Monthly Archives: May 2015

Keeping Goods Records

Bookkeeping is the glue that keeps your business together

Many business owners don’t keep good records. Some don’t understand bookkeeping; others understand it but maybe afraid of what the numbers might tell them. If your reocords aren’t in good shape, the business could fall apart. A healthy business is monitored through its records on a regular basis so you can find problems and correct them before it’s too late.

1. Keep an audit trail
An audit trail is nothing more than a record of all your invoices and checks in numeric order. The thing to remember is never skip numbers. Record voided cheques and invoice numbers in numeric order with all other cheques and invoices. Only denote each one that is “voided.” This assures there will be no gaps in your numerical sequence and leaves a proper audit trail.

2. Due Date Reminders
It’s a good idea to follow a computerised diary for each due date reminder. Due dates should be recorded for all tax, superannuation, insurance obligations and any other statutory requirements.

3. Be Consistent
Consistency is essential to successful business bookkeeping. If you use a paper bookkeeping system, always be sure to head your columns the same way each month throughout the year. This small matter of consistency will save you and your accountant time and aggravation.

4. Deposit Books
How do you handle your bank deposits? One easy way is to record your daily deposit in a deposit book. Generally, these books come with a white (original) copy and yellow (duplicate) copy in books of 50. For a small business, an order of 200 duplicate deposit could last 2 years unless you make deposits everyday. As you write each deposit, it is a good idea to remove the white copy to give to the bank and leave the duplicate (yellow) in the book. That way nothing gets lost.

5. Bank Account Statements
When opening a business cheque account, you should request a statement with a month-end cut-off date. This will save you time when reconciling your records with the bank statement every month. The closer the cut-off date to the month end, the fewer cheques you will need to record as outstanding. And don’t toss those bank statements into a filing cabinet without reviewing them. Resist the urge to do this! As soon as your statement arrives, review it before anyone else sees it, including your bookkeeper or employees.

6. Petty Cash Tin
Almost all small businesses make small cash purchases. You may want to set up a Petty Cash tin to keep control of those purchases. Get yourself a metal cash box and put in currency and coin that totals $100.00, for example. . This will be your starting point. The value of this tin should remain at $100.00 at all times. Perhaps you or your employee purchases a notebook at the local office supply store for $5.00, using money from the Petty Cash tin. When you get back to the office you will put your receipt in the box. Now you should have $95.00 in currency and one receipt for $5.00. The value of your box is still $100.00. You can continue using the Petty Cash Box until you run out of cash. Then replenish the box by writing a cheque for “Cash”, expensing all the receipts, and cashing the cheque at the bank. After you cash the cheque, the new currency and coin go into the Petty Cash tin, so you’ll be starting again with $100 in the tin.

7. Storage Boxes for Each New Year
Keep all your records for one year in one box. If you need more than one box make sure you label each box the same year, contents on the outside of the box and note that it is box 1 of 2 etc…You can put a copy of your tax return, bank account statements, BAS, Super, Payroll records, paid creditors etc . Store it somewhere accessible.

8. Filing Paid Invoices
Start new lever arch file folders at the beginning of each financial year for all your paid paid creditors. It’s not necessary to start a folder for each supplier unless you do a large volume of business with that supplier. You could get by with a folder for all suppliers from A-K, L–Z.

9. Printing Invoices
Ensure all your customer invoices have a Remittance section on the bottom of the page which clearly states invoice number, amount and customer name. This will make it quicker to allocate the payment on your accounting system.

10. From Paper System to Computer Program
When going from a paper bookkeeping system to a computer system you will want to run dual systems for a few months. You want to be sure both systems come up with the same totals before dropping the paper system.

11. Deposit That Cash Right Away
Get into the habit of depositing all cash immediately at the bank once it is received. This ensures that all income will be properly recorded.

12. Choose the Right Accounting Method. Cash or Accrual?
Many small businesses opt for the cash system because it is much simpler. In fact, the ATO requires that you use the accrual method only if you have $1 million in sale. It is best to consult with your Accountant which method is best for your business.

13. You Are Taxed On Net Profits
Many business owners think they are taxed on all the money they take out of their business. In fact, if you are a sole trader (rather than a corporation) you are taxed on the profits of the business-not the turnover. Your estimated income tax payments should be based on the net profits of the business.

14. Computer Software
The biggest mistake people make is not taking the time to set up their accounting software correctly when they install it on their computers. The old saying “Garbage in – garbage out” applies here. If you want a financial report you can trust, you will need to be sure it is set up correctly from the start.

15. Start at the end
When starting a new business; determine what expense categories to track by taking a look at the tax return you or your accountant will need to file. Write down all the categories that apply to your business. Then include those categories when you set up your bookkeeping system.

16. Don’t over-categorise
Most of us tend to make things harder than they need to be. For instance, when categorizing office supply expenses, we don’t need separate categories for fax paper, letterhead and printer cartridges, etc. All these items can simply be listed under Office Supplies.

17. Personal Credit Cards
Save time by using a private credit card. Do not mix your business credit card with your private expenses. This creates unwanted bookkeeping expense.

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Whip your business into shape now!

  • Look at your financial statements each month.  As a minimum, you need to view your Profit & Loss, Balance Sheet, Aged Receivables & Aged Payables reports.


  • Check your bank account. If you don’t have any money in it and are constantly relying on credit, this is a good sign you have a Cash Flow problem that must be addressed quickly
  • Tips to increase earnings:
    • Brainstorm ways to increase sales without discounting or incurring costs
    • Stop discounting
    • Calculate how much Profit Margin you are making on everything you sell
    • Work out where you can increase prices without having a negative impact on sales
    • Collect all money owed to you
    • Investigate ways to get paid immediately (COD terms)
  • Tips to slow down spending:
    • Re-negotiate better supplier terms
    • Minimise unnecessary spending on Fixed Assets before you invest in plant and equipment, determine how much sales will have to increase before you pay off the item
    • Order only as much inventory as you absolutely need. If you can get new shipments of stock in 3-5 days, there is no need to have 3 months worth of sales sitting on your shelves
    • Cut unnecessary expenses


Wouldn’t it be great to start the new financial year knowing exactly the level of sales you need to achieve in order to meet your fixed financial commitments?

Breakeven is one of the most simple and powerful calculations that you can use to achieve profitable growth, measure your performance.  A company is said to “breakeven” for a period (usually a month) when its sales revenue catches up to its costs. Specifically, accountants talk about break-even as the point where ‘fixed costs’ (rent, salaries, etc.) are matched by ‘gross profit margin’ (sales revenue minus cost of goods sold).

Calculating your breakeven each month and knowing exactly which day of the month you breakeven, allows you to hit the sweet spot of your company and make informed, strategic decisions about how to achieve growth that is profitable for your bottom line.

Tips to Calculate Breakeven in Your Business:

  • At a minimum, breakeven must be calculated monthly.  Your key numbers (like gross profit margin and fixed costs) are changing all the time, which means that you’re break-even is also changing.
  • Break the target down into bite size pieces – i.e. how much per hour or per salesperson each day.  The target is only useful if you can track and measure it each day.
  • If you are behind target at a given point, resist the urge to put items on sale to increase revenue.  Discounting decreases your gross profit margin which makes it even harder to hit your breakeven target.
  • Post the targets somewhere prominent and demonstrate to everyone that you are serious about measuring and reporting on profitability. It is not enough to [just] break-even and cover costs – you should set and strive for a breakeven plus profit target each month.


The end of financial year is an extremely busy and demanding time for employers and staff. Follow the EOFY guidelines to minimise unnecessary accounting fees.  Check that your current bookkeeper has a checklist and that they are providing your accountant with a full set of reconciled accounts. We’ve prepared a quick checklist to help you close off the old year and get ready for the new financial year.


The ATO announced that their E-Record system will not be available from July 2010.
So where does that leave small business owners?
Many of our bookkeeping clients do not have accounting software, they simply hand us the paperwork and we prepare the bookkeeping on their behalf. Companies like MYOB offer a basic software package starting at around $60 and there are other options of accounting software on the internet.

  • You can browse through the range of MYOB software HERE
  • Need MYOB Training? or Want to know if MYOB is the best for your business?

Before you rush into a new accounting software program, have a chat with us and we’ll offer some economic solutions for your business. We’ll help you determine which accounting software may be most suitable for your business, to replace ATO E-Record.

Whilst the staff at Harvey Norman and similar electrical stores sells software, they know little about accounting or bookkeeping and will endeavour to sell you the most expensive package they can!


When you lodge your next Activity Statement remember these two points in order to avoid delay with your refund:

  • If you are reporting a zero amount – print ‘0’ – don’t use nil, zero or leave the field blank.
  • Leave boxes blank that are not applicable to you – don’t use N/A or nil.


The government is offering a free superannuation clearing house service to small businesses with less than 20 employees.

The Small Business Superannuation Clearing House (the Clearing house) is administered by Medicare Australia and lets employers pay their super contributions to a single location. For those of you who currently have employees belonging to different super funds this could potentially save you or your bookkeeper significant amount of time in preparing the monthly or quarterly super contributions.

The Clearing house is available from 1 July 2010.

For more information, visit or phone Medicare on 1300 660 048.


We hope you enjoyed the first edition of our bookkeeping & accounting tips and we look forward to sharing many more valuable tips with you in our next issue.

Calculating a Charge-Out Rate

Many service businesses find establishing a fair charge-out rate difficult. Here are some guidelines on establishing a fair but profitable rate for your business.


These are the 5 basic steps you need to take to work out a charge-out rate for your time:
1.       Decide what income you want from your business
2.       Work out how many hours you can realistically charge out per year
3.       Work out a chargeable rate to achieve your income
4.       Work out your overhead costs
5.       Add a profit margin

Assume you want an annual income of at least $48,000 (before tax) from your business.  This figure could be related to the standard of living you want or what you could earn elsewhere as a salary.
When you’re selling your knowledge, skills and services, you’re effectively selling time.  The key point here is that you have to be realistic about the amount of time you can actually charge out during any one year.

This is how it’s worked out:

  Weeks x Hours Total Hours
Total Year

52 x 40 



3 x 40 


Public Holidays

2 x 40 


Sick Days

1  x 40 


Total Hours to Deduct  


Balance Available  


Less Non-Chargeable Tasks

Say 25% of your time





Annual Desired Income


Divided by Chargeable Hours


Hourly Charge Out Rate   


Add Appropriate Industry Levy

Say 4%


So in order to earn a salary of $48,000 a year, you must at least charge your time out at $36.50 (rounded up). But this is only the labour component of your charge out rate. You still need to recover your office overhead which takes us to step four.

You should know what your overhead costs are from previous profit & loss statement or if you are a new business from your business plan or budgets.
Let’s assume, for this exercise that they are something of this order:

Accounting Fees








General Expenses






Legal Fees


Motor Vehicles






Repairs & Maintenance






$20,000 divided by the 1,380 chargeable hours means you need to add another $14.49 to your hourly charge-out rate of $36.50.

In addition to making your target salary of $48,000 you also need to make a profit margin to cover you for replacement costs of equipment and repairs as you don’t want to be taking this out of your salary.

So the final calculation is:

Charge-out rate to cover your income requirements


Charge-out rate to cover your business overheads




Profit Margin (say 15%)


Final charge-out rate


This means that your charge-out rate should realistically be at least $58.64 an hour minimum.

Is the rate competitive?
Is it lower than average?
Is it higher than average?
Do you lack confidence and undersell your services?
If your rate is well above average, you might need to look at emphasising the value-added components that justify the difference.

1 Article – Business In Tough Times

With marketing, there are a few questions you have to ask yourself: How good are you at marketing? Have you ever had expert help? Are you making yourself a victim of tightwad ways and false economy?

So many business owners forget that most of us get 80 per cent of our business from 20 per cent of our customers. How well do you market to your best 20 per cent? Have you ever asked them respectfully for referrals for your business?

Business speaker and customer service expert Martin Grunstein argues that so many of us in business simply don’t ask for business. We don’t even effectively communicate to our customers what we sell, he says.

I learnt this first hand when I innovated by introducing a ‘messages on hold’ tape for my clients while they were waiting on the line. This simply told my customers that our business included financial planning, business coaching and the publishing of magazines and newsletters as well as books.

It staggered me the number of people who said they didn’t know my business did all of these things. Most knew me as a media commentator and business speaker and so for years I had ignored potential markets. The cost of this innovation was small but the returns have been considerable.

When you are feeling the pressure in business, Edward de Bono, who I interviewed on my Talking Business program on Qantas, says business owners have to be lateral thinkers to be successful. He says the successful competitor thinks outside the box, and his words are even more relevant when a recession threatens.

Believe it or not, when your business is under stress for whatever reason, it could be time to seek expert guidance. Sure, saving money and killing costs are important during tough times, but the stress could be partly of your own making.

You might be working in your business too much and not on it. You might have a lot of frustrations in your business and you don’t know how to create systems to rid yourself of them. The goal is to have a business that works for you and that works even if you are not there. That’s when you have a business you can sell, franchise or that can just be a joy to own.
I remember my business coach gave me some great advice a few years back and I will share it with you.

Tough times may not seem like the best times to give bonuses, but if one of your departments is truly excelling, you can build great staff loyalty by acknowledging successful efforts monetarily, she said.

Also, listen openly to your employees and communicate honestly about business conditions. Simple courtesies like these can have long-lasting positive effects.

Finally, now is the time to really talk to and listen to your customers it’s the best way to keep them and get more business from them. It is also the time to objectively ask if you need help from experts to make your business more professional.


– Make sure customers know everything your business offers.
– Ask for business
– Get guidance to ensure your business is running to its maximum potential.

Is a Bookkeeper a Luxury?

For a small business, paying a bookkeeper might seem like an extravagance. In reality, the time and stress of DIY bookkeeping may be affecting the growth of your business.

Since July 2000 there has been a new dance in the business world. It’s called the Business Activity Statement, commonly known as the BAS. The BAS isn’t easy to get the hang of. Many small business owners are still trying to teach themselves the steps. Worse, doing the BAS is only one of a number of bookkeeping routines that have to be learned if the show is to go on.

It’s an aspect of running a business that gets a lot of people down. Keeping up with day-to-day financial management, submitting regular BAS reports to the tax office, and preparing end-of-year information for the accountant are all on the ‘Yuk’ list for many small business owners. As a result, these things are often left to the last minute — or not done at all.

It’s no wonder. Bookkeeping is an expertise and it’s time-consuming. Learning how to correctly enter data into a software program, making sure GST is recorded properly, keeping up with tax office rulings on payroll and Super, and producing accurate cashflow reports can be unwelcome distractions from the work you are passionate about.

If this sounds like you, perhaps it’s time to consider hiring a bookkeeper.

Bookkeeping is different from accounting. Bookkeeping is about day-to-day management of the finances. An accountant can do that, but may charge a lot more than a bookkeeper. An accountant is valuable for preparation of tax returns, conducting an overview of the business and providing financial planning.

During the year, the bookkeeper will, at the very least, keep up-to-date records of payments your business makes to suppliers and income received from sales of products and services to clients. This information will be used by the bookkeeper to prepare the BAS statement which goes to the tax office, usually every quarter.

Bookkeepers can do more. They can maintain inventory records, manage a payroll, and provide you with regular management reports so you know how your business is going now and will be going in a week, month or year from now. It’s up to you how involved you want your bookkeeper to be.

Bookkeepers don’t need to be employees or even work at your office. These days many bookkeepers run their own business, often from home. They will organise a secure system to regularly pick up receipts and other documents which they return to you when they’ve recorded the information.

There is a huge range in the hourly rate contract bookkeepers charge, from $45 to $80 per hour. Like any service, paying the least doesn’t mean you are getting less and paying the most doesn’t mean you are getting the best. It depends on what qualifications a bookkeeper has, whether they have overheads, whether you’re getting an account manager as well as a bookkeeper for the hourly rate and how complex the work is that you want done.

To date the bookkeeping industry has been unregulated so there has been no specific qualification, amount of experience or association membership required for someone to call themselves a bookkeeper. Anyone could complete a few hours of training and claim to be qualified. This year the legislation is changing and bookkeepers providing BAS services will be required to have, at least, a Certificate IV in Financial Services (Accounting).

There is no standard amount of time a bookkeeper spends on entering data or preparing a BAS, so it’s impossible to suggest how much your bookkeeping might cost. A guess can be based on the number of purchases and sales made per week or month and how big your payroll is, but there are so many varying factors that you won’t really know the cost until your bookkeeper gets going. It always takes a bookkeeper longer in the beginning as they set up systems and generally get to know how your business works.

Hiring a bookkeeper can be tricky, especially if bookkeeping is something you don’t really understand. As with any recruitment process, you base your decision on qualifications, references, length of experience and personality. Knowledge of your particular industry can be a bonus but it’s not necessary. A highly experienced, well-qualified bookkeeper will ask the right questions and learn quickly.

You might pay more, but it can be worthwhile using a bookkeeping company rather than a sole operator. A bookkeeping company will have a few bookkeepers on staff, should conduct regular reviews of its bookkeepers’ work, should ensure their bookkeepers are up to date on all tax office rulings and software changes and will be able to supply a fill-in should your regular bookkeeper take leave for any reason.

The lowest-cost option for getting your BAS prepared and keeping basic financial records is for a bookkeeper to work directly from your bank statements. You note which are business and which are personal expenses, and the bookkeeper will enter and code the information. Some companies offer packaged fees for this, so the costs are set and there are no surprises. With this option, you can still get the regular reports that businesses benefit from, such as profit and loss and cashflow reports, as well as end-of-year reports for the accountant, which may make your tax returns less expensive.

Whichever style of bookkeeping service you choose, knowing that your financial records are being kept accurately and that you’re doing everything right as far as the tax office is concerned will give you peace of mind. More than that, the time you used to spend dancing clumsily around ATO deadlines can now be spent catching up on industry developments, training staff and, most importantly, growing your business.

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How to Get Your Bills Paid by Christmas

No one likes to do it, but sometimes it’s necessary to get nasty with customers that have not paid your bills. Unfortunately, given the time of year and the state of the economy, now’s the time to get nasty. There are a heap of different things you can do to discipline unruly debtors. The trick is to start hammering them as soon as invoices fall due.

Step 1 – don’t sit on late invoices
As soon as an invoice falls due there should be a process in place so that a reminder is sent to the customer whose account is in arrears, with a request for payment by a specific date – say five days from the time of the first reminder notice. If the invoice isn’t paid after that, telephone the errant client and find out why the invoice has not been paid. Then, set another payment date or, if the customer is having financial difficulties, arrive at an agreement about a payment plan. If the customer misses the next date for payment, it might be prudent to chase the account through more formal means.

Step 2 – use a debt collector
If the invoice in question is sizeable enough, it’s worth appointing a debt collector to chase it. This sends a message to the customer you are serious about collecting the money – just the sight of a debt collector can scare some late payers into meeting their obligations.

Step 3 – tighten your credit policy
If you’re constantly finding your customers are late paying their debts, it could mean you need to tighten your credit policy. It’s an idea to shorten your payment terms, perhaps from a month to 14 days. It might also be an idea to review your appetite for offering credit to customers, and only offer credit to those you know have the capacity to pay their accounts. So thoroughly vet new customers’ ability to pay your invoices when they first become customers. This means formally checking their credit record and credit references, rather than simply hoping they can pay their bills.

Step 4 – fire customers who don’t pay their accounts
Don’t keep doing business with customers that are regular late payers. These people are not making you money, will never make you money and are just wasting your time. Letting non-paying customers go only opens up room in the business for new customers that will pay your invoices. When the economy was booming, many of these steps were simply unnecessary because most customers could pay their bills on time. But times have changed and businesses that don’t recognise this and tighten their credit policies accordingly could see themselves unable to pay their own bills, the worst case scenario by anyone’s measure.

2011 Year End FBT Planning

With the FBT year ending on 31 March 2011, business owners and managers should now start planning and preparing to ensure they are compliant, and minimise the possibility of an audit.

As a result of a high level of non-compliance amongst many small and medium sized businesses, the ATO is monitoring Fringe Benefits Tax (FBT) returns closely.

One of the ATO’s concerns is that large numbers of employers have not submitted FBT returns, although they have provided “taxable” employee fringe benefits. An employer cannot avoid fringe benefits tax by choosing not to claim a tax deduction for a particular expense.

The ATO’s major focus areas include:

  • cars and in particular luxury cars with high business use claims;
  • cars that are garaged at home;
  • car parking;
  • living-away-from-home allowances;
  • benefits provided to employees by third parties;
  • entertainment;
  • benefits provided under the $300.00 minor exemption; and
  • accounting for employee contributions.

It is increasingly likely that the ATO will audit businesses that are not complying. In a world of sophisticated computer programs and data matching software, businesses can easily be caught. For example, if cars are provided to employees, data-matching against state road authority records, questionnaires and compliance verification will be key trigger points for an ATO audit.

Important issues that business owners need to consider in 2011 are:

Documentation and Calculation of Benefits

  • Have all the odometer readings at 31 March been recorded and signed?
  • Have all declarations been received to ensure that FBT claims are valid? For example, the “living away from home” or “business use” declarations must be signed and be in order.
  • If the ‘actual’ method for car benefits is used, has a log book been kept for a continuous period of 12 weeks? Is the log book more than 5 years old? If so, it is no longer valid and a new log book will need to be kept for another 12 weeks.
  • If the ‘statutory method” for car benefits is used, has the correct cost price been calculated and is inclusive of GST?
  • Ensure that working papers, invoices and other documentation (e.g. travel diaries) have been kept and are up-to-date.
  • Undertake a review of certain accounts in the general ledger (e.g. office expenses, staff amenities and subscriptions) to identify any private expenses paid on behalf of employees which are subject to FBT. Your bookkeeper or accountant should be given this task.
  • Have the FBT concessions been correctly applied? For example, management may decide that all meal entertainment benefits are under $300 for each employee for the purpose of the minor benefits exemption, but are they in fact minor benefits? i.e. are they provided infrequently and irregularly? If not, the benefits are subject to FBT.
  • If the business is claiming an FBT exempt commercial vehicle, is it listed in an ATO ruling?

Employers are entitled to rely on the documentation provided by employees (e.g. car log books) when preparing the FBT return. However, this reliance does not prevent the ATO from making adjustments in an audit where the documentation is found to be false or incorrect and imposing extra tax together with interest and penalties.

Eligible Work-Related Items

These are very tax effective benefits that can be provided to employees as the items are fully tax deductible and exempt from FBT if certain conditions are satisfied. Examples include a laptop computer, mobile phone, briefcase, electronic diary, computer software, and tools of trade.

The FBT exemption is limited to one item of each type per employee every FBT year and the item has to be used “primarily for work purposes”. For example, an employer can provide an employee with a laptop computer, mobile phone and an electronic diary every FBT year.

If the first item was lost, stolen, destroyed, or is replaced due to developments in technology, the employee can be provided with a replacement item in the same FBT year and still obtain the FBT exemption.

Post FBT Lodgement Issues

Following lodgement of the FBT return, a number of other issues need to be considered including:

GST & Income Tax
There needs to be consistent treatment between income tax, GST and FBT. For example, if the business is not entitled to claim entertainment expenses, then it cannot claim GST credits.

Where an employee has made a contribution (or payment) towards a fringe benefit, there is a requirement to report and remit GST of 1/11th on the business activity statement. The GST exclusive value of the contribution also needs to be reported on the income tax return.

An employer is required to report certain frin ge benefits on an employee’s PAYG Payment Summary where the taxable value of these benefits exceeds $2,000 per employee.

Salary Packaging
The salary packages of employees needs to be reconciled. For example, in relation to a car benefit, this includes all lease and running costs and also the FBT charge.

Workcover & Payroll Tax
The amount of taxable wages for workcover and payroll tax purposes is the grossed-up value of fringe benefits provided. This imposes an additional compliance burden on employers and exposes them to penalties and interest where they have understated their workcover and payroll tax obligations.

Where is your Break Even Point?

Where is your Break Even Point

Courtesy of (ABN) Australian Bookkeepers Network Tax Tuesday Highlight

The break even point for any business is probably the most critical number that goes ignored by most start up businesses. And even if some analysis is done by a potential business owner, it is usually only done on direct costs and not including overheads. However, not only is it important to know for start up business, but it’s a critical number to understand for all business. It is a guide, a minimum standard if you will, that will allow you to understand the point in time that you cross over from loss to profit (or vice versa).

Imagine a slowing economy or a business experiencing decline (not too hard to imagine in the last few years). Knowing your break even point allows you greater understanding and the ability to manage your finances in a more effective way. As things decline you can be acutely aware of the minimum standard that must be reached and also, forecast with more accuracy (and more easily) the losses that may be made if the declining trend continues. This is of most importance if you need to seek external finance to prop up cashflow.

A break even analysis can form the basis of so many calculations:

  • Sales targets for your sales team
  • Cashflow predictions
  • Profit analysis
  • Trend analysis
  • Many many more

Break even points can be calculated over any time period. Most people want a critical understanding of their monthly numbers. Therefore, knowing your break even point on a monthly basis. To work out your break even point you need to know the following for each month:

  • Average price of each product/ service sold
  • Average cost of each product/ service to sell
  • Fixed costs for the month

Using these numbers, we can calculate a crude break even point that you can keep in the “basic toolkit” of your business.

For more information contact allthatcounts on 02 8850 1491