Are They A Sub-Contractor Or An Employee?

I have noticed over recent times that businesses are opting to increase the number of people working for them by using the services contractors instead of employing staff.

A word of caution - the contractors you are using may in fact need to be converted to employees!!!

The Australian Taxation Office has an online resource where you can check to see if the people working for you can do so as contractors.

This resource is called the Employee/contractor decision tool.

If you are an employer using contracted staff, take a moment to answer the questions on the Employee/contractor decision tool just to make sure you have the people working for you "correctly" employed.

Essential Management Reading

Long time readers of this blog will know that I have been subscribing to the Manager Tools podcast for some time now.

I find it to be the best source of information and advice on effective management that I have been able to find on the Net.

Apart from the fantastic information that is provided by Mike and Mark (the hosts) on effective management skills, one thing I do appreciate is that they constantly provide reference sources - in particular book titles and authors - that can provide further advice on this subject.

Over the course of their podcasts there have been numerous mentions of the management philosophy of Peter Drucker, so I have recently purchased one of Mr Drucker's books, titled The Essential Drucker and I am finding it fascinating reading.

I have just read a chapter titled "How Should Objectives Be Set and by Whom" (commencing page 117) and wish to share with you the first 3 sentences of this chapter - [Quote] "By definition, a manager is responsible for the contribution that his or her component makes to the larger unit above and eventually to the enterprise. The manager's performance aims upward rather than downward. This means that the goals of each manager's job must be defined by the contribution he has to make to the success of the larger unit of which he is a part. [end quote].

The chapter goes on to say that because of these responsibilities, there is a requirement for "each manager to develop and set the objectives of his unit himself".

Have a think about these sentences for a minute and then compare what is being said here to your own situation if you are in a management role.

Are you - as a manager - expected to set objectives and tasks for your team with the long term benefit of your company in mind (i.e. aiming upward), or is your role as a manager defined by the way in which you motivate the people in your team with little to no focus on action plans that will "better", or "advance", the position of the company you work for (i.e. aiming downward)?

Another way to look at it is by thinking about how much of your time is spent "reactively" putting out the "spot fires" within your team, versus the time you spend "proactively" implementing strategies within your team that will increase the "bottom line" to your company.

Before starting my own business I had worked in many different areas of many different organisations - both large and small - and I can confidently say that the focus of management in every business that I worked in was the "reactive" example above rather than the "proactive".

Certainly, managers were called together in "working parties" to put together "implementation plans" to improve business performance (upwards focus), but these "working parties" only met when there was free time from their "real" job which was "looking after the performance of their staff" (downwards focus).

I am finding that the reading of The Essential Drucker is turning my view on management totally on its head and is beginning to give me many refreshing ideas on ways to improve my management skills in the various business roles I now find myself in.

A huge thank you goes out to the Manager Tools team - once again you have provided me with an absolute gem to assist me in being a more effective business owner and manager - keep the podcasts and author suggestions coming guys because you have an avid listener here in Australia.

Others Agree!!

Long time readers of this blog will know that I have been going on for years now about the benefits of small businesses using a sub-contracted bookkeeper to look after their financials so that they can spend more time focussing on their core business, or at the very least to give them some free time to spend with their family and friends.

It appears that the word is getting out - I have just been reading a very good article from a totally unrelated group who is saying exactly the same thing - have a read of the article via this link and if you are a small business looking for ways to increase the time you spend chasing new customers, or you are searching for ways to get more free time to spend with family and friends, seriously consider outsourcing your bookkeeping to a sub-contracted, qualified bookkeeper

Time To Get The Financial Data Together - It's BAS Time Again!!!

Just a quick reminder that the end of this week marks the end of the first quarter for the 2011/2012 financial year - time to lodge your BAS returns again!!!

Remember to have a good look through things like your pockets, purses, wallets, gloveboxes and anywhere else you throw receipts when you are in a hurry - how much extra GST could you be paying if you don't record all these business expenses?

Also remember to make sure you check and reconcile your bank statements for the quarter to make sure you record any expenses that are coming out via direct debit - and make sure that if these expenses are over $75.00 and you are claiming the GST that you also have a tax compliant invoice handy for the purchase.

Isn't BAS time fun?!!!! 8=)

The Value Of Information "In The Cloud"

I have been listening to lots of talk about keeping your information "in the Cloud" for a while now, but I have not been paying much attention to it until recently when I found out the hard way how beneficial this aspect of the Net can be to your business' success!!!

We were travelling overseas recently and while sitting in Los Angeles Airport waiting to fly home I received a call from a potential new bookkeeping customer.

The caller was in a hurry to get their bookkeeping done so that they could lodge their tax returns and had been given MYbookkeeping Services contact details by one of our long time customers who is very happy with our services (aren't referrals wonderful?!!!).

The call was going wonderfully when I hear the magic words - "Can you email me through your resume so that I can show your qualifications to our Board?"

Normally my response would have been a simple "Certainly - can I have your email address please and I will send it straight through", but there was a problem - just before leaving for overseas I had upgraded my laptop and my resume was on the old computer - back in Australia!!!!

Fortunately the caller was most understanding and when I gave them an undertaking to email it through as soon as I got home, they were happy to wait.

This incident taught me a very valuable lesson - you never know when a business opportunity is going to present itself, so always - and I mean ALWAYS - make sure that all the information you need to make yourself look professional in the eyes of a potential customer is easily accessible, no matter where you are.

Needless to say, my Google Docs account now has my resume uploaded to it and I would encourage all business owners to spend some time thinking about what information they could be asked for at a moment's notice - if this information is not with you 24/7 consider putting it "in the Cloud" for easy access.

Why Not Just Use A Bookkeeper

I got an interesting Google Alert today called "Bookkeeping Sucs" and as it is not the usual type of title you tend to read when you hear about bookkeeping matters I thought I would have a look at it.

In the article it appears that someone is trying to find easy to use bookkeeping software that "ticks all the boxes" for their particular business.

The writer is obviously frustrated by the fact that they cannot find a product that meets their specific requirements and is asking if anyone knows of a package out there that could help them with their business needs.

I cannot help but think "why even bother?". The writer says straight out that they hate bookkeeping (their exact words) so why not get someone to do it for you?

When your car needs fixing you take it to a mechanic, when your bathroom needs fixing you call a plumber, so if you need to have your financials collated for tax purposes and you do not like doing it yourself, why not use the services of a business that specialises in this field?

Contact a couple of bookkeepers in your area, choose one that feels right for you, talk to them about what services they can provide, then weigh up the price of their services against the down time (and money) you lose while trying to do your own books - it may be an easier (and more cost effective) option than constantly trying to find the "perfect" bookkeeping package and doing this work yourself.

Is Your Bookkeeper "Qualified"?

It has been an interesting day today - I have been discussing bookkeeping services with a number of potential clients and one point has become blantantly obvious - the gap between fully qualified bookkeepers and those "back yarders" who have been doing bookkeeping for years with little to no formal qualifications is getting seriously wider.

My concern is that there are a lot of people claiming to be "bookkeepers" out there who are providing what they call quality service but have little to no knowledge of the basic principles of double entry accounting.

How can you provide "quality" bookkeeping services if do not even know the difference between a Balance Sheet and a Profit & Loss report?!!!!

To all you business owners out there, remember that if you are using a sub-contracted bookkeeper to assist you with the completion of your BAS and IAS returns they now need to be a Registered BAS Agent.

Remember to ask your bookkeeper to provide you with details of their BAS Agent registration (they should be able to provide you with their Registration Certificate issued to them from the Tax Practitioners Board) and if they cannot provide you with this certificate seriously consider changing your bookkeeper - not doing so could end up being a real inconvenience to you - not to mention the extra expense you might incur with getting your financials sorted at a later date.

Even if your bookkeeper can provide you with some evidence of "qualifications" ask them this simple question - "What is the difference between Balance Sheet and Profit & Loss reports?" - it is the most basic of accounting principle questions and if it cannot be answered seriously question your bookkeepers "qualifications".