Including a Finance Option in your quotes to increase sales and margins

Let me start off by saying that most clients will ultimately finance the equipment they buy. Understanding this presents an excellent opportunity for suppliers to offer finance as a function of their sales process. In doing this, suppliers can reap significant rewards both in increased sales as well as margins on those sales. To explain this in more detail the following is relevant Increased sales. This formula is relevant whether the asset is $5,000, $50,000 for $500,000. For the sake of the exercise we will focus on a $50,000 asset. … [Read more…]

It’s the leftover not the turnover that is most important

If a new customer paid you $8000 in return for one hour of your time, would you be willing to do that work? There would be very few people who would say no. Similarly, if you could save $8000 in expenses for the same one hour of your time, would you be just as keen to do that? $8,000 is the saving on a $300,000 truck if you manage to obtain finance at an interest rate which was 1% less than you were initially offered. Unlike home loans, Truck and Equipment Finance … [Read more…]

Finance – It’s more about the relationship

As any business owner in a capital intensive industry would know, finance plays a significant role in their business. It is also true that finance needs to be competitive as it is a significant cost and a 1% saving in the interest cost on the finance of a $500,000 asset will save around $10,000 on a five year term & these savings can be obtained where business owners engage with the right finance provider. Once this is achieved, then it is all about relationship. Business owners have their lives made … [Read more…]

How To Calculate The Cost Of Delaying An ERP Implementation

It’s time to implement – disruptions, risks, conflicting priorities aside, how do you calculate the cost of delaying an ERP implementation? And ensure that the ERP project is back on the priority list? While there are several ways to calculate the cost of delay, a simple calculation that you can use is to apply projected improvements to your own financials such as; Revenue improvements of 2% – 10% Gross Margin 1% – 5%* For example, with a revenue of $100M you have the Annual Improvement Opportunity of between $2M and … [Read more…]

Prepay and pooling offset

Having recently written an article about the very significant increases in depreciation (up to 30% under the simplified tax system) now available to larger companies with an annual turnover of up to $10 million, there are two additional aspects which provide further benefits. At the risk of sounding like Tim from a Demtel commercial “but wait there’s more”, there actually is! Depreciation offset rules Under the pooling provisions within the simplified depreciation system ALL assets sit in this pool. If an asset which has been depreciated to say $100,000 (as … [Read more…]

Accelerated Depreciation, the gift for companies with a turnover of up to $10million

Although much publicity after the 2016 & 2017 budgets surrounded the ability for larger businesses to claim 100% depreciation on assets purchased of less than $20,000 through the reclassification of small business to incorporate companies with a turnover of up to $10million, this is “small change” compared to what has now become available to those companies under the Simplified Depreciation Rules. See link: Simpler depreciation for small business Under the Simplified Depreciation Rules, company owners can actively elect to place all of their assets in a pool for depreciation purposes … [Read more…]

Taking control of your future

Business growth requires a solid foundation which is built on a solid, well thought out risk management system. When you minimise your risks, you reduce exposure to losses and maximise profits.The single most important thing an SME can do to minimise risk is to establish a risk management plan that identifies risks & nominates processes to deal with them. The list of business risks can be extensive but can be categorised as: Regulatory Risk Market Risk Environmental Risk Credit Risk. As a specialist in Credit Facilitation to the Drilling sector, … [Read more…]

Equipment finance: Are you getting a tax deduction for every $ you spend?

There are three common ways to finance machinery but only one will deliver a tax deduction for the full amount of the monthly payment. Commercial Hire Purchase (CHP) and Chattel Mortgage will typically only deliver a tax deduction of 55 cents to 65 cents for every $1 you spend in the monthly finance payments you make. To put this in more clear terms, when you finance $100,000 over a five year term you will spend around $115,000 including interest. Of that $115,000, you will typically only be able to claim … [Read more…]

Getting finance with your first machine

With many sectors experiencing boom times for work, we are seeing an increasing number of new businesses commencing. Sydney, especially in the civil & trade related areas is a great example. Sydney currently represents a once-in-a-lifetime opportunity for new companies to commence as there is such a significant amount of work available. We are seeing these new companies start in many forms. Whether it’s a valued employee being given an opportunity to buy a piece of machinery and dry hire that back to their employer while they are still working … [Read more…]

Equipment finance accessed as easily as fuel

Finance! An important fuel of industry, so is there a way to easily fill up whilst getting a good price at the bowser? In today’s business environment, the vast majority of companies live in a world where the prices that they charge for their goods and services is very much influenced by pricing pressure of the competitors in their market. Fuel prices is just one example and believe it or not, so is finance. Equipment and vehicle finance is a heavily contested space with a dozen or so banks and financiers … [Read more…]