Does the date June 30 make you feel uneasy?
Profit and loss figures getting you down?
You’re not alone.
The end of financial year typically means three things; closing the books, preparing tax returns and a great deal of stress.
As a business owner, I have previously fallen victim to this common business vice, conditioned to fear EOFY with a focus on only profit, loss and taxes. However, just like Swayze did for Baby in that famous Dirty Dancing scene, I’m here to save EOFY.By concentrating on five key tasks, you can take EOFY out of a corner, once and for all.
Were there differences between your forecasted costs and agreed contract costs?
Do your service providers invoice you on an irregular basis?
Examining the cost of external services is key to ensuring there are no financial surprises next EOFY. From your accounting consultant to your cleaning company, taking note of the difference between your forecasted costs vs actual costs for services can assist you in identifying pitfalls in your budget. It will also help you determine where you need to focus your attention in the new financial year.
If you can, talk with your service providers about a flexible, regular payment method, and a yearly scope of works that covers extras. This forward planning can allow you to stop unexpected financial surprises, and you significantly reduce your stress levels.
When we plan the year ahead with our clients, we advise them to factor in potential extras. In the cleaning industry, many companies unknowingly accept seemingly cheaper quotes that do not include emergency cleaning, window cleaning and carpet cleaning. This means that money saved initially, is spent on exorbitant last minute fees and charges.
Do you know what you are liable for when hiring contractors?
Are your contractors fully compliant with Fair work laws?
After Woolworths was held accountable for breaching workplace laws, and the MCG was caught for underpayment of overseas workers, it has become more evident than ever before that we should be checking our supply chains and contract agreements.
This is particularly relevant in our industry, where many of the cheap cleaning companies contract low-skilled and vulnerable workers. When I started Clean Feeling, I knew that we would not be able to compete with the cheap rates charged by these companies. However, in working with a strong local team of qualified and experienced cleaners, our business and clients benefit.
As a business owner, you have the corporate responsibility to ensure there are no sham contracting agreements within your supply chain. Many businesses often assume that as their agreement allows one level of subcontracting fully compliant with Fair work laws, that this covers the entire supply chain. This is not always the case.
Take this time of year to check your supply chain compliance, and ask your contractors provide transparency in proving this. If you’re not sure about how accessorial liability, EOFY is a great time to review the current Fair Work Liability Laws. That way, you are not held accountable for sham contracting, or made to pay employee’s unpaid wages and entitlements if they are indeed contracting illegally.
Do your employees sign an employment agreement?
Does it include provisions for internal and client confidentiality obligations?
What about ownership of intellectual property?
Protecting your business with modern restraint clauses can protect you from being held liable for data breaches. This is critical for all business, not just technological products and services, particularly when it comes to customer data in communication and marketing.
Whether you’re working with contractors, service providers or employees, there is a level of trust you must establish to ensure you build strong relationships and enforce legal boundaries that protect your company assets.
At Clean Feeling, we personally interview and qualify all cleaning and head office staff before employment, as we believe that trust is a key factor in what separates us from other cleaning companies in Mackay. Our cleaners are often in offices after hours, or before opening, so our employee relationships and contract agreements ensure we provide a trustworthy and legally compliant cleaning service for all clients.
If you are based in an office, you can also use this time of year to backup and secure your registration, financial and customer data in a secure off-site location. This can help your business in the event of a natural disaster, which in Mackay is particularly important due to our coastal positioning.
Do you have a clear business plan in place?
Have you accounted for unexpected costs?
Without a plan + scope of work you cannot measure success or handle any unexpected turns that the year may bring. I would highly recommend that as EOFY approaches, you create a document that highlights your requirements and expectations of the year ahead, listing all regular and periodic tasks.
Determining who is responsible for these tasks, then reviewing expectations regularly can give you, as a business owner, peace of mind. Whether these works are to be carried out by contractors or employees, the process of analysis should be the same.
With all our clients, we provide a detailed scope of works, and encourage our clients to catch up with us regularly throughout their contract period. This means we can ensure they are getting the best service, quality and value.
Embracing the firsthand intelligence that EOFY brings, particularly in regard to forward planning and regular reviews of existing agreements, can help your business capitalise upon this stereotypically stressful time of year.
Do you know exactly what you’re legally covered for?
Do you have a copy of your contractor’s public liability insurance?
$20million public liability insurance is the standard recommendation to protect your business from property damage, through to personal injury claims. At Clean Feeling, we always present our clients with a copy of our public liability insurance, not just to reassure them of our professionalism, but to provide a level of transparency and credibility.
If you are currently contracting a commercial or domestic cleaning service, EOFY is the perfect time of year to ask for a copy of contractors’ public liability insurance. When you receive this insurance note, check it’s inclusions. Is your location type included? Mining sites, industrial workshops, shopping centres and public places may incur additional fees for cleaning companies, so you should always check that your location is covered.
In the provision of domestic cleaning services, I have noticed that many of our clients who previously contracted out to sole traders, were unaware of the fact that if your cleaner doesn’t have cover, you’ll likely be held responsible for damages and injury on your property. This is because, for the cleaner, you are classified as an ‘employer’.
EOFY is often misunderstood. put in the corner until it must be done. The five tasks listed above however, can help us to see EOFY as a time to highlight wider opportunities for growth, and determine which areas of the business are holding us back.
If you change your perspective slightly, to see the benefits of the end of financial year, rather than just viewing it as that stressful “Tax time” I do believe you will be able to capitalise on EOFY and stay one step ahead of your competition.
We recommend that you seek independent financial and taxation advice before acting on any information in this article. This is general information only and we haven’t taken into account your objectives or financial situation.