SuperStream is a government initiative which details the way businesses are to pay employee superannuation contributions to superannuation funds. Businesses with 20 or more employees are already required to use the system, with small businesses with 19 or fewer employees needing to put the system in place. The original deadline for small businesses to be ‘Superstreamed’ was June 30, 2016, but the ATO are showing flexibility by extending this deadline to October 28, 2016. From my perspective, I highly recommend you cross over to the new regime as soon as possible as there are productivity and efficiency improvements to be gained.

SuperStream transmits money and information in a consistent format across the super system between employers, funds, service providers and the ATO in a single transaction, even if you deal with multiple super funds. The data is linked to the payment by a unique payment reference number.

How your business becomes SuperStream compliant is your choice. Options include using a compliant payroll system, using a super fund’s online system, using a messaging portal or using a super clearing house like the ATO’s Small Business Super Clearing House (SBSCH). For your information, the ATO’s SBSCH is a free, optional service for small business with 19 or fewer employees.

You don’t need to use SuperStream for contributions to your own self-managed super fund (SMSF) if you are an employee of your family business, or if you are a sole trader and you make personal superannuation contributions to a super fund for yourself. For these types of contributions you just keep using your previous processes.

If you need help getting SuperStream compliant, don’t hesitate to contact us on (03) 9554-3128.

Ross – Virtual/Part-Time CFO

Last week, you completed the last piece of your budget financials for the new financial year, your Cashflow Budget.

Congratulations on completing your 3 months budget creation journey! I hope you have learnt a few things along the way.

You should now have a phased Profit and Loss budget, a budget Balance Sheet and a budget Cashflow Statement.

RESPONSIBILTY AND ACCOUNTABILITY

Now that you have created these budgets for your business, you need to assign responsibility and accountability for components of the budgets to personnel in your organisation. I would suggest the following as an indicative responsibility assignment:-

Profit and Loss Budget

• Sales Budget responsibility – Sales Manager
• Distribution Overheads responsibility – Distribution Manager
• Selling Overheads responsibility – Sales Manager
• Administration Overheads responsibility – Accountant, Finance Manager or Virtual Part-Time CFO
• If you are a manufacturer, your manufacturing budget – including direct materials, direct labour, direct overheads and Production Overheads responsibility – Production Manager
• If you are a distribution company, your cost of sales budget responsibility – Purchasing Manager
• If you are a service entity, your direct cost of services responsibility – Operations Manager.

Balance Sheet Budget

• Accounts Receivable Budget responsibility – Accountant, Finance Manager or Virtual Part-Time CFO
• Inventory – Raw Materials responsibility – Purchasing Manager; Work in Progress and Finished Goods responsibility – Production Manager.
• Accounts Payable Budget responsibility – Accountant, Finance Manager or Virtual Part Time CFO

MEASUREMENT

Once you have assigned responsibility for budget areas, you need to ensure the relevant personnel are accountable for their budget areas, by measuring and reporting actual numbers against the budgets every month. This will require the development of a reporting structure and comparison reports. These reports and numbers should form part of your monthly review meeting focussing on exceptions that need action, explanation or further investigation. Such reports and analysis can be prepared by the Accountant, Finance Manager or Virtual Part Time CFO to ensure independence and impartiality.

SUMMARY

Use this week to assign responsibility for budget targets and develop a reporting and accountability structure so each month you can measure and compare the progress of your actual numbers against your budget numbers. Once you start measuring things, it is amazing how quickly improvement can actually come from the simple measuring process itself, as well as the identification of improvements opportunities.

All the best for a prosperous and successful financial year! As always, if you need some help or guidance, don’t hesitate to call me on (03) 9554-3128.

Next week we will move away from the budget process and onto some new topics to provide a sound foundation for business success.

Ross – Virtual Part-Time CFO