As accountants in Sydney, we want to provide you with an update on the current state of business activity at S & W and for our clients, nearly two months into the new year. We have seen a resurgence in business operations after the regular break from mid-December to early February.
Our Clients
- Business activity has increased but in a subdued fashion. Our business clients, while in the main doing well, are tentatively pushing forward with trying to grow their businesses. We have good operators in the building and property sector (and related industries) who have plenty to work on and expect a good year. Retail experienced an excellent Christmas period, but the operators with good, sought-after products were doing much better than the run-of-the-mill product. Buyers are very discerning and are very picky. The product has to be first class, and customers are waiting for the inevitable sales to get the product for the right price.
- We have noticed several potential business sale transactions starting up with purchasers only interested in our client’s businesses that have something different (i.e. a product or service that is different to what else is out there or has synergies with the purchaser’s own product range). With the subdued confidence around at the moment, only the outstanding businesses are attracting attention from purchasers. Average businesses for sale with low to average profits or no point of difference are being left on the shelf and are getting limited enquiries.
- Good projects are hard to come by for professional services, and consultants are always worried about where their next engagement will come from.
- Manufacturing is travelling well if the client has a point of difference. There is increased competition from rip-off products, and while all businesses try to protect their products with patents and the like, enforcing this protection is very difficult and costly, with no guarantee of success, especially when the copied product is developed overseas.
- In general, the troubled passage of last year’s budget through Parliament, along with the leadership dramas of the last few weeks, means businesses do not have a lot of confidence in the environment. Most businesses are cautiously moving forward but ensure they don’t take too many risks and are not stepping outside their comfort zone. The next few months will need to clarify the situation and instil confidence into the business environment. Here’s hoping, for all our client’s sake. However, good businesses are still doing very well, even in difficult times.
- On the tax side of things with our clients, we have noticed over the last few months an increase in the number of audits being conducted by the ATO and Payroll tax and Workers’ compensation authorities. Responsibilities when engaging contractors are primarily a focus for the above authorities. The industries looked at were building, landscaping, cleaning and other industries, which tend to use a lot of contractors to meet their projects. There is nothing to fear if your paperwork and procedures are in place and you have met your tax responsibilities (as all our clients had) but be aware that they are active. There has also been some audit activity with our clients in GST on property transactions, and we are aware the ATO will be looking closely at any CGT Small Business Concessions claims.
S & W
- We have hit the ground running with a lot of activity already in the new year and plans for the year to come.
- Our new website is now finished and has a new look, with new content and more information for clients and associates alike. Feel free to visit it, look, and give us some feedback on any likes or dislikes.
- In the next few weeks, we will have a survey about our newsletter, asking what you like, what you don’t like and how it could be improved. Please help us to improve our communications with you by taking a minute to answer the short questions on the survey online.
- We have had some additions to our team, especially in the Measured Success bookkeeping and Momentum Business Growth management accounting divisions. These areas are growing well and provide clients with an online solution to their bookkeeping and accounting needs and integrate with our year-end compliance and tax planning service as it is all under one roof.
- We have several client events coming up in the next few weeks. We have invited those who, we believed, were the potentially interested clients to each event, but if we missed you and you are interested in coming to the following events, please let us know.
- Xero Bookkeeping Workshop – Thursday, 5 March at 12.30 pm at the Kirribilli Club. Details here.
- State of the Economy and Investment Markets – Thursday, 26 February at 7.15 am in our Boardroom on the Ground Floor at Burton Street
- There will be other events of interest during the year, so watch this space.
That’s it for now. We hope this update on our clients’ general state of affairs and what is happening with us has given you some guidance on the year ahead.
*Correct as of February 2015
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
