We caught up with BridgePoint Group’s director, Mitchell Turnbull, to find out why this time of year is critical, strategically, if you are looking to grow your business.
Tax Planning is Critical
The purpose of tax planning is to minimise the amount of tax being payable and the timing of those payments. Tax planning falls into two categories:
– Identifying deductions and actions that give rise to a permanent difference in the amount of tax you pay
– Identifying opportunities that give rise to a temporary (or timing) difference in the amount of tax you pay right now
We’ve been working with clients implementing strategies that help to reduce their taxable income this year, thereby minimising the amount of tax that will be payable now. It’s about planning. Which is perfectly legal and should never be confused with evasion.
There is only so much you can do to limit tax payments within the confines of Australian tax law. So, it’s about looking at doing things now, prior to 30th June, which will be of benefit to you. We look into how much tax has to be paid in relation to this year (2021-22 financial year) and if the timing of that tax payment can be pushed out by twelve months. The benefit of that being the client has more cash in their pocket for the next financial year.
Also keeping us very busy is forecasting and budgeting with our business clients for the next twelve months. BridgePoint Group is a big believer in what you don’t measure you don’t manage. We are working with clients to look at budgeting and forecasting for the next financial year right this minute. The benefit is that it provides a basis for decision-making, for knowing how the business should be performing and creates accountability to the result.
Looking at a business’ performance versus its benchmark, on a month-to-month basis, over the next financial year gives us an indication as to whether the business is performing as it is expected, or has been forecast to. If the results are not as expected we can advise changes to turn the performance of that business around. It’s about setting a benchmark for performance and measuring against that benchmark on an ongoing basis.
Clients get conditioned to looking at results-versus-performance on a monthly basis over a twelve-month period. It lessens the risk of a poor yearly or quarterly result. We can advise which ‘levers’ to pull by analysing the results. The business owner makes the right calls to improve areas of the business that are struggling based on logic, not guess work.
This time of year, BridgePoint Group mainly focuses on tax planning and strategic activities for our business clients. We look to help their tax position leading up to the 30th June deadline and see if we can minimise the tax payable now. We then look to advise what can be done strategically to improve a business’ performance over the next twelve months and beyond. Putting budgets and forecasts in place is a hallmark of success. So, if you want to achieve more, introduce the discipline of budgeting in your business. It’s not that hard and we can do the ‘heavy lifting’ for you.
If you want to find out more about the processes mentioned, please don’t hesitate to reach out to Mitchell Turnbull (email@example.com) on 1300 656 141