Review your business expenses - and save
Binghay Co • April 1, 2024
Running a business costs money. There are always costs, overheads and supplier bills that mount up – and these expenses will gradually chip away at your cash position, making it more difficult to grow and make a profit.
So, what can you do to reduce your spend levels? And what impact will this have on your overall margins, profits and ability to fund the next stage in your business journey?
Getting proactive with your spend management
Spend management is all about getting in control of your expenses – and, where possible, aiming to reduce the level of costs and overheads that you incur as a company.
Excessive spending eats into your cashflow, reduces your profit margins and stops you from achieving the profits that you’re capable of as a business. So if you can get proactive with your spend management, you can actually make your company a far more financially productive enterprise – and that’s great for your overall business health.
So, what can you do to reduce spend and slim down your company expenses?
Here are some key ways to reduce expenses:
- Reduce your overheads – your overheads are the unavoidable costs of running your business, producing your products or supplying your services. If you have bricks and mortar premises, these overheads will include rental payments, utility bills and the cost of paying your staff. Drill down into the numbers and see where there are opportunities to reduce these overhead costs. That could mean moving to smaller premises, or reducing the size of your workforce, to reduce payroll expenditure.
- Put limits on staff expenses – if your employees can claim expenses, or buy raw materials and equipment with the company’s money, these costs can soon start to rack up. It’s a good idea to put a spending limit in place, so each staff member can only spend up to an agreed amount. Having a clear expenses policy helps, as will training up your staff in good spend management techniques. Expenses cards or expense managment software will allow you to quickly set spend limits, track expenses and pull your expenses data through to your cloud accounting platform for processing.
- Look for cheaper suppliers – if you can reduce your supplier costs, this will go a long way to bringing down your overall spend. If you’ve been with certain key suppliers for years, look around for new quotes, look at current market prices and see if you can negotiate better deals. And if your old suppliers aren’t flexible enough, try swapping to newer, more eager suppliers who will be willing to meet you in the middle on price.
- Make your operations leaner – the bigger your operational costs are, the less margin you’ll make on your end products and services. One way to resolve this is to aim for a ‘lean approach’, paring back your staff, resources and operational complexity to the bare minimum. By making the business as lean as possible, whilst still delivering the same output, you keep your revenue stable, but reduce the spend level that’s eating into your cost of goods sold (COGS). The smaller your COGS, the more profit you make on each unit or sale – and that means better cashflow, more working capital and bigger profits.
- Explore tax reliefs – you might assume that tax costs are an unavoidable expense when running your business, but it’s worth exploring which tax reliefs, grants or other business benefits you may benefit from. For example, research and development (R&D) tax credits that help cut your corporation tax expenses if you can demonstrate that you’re involved in innovation and groundbreaking R&D within your industry or specialism.
Talk to us about improving your spend management
If you’d like to get in control of your expenses, we’d love to chat. We’ll review your current costs and will highlight the key areas where expenses can be cut. Then we’ll help you formulate a proactive spend management programme, to reduce your unnecessary spending.
If you want to learn more about this topic and how we can help your business, contact us to set up a FREE consultation so we can get started.
Binghay & Co are Accountants & Business Advisors located in Docklands, Melbourne.
From 1 July 2026, thousands more businesses—including accounting and professional services firms - are now regulated under Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws. This includes newly regulated sectors such as accounting, real estate, conveyancing, legal services, as well as dealers in precious stones and metals.Under these new laws, such businesses must meet additional obligations, including: - implementing AML/CTF programs, - conducting customer due diligence, - reporting suspicious matters, and - keeping relevant records. Are all accounting services now regulated? In short, no. Only some services provided by accountants are considered regulated services (known as designated services). Some examples of when the AML/CTF regulations may now apply include when an accountancy firm: - helps create or restructure a company, - assists in the planning or execution of a transaction to sell, buy, or transfer a company, - receives, holds, controls or manages a client’s money to help plan or execute a transaction, - provides a registered office or principal place of business address. This list isn’t exhaustive. For a full list of designated services, refer to AUSTRAC’s website.As a general rule, general tax return preparation, bookkeeping, and payroll services are not considered designated services. What do these changes mean? Some of our onboarding and engagement processes may look a little different from 1 July, and we may have some additional questions or require extra documentation before we start to provide a designated service. These changes are necessary for us to remain compliant with AML/CTF laws, no matter how long we’ve worked with a client. If you have any questions about these changes, as ever, please feel free to get in touch.
In just a few weeks, Payday Super will finally go live. From 1 July 2026, quarterly super contributions for employees will end. Instead, employees’ super will need to be paid at the same time as their salary and wages, with payments typically due in employees’ super accounts within seven business days after payday. But with such a big change on the horizon, employers need to know the process for settling their employees’ super obligations for the quarter ending 30 June 2026, and how to smoothly transition to the new Payday Super rules from 1 July 2026. Settling super for the quarter ended 30 June 2026 The quarter ended 30 June 2026 is the last period for which the current quarterly super payment rules apply. Employers will need to calculate their employees’ super based on their ordinary time earnings and pay that amount in full, on time, and to the correct fund by 28 July 2026. If an employer misses the 28 July deadline, a super guarantee charge (SGC) statement will need to be filed and any SGC paid for the quarter ended 30 June. Note that the late payment offset is not available for this final quarterly payment. Crucially, keep in mind that any super payments received on or after 29 July will be applied under the new Payday Super rules, even if the employer intended these payments to be made for any super owed for the June quarter. Running payroll under Payday Super From 1 July 2026, Payday Super is in effect, with super guarantee payments based on an employee’s qualifying earnings from 1 July 2026 (even if the work that earned that pay was done before 1 July). Under Payday Super, super guarantee payments should generally arrive within an employee’s super account within seven business days after payday (there are times when this deadline is longer, for example in the case of a new hire). Be aware though, any contributions received into an employee’s fund on or before 28 July will actually reduce any super owing for the quarter to 30 June 2026 in the first instance. Once super for the June quarter has been settled, any remaining contributions will then be counted towards the amount due under Payday Super. While this is an important quirk in the rules, the reality is that if an employer pays the correct amount for both their June quarter and first Payday Super payment, then both sets of contributions will be made on time, and there won’t be any risk of incurring penalties for late payment. Ready for Payday Super? Do you have any last-minute questions about Payday Super, or worried about how to handle the changeover period? Speak to a member of our team today – we’d be happy to help.
On Tuesday, 12 May 2026, Treasurer Jim Chalmers delivered the ‘most important and ambitious Budget in decades’. Certainly, the 2026-27 Federal Budget was ambitious, announcing significant reforms to capital gains tax and negative gearing in a bid to support home ownership and improve the fairness of the tax system. Outside of those headline changes, targeted cost-of-living support was announced for Australian workers, including a $250 Working Australians Tax Offset, while businesses also received some relief thanks to the $20,000 instant asset write-off being made permanent, alongside loss relief reforms for companies. Key Budget tax announcements Capital gains tax reform From 1 July 2027, the 50% capital gains tax discount (which was introduced back in 1999) will be replaced by cost base indexation for assets held for more than 12 months, with a 30% minimum tax imposed on most net capital gains. All CGT assets – including pre-1985 CGT assets – held by individuals, trusts and partnerships are affected by these changes. However, transitional arrangements mean the reforms only apply to gains accruing on or after 1 July 2027. Gains on pre-1985 assets accrued before 1 July 2027 will remain CGT exempt. Investors in new residential properties will be able to choose either the 50% CGT discount, or cost base indexation and the minimum tax. Negative gearing curbed Under the current system, losses from a rental property can be used to reduce other forms of taxable income (e.g. salary and wages) in a process that’s known as negative gearing. From 1 July 2027, losses related to established residential investment properties purchased from 7.30pm AEST 12 May 2026 will only be deductible against rental income or capital gains from residential property. Excess losses will be carried forward for offset against residential property income in future years. This change applies to individuals, partnerships, companies and most trusts. Superannuation funds, including SMSFs, are excluded from the changes. Investors in established residential properties acquired prior to 7:30pm AEST 12 May 2026 can continue to apply the current negative gearing rules until the property is sold. Properties purchased between announcement and 30 June 2027 may be negatively geared during this period, but not from 1 July 2027. A specific carve out is included for investments in eligible new builds, which can continue to be negatively geared before and after 1 July 2027 (i.e. current negative gearing rules remain in place). Individuals A new, permanent Working Australians Tax Offset of $250 will apply from 1 July 2027, available to those who derive income from work, such as employees and sole traders. Originally announced during the 2025 Federal election and reconfirmed at the Federal Budget, a $1,000 instant tax deduction is to be introduced from 1 July 2026, benefitting Australian tax residents who have low work-related deductions. Importantly, there will be no substantiation requirements to claim the deduction. Individuals with work-related expenses over $1,000, or who earn only business or investment income, can continue to claim their deductions in the usual way. While not a new Federal Budget measure, already-legislated changes in personal tax rates will shortly come into effect. From 1 July 2026, the tax rate that applies to taxable income between $18,201 and $45,000 will reduce from 16% to 15%, falling further to 14% from 1 July 2027. Instant asset write-off now permanent From 1 July 2026, the instant asset write-off is permanently extended to $20,000 for small businesses with turnover up to $10 million. Assets valued at $20,000 or more can continue to be placed into the small business simplified depreciation pool. Loss relief for companies From 1 July 2026, companies with aggregated annual global turnover of less than $1 billion will be able to carry back a tax loss and offset it against tax paid up to two years earlier. This change applies to revenue losses only and will be limited by a company’s franking account balance. Small start-up companies will also be able to access ‘loss refundability’. From 1 July 2028, start‑up companies with aggregated annual turnover of less than $10 million that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset. However, the offset will be limited to the value of fringe benefits tax and withholding tax paid on Australian employee wages in the loss year. Minimum tax on discretionary trusts From 1 July 2028, and subject to certain exceptions, trustees will pay a minimum tax of 30% on the taxable income of discretionary trusts. Beneficiaries, other than corporate beneficiaries, will receive non-refundable credits for the tax payable by the trustee. This change does not apply to other types of trusts (e.g. fixed and widely held trusts (including fixed testamentary trusts), complying superannuation funds, special disability trusts, deceased estates and charitable trusts). Expanded rollover relief will be provided for three years from 1 July 2027 to support small businesses and others that wish to restructure out of discretionary trusts into another entity type, such as a company or a fixed trust. Fringe Benefits Tax and EVs From 1 April 2029, a permanent 25% discount on fringe benefits tax (FBT) will be available for all electric cars valued up to and including the fuel‑efficient luxury car tax threshold. All electric cars valued up to and including $75,000 that are provided before 1 April 2029 continue to be eligible for a 100% discount on FBT. Electric cars valued above $75,000 and up to and including the fuel‑efficient luxury car tax threshold that are provided between 1 April 2027 and 1 April 2029 will be eligible for a 25% discount on FBT. Administration Expansion of the ATO’s pilot of ‘dynamic’ pay as you go (PAYG) instalment calculations, with expanded access to monthly payments. From 1 July 2027, small and medium businesses can opt in to reporting and paying PAYG instalments monthly and to using an ATO-approved calculation embedded in accounting software to calculate and vary their instalments. Taxpayers with a demonstrated history of non‑compliance will also be required to report and pay PAYG instalments monthly. The Government has also confirmed that it will work with the states and territories to harmonise payroll tax administrative arrangements.
