The Power of Written Agreements
Some businesses consider it a nuisance, or at best an unnecessary procedure, to commit agreements to a written document. Agreed, creating a written contract can take a bit of time, sometimes there will be a cost, however whilst a verbal contract is legally valid it does require equal interpretation by both parties of meaning and intention in order to avoid dispute.
Examples of agreements to consider implementing in a written form? Simplistically:
- Employment contracts
- Supplier contracts
- Customer agreements
- Contractor agreements
What are some of the benefits of written agreements?
- Signed mutual agreement between the parties
- Easily accessible information
- Reduced opportunity for dispute with regard to meaning and intention
- Reduced risk of misunderstanding
It pays to take the time and effort to produce a written document at the start of the engagement; a much more effective process than determining an answer in resolution to an undocumented business agreement.
Compliance Essentials can assist your business with internal process and systems; contact us www.complianceessentials.com.au
The first in the series of Simple Mistakes looks at ACN/ABN and company documentation:
Is your Australian business incorporated via ASIC? If so your company must operate by the rules determined in the Corporations Act 2001.
Are your company documents correct?
The Act (s153) requires that a company sets out its name on all public documents along with the company’s ACN (Australian Company Number) or ABN (Australian Business Number) – for a two page or more document the above information must be shown on the first page.
Is your ABN displayed?
All businesses with ABNs
Make sure that your ABN is clearly displayed on your invoices to customers to avoid a withholding tax deduction from your incoming payment.
Compliance Essentials can assist with all your business compliance requirements, contact us on 1300 602 880 or via our website
Some of the mistakes that businesses make when it comes to compliance are very simple, and because of that we are launching a series of posts looking at some of the matters which can be very easily rectified.
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Need to look at the bigger picture? Contact us on 1300 602 880 or via the website for an initial discussion as to how Compliance Essentials can help your business.
The name of your business is a powerful intangible asset; a business name is the foundation for building a good reputation and customer loyalty.
The question then is are you protecting your business’ reputation? Once reputation is tarnished it can be difficult to regain customer confidence and maintain market position.
Question number two, how to protect the standing of business reputation and brand? Taking steps to ensure that a business operates within relevant legislation and regulations are part of this process hand in glove with identifying existing and ancticipated areas of risk exposure and treating risks in order of priority i.e. the greater the risk to a business the higher the ranking on an action plan.
Starting off with a business health check will identify areas of risk and potential non-compliance and enable decision makers in the business to formulate a program to remedy matters identified in the gap analysis.
Want to take steps to protect your organisation’s reputation? Compliance Essentials can assist in the process; free phone 1300 602 880 to arrange a meeting for an initial discussion. www.complianceessentials.com.au
So what is the issue with ‘compliance’? Has the word acquired a bad image or does it go deeper?
One of the issues – the decision makers in some organisations fail to admit that ‘compliance’ is relevant to what they do, whereas in fact every organisation has compliance obligations.
Forget the handle and move away from the concept of policing. The issue does not necessarily lie with the concept of compliance, the issue rests with not acknowledging and accepting that adopting a compliant culture can bring benefits.
Organisations that can’t see the gain unfortunately don’t acknowledge the potential of pain until it happens to them. Using the analogy of insurances, it isn’t common practice to wait, for example until there has been a theft or involvement in a car accident, to think about insurances; most of us buy the required policies to protect ourselves and/or our businesses in case the bad things happen outside of our control. In a similar way, using best endeavours to proactively implement compliance in an organisational environment is a means of taking control as well as protecting a business from the risk of serious compliance breaches that could, amongst other outcomes, cause injury, have a financial impact, damage reputation.
Why not take the benefits, which are manifold, and will ultimately make a contribution to the bottom line.
By the way, it is calculated to be far more costly to remedy a proven compliance breach than to be in control with the implementation of a compliance plan………….
The Compliance Essentials Team
There are changes going along in Victoria and across Australia of which NFPs need to be aware:
Victoria The Associations Incorporation Act has undergone reform that will take effect on 26 November 2012. The changes that will affect all Victoria NFPs incorporated under the Act is the change of title of Public Officer to Secretary and the implementation of a three tier structure for annual reporting; other changes include new Model Rules, privacy of members of associations, legalising trading activities. There is no requirement for an incorporated NFP to take any action at present however this does seem to be a good time for those long standing organisations to review their rules.
Where there is inconsistency between existing rules and the requirements of the new legislation the legislation will override the organisational rules.
ACNC It’s been a while in coming however legislation to approve the ACNC has been passed through Parliament and the Commission is expecting to go into action in December this year. The ACNC will focus on charities in the first instance. Organisations with charitable tax concessions will be automatically taken into the the new system; moving forwards an organisation that wishes to register as a charity must do so via the ACNC.
There is an increasing amount of information with regard to ACNC functions on their website and via subscription to updates.
Need help with your NFP Board and governance techniques? Compliance Essentials includes Board mentoring and governance review as part of our service products, contact us on 1300 602 880 or via our website at www.complianceessentials.com.au
The Melbourne press this weekend has been abuzz with the story of, and alleged reasons for, the sacking of the Principal of Methodist Ladies College. It isn’t appropriate to pass judgement on the matter without the full facts however the stories indicate that the Board of MLC were not in full possession of facts on all the operational matters of the school.
Last year the judgement in the Centro case (CESept2011e-bulletin) specified that Board members do not need to be financial experts but do need to be able to understand financial reports and also that Board members should familiarise themselves with operational matters.
Compliance Essentials is available for governance support and mentoring; contact us on 1300 602 800 or via our website www.complianceessentials.com.au
The start of the ACNC, originally put back to 1 October 2012, is now seemingly delayed again as the pertinent legislation works its way through the halls of government. We are watching with interest for the impact these changing time scales may have on relevant not-for-profit organisations across Australia.
The Compliance Essentials Team
Being in a new financial year doesn’t automatically close out the previous one. We know as business managers that there are tax, GST and PAYG matters to deal with as well as superannuation; and the deadlines are getting close for each.
Getting caught out can be a costly experience. There are some useful checklists available on the ATO website that can be used as part of the organisational governance, compliance and risk management process and which can assist businesses in covering off their ATO obligations on an ongoing basis.
If more help is required we can be contacted for a no obligation discussion, on these or other compliance matters, via our website at www.complianceessentials.com.au
The Compliance Essentials Team
Just because a business isn’t listed on the Australian or international Stock Exchanges does not mean that there is an exemption from ‘compliance’ (or any of the synonyms); it is incumbent on business owners and managers to make sure that their organisation operates within the confines of legislation and any relevant regulation. Fully supportive of the concept that ‘one size does not fit all’ when it comes to obligations, nevertheless we are fully aware of the impact on organisations that are proven guilty of a breach of obligation and that the effect can be not only financial but further reaching as far as damage to reputation and other consequential losses.
Compliance Essentials can work with organisations, of all size and structure, to help to mitigate the risk of a compliance breach. Contact us on 1300 602 880 for a no obligation discussion www.complianceessentials.com.au
The Compliance Essentials Team