All Posts by Lielette Calleja

The Break-Even Point In Your Service Industry

The Break-Even Point In Your Service Industry Is Not A Game

There is no better number to understand in your business than your break-even point.

I have seen businesses entirely focused on trying to achieve growth by having a razor beam edge fixated on their sales numbers only.

While it’s important not to lose sight of sales it’s not the critical number you should be only focused on.

It might surprise you that one of the most effective ways to drive profit is to focus on your break-even point.

Typically, the break-even point is used by manufacturers to work out how much revenue or units is required to sell to cover their variable and fixed costs. In my research in working out the best method, I was amazed to find that very little was dedicated to the service industry – my industry!

It opened a Pandora’s box for me. Did someone miss the memo? Have they not seen that Australia is saying goodbye to making things? The world economy is different now. Any left-over love for making things on the significant scale has moved over to China. The jobs of the future are in helping and doing, not in the making as harsh as that sounds.

Services are at the heart of our nation. It’s where we find the people who help:

  • Doctors
  • Lawyers
  • Teachers
  • Cleaners
  • Truck Drivers
  • Designers
  • Architects
  • Accountants
  • Engineers
  • IT
  • Drivers

While there will always be some form of small manufacturing in Australia, it’s safe to say we can easily base our whole economy on services. These services are exportable across the seas and have taken off in the last few years. Take for example financial and business services, because of the internet and online solutions, which can be one of our biggest exporters.

So, coming back to my initial point.

How does a service industry business work out their break even?

The complication in calculating a service business break-even is that the business doesn’t have a physical product to sell like a retailer or manufacturer.

The first step is to identify your unit. Example a consultancy-based firm bills their customers by the hour and an accounting firm charges by a tax return or suite of services, a training company sells courses, and other businesses might have a fixed price per customer, also known as value-based pricing.

In each case, they are all seeking to find out how many units (hours, tax returns, courses, customers and so on) they need to reach break-even.

Distinguishing your variable and fixed costs is where the complications are. The nature of a service-based business means that the most considerable portion of its expenses commonly relates to wages and salaries leading to difficulties in defining what is variable and what is a fixed cost.

We have picked out two different examples to highlight how this works.

Example 1

Business Type:  Consultancy
Unit of Measure:  Clients
Objective:  Find out how many clients they need to break-even
Total Fixed Costs:  $260,000 (Wages $182,000; Other $78,000)
Selling Price:  Average client will need 100 hours per year @ $125 per hour = $12,500 p.a.
Variable Cost:  Variable cost is $2,100 p.a. (includes printing, on-call consultants, room hire)

The Breakeven Formula

Total Fixed Cost / (Selling Price – Variable Cost)
$260,000 / ($12,500 – $2,100) = 25 clients
The business needs 25 clients each year to break-even.

The businesses income statement would look like this:



No of Clients





Variable Costs



Gross Profit  


Fixed Costs


Net Income



Quick Capacity Check

While we know we need 25 clients to break-even the question remains does the business have the capacity to handle 25 clients.

A quick calculation to work this out is:

25 clients x 100 hours each per year = 2,500 labour hour.

Based on a 38-hour week operating 48 weeks of the year, the two consultants can provide

(38 hours x 48 weeks x 2) = 3,648 hours

At break-even the business operates at 69% capacity (2,500/3,648)

This means that the business is more than adequate to take on more clients.

Example 2

Business Type:  Accounting
Unit of Measure:  Charegable Hours
Objective:  Find out how many hours they need to break-even
Total Fixed Costs:  $85,000
Selling Price:  $125 per hour
Variable Cost:  $57 per hour

The Break-even Formula

Total Fixed Cost / (Selling Price – Variable Cost)
$85,000 / ($125 – $57) = 1,250
The business needs 1,250 chargeable hours each year to break-even.

The businesses income statement would look like this:








Variable Costs



Gross Profit  


Fixed Costs


Net Income  


Quick Capacity Check

Assuming the business can call on only one person to provide the service.

A quick calculation to work this out is:

Based on a 38-hour week operating 48 weeks of the year, the one consultant can provide

(38 hours x 48 weeks) = 1,824 hours

At break-even the business operates at 69% capacity (1,250/1,824)

This means that the business is more than adequate to take on more clients.

If you are in a service-based business, take the challenge and calculate your break-even point.  This number forms the basis for key pricing decisions, volume and capacity planning in running your business.

All That Counts have years of experience working with businesses and helping them to understand the importance of break-even and strong margins.  Talk to us today and find out how we can help your business gain that competitive advantage.  We would love to hear from you.

The self-employed and the gig economy

The self-employed and the gig economy

You would be forgiven for thinking that not so long ago, the “gig economy” was a space for musicians and freelance designers to bid for their next piece of short-term work. Software enabled programs like ELance and Upwork were the minority, with most Australians in the dark about using the internet for work and new gigs, and focusing on the nine-to-five. All this has changed. Welcome to the gig economy!

The gig economy is now a prominent and lucrative business that is here to stay. It is a wide-spread global industry that promises a future of vested entrepreneurs and unlimited innovation.

Platforms such as Airtasker, Freelancer, and Speedlancer have opened the doors for many corporate high flyers. It is no surprise to see that many are now leaving their fixed hours and suit for a flexible work life balance, giving them the opportunity to start up a business where they can follow their passion and provide a host of consumer-to-consumer services.

This has turned the rules of business upside down, and for those of us moving over to the gig economy, there are new skills to learn.

In the traditional world of business, finding clients means a lot of networking, including self-promotion via social media. In the gig world, finding new business comes from mobile apps and online platforms that instantly pair both parties, based on the skills needed to get the job done – the real challenge is maintaining finances, and adjusting to the new working landscape.

If you want to give your gig business a chance to grow legs and succeed, we should look at what the successful people in this space are doing when starting out.

  1. Start lean

Lean, small, nimble and flexible are good things. It means you don’t need to outlay vast amounts, and in turn don’t need to make huge amount of revenue. Starting out lean means it’s hard to fail, and easy to succeed.

Many business owners try to cut costs by doing their accounting themselves. If done poorly, however, this can cause you a lot of headaches, unnecessary costs, and put your business at risk. Consult with a professional to determine the best structure for your business, and what level of reporting requirements you need to satisfy the ATO.

  1. Online and mobile accounting

No matter how small you are, there is no excuse or reason to keep track of your finances in a spreadsheet. QuickBooks Self-Employed (QBSE) accounting app is ideal for businesses that are not registered for GST but need to invoice on the go, track expenses and track mileage. Leaving the heavy lifting to your app means you can spend more time on your business.

  1. Track your expenses on the go

One of my all-time favourites.  It means I can forego the wad of receipts that are exploding in my purse, in between my car seats, on my dashboard, et cetera.… you get the drift!

With apps like QuickBooks, you just snap a photo of the expense on the go. No need to look at that receipt again!

  1. Separate personal and business

Always keep your personal and business finances separate, for both bank and credit card accounts. While it may be convenient at the time to buy your groceries on your business card, don’t make it a regular habit. Your business account is for business use. Applying this practice will save you a lot of time, and a lot of hassle!

By following these best practices, you’ll be putting your new gig economy business in good standing for the future, and keeping track of all that counts.

Lielette Calleja, Director, All That Counts

Bookkeeping Done Right – AFFORDABLE FIXED FEE

Don’t like costly surprises?

Neither do we. Get an affordable bookkeeping fixed fee quote now! Successful business owners choose to work with qualified bookkeepers so they can work on growing their business.

Our fixed fee packages includes FREE online accounting software, payroll, debtors, creditors, reporting, BAS lodgement as well as innovative solutions to streamline your operations which enables you to manage your business better.


End of Financial Year Guide for Small Business

End of Financial Year Guide for Small Business

To take advantage of all the deductions and tax minimisation strategies available to your business you need a clean set of up to date accounts

We would like to draw your attention to some of the key items that need to be addressed in order for your accountant to minimise your tax.

Accounts to Reconcile

  • Bank & Credit Card Accounts

Reconcile statement balance to 30 June.

  • Clearing Accounts

Clearing accounts should have a zero balance at the EOFY.

  • Petty Cash

Petty cash needs to be counted and reconciled to balance as at 30 June. Ensure all receipts have been entered into your accounting software and reconciled to a petty cash tin held by the business.

  • Undeposited Funds

This account should reflect the amounts un-banked as at 30 June.

  • Suspense Accounts

This should only be used as a holding account until you have certainty where to allocate the transaction. Ensure this is cleared out as at 30 June.

  • PAYG Withholding

The balance reflected in this account as at 30 June should be the amount left to remit to the ATO.  This usually would be 3 months (last quarter Apr – Jun).

  • Salaries & Wages

Prior to producing payment summaries to staff you need to ensure that the gross wages in your payroll report agrees to the balance in your profit & loss for the year and also agrees to the total sum of payment summaries produced.

  • Superannuation Payable

The balance reflected in this account as at 30 June should be the amount left to remit to the Super funds.  This usually would be 3 months (last quarter Apr – Jun).

  • GST Liability

The balance reflected in this account as at 30 June should be the amount that is payable/refund to the ATO.  This usually would be 3 months (last quarter Apr – Jun) if on quarterly BAS.  It’s always a worthwhile exercise to prepare a spreadsheet of what was lodged with the ATO and what your accounting system shows.  This will pickup any differences throughout the year that haven’t been picked up.

  • Accounts Payable

Make sure your Accounts Payable Summary report agrees to your Balance Sheet Accounts Payable or Creditors balance at 30 June.

  • Accounts Receivable

Make sure your Accounts Receivable Summary report agrees to your Balance Sheet Accounts Receivable or Debtors balance at 30 June.

  • Inter-company Loans

If you operate multiple entities and they borrow and loan money to each other you want to ensure that these loan amounts are reflected in both company accounting files. One company will have a DR balance and the other company should have the same amount but a CR balance.

  • Inventory

If your business tracks and stocks inventory you will need to run an inventory valuation report as at 30 June.  Make sure the balance on this report agrees to your Balance Sheet Inventory or Stock on Hand figure balance.

Things to Consider

  • Bad Debts

If you are on an accrual basis, you will be paying tax on the invoices you issue for the financial year, regardless if paid or not. Review your debtors list prior to 30 June and write off those invoices you know won’t be paid to avoid paying tax this year on money you will not likely ever receive.

  • Deferring Income

If cash-flow permits you may want to reduce income for the year by deferring some of your June invoices until July.

  • Accrue Expenses

Accrue expenses before 30 June, these including stationary, office supplies, repairs, computer supplies, etc.

  • Employee Superannuation Contributions

If cash-flow permits ensure all employee and employer superannuation contributions for your June quarter superannuation owing are made prior to 30 June to secure a tax deduction as superannuation is only deductible when paid.

  • Prepayment of expenses  (Small Business only)

If your cash flow allows, you should consider making advance payments for expenses over the next 12 months (e.g. Rent, insurance, advertising). If you are eligible for the small business concessions, you can claim an immediate deduction for such prepayments – obtain advice from your accountant

  • Capital Purchases for Assets less than $20,000

If your business is a small business entity (Proposed at turnover of less than $10m) depreciating assets valued at less than $20,000 are immediately deductible provided they are acquired and installed ready for use on before 30 June. – If cash-flow permits you may want to upgrade your computer equipment for an instant write-off

The balance of the general small business pool is also immediately deducted if the balance is less than $20,000 at 30 June 2017.

  • Repay Director Loans

Repay director loans (i.e. amounts borrowed from the company) to the extent possible prior to 30 June to minimise any Division 7A loan balances outstanding and thereby minimise any dividends required to be paid as income to shareholders – obtain advice from your accountant

  • Investment Property Deductions

If you own a rental property, consider arranging a depreciation report to allow you to maximise the depreciation and building write off deductions for your investment property.

  • Accounting Software Upgrade

Why not use the start of a new financial year to evaluate your accounting software.

Questions to ask yourself:

1. Is the system giving me the information I need to operate my business most effectively
2. Am I desk bound to my software
3. Would I gain benefits from having a cloud mobile application like QuickBooks Online
4. Has my business outgrown my current accounting system and need to look at something like JCurve
5. Can my Accounts Payable processes be automated using software like Receipt Bank
6. Do I need to make an appointment with a cloud accounting adviser like Contact

Please note the following information is factual only and does not constitute advice or recommendation.

Should you have any questions regarding the above please do not hesitate to Contact our office.

Phone: 1300 884 722




Making The Switch Is Seriously Easy

All That Counts is an award winning bookkeeping company that has been helping Australian Businesses with their bookkeeping since 2004.

Our team of experienced and qualified bookkeepers provide professional and consistent services that are individually geared towards your business needs.

All That Counts can simplify and streamline your business processes and where required integrate solutions into your accounting system that will ensure your business thrives.

We don’t believe in charging for every hour worked.  We believe it’s the value in the hour that counts.

Making the switch is seriously easy!

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It’s important for us to get to know your business to see if we are the right fit. If you are using a current accounting software package we will do a full review of that system and share our findings.

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This form enables us to collect all the information we need about your business so we can provide you with a fixed fee.

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We will introduce you to your dedicated bookkeeper who is aligned with the skills your business and industry requires.

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Your success is our success.  You will never have to worry about bookkeeping again.  Your dedicated All That Counts bookkeeper will make sure everything is up to date, correct and on time.

QBConnect Sydney is Almost Here!

qbconnectI’m super excited to have QBConnect staged in my hometown of Sydney on 18 May 2017 at the iconic Sydney Cricket Ground.

You see, last October I was extremely fortunate to experience my first QBConnect Conference in San Jose, California as one of the invited international VIP contingents (that’s me pictured above with Bill Rancic who was the MC) who will Sydney have is the biggest question on everyone’s lips?

Looking back it was a surreal and very humbling feeling when I arrived at the Fairmont Hotel in San Jose. This was going to be my home for the next 5 days. I kept asking myself

“How did a Sydney girl like me who’s only desire was to help and educate as many small business owners become financially fit using QuickBooks Online end up here in the US”

Intuit don’t do things in halves and QBConnect is an excellent example of this, with a star-studded line-up of celebrity keynote guest speakers including Basketballer, Shaquille O’Neil, Fitness Guru, Jillian Michaels and Skateboard legend, Tony Hawkes plus the list goes on. One might be right to think what can celebrities share with us over two days that will impact our thoughts and thinking.

Let’s just say the biggest highlight for me was listening to all these amazing speakers share with us their journey in the business world, something you don’t read about online or in the glossy magazines. They all had an honest and raw story to tell, but the one thing that was unanimous amongst them all was their success continues due to the trusted team that support them – including their accountants and bookkeepers.

I walked away feeling more confident in what I do and that yes, I do make a difference, and our clients who choose to work with us and value our skills must feel the same which is why they can focus on what they do best like our celebrity friends.

The breakout sessions I attended were educational and inspiring. The hardest thing was deciding which one to attend. My inner voice again started saying

“Wow, when I grow up I want to be one of those speakers presenting at QBConnect one day.”

So, when I wasn’t listening to speakers or attending breakout sessions, I was mixing it up with the hundreds of exhibitors spread out across two exhibitor halls. My strategic plan was to connect with a handful of essential apps that would add value to my client base back home, and this is where I soon realised to my disappointment that most of the apps only worked with the US version of QuickBooks and not the Australian version.

Which is another reason why I’m super excited that Australia finally has QBConnect because all the exhibitor’s products will work with our very own Australian version of QuickBooks Online.

Did I also mention that I will also be one of the speakers at QBConnect? It seems I have grown up and the beautiful people at Inuit US & Australia think so too …. Lol

I couldn’t think of a more suitable agenda for me to lead: Using QuickBooks as a Small Business Owner – after all this is what I do every day educating clients and small business owners on how to simplify, automate and integrate their processes using QuickBooks Online.

It’s not unusual for me to make customers cry tears of joy when I show them how we do this – so I will attempt to do my best to repeat this on the day.

Just in case I haven’t convinced you enough why you should register to attend QBConnect as a small business owner below are my 3 top reasons why you should:

1.     Celebrity Speakers – you will walk away feeling more inspired and pumped to smash out more goals in your business

2.     Exhibitors – there could be that one app/solution that changes the way you do business which will allow you to scale and grow without investing too much in resources

3.     Come and hear me speak – you will walk away with real solutions/processes that you can implement in your business that will simplify your life and give you more financial control even if you don’t use QuickBooks Online.

You can register on this link

Look forward to meeting many of you there!

Lielette 🙂

Follow me @lieletteATC

Below are some pics of my amazing time in San Jose last year! I’m sure we will create just as many great memories in #QBConnect Sydney

Our Top 5 Tips to Hitch That Ride to The Cloud

hitch your rideIf you’re a small to medium sized business (SMB) now is the time to finally move your financial accounting software from your office server to the cloud.

Successful migrations can be made easy with the help of an experienced cloud accounting specialist.

There’s not a singular method for migration. Each business must deal with a unique set of circumstances. The key is to understand your situation and identify a strategy that allows you to transition while causing the least amount of disturbance and down time.

An experienced cloud accounting specialist will be able to identify the correct approach for your business.

When you’re using in-house servers, you are forced to be physically present in the office or restricted to a specific computer to access files and tools. All of this goes away with the cloud.

Are you ready to start doing business on the road, at home or in the office?

Here are our (5) five tips on how to seamlessly hitch that ride to the cloud:

  1. Plan the perfect timeline for the migration: Planning the right time of year is critical. You no longer need to stick with a 1 July conversion or migration as historical transactions can be part of your migration process. Determine your own busy periods and avoid them. Ensure your key staff are not on leave as their involvement will be critical for a successful migration and on boarding process.

  2. Pick the right product by asking the right people: Don’t get caught out using the wrong software because your accountant suggested you use the product of their choice with little consideration for what is best for your business. Do yourself a favour and engage with a cloud accounting specialist that works with several accounting solutions not just one. They will be able to provide you with an unbiased recommendation on what will work best for your business. Bookkeepers are generally your best go to people as they are trained to work with different industry types and software. They tend to become your best resource in the cloud accounting space.

  3. Avoid hidden costs and fees: Make sure you clearly understand what you’re paying for. The value of the cloud is that it removes a great deal of costs — hardware, support, maintenance, downtime etc. Often, the biggest problems occur when companies don’t understand a contract or the deliverable’s.

  4. Always review deliverable’s: Be clear about the deliverable’s. Otherwise, you’ll hear this phrase: “That wasn’t included in our estimate. It’s extra.” Therefore, you must demand a fixed price contract and understand what’s not included in the contract is just as important as knowing what’s included.

  5. Don’t undervalue the cloud: Avoid getting hung up on license or monthly subscription fees. Focus on the value that the cloud will bring to your business. Your existing server based financial accounting software solution won’t seem so cheap if you calculate all the costs to maintain and upgrade the system. A cloud accounting system includes all your updates, payroll tax rates, enhancements, tech support, real time numbers and real time collaboration with your accountant & bookkeeper.

If you are thinking about hitching a ride to the cloud or want to know more then contact one of our cloud accounting specialist on 1300 884 722 or email me directly at – we would love to chat with you!

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Dear Hard-Working Business Owner

You seem to be doing all the right things, you work hard and you look after your clients, yet … your business is still … well, pretty damn ordinary!

Read our latest blog on the importance of getting automated and using the latest cloud technology available.  Would love to hear your thoughts on this 🙂

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