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The Basics of Strategic Advice: Why Your Business Needs an Evolving Strategy

Written by webadmin on . Posted in budgeting, cashflow, News, Tax.

Strategy Needs More of Your
Time — Here’s Why

Are you spending enough time working on your business strategy?

Past research from The Alternative Board found the average entrepreneur spends 68.1% of their time working ‘in’ their business (tackling day-to-day tasks, putting out fires, etc.) and only 31.9% of the time working ‘on’ their business (e.g., long-term goals, strategic planning).

Revisiting and updating your business strategy is vital for a growing business – and that means making more time to focus on strategic thinking.

Key things to revisit in your current business strategy

Test your financial scenarios, cash flow, and budgeting:

Stress-test your cash flow by creating worst-case scenarios and adjusting your operating budgets to reflect the current rising costs for raw materials or labour. Look for any non-essential spending and set clear targets for preserving your cash levels and working capital.

Revisit your customer value proposition

Re-evaluate your customer value proposition (CVP) to confirm it still meets the changing needs of your market and target audience. This might mean simplifying your product offerings, adding a high-value service tier or putting money into deeper customer research and development.

Diversify your product/service offerings

Diversify your products and services to help you engage with new or underserved customer segments. Reducing your dependence on a single revenue stream stops you ‘having all your eggs in one basket’ and helps you reduce the overall risk to the business.

Match talent and resources to your growth strategy

Review your team structure to make sure your key talent is focused on growth and high-return activities.

Putting money into targeted up-skilling and training can improve your overall capabilities, while outsourcing to fill any critical gaps will help you capture new opportunities.

Helping you create a viable business strategy and growth plan

If you’ve not revisited your business strategy in a while, now’s the time to get proactive. Talk to our team and we’ll work with you to review, revise, and rework your strategy.

ATO Interest Deductibility Ended 1 July 2025

Written by webadmin on . Posted in budgeting, cashflow, News, Tax.

Tax Update: ATO Ends Interest Deductibility

Homeowners Benefit from Rate Cuts & Refinancing Strategies

As of 1 July 2025, important tax and finance shifts are reshaping homeowners’ strategies.

  1. ATO Interest No Longer Tax-Deductible from 1 July 2025

Starting 1 July 2025, General Interest Charges (GIC) and Shortfall Interest Charges (SIC) applied by the ATO for late or underpaid taxes will no longer be tax-deductible—regardless of when the underlying tax debt originated.

Interest incurred before 1 July 2025 remains deductible in your 2024–25 return. So, now is the final opportunity to claim those deductions.

For context, the GIC currently stands at around 10.78%, compounding daily.

What this means:

  • Carrying ATO debt after 1 July becomes an entirely non-deductible expense, making it significantly more costly to delay tax.

Actionable steps:

  • Pay off ATO debt.
  • If unable to pay outright, consider refinancing through a commercial or home loan—interest on such loans remains tax-deductible for business-related debt in certain situations, provided it is properly structured.
  • Explore options for remission, though recent trends suggest the ATO is being stricter, so success isn’t guaranteed. In requesting a remission, the ATO will assess whether the delay in payment was outside of your control and if you have taken reasonable steps to rectify the issues.
  1. Home Loan Interest Rate Cuts & Refinancing Trends

Australia is seeing a wave of interest rate relief that homeowners can leverage.

  • On 13 August 2025, the RBA cut the cash rate by 25 basis points to 3.60%—the third reduction of the year (RBA).
  • Major banks (CBA, NAB, ANZ, Westpac) promptly passed on these cuts to their variable-rate home loan customers, with effective dates ranging from 22 to 26 August (ABC News).

Strategic refinancing opportunities:

  • Refinancing can provide several potential benefits such as reduced interest rates, lower repayments, access to equity, debt consolidation, debt recycling & extended repayment terms and improved cash flow.

The ATO is Escalating Enforcement

The Australian Taxation Office (ATO) has significantly shifted its approach in recent months, becoming far more stringent in its dealings with taxpayers. Where once the ATO was relatively flexible and accommodating, it is now taking a harder stance.

Requests for remission are being declined with increasing frequency (despite the requests meeting Tax Administration Act criteria for remission). Applications for payment arrangements are being subjected to stricter scrutiny, with many being refused outright or only granted after detailed financial information has been provided to justify capacity to pay. Audit activity is also expected to increase, placing further pressure on businesses already carrying tax debt.

The message from the ATO is clear: outstanding debts must either be paid in full or placed under an approved arrangement that is strictly adhered to. Failure to do so will quickly trigger escalated recovery action.

Bottom Line & Essential Reader Takeaways

  • Act now: Consider your options for reducing your ATO debt.
  • Watch the mortgage market: With rate cuts rolling out, homeowners should evaluate whether refinancing or switching lenders can deliver savings or better loan terms.
  • Talk to Zweck Consulting: About how to structure refinancing – especially mixing personal vs. business uses – this can have major implications for deductibility and long-term costs. We work with trusted brokers and advisers to help you find the best approach.

Key EOFY Dates & Deadlines to Watch for

Written by webadmin on . Posted in budgeting, cashflow, News, People and Culture, Tax.

As the End of Financial Year (EOFY) approaches, it’s crucial for both businesses and individuals to keep track of important dates to meet tax obligations, avoid penalties, and make the most of financial planning opportunities. Staying on top of deadlines isn’t just vital for the current financial year — it’s equally important to prepare for the upcoming one.

At Zweck, we’ve compiled a list of essential EOFY dates and key deadlines for this financial year and the next (1 July 2025 – 30 June 2026) to help you plan ahead confidently.

Key Dates for the 2025–26 Financial Year

July 2025:
  • 14 July – Due date for Final Single Touch Payroll (STP) declaration due.
  • 28 July – Superannuation Guarantee contributions (SGC) for the quarter ending 30 June 2025 must be paid to avoid penalties.
August 2025:
  • 1 August – Can start lodging QBCC Financial Reporting.
  • 21 August – Monthly July IAS (PAYG Withholding & PAYG Instalments) return due.
  • 25 August – Quarterly June BAS Return due.
  • 28 August – Taxable Payments Annual Report (TPAR) due.
September 2025:
  • 21 September – Monthly August IAS (PAYG Withholding & PAYG Instalments) return due.
 October 2025:
  • 28 October – Super Guarantee contributions due for the quarter ending 30 September 2025.
  • 28 October – Annual BAS lodgment due.
  • 31 October – Deadline for annual individual income tax return lodgment & deadline for taxpayers who lodged late in the previous year without a lodgement concession or if they are a first-year lodger & for QBCC licensee’s you must lodge MFR reports for licence upgrades.
November 2025:
  • 1 November – Can start lodging QBCC Financial Reporting.
  • 21 November – Monthly October IAS (PAYG Withholding & PAYG Instalments) return due.
  • 25 November – Quarterly September BAS return due.
December 2025:
  • 21 December – Monthly November IAS (PAYG Withholding & PAYG Instalments) return due.
  • 31 December – QBCC Financial Reporting due: Categories 1-7 (turnover >$800k).
 January 2026:
  • 28 January – Super Guarantee contributions due for the quarter ending 31 December 2025.
February 2026:
  • 21 February – Monthly January IAS (PAYG Withholding & PAYG Instalments) return due.
  • 28 February – Quarterly December BAS due.
March 2026:
  • 21 March – Monthly February IAS (PAYG Withholding & PAYG Instalments) return due.
  • 31 March – QBCC Financial Reporting: SC1 & SC2 Categories (Turnover <$800k) due.
April 2026:
  • 28 April – Super Guarantee contributions for the quarter ending 31 March 2026.
May 2026:
  • 15 May – Company income tax returns to be lodged.
  • 20 May – Tax Planning (if required).
  • 21 May – Monthly April IAS (PAYG Withholding & PAYG Instalments) return due.
  • 25 May – Quarterly March BAS return due.
June 2026:
  • 21 June – Monthly May IAS (PAYG Withholding & PAYG Instalments) return due.
  • 30 June – Trust Resolution due & date marks the end of the 2025–26 financial year.
July 2026:
  • 1 July – This date marks the commencement of the 2026–27 financial year.
  • 14 July – STP Payroll.
  • 28 July – Super Guarantee contributions due.

Why These Dates Matter

Missing deadlines can lead to penalties, interest, and missed opportunities for tax optimisation. Staying ahead allows better cash flow management and reduces last-minute pressures.

How Zweck Can Help

Our expert team works closely with you to ensure all your financial obligations are met on time. From lodgement reminders and payroll compliance to strategic tax planning, we guide you through each step of the financial year.

Contact us today to discuss how we can help you stay ahead with your EOFY and ongoing compliance requirements.

Important Update: ATO’s New Approach to Payment Plans

Written by webadmin on . Posted in budgeting, cashflow, News, Tax.

 

Important Update: ATO’s New Approach to Payment Plans

The Australian Taxation Office (ATO) has significantly ramped up its approach to managing overdue tax debts — particularly when it comes to payment plans. Businesses and individuals can no longer assume the ATO will take a lenient or slow-paced approach. The message is clear: proactive communication is essential.

Payment Plans Under Stricter Scrutiny

Over the past year, the ATO has sharpened its focus on debt collection, with a noticeable tightening around the approval and extension of payment plans. We’re seeing more cases where payment plan requests are being declined or where existing arrangements are being cancelled due to missed deadlines or insufficient engagement.

In short, it’s no longer enough to submit a request

and wait. The ATO is expecting more from taxpayers — timely lodgements, realistic repayment proposals, and clear evidence of financial position where relevant.

Get on the Front Foot

If you or your business are facing challenges meeting ATO obligations, the most effective step you can take is to engage early and openly. Acting before a due date passes allows more flexibility in negotiating terms. Once debt becomes overdue or lodgements fall behind, your options narrow quickly.

At Zweck, we work closely with clients to:

  • Engage with the ATO early on your behalf
  • Structure realistic and compliant payment plans
  • Request deferrals or extensions where possible
  • Monitor compliance with existing arrangements

Avoiding or delaying contact with the ATO often leads to penalties, interest, or even legal action — all of which can usually be prevented with proactive planning.

Interest No Longer Deductible from 1 July 2025

Another important change to be aware of: from 1 July 2025, interest charged by the ATO on outstanding tax debts will no longer be tax deductible. This means businesses will no longer receive a tax benefit on General Interest Charges (GIC) — further increasing the real cost of unpaid tax.

For the 2025–26 income year, the GIC rates have also been announced. For the July to September quarter, the GIC annual rate is 10.78%, which equates to a daily rate of approximately 0.0295%. This underscores how costly carrying unpaid tax debt will become under the new rules.

This upcoming change reinforces the need to stay ahead of your obligations. Carrying tax debt will soon become even more expensive, both financially and from a compliance perspective.

Final Thoughts

The ATO’s position is clear — it’s time to take your tax obligations seriously and stay ahead of the curve. If you’re unsure where you stand or need help managing payments, don’t wait until it’s too late. Reach out to the Zweck team to discuss your situation and get the right plan in place.

Is Your Business Ready for FY26?

Written by webadmin on . Posted in budgeting, cashflow, News, Tax.

What FY26 Means for Your Business: Key Changes Incoming

With the 2025–26 financial year just around the corner, now is the time to start preparing your business for the changes ahead. From tightening ATO compliance measures to potential new legislation impacting payroll, FY26 is shaping up to be a year of increased responsibility — and opportunity — for business owners.

Staying Ahead of Compliance

The ATO has signalled a continued focus on timely lodgements, accurate reporting, and early engagement — particularly when it comes to tax debts and payment arrangements. As outlined in recent updates, interest on outstanding ATO debts will no longer be tax deductible from 1 July 2025, increasing the cost of carrying overdue amounts. This change, coupled with higher General Interest Charge (GIC) rates (currently 10.78% annually for Q1 of FY26), means businesses must be more proactive than ever in managing cash flow and compliance.

Same Day Super – What You Need to Know

One of the most significant proposed changes that may impact businesses in FY26 is the introduction of same day superannuation payments. If legislated, this would require employers to pay employees’ superannuation contributions at the same time as wages, rather than quarterly.

While this change is not yet law, it’s expected to have a major operational impact — especially for small businesses. Moving to same day super would require real-time payroll systems, tighter cash flow management, and closer alignment between finance and HR functions.

What this means for your business:
  • Payroll systems may need to be upgraded or reconfigured
  • Payment processes will need to align closely with super clearing houses
  • More frequent outflows could affect weekly or fortnightly cash flow
  • Compliance risk will increase without real-time tracking and automation

It’s important to begin assessing whether your systems and processes can handle this shift, and consider speaking with your accountant or bookkeeper to get ahead of the curve.

Other Considerations for FY26

In addition to ATO changes, there may be updates to:

  • Award wages and super guarantee rates
  • STP (Single Touch Payroll) Phase 2 compliance checks
  • Digital record-keeping requirements
  • Reporting deadlines for small businesses and trusts

Now is the ideal time to conduct a financial health check, review your internal processes, and set up the right support for the new financial year.

How Zweck Can Help

At Zweck, we help businesses prepare for financial year transitions with clarity and confidence. Whether it’s updating your payroll software, reviewing superannuation processes, or navigating new tax rules, our team is here to keep you compliant and in control.

Need help getting ready for FY26?

Contact Zweck today for a tailored EOFY prep session and start the new year strong.

Bendel Case: Landmark Decision on UPEs and Division 7A

Written by webadmin on . Posted in News, Tax.

In recent legal developments, the Full Federal Court of Australia delivered a landmark ruling on 19 February 2025, in the case of Commissioner of Taxation v Bendel [2025] FCAFC 15. This decision has shed light on an important aspect of trust distributions and the implications for Division 7A (Div7A) of the Income Tax Assessment Act 1936 (ITAA 1936).

For businesses and individuals involved with trusts, the key takeaway is that unpaid present entitlements (UPEs) arising from trusts allocating income to corporate beneficiaries, do no, under the circumstances outlined in this case, constitute loans for Div7A purposes.

What is a UPE?

Before diving into the specifics of the Bendel case, let’s define UPE. A UPE arises when a beneficiary of a trust is entitled to a share of the trust’s income, but that income is not immediately distributed in cash. Instead, the entitlement remains unpaid and is often recorded as a liability in the trust’s accounts.

The Bendel Case Overview

The Bendel case involved Gleewin Investments Pty Ltd, a corporate beneficiary of a discretionary trust, which was entitled to income distributions from the trust during the 2013 to 2017 income years. Although income was allocated to Gleewin Investments Pty Ltd, it was not physically paid out. The Australian Taxation Office (ATO) sought to apply Division 7A, maintaining that these UPEs should be treated as loans, potentially triggering adverse tax consequences.

The ruling clarified that a UPE allocated to a corporate beneficiary is not automatically considered a loan under Div7A, even if the amount remains unpaid. This decision has significant implications for businesses and individuals who operate trusts and use corporate beneficiaries to manage income distributions.

The Full Federal Court unanimously dismissed the ATO’s appeal, concluding that:​

  • A “loan” under section 109D(3) of the ITAA 1936 requires an obligation to repay a sum, not merely an obligation to pay.​
  • A UPE represents an obligation to pay, establishing a debtor-creditor relationship, but does not equate to a loan since there’s no obligation to repay an advanced sum.​

The Court emphasized that expanding the definition of “loan” to include UPEs would be inconsistent with the statutory context and could lead to unintended double taxation.

Implications for Your Business

Historically, UPEs were converted to Division 7A loans in Year 2 under the former TR 2010/2 and PS LA 2010/3, as this was the point at which they were considered to provide financial accommodation and therefore constituted loans under common law, triggering Division 7A.

Where such conversions were undertaken in compliance with the law as understood at the time, current legal and specialist opinion is that they cannot now be reversed to UPEs, as the loan conversion has already occurred.

For UPEs arising in the 2024 income year that have not yet been converted into complying Division 7A loans in the 2025 income year, there remains an opportunity to crystallise these UPEs without triggering a loan conversion and, for now, avoid Division 7A consequences.

That said, the ATO has been granted special leave by the High Court to appeal the relevant decision and has issued a Decision Impact Statement indicating its view that Division 7A continues to apply. Even if the appeal is unsuccessful, the ATO has flagged ongoing compliance activity regarding UPEs under section 100A of the ITAA 1936.

Our recommended approach is to crystallize the UPEs for now, defer lodgement of any 2025 income tax returns that may involve non-complying loans in the event the ATO succeeds, and await further expert commentary.

Commissioner of Taxation v Bendel [2025] FCAFC 15 (Published 19 March 2025) | Legal database

Federal Budget 25-26: What It Means for You and Your Business

Written by webadmin on . Posted in News, Tax.

The 2025–26 Federal Budget has landed, with the government continuing its focus on easing cost-of-living pressures, strengthening small business support, and tightening integrity across the tax system. Most changes kick in from 1 July 2025, aligning with the new financial year. However, some measures—like energy bill relief—apply sooner. Now is the time to prepare so you’re ahead of the curve. At Zweck, we’ve reviewed the budget in detail and summarised the key measures for you.

For Households

  1. Stage 3 Personal Income Tax Cuts – Revised but Going Ahead
  • The 19% rate will be reduced to 16%
  • The 32.5% rate will drop to 30% for incomes between $45,000 and $135,000
  • Higher thresholds will apply for the 37% and 45% brackets

These adjustments mean more disposable income for most workers. Whether you’re saving, investing, or just covering everyday expenses, the tax cuts will put more money back into your pay packet from 1 July 2025.

  1. Medicare Levy Thresholds Increased

Thresholds have been raised to reflect wage growth, exempting more low and middle-income earners from the 2% Medicare levy.

  1. $300 Energy Bill Rebate for Every Household

Every household in Australia will receive a $300 electricity rebate, applied automatically in quarterly installments through energy retailers. This is a universal rebate—not means-tested—and is designed to ease the pressure from rising energy costs, especially during peak usage months.

For Small Businesses

  1. $20,000 Instant Asset Write-Off Extended

The government has proposed extending the $20,000 asset write-off to 30 June 2025 for small businesses. This measure is still before Parliament and hasn’t yet been passed into law.  It applies to each individual asset used or installed by 30 June 2026.

  1. Energy Bill Relief Fund

From 1 July to 31 December 2025, eligible households and small businesses will receive $75 per quarter off their electricity bills from 1 July to 31 December—totalling $150 per household.

  1.  Funding for Cybersecurity and Digital Capability

New funding to help small businesses strengthen cybersecurity and upgrade digital systems. With cyber threats on the rise, these incentives help businesses future-proof their operations and remain competitive in a digital economy.

  • Help businesses invest in security upgrades like multi-factor authentication, secure cloud storage, and data protection tools
  • Provide access to cyber health checks and advisory services to assess risks and improve resilience
  • Support the adoption of digital technologies, including e-invoicing, cloud software, customer management platforms, and online services
  • Improve online visibility and customer engagement through digital capability programs

Other Changes Worth Knowing

Tightening of Foreign Resident CGT Rules

Expanding and clarifying Capital Gains Tax (CGT) rules for foreign residents in the 2025–26 Budget. The proposed reforms aim to:

  • Close existing loopholes that allow foreign investors to avoid CGT on Australian assets
  • Clarify the definition of “taxable Australian property”, ensuring a more consistent application of the rules
  • Ensure that foreign investors pay their fair share of tax when disposing of Australian real estate and other relevant interests

These changes ensure that CGT rules are applied more effectively to cross-border transactions. If you have overseas interests or clients who do, these changes may influence decisions around property sales, structuring, and timing.

Managed Investment Trust (MIT) Reform

The Government has announced it will review and tighten tax concessions for Managed Investment Trusts (MITs), with a focus on limiting access for foreign investors. The focus is on tightening eligibility and preventing business income from being misclassified as passive income. This could affect investment structures and distributions for some trusts. It’s important to review trust arrangements before EOFY.

Compliance and Regulatory Updates

ATO Integrity Measures

The ATO will receive additional funding to strengthen tax system integrity, with a focus on:

  • Expanding the Tax Avoidance Taskforce to target high-wealth individuals and complex tax schemes
  • Boosting GST compliance, including identifying under-reporting and fraud
  • Increasing audits of high-risk claims like work-related deductions, rental expenses, and R&D incentives

Regulation of Tax Practitioners

The Government will provide additional funding to the Tax Practitioners Board (TPB) to strengthen regulation and enforce professional and ethical standards across the tax profession. With greater enforcement on the horizon, it’s crucial to work with qualified, transparent, and proactive advisors—like Zweck—to keep your affairs in order.

Need Help Navigating the Changes?

With an election around the corner, much depends on the outcome and direction of the next government. While temporary relief and targeted compliance funding dominate the announcements, deeper tax system reform remains absent. If you have questions about how these announcements affect your personal or business tax planning, please get in touch with our office. We’re here to help you navigate this uncertain landscape with clarity and confidence.

Contact us now to organise a consultation so you’re ready for 1 July and beyond.

How to use forecasts and scenario planning

Written by webadmin on . Posted in Uncategorised.

For centuries, accounting was all about reviewing historic information – but that only told you about the past, not what was going to happen in the future.

If you’re only looking back at past periods and historic numbers, this limits the insights you can achieve for your business. With a backward-looking ideology, it becomes difficult to plan, run through different scenarios or understand the path of the business going forward.

Forecasting changes this. With the right data analysis and forecasting tools, you can project sales, cash, revenue and profits into the future – and get in control of your business.

A forward-looking view of your business journey

Forecasting switches the focus of your financial management. By moving to a forward-looking view of your business journey, you can see further down the road – and that helps to spot any opportunities and avoid common business pitfalls.

Forecasting adds value by:

  • Highlighting the data patterns – a forecasting tool takes your historic data and projects it forward in time. This helps you and your advisers spot patterns, trends, gaps and opportunities, revealing the true ‘story’ behind your business accounts. For example, forecasting may reveal a predicted seasonal slump in the next quarter, allowing you to plan ahead and proactively take action to minimise negative impacts.
  • Giving you a future view of your business – instinctively, business owners will look back at prior periods to assess performance. There’s value to reviewing your historic actuals, of course, but using forecasting helps you to look forward, rather than just backwards. Forecasting is the satnav, showing you the road ahead, rather than the rear-view mirror showing you the road you’ve already travelled.
  • Helping you scenario-plan – with a financial model of your key drivers, combined with accurate forecasting, you can quick answer your burning ‘What if…?’ questions. Forecasting lets you run different scenarios, with different drivers, to see how business decisions may pan out over time. If option B performs better than option A, that’s invaluable information when defining your next strategic move.
  • Making informed, evidence-based decisions – having ‘the full picture’ of combined historic numbers, forecasts and longer-term projections aides your business decision-making. Forecasting gives you solid evidence on which to base your strategy, and helps to red flag any threats that are looming on the horizon – giving you the best possible information to keep your executive team informed and on the ball.
  • A deeper relationship with your accountant – forecasting also helps us to get a far more granular view of your business. This helps to spot potential areas of performance improvement, and to give you the best possible strategic advice, all backed up by solid, empirical data and management information.

Talk to us about the benefits of forecasting

If you want to get in control of the destiny and results of your company, come and talk to us. Forecasting helps you highlight your future threats and opportunities – and create a proactive strategy to improve the performance of your business.

Cash register

Instant asset write-off extended for small businesses

Written by webadmin on . Posted in Tax.

New legislation moving through the Australian Senate will increase the instant asset write-off threshold to $20,000. This change aligns with the 2023–24 income year, providing consistency for small businesses in understanding which new assets can be immediately deducted.

Eligibility Criteria

To be eligible for the instant asset write-off, the following conditions must be met:

  • The asset must be installed or ready to use between 1 July 2024 and 30 June 2025.
  • The asset must cost less than $20,000.
  • The annual aggregated turnover of the business must be less than $10 million.

The $20,000 threshold applies on a per-asset basis, allowing multiple assets to be written off instantly if each asset costs under $20,000.

Assets Over the Threshold

Assets valued at $20,000 or more cannot be immediately deducted. Instead, they can be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.

Next Steps

Small businesses can continue to immediately deduct eligible assets using the instant asset write-off. This amendment is intended to improve cash flow compared to deducting assets in the small business depreciation pool and reduce record-keeping over time.

The provisions preventing small businesses from re-entering the simplified depreciation regime (lockout rules) for five years if they opt out will remain suspended until 30 June 2025.

Please contact our office if you have any queries regarding these announcements.

Cafe_Worker

Why Productivity Matters and What You Can Do About It

Written by webadmin on . Posted in People and Culture, Uncategorised.

Productivity is a term linked to strong economies, successful businesses, and the efficiency of clever staff. If businesses were more efficient, we’d see fewer failures, more jobs, and better incomes for everyone.

According to the Xero Small Business Insights special report in Australia, the most productive industry in 2023 was wholesale trade ($214.20/hour), while hospitality lagged at $40.20/hour. Though productivity dipped across all industries, ten sectors, including manufacturing, agriculture, and construction, outperformed the national average ($100.30). Western Australia was the most productive state ($102.50/hour), with productivity 15% higher than Tasmania ($89.00/hour), the least productive state.

What is Productivity?

Productivity measures how efficiently a business turns inputs into outputs. The more productive you are, the better you turn resources like labour, capital, or materials into products or services you can sell.

Types of Productivity

  1. People Productivity: How much work it takes to deliver products or services to customers, usually measured as hours worked per dollar earned.
  2. Financial Productivity: How well a business monetises its investments in assets like machinery, often measured as the return on capital invested.
  3. Materials Productivity: How much a business spends on materials to generate sales, including inventory and energy.

Why Productivity Matters

More productive businesses get more from less. This boosts their potential to profit, handle inflation or slowdowns, and withstand price competition. Productivity gains are harder to come by nowadays, but digital tools have levelled the playing field, allowing small businesses to compete with larger ones.

How to Increase Productivity

There are four main ways to boost productivity:

  1. Better Tools: Tools amplify efforts. Invest in software or equipment that reduces manual work. For instance, a booking system that integrates with your calendar and payment systems.
  2. Smarter Methods: Continuously review and improve your processes.
  3. Skilled Workers: Invest in training and development.
  4. Entrepreneurship Mindset: Embrace optimisation and innovation.

Increasing Productivity Checklist

  1. Better Tools:
    • List potential investments and their costs.
    • Estimate the return on each investment.
    • Choose the best mix of affordability and impact.
  2. Smarter Methods:
    • Map out and document your work processes.
    • Identify and address friction points.
    • Implement software for repetitive tasks.
    • Align processes with customer preferences.
  3. Skilled Workers:
    • Ensure clear job descriptions and training.
    • Regularly provide and receive feedback.
  4. Entrepreneurship Mindset:
    • Look for scaling opportunities.
    • Stay open to acquisitions.
    • Focus on niche opportunities.
    • Continuously improve supply chains.
    • Hire and empower entrepreneurial staff.

Boosting Productivity is an Attitude

Small businesses can significantly improve productivity by constantly refining processes, investing in tools, and eliminating inefficiencies. With smart investments in teams and technology, the benefits will add up. Efficient businesses experience fewer delays, miscommunications, and wasted efforts, leading to increased satisfaction and profit.

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