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If cashflow planning is so straight forward, why is it that so few businesses actually prepare a Cashflow Statement? AND of those that do, why is it not constantly refined and adhered to? Cashflow is after all the LIFEBLOOD of any business. Without cash a business cannot operate. The business landscape is literally littered with profitable business who have failed because of poor Cashflow.
If you do not want to be one of these statistics than Cashflow planning is crucial.
This is how you do it!
Set the rules of the game of business.
- Establish and stick to your terms of trade. Make sure all customers and all employees understand this.
- Do not be afraid not to do business with some customers. Its business on your terms.
- Bill promptly, collect quickly and pay slowly
- Establish payment terms with your suppliers that are longer than the terms you offer customers
Understand the key drivers that impact Cashflow
Allow for unforeseen circumstances
Create an Income and Expense Budget
Create a Cashflow Budget
Monitor your Cashflow weekly
Use all the resources available to you to "get it right"
Managing your own super is not for everyone but it does have its advantages.
Many people out there aren't even sure what the differences are between the various types of super funds available. If you are under 40, super is something you have to contribute to and probably believe you don't need to think too much about it just yet (super=retirement=getting old). If you are over 40, you may have a peaked interest in those fund statements and are just a little intrigued about where it is all taking you. It's at this crossroads when you may be feeling that pull towards taking control of you super yourself.
Guess what? You can.
If you have the time to spend and the inclination to manage your own superannuation fund (it is real Aussie dollars of yours after all) you will see that with your level of effort and knowledge, you can set yourself up for better long term retirement results. These results will vary from individual to individual, but in essence mean that you can achieve the goals you have for your future.
There are currently 3 main types of super funds. There are also other types of funds for government employees and those working for large companies, but for most of the population the following are the most relevant.
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We thought you might appreciate a few end of financial year ideas to keep you on track and ahead of your financial game. How about saving on your tax now and enhancing that retirement nest egg by putting into place some of the strategies below.
Government Co-contribution
If you earn less than $31,920 the government will contribute $1.00 for every $1.00 you contribute to super, up to a maximum of $1,000. The Government's co-contribution is then reduced until your earnings reach $61,920 (including fringe benefits and employer super contributions) where no co-contribution is claimable.
Concessional Contributions
Concessional contributions are contributions made by salary sacrificing if employed or by making personal deducted contributions if you are self-employed. If you're over 50, you can still contribute up to $50,000 a year (under 50's are limited to $25,000). Super is one of the most tax-effective ways of holding assets until you retire. If we assume that your tax rate is 38.5% including medicare levy and you chose to contribute an extra $10,000 to super (vs taking it home as pay), let's look at the resulting tax position using super.
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