Welcome to the first edition of The Blueprint.

This is a e-newsletter exclusively for the industrial, manufacturing and construction sectors focusing primarily on SME’s. It is designed to only have good worthwhile information in it. It’s information sourced only from working with high performing SME’s. It’s information that is very proactive, sometimes provocative and most importantly practical.

It is not a weekly, monthly, bi-monthly or annual publication. It’s a periodical. That means it will come out only when there is something worthwhile to say or report on. There is no charge for it so please send it to your friends/colleagues/team members. If you do send it on, please do ask them to subscribe so we can send it direct next time.

Our articles are inspired by issues faced by our clients and their request for topics to be covered (please contact us with a topic request).

In this edition there is an article on the workplace reform, business cashflow funding  and payroll systems .

In future editions we will feature case studies of successful businesses and touch on the secret of their success. We will also cover pertinent issues such as:

• Succession planning and managerial shareholder buy-ins
• Shareholder agreements - key items to be included
• Asset protection strategies
• Creating effective management reports using Key Performance Indicators
• Buying a business? Undertaking a due diligence process
• Motivating your staff

 All feedback is welcome. Enjoy the first edition of The Blueprint .

Regards,

David Carpenter
Partner

workplace reform business cashflow funding payroll systems

Workplace reform - what will it mean for employers

On 13 February 2008 the Federal Government took its first step to reform Australia's industrial relations laws by tabling the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 (Bill).

The Senate Committee Inquiry into the implications of the Bill, delivered its recommendations a month earlier than the expected deadline with opposition senators generally approving the Bill.

The Bill was passed by both houses of Federal Parliament on Wednesday 19 March 2008 and received Royal Assent on Thursday 27 March 2008.

With approximately 1.6 million employees being covered by workplace agreements (lodged since March 2006 per Workplace Authority November 2007 statistics), this reform will impact many Australians.

Let's look at the key changes:

• End of AWAs - the Bill prohibits any new individual Australian Workplace Agreement (AWA) being made from its commencement date. Those AWAs that have already been made but not yet lodged can be lodged only within 14 days after the commencement of the Bill.
• The Bill provides that existing AWAs will be able to operate to their full term with the latest possible expiry date of all AWAs as 31 December 2012 unless terminated or replaced.
• Moving to ITEAs - The Bill provides for the introduction of Individual Transitional Employment Agreements (ITEAs) to be made during the transitional period of award simplification. All ITEAs are to have a nominal expiry date of no later than 31 December 2009. The Bill enables those employees whose employment is currently regulated by AWAs and new employees to use an ITEA up until that date.
• A Return to the 'No Disadvantage Test' - the Bill reintroduces the No Disadvantage Test which is to replace the Fairness Test. ITEAs and new collective agreements will only commence operation once the Workplace Authority Director has approved them on the basis they pass the new no disadvantage test.

Introduction of 10 National Employment Standards (NES) is planned for commencement on 1 January 2010. The NES are:

1. Maximum weekly hours of work
2. Requests by parents for flexible working arrangements
3. Parental leave (and relate entitlements)
4. Annual Leave
5. Personal/carer's leave and compassionate leave
6. Community service leave
7. Long service leave
8. Public holidays
9. Notice of termination and redundancy
10. Fair Work Information Statement

The next round of legislative reform is expected to be released around June 2008. This legislation will reintroduce unfair dismissal laws for those businesses with 100 employees or less.

Business Cashflow Funding

Insurance Premium Funding (IPF) is a cost effective way for you to spread your annual insurance premium over easy monthly instalments, with contracts usually written over a period of six to ten months depending upon the policy being funded.

Achieve maximum business growth by retaining your working capital and preserving your facilities for other income generating opportunities. Fixed interest charges for the term of the facility protect you against interest rate fluctuations and are fully tax deductible. No loan service fees or security fees apply. Automatic payment transfers reduce your administration costs.

How does it work?
The finance company finds your insurance premium and arranges its payment by the due date, on your behalf. You repay the cost over an agreed period, in equal monthly instalments, by way of a direct debit facility, credit card or BPAY. This funding option can be extended to most types of commercial insurance including industrial special risk, public liability, workers' compensation, comprehensive motor vehicle and professional indemnity.

Debtor Finance
Is a financing product that allows you to maximise your cash flow through borrowing against the oustanding value of your trade debtors. This product is suitable for businesses experiencing rapid growth that sell goods or services or services on credit terms but have restricted liquidity.

• It is available for businesses which sell goods or services to other businesses on credit terms
• Confidential Debtor Finance to eligible customers, where you control the collection of debtor payments and the Bank's facility is not disclosed to your debtors is also available
• Can be used to meet your ongoing working capital requirements, assist in reducing administration costs, balance your business cash flow at critical times of the year and even help you take advantage of supplier discounts
• No property required as security - allows you to utilise your property for other investment purposes
• Unlocks liquidity tied up in debtors - instead of waiting 30,60 or 90 days for your debtors to pay, Debtor Finance provides you access of up to 80% of the value of your oustanding debtors.

Payroll getting you down? It shouldn't be

Stand alone Payroll systems are often thought of as an unnecessary luxury; however, with the ever changing industrial relations landscape, complexity of industrial agreements and increasing size of businesses workforces, the need to invest in efficient payroll systems is greater then ever.

A common complaint from business owners is inaccurate leave entitlement balances. Often this is a result of using entry level accounting systems to accrue leave entitlements for large numbers of employees with varying employment conditions. As a result, business owners are forced to consider using stand alone payroll software that provides simplification in managing various employee award conditions within the one easy to use system.   

The solution is to implement a mid level payroll system. Mid level payroll systems are feature rich and flexible as they are designed to do one thing, process payroll efficiently. One such product is HR3's HR3Pay. HR3Pay's main features and benefits are:

• User friendly modern interface
• Feature rich and value for money
• Load award conditions and template pay scales
• Single point entry for changes in award conditions and pay rates
• Communicates electronically with the ATO, financial institutions, employees, business owners and various popular accounting systems
• Scalability - Advantage Pack, Human  Resource Pack, Electronic Time & Attendance and web based Employee Self Service Kiosk

Before making any decision to implement a mid level payroll package you must do the following:

• Prepare a needs analysis of your payroll requirements
• Obtain a demonstration of the products your considering
• Consider any decision regarding comprising on features as this reduces the value proposition of the product
• Budget constraints 

If you are considering moving to a mid level payroll system and require assistance preparing a payroll system needs analysis for your business or would simply like a demonstration of the HR3Pay product and discuss what it can do for your business, please contact Michel Graham, HR3 accredited reseller, from Cutcher & Neale’s Business Software & System Solutions division.

If you require any further information on any of the topics we have touched on, please contact Cutcher & Neale to discuss your specific needs and how we can work with you to meet these challenges and move forward with accuracy and confidence

Meet David Carpenter

David Carpenter is a Partner with Cutcher & Neale and is part of our Business Services division. David's qualifications include Bachelor of Commerce from The University of Newcastle, a Fellow of the Institute of Chartered Accountants in Australia (ICAA), a Fellow of  the Taxation Institute of Australia and Member of the Australian Institute of Management. He also has extensive experience assisting SME’s in the industrial sector in dealing with their accounting, taxation and business advisory needs.

David is a keen sportsman enjoying all forms of sport. He is a keen golfer. David is married with two children.

David’s expertise is in the following areas:

• Taxation Advice and Planning
• Business Structure Consultancy
• Business Planning, Reconstruction and Valuation
• Management Consultancy
• Franchise Consultancy
• Goods & Services Tax

 

Disclaimer: The material contained in this e-newsletter reflects general advice only, and has not been prepared to provide specific personal advice to any particular individual(s). It does not take into account the individual circumstances, risk profile, needs and objectives of specific individuals. The examples are used for the purposes of illustration only. The publishers and authors expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this e-newsletter. If the advice related to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement before making any decision. Readers should not act upon any matter or information contained in or implied by this e-newsletter without seeking appropriate professional financial advice.