YML Insight August 2015

From Your Trusted Accountant

The number of small business owners switching to cloud computing is expected to double in the next six years, according to a new US study from Emergent Research. That’s a massive increase from 37% to 80% - and here are six reasons it’s worth joining that 80% in the cloud.

1. Improved bookkeeping Easy access, multi-level management, and vital record keeping all in a one-stop shop. Moving to the cloud will help you manage payroll tax, transactions, client details, inventory and other accounting records. Automate payment of taxes and invoices with ease.
2. Multi-user access Collaborate on projects, manage content and share documents with multiple users in the cloud. Edit documents secure in the knowledge that all updated data and document history remains current and easily accessible from anywhere with an internet connection.
3. Security and data recovery Servers crash. Malware and viruses attack networks. USBs and portable drives get lost. Internal systems get gutted by fire or water damage. Don’t become complacent about data security - lessen your risk with the cloud. Your data will be secure under industry best practice, 512-bit SSL encryption, and regular data back-ups; so in case of disaster you can instantly recover a recent system back up.
4. Storage Gone are the days of constantly upgrading your groaningly full storage systems and predicting your required network data. Agile cloud systems store your data and expand as need demands. Efficiently access files, create your own data retention policies, and institute your preferred data management system with the cloud.
5. Scalability Cloud systems are without boundaries - expand or shrink on the needs of your business, and add more resources into the cloud without a costly refit of IT systems.
6. Save on resources Low costs, increased efficiency, and automatic free software updates means, with the cloud, you only pay for what you use. Your IT costs will drop because the cloud operator is responsible for the functionality of the cloud. Reduce your operational costs; streamline your business processes, while allowing your employees the same advantages of big business, without the operational costs. Create a level playing field, with the cloud.

If you’re looking to move to the cloud, or want a cloud accountant, contact us.

From Your Financial Adviser

This is an excellent time for consolidation of all your hard work and assets. Try our over-40 financial security checklist, and see how you measure up. Do you….

1. Have a savvy financial adviser? Your financial adviser should be an expert in your particular investment interests and goals, unpick the trends, and maximise your investment strategies. Meet regularly, and always check ASIC records to verify your advisor has the right qualifications and track record.
2. Have an innovative accountant? Ensure your accountant is a partner in wealth creation, legitimately minimizing your taxes and creating extra revenue streams through strategies such as super fund investment. If your current accountant doesn’t match up, consider moving on.
3. Have a debt reduction plan? This is crucial. Start paying cash wherever possible. Aim to keep all credit cards at zero each month. Plan to work off all other existing debts, such as mortgages, and prioritise in terms of which has the highest interest rates.
4. Maintain your assets? Stocktake your existing assets, and then keep them in excellent condition. This covers everything from your house and car to any articles of high value that you’ve identified are assets unlikely to greatly depreciate.
5. Have an emergency fund? Keep it stocked up and accessible. Budget a small amount of money each week into the fund so you’re covered for any unforeseen medical or other emergencies.
6. Understand super performance? Understand how much money you will require to retire comfortably, in the lifestyle you desire. Make sure you understand your super investment products, and regularly monitor your account to ensure it is meeting your goals. Consolidate your super in the best product so you’re not paying fees for multiple unsuitable funds. Finally, think about setting up a self-managed super fund (SMSF). With the right advice and investment strategies, an SMSF can be tailored to suit your goals.
7. Have multiple income streams for retirement? Which of your long-term investment products will be ripe for yield in twenty years? Diversify wherever possible, such as holding stock options as well as real estate. Look at what equity you can draw upon. Sometimes the modest but regular yearly turnover may be preferable to the high yielding but inconsistent product when planning for retirement.
8. Have a business succession plan? If you own a business it’s a good idea to start thinking about how it will tick over once you retire. Start thinking about a likely successor, and consolidating the business so its structure won’t be shaken up by your departure.

If you said yes to more than four of these, then you’re well on your way to being financially secure. If not, this checklist will act as a helpful guide to find where the gaps currently lie in safeguarding your future.

From Your Finance Specialist

Whether you’re a homeowner, an experienced investor, a business owner, or all of the above, you may be thinking about expanding your real estate portfolio. You already know there are many things to consider when investing in property, but we can offer a few tips to enlighten and lighten the stress of buying property.

If you are in the market to borrow and buy an investment property, you may be aware that most lenders have reduced their LVR (Loan to Value Ratio) forcing investors to come up with a bigger deposit. If this is an issue that concerns you, there is still good news. Options are always available to make your financial goals work, despite any hurdles that may present themselves.

1. You could save for a larger deposit. This might seem daunting, but the professionals at YML Group can assist you to assess your finances.
2. You could buy a property using up to 20% of a parent/s’ property as a security. This is a decision that requires thought and consideration, and of course, a willing parent!
3. If you already own a property, you could increase your equity in that property by making bigger monthly payments. By increasing your monthly payments to above the minimum amount, you could save yourself paying additional mortgage insurance.
4. If you have a high limit on your credit card that goes consistently unused, it can be a good idea to reduce the limit on your credit card. If you have multiple cards, it’s also a smart plan to assess the limits, how often you use the cards, and whether you need multiple accounts.  Lenders consider the limit on your credit card, not the actual debt, when assessing your request for finance.

For more information, tips, and financial guidance, give the finance specialists at YML Group a call. We’ll be happy to talk you through the process of investing in the property market.