Category: Finance

What is the Difference Between a Super Fund and a Self-Managed Super Fund?

Superannuation (or super) is a strategy to save our money for the future, while we are working.

It’s needed for and greatly appreciated as an income stream in retirement. Super is compulsory for all people who have worked and reside in Australia.

Generally, you can either be part of a standard, industry super fund, or you can have a self-managed super fund (commonly abbreviated to SMSF).

Want to know the key differences between a super fund and a self-managed super fund?

Read more from the Belmont accountant team at Llara Tax & Accounting to find out.

What is a standard super fund?

A standard super fund, also known as an industry super fund, is a low to medium cost accumulation fund. As non-for-profit funds, this means the profits made are put back into the fund.

Many bigger super funds allow anyone to join. However smaller funds may have more restricted member screening purposes, like only members working within the health sector.

Advantages:

  • All profits are put into the fund for its members to benefit from,
  • Compliance risk is assumed by the professional licenced trustee,
  • Funds are not-for-profit,
  • Generally open to everyone, and
  • Run by industry associations and members.

Disadvantages:

  • There’s a limit to your investment options, and
  • Less individual flexibility and freedom to choose specific investments for yourself.

Where people often miss out, is by not changing their super funds as they switch careers or advance in their career.

What is a SMSF?

A self-managed super fund is a super fund that’s private to you (or a maximum of 3 other members), where an employer puts your super into, but you manage it.

Advantages:

  • There’s a range of investment options,
  • Concessional tax rate benefits,
  • Consolidation of superannuation assets is available,
  • Flexibility in accumulation, pension accounts and estate planning,
  • Transparency, and
  • The ability to add value to your super through property.

Disadvantages:

  • All reporting obligations such as financial statements, tax returns and independent audits is your own responsibility,
  • Any annual valuations of assets if and/or when required is the responsibility of the member(s).
  • It takes a lot of time to run a SMSF,
  • The member(s) is responsible for keeping up to date with any and all super law changes,
  • And the annual cost of running a SMSF is $13,900.

A SMSF might be the right choice for you if you have researched your investment options extensively, have the time, understanding of and ability to cover the costs associated with operating one.

There’s no one size fits all when it comes to super funds and their suitability for you now and in your future. However, consulting with an advisor will ensure you make the right decision.

A Belmont accountant is here to help

Llara Tax & Accounting are your local Belmont accountants here to help you understand and utilise the best super and taxation strategies for your current and future needs.

Contact Llara Tax & Accounting today for professional advisory services, including utilising the best superannuation strategies for your needs.

References:

https://www.bottomlinecontrol.com.au/info/smsf-vs-industry-fund-which-is-the-best-option-for-your-superannuation

How to Manage Your Cashflow in 10 Steps

Cashflow is the real or virtual movement of money. While most of us have the general sense of what cashflow involves, many business owners struggle with adequate and streamlined cashflow management.

Don’t worry, it happens to the best of us…especially small business owners.

Want to know how to manage your cashflow better in 10 easy steps?

Read more from your local Belmont accounting team at Llara Tax & Accounting to find out more.

1. Avoid spending on non-essentials

Planning your expenditure for the next month, quarter or even year will save your business time and money in the future.

We budget in our personal lives (some of us better than others), so why don’t we for our business lives? Considering non-essential expenses in the context of your financial (cashflow) projections and if possible, staggering or delaying these purchases where appropriate.

2. Check your inventory regularly

Utilising a strategic approach to your inventory management is something you need to be doing.

Why?To avoid the unnecessary costs associated with poor stock management. Also, inventory checks will ensure you’re not keeping excess stock.

How can you do this? Start using an inventory management system and monitoring your inventory levels on the regular (1-2 times a year at minimum).

3. Consider Cloud accounting

Cloud accounting software allows you to access your financials anywhere, anytime.

We can help you find the best Cloud accounting services suited to your business.

4. Document your debt collection process

Everybody loves a paper trail. They make running a business that little bit smoother.

As you might have experienced firsthand, late payments can put a considerable strain on your cashflow.

So, what should you do? Make your customers and clients aware of your debt collection process and the action you will be taking if they fail to pay on time.

5. Keep on top of your invoicing

Small businesses must keep on top of efficient invoicing to maintain a steady cashflow. Do this by sending invoices ASAP that are clear with your terms and follow up on unpaid invoices.

6. Manage expansion

It’s important not to get in over your head when the success of your small business grows strongly and quickly. Remember growth should be sustainable, not quick and risky.

Talk to your Belmont Accountant about maintaining good cashflow for your growing business and managing a sustainable expansion.

7. Plan for emergencies

In business, expect the unexpected, especially that of cashflow shortages. Formulate a plan to access additional capital in emergencies.

8. Rent instead of buy

Why buy an office, machinery and/or business vehicle when you could lease them? This is a smart strategy for managing your cashflow.

9. Stay on top of costs

It’s oh-so-easy to lose track of not only time, but expenses too, when work is incredibly busy.

Remember though, that a handful of high-cost months can put a serious dent in your cashflow.

Your trusted accountant can help you stay on top of costs.

10. Trust in your local Belmont business accountant

Llara Tax & Accounting are here to take the complexity and confusion out of your accounting and taxation needs.

As a family owned and operated small business, we understand all the trials and tribulations that go hand in hand with running a business. With our personal, professional and proactive approach to our clients, you can rest assured that you’re in good hands.

Are you a local business in Belmont or beyond and need an accountant to help you manage your cashflow?

Contact Llara Tax & Accounting today.

References:

https://blog.earlypay.com.au/10-tips-for-managing-your-small-businesss-cash-flow