nuwaru
  • Home
  • Our services
  • Our People
  • Find World Class Talent
  • Join our talent platform
  • Blog
  • Contact
  • Privacy Policy

News & updates

EOFY planning for small business

30/6/2020

0 Comments

 
​It’s fair to say, the 2020 financial year has been an interesting journey for most, with added complexities from the bushfires, floods and COVID-19.
 
To help with year end planning, Ben Wong our small business specialist has listed the high level touch points that need to be considered.  

​If you need any help, please get in contact with Ben at ben.wong@nuwaru.com
Picture
Picture
Picture
0 Comments

Due diligence in the New Normal

9/6/2020

0 Comments

 
written by: Jonathan Dunlop

Focused and thorough due diligence has always been a critical component in the proper evaluation of a target business.  

Properly done, good due diligence identifies the risks and opportunities in a target business, flushes out key matters to be negotiated, informs deal value and enables effective post acquisition planning.  
Picture
​​The new normal is often used to refer to a post pandemic world, however it really is much more than that. ​
 As well as being a major global health issue, the pandemic has accelerated and amplified collective awareness of issues of concern that have been with us for some time.  In particular, geo-political tensions, breakdown of global systems, economic inequality, racial inequality and climate change, to name but a few.
​
In the new normal, the business environment is changing at an unprecedented pace, businesses are responding rapidly and, for those considering making investments, the importance of doing thorough due diligence has never been greater.  

Businesses are operating in an environment that is changing quickly

The changes we are seeing in the business environment include:
  • more volatility, with higher peaks and lower troughs, over extended timeframes;
  • local goods and services being preferred over those from other parts of the world;
  • increasing preference for contact free commerce;
  • new government regulation, including workplace health and safety, local procurement incentivisation and taxation stimulus; and
  • greater levels of scrutiny of corporate purpose and activity.

Businesses are reshaping for success at high speed

There is no question that in the new normal, customer behaviours will be different.  Some industries will be compelled to restructure.  Market positions will shift drastically.  Businesses that are taking action now will be those that come out on top.
​
Many business leaders have publicly discussed the desire to preserve the perceived benefits arising from the new ways of working established during the pandemic lockdown, including flattening of management structures, flexibility in responding to clients and rapid decision making.  These leaders are already reshaping their businesses to be successful in the new normal:  
  • renewing the focus on revenue generation, recognising it is fundamental; 
  • building new partner networks to facilitate identification, capture and delivery of business opportunities;
  • reviewing operations, including workforce flexibility, supply chain diversification and value chain digitisation and automation; 
  • reducing organisational complexity by eliminating the bureaucratic middle and shifting cultures to be learning and innovation rich; 
  • driving towards real time information to support rapid decision making, investing in data, internet of things and artificial intelligence; and 
  • demanding greater cost transparency to enable stronger cost management, including turning costs previously considered as fixed into variable costs through outsourcing.  

Robust due diligence is more essential than ever before

In a well conducted due diligence the historical and prospective performance of a target business are closely assessed and an inside looking out perspective is as important as an outside looking in perspective.  

Business performance in the new normal may differ drastically from past performance.  Understanding past performance remains important.  However, it is much more important to identify what will change in the external environment and understand how the target business needs to respond. 

In every extended industry value chain, ultimately at one end there is a consumer, a person.  Understanding whether and how that consumer’s buying behaviour is changing is vital to developing a view about the size and growth rates of the (possibly intermediate) market that the target business sells to.  

Extended industry value chain analysis can assist with understanding how the business shifts arising from the new normal might manifest.  These are likely to be significant for many industries and for the futures of businesses in those industries.

​Changes in competitive landscapes require more analysis.  Some companies will be acting quickly and have the cash reserves to weather a downturn, or chase new opportunities, or invest in change. Others will be slow to respond or cash strapped or both.  Businesses that were previously dominant in their markets may be usurped by smaller, more nimble players.

Inside target businesses, transformation will be happening.  Evaluating whether the changes are the right ones in the right timeframe, and whether management has the implementation capability required, can only be done after developing a deeply considered view about the external environment.  

Even a thorough evaluation of the likely shifts in the external environment and how the target business is responding will not provide a crystal-clear picture.  Sensitivity analysis is useful and should be used.  Scenario analysis is even better, particularly if likelihood assessments can be assigned to base, worst and best case scenarios.  
​
Doing a deal well requires a robust due diligence.  As we move into the new normal, this has never been truer.  
0 Comments

These Taxing Times - COVID-19 tax planning

14/4/2020

3 Comments

 
Picture
In the past couple of weeks most of the tax discussion has been dominated by the raft of stimulus measures that are being released, seemingly daily, by the Federal and State Governments.  

Staying on top of the various stimulus measures and maximising the available benefits for your business and your employees is critical.  The immediate challenges of the COVID-19 business crisis has meant a somewhat reactionary approach is necessary (practically nobody saw this coming) and the stimulus measures have been carefully targeted by the Government to help business:
  1. Resolve key workforce management challenges (JobKeeper payment and Supporting apprentices and trainees)
  2. Address near term cash-management challenges and business resilience (Cash flow support for small and medium business, Instant asset write-off, Accelerated Depreciation, Deferrals for tax payments and Remission of interest and penalties).

But… you should start “planning ahead” now

Looking beyond the here and now, you need to be planning for a return to normal business, although “normal” may be different for some time or indeed forever.  It is important to reimagine what the next normal will look like:
  • Will you be as profitable as you were before and what does this mean for your tax payments and tax attributes?
  • What shifts will emerge in your capital and funding structures, the supply change or customer base and what new transactions will emerge as a result?
  • What regulatory changes will emerge in the tax landscape to pay for the Federal Government’s debt and deficit?
In all the uncertainty that COVID-19 has brought upon us, the one thing that is certain will be the ongoing shifts in the regulatory and competitive environments during and post COVID-19.  Businesses that can anticipate these changes and plan ahead will thrive.

The key to any planning is tax forecasting

Business forecasting is critical when confronting uncertainty, as it gives you a clear base line to assess alternative outcomes.  Most businesses should be currently reviewing financial assumptions and producing new forecasts.  It is necessarily an ongoing process and your tax forecasts should work in parallel.

A good tax forecast model is more than multiplying accounting profit by 30% and assuming four equal tax instalments.  Perhaps this is a reasonable approximate, but it does not tell you the story that is important to your business.  

A good tax forecast model forecasts the key risks and tax attributes of a business.  It should forecast and assess the following:
  • The tax impact of key tax adjustments – known and expected permanent and timing adjustments and their impact on taxable income and tax payments
 
  • Likely/potential shocks or transactions – further significant drops in revenue (10%, 20% or more from the base line forecasts), sale and lease backs, asset write downs, factoring of debt receivables  
 
  • Tax payments - including calculation of instalment rates, understanding the lag in tax instalments as compared to current performance (thereby showing the potential triggers for varying instalments) 
 
  • Franking credits – impact of changes in dividend and capital management policies, at what point will you be able to consistently frank dividends again, and are you likely to be in a franking deficit position because of recently paid franked dividends
 
  • Thin capitalisation - impact of new debt, asset write downs, impact ongoing losses will have on the net asset position 
 
  • Tax loss usage - at what point will losses be fully utilised, what impact will capital raises have on the continuity of ownership test and what impact will new transactions and changes in your business have on the same business test

​Appropriate forecasting of key tax attributes and risks enables you to understand what drives the numbers and identify what the trigger points are for key decision making.  

Such a strategic approach not only manages tax risk, it ensures that when the right opportunities present themselves it is more likely that you are able to capitalise on them to drive business value through tax outcomes, and be ready for a post COVID-19 world
3 Comments

Talent platform

3/4/2020

0 Comments

 
0 Comments

Client update session

3/4/2020

0 Comments

 
Some actions shots from our recent client session where we updated on our new strategy, new name, vision and mission and the general expansion of our business over the last year. We also had some really insightful and fun tax update trivia and as always some great conversations over pizza and a drink. Thanks all to those in attendance and our dedicated team at Nuwaru who presented and worked to bring the session to life.
0 Comments

Training

1/4/2020

0 Comments

 
A snapshot of our monthly training at Nuwaru and a very big thank you to Shane Peters for presenting on some of the recent developments in the payroll tax space, including the recent Optical Superstores case.

If you are interested in joining the team at Nuwaru or would like to talk with one of our specialist tax or accounting partners please reach out to
Mark Oh or myself.
Picture
0 Comments

True & fair view

31/3/2020

0 Comments

 
Congratulations to our own William Xu, who has co-authored a paper entitled “The true and fair view: exploring how managers, directors and auditors engage in practice", with Dr Matthew Egan from the University of Sydney Business School. The paper has been formally published in Accounting Forum, an international journal in accounting and business.

To find out more on the paper, please navigate to this address:
https://lnkd.in/gjRREgh

If you'd like to benefit from William's expertise on this or other accounting matters, reach out to William Xu or Mark Oh.
Picture
0 Comments

Open for business - as usual

30/3/2020

0 Comments

 
In these unprecedented times, we wanted to give you some assurance that Nuwaru is doing, and will continue to do, everything possible to protect our clients. Our aim is to ensure that we ensure the good health of ourselves and our clients at this time, and still continue to service clients who may be needing our services.

As you know, we have always operated from virtual offices, which means that we all operate from our homes and not in a typical workplace environment. In addition, we utilise technology such as Microsoft Teams and cloud based servers to interact with each other. This means that there should be no disruption to our service to you, and we remain “open for business”.

Should you require a meeting with us, we will be flexible to your needs. Should you require a face-to-face meeting, we will observe social distancing (no handshakes and physical separation) and are able to meet. Alternatively, we can easily and effectively also meet utilising our video conference facilities. We encourage you to continue to contact us should your business needs arise. Please stay safe, and Nuwaru will continue to support you through these times.

​Sincerely, The team at Nuwaru


#openforbusiness #wfh #newtax #cfos #tax #staysafe

0 Comments

Follow us on twitter

30/3/2020

0 Comments

 
We've moved into the Noughties ... and are now on Twitter! Find and follow our Twitter handle @nuwaru_nuwaru - we are still working on building our profile and look forward to connecting and engaging with all our new followers!
0 Comments

Finalist in the Client Choice awards

30/3/2020

0 Comments

 
Nuwaru is very proud to have been selected as a finalist in the Client Choice Awards for the Professional Services Startup of the Year. Thanks to all our clients who have supported us and continue to support us on our journey, the entire Nuwaru team, beaton and the The Australian Financial Review (see page 21 of todays AFR for the announcement).
Picture
0 Comments
    View my profile on LinkedIn

    Author

    The Nuwaru Team

    Archives

    June 2020
    April 2020
    March 2020

    Categories

    All

    RSS Feed

    subscribe to Nuwaru

Submit
  • Home
  • Our services
  • Our People
  • Find World Class Talent
  • Join our talent platform
  • Blog
  • Contact
  • Privacy Policy