled super fund details after they have confirmed that you are their employer.

If the ATO provide a stapled super fund result for your employee, you must pay your employee’s super using the stapled super fund details the ATO provide you.

Step 3: Pay super into a default fund

You can pay into a default fund, or another fund that meets the choice of fund obligations if:

• your employee doesn’t choose a super fund, and
• the ATO have advised you that they don’t have a stapled super fund.

If you have any queries in relation to the above, please contact one of the team at MGI South Qld.

The Fair Work Ombudsman has published a new Casual Employment Information Statement.

The attached is the statement which should be given to all new casual employees when they start work.

Please contact your HR team to understand what this means for your business. Feel free to contact your MGI Adviser should you need a referral to an HR expert.

The 2021 COVID-19 Business Support Grant for lockdown-impacted businesses in Queensland is now open to applications (except in relation to the $1,000 grant for non-employee sole traders).  While it was originally announced as a $5,000 grant, the grant support has been increased.  Below is a summary of the grant amounts and eligibility conditions.

The 30% turnover (i.e. income) decline is based on a nominated 7-day period with comparing to the same 7-day period from 2 years ago (or an alternative 7-day period if that isn’t situatable).  The nominated 7-day period must include one full day of the lockdown periods in July & August 2021. Your business doesn’t necessarily need to have been in one of the lockdown zones, it just needs to show it is in Queensland and it had the 30% decline in the nominated period.

The application for the grant is online only and must be completed by the business and not their advisers.  As part of the application, evidence is required from various records from your bookkeeping records (e.g. BAS, payroll reports, BASs, income reports). Alternatively, a letter can be provided by your accountant instead to advise these details instead or we can assist with getting the records from your bookkeeping records.

Importantly, it has been announced that funds will be provided to all successful applicants, so the grant isn’t limited to a certain cap.  Once a grant application is successful approved, the funding will be paid within 2 weeks of the approval.

The non-employing sole trader grant of $1,000 is not currently open for applications but you can currently register your interest to receive updates from the Queensland Government.  If you are sole trader but have employees, you should consider the small, medium or large grants instead.

For further information, please contact MGI or see the details on Queensland Government website below.

https://www.business.qld.gov.au/starting-business/advice-support/grants/covid19-support-grants

The Queensland government has introduced a Business Boost grants program which is aimed at providing support to businesses to advance improvements in their efficiency and productivity with funding of up to $15,000 (excluding GST) on meeting the criteria.

This grant supports activities in 3 project areas:

1. 1. Future planning
   2. Specialised and automated software
   3. Staff management, development, and planning

Eligibility Criteria

To be eligible for the grant, the business must (at the time of applying):

• have fewer than 20 employees;
• have an active Australian Business Number (ABN) and registered for GST;
• have a Queensland headquarters;
• have a turnover of between $300,000 (minimum) and $600,000 (maximum) in the
  last financial year (2020-21);
• have a publicly reachable web presence to identify business operations (such as
  business website, social media pages); and
• have owners/directors that are not insolvent or undischarged bankrupt

Eligible Projects to Spend the Grant

1. Future planning

• Strategic business planning for innovation or growth
• Implementing a governance board to guide strategic
  planning
• Exporting opportunities and requirements
• Compliance with industry regulations and standards

2. Specialised and Automated Software

• Design and implementation of management systems,
  including
  • Data warehouses
  • Asset management
  • Customer Relationship Management systems
  • Quality & Compliance management
  • Risk management
  • Production systems
  • Project management systems
• Bespoke/Complex website design and build including
  e-commerce, software integration, booking systems
• Cybersecurity tools
• Innovative technology that improves or diversifies service
  offerings

3. Staff Management, development & planning

• Human resource management skills building
• Professional development and training
• Digital workplace plans and systems for a remote workforce

Available funding

Your business may be eligible to receive a grant payment of up to $15,000 (excluding GST) on completing your proposed project.

The successful applicants must co-contribute at least 30% of the total project costs.

Grant funding will be paid only after compliant acquittal documentation is received.

Grant funding is not eligible to projects with a total cost of less than $10,715 (excluding GST) and payments made before the approval date.

Application Process

Applications open at 9am on 30 July 2021. The application form will be available online after this date via the DTESB SmartyGrants portal.

https://dtesb.smartygrants.com.au/

This grant program is competitively assessed and not all applications will be funded.

Our team will be available to assist you to maximise your chance of receiving the grant.

What are the key factors to optimise business value?

Value optimisation is all about growing business value. Value optimisation factors are issues within the business that can be planned for and addressed prior to selling that will assist in a smooth sale transaction at the optimum price. The key value areas for your business are growth, performance and succession. By focusing on optimising these areas, your business value will improve.

The path to value optimisation

The following illustration demonstrates the path you can take to optimise the value of your business.

Confused? How do I address these factors in my business?
Take a look at the following table that provides an indication of some of the industry best practice strategies that can be implemented to address these key value factors.

By addressing all of the above value factors, you will improve profit, improve the value of your business, and maximise your position when it is time to sell.

Some of the barriers to improving the value of your business and achieving your desired sale price could include:

• Business being too principal reliant
• Not spending enough time working on your business
• Expenses out of control
• Lack of client segmentation
• Poor systems and processes
• Unrealistic expectations about the value of your business

If any of these barriers are relevant to your business, these should be addressed. Contact your MGI advisor should you require any business coaching or help with business planning.

Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Bstar accepts no responsibility for any loss suffered as a result of any party using or relying on this article.

PPPM spells happiness.  According to a recent course (University of Texas) ROI and Happiness:

Pleasure
Positivity
Purpose
Meaning

This all leads to happiness in the workplace.

An esoteric concept, no not at all, but one to easily diminish if you don’t care about your people.  Remember how you treat your people tells everything about you. We are not talking about avoiding negativity at all costs and pretending to be happy (note: high performing teams cannot carry passengers). Happiness leads to success not the other way around. It’s about being optimistic and resilient, employees are as responsible as employers to achieve workplace happiness.  Attitude becomes a more important attribute than skill.

So, what does the science say:

• Happier people are physically healthier so take less sick leave (16 days less).
• Retention improves dramatically.
• Happier people are also more collegial, so they are better team players.
• Happier people are more creative and make better or more objective decisions.
• Organizations with happier employees are more productive and profitable. (outperformed S&P top 500 14 times)

This is why investing in employee happiness is a very smart thing to do.

To start with it would be useful for organizations to gain an understanding of the five main determinants of employee happiness: basic needs, autonomy, mastery, belonging and abundance culture.  The issue is having balance, all are important and people perform best when they are in the ‘flow’, their competence is matched to their challenges.

Employees can do even more for their own happiness. In fact, the employee should be encouraged to take the lead.

The health of our relationships at work is more important than physical health in relation to happiness. The science shows, the more you genuinely care for your co-workers, the happier and more successful you are likely to be. Culture is an important determinant of happiness because culture is a feature of the environment and the environment wields a powerful influence over our behaviors.

Simple things the employer can do:

• Create equality among employees.
• Treat external stakeholders, particularly your suppliers well.
• Hire based on values.
• Make mastery part of performance review.
• Give $200 to your employees to personalise their workspace.
• Make employees take their leave.
• Reduce face time at work.
• Reduce too many rules.

Simple things the employee can do:

• Make the effort to stay well (healthy lifestyle).
• Express gratitude.
• Seek happiness outside of work.
• Don’t do work on leave.
• Use your most productive time to be creative.
• Maintain a desire for learning (mastery).

In conclusion, a word of caution, you will be happier at work and hence, more successful. This is good, but if you are not careful, the success can sabotage your happiness.  Wealth seems to be especially potent at relationship spoiling. Studies show that the wealthier we become, the less we prioritize our relationships over things like making money and being even more successful.

Shrinkage in the retail sector has a major impact on the profitability of supermarkets and other stores. Shrinkage is the result of theft by customers and staff, and is also caused by damage to goods as a result of poor ordering and handling practices. It can be equal to three per cent of sales at some independent supermarkets. The shrinkage problem tends to be worse in smaller stores with an average shrinkage factor of around five percent. If retailers want to improve profitability they first need to understand shrinkage.

A recent case study revealed a supermarket business turning over 10 million dollars per year while poor shrinkage control contributed to losses of 10 thousand dollars per week off its bottom line. It seems the smaller a supermarket is, the higher the shrinkage problem. As independent supermarkets increase their turnover, the shrinkage problem reduces to an average of around 1.75 percent. Better quality systems, and better management of the factors that drive shrinkage, contribute to the lower figure in larger supermarkets. Best practice operations are achieving shrinkage levels of less that 0.5 percent.

In reality, most supermarket operators do not know the true cost of shrinkage. Often this is the difference between success and failure of the business particularly when profit margins are so tight. An improvement in shrinkage management of just one per cent of sales can improve profitability by thirty-three percent. This type of saving can enable retailers to channel their resources into areas which will make a positive impact upon their cash flow.

Identifying Shrinkage

Shrinkage can be defined as the loss in margin due to poor stock management procedures, reporting practices and internal controls. It is measured by comparing the gross margin from the Point of Sale (POS) Report to the financial accounts or internal stock management reports.

Some of the factors that contribute to shrinkage include theft by customers and staff in the supermarket, inconsistent pricing practices, excessive and uncontrolled discounting, absence or infrequent stock taking, as well as damage to goods as a result of poor handling and ordering practices. For managers and owners, shrinkage is a very attractive area to address as the benefits flow straight to the bottom line. We advocate benchmarking the store to identify the gravity of the issue.

Some of the best practice operators have achieved low shrinkage levels by implementing stock management systems, which are compatible to existing POS systems, allowing for automatic re-ordering, regular rolling stock-takes on high-risk items, and stock management procedures. These systems are supported by staff training and job descriptions and assigning responsibility to selected staff, thus delivering tangible benefits to the supermarket owner.

Just some of these benefits include improved cash flow from reduced stock levels, as a result of ordering of stock consistent with sales demand, reduced theft by making high risk items more visible to staff, and providing an early detection of pilferage through instant stock management reporting.

This type of improvement enables the retailer to then direct their resources into other areas, such as improving their supermarket layout and design. Shrinkage efficient supermarkets are most likely to survive and thrive in a competitive market. To improve profitability allows retailers access to funding for supermarket refurbishments, which is an essential part of competing for market share against national chains.

Shrinkage Reduction Planning

Financial benefits show as soon as a supermarket addresses its shrinkage problem. The best way to begin this process is for the retailer to talk to a professional adviser, or seek advice from industry specialists to develop an action plan to implement better operational practices.

Most retailers are time-poor and work long hours so the most effective way to develop a shrinkage plan is to identify your immediate goals, determine what resources are required (money, people, and time) and allocate tasks to responsible persons. One of the biggest shrinkage issues is that supermarket owners do not compare their management account gross profit (GP) percentage with what comes out from their POS system. This is a big mistake. We found most retailers were unable to produce accurate management accounts on a timely basis and most often conduct stock-takes once a year for tax purposes.

Shrinkage loss really hits home when retailers compare their GP in the financial accounts provided by their Accountant to POS reports. The key is to develop a stock management system that allows for timely and accurate management reporting. Our industry manager recently saw supermarket figures showing a nine percent difference between the POS GP percentage and accounting GP percentage.

For example, regular weekly stock-takes of high wastage and theft items (e.g. meat and fruit/vegetables and tobacco) and cyclic stock-takes on other items will allow for effective monitoring of GP variances.

Adopting a standardised chart of account and journals will improve management reporting of shrinkage as scanning systems ignore the issue. Some supermarket chains have front-end systems that record all customer returns and place the reason for the return and reports at the back office each day and for the week. Further ‘reduced to clear items’ are also all managed via the front end.

Some chains also ensure its cleaners to place floor waste into a separate bin. This separate bin is then checked to see what products the cleaners have swept up and if these products can be reclaimed. It is important that staff take the time to monitor stock, even if it does mean checking the dairy fridge more frequently. You can use technology to keep track of perishables within the supermarket.

“I can’t work any harder and I don’t know how my business is travelling.”

“I don’t feel like I understand my business.”

“I made $300k last year, was it a good year?”

“Numbers give me headaches”.

“My accountant tells me I have to $50k in tax as I made a profit last year. But WHERE IS THE CASH?”

These are some of the most common refrains we hear from clients. These are all heart-felt cries for help for no-nonsense, simple ways to understand their businesses, how it operates, its financial performance and its ability to provide for a lifestyle.

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How To Run Your Business More Efficiently

After having worked with numerous businesses from many industries, we found that the following process works the best in helping our clients:

• Having regular meetings with them to help to spend time working on their business, not just in it;
• Providing them with easy-to-understand and yet at the same time, sophisticated reporting on the key metrics for the business; and
• Providing them with a sounding board to make decisions.

The centrepiece in our process is our ability to provide easy-to-understand reports focusing on the key metrics for the business. These provide our clients with the “hard numbers” from which they can come up with options and make decisions.

For example, it is no secret that the hospitality industry has had a tough time lately due to the lockdowns. It is now even more critical for the owners of restaurants and cafes to keep a close eye on their numbers. Here are some of the screenshots from reports prepared for a restaurant client. Accounting and Management reports like these have proven to be extremely helpful in helping the client in making the right decisions to thrive and not just survive in the current downtown.

Here is another example from a what-if analysis we did for manufacturing client, whose business received a bump in sales as they supplied products which were in high demand due to the lockdowns. In this case, they asked us if they can afford to invest in a particular piece of machinery to keep up with the increased demand, and we were able to answer their question on the spot with an instant profit and cash forecast which our purpose-built software is capable of.

The Fair Work Ombudsman has published a new Fair Work Information Statement that incorporates the recent law changes to casual employment.

The attached is the new version which should be given to all new employees.

Please contact your HR team to understand what this means for your business. Feel free to contact your MGI Adviser should you need a referral to an HR expert.