Rising global energy prices are a worry for all business owners. When the cost of your predicted annual bill goes up, that’s likely to stretch your cash flow thin. So, what can you do to overcome the problem of rising electricity and gas prices? We’ve outlined five simple ways to reduce your energy bills.
Simple ways to reduce the impact of the energy crisis
The obvious way to beat the energy crisis is to reduce your company’s energy usage.
With prices going up, cutting your energy consumption makes good sense and should help reduce your annual bill. As a bonus, reducing your energy consumption makes your business more sustainable and energy-conscious.
Here are five ideas for bringing down your energy usage:
Properly insulate your buildings. You obviously need to be sensible about heating and cooling your workspaces during the hot or cold months of the year. Using heating and air conditioning (air-con) 24/7 can be expensive, so properly insulating your workspaces is a good move. If your rooms stay warmer in winter and don’t bake in summer, your heating/air-con won’t work so hard – reducing your energy spend.
Be sensible with your lighting. Lighting is another essential overhead and an area where smart gains can be made. Use energy-efficient light bulbs that draw less power. Don’t leave exterior lights on after business hours. And fit sensors in offices, meeting rooms, and workshop spaces that turn off the lights if no one is using the room. These are small actions that can quickly start to cut down your bill.
Switch to energy-efficient equipment and technology. Our business tech is gradually becoming greener and more energy-efficient. Review your company’s main electrical equipment and see how much energy could be saved by moving to updated, energy-efficient tech. With so many pieces of equipment constantly plugged in and turned on, having tech with low-power modes and automatic standby modes can significantly reduce your energy consumption in a busy office or factory.
Consider using renewable energy. One way to escape the monopoly of your energy provider is to provide your own off-grid power. Climate change is an ever-growing problem, so switching to renewable energy gives you an independent power supply and reduces your carbon footprint. If you are looking at solar, think about how much power you consume and when you consume it to understand the return on your investment.
Shop around for the most affordable energy provider. Finding the most cost-effective energy supplier can bring down your bills. Prices are obviously rising across the sector, but check out what deals other energy providers offer and shop around. The Australian Energy Regulator has a list of comparison tools to help you to compare the price of different energy plans. You’ll also find lots of tips on this website.
Energy prices will likely remain unstable for some time, so it’s important to keep a close eye on your energy overheads and their overall impact on your finances.
For more information on cutting costs and controlling spending, check about this article here.
The summer holiday period can be confusing to employers and employees alike. Public holidays worked or taken as annual leave, business shutdowns, annual leave provisions… There are many rules employers need to understand.
Employees are entitled to annual leave and public holidays under the National Employment Standards minimum entitlements.
Employers can ask employees to work on public holidays within reason. For example, if the business is open every day of the year, and the employment agreement states that public holidays may be required, the employer can reasonably ask an employee to work a public holiday.
An employee can refuse to work on a public holiday if the request is unreasonable or there are reasonable personal grounds for refusing.
Christmas and New Year Public Holidays 2022-23
This year the following public holidays apply to employers in all states:
Sunday, 25 December 2022, Christmas Day
Monday 26 December 2022, Boxing Day
Tuesday, 27 December 2022, Additional public holiday for Christmas Day
Sunday, 1 January 2023, New Year’s Day
Monday, 2 January 2023, Additional public holiday for New Year’s Day
Public holidays are paid at ordinary rates for employees who take the day off. Employees who work on a public holiday must either be paid penalty rates according to the relevant award. Or be given an extra day off in lieu of the public holiday. Some awards have specific provisions or additional benefits for public holidays, so it’s important to check.
If an employee has booked annual leave for the Christmas and New Year periods, the public holidays are not counted as annual leave. For example, if a permanent employee is on annual leave from Monday, 26 December to Friday, 6 January, they will use eight days of annual leave, not ten. Two of the days are paid as public holidays.
Some other key points to remember:
Public holidays are counted as service, so annual, and personal leave continues to accrue as usual.
Overtime worked on a public holiday may be paid at a different rate than regular overtime. Check the relevant award or agreement.
Check the award or agreement for shutdown provisions. Most awards have guidance for directing employees to take leave during annual shutdowns.
If employees don’t have enough annual leave, employers can agree to pay them in advance for leave not yet accrued, or the employee can take unpaid leave.
The FWO has further advice on rules and entitlements during the end-of-year holiday season.
You might also need to think about cash flow planning for the holiday period, particularly if the business shuts down but still has obligations for payroll and other expenses.
We can advise you about your employer responsibilities and help plan holiday period payments so you can make the most of your summer holiday!
Are you looking for expert assistance for accounting and bookkeeping in the building and construction industry?
We know it’s a complex industry, and it’s been hit hard recently. Getting professional help to get your business finances under control will help ease the stress of pressures that many in your industry are facing. Engaging advisors who are specialists in your unique industry can help you to sustain your business and even thrive in difficult times.
There are many areas of bookkeeping for the building and construction industry that we often see could be managed better (and more profitably) with sound advice and the right software.
Tracking work in progress
Applying customer and supplier deposits
Allocating progress payments
Accounting correctly for retentions
Complex payroll and contractors
Accurate job costing
GST and BAS payment planning
Managing the fixed asset register
Control of inventory stock levels and costs
Taxable payments annual report
Accounts payable and receivable management
Cash flow forecasting and budgeting
Just like your construction work, using the right administration tools makes the job easier. Businesses often start with simple accounting and business management software but don’t upgrade the admin, payroll, and accounting tools in line with business changes or growth.
Talk to us if you’re ready to review or upgrade your current bookkeeping and business systems. We can advise on the best accounting software for the construction industry, and related add-on solutions for your business and help implement best practices to streamline the administration and accounts.
Why should you digitize your cash flow processes to have the best control over your cash? Why is it especially important now?
Keeping on top of your cash flow is even more important during tough economic times. With a global slowdown on the cards, energy prices soaring, and supply chain challenges, cash will likely be tight over the coming year and beyond. Cloud technology and fintech apps can give your business the best possible control over its cash.
Why is cash flow so important?
To keep your business operating, you need enough money coming into the business to cover your outgoings. Together with enough surplus cash to deliver a profit. When a recession begins to hit, this can significantly impact your income.
Consumers will have less disposable income to spend on your products and services. Business customers will be looking to reign in their spending on suppliers. As a net result, your business will likely make fewer sales and bring in smaller revenues.
This means:
Reduced income coming into the business
Less cash in the business to cover your operational expenses
Not enough money in the bank to pay suppliers, utility providers, or payroll costs
In the worst-case scenario, insufficient cash flow for you to continue trading.
What can you do to improve your cash flow situation?
The more informed you are about your cash position, the more you can do to prepare for any cashflow gaps. This foresight can make all the difference when you’re battling against tough external economic forces and a downturn in sales.
If you want to safeguard your cash flow, these are some sensible steps to take:
Switch to cloud accounting – accounting and finance technology has progressed greatly in assisting business digitize their cash flow processes. The latest cloud accounting platforms offer detailed reporting of your cash position. These software tools generally provide real-time data, giving you up-to-date cash numbers.
Integrate with cashflow forecasting apps – cloud accounting platforms let you add third-party apps to create a custom app stack of helpful business tools. There are plenty of cash flow forecasting apps to choose from, allowing you to predict your future cash flow position.
Plan for the cashflow gaps – when your forecast shows a shortfall of cash coming up, that’s the time to take evasive action. If you see a cash hole approaching next month, it’s time to look at ways to raise extra finance to fill that hole. That could mean extending your bank overdraft, taking out a small business loan, or taking out an invoice finance facility with a lender.
Look for opportunities to cut your overheads – one way to even up your cash flow is to cut down on your expenditure. If you can cut back on overheads, expenses, and unnecessary costs, this can help you re-balance your cash position, even when cash flow is tight. Look for cheaper suppliers. Buy in smaller quantities. Take every opportunity to cut costs and keep your spending more sensible.
Update your prices and your sales strategy – raising your prices is one way to bring in more cash with the same sales volume. But it’s a balancing act. Putting your prices up can alienate existing customers and could see you losing customers. However,if you can find the sweet spot for your pricing AND drum up more sales, you can quickly increase revenue and give your cash inflows a healthy boost.
Review your cash flow reports regularly – it’s important to look at your cash flow numbers and reporting regularly. Don’t wait until just at period-end. This is particularly important when economic times are tough. With the most current cash information to hand, you can make informed business decisions to keep the business operational.
Talk to us about updating your cash flow processes
With your business in a healthy cash flow position, you give yourself solid financial foundations for riding out the global recession. No business is invulnerable in these conditions, but with liquid cash in the business, you have more flexibility and more capital with which to play.
Book a meeting, and let’s see how we can help you digitize and improve your cash flow processes.
It’s tough going for business owners this winter. Illness is rampaging through the community – hitting staff, suppliers, clients, and schools – creating disruption throughout the economy. Burnout is on the rise!
With the labour market tight, businesses are already understaffed. Add high absenteeism rates, and remaining workers and business owners are under incredible pressure. When you love your job and always want to do the best for your clients, it’s easy to start overworking yourself and run the risk of burnout.
It’s vital that you take care of yourself this winter, so here are three ways to help prevent burnout:
Start saying ‘No’– Small business owners are experts in saying ‘Yes!’ and then figuring out the details later. It’s how you grow a small business and build your reputation for being able to solve problems for your clients. If you’re overworked and stressed, it’s time to start saying ‘No’. Begin by turning down work from difficult clients, or work that’s outside your core business, so you’re focused on where you add the most value.
Identify at least one area you can outsource – You can’t do everything yourself, particularly if you’re understaffed. Look at your processes and identify an area that’s not part of your core business that you can outsource. It might be social media posts, office cleaning, or even just subscribing to a meal kit service to take the stress out of cooking. Usually, the cost of these initiatives will quickly pay for themselves: once you feel less stressed, you’ll be more productive.
Hold onto your interests outside work – Running a business can be all-consuming, but hang onto your friends, sports and hobbies even when it gets busy. Letting your relationships, health, and pastimes dwindle away will undermine your emotional, physical, and mental health.
We can help
Not sure if outsourcing tasks will pay for itself? We can work with you to analyse the costs and benefits of any business investment. Get in touch. We’d love to hear from you and assist you in preventing burnout.
