The Banker's Mantra

Harris Black works with many businesses on a daily basis to ensure that they are in control of their finances. In so doing, we are often reminded of the "Banker's Mantra" (Paul Simister - Business Development Advice, 2013):

Turnover Is Vanity, Profit Is Sanity… But Cash Is Reality
Read it, learn it and take it to heart. It contains one of the core secrets to long term business success.

Turnover Is Vanity

Perhaps you don't use the word turnover so please, insert your word… sales revenue, fees receivable, gross income into the sentence "… is vanity."

Your turnover may be a very impressive figure.. HOWEVER this does not always translate to profit. Sales revenue or turnover is not a reliable guide to business profitability.

Turnover can easily go up BUT profit can still go down. So whilst monitoring your turnover is very important to determine if you are growing or contracting, there are other areas of focus which really confirm you are succeeding.

Profit Is Sanity

What you're really in business for is to make a profit… Hopefully a nice, juicy profit that increases year-on-year.

It's essential to understand things like:

  • Your Break Even Point;
  • Your Gross Profit Margin; and
  • Your Overhead Cost 

These then determine the turnover you need to run a profitable business.

If you plan to sell your business within the next five years, you need to give profit a particularly high focus as most businesses are sold on a multiple of profits.

Profitability is your reward for working hard and taking on the risk of being in business – working for no profit is unrewarding, exhausting and stressful.

No wonder "Profit is Sanity".

Cash Is Reality

The calculation of profit is based on various assumptions and judgements.

But the cash in the bank is fact.. "Cash Is Reality".

In the end, cash is what really matters to businesses…. If you have cash, you have options and we all know the saying "Cash is King"… If you don't have cash, you have problems.

No cash = No business.

Profit Does Not Equal Cash

There are many reasons profit does not equal cash. We have listed a few key of these below:

  • Working Capital - Debtors (people who owe you money), Creditors (people to whom you owe money) and Stock… Whilst they are recorded in the profit and loss when an invoice is sent or received, the cash actually changes hands at a later date;
  • Loan Repayments – Loan repayments are not recorded on the profit and loss at all… But you will certainly come unstuck if you don't meet your repayments with cash;
  • GST – Again not recorded on the Profit and Loss… and GST can build up to a substantial amount each quarter;
  • PAYGW, Super and Other Employment Costs – Again whilst they may have hit the profit and loss, they don't hit the bank account until sometime later; and
  • Asset Purchases – You may have paid the cash, but the cost only gets expensed over time in the profit and loss.

So Where to From Here?

Focus on delighting customers but…

  • Think Profit.
  • Think Cash. 

Take control of your business and…

  • know what your cash flow will look like in the months ahead;
  • know your Break Even point, GP Margin and Overheads;
  • know what your profit should be at the end of the year;
  • know the revenue you need to hit each month to reap the rewards you deserve;
  • know the early warning signs that your business is struggling; and
  • know the impact of a business decision on your cash and profit before you make it.

Do you want to take control of your business success?

Contact your Harris Black team member…
We have the skills, knowledge and energy to help.

Brentnalls Conference 
Harris Black is a key participant in a network of nationally affiliated independent chartered accounting firms called the Brentnalls Group. The 'Brentnalls Edge' is a unique way of approaching business that centres around creative thinking, strategic planning and goal setting.

Bi-annually Harris Black get together with the Directors and Managers of our affiliates from New South Wales, South Australia, Victoria, Western Australia and New Zealand to network, compare strategies and consider ways in which we can develop procedures to better service our clients.

In October Harris Black hosted the bi-annual Brentnalls Affiliation Conference at Sheraton Marina Mirage Gold Coast.

Harris Black's Top 15

Christmas is just around the corner and for this month's edition of Harris Black's Top 15 we have focused on our favourite festive Christmas dishes. Here are some of Team Harris Black's favourites:   

  1. Roast Turkey with Cranberry Sauce and Gravy;
  2. Fruit Balls;
  3. Ferrero Rocher Mouse;
  4. White Christmas;
  5. Prawn and Mango Salad with Lime Aioli; 
  6. Cold Turkey Sandwich;
  7. Rocky Road;
  8. Rum Balls;
  9. Pavlova;
  10. Christmas Pudding;
  11. Double Smoked Ham;
  12. Caramel Flan;
  13. Honey Hickory Ham;
  14. Lemon Meringue; and
  15. Embutido.


Avoiding Mindless Office Habits

The worst part about bad habits picked up at the office is the fact that many employees don't even realise they are doing them.

Work life can often introduce a range of bad habits that can take a serious toll on a person's health. But it is never too late to change. Being aware of what these habits are and thinking of ways to avoid them can improve a person's mental and physical health. Here are some common mindless habits that many employees may have without even realising.

Leaning Your Face In Your Hands

Even though it may be a comfortable position, touching your face excessively is an enemy to good skin care and hygiene. Regularly touching your face can make you skin more likely to break out since you are spreading germs or other bacteria from your hands. Always try to sit up straight to avoid the temptation to do this. If that's too hard, make sure you keep your hands nice and clean by washing them regularly.


Bad posture can result in bad health. Having poor posture while staring at some form of technology can strain your upper body, which can lead to neck and shoulder pain. Slouching can also negatively influence your mood. Just like the point above, make a mental note to always try and sit up straight.

Sitting All Day

If you haven't already heard, sitting is considered to be 'the new smoking'. This isn't that great for those who work at a desk for eight hours a day. Sedentary lifestyles increase the risk of having diabetes and heart disease, and it can also hurt your back. Try and move around as often as you can in the office. Perhaps go for a short walk every so often, use a standing desk if possible, or even engage in some yoga to undo any damage received from sitting at a desk all day.

SMSF Trustees Warned To Plan For Cognitive Decline 

The ATO has highlighted the issue of cognitive decline, noting that dementia is on the rise and that it is important for trustees of self-managed super funds (SMSFs) to have plans to ensure that financial matters will be effectively managed, if and when trustees no longer have the capacity to manage their funds.

"SMSFs are in reality usually managed by one trustee and require a high level of financial decision-making. While many trustees remain perfectly capable of effectively managing their financial affairs well past retirement age, there is a risk that some with diminished capacity to effectively manage their fund may nevertheless continue to do so. Most don't have a plan for what to do if they get to this point", said Kasey Macfarlane, ATO Assistant Commissioner, SMSF Segment, Superannuation.

In this regard, Ms Macfarlane said, it was essential that trustees "agree in advance about decision points and exit decisions, to have a will and appoint an enduring guardian and power of attorney".

Student Loan Debt Recovery From Overseas 

As part of the 2015 Federal Budget, the Government announced that Australians living and working overseas who have a Higher Education Loan Program (HELP) or Trade Support Loan (TSL) debt would soon be required to repay that debt in line with the obligations that apply for debtors who live and work in Australia.

The repayment obligations are expected to apply from 1 July 2017, based on income earned in the 2016–2017 financial year. The repayment obligations would only commence once the individual's income reached the minimum repayment threshold. People heading overseas for more than six months would be required to register with the ATO, while those already overseas would have until 1 July 2017 to register.

TIP: The Government is intending to facilitate reciprocal arrangements with foreign governments. That is, the Government intends to share details of individuals to allow foreign governments to identify if their citizens with student loan debts are living and working here in Australia. At this stage New Zealand and the UK have been flagged for reciprocal arrangements.

TIP: Individuals can make voluntary repayments at any time to reduce their HELP debts. Currently, if you make a voluntary HELP repayment of $500 or more, you get a 5% bonus. If your HELP debt balance is less than $500 and you make a voluntary repayment to pay out the debt, you also get a 5% bonus. Voluntary payments are in addition to compulsory repayments. Any voluntary repayments you make are not tax deductible.

Unbundling Phone And Internet Expense Claims For Work Purposes

Individuals can claim deductions for mobile, home phone and internet expenses that have been incurred for work purposes. However, correct apportionment for work use is a key issue. According to the ATO, as there are many different types of plans available, taxpayers need to determine their work use using a reasonable basis.

For example, phone and internet services are often bundled. When a taxpayer is claiming deductions for work-related use of one or more services, they need to apportion their costs based on their work use for each service. If other household members also use the services, the taxpayer needs to take into account that use in their calculations.

TIP: If the taxpayer has a bundled plan, the ATO says they can identify their work use for each service over a four-week representative period during the income year. This will allow the taxpayer to determine their pattern of work use, which can then be applied to the full year. Please contact our office for assistance.

Tax Debt Release Application Refused 

The Administrative Appeals Tribunal (AAT) has refused a couple's application to be released from their tax debts after finding the couple (the taxpayers) would not suffer serious hardship if they were required to satisfy the liability. The tax debt the taxpayers sought to have released amounted to some $25,000. The taxpayers argued they should be released from the tax debts because their financial position was due to "serious family difficulties and problems", which had distracted them from their tax affairs.

Although the AAT was sympathetic towards to the taxpayers, it concluded they had not discharged the onus of proving that they would suffer serious hardship if they were required to pay the relevant tax debts. The AAT reached this conclusion after calculating the taypayers' fortnightly income and expenses. In this regard, the AAT noted the taxpayers were making more than the required minimum mortgage repayments and could draw down on their home loan.

Even if it were a case of serious hardship, the AAT said, it would not exercise the discretion to waive the debt. Among other things, the AAT noted that one of the taxpayers was a beneficiary in the estate of her mother and stood to receive approximately $200,000.

TIP: Serious hardship exists when payment of a tax debt would leave you unable to provide for basic living necessities for yourself and dependants. The Tax Commissioner has the discretion to release you from eligible tax debts; however, even if the Commissioner is satisfied that serious hardship would result from payment of the tax debt, he is not obliged to exercise the discretion in your favour.

ATO Targeting Ride-Sourcing Drivers And eBay Online Sellers

The ATO has announced that it will acquiring details of ride-sourcing drivers from ride-sourcing facilitators. The data will be matched electronically with ATO data holdings to identify people. The ATO said the aim of the data-match is to identify taxpayers that can be provided with tailored information to help them meet their tax obligations, or to ensure their compliance with the tax law. The ATO estimated that records relating to between 10,000 and 15,000 individuals will be matched.

TIP: The ATO has affirmed that people who provide ride-sourcing services are providing "taxi travel" under the GST law. The ATO has previously advised that it expects all drivers involved in providing ride-sourcing services to be registered for goods and services tax (GST). Please contact our office for information and assistance.

The ATO is also acquiring online selling data from eBay relating to registrants who sold goods and services to a value of $10,000 or more during the period 1 July 2014 to 30 June 2015. The data requested includes information that will enable the ATO to match online selling accounts to taxpayers, including names, addresses and contact information, as well as information on the number and value of transactions processed for each online selling account. It is estimated that records relating to between 15,000 and 25,000 individuals will be matched.

Important Tax Dates

1 December 2015
Income tax for taxable large/medium taxpayers, companies and super funds – due date for payment. Lodgement of return due 15 January 2016. 
Income tax for the taxable head company of a consolidated group with a member deemed to be a large/medium taxpayer in the latest year lodged – due date for payment. Lodgement of return due 15 January 2016. 
Income tax for companies and super funds when lodgment of the tax return was due 31 October 2015 – due date for payment.

21 December 2015

November 2015 monthly activity statement – due date for lodging and paying. 

Office Closure 

Please note our office will be closed from 11:00am Wednesday 23 December 2015 and re-open for business at 8:30am Monday 4 January 2016. 
We wish you a safe and happy Christmas and a prosperous New Year.

About Us






Since 1994, Harris Black has been providing accounting and advisory services to our valued clients to help them achieve their business and personal wealth goals.


National Affiliation

Harris Black is a key participant in a network of nationally affiliated independent chartered accounting firms called the Brentnalls Group.


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Level 16, 333 Ann Street
Brisbane, QLD 4000 
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P: (07) 3032 0200
F: (07) 3032 0201