Skipping silly season business mistakes

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The silly season didn’t get its name out of nowhere. It’s busy, filled with end of year activities, holiday celebrations, and everything needs to be completed ‘before the break’.

As business advisors, we’ve seen where it can go wrong and how one little mistake can have big consequences. To help your end of year feel like Christmas morning, here are the common holiday mistakes we see and how to avoid them.

1. Gifts come boxed with Fringe Benefits Tax

   Gifts are a great way to say thank you to your team, but not checking what tax implications they could occur first could have you wishing you didn’t add to cart.

   While some gifts can be tax deductible, it’s important to ensure Fringe Benefits Tax (FBT) doesn’t apply. The easiest way to remember if FBT applies to employee gifts is to ask yourself: 

   1. Is this gift over $300 in value?
   2. Could this be considered entertainment?
   3. Could this be seen as an additional benefit on top of (or instead of) salary or wages?

   
   But what about clients or prospective customers? At the time of this article, non-entertainment related gifts for current or former customers and clients may be deductible. So, that sporting event ticket or personalised client gift? That may not be deductible come tax time.

   > Read more about Fringe Benefits Tax

2. The staff party budget was blown, and so too was your tax exemption

   Everyone loves a holiday party, but that good time could come with a tax hangover come 30 June!

   As these celebrations can be seen as entertainment, they can be tricky to navigate and there are specific Fringe Benefits Tax (FBT) rules that could apply.

   Holding the holiday party on a work day with just your employees, on your business premises? You might not pay fringe benefits tax on your food and drinks.

   Going off site to that new local venue, and families are invited? It depends on how much per person you are paying.

   A quick call to your accountant or business advisor can save you a hassle down the business year track.

3. New year, same goals

   You didn’t complete all your goals for the year, so what’s the harm in simply rolling them over and starting again? And again?

   This is an easy trap to fall into, especially when you’re a busy business owner or builder and goals are incomplete. However, if your business strategy is changing, your goals and plans should change with it. Otherwise, you’re working with misaligned projects, targets and goals, impacting not only your business outcomes but team morale.

   Here, it’s as simple as sitting down as a team and reviewing your strategy, plans and goals, and making strategic changes. Not sure how? Our business advisors can step through a strategy planning day with you.

4. The admin is left waiting for you to return

   Administrative tasks and back of house activities are always at the bottom of business owners and builders’ to-do lists. In fact, one in five small business owners say they can’t keep up with financial admin.

   While leaving it for the ‘new year quiet’ or while on holidays might sound like a good idea, the reality is it won’t happen. Getting through these tasks before you go on holiday is also great for business – not to mention your mental health – as you are starting fresh in the new year.

   There could also be tasks you could be delegating to others in your team, could be automated, or strategically outsourced to an expert such as a business advisor.

5. You haven’t planned for the quiet dips or resourcing high

   You might be looking forward to the seasonal quiet or holiday break. But is your bank account and business ready?

   Forecasting what you need now (both from a cash and resourcing perspective) will help you make proactive decisions now, ensuring there are no financial or business surprises. It also ensures your team has what they need to continue business over the break.

   Closing down over the break and resourcing is not a concern? Our business advisors recommend doing a cashflow forecast at a minimum so you know exactly what’s coming in, what’s going out, and any financial gaps you need to prepare for.

   > Signs your cashflow could be in trouble

6. You’re taking a break, but no one knows it

   Letting your customers and clients know about closure dates seems simple but can easily be overlooked in the flurry of December activity. Be proactive and let your customers know:

   • When you’ll be unavailable or closed (and when you return)
   • Who to contact during the holiday break (if required)
   • Updates on outstanding work or projects

   This not only ensures your customers won’t be calling you when you’re enjoying that well-deserved break, but creates a better customer experience and open communication.

7. Your holiday team haven’t got what they need to keep things ticking

   You have your team organised for the break. Rosters are created, project timelines updated, and everything has been communicated. But does your team have the processes, procedures or access they need to do the job?

   This simple oversight can really derail your business in a big way. Especially when it comes to system or site access and the one person you need is away or not contactable.

   Before your regular team go on leave:

   • Make sure process and procedures are up to date
   • Log into systems early to ensure they have the access they need
   • Ensure teams have the physical and virtual access details they need to get on site
   • Check online access to systems, workflows or approvals possible for those working remotely

8. Next year’s planning is next year’s problem

   When you have a list a mile long to get through, it can be tempting to leave planning for the new year. However, leaving it to the last minute can have big impacts, from inefficient budgeting and inventory management to financial losses.

   While b>a planning session with your leadership team or business advisor is advised, a simple end of year business reflection exercise can go a long way. By reflecting on your experiences, actions, outcomes and decisions, you can identify areas of improvement, improve goal setting and decision making, and strengthen your business resilience.