As a small business, conflicts of interest can be a major issue (particularly when you have a small number of employees).

Conflicts of interest are often a trigger for workplace tension and gossip, reducing productivity and damaging employee relations.

A conflict of interest occurs when an individual’s personal interests – family, friendships, financial, or social factors – could compromise his or her judgment, decisions, or actions in the workplace.

Common examples of conflicts of interest in business include:

• Recommending a friend or family member for a job position.
• Employers not disclosing that a candidate being considered for a job is a friend or family member.
• An employee starting their own business that provides similar products or services, especially if a non-compete agreement has been signed.
• Working for a competing company.
• Posting to social media about the business’ failures.
• Romantic relationships between an employee and their supervisor.
• Accepting a favour or gift beyond the agreed amount from a client.

The best way to avoid conflicts of interest in the workplace is to establish a code of conduct that clearly outlines the standards and expectations of the business. It should cover details of business policies and list everyone it applies to, including employers and employees, board members, management, officers, and contractors. This code of conduct should be communicated to employees verbally and re-enforced through discussions.

A good code of conduct will reflect the culture and values of the business, provide information on how workers can expect to be treated and how they are expected to behave. It should be accessible to all employees, be well organised and comprehensive but also easy to understand.

This can be achieved by providing situational examples, answering common questions workers may have, and avoiding technical or legal jargon that may be confusing.

Throughout the financial year, there may be periods where your business finds itself facing a recurring problem with its cashflow.

Small businesses with cash flow issues may find themselves more at risk of failing or suffering significant financial hardship – during these critical times in the business landscape, this is not an ideal situation.

Cash flow provides a business with stability so they can pay employees, avoid loan defaults and pay the overheads necessary to keep their business up and running. Follow these tips to boost your cash flow to secure your business’ future.

Perform A Business Health Check

Preparing financial statements will give you an objective insight into the health of your business. Identifying if you have a cash flow problem is the first step to coming up with solutions. The following reports will allow you to see if your cash flow is up to scratch.

•     A balance sheet will tell you what your business is worth on any day. The value of your business is calculated by subtracting your liabilities from your assets.
•     Profit loss statements reveal if your income is meeting your expense requirements. If your profit is dipping below your expenses, it is time to change.
•     Cash flow reports reveal the money going in and out of your business over a set period and identify peak and off-peak periods

Use A Business Budget

After analysing your cash flow situation, is your cash flow cyclical?

Creating a yearly budget is not only imperative to receive financing in future, but will also help you identify the best months to save to cover the quieter months.

Where applicable, business owners can consider flexible rostering, whereby employing casuals and using a flexible roster can help you cut back on hours when you need to improve your cash flow in quiet periods.

When you have identified your quieter periods of the year, try to find additional revenue streams for when cash is low. Is there a product or service that could be introduced? Work with your team for new ideas to cover low cash months.

Get On Top Of Your Accounts Receivable

Allowing late repayments jeopardises your cash flow and can put you in a tight financial spot. Avoid being out of pocket by implementing some of these credit policies:

• Collect the debts on time – allowing late payments means that you’re without those funds for longer
• Offer an early bird discount to incentivise early repayments – it pays to repay that kindness
• Set credit limits and payment terms – know exactly what your terms and conditions are so that you can make sure that those who owe you are abiding by them
• Make credit applications and carry out credit checks on all new customers
• Penalise late payments with interest – set a specific interest rate that will apply and which you deem as fair.
• Consider cutting down on inventory – unsold stock can be a waste of funds, and if you’re finding yourself with plenty of it, you may not need to be ordering as much.
• Request upfront payment or a non-refundable deposit where viable, especially when dealing with large orders.

If you’re looking for assistance with invoicing, chasing payments or a general checkup of your business’s cash flow situation, accountants like us are equipped to help. Speak with us to find out what we can do for you.

As businesses grow, you will inevitably need to create new roles and hire new staff.

Adding a new member to your team is always challenging; when hiring someone to fill a new position, there is even more pressure to make the right call.

Business owners who can allocate workplace responsibilities efficiently and logically stand to reap significant benefits in the long run.

The challenge is not just choosing the right person but also making sure that you have clearly defined the new role and established your expectations. You should spend time thinking carefully about the skill set, experience and aptitude you will require from your new employee.

Even in times of high turnover, many owners are anxious about the financial commitment of taking on new staff members. While paying additional wages may seem like a gamble, failing to take on the extra labour you need will almost certainly damage your business.

You and your current employees will have much more stress to deal with, and chances are that efficiency and quality may suffer down the line.

In situations where you are worried about taking on a new staff member, it is important not to make the mistake of hiring an inexperienced person on the sole consideration that you are able to pay them a modest salary.

You need to think very carefully about what your business needs today and what you may require from your team as you continue to expand.

For example, as things get busier, you may find that you will need to devote more of your time to dealing with suppliers, and as a result, you will need someone you can trust to manage day-to-day matters at your store.

Hiring new staff and defining their roles within your business is incredibly important to your future success. Staff are the most important asset that a business has, and how management has defined roles and responsibilities can significantly impact employees’ abilities to perform.

Before you start recruiting a new staff member, you should write down all of the tasks you would require a new employee to complete and the responsibilities you may want them to take on in the future.

Once you have written down everything, you can think of, take a step back and look at the list.

At this point, you need to consider whether it will be in the business’s best interests to have a single person take on every task.

You may realise that some of the tasks are suited to an entry-level position, whereas others require specific skills and experience.

If this is the case, you should consider various options for restructuring the division of work between existing roles so that the new role will be suited to a specific type of candidate.

There is also always the option of creating a part-time position, or even two part-time positions,  instead of a full-time role as well, pending business budgets & expenses.

Many businesses will require extra help in busy periods such as the Christmas holidays. When hiring someone for a specific period, you should be upfront with them from the start and clearly explain the dates you have in mind.

Hiring and creating a new role for your business requires careful planning, particularly around payroll, classifying the employee, or even integrating and onboarding them into the pre-existing structure. Speak with a professional business adviser if you are unsure about any of the procedures you may need to implement during the hiring process.

Are some of your employees covered by a pre-2010 agreement (also known as a ‘zombie agreement’)?

These agreements will be automatically terminating (‘sunsetting’) on 7 December 2023 unless an application is made to the Fair Work Commission to extend the default period for the agreement before 7 December 2023.

Many of these pre-2010 agreements no longer cover anyone and have ceased operating.

For example, many pre-2010 agreements have been replaced by enterprise agreements, only covered employers, projects or worksites that no longer exist, only covered named employees who are no longer employed by the employer, or have been terminated by the parties, or by the Fari Work Commission.

However, for those employees still covered by this type of agreement, there are a number of key items to complete to either extend the agreement or bring them into line with the modern award.

Types Of Zombie Agreements

Pre-2010 agreements that continue to operate today (‘zombie agreements’) could include the following kinds of registered agreements:

• ‘Agreement-based transitional instruments’

These agreements were either:

• collective — covering employer(s) and a group of employees, or
• individual — covering one employer and one employee.

• ‘Division 2B State employment agreements’, or

Division 2B State employment agreements are based on agreements registered under State industrial laws in New South Wales, Queensland, South Australia and Tasmania before 1 January 2010 that covered referred employers.

• ‘Enterprise agreements made during the bridging period’ (1 July 2009 to 31 December 2009)

Enterprise agreements that were made under the Fair Work Act between 1 July 2009 and 31 December 2009 had to pass the ‘no disadvantage test’ rather than the ‘better off overall test’.

These agreements were collective agreements.

What Do I Have To Do? 

If a pre-2010 agreement still covers one or more employees (it is a ‘zombie agreement’), you as an employer must give the employee(s) a written notice about the sunsetting of the agreement before 7 June 2023.  An application must be made to the Fair Work Commission to extend the default period for the arrangement must be made bef

You don’t have to do anything if your pre-2010 agreement no longer covers anyone.

Who Can Apply For An Extension?

You can apply to extend the default period for a pre-2010 agreement that is still in operation (a ‘zombie agreement’) if you are:

• an employer covered by the agreement
• an employee covered by the agreement, or
• an industrial association that is entitled to represent the industrial interests of one or more of the employees covered by the agreement.

If you have already been granted an extension to the default period beyond 6 December 2023, you can apply for a further extension. You must apply before the end of the extended default period.

You can make as many extension applications as you like, provided the pre-2010 agreement has not yet been terminated. You must include a copy of the pre-2010 agreement with your extension application.

Your application should also specify whether bargaining is occurring for a new enterprise agreement or whether the employee(s) would be better off overall if the pre-2010 agreement continued to apply than if the relevant modern award applied.

If you’re unsure whether your employee agreements fall under a pre-2010 agreement, you should seek independent advice from a business adviser – why not start that conversation with us today?

The end of the financial year is the best time to work out the potential debts your business may incur or have already incurred.

Businesses can go into two kinds of debt – good and bad. Determining the type of debt is highly dependent on how the debt has been used for your business.

Good debt can potentially support your business’s growth and ability to create and generate wealth. This could be when your business purchases an asset through borrowed money that generates income for the business, with the return on investment for the asset exceeding its after-tax interest cost. If you are a business in a seasonal industry, you could use a business loan or line of credit to balance out uneven cash flow in the slower seasons.

Generally, good debt generates more value or money than the loan itself costs. It allows you to expand by financing things for the business, such as equipment, premises, skilled employees and marketing.

Bad debt may come in two forms. The first is as a loss that your business has incurred because credit has been extended to customers that cannot be repaid or recovered (which should be expensed on your income account). The second could be due to a loan that your business takes out to use for financings, such as growth or day-to-day operations.

Bad debt essentially affects the bottom line and disrupts the day-to-day activities and operations by affecting cash flow, constraining growth, and even threatening the survival of your business.

However, even good debt can become bad if not carefully managed and controlled.

Always have a plan for paying off debt in place, and try to pay off the more expensive forms of good debt before paying off the cheaper good debts. You can also speak with us about controlling your business’s debt rather than allowing the debt to control you.