As the Australian business landscape becomes increasingly digital, small and medium-sized businesses (SMBs) face growing pressure to technologically transform or risk falling behind their competitors. However, digital transformation requires technology investment and the technology that businesses need may not always be available at a cost-effective price point. Nevertheless, according to BidFin, it is possible for SMBs to digitally transform and futureproof their business without crippling their bottom line.

Ross Simon, chief executive officer, BidFin, said, “A technology investment is precisely that: an investment. As such, it needs to provide a strong return. As businesses look to transform and modernise, the thought process, or motivation behind it, needs to change. Business leaders need to look at technology investments to drive business growth, and not as a cost-saving exercise.

“Digital transformation, especially for SMBs, can be a double-edged sword. Failing to invest in digital means failing to keep pace with the market. Yet, at the same time, it also means significant spend on something that will take time to deliver a return. However, making smarter, more considered decisions when it comes to technology investments can make all the difference.”

When committing to new technology investments, one of the biggest considerations for SMBs is the 12-month roadmap for their business. The last two years have disrupted virtually every business and industry, and most will now be looking at a different roadmap than what was originally planned.  

Ross Simon said, “Before investing in new technologies, it’s essential to consider how the business has changed and what the goals are for the next 12 months. This will help the business to map out the technology ecosystem that is required to help meet those goals and better prepare the business for the future. As part of this, it’s also essential to consider any market or industry changes and how technology can help the business scale and adapt to shifting market and customer needs.”

Business leaders also need to consider the financial incentives involved in making new, transformative technology investments. The Australian government has announced the Small Business Technology Investment Boost to help businesses acquire the necessary technology. This initiative lets businesses with less than $50 million aggregated annual turnover write off $120 of every $100 they spend on digital solutions.

However, government incentives only go so far. While they can help businesses to recover costs over time, they still need to consider how they will fund technology innovation and digital transformation in the first place. Leveraging the right payment option can help businesses realise the benefits of technology investments with minimal impact on their existing cash flow. And, over time, the benefits of having the right technology in place can effectively lead to it paying for itself.  

Ross Simon said, “Flexible financing options, such as software and services payment plans, are available to help businesses transform their operations without incurring significant costs upfront. This lets them make more affordable payments over time and helps reduce the risk of meeting long-term business needs by using risk-adjusted payment plans. Working with a specialised technology financing partner can help SMBs find a solution that meets their specific business needs. It can also mean that they are repaying technology investments as those investments deliver value, reducing risk substantially.

“Ultimately, digital transformation is the future for SMBs, and specialised technology finance payment plans are the way forward.”  

Cashrewards “near-zero-risk” model offers significant benefits to retailers under strain.

A new independent study finds that Cashrewards’ pay-on-performance model significantly benefits retailers grappling with tough market conditions.

As retailers face looming uncertainty over inflation, a new study has found that Cashrewards, Australia’s largest cashback program, can deliver significant returns while offering “near-zero” risk to retailers.

Cashrewards today announces the results of an independent Forrester Total Economic Impact™ (TEI) Study, which found that its pay-on-performance model offers significant benefits – from increased revenue to customer acquisition – with little risk.

Cashrewards – which has over 1.4 million members and partners with more than 2,000 merchants, including Apple, Myer, Liquorland and Target – commissioned Forrester Consulting to examine the potential return on investment generated by deploying Cashrewards

Forrester interviewed four decision-makers at leading retail brands and aggregated their experiences with Cashrewards into that of a single, composite organisation.

The results revealed that, in aggregate, partnering with Cashrewards benefits these organisations:

● A return on ad spend (ROAS) of 14 to 1.

● A total benefit of A$74.6m over three years versus costs of A$12.1m, leading to an ROI of 514%.

● $14.5m increase in incremental revenue among new customers.

● $11m increase in incremental revenue among existing customers.

● $48m increase in revenue when marketing spend was redirected from former marketing avenues to Cashrewards.

Chief Marketing Officer at Cashrewards, Nicole Bardsley, said: “We turn inefficient marketing spend into real value for our merchant partners, and the results from this independent study confirm this for us. Cashrewards drives real conversions and new customer acquisition results and show the value we offer partners.”

Not only did the Forrester TEI study uncover the financial benefits of deploying Cashrewards, but it also uncovered several unquantified advantages for enterprise clients. These included improved market acuity, thanks to campaign recommendations from Cashrewards, better brand alignment due to Cashrewards’ ability to work with companies on the tone of voice and messaging, and increased operational efficiency.

Digital Marketing and Marketing Technology Manager of an American multinational technology company that was interviewed by Forrester for the study said, “Cashrewards is the top player in the market. We see sizeable performance from them. It made sense to partner and engage with them.”

The Forrester study observed that today’s complex omnichannel retail environment can present challenges for marketers. However, Cashrewards offers businesses near-zero risk, as they only pay on conversion.

Two-thirds of Australian small business leaders don’t fully understand a business tax return, according to new data from Xero, prompting a push towards expert advice.

Only 34% of the 500 small businesses surveyed in the Xero Small Business Insights report understand all parts of a business tax return, with 52% not knowing what deductions they are eligible to claim.

Positively, the research also found that the majority engaged with an accountant or adviser during tax time, highlighting the pivotal role they play in keeping businesses tax compliant.

“For many small business owners, tax time can be stressful, and it’s often a struggle when the end of financial year approaches,” says Sid Cachuela, COO and co-founder of SME tax accountant firm POP Business.

“Knowing what a small business can claim on tax each year can be challenging if you don’t have the right support.”

Knowing the basics

Understanding the basics as a small business owner will get you through a lot when it comes to tax. But as the data shows, many small business owners would rather be stuck in traffic than focus on their EOFY obligations.

“Not everyone is going to know the basics of their tax return. You probably didn’t start your business with a red-hot passion for business administration,” says Cachuela. “But skirting your responsibility could not only cost you money that could be reinvested back into your business, but it could land you in trouble with the ATO.”

So here is a short explanation of the basics.

You can claim a deduction for most costs incurred in running your business via your annual business tax return. Deductions are amounts you can claim for expenses involved in running your business.

The amount of tax your business must pay depends on your business’s taxable income. The Australian Taxation Office (ATO) calculates your taxable income using this formula:

Assessable income – tax deductions = taxable income.

Assessable income is generally income your business earns. It includes income you get before tax from your everyday business pursuits as well as other income that is not part of your day-to-day activities, such as capital gains.

You must also lodge an income tax return for any year you run your business. You need to do this even when you don’t expect you’ll owe tax.

What expenses can and can’t you claim?

Now that you know the basics, it’s time to get down to the juicy stuff – what deductions are available to you?

But before going into all the small business expenses you can claim, let’s take a quick look at some of the expenses that are not deductible. These include:

• Entertainment expenses
• Traffic fines
• Private or domestic expenses, such as childcare fees or clothes for your family
• Expenses relating to earning income that is not assessable, such as money you earn from a hobby
• The GST component of a purchase if you can claim it as a GST credit on your business activity statement.

“The general rule of thumb is the deduction must relate directly to earning your income and the expense must have been for your small business rather than for private use,” says Cachuela. “If the expense is a mixture of business and private, you can only claim the portion that is used for your business.”

Types of claimable expenses

Broadly speaking small business expenses fall into the following core categories – general business operating expenses, business travel expenses, and home-based business expenses.

“Basically, general business operating expenses – the first and most common category – includes expenses for your small business to generate income,” says Cachuela. “There’s a fair chance you can claim a deduction for these expenses.”

Typical small business operating expenses that can be claimed include tangible things like repair and maintenance costs, office space rent, printing expenses and laundry charges.

It also includes more intangible costs such as subscriptions, employee benefit programs, and advertising and marketing fees.

In addition, other expenses that have more to do with the general operation of the business are included in this category, such as accounting and legal fees, membership dues, training, and insurance expenses.

“One tip for general expenses is to fill in an expense log with the time, date, and reason for purchase. This is a fantastic way to prove costs were business-related,” says Cachuela.

Business travel expenses

If you’ve travelled to attend a business conference or taken an international business trip to meet a customer, the good news is that you should be able to claim those travel expenses as a deduction on your tax return.

Typical business travel expenses include:

• Transport costs, including train, bus, taxi (including Uber and other rideshare services) and airfares
• Accommodation and meal expenses for overnight business travel, and
• Certain motor vehicle expenses.

“There are however some specific rules that apply to different travel categories, which you could ask your tax agent about,” Cachuela warns.

Home-based expenses

If you operate a small business (including an online business) from home, you may be able to claim tax deductions for some of the costs relating to the areas of your home (such as a home office or study) that you use for business purposes.

Home-bases business expenses are often categorised as follows:

• Occupancy expenses – including mortgage interest or rent, council rates and home insurance premiums, and
• Running expenses – similar to operating expenses, running costs relate to costs such as gas and electricity, repairs to furniture and furnishings, phone, and internet among other things.

“What you can claim will be dependent on your personal circumstances and how you operate your business from home,” Cachuela says. “It’s worth noting that small business owners running a business from home may also have to pay capital gains tax when the home is sold.”

Keeping records

While the previous extensive lists of deductibles are by no means exhaustive, none of it is worth anything without proof.

“We say this a lot to all our clients, but we can’t stress enough the importance of keeping records,” says Cachuela. “From plane tickets, business credit card statements to business car leasing statements and business bank account fees, you need records to back up any claim you make in your business tax return.”

According to the ATO, small businesses need to keep records to substantiate what they claim.

Under tax law, your records must explain all transactions and be:

• In writing, either on paper or electronically.
• In English, or in a form that we can readily access and convert into English.
• Kept for five years (although some records need to be kept longer).

Another reason to keep your records is in case you get audited by the ATO. Tax audits can come out of nowhere and be expensive, and you will have to deal with the interruption involved in responding.

“This is where Tax Audit insurance can come in handy, as it covers a business for costs if it is selected by the ATO for auditing,” says Cachuela. “The policy covers the costs of accountants and other professional fees incurred in the course of an audit.”

“Our partners at BizCover can handle any of your Tax Audit insurance needs.”

The bottom line

Many small businesses dread the end of financial year and consequentially miss out on making the most of their deductions. Others may not fully understand their obligations and run the risk of getting audited.

But it doesn’t have to be that way. Having a base understanding of the risks and benefits of tax is an essential part of running a small business in Australia.

“You put on many hats when running a small business, and it’s now time to put on that tax hat again,” says Cachuela. “Preparation is key when it comes to lodging your tax return and our team at Pop Business are there to help shoulder the load.”

The Chartered Accountants Australia and New Zealand (CA ANZ) has released a new Cyber Security Hub and Playbook for small businesses – to help them prevent, prepare for and recover from cyberattacks.

Australian businesses lost $33 billion to cybercrime in the 2020-21 financial year alone, with small and medium sized businesses the big new target for cyber criminals.

CA ANZ CEO Ainslie van Onselen said the Hub and Playbook will help members take practical steps to build a cyber security strategy and also discuss this issue more confidently with their clients.

“Attempted robbery, blackmail and fraud have always been a big issue for small businesses, but these days criminals are trying to get in via the laptop rather than the back door,” Ms van Onselen said.

“Digital transformation has pushed innovation, including in criminal activity. While all types of companies are threatened, SMEs are most at risk because they are typically the least mature regarding their cyber security risk and resilience.

“Cybercrime comes in many different forms, from fraud and identity theft to romance scams and malware attacks. When it comes to cybercrime, it’s a matter of when, not if, someone will try something against your business.

“That’s why it’s incredibly important that SMEs take the opportunity to review their cyber plan, put proper processes and procedures in place, and invest in best-practice cyber security.

“Too few organisations plan to prevent cyber incidents, respond and recover from them, and as a result, they suffer. The other thing that SMEs don’t do well is communicating that cyber security is a team effort and a team responsibility.

“All employees and contractors need to take responsibility for the data, software and devices they use at work because it takes just one person to bring down an entire network through a simple error.”

The CA ANZ Cyber Security Hub and Playbook contain a suite of useful information, including:

• A model to plan your cyber security enhancement by assessing risk and creating a cyber plan.
• A self-assessment tool to assess the state of your cybersecurity.
• A mitigation strategy was developed by the Australian cyber security agency.
• A summary blueprint for incident response and guidance on reporting a data breach in Australia and New Zealand.

Other compelling cyber security statistics:*

• Globally, more than $40 billion in records were exposed by cyber incidents in 2021, up 78 per cent on 2020.
• Globally, there were $945 billion in losses to businesses in 2020 from cybercrime.
• In Australia, there were 67,500 cybercrime reports, an increase of nearly 13 per cent from the previous financial year.
• In Australia, 22,000 calls were received by the Cyber Security Hotline, an average of 60 per day, and a 310 per cent increase from the previous financial year.
• In New Zealand, 28 per cent of cyber incidents were linked to foreign state-sponsored computer network exploitation groups.
• In New Zealand, there were 404 cyber incidents in nationally significant organisations in 2020-21 financial year, up 15 per cent from the previous year.

Visit the CA ANZ Cyber Security Hub and access all the tools and resources, including a copy of the Playbook at caanz.com/CyberHub.

*Statistics courtesy of McAfee, Australian Cyber Security Centre and CERT NZ. See Playbook for details.

As financial experts continue to predict an Australian recession in the next two years, new research has found that 34 per cent of Aussie SMEs wouldn’t survive more than 6 months of economic downturn, with 14 per cent unable to survive a recession at all.  Economists are facing a difficult choice to stabilise the economy, by either increasing interest rates significantly and putting banks and businesses at risk of defaulting on loan repayments or allowing inflation to rapidly increase and reducing consumer confidence and spending.  

Aussie businesses are also torn about whether a recession or rising inflation would be more damaging to their businesses, as 55 per cent are more concerned with the impacts of a recession, while 45 per cent would be worse-off from continued rising inflation. 

The findings were derived from a survey of an independent panel of 253 Australian SME owners, commissioned by Small Business Loans Australia, a free comparison website helping Australian business owners find the best financing and loan options in Australia. The full survey results, including breakdowns across ages and States, can be found here.

In the survey, Small Business Loans Australia asked respondents to forecast how long they could survive through a recession. Recessions are normally short and sharp. An example is the 1990 recession, which lasted 14 months1. Only 39 per cent of survey respondents would’ve made it through the previous Australian recession, predicting they could survive 18-24 months. Fourteen (14) per cent would not survive a recession at all, however short. One-fifth (20 per cent) admitted they would survive less than six months of a recession and one quarter (28 per cent) predicted they would survive just 6-12 months.  

Alon Rajic, the founder and managing director of Small Business Loans Australia, says: “The survey results are concerning. Many Australian businesses have had to endure a tough two years of decreased margins and cash flow, due to operational limitations, lockdowns and lower consumer confidence. As a result, many SMEs are heading into a recession without a savings cushion or plan B. The sector is extremely resilient and my hope is that businesses have learnt from the pandemic to have some safeguards prepared to see the other side of this period.” 

Concerningly, larger businesses were least equipped to combat the impacts of a recession:  

31 per cent of medium-sized businesses (with 51-200 employees) said they could not survive more than six months of a recession, compared with 26 per cent of small businesses (with 11-50 employees) and 16 per cent of micro-businesses (with 1-10 employees). 

“Recessions can affect businesses of all sizes, however, typically larger companies can have an extra financial buffer to fall back on, as it is normally easier for them to secure financing. It is concerning to see established businesses have a gloomy outlook on their ability to survive a recession.  

“To minimise the impacts of a potential recession, I encourage SMEs to implement preventative financial practices now. Renegotiate vendor agreements and re-examine your accounting books to cut costs where possible. If SMEs are paying off business loans and have been affected by increased rate rises, consider consolidating debts and refinancing loans to secure a lower rate. Comparison services make good online research tools, and can help SMEs find an appropriate loan that will allow them to fix lower interest rates.” 

Despite the majority of SMEs suggesting they wouldn’t be able to survive more than a year in a recession, only 55 per cent of respondents believed a recession would be worse for their business than continued rising inflation. 

Small businesses would feel the effects of a recession the most, with 63 per cent believing an economic downturn would be worse for their business than inflation, followed by 53 per cent of micro-businesses and 51 per cent of medium-sized businesses. 

Alon adds: “SMEs are the backbone of the Australian economy, and it is concerning that they continue to face many external factors, including a recession, that threatens the survival of their businesses. Ultimately, an economic downturn is predicted but not guaranteed and targeted government stimulus and investment in population and export growth could pull our SME market safely through this period of uncertainty. Businesses who proactively make changes and put practices and safeguards in place will also be able to survive and thrive beyond this tough period.” 

Monash University and Blundstone Australia have created the intelligent Blundstone boot a hi-tech boot concept designed to address the specific needs of doctors, nurses and other healthcare professionals.

Monash’s Design Health Collab and SensiLab partnered with Blundstone Australia to incorporate the latest technology and design techniques to increase personal safety and comfort in demanding healthcare environments. The design has been shortlisted for the prestigious Designers Australia Awards 2022.

Healthcare workers were at the forefront of the project, with the design team regularly conducting workshops with doctors, nurses and other health specialists to ensure the boot addressed challenges specific to the industry, including comfort, durability and hygiene.

Dr Rowan Page, from Monash Health Design Collab, says the technology captures rich information about the day-to-day challenges faced by the wearer and uses machine-learning techniques to provide real-time feedback and task classification.

“We’ve integrated a sensor system that analyses multiple parts of the foot to provide real-time feedback via a smartphone app that detects abnormalities and highlights potential issues,” Dr Page said.

“The shoes classify different tasks undertaken throughout a work shift and can identify different postures, changes in walking gait and the lifting of heavy loads.

“The visualisation of this data can show areas of high pressure on the body across the workday and highlight potential problem areas.”

With further development, the technology could highlight safety concerns, such as injury risk and fatigue, and prevent accidents before they occur.

The team’s research highlighted comfort and hygiene are priorities for healthcare workers when selecting shoes for work. The boot’s upper – the material covering the foot – provides chemical and bacterial resistance to the wearer.

Blundstone Joint-CEO Adam Blake says people rely on Blundstone boots to protect them in all sorts of environments.

“We strive to be an innovator and collaborator that leverages the best science and technology, seeking to partner with leading expertise and knowledge,” he said.

“Partnering with Monash’s Design Health Lab and SensiLab has been a great opportunity for
Blundstone to dive deeply into understanding the needs of workers within the healthcare space”.

Sustainability and ethics are also at the forefront of the design. The concept boot uses synthetic and plant-based materials, a computer-knitted collar that eliminates material waste, an upper that provides chemical and bacterial resistance, and a sole made from a recyclable polyurethane.

learn more about the Intelligent Blundstone Boot.

Around one in four Australians (26 per cent) say COVID has impacted their plans for retirement, according to new data from leading profit-to-member superannuation fund Equip.

More than one in ten (11 per cent) say COVID-19 has stalled their plans for retirement, with those closest to retirement age being the least optimistic their working days are drawing to a close. 15 per cent of Australians aged 55 and over say they’re pushing their plans for retirement back, with almost half of these (46 per cent) by a hefty 4-5 years.

However, the study also found that 15 per cent intend to bring their retirement forward in the wake of the pandemic.

In a poll of more than 2,000 people, Equip found that when looking to the future, close to a third (30 per cent) of Australians said they do not feel they’ll be able to control when and how they begin winding down their working life (for example, going part-time).

With financial insecurity front of mind post-pandemic and against a backdrop of rising inflation, 22 per cent reported a drop in their annual income in the past two years, while a quarter (25 per cent) said they have less disposable income now than they did in 2020. This jumps to one in three (33 per cent) for those aged 55 and over.

“Purse strings have been tightened due to the rising cost of living and the fallout from COVID. It’s not surprising that this pressure is causing some retirement plans to be revised,” said Scott Cameron, CEO of Equip.

The same study also found that many Australians are overestimating the amount they need to accrue to retire. According to the Association of Superannuation Funds of Australia’s Retirement Standard, to have a ‘comfortable’ retirement, single people will need $545,000 in retirement savings, and couples will need $640,000.

Yet Equip’s study found more than a third (36 per cent) of people estimate that an individual minimum of $750,000 is required for a comfortable retired life.

“Retirement is one of the most important stages in a person’s life. We all have different ambitions for our retirement, but for most of us, it’s a time to enjoy the simple pleasures in life. Quality time with family, travel and pursuing hobbies that full-time work doesn’t usually allow for.

“Many Australians are grossly misjudging how much they need in their reserve to retire, which is likely causing additional – and perhaps unnecessary stress.

“The more you financially plan for your retirement, the better off you’ll be. A financial planner can help you make sure your super is on track to deliver the best retirement possible for you and your family.

 “Small steps now, such as making voluntary contributions into your super if you have disposable income, can have a huge payoff down the line,” said Mr Cameron.

Retirement Case study: Wayne, 64, Strathalbyn (SA)

“My goal was to retire at 63, and thanks to my financial planner, I have”

An auto electrician in the mining industry, Wayne officially retired in March 2022.

“It’s not easy work,” says Wayne. “Some days you’re up at 4am and you don’t get home till after dinner time. As I’ve been getting older, it wasn’t viable for me to keep going. Some people have it in them, but I was ready to take a step back once I hit my early 60s.”

Wayne lives with his partner and has recently bought a plot of land in Strathalbyn, where they’re building a home together to live out their retirement. “What with me retiring, and our two sons moving away from home, we decided we were ready to make a move. We’re in a caravan for the rest of the year while it all comes together, but we’re excited to be building our dream home.”

Wayne officially retired at age 63. “I was retrenched from a role at 58, but that felt too early to consider retirement. I knew I had a few more years in me. 63 felt like the right time for me to call it a day.”

Wayne credits close collaboration and communication between his financial planner at Equip and his personal accountant in his mid-50s for making his retirement a reality.

“Our accountant was able to give our financial planner at Equip a breakdown of all our assets. Once he had visibility on what I owned, and how much was in my super, he created a bespoke retirement plan for me. It depends on what you want to do in your retired years, but for me and my family, we didn’t need a million dollars in the bank. We were able to configure everything we needed to comfortably live on, and set out a date from there.”

“One of the key things he did for me was adjust the risk in my portfolio. As I get older, I want to take less risk with my investments and my financial planner helped adjust the risk in my portfolio. I wouldn’t have known where to begin in making that decision. It’s best to rely on the experts to make that call for you.”

Wayne also credits salary sacrifice contributions he made during his working years for helping him achieve a healthy reserve on retirement. “I only started paying attention to salary sacrifice in my 50s. I immediately saw how much it helped my super balance grow – my only regret is that I didn’t do it sooner. I’m trying to get my sons, who are in their 20s, to start making salary sacrifices now.”

Wayne is confident that health permitting, he’ll be able to achieve everything he wants to in his retirement. “My account-based pension will obviously decrease as I begin to tap into it, but the projections for my managed fund look very promising.”

Alongside building their new property, Wayne has travel on his to-do list for retirement. “Me and my family have always been keen travelers. We’ve lived all across Australia throughout the years, and I’d like to go back and visit old memories and friends. I also have a son in Victoria who I’d like to visit more often.”

While he may have hung up his professional boots, Wayne is keen to keep active in his community through volunteering. “We’ve moved to a new part of the state and can’t wait to get stuck into our new neighbourhood. It’s important to me to use this downtime to give back and help others find their way.”

“We have a commitment to equip our members with knowledge and tools today to prepare them for whatever tomorrow brings, whatever stage of life they are at. Equip offers personalised advice tailored to each of our members, to ensure they get the best outcome for their super,” Mr Cameron concluded.