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The Riddle Of Risk & Return




Winston Churchill once described Russia as " a riddle , wrapped in a mystery , inside an enigma " 

In today's world we are faced with a similar riddle, that of  risk versus return . This relates to so many 
decisions we make in our businesses , farms and investments generally.

Generally people belong in one of the 4 categories of risk style;
* cautious 
* daredevil 
* adventurer 
* calculator 

How you fit into these categories can change over time .
Any business / financial decision is usually made using a calculation of balancing the risk of an action 
against the expected return . Often the higher the risk the greater the return.

How can you measure the risk? How can you manage the risk ? Are questions we are often asked 
We can't solve the riddle but we can unwrap the mystery and help you through the puzzle 



You Can't Stop Progress



If you want your business to grow, you have to be committed to moving with that growth.
This little pearl of wisdom could be directed at the new digital age with the internet, smart phones and social media.
It could be directed at being flexible in your business planning and moving with the times and trends.
It also can be directed at your physical location, and being willing to move to where you are needed.

GMG Accounting have done just that.  As our firm continues to grow in terms of client base, employees, and development, we have also recognised that we are needed a little further afield.  With this in mind, we have opened an office in Charlton.

Myself and colleague Jess Round, a former Charlton local, are now available for appointments each and every Tuesday.  We can assist with your farm accounting, business accounting, individual tax, succession planning, estate planning, self managed super funds and anything else that you might want to discuss with a CPA.  We are even more than happy to talk about the weather, footy, netball, hockey and this month's blue moon, or the Olympics.

We are now open at the Circle in the old Globe building but will be opening our new premises at 17 High Street next month, so make an appointment today by calling 50329422
 

Good Decision Making

 
 As advisers we often witness or are directly involved with the decision making process of our clients.
Whether that decision is merely the purchase or sale of some shareholdings or a significant property purchase the process to reach that decision varies from client to client.

There are basically two kinds of decision making processes.

   Justified - Decision already made just need to justify it.

   Selective - Gathering Facts and assessing alternatives.

Whilst many good gut decisions are made and then justified after the event by far the more consistent and considered approach particularly to those who are risk adverse is the selective approach.

The steps to a selective approach are relatively simple to implement

  • Gather the Facts
  • Identify a number of alternatives
  • Assess those alternatives
  • Decide

 Personalities and emotions often influence decision making but if you consider the four steps to the selective approach poor decisions are likely to be less.


New ATO reporting requirements have been put in place regarding you and your contractors.

Effected businesses in the Building & Construction Industry are required to keep track of and
report the following details for each and every one of their contractors:

  • ABN
  • Name
  • Address
  • Gross amount paid (including GST)
  • Total GST paid

 

These reporting requirements have been put in place as of July 1 2012.

 

This requirement extends to all businesses in the Building & construction industries, The ATO have singled out over 70 different business types, so if you think this does not effect you, you may have to think again.

 

These industries include some of the following:

  • Bricklaying
  • Cabinet making
  • Earthworks
  • Engineering
  • Glass and glazing work
  • Irrigation system construction
  • Roofing and guttering
  • And many more - A full list is available at our resources page.

 

If you are concerned about exactly how you will have to report these payments, contact us at the office for more information.

Introduction to Fuel Tax Credits

Many of our clients currently claim credits on their Business activity statements for the tax they have paid on fuels such as diesel and petrol. This rebate can quite significantly reduce a client's GST liability or be returned to them as a refund if no GST is payable. 

The most common claims are for: 

  • Fuel used in a vehicle weighing more than 4.5 tonnes (truck) on a public road 
  • Fuel used in agricultural activities, fishing & forestry 
  • Fuel used in machinery for other activities including mining, construction & manufacturing 

There are a number of other uses of fuel that could make you eligible for a fuel tax credit. So if you think you might be eligible please give us a call. 

Read more…

Is The Party Business, Your Business?

The names 'Tupperware', 'Lorraine Lea Linen', and 'Chefs Toolbox' often remind people (especially women) of an evening with friends buying high quality products which are more expensive than what you would get in stores, but are also of much higher quality. These types of direct selling companies offer commissions to their sales force in return for them actively selling the products. 

In the last 12 months here in the office, we have had two staff members who have taken up these opportunities so there has been some discussion about when it is no longer classed as a hobby but is a business and so the income needs to be declared. Income in this example is the commission that is earned off sales, not the total sales amount. 

There is a list of questions on the ATO website which help to determine whether the activity you are undertaking is a business or a hobby. They are questions regarding the goal of the activity, manner in which it is undertaken and the characteristics of the activity.

Read more…



 
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