What is a Franchise – Leigh Barker Tangible Assets

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A franchise is a is a way to expand a business through a licence arrangement between one business owner to another. The franchisor licences its trade name and systems of doing business to the franchisee who agrees to do business under the terms of the licence.

The franchisor provides business support whereas the franchisee pays a franchise fee to cover the cost of the trade name and operating methods. While the franchisor will exercise control some elements of operations to protect intellectual property the franchisor has little or no involvement in the day to day operations of the franchisee.

As a franchise brand is considered the most valuable asset, franchisors expect the franchisee to implement brand standards at every location as customers have little to no interest with whom owns the assets they simply require their products or services for which the brand is known.

Franchising is a popular method for companies to increase distribution of goods or services and has benefits for both the buyer and the seller. For a franchisor there is the main benefit of using other peoples money to expand more rapidly than possible. Other benefits include the ability to collect fees to continue to build the brand without losing control.

A franchisee benefits from ongoing training and support, sales power, group purchasing, the use of an established business model and customer lead generation.

Following the system is critical to the success of a franchise while departing from the system without approval can be detrimental to the franchise.

Disclaimer: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group. Note that all content of this blog is general in nature and is not financial or investment advice thus anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

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What is Customer Service – Leigh Barker MWC Group

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Customer service is the support offered to customers before, during and after they purchase or use your products. Customer service is integral to maintaining client relationships which is the key to continuing revenue thus many businesses endeavour to increase customer service levels to generate a positive perception of the business as a whole.

A successful business will recognise the importance of providing outstanding customer service which can mean the difference between retaining or losing a customer thus customer service should be a one-stop endeavour for the customer and proactively following up the customer to ensure they are fully satisfied is a smart move.

Customer service representatives of a business must be accessible, knowledgeable and courteous with good listening skills and the ability to compromise to reach a solution in particular since the introduction of technology such as smartphones where customer service will increasingly be centred on the mobile experience.

No matter the size of a business good customer service must be at the heart of the business model thus improving customer service skills can lead to greater customer satisfaction and while it can take extra time, resources and money, good customer service can generate positive word of mouth for a business to grow and prosper.

Customer service can increase customer loyalty. Increase how often customers uses your goods and services which in turn increases the amount of money a customer spends in your business.

In general, customers are willing to pay for a better experience thus good customer service experiences will benefit the bottom line.

Disclaimer: Prepared by Leigh Barker MWC Group, Accountant, Portfolio Finance, Gordon, West Pennant Hills and Tangible Assets. Note that all content of this blog is general in nature and is not financial or investment advice thus anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

What is a Living Away from Home Allowance – Leigh Barker West Pennant Hills

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A living away from home allowance is a payment made by an employer to an employee who due to work commitments is living away from their usual residence.

A living away from home allowance pays for expenses such as accommodation and meals while working away from your usual place of residence for extended periods. Generally, an employee is considered to be living away from home when an employee occupies a temporary residence for greater than 21 days.

A living away from home allowance is income tax free and is not declared as assessable income in a tax return. Conversely there is no tax deduction available for expenses that have been covered by a living away from home allowance.

A living away from home allowance is a fringe benefit that is paid by the employer, not the employee.

As a living away from home allowance is administered by the employer as opposed to the Australian Tax Office, living away from home allowances a generally provided on a timetable set by the employer. Generally, a living from home allowance is deposited into the employee’s bank account at the same time as normal pay.

In receiving a living away from home allowance, it is advisable to retain and to give to an employer a record of expenses incurred such as receipts, credit card or bank statements and a declaration setting out information about the expense.

Disclaimer: Prepared by Leigh Barker West Pennant Hills, MWC Group, Accountant, Portfolio Finance, Gordon and Tangible Assets. Note that all content of this blog is general in nature and is not financial or investment advice thus anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

What is a Family Business – Leigh Barker West Pennant Hills

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While all around us, family businesses are often overlooked as a form of ownership.

A family business typically has two or more family members involved in the business, holds a majority ownership or control lies with the family. A family business is a commercial operation in which decision making is influenced by family members.

The family business is one of the oldest and most common forms of business which is economically important and often underestimated. Family businesses play an important role in all countries and make a sizeable contribution to all economies.

A family business of any size is considered a family business if decision making rights are in possession of the person who established the business, or in the possession of the person who acquired ownership of the business, the majority of decision making is made directly or indirectly, and at least one family member is formally involved in governing the business.

Like all businesses, a family business can have both advantages and disadvantages and balancing competing interests often becomes difficult within a family business. There appears to be two main factors that affect the development of a family business and subsequent succession planning these being the size of the family compared to the volume of the business and suitability to lead the business in terms of management ability, technical skills and a commitment to continuity.

While a family business can present special challenges to those who run them, these are of little consequence as long as they continue to be managed by those who are steeped in tradition.

Please note: Prepared by Leigh Barker West Pennant Hills , Accountant, Portfolio Finance, Gordon, MWC Group and Tangible Assets. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.

What is a Travel Allowance? – Leigh Barker MWC Group

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A travel allowance is an amount paid to employees to compensate for out of pocket expenses incurred on behalf of the employer while you travel for work. In the main a travel allowance will cover such expenses as accommodation, food, drink, transport, laundry and telecommunications.

A travel allowance is paid to an employee who is travelling on business and is not thought of as living away from home. Generally, an employee travelling for business is not accompanied by their spouse or children.

While a travel allowance is considered to be assessable income which may attract PAYG withholding, any expenses incurred on meals and incidentals may be deducted against the allowance on the proviso that it meets the criteria.

Every year the Australian Tax Office (ATO) releases a tax determination listing all reasonable amounts that can be paid as a travel allowance covering accommodation, meals and incidentals.

Thus, when the amount claimed by an employee for a domestic travel allowance does not exceed the ATO’s reasonable allowance amount there is generally no requirement to substantiate the claim by providing either written evidence or a travel diary. If the expenses associated with the travel allowance exceed the reasonable travel allowance set by the ATO it would wise to retain documentary evidence to substantiate the expense. Conversely, claims for overseas expenses must be substantiated through written evidence inclusive of a travel diary.

If the travel allowance does not appear on the payment summary the allowance is not included in the return and in this instance, there is no ability to claim any deductions.

Please note: Prepared by Leigh Barker MWC Group , Accountant, Portfolio Finance, Gordon, West Pennant Hills and Tangible Assets. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance

What is an Australian Business Number – Leigh Barker Tangible Assets

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When an activity becomes a business, it may require an Australian Business Number (ABN). If this point has been reached you can apply for an ABN to use in all business transactions. In order to ascertain if an activity has become a business there is an ABN entitlement tool located on the Australian Business Register (ABR) to assist with that decision-making process.

While there is no single test to determine if an activity is a business there are numerous features that may indicate that activities being undertaken may form a business. For example, there is an intention to make profit, there are sales of products or services of a reasonable size, activity is conducted in a business-like manner, having licenses or qualifications, having a registered business name, and maintaining records and accounts.

An Australian Business Number (ABN) is an eleven-digit unique identifier that is issued by the Australian Business Register (ABR) which is a branch of the Australian Tax Office (ATO). An ABN is free when registering through the ABR and once registered, ABN details are held in the ABR.

An ABN is generally quoted on all invoices and other documents relating to the sale of goods or services made to another business else a withholding tax may be applied under the PAYG withholding system.

As a unique identifier an ABN will allow businesses to be readily identified by government and non-government businesses. Once issued the ABN will appear on the ABN Lookup database.

Please note: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group, Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance

What is a Self-Managed Superannuation Fund – Leigh Barker Tangible Assets

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A self-managed superannuation fund (SMSF) is a trust structure managed by its members to provide benefits to these same members upon retirement. An SMSF operates under similar rules and restrictions as ordinary super funds. An SMSF is designed for its members to have direct control over their retirement savings and investments.

An SMSF is a private superannuation fund regulated by the Australian Tax Office (ATO) who checks the compliance of the SMSF on an annual basis. An SMSF comprises no more than 4 members all of whom are trustees of the SMSF, all of whom are personally liable for all decisions made by the SMSF. All members must be trustees and all members are responsible for decision making and compliance with relevant laws.

An SMSF is established for the sole purpose of providing benefits to members in retirement. An SMSF is a vehicle to save for your retirement.

An SMSF may either have a corporate trustee or an individual trustee who is responsible for making investment decisions and implementing the investment strategy of the fund.

It is important that the assets of an SMSF are separated from those of the trustee. As such an SMSF is required to have its own tax file number (TFN), an Australian business number (ABN) and its own bank account into which all SMSF deposits and payments are made. In addition, all investments are to be made in the name of the SMSF. The failure to separate assets is a clear contravention of super legislation and associated regulations.

Please note: Prepared by Leigh Barker Tangible Assets , Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance