gunson-mclean

5 benefits of working with a business advisor

Sat, 18 Apr 2026 01:40:11 GMT

As your accountants can do so much more than just the bookkeeping. We’ve outlined 5 key areas where we can offer deeper, business-critical advice and support.

You know that an accountant can look after the books and keep your numbers in good order.

But have you ever thought about the additional services and advice that an accountant can bring to you as a fully fledged business adviser, coach and mentor?

Let’s explore what other business-critical services your adviser could offer:

1. Providing an outsourced finance function

Managing your everyday finances can eat into your available business time.

By outsourcing your finance function, your accountant can manage the day-to-day bookkeeping, payroll, accounts payable (AP) and accounts receivable (AR). This not only eases your financial workload, it also gives you improved, real-time oversight of your finances.

2. Cashflow forecasting and scenario-planning

Cash is king, but managing and forecasting cashflow can be a complex task.

Your accountant can provide in-depth cashflow forecasts and help you create best-case, worst-case and business-as-usual scenarios for your cash position. With this future view of cashflow, you can make better decisions about hiring, inventory and debt management.

3. Strategic planning and goal-setting

Every business needs a strategy to drive it forward. But who’s writing your strategy?

Working with an experienced business adviser brings an objective viewpoint to your strategic thinking. Your adviser helps you align the financial targets of the business with your own personal and professional milestones. And your strategy can be tracked and regularly reviewed to see how you’re tracking against these key goals.

4. Reporting KPIs and dashboards

Your business is generating all kinds of different data – but are you reporting on this data?

An adviser can help you visualise your financial and non-financial data by setting up custom dashboards and key performance indicators (KPIs). This turns these dry numbers into real, actionable insights – insights that can inform your business decision-making.

5. Business coaching and mentoring

Working with a business coach gives you the support you need as an entrepreneur.

Your advisor can be a confidential sounding board – someone you can go to when you need advice, an independent viewpoint or just a shoulder to lean on. We’re there to guide you through the big leadership challenges and operational challenges you may face along the way.

Book some time with our team and let’s see where we can start offering you deeper insights, business-critical strategic advice and the benefits of 1-2-1 coaching and mentoring.

Tips for Moving Day

Fri, 17 Apr 2026 23:14:15 GMT

It's that time again and Moving Day is upon. Moving Day' is a big day in the farming industry. To help you with a smooth transition here are some tips:

Early preparation

Make sure sharemilker or contract milker contracts are signed.
Plan a farm inspection with relevant parties (farm owner, incoming and outgoing sharemilkers, farm manager, advisor).
Recruit and finalise employment agreements for new farm staff.
Communicate plans and dates with everyone involved.
Contact your insurer and utility providers.

Farm owner responsibilities

Make sure employees leave the houses clean and tidy.
Carry out house inspections for maintenance.
Comply with healthy home standards.
Confirm departure and arrival times with tenants.
Consider drug testing, if needed.

Animal movements and biosecurity

Plan animal movements carefully.
Clean and disinfect farm equipment and machinery.
Minimise the risk of introducing exotic pests.

About 5,000 farmers do this every year. Talking clearly and planning well makes this important farming tradition go smoothly.

Farm finance: What to know before (and after) you borrow

Mon, 06 Apr 2026 01:30:10 GMT

Interest rates are always moving, but agricultural loans in New Zealand often come with tighter conditions and higher interest rates. Need help planning your next step?

While interest rates are constantly moving up and down, rural lending in New Zealand has its own rules. Because of regulatory requirements, agricultural loans often come with tighter conditions and higher interest rates.

Lenders also place more emphasis on climate resilience, compliance, and seasonal volatility, while larger farms face increased scrutiny around governance and long-term planning.

Before you apply…

Make sure you’re putting your best foot forward before approaching your bank with:

Up-to-date annual accounts
Clear cash flow forecasts
Current stock and asset schedules
A business plan that outlines risks and opportunities (especially for larger investments).

Secured the loan?

Time to make sure your debt is working for you, not against you. Here’s how:

Stay on top of your financials. Up-to-date records make it easier to spot pressure points and plan.
Review your debt structure. Are you on the right mix of fixed and floating rates? Could refinancing free up cash or ease pressure?
Don’t wait for problems to arise. Talk to your bank early if you foresee a cash flow concern.

Need help reviewing your strategy or planning your next step? We’re just a call away.

5 key ways to lower your reliance on fossil fuels

Thu, 02 Apr 2026 01:23:56 GMT

Looking to cut your reliance on fossil fuels? We share five ways to help make your small business more sustainable and energy efficient, while contributing to reduced emissions.

As small businesses, we’re still heavily reliant on fossil fuels to run our operations. Small businesses represent 90% of all companies and generate 60%-70% of industrial emissions.

We use petrol and diesel to fuel our vehicles and machinery. Some use international flights and aviation fuel to transport our goods to other countries.

A meaningful chunk of our electricity is still produced using coal-fired power stations. There’s also the impact of producing plastics and petrochemical derivatives to consider.

With climate change a pressing concern, it’s helpful for small businesses to do their part in achieving lower emissions. And with the Middle East currently so unstable, finding alternatives to fossil fuels is becoming business critical, rather than just a green policy.

Here are five important ways you could make your business less reliant on fossil fuels.

1. Decarbonise your vehicles and logistics

Replace your petrol and diesel vehicles with electric vehicles (EVs) where possible. This eliminates tailpipe emissions and reduces your exposure to spikes in fuel prices, while also lowering the long-term maintenance costs for your delivery vehicles or service fleet.

2. Switch to renewable energy

To make your energy usage more sustainable, consider installing solar panels or small-scale wind turbines on site to generate your own electricity. If you rent, explore to switch to a ‘Green Tariff’ provider that guarantees your power is sourced from 100% renewable assets.

3. Reduce your overall energy consumption

Reduce your demand on the electricity grid by upgrading to energy-efficient alternatives. This could include moving to LED lighting, high-performance insulation and smart thermostats. Eliminating your energy wastage is the fastest way to reduce your need for coal-fired power.

4. Localise your supply chain

Try sourcing from local suppliers where possible to cut down on the carbon in your supply chain. This drastically cuts your use of aviation and the heavy-fuel oil consumption required for international shipping. It also minimises your exposure to logistics disruptions caused by rising fuel prices.

5. Ditch plastics and move to bio-materials

Reduce your reliance on petrochemicals by replacing plastics with bio-based alternatives or recycled alternatives. Using circular packaging models lowers the demand for oil-based materials and helps you align more closely with global Net Zero standards.

5 key areas to plan for as a new employer

Thu, 19 Mar 2026 03:33:22 GMT

Are you about to hire the first employees for your new business? Here are 5 key areas to think about when becoming an employer for the first time.

When you found a new business, it’s vital that you employ the ideal team for the job.

But building that team isn’t just about finding the best talent. It’s also about laying the foundations for being an employer and ticking all the right compliance boxes.

We’ve highlighted five key considerations to include in your planning as a new employer.

1. Payroll and statutory contributions

The most obvious responsibility you have as an employer is paying your staff .

You’ll need systems and processes in place to pay wages, withhold income tax and make the mandatory payments and contributions towards your employees’ retirement funds or superannuation. Compliance with employee remuneration law is mandatory and late payments can trigger significant financial penalties and legal scrutiny.

2. Employment law

When hiring staff, you’ll need to comply with all relevant employment laws .

You’ll be required to draft clear employment contracts that define the roles, notice periods and leave entitlements of your employees. You’ll also need to stay updated on national employment laws to ensure you’re meeting your responsibilities relating to discrimination, health and safety, pay rates and termination processes etc.

3. Onboarding and training systems

Once you’ve hired your first employees, the next step is to onboard them to the business and train them up in the relevant skills needed for their roles.

Create a structured integration process for your new hires that gets them up and running as quickly as possible. This will include clear documentation around your internal workflows, safety protocols, company rules and expectations of their roles.

4. Performance and people management

As a new employer, there’s a steep learning curve when it comes to becoming a people manager and taking on the role of leading your team.

Make sure you have clear procedures laid out for day-to-day management of employees, performance reviews and staff resourcing, etc. Think about how you’ll deliver feedback, set measurable goals and handle conflict. Moving from ‘doing’ to ‘leading’ requires a deliberate communication strategy to keep the team aligned with your business goals.

5. Health, safety and wellbeing

As an employer, you have a legal and moral duty of care towards your staff.

You’re legally and ethically responsible for delivering a safe work environment where your team will be safe to carry out their role. Make sure you have employers’ liability insurance in place, carry out regular risk assessments and consider targeted initiatives that support both physical and mental health for your workforce.

If you’re about to start hiring, come and talk to our team about planning out your compliance responsibilities as a new employer.

How to accept payments online – and why it’s smart

Thu, 12 Mar 2026 03:29:57 GMT

One of the best things about online shopping is instant, hassle-free payment. Enter your details, click, and you’re done. If your customers can make an instant online payment, they’re likely to pay you more quickly – and they’ll appreciate the simplicity too.

The details

Online payment methods include credit and debit cards, ACH (Automated Clearing House) services like Paypal, and repeat payments through direct debit. Payments are managed by merchant service providers – specialist companies that process transactions on your behalf. Some focus on credit and debit cards, while others stick to ACH or direct debit.

Choose a provider that can integrate with your accounting software, and you can add a super-simple payment button to future invoices.

The costs

While your merchant service provider shouldn’t charge any set-up fees, they will charge transaction fees. These range from 2-4% of the invoice for debit or credit cards, and under $2 a transaction for direct debit. These fees are an added expense, so they need to be included in your profit calculation – smart accounting software will do this automatically.

Because credit and debit fees can add up, many businesses don’t offer online payment for invoices over a certain amount.

The benefits

Businesses using online payments get paid faster. Of course, not every client will pay instantly just because they have the option, but it should speed up your average payment time.

A bonus benefit? Customers appreciate the ability to pay online, so offering it as an option can be a big point in your favour.

EOFY Check-In

Thu, 05 Mar 2026 03:26:26 GMT

Questions to Ask Now to Plan for the Year Ahead

As the end of the financial year approaches, it’s easy to stay focused on the day-to-day - finishing jobs, chasing invoices, keeping things moving.

But March is also a natural point to step back.

Before the new financial year begins, taking a moment to review how things have actually tracked can make a real difference to how you plan (and perform) in the year ahead.

Here are five simple questions worth asking.

1. Are you where you expected to be?

Think back to the start of the financial year - what did you expect revenue, workload, or growth to look like?

Are you ahead, behind, or about where you thought you’d be?
If things are off track, do you know why?

This isn’t about judgement - it’s about understanding what’s actually driving your numbers.

2. What surprised you this year?

Most businesses have had a few curveballs this year - whether it’s rising costs, slower payments, or shifts in demand.

What caught you off guard?
Were there costs or pressures that crept up over time?

These are often the things worth planning for more deliberately next year.

3. Is your cashflow working for you?

Profit is one thing - cash in the bank is another.

Are you regularly tight between payments?
Are debtors taking longer to pay?
Are you comfortable with your current buffer?

For many small businesses (and especially in seasonal industries), cashflow is the difference between feeling in control and constantly chasing.

4. Are drawings or wages sustainable?

It’s worth checking whether what you’re taking out of the business aligns with what the business can realistically support.

Are you relying on irregular or catch-up drawings?
Is your structure still working for how the business has evolved?

A quick review now can prevent pressure building into the next financial year.

5. What needs to change next year?

This is the most important question.

Based on what you’ve seen this year:

Do your prices need adjusting?
Are there costs you can better manage or reduce?
Is it time to invest (or hold back) in certain areas?

Small, intentional changes now can have a big impact over the next 12 months.

EOFY isn’t just about getting everything filed and finalised -it’s an opportunity to step back and make more informed decisions for the year ahead.

Even a short review now can help you:

Avoid repeating the same challenges
Plan with more confidence
Start the new financial year on the front foot

If you’d like help working through your numbers or sense-checking your position before year-end, we’re here to support you.

KiwiSaver Changes and April Payroll Updates: What Employers Need to Know

Thu, 26 Feb 2026 03:10:57 GMT

From 1 April, several updates come into effect that will impact payroll, employment costs, and compliance. While none are particularly complex on their own, together they’re worth reviewing now to ensure everything runs smoothly into the new financial year.

Here’s a clear overview of what’s changing - and what to check.

KiwiSaver Contribution Changes

From 1 April, KiwiSaver contribution settings are changing - and this will have a direct impact on both employer costs and payroll setup.

Default contribution rate increasing

The default KiwiSaver contribution rate for both employees and employers will increase from 3% to 3.5%. This change applies automatically unless action is taken.

Employees can remain at 3% (with approval)

Employees who wish to continue contributing at 3% can apply to Inland Revenue for a temporary rate reduction.

To apply the lower rate, employers must receive confirmation (an IRD acceptance letter) from the employee. Without this, both employee and employer contributions must be increased to 3.5%.

Employers can match the lower rate

If an employee has an approved temporary reduction, employers can match this and continue contributing at 3%.

Once the employee moves back to the higher rate, employer contributions will also need to increase accordingly. Inland Revenue will notify employers when this occurs.

KiwiSaver extended to younger employees

From 1 April, employees aged 16 and 17 who contribute to KiwiSaver will also be eligible for employer contributions.

If you employ staff in this age group, this may introduce a new cost that hasn’t previously applied.

What to do: Take a few minutes to sense-check your KiwiSaver settings in your payroll system and ensure everything aligns with current requirements.

ACC Earners’ Levy Increase

The ACC Earners’ Levy rate is increasing from 1 April, which will affect the amount deducted from employees’ wages.

This is typically applied automatically through payroll systems, but it’s still important to:

Confirm your system has been updated with the new rate
Check payslips in early April to ensure deductions look correct

What to do: Run a quick review after your first April pay run to ensure the updated levy has been applied accurately.

Minimum Wage Increase

Minimum wage rates are increasing from 1 April:

Adult minimum wage: increasing to $23.95 per hour
Starting-out and training wage: increasing to $19.16 per hour

If you have employees on or near minimum wage, their pay rates will need to be reviewed and adjusted.

What to do:

Identify any affected employees
Update employment agreements if required
Ensure new rates are reflected in your first April pay run

Protecting you and your business: taking out insurance

Tue, 03 Feb 2026 02:51:51 GMT

Business insurance is a vital part of protecting your enterprise. We outline five of the most common types of insurance and how they safeguard the future of your business.

We all hope that our pathway along the business journey will be smooth and uncomplicated.

But the reality is that accidents can happen, along with unplanned injuries, damaging weather events and legal suits from disgruntled clients.

So, what can you do to protect your business from these potential negative consequences? The answer is to take out the relevant business insurance for your company.

Five common kinds of business insurance policies and how they protect you

Public liability insurance

Public liability insurance covers your legal costs and compensation claims if a third party – such as a customer or passer-by – suffers an injury or property damage because of your business activities. It’s an essential policy to take out if you interact with customers in a physical space.
Product liability insurance

If a product you design, manufacture or supply causes injury or damage to a consumer, product liability insurance protects you. It handles legal defense fees and settlement costs and is a vital policy for all retailers, wholesalers and manufacturers that produce or sell physical products.
Business contents insurance and tools insurance

Business contents insurance covers the cost of replacing or repairing your internal assets – items like computers, furniture and stock – if they’re damaged or stolen from your premises.

Tools insurance covers the cost of repairing or replacing your vital portable gear – things like your laptop, specialist machinery or hand tools – if they’re stolen, lost or damaged.

Having contents and tools insurance in place to cover the expense of repairs or buying new equipment means you can get back up and running without major out-of-pocket costs.
Employers’ liability insurance

Employers’ liability insurance covers your compensation costs if an employee falls ill or is injured while working for your business. The specific legal requirements vary from country to country, but it’s often mandatory for employers to take out protection against workplace-related health and safety claims.
Professional indemnity insurance

Professional indemnity insurance protects you against legal costs and damages if a client suffers a financial loss because of your professional advice or services. It’s a crucial policy for consultants and experts, shielding your business from client claims of negligence, errors or omissions in your work.

Working with you to understand your insurance needs

Whatever stage you’re at in the business journey, it’s important to think about the insurance needs of your business and the specific areas where you may need protection.

We’re not insurance experts, but we can work with you to define the basic policies you’ll need. We can also connect you with the best insurance brokers and agents for your business type, industry or niche sector – so you get tailored advice on your insurance requirements.

What are trade tariffs and how can they affect your business?

Tue, 27 Jan 2026 02:40:28 GMT

We’ve heard a lot about trade tariffs in the news. But what is a trade tariff and how could these customs taxes impact your small business?

Over the past few months, we’ve heard a lot in the news about the possibility of trade tariffs, especially in relation to the tariffs imposed by the current US administration.

But what exactly is a trade tariff? What do they do? And how could high trade tariffs affect your ability to export to certain countries and territories?

What is a trade tariff?

A trade tariff is a tax that’s levied on imported goods when they pass through a country’s customs border. This mandatory tax is paid at the border, with the amount you pay determined by global classification codes for specific products and goods.

Paying the tariff increases the cost of exporting goods to this territory. Imposing the tariff discourages foreign enterprises from importing goods into the country and supports domestic businesses in making and selling the same goods locally.

What’s the impact when trade tariffs are imposed?

Imposing trade tariffs can have several significant impacts for foreign entities and businesses that trade internationally:

Reduced export demand: Foreign countries and overseas businesses can experience a sharp drop in their market share as their goods become artificially expensive due to the trade tariffs. This forces businesses to reduce their exports to this country and consider other, more profitable, territories.

Increased costs: Importers bear the direct financial burden at the border, facing higher ‘landed costs’ and administrative complexities. This can significantly reduce the importer’s profit margins and efficiency of their supply chain.

Retaliatory trade cycles: Tariffs often trigger tit-for-tat responses from foreign governments. This creates a cycle of trade barriers that leads to the market becoming more volatile and operational costs becoming less predictable – creating uncertainty for all parties involved.

How could high trade tariffs affect your business?

Economically, trade tariffs increase your cost of goods sold (COGS), by adding a tax cost whenever you export your goods into this particular territory.

With trade tariffs possibly playing a role, it pays to scenario-plan all potential outcomes, so you’re fully prepared for the potential impact.

Why 'strategic smallness' could be a major benefit for your NZ business

Tue, 20 Jan 2026 02:32:44 GMT

Is big really better in business? Strategic smallness could be a major advantage for your Kiwi small business. We explore why.

We’re used to the prevailing motto in business being ‘bigger is better!’. So much of the strategic thinking and entrepreneurial ideas we’re surrounded by talk about the need for growth as the key driver of success, longevity and healthy profits.

But that tide may be turning. Professor Rod McNaughton, Professor of Entrepreneurship, University of Auckland, Waipapa Taumata Rau, argues that ‘strategic smallness’ may actually be a real business benefit for many New Zealand enterprises.

Let’s look at five key reasons why staying small and agile could be the perfect way to achieve the business goals you’ve set for your Kiwi company.

Productivity through AI-driven automation
Adopting AI in a more proactive way helps you automate routine tasks, making it easier to deliver high productivity without the overhead of additional staff. By staying small and automating these low-level processes, you can compete with much larger global entities.
Staying operationally agile
Agility is a core strength for smaller businesses, allowing you to rapidly adapt to fluctuating market trends. This speed and responsiveness make it easier to grab the fast-moving opportunities that larger, bureaucratic organisations often miss out on.
Digging deep into your specific niche
Strategic smallness is great when you’re looking to focus on high-value, specialised products rather than low-margin mass production. By digging deep into a niche, and prioritising quality over volume, you can maintain premium pricing and build stronger, more authentic brands.
A reduction in risk
Modern anti-scale entrepreneurs use digital tools to manage large, international supply chains efficiently. This allows you to stay lean and resilient, while avoiding the financial risks and complexities that are commonly associated with traditional scaling.
A more resilient and attractive business model
Smaller firms often have greater social and environmental resilience. The compact nature of your business model makes it easier to align with community values and sustainable practices, positioning your brand as a good option when compared to large, global conglomerates.

If embracing strategic smallness sounds like it should be part of your ongoing business strategy, come and talk to us. Our team can help you understand the financial, operational and strategic implications of staying small, and the potential impact for your future success.

Why your accountant is the mentor you didn’t know you needed

Tue, 13 Jan 2026 22:04:22 GMT

Looking for someone to guide your entrepreneurial journey? Your accountant could be the mentor you didn’t know you needed.

A business mentor can provide guidance and support, so you make the right decisions and stay focused on the end goal as a business owner. They can also help you move forward in your career by providing advice and feedback on what steps to take to reach the pinnacle of success.

But have you ever thought of your accountant as a mentor?

Why your accountant is the ideal mentor

Having someone who understands your business journey is incredibly important. You might see an accountant as someone who files your tax returns. But, in fact, we’re experienced business owners, with access to a significant network of other business professionals.

An accountant can be the mentor you didn’t know you needed. No-one knows your business better than us, so we’re perfectly placed to offer you advice, guide your business journey and help you push your skills and capabilities as a business owner.

As a mentor, an accountant will:

Expand your knowledge as an entrepreneur – as business owners, we have the knowledge and experience to help you move your business forward. And we can work with you to expand your leadership skills, business thinking and entrepreneurial ideas.
Be a shoulder to lean on – we'll offer 1-2-1 mentoring sessions where we can listen to your unique worries and concerns as a business owner. Having someone on the same page to listen and empathise is vital for your business and your own mental health.
Guide the important elements of your business – we’ll help you manage and improve your business strategy, planning and decision-making skills. We’ll also provide the management information systems you need to guide your finances and planning.
Keep your finances on track – we'll show you how to maximise profits, reduce costs, and make better financial decisions. We’ll also help you plan your own personal wealth and tax strategies, so you can achieve your own entrepreneurial goals and lifestyle.
Introduce you to a broader business network – we work with hundreds of other business owners across a range of industries. This means we can link you up with other entrepreneurs and founders, so you have a network of other like-minded individuals to connect with. This can be vital when brainstorming and benchmarking, or if you need to talk to someone who understands the specific pain points you’re experiencing.

Having someone to guide your business journey can be invaluable. A business owner must grow and evolve along with their business, and having regular mentoring catch-ups is the ideal way to progress, offload your concerns and look for new inspiration.

If you want to grow as an entrepreneur, please come and talk to us about our mentoring services and how we can guide your business future.

Payroll Tips for a Hassle-Free Summer Break

Thu, 04 Dec 2025 19:07:50 GMT

The Christmas season can create payroll challenges, but understanding the rules can help you stay compliant.

Annual Leave: By law, employees are entitled to four weeks of paid leave per year. To avoid last-minute staffing problems, set clear deadlines for leave requests.
Holiday Pay : Employees must be paid for public holidays that fall on their regular workdays. Keeping up-to-date employee records and rosters ensures accurate payment.
Christmas Closures : Plan ahead for any business shutdowns. You must provide at least 14 days' notice before a closure. If an employee doesn’t have enough leave, they must be paid 8% of their gross earnings since their start date or their last leave entitlement, minus any leave paid in advance if agreed upon.
Cashing Up Leave : If it’s part of the agreement or you choose to allow it, employees may cash up to one week of annual leave each year. However, you cannot pressure them into doing so.
Casual Workers : Casual employees should receive an additional 8% on top of their earnings instead of accruing leave, and this must be clearly shown on their pay slips.

With careful planning, you can keep payroll running smoothly, allowing both you and your team to enjoy a stress-free holiday season. Feel free to reach out if you need any assistance or clarification.

Holiday cashflow for your small business

Wed, 03 Dec 2025 17:13:52 GMT

This time of year can be hard on small businesses. With a bit of pre-planning and being proactive, you can set yourself up for a financially stress-free holiday. Talk to us. We can help.

Are you heading away for a break from the business this year?

This time of year can be hard on small business. Your expenses continue and your cashflow can suffer when your debtors go on holiday.

Leading up to the holiday period, is your business cash flow in good health to carry you through? With a bit of pre-planning and being proactive, you can set yourself up for a financially stress-free holiday.

Planning your cash-flow over the holiday period

Invoice early - Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.
Chase payment - Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.
Talk to suppliers - A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
Review your costs - Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for. It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.
Talk to the bank or tax department - If cashflow is tight, make sure you have conversations early so you have everything in place to see you through.

Promoting your business in the digital age

Thu, 13 Nov 2025 21:30:10 GMT

Is your digital marketing strategy still fit for purpose? We outline four key elements your business should be using to advertise your brand and engage with new customers.

As a small business, you know you need an online presence as a brand. You have a company website and you post occasionally on your blog page.

But at this point in the digital transformation of business, that’s not enough for customers to find you, engage with you and become long-standing customers of the business. To promote your business effectively, you need to embrace both the digital revolution and the benefits of automation and artificial intelligence (AI).

Four key digital channels that should be on your agenda

1. Search Engine Optimisation (SEO):

Healthy search engine optimisation (SEO) ensures you have long-term, trusted organic visibility of your business when potential customers search online. The idea is to make your brand visible in the digital marketplace. This means keeping your website up to date and producing content that secures high rankings and attracts passive buyers/clients to your site.

2. Social Media:

Social media channels, like Facebook, LinkedIn, Instagram, and Threads, are more than just a ‘nice to have’. Depending on your business, these platforms can be an essential way to build a recognisable brand community and create some real customer engagement. It’s important to produce regular content that’s consistent, relevant and tells your followers exactly what kind of business you are.

3. Generative Engine Optimisation (GEO):

In the age of AI, mastering generative engine optimisation (GEO) is just as important as having good SEO. GEO is critical for surfacing your content and brand in AI-driven summaries, chatbot results and voice search results. Authoritative content, structured data and concise, factual answers allow your brand to become a trusted source of truth in generative AI searches.

4. Programmatic Advertising:

Programmatic advertising can give you the tools to automate the purchase of ad space across thousands of sites and apps. It uses real-time bidding and data to match adverts, online ad space and target audiences. Get it right, and you can ensure your ads reach the perfect customer at the best time to convert them into paying customers.

Time for an update?

When was the last time you updated your digital marketing strategy? If you’ve not changed your strategy in the past 12 months, then a review is well overdue!

Tax on Payments to Employees - Allowances, Benefits, and Lump Sums

Wed, 12 Nov 2025 21:27:03 GMT

When it comes to employee payments, not everything is as straightforward as wages. Allowances, benefits, and lump sums each have their own tax rules — and it’s easy to get caught out.

From time to time, you might make payments to your employees beyond their regular wages - things like:

allowances
benefits
holiday pay
lump sum payments

While some of these can be tax-free, most are taxable. In some cases, the employer pays the associated tax directly. In others, tax is deducted through PAYE on behalf of the employee.

You may also provide non-cash benefits — such as perks or reimbursements - as part of an employee’s total package. Even though these aren’t paid in cash, they still have a value that may be taxable.

The correct tax treatment depends on what the payment is for and the circumstances around it.

Allowances

There are several types of allowances, but the key question is whether they’re true reimbursements of work-related costs.

If an allowance simply covers out-of-pocket expenses incurred while doing the job, it’s generally not taxable. Examples include mileage, meals, or tools (including phones and laptops).

However, if the allowance amount exceeds the actual cost, the excess is taxable. In that case, you’ll either deduct PAYE or pay fringe benefit tax (FBT) on the difference.

Travel allowances

When it comes to travel payments, the tax treatment depends on what the payment covers:

If you’re reimbursing the employee for their own travel costs, PAYE applies.
If you cover the travel directly , FBT may apply.

For a travel allowance to be tax-free, the travel must be “on work” - not simply travel to and from work. The specific circumstances will determine which rules apply.

Claiming GST on employee payments

If you’re GST-registered, you may be able to claim GST on work-related allowances , provided you keep all relevant tax invoices. However, GST can’t be claimed on non-work-related items or general benefits, as these don’t qualify as business expenses.

Benefits

Employee benefits can take many forms. They’re not part of wages, but they still represent value to the employee.

As they’re considered perks, the employer usually pays FBT (or sometimes PAYE) on their value.

Benefits generally fall into one of three categories:

non-cash benefits
cash benefits
special benefits

Holiday pay

Holiday and leave payments are straightforward - they’re subject to PAYE , just like normal wages.

Lump sum payments

Lump sums cover everything else that doesn’t fall neatly into the categories above, such as:

bonuses and gratuities
back pay
cashed-in annual leave
redundancy or retiring allowances
payments for restrictive covenants or exit inducements
overtime payments

Employees generally pay PAYE on these payments. Keep in mind:

PAYE rates will vary based on the employee’s total taxable income.
ACC earners’ levy doesn’t apply above the maximum income threshold.
Redundancy and retiring allowances are not subject to the ACC levy.

Need clarity?

Working out the correct tax treatment for employee payments can be confusing.

If you’re unsure how the rules apply to your situation, get in touch — we can help ensure your business meets its obligations and avoids unnecessary tax surprises.

How claiming expenses can lower your tax bill

Fri, 07 Nov 2025 21:13:56 GMT

Did you know you could be claiming back many of your business expenses? Here’s our guide to claiming expenses and reducing your tax bill as a small business.

At a time where cashflow is tight and the economic outlook is less than rosy, it’s important to look for any possible way of saving money and reducing your tax bill.

Claiming your business expenses is one way to put money back in the kitty

Why claim against your small business expenses?

It doesn’t matter if you're a limited company or sole trader, you have the option to claim your business expenses back annually in your tax return to the Inland Revenue.

Viable operational expenses are deducted from your business earnings over the course of the year, reducing what’s known as your ‘taxable income’. In essence, you reduce the amount of income you must pay tax on, cutting your tax bill and bringing money back into the business.

What expenses can you claim?

Many of your business and operational expenses will be tax deductible

Here’s a breakdown of what you claim:

Vehicle expenses, transport costs and travel for business purposes
Rent paid on business premises
Depreciation on items like computers and office furniture
Interest on borrowing money for the business
Some insurance premiums
Work-related journals and magazines
Membership of professional associations
Home office expenses
Work-related mobile phones and phone bills
Stationery
Work uniforms
Tax agent’s fees.

If you own an investment property, expenses you can claim for include:

Repairs and maintenance (but not renovations that substantially improve the value of the property)
Professional services fees, like accountants, lawyers or property managers
rates and insurance
Mortgage repayment insurance
Vehicle and travel expenses when you travel to inspect your property or do repairs
depreciation on capital expenses, like whiteware, appliances or heat pumps
Legal fees involved in buying a rental property, as long as the expense is $10,000 or less.

How do you make a claim?

To claim an expense, you must have a record of that expense, eg a receipt, or Inland Revenue may not allow the expense to be claimed.

Your business accounts will be submitted at the close of the financial year. These will include all income and expenses you’ve incurred over the year, including records of all your expenses.

To claim against any eligible expenses, you’ll need a copy of a receipt for the purchase. When you file your tax return, you’ll either copy your income and expenses into your financial statements summary (IR10), or send Inland Revenue a summary of your accounts.

It’s good practice to partner with an accountant or bookkeeper, and to use the latest cloud accounting software so you have all the data needed to make your expense claims.

Talk to us about improving your expense management

Claiming back your business expenses is a simple way to cut your taxable income and reduce your overall tax costs – a move that can be a major boost for your cashflow. We can help improve your expense management, setting up the best accounting systems and claiming back all eligible expenses.

Share investments and tax

Wed, 05 Nov 2025 21:21:06 GMT

Whether you’ve just started to play around with Sharesies, or are already comfortably managing your share portfolio, you need to be aware of how it affects your tax position and the implications if you sell your shares.

Whether you are just considering purchasing shares or already a confident investor, it is important to understand the variables affecting the taxation of shares in New Zealand:

what kind of entity are you trading under? Have you acquired shares as an individual (or in a partnership), or as a company or trust?
are the shares in a New Zealand enterprise or a foreign company?
if the shares are in a foreign company, does the investment fall under the Foreign Investment Fund (FIF) regime or under the rules for a controlled foreign company (CFC)?
what amount are you investing?
do you have a controlling interest in the company you are investing in?
is your main purpose acquiring the shares to sell them again, or as part of a share dealing business?

Ordinary tax rules apply to investors who hold:

shares in New Zealand companies
shares in Australian companies exempt from the FIF rules (broadly, larger ASX listed companies)
shares in foreign companies and other attributing interests (that are not exempt) that cost NZ$50,000 or less, where the holder has not opted into the FIF rules
foreign shares where the holder has opted into the FIF rules but the total cost of the FIF interests is $10,000 or less, so a de minimis exemption from the FIF rules applies.

Different tax rules may apply to investors with shares in foreign companies that don’t meet these criteria.

The rules are complex. Call us to discuss your options, identify the supporting documentation you need to keep, and the tax disclosures required. Depending on your situation, we may also recommend you seek targeted advice from a professional financial advisor.

Getting late payments under control

Sun, 02 Nov 2025 21:04:18 GMT

62% of New Zealand businesses say they’re losing money to late payments. We’ve got 4 simple tips for speeding up those late payments and making it easier for customers to pay you.

Many NZ small businesses are finding late payment to be a major issue.

A recent survey from payment provider, GoCardless, found that 62% of New Zealand businesses believe they’re losing money to late payments – some even reporting estimated losses of over $10,000 per month, on average.

Let’s look at what late payment means for your cashflow and working capital, and what steps you can take to improve payment times and your overall cash position.

Why is late payment such a problem?

Your financial health as a small business depends on your ability to bring in stable income (revenue) and to keep your expenditure (costs) to a minimum.

If payment arrives on time, this boosts your cashflow, provides the working capital needed to operate the business and, hopefully, leaves enough surplus to deliver a profit.

When payment doesn’t arrive on time, this whole financial process breaks down, leaving you with no cash in the bank, outstanding debts to pay and dwindling capital resources.

The aim of your accounts receivable function is to collect payments from customers as quickly as possible. The sooner that income is received, the better, helping you stay in a positive cash flow position and access the liquid capital needed to trade, expand and innovate.

Here are four key ways to speed up the collection of payments:

Invoice on time using e-invoicing
Use e-invoicing (electronic invoicing), and the automation tools in your accounting software, to generate and send invoices as soon as the job is complete. E-invoicing systems reduce potential human keying errors, are delivered instantly and can be integrated with payment portals for a faster, smoother and more professional billing process.
Offer multiple ways to pay
Customers are more likely to pay when you make that process as easy as possible. Offer a range of payment options directly on the invoice, such as payment gateways (Stripe, PayPal etc), credit/debit card processing and direct bank-to-bank instant transfers. Reducing friction drastically increases the speed of collection.
Break up projects into multiple invoices
Instead of waiting for the entire project to conclude, structure large jobs to include an upfront deposit and staggered progress payments that are tied to milestones in the project. This strategy speeds up cash inflow throughout the project, giving you a stable flow of revenue that boosts your cashflow and your available working capital.
Run an efficient credit control function
Make sure you have a strict credit control or debt management process in place. This means setting clear payment terms and being systematic about chasing late payments when deadlines are missed. Regular monitoring of aged debt helps you quickly identify any overdue accounts and take decisive action, such as legal escalation or using a collection agency.

Faster payments keep cash flowing into the business, keeping the company’s financial health in check and helping you mitigate some of the current economic challenges.

Come and talk to our team about effective strategies for using sophisticated e-invoicing, adding more payment options, being strategic with your invoicing and keeping aged debt under control.

Becoming an employer of choice

Wed, 15 Oct 2025 10:57:05 GMT

How to attract great people to your business and how to keep them. Three tips to help you rise to the challenge to become an employer of choice.

Your mission, should you choose to accept it? Build a great team who identify with your values and vision, enhance profitability and innovation.

Build team culture

A healthy work culture will attract suitable recruits to your business. Ensure the culture complements your business. Are you trying to achieve a tight ship or a more laid-back atmosphere? Check in regularly to make sure team members are happy and motivated. Celebrate wins. Set clear goals.

Invest in your team

Ensure up-skilling and training are available. It creates loyalty in your team, can help to ignite passion, solidify employee retention, and of course, grow your team’s expertise. If you have the right staff on board, it’s an investment in their career for them and an investment in your business for you.

Model leadership

Be a good boss. Pay your staff accordingly and review pay at regular intervals. Be flexible. Focus on the real foundations of business success — nothing is more frustrating to an adult employee than micromanagement and excessive control. If the work is being done and done well, there’s no need to check your watch when staff members are coming or going. Remember your staff are human with lives outside the office. But if there are essentials that need coverage, work with the team for the best solutions.

Be a role model. Communicate openly and with active listening. And be alert to the leadership potential in your team and opportunities to develop it. Get your team invested in the business’ success.

What the IRD Expects from You as an Employer

Fri, 10 Oct 2025 10:52:13 GMT

As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer.

Register as an Employer

Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations.

Accurate Record Keeping

The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes:

Employee personal details
Wages and salary paid
Payroll dates and methods
PAYE deductions and remittances
Details of benefits or allowances provided to employees

Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD.

Deduct PAYE Tax

You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided.

Pay Employer Contributions

In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax.

Issue Statements and Forms

At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required.

File Employer Returns

Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions.

Handle Tax Codes and Changes

It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings.

Comply with Audit Requests

The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital.

Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.

Starting a sole trader business

Tue, 07 Oct 2025 10:46:44 GMT

Thinking of starting your own sole trader business? The Sole Trader Toolkit from the Ministry of Business, Innovation and Employment has all the basic advice you might need.

Not all businesses have to start big. Becoming a sole trader is a great way to become self-employed and to quickly get your business idea off the ground.

If you’re thinking about starting your own one-person business, the Ministry of Business, Innovation and Employment has some great resources to demystify the process and help you get set up as a successful sole trader.

Let’s take a look at the Sole Trader Toolkit and what it offers.

1. Becoming a sole trader

In the Becoming a sole trader guide , you’ll get the low-down on how to begin working for yourself. Setting up your own sole trader business is far less complicated than becoming a limited company. All you need to do is inform the Inland Revenue (IR) once you start working for yourself, so you can be taxed on the business profits you generate.

2. The Sole Trader Checklist

The Sole Trader Checklist has a full breakdown of all the key areas to complete when becoming a sole trader for the first time. This includes tasks like paying your income tax, managing your business expenses and dealing with goods and services tax (GST). It also has advice on paying Accident Compensation Corporation (ACC) levies, plus tips on invoicing and contracts.

3. Writing your sole-trader business plan

The Quick-focus business plan has a 10-step template for completing your first business plan. Having a plan is essential. It gives your new sole trader business a clear mission, some strategic goals and sets out the key numbers that will drive your finances and profitability.

4. Managing your finances effectively

Being in control of your finances helps you run a profitable enterprise and stay compliant with your Inland Revenue requirements as a sole trader. The Sole Trader Toolkit offers a Tax 101 guide to get you up to speed with self-employed income tax. It also has a guide for making tax time easier and a handy cashflow forecaster tool to help maintain a positive cashflow position.

Helping you build your sole trader business

If you’ve ever fancied being your own boss, our team is here to help you work out the numbers, get a business plan together and stay compliant with all the IR rules.

Book some time with us to talk through your business idea and your plan for the future.

Payroll Doesn’t Have to Be a Headache: How to Simplify & Stay Compliant

Wed, 01 Oct 2025 10:35:34 GMT

Managing payroll can sometimes feel like navigating a maze; complex regulations, tight deadlines, and countless calculations can easily overwhelm business owners. However, with the right strategies and tools, payroll can be streamlined into a smooth and efficient process. Here’s how you can simplify your payroll process while ensuring full compliance.

Embrace Technology

Choose the Right Payroll Software

Investing in good payroll software is one of the best steps you can take. Look for features that automate calculations, tax submissions, and generate detailed reports. Many software options now offer cloud-based solutions, providing the flexibility to manage payroll anytime and anywhere.

Stay Informed on Compliance

Know the Laws

It’s crucial to stay updated on federal, state, and local labor laws, as these often change. Non-compliance can lead to penalties, so consider subscribing to industry newsletters or updates from trusted legal resources.

Record Keeping

Maintain meticulous records of employee hours, wages, and payroll taxes. Proper documentation safeguards you from legal troubles and helps resolve any discrepancies promptly.

Set a Consistent Payroll Schedule

Consistency is key in payroll processing. Choose a payroll frequency that suits your business - whether it’s weekly, bi-weekly, or monthly - and stick to it. This creates predictability for both you and your employees, allowing better financial planning and cash flow management.

Automate Tax Calculations

Manual tax calculations are prone to errors. Automating tax withholdings through your payroll software ensures accuracy and compliance with the latest tax rates and contributions. This reduces the likelihood of costly mistakes and late penalties.

Regularly Audit Your Payroll Process

Conduct internal audits periodically to identify errors and inefficiencies in your payroll process. This proactive approach helps catch and remedy issues before they escalate, ensuring your business remains compliant and efficient.

Consider Outsourcing

If payroll complexities feel overwhelming, consider outsourcing. This allows you to focus on your core business activities while ensuring that payroll is handled by experts who stay abreast of ever-changing regulations and compliance requirements.

If payroll continues to be a challenge, our team of experienced accountants is here to help. We offer comprehensive payroll solutions tailored to fit the needs of small and medium businesses, ensuring compliance and efficiency at every step. Contact us today to learn more about how we can support your payroll processing needs.

Liberating you and your business with AI: sales and marketing

Wed, 27 Aug 2025 08:42:45 GMT

Sales and marketing are essential for finding new customers but eat into your business time. We explore how the latest AI agents can automate many of your sales and marketing tasks.

Sales and marketing are fundamental elements of finding new customers. But sales and marketing activity can also be a major draw on your time and resources.

So, wouldn’t it be great if you could automate some of the basic sales, marketing, and social media activity? The reality is that AI is more than capable of taking on these tasks.

Let’s look at five areas of your sales and promotional activity where AI tools and AI agents can take on some of the fundamental workload.

1. Sales

AI sales agents can automate some of the most time-consuming parts of the sales process, including lead qualification, follow-up emails, and scheduling. Agents score leads based on their likelihood to convert, helping you focus on the most promising prospects. They can also analyse sales calls to provide insights on what works, and what doesn't.

AI product example: HubSpot Sales Software is AI-powered sales software that offers guided selling, sales engagement, deal management, reporting and analytics, CPQ (configure, price, quote), and coaching for your human sales team.

2. Business development

To boost your business development, AI agents can help you find new opportunities and increase your access to prospect data. They can scrape public data sources, like LinkedIn, to build comprehensive lead profiles, identify key contacts, and even track job changes to turn existing relationships into new business opportunities.

AI product example: Apollo.io is an AI-driven sales platform that provides you with sales intelligence, pipeline builders, a call assistant, and enrichment of your prospect data.

3. Marketing

A true AI marketing agent automates and optimises your whole campaign, not just the campaign content. Agents use your customer data to personalise customer journeys, predict the best time to send emails, and even recommend the next best actions for improving the campaign's performance. You get better marketing results with less time-intensive manual effort.

AI product example: Active Intelligence is an AI-powered marketing tool that brings together data points and purpose-built AI agents to deliver fully-realised marketing strategies.

4. Social media

AI agents for social media can automate your content creation, scheduling, and performance analysis – all within the one tool. Agents can generate post ideas, write captions, and suggest the best times to post for maximum engagement. They can also provide insights into what your audience is saying about your brand, competitors, and wider industry trends.

AI product example: OwlyGPT is a social media AI assistant from Hootsuite. Owly pulls from real-time social conversations to generate fresh insights, effective strategies, and social content that resonates with your customer audiences.

5. Data analytics

AI-powered data analytics tools help you quickly make sense of your sales and marketing data, without needing to be an analytics expert. AI agents can track hundreds of metrics, identify patterns in your customers’ behaviour, and give you tangible insights into which sales and marketing actions will drive the best results.

AI product example: Zoho Analytics is an AI-driven business intelligence and data analytics platform that’s designed to help businesses make sense of their data, without requiring a deep technical background. Zi, their AI Assistant, gives instant answers in the form of charts, reports, and key performance indicators (KPIs).

These strategies provide less time spent on low-level sales and marketing tasks and more time to focus on your wider business strategy, talking to customers, and working to develop your offerings.

Could your business survive without you?

Wed, 20 Aug 2025 08:40:12 GMT

Would your business fall apart without you? What’s your Plan B in case of accident, illness, or just so you can take an occasional holiday? If you were thinking of selling it, what’s your exit strategy?

Would your business still thrive, or would it suffer a catastrophic failure if you suddenly stepped away?

It’s tough to remove yourself from the day-to-day operations when you’re passionate and busy. However, sudden accidents, illnesses, or family emergencies can – and will – happen and you need to be able to step back knowing your systems are robust enough to cope.

Build in resilience

For your business to work for you, you need to make yourself replaceable. Large corporations have plans in place to mitigate what’s known as ‘Key Person Risk’. But when you run a small entrepreneurial venture, who is the backup?

The more you can train and empower your team to perform the business’s essential daily functions without micromanagement, the closer you'll be able to enjoy a lifestyle business.

Establish repeatable and scalable support infrastructure to run the daily operations and create a great team that you can lean on. Your staff need a common purpose – knowing why what they’re doing matters – as well as clear expectations around their roles. By creating a suitable work environment, where employees, both individually and as a team, are more efficient and likely to enjoy what they do, you’ll breathe easier knowing they have your back (and your business) in an emergency.

Finally, it’s important to know what the business looks like without you. An exit strategy is often thought of as the way to end a business - which it can be - but in best practice, it’s a plan that moves a business toward long-term goals and allows a smooth transition to a new phase. That may involve re-imagining business direction or leadership, keeping financially sustainable, or pivoting for challenges.

A fully formed exit strategy takes all business stakeholders, finances, and operations into account and details all actions necessary to sell or close. Strong plans recognise the true value of a business and provide a foundation for future goals and new directions.

Top Tips:

No one is irreplaceable – Challenge yourself to step away for a week. Which systems fall over? Which procedures get left hanging? Which duties get ignored? Go cold turkey as a test case for the time you may have to leave your business in the hands of others.
Embrace innovation – Get systems that are simple, streamlined, effective, and can be used by multiple key team members. Make sure anyone can log in and see exactly what’s needed for what reason at any time.
Recognise the value you’re creating - A business that doesn’t rely on its owner is worth a lot more when the time comes to sell or pass the reins to someone else.

Talk to our team about structuring your business to make it more reliable.

Funding your growth: the pros and cons of alternative lenders

Wed, 13 Aug 2025 08:38:40 GMT

The big banks are reining in lending, making alternative, non-bank lenders an attractive proposition. But what are the pros and cons of accessing funding from a non-bank?

To grow your business, you need access to additional capital. And one of the traditional routes to business finance has often been the big banks.

But with the prudential regulation system making it mandatory for New Zealand banks to keep large cash reserves in place, the banks are tightening their belts and lending less. That’s good for the stability of the bank’s financial governance, but not so good if you’re a Kiwi small business owner that needs extra capital and a solid loan from your bank.

The Reserve Bank is holding a consultation on how much capital New Zealand banks should hold, so lending may ramp up again in the future. However, there is another option.

The past few years have seen considerable growth in the ‘alternative lending’ market – with specialist business lenders and online lenders now available.

Let’s look at what alternative lending is and the key pros and cons of this kind of finance.

What are alternative lenders?

Alternative lenders are non-bank financial institutions, like fintechs and online platforms. As an ‘alternative’ to the big banks, they provide quicker, more flexible sources of capital, giving you an agile way to bring extra funding into your business.

These non-bank lenders offer diverse products, such as short-term business loans, lines of credit, and invoice financing, helping you cover cash flow gaps and support your growth.

The pros and cons of using alternative lenders

If you’re in urgent need of a cash injection, alternative lending from a non-bank is one option to consider when looking for routes to funding. Let’s examine the pros and cons of accessing finance from a non-bank:

Pros of alternative financing:

Faster and more flexible lending process: Alternative lenders often have streamlined online applications and less rigid lending criteria. This makes approval and funding generally much faster than traditional banks – a crucial difference when your cashflow needs are urgent.

Higher approval rates: Non-banks are generally more willing to lend to businesses that traditional banks have declined. This is good news if you’re an early stage startup or the business has a shorter trading history, lower credit score, or fluctuating income.

Diverse and tailored products: Alternative lenders offer a wide range of specialised products, such as lines of credit, invoice financing, or short-term loans. That’s good news if you want to customise your finance to fit a specific business need.

Cons of alternative financing:

Higher interest rates and fees: Due to the increased risk they take on, alternative lenders will typically charge higher interest rates and can have additional fees – such as drawdown fees. This may make the total cost of borrowing more expensive than with a traditional bank.

Less regulatory protection: Unlike consumer loans, business loans from these lenders may not have the same protections under the Credit Contract and Consumer Finance Act (CCCFA). If the worst happens, this can leave you exposed and with limited protection in place.

Risk of personal guarantees: Many alternative lenders require a personal guarantee, meaning that if your business defaults on the loan, you become personally liable for the debt. A personal guarantee puts your personal assets (such as your home) at risk.

Talk to us about finding the right finance for your business

A workable financial strategy factors in the need for capital. With sales, revenue, and cash flow still challenging, having a route to extra funding is vital.

We can help you understand your cash flow and working capital needs and help you build a funding strategy that meets the requirements of your broader growth strategy.

Reducing the uncertainty: financial forecasting and planning

Wed, 06 Aug 2025 08:36:41 GMT

Economic conditions and the costs of trading make it difficult to keep your finances on track. We’ve put together five ways to help you reduce the financial uncertainty and improve your planning.

Uncertainty can be a major threat to your strategic financial planning.

Being unsure of what lies around the corner makes it difficult to make those important financial decisions around operational budgets, investment and growth funding.

But by using forecasting and scenario-planning, you make it easier to manage your finances and reduce some of the financial uncertainty.

Looking to the future with your financials

Analysing your cashflow statements, profit and loss reports and quarterly management accounts gives you an indication of where you’ve been as a business. But these reports don’t tell you much about where you’re going, and what your financial future may look like.

By looking forward, rather than backward, you can start to get a better idea of the landscape that lies ahead – including future cashflow, revenue, profits and operational budgets.

Five key techniques you can use to reduce your financial uncertainty

Cash flow forecasts

Cash is king, so having a detailed overview of your cash flow trajectory is vital.

With cash flow forecasting apps, like MYOB, Xero and Figured, you can predict your cash availability and spot potential cash shortfalls – while there’s still time to plug the hole. By cutting expenses or seeking short-term funding, you can keep the business in a positive cash flow position. It’s this forecasting and foresight that keeps you trading, despite the uncertainty in the market.

Revenue forecasts

Knowing the future patterns in your sales and revenue data helps you keep your income stable.

Revenue forecasting apps analyse your sales data, revenue trends and market shifts to anticipate fluctuations in your revenue. Armed with this future view of your potential revenue, you can adapt your pricing, invest in more marketing, and make your income more consistent.

Scenario planning

There’s always more than one potential outcome of any business situation. Having a plan B (or C, D and E) allows you to understand the multiple potential possibilities – and plan for them.

Forecasting apps help you model potential ‘what-if’ scenarios, so you can see the possible outcomes of an economic downturn or disruption to your supply chain disruptions. This kind of scenario planning makes it easier to make contingency plans and mitigate the potential risks.

Profit projections

Being a profitable enterprise is important for a number of reasons. It shows lenders you’re a low-risk borrower, allows you to invest in the business and drives your dividend payments.

Software tools help you track your performance and estimate future profitability, factoring in variable costs, sales, and market changes. This helps you determine your price point, drive cost-cutting measures, or make investment decisions that keep the profits rolling in.

Budget forecasts

Tracking and forecasting your budget performance keeps your expenses in check.

Use the budgeting tools available to you within MYOB or Xero to help you build dynamic budgets and remain on budget to achieve your financial goals. Budget forecasts help you track your performance, control your expenses and cut any unnecessary spending, keeping you on track with your agreed budget.

Making your financial future clearer and easier to navigate

With so many ups and down in economic conditions and the costs of raw materials and labour, getting serious about financial forecasting really is a must.

Come and talk to us about the key areas of financial uncertainty in your business – and find out how we can guide you through these uncertain times and out the other side.

The art of delegation

Wed, 30 Jul 2025 04:05:53 GMT

How often do you get to the end of a working day and wonder where the time went?

Perhaps you never got to item 3 (or even item 1!!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is.

The answer to free up time is to delegate more – either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right?

So, what is the art of delegation?

We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others.

Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate.

The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value – two minds being better than one.

Here are some essential principles to apply to help you to delegate (as opposed to abdicate!):

Delegation

Assess the task, issue to the right person and support - helps build trust and respect
Be specific and crystal clear for greater communication
Request they repeat back instructions, so you know you were understood, enabling higher productivity
Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable
Both parties to review - opens the door for future work

Abdication

Issue tasks to anyone and forget about it - shows distrust and a lack of respect
Giving unclear and little information results in poor communication
Don’t ask if you were understood - results in low productivity
Don’t set a time frame – it can mean jobs are delayed and over budget
Different expectations can result in disgruntled clients
No review results in no future work

Delegation is a skill to be learned; applying these principles consistently will ensure long-term success.

“No person will make a great business who wants to do it all himself or get all the credit” – Andrew Carnagie

Action list:

Which tasks am I currently doing that I could delegate to others?
What can I do with the time I free up?
Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development).
What is the best way to document what is expected and how it should be done?
What support and review process is needed to ensure success?

Work vehicles? Stay on top of tax with logbooks

Wed, 23 Jul 2025 04:04:29 GMT

Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways.

Sole traders and partnerships can claim income tax deductions for motor vehicle expenses if the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can’t claim 100% of vehicle expenses. You need to work out the business use of the motor vehicle to calculate what deduction you can claim. You can do this either by using a logbook to track actual costs or using a logbook over a test period to establish the average business usage.

Companies are a bit different. Where company vehicles are used partly to earn income and partly for private use, vehicle costs associated with private use are liable for FBT. Companies can use logbooks to keep track of work-related costs and show either that the vehicles are work-related vehicles which don’t attract FBT where used for work purposes only, or that FBT is accounted for correctly where there is some private use of other vehicles. The logbook becomes a record of work-related use and of private use subject to FBT. Where a company restricts private use of the vehicle, a logbook is used as evidence that employees have complied with the restriction.

Whatever type of business structure you have, we can advise you on keeping good records and understanding what you can claim.

Changes to KiwiSaver: How to get your business ready

Wed, 16 Jul 2025 04:03:08 GMT

Major changes to KiwiSaver were announced in Budget 2025.

The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme.

How will these changes affect your employees and your small business?

Let’s take a look at the details of these KiwiSaver changes.

Changes affecting your employees

First off, let’s outline how the initial changes announced in Budget 2025 will affect your employees and other Kiwi workers:

Since 1 July 2025:

Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify.
Government contributions to halve: The government KiwiSaver contribution will halve, reducing the maximum government contribution from $521.43 to $260.72 each year.
High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions.
No change to 2025 government contributions: There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate.

Changes affecting your small business

Next, let’s lay out the KiwiSaver changes that will directly affect your business:

From 1 April 2026:

Employer contributions will rise to 3.5%: From April 2026, the default KiwiSaver contribution rates for both employers and employees will rise to 3.5% – up from 3%.
Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026.
Employers can match the rate reduction: As an employer, you’ll be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you’ll need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this change.
Younger workers will qualify for KiwiSaver contributions: People aged 16 and 17 will qualify for employer contributions. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions.

From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%).

Getting ready for the KiwiSaver changes

These amendments to KiwiSaver could have a significant impact for your small business.

Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket.

You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates.

From Compliance to Confidence: What Advisory Really Means for Forestry and Transport Businesses

Wed, 09 Jul 2025 03:59:35 GMT

If you're running a business in forestry or transport , you already know the numbers matter - but so does the bigger picture. It’s not just about staying compliant with tax and paperwork (though that’s important). It’s about making smarter decisions with the help of someone who understands your industry, your challenges, and your goals.

At Gunson McLean, we want to help rural operators across Northland to shift from reactive accounting to proactive advisory - turning uncertainty into clarity, and pressure into progress.

Compliance vs. Advisory: What's the Difference?

Compliance is about keeping you on the right side of the law - filing GST, paying the right amount of tax, meeting deadlines, and producing financial statements.

Advisory , on the other hand, is about looking ahead. It’s where we work with you to make sense of your numbers and use them to support smarter decisions, reduce risk, and help your business grow in the right direction.

Think of it this way:

Compliance looks backwards.
Advisory looks forwards.

For Transport Operators: Planning for the Long Haul

Margins are tight in the transport industry. Rising fuel costs, new compliance rules, and aging gear all put pressure on cash flow.

With advisory support, we can:

Help you decide when to replace or finance new vehicles
Forecast your cash flow so you’re never caught short
Build a buffer to manage fuel cost volatility
Plan for driver shortages or operational slowdowns

Rather than reacting to problems when they hit, advisory helps you prepare in advance.

For Forestry Operators: Navigating Cycles and Complexity

The forestry cycle isn’t just seasonal - it’s multi-year. That means your financial strategy has to be just as long-term.

With advisory, we can work with our clients to:

Map income and expenses across planting, thinning, and harvest phases
Understand the cash flow impact of different harvest timings
Explore carbon credit opportunities (or implications)
Structure business and land ownership to support succession planning

We get into the detail — and help you step back to see the bigger picture.

So What Does Advisory Actually Look Like?

It’s not just a buzzword. At Gunson McLean, advisory looks like:

Regular check-ins , not just annual meetings
Forecasts and “what if” planning , so you can make informed decisions
Strategic insights tailored to your industry, not generic advice
Support with major decisions , from land purchases to asset finance
A sounding board who understands your business (and where it’s heading)

Confidence Comes From Knowing Where You’re Going

Most rural businesses don’t need more complexity - they need clarity. That’s the goal of good advisory. It’s about helping you go from “How do I get through this year?” to “Where do I want to be in five?”

Could the EU be your next export market?

Wed, 02 Jul 2025 11:08:48 GMT

Kiwi goods exports to the EU surged by 28% last year. Here’s how to maximise your export strategy to make the most of the New Zealand-European Union Free Trade Agreement.

The introduction of the New Zealand–European Union Trade Agreement (FTA) has proved to be a great opportunity for Kiwi small businesses looking to diversify into a new market.

Kiwi goods exports to the EU have surged by 28% over the first year of the trade agreement, so the EU may well be your next target market!

Trade and Investment Minister Todd McClay, was quoted as saying: “In the last 12 months our goods exports to the EU surged from $3.8 billion to over $4.8 billion.”

What’s the advantage of exporting to the EU?

Here’s a quick breakdown of the main advantages of the FTA:

NZ exporters can compete more effectively in the EU market against global competitors.
91% of current NZ exports to the EU now enter duty-free, from day one.
The FTA provides greater certainty for NZ services exporters in the EU.

How can you maximise your EU export strategy?

If your business is going to make the most of the FTA, you’re going to need a good export strategy – an approach that can deliver stability and good returns on your export investment.

Let’s look at four options for maximising your export strategy.

Make the most of the FTA benefits for free trade

Make sure you understand the specific tariff reductions and eliminations for your product category under the FTA, which came into force on May 1, 2024.

Use tools like the Tariff Finder (https://www.tariff-finder.govt.nz/) to find the best entry points and focus on goods where duties have been significantly reduced or eliminated to make your pricing more competitive.

Develop an EU-focused online presence

Review and optimise your online presence for EU consumers, so your website, marketing and sales materials are accessible for an EU audience.

Think about things like variations in language and cultural preferences from country to country. Refine your e-commerce platforms and digital marketing to reach specific customer segments across all EU member states that are part of the FTA.

Look for EU partners to collaborate with

Find established distributors, retailers and complementary businesses to collaborate with.

By building relationships with other EU suppliers and companies, you can use their existing networks and market knowledge to speed up your entry to this new market. This can reduce some of the logistical complexities and build trust with your new EU customers.

Highlight sustainability and the high quality of NZ goods

In your marketing, emphasise New Zealand's reputation for high-quality, sustainable products and ethical production practices.

With increasing consumer demand for sustainable goods in the EU, marketing your products' origin and environmental benefits can be a significant differentiator. It’s a great way to attract discerning European customers at a premium price point.

With the New Zealand-European Union Free Trade Agreement proving to be such a success, diversifying into the EU market is a sensible move for your business.

Recruit a great team

Mon, 30 Jun 2025 11:03:59 GMT

A dedicated team can be the point of difference that propels your business from good to great. Here are some tips for successful recruitment.

Is your team a cohesive unit? Enthusiastic, efficient, trained to deliver the best outcomes for your business and your customers?

The cost of getting recruitment wrong may not be immediately apparent. It’s more likely to show as a slow burn for the business:

High turnover burns up resources for advertising and the time taken for recruitment, induction and training.
Dealing with unreliable employees is challenging. If not handled well it can be a real liability for the business.

The cost of getting it wrong is high. The return on investment of getting it right is basic to your success.

Read the room: Take a careful look at each CV. Ask the right questions. Be wary a person isn’t too quick to jump ship. This doesn’t mean you should disregard potential candidates who may have wide experience in a variety of roles across different businesses, maybe even different sectors. But ask why someone may have moved around a bit. Their answer may persuade you they’re the candidate you’re looking for. Or not.
Room to grow? Look for someone willing to grow at this stage in his or her career. Don’t write off candidates with extensive experience who are ready and eager to challenge themselves in a new setting.
The right fit: Don’t under-estimate the importance of a good fit with you and the rest of the team. He or she may be a star performer but if they’re not a good fit in your team, it can throw everyone’s game off.

Fringe Benefit Tax (FBT): What NZ Business Owners and Farmers Should Know in 2025

Thu, 26 Jun 2025 10:58:18 GMT

FBT rules are tightening, and perks like vehicles or staff meals could cost more than you think. Stay ahead of changes for 2025.

Fringe Benefit Tax (FBT) can feel like one of the more frustrating parts of running a business in New Zealand. Whether you're providing vehicles to staff, putting on team lunches, or giving discounts on goods, there's often an FBT angle to consider.

And with Inland Revenue signalling interest in tightening compliance and reviewing how certain benefits are taxed, it’s a good time for business owners and farmers to make sure they’re up to speed.

Here’s a practical guide to how FBT works, where the common traps are, and what may change in the near future.

FBT 101: What Is It?

FBT is a tax paid by employers on non-cash benefits provided to employees (including shareholder-employees) in connection with their job.

Common examples include:

Work vehicles available for private use
Discounted goods or services
Subsidised staff meals or entertainment
Accommodation or board
Low-interest loans

If you're supplying any of these, you may have an FBT obligation - even if it feels like a small or occasional perk.

Common FBT Pain Points for Business Owners & Farmers

FBT can be especially tricky for family businesses, farms, and small teams where the line between business and personal use isn’t always clear. Here are some common challenges:

Company Vehicles

Vehicles available for personal use - even just on weekends - can trigger FBT.
Utes used on farms may qualify for a "work-related vehicle" exemption , but only if strict signage and usage conditions are met.
IR has been stepping up audits in this area.

Staff Entertainment

Meals, drinks, and staff functions are often partially deductible and may also attract FBT.
Differentiating between business entertainment (e.g. client meals) and employee perks (e.g. Friday BBQs) is key.

Accommodation

Providing a house or accommodation to workers (common in farming) can create FBT liability.
The “market value” of the accommodation must be assessed, unless exempt under specific rules.

Record-keeping

FBT is calculated based on either the individual or alternate rate - choosing the wrong method or missing filing deadlines can lead to penalties.

What Might Be Changing?

While no new FBT laws have been passed yet, several areas are under review or discussion:

1. Electric Vehicles (EVs)

Zero-emission vehicles have been FBT-exempt since 2022, but this may change with the withdrawal of the Clean Car Discount.
A future tax on EV fringe benefits hasn’t been ruled out.

2. Simplification of Rules

Many businesses have called for clearer, less time-consuming FBT rules - especially around shared vehicles and low-value benefits.
IR has acknowledged the system is complex and under review.

3. Valuation and Exemptions

Some valuation rules (e.g. for accommodation or discounted goods) may be updated to reflect inflation and changing market norms.
There's ongoing discussion about adjusting de minimis thresholds (e.g. small-value perks being exempt).

What Can You Do Now?

Review your perks : Take stock of any benefits you’re offering - especially vehicles, housing, and discounts.
Check exemptions : You may be able to claim an FBT exemption for some farm vehicles or work-related travel.
Keep records : Accurate logs (especially for vehicle use) are key to avoiding unnecessary FBT.
Talk to your accountant : FBT is full of edge cases - getting tailored advice can save time and money.

Final Word

Fringe Benefit Tax can be easy to overlook - but it can also catch you out if you’re not careful. As Inland Revenue continues to modernise and refine its approach, being proactive with your FBT obligations is more important than ever.

If you’re unsure how any of the above applies to your business or farm, get in touch with your adviser - we’re here to help make it straightforward.

Investment Boost: How to maximise the benefits of this new scheme

Mon, 23 Jun 2025 10:50:25 GMT

Budget 2025 introduced the Investment Boost scheme. But how can Investment Boost help you reinvest in growth and the competitiveness of your business? Check out our summary.

As part of Budget 2025 , the Minister for Finance introduced Investment Boost – a new way for Kiwi businesses to reduce the cost of investing in new assets and equipment.

Investment Boost is expected to lift NZ GDP by 1% and wages by 1.5% over the next twenty years, with half these gains in the next five years.

Let’s look at the benefits of the scheme and how it could help your small business.

What does Investment Boost offer?

Investment Boost is a new tax deduction that’s available to all Kiwi businesses, whatever the size of your business or your business type.

From 22 May 2025, you can claim 20% of the cost of new assets as an expense, then claim depreciation as usual on the remaining 80%.

What can you claim?

To claim Investment Boost, the asset you purchase must be:

New or new to New Zealand
Available for the business to use on or after 22 May 2025, and
Depreciable for tax purposes.

You can also claim for:

new commercial and industrial buildings
improvements to depreciable property (but not residential buildings)
primary sector land improvements
assets arising from petroleum development expenditure and mineral mining development
expenditure incurred on or after 22 May 2025 (except rights, permits or privileges)

What can you NOT claim?

There are some limitations on which assets you claim for under the Investment Boost scheme.

You cannot claim for:

second-hand assets that are sourced from New Zealand
residential rental buildings
most fixed-life intangible assets (such as patents)

How can you make a claim?

You can claim the Investment Boost in your income tax return for the financial year in which you purchase a new eligible asset.

For instance, if you buy a new asset on May 23, 2025, include the Investment Boost amounts in your 2026 income tax return (which covers the financial year ending March 31, 2026).

How to maximise this tax incentive

So, that’s the lowdown on how the Investment Boost scheme works. But how can you use this tax incentive to make a tangible difference for your small business?

Here are five ideas to get you started.

1. Invest in technology and AI to boost your productivity:

Use the 20% tax deduction to buy new machinery, software (including AI tools) and equipment. This direct cashflow benefit makes modernising your operations more affordable and, with new, cutting-edge equipment and tech, you can give yourself a real competitive edge.

2. Increase wages and attract new talent:

By investing in new assets that boost productivity, your business can generate more revenue and improve profitability. This financial uplift helps you offer competitive wages and benefits, making your business a more attractive employer in the currently tight labour market.

3. Upgrade and future-proof your business:

In an unstable economic climate, the Investment Boost encourages proactive investment. By replacing aging equipment, upgrading commercial buildings, or investing in new infrastructure you’re better prepared to weather the economic ups and downs that lie ahead.

4. Investment in sustainable assets to assist with climate change threats:

Use the tax savings from the Investment Boost to invest in environmentally friendly assets. This could include purchasing electric vehicles for your fleet, installing energy-efficient machinery, or investing in renewable energy solutions for your premises.

5. Reinvest in growth and new revenue streams:

The lower tax bill from the Investment Boost frees up more capital. Reinvest these savings into areas that fuel growth. This could include expanding your product lines, entering new markets, increasing marketing efforts, or providing advanced training for your team.

If you’re looking to invest in new assets and equipment, Investment Boost has come along at exactly the right time. Come and talk to our team about maximising this tax incentive.

The Future of Accounting Technology: What Small and Medium-sized Businesses (SMBs) Need to Know

Tue, 17 Jun 2025 23:08:28 GMT

From AI to automation, accounting tech is changing fast - and SMBs stand to gain the most. Here’s what to know (and how to keep up).

Accounting technology is evolving at lightning speed, and for small and medium-sized businesses (SMBs), it’s opening up new ways to save time, cut costs, and make smarter decisions. But with so many changes, it can be tricky to keep up. Let’s explore what’s coming next and how SMBs can take advantage - without feeling overwhelmed.

1. Automation Is a Game-Changer

Imagine you’re running a small café. Between keeping the books, chasing invoices, and sorting taxes, your admin time adds up fast. Automation is here to help. Today’s accounting tools, like MYOB or Xero, handle repetitive tasks like bank reconciliations and invoice processing automatically.

For example, instead of manually matching hundreds of payments to invoices, tools like these can do it for you in minutes. That frees up your time to focus on your customers - and maybe even take that holiday you’ve been putting off.

2. AI and Machine Learning: Smarter Than Ever

Artificial Intelligence (AI) and Machine Learning (ML) might sound futuristic, but they’re already making a difference for SMBs. These technologies can predict cash flow trends or flag unusual transactions that could signal errors - or even fraud.

Picture this: you run a small construction business, and cash flow is tight between projects. AI-powered tools can analyse your spending and income patterns to forecast when you’ll hit a crunch. With that insight, you can plan ahead - maybe by negotiating better payment terms with suppliers or chasing up outstanding invoices earlier.

3. Cloud Technology: Your Office in Your Pocket

Gone are the days when accounting meant being stuck at your desk. Cloud-based platforms like MYOB or Xero, and QuickBooks Online let you access your finances from anywhere. Whether you’re at a client meeting, working from home, or catching up on admin during a flight, you’re always connected.

For example, a tradie can create an invoice on-site after completing a job, ensuring it gets to the customer faster. No more waiting until you're back at the office - everything happens in real-time.

4. Connecting the Dots with Integration

Imagine if your accounting software could talk to your inventory system, payroll tool, and CRM - automatically syncing data across all your systems. That’s the power of integration. For SMBs, it’s a massive time-saver.

Take an online retailer, for instance. Integrating MYOB or Xero with an inventory tool like Unleashed means sales, stock levels, and invoices are updated instantly. No double data entry, fewer mistakes, and more time to grow your business.

5. Data Privacy: Getting It Right

Data security is a big deal, across all markets, with regulations from local (California Consumer Privacy Act), through to national (eg Australia’s Notifiable Data Breaches scheme, New Zealand’s Privacy Act 2020) and even multi country (eg GDPR in EEA). These hold businesses accountable for protecting personal information across regions and countries.

Let’s say you’re a family-run accounting firm. If you use cloud-based tools, make sure they offer top-notch security features like encryption and multi-factor authentication. Choosing software that aligns with local privacy laws keeps your clients’ trust intact - and keeps you on the right side of the law.

6. Accountants as Advisors

Thanks to all these tools, accountants are spending less time crunching numbers and more time offering strategic advice. For SMBs, this is a huge win. Your accountant can now help you plan for growth, reduce costs, or even assess whether it’s time to expand.

For example, a boutique clothing store might work with their accountant to use real-time data from their accounting platform to forecast seasonal trends and plan stock accordingly. It’s no longer just about keeping the books - it’s about making your business thrive.

The Future Is Bright

Accounting technology is becoming more powerful, user-friendly, and affordable. For SMBs, this means less time on admin, fewer mistakes, and more insights to drive growth.

Start small - automate one process, connect one tool, or explore cloud accounting. Every step brings you closer to a smoother, smarter way of managing your business. The future of accounting isn’t just about numbers; it’s about empowering SMBs to succeed. Are you ready to embrace it?

What is a Family Advisory Board?

Thu, 12 Jun 2025 23:01:04 GMT

Family businesses can face challenges as they grow, and need to consider long-term directions and succession planning. Good governance is critical for every business. Have you thought about what a family advisory board could bring to your business?

Good governance is critical for every business but not every governance solution will work for every business. Family businesses, in particular, can be stretched. Everyone is so busy just working in the business it can be easy to lose sight of the big picture. And what about when it’s time to think about handing on the business to the next generation? A family advisory board can really help to put a structure around planning for the future, and give everyone a voice.

The board is a body of ‘elected’ or selected members who oversee the activities of a business. The focus of the board should be to add value to your business and improve processes. The board’s role is to determine business goals and objectives based on the owner’s succession plan, or goals and wishes and to develop and nurture business relationships with suppliers and customers.

When it comes to deciding on board members, you need to opt for trustworthy members with focus and relevant experience and expertise. A board member should always have integrity and act ethically. You will also need an experienced leader on the board. It is a good idea when appointing board members to look for trusted people who can provide skills and insights other members may not possess, e.g. accountant, lawyer, farm advisor, banker.

The board’s role is to determine business goals and objectives based on the owner’s wishes and values, and to develop and nurture business relationships with interested parties (i.e. future owners, customers, suppliers, lobby groups).

As a board member, your role would include establishing objectives, making sure adequate resources are available (including finances), and approving budgets.

It is also a good idea, in a family business, to have a few independent board members. They can bring in specific business expertise and also help to defuse potentially emotionally charged issues where they arise.

Have You Thought About Income Equalisation?

Mon, 09 Jun 2025 23:04:37 GMT

Farming income can be unpredictable - but your tax bill doesn’t have to be. Income equalisation helps even things out over time.

If you run a farming business, you know all too well how income can fluctuate dramatically throughout the year. Seasonal peaks, unpredictable weather, and other unforeseen events can make managing both cash flow and tax obligations a real challenge.

One tool that many farmers, fishers, growers, and foresters may find useful is the income equalisation scheme - a government-backed initiative designed to help smooth out income variations over multiple years, easing tax pressure and improving financial stability.

What Is Income Equalisation?

Income equalisation allows you to spread your taxable income over two or more years by setting aside some of your current year’s income in a reserve. You then use that reserve to reduce your taxable income in a year when your earnings are lower.

This can be a game-changer when you have a bumper year, allowing you to save some of that income and reduce your tax bill in a leaner year - helping to keep your finances steadier over time.

How Does It Work?

The scheme works through a reserve account that you set up with Inland Revenue via myIR. You can:

Register for income equalisation in real-time
Set up an environmental restoration reserve, if applicable
Deposit income into your reserve during high-earning years
Withdraw from the reserve to offset income in lower-earning years

All transactions are tracked online under your myIR account, making it straightforward to manage.

Who Can Benefit?

Farmers and rural businesses with variable incomes - especially those affected by seasonality, weather events, or market volatility - may find this scheme particularly helpful. It’s also available to fishers, growers, and foresters.

For example, if you had a strong dairy payout this season, income equalisation can help you put some of those earnings aside to smooth tax obligations in a year with less favourable returns.

What Should You Consider?

While income equalisation can be highly beneficial, it’s important to assess whether it suits your specific situation. Factors such as your cash flow needs, expected income fluctuations, and tax position all play a role.

Need Help?

Unsure if income equalisation is right for your business? Our team can help you navigate the scheme, assess its benefits, and assist with registration and ongoing management.

Understanding the IRD’s Livestock Valuation Schemes: Herd Scheme vs. National Standard Cost

Thu, 05 Jun 2025 22:59:04 GMT

The way you value your stock can make a big difference come tax time. Find out which method fits your farm best - Herd Scheme or NSC.

For many New Zealand farmers, livestock is one of the biggest assets in the business - and how you value that stock at the end of each financial year can have a big impact on your taxable income. The IRD offers two main livestock valuation methods: the Herd Scheme and the National Standard Cost (NSC) method .

Understanding the difference between these schemes - and which one is right for your operation - is key to managing tax and planning for the future. We've broken it down into a top-line overview:

What Are Livestock Valuation Schemes?

Each year, farmers need to assign a dollar value to their livestock. This isn’t just for the balance sheet - it also determines how much income or loss is recognised for tax purposes. The IRD allows you to choose between two main methods for certain livestock types:

Herd Scheme
National Standard Cost (NSC) method

1. The Herd Scheme (Market Value Approach)

This method treats livestock more like capital assets (think long-term investments, not just inventory). Livestock are valued based on average market values set by the IRD each year.

How it works:

Values are published annually by the IRD for each livestock class (e.g. dairy cows, beef cattle, sheep).
You don’t track the individual costs for animals.
Once you enter the Herd Scheme for a livestock class, it’s generally considered a long-term election (you can’t switch in and out easily).

Best for:

Long-term farmers who want stable, less volatile tax outcomes.
Those who are building up or holding steady livestock numbers.

Pros:

Simpler over time - less record-keeping.
Smooths out income fluctuations (less taxable income when stock values go up).
Useful for succession planning and long-term strategies.

Cons:

You can’t easily change back to NSC once you elect into the Herd Scheme.
In the year you switch, increased values may create a tax bill if values are higher than your NSC book value.

2. National Standard Cost (NSC) Method

This method values livestock based on standardised cost calculations - the average cost of rearing and purchasing livestock, adjusted annually by the IRD.

How it works:

You calculate the cost of raising livestock (e.g. feed, vet, labour, depreciation).
The IRD provides guidelines for this cost each year, depending on stock type.
Tax is paid on increases in value (from births or purchases).

Best for:

Growing farms that are increasing stock numbers year-on-year.
Farmers wanting to maximise deductible expenses upfront.

Pros:

Can reduce taxable income in years when you’re building stock.
More detailed control over accounting.

Cons:

More admin - requires tracking costs and stock changes carefully.
Can result in higher tax when selling livestock or reducing stock numbers.

Can You Switch Between Schemes?

Yes - but there are rules. You can elect into the Herd Scheme from NSC, but switching back is generally not allowed unless special permission is granted. So it’s a decision to make carefully, ideally with your accountant.

Which Scheme Is Right for You?

The right method depends on your farm’s size, goals, and stage . Many established farmers prefer the Herd Scheme for its simplicity and long-term stability. Meanwhile, newer or growing operations might benefit from NSC’s ability to lower tax early on.

Need Help Choosing?

Every farm is different - and the best tax choice today might not be the best for next year. If you're unsure which scheme suits your business, get in touch. We can walk you through the numbers and help you make a smart, tax-efficient decision for your operation.

What does a cut to the official Cash Rate mean for you

Thu, 29 May 2025 01:27:07 GMT

On 28 May 2025, the Monetary Policy Committee agreed to reduce the Official Cash Rate (OCR) by another 25 basis points to 3.25%. This planned cut to the official Reserve Bank of New Zealand (RBNZ) rate is aimed at stabilising economic conditions in Aotearoa and for inflation to stay within their target of 1 - 3%.

But how will a drop to a 3.25% rate affect your small business?

The key business pros and cons of the OCR cut

A cut to the OCR has both potential benefits and drawbacks for New Zealand-based small business owners. Here's our breakdown of the possible implications for your business:

Potential benefits

Reduced borrowing costs – a cut to the OCR means lower interest rates on loans, including business loans and mortgages. This could mean easier, and potentially cheaper, access to capital for your small business, helping you finance your planned growth initiatives, equipment purchases or operational costs.

Increased investment – with borrowing costs now dropping, it’s a good time to look for business funding and finance. With repayments lower, you could look to invest in expansion, innovation or hiring new employees (all key elements of growth for 2025).

Improved cashflow – with your loan repayments now smaller and more manageable, you free up cash for the business. This liquid cash can be used to reinvest in the business, cover your increasing operating expenses or build a financial buffer.

Boosted consumer confidence – a lower OCR can sometimes lead to higher consumer spending, with customers feeling they have more cash in their pocket. If you’re a B2C business, this can lead to boosted sales and increased revenue.

Potential drawbacks

Slower economic recovery – the OCR is often used to stimulate economic activity, but, paradoxically, in certain circumstances, it can actually slow down recovery. A cut could benefit businesses in the long run, but a slower economic recovery may mean lower sales in the short to medium term.

Inflationary risk – cuts to the OCR could lead to future inflation spikes. Lower interest rates lead to cheaper borrowing and more spending. As prices and spending rise, so will the rate of inflation. Potentially, this could increase operating costs for your businesses.

Uncertain impact on interest rates – the high street banks won’t always pass on the full OCR reduction to borrowers. It's important for you to shop around and compare interest rates between business banks, to ensure you're getting the best deal.

Talk to us about the impact of the OCR for you business

The impact of the OCR cut on your business will vary, depending on factors like the industry you trade in, access to capital, and your reliance on consumer spending.

A further cut is possible in May, especially given recent global economic instability.

Talk to our team about how the OCR cut may affect your business plans for 2025 and beyond.

We can help you:

Review your loan options and whether refinancing makes sense.
Plan for growth and extra investment, using the potential cashflow boost
Keep an eye on inflation rates and how to adjust your pricing
Keep up to date with the OCR and the major NZ economic situation.

Key Points from the 2025 Budget

Mon, 26 May 2025 01:49:46 GMT

Here’s a quickfire summary of Budget 2025. The Budget has increased spending in health, education, defence, and law and order, as well as delivering targeted support for business investment and infrastructure growth.

Investment Boost

The new "Investment Boost" tax incentive aims to accelerate business capital spending. From 22 May 2025, businesses can immediately deduct 20% of the cost of eligible new plant, equipment, technology, or work vehicles in the year of purchase—on top of standard depreciation rules. The scheme also applies to new commercial buildings, which are otherwise ineligible for depreciation. There is no cap on the value of assets claimed.

KiwiSaver

Significant changes to KiwiSaver take effect from 1 July 2025. Government contributions will halve to 25 cents per dollar (capped at NZ$260.72 annually) and will be removed altogether for individuals earning over NZ$180,000.

Eligibility is being extended to 16- and 17-year-olds, with compulsory employer contributions starting 1 April 2026.

The minimum contribution rate for both employers and employees will increase to 3.5% in April 2026 and to 4% in April 2028. However, members may apply for a 12-month “savings rate reduction” to remain at 3%.

Health

A $7 billion increase in health funding will support infrastructure upgrades, additional capacity for elective surgeries and outpatient services, enhanced dementia and aged care, and longer prescriptions (up to 12 months) for those with chronic conditions.

Education

Education receives a major funding boost to improve support for students with additional learning needs. This includes hiring more specialist staff and teacher aides, building new classrooms for children with disabilities, investing in early numeracy interventions and improving school attendance by tackling truancy.

Defence

Defence spending rises to fund modernisation across land, sea, air, and space. The Budget includes funding for new maritime helicopters, two new aircraft to replace an ageing fleet, and investment in cyber and space capabilities to improve NZDF readiness.

Infrastructure

A significant increase in capital investment will support upgrades across multiple sectors. Key projects include improvements to the national rail network, new school facilities, an expansion of Christchurch Men’s Prison with 240 high-security beds, and a new housing fund to build more social and affordable rental homes.

Wellbeing Toolkit at your fingertips

Mon, 12 May 2025 01:29:32 GMT

Mental wellbeing is a valuable business asset. Employers who prioritise it have better engagement, reduced absenteeism and higher productivity. New tools make it easier to incorporate wellbeing principles into your health and safety plan.

Heard of The Five Ways to Wellbeing? They are simple and proven actions you can introduce in your workplace to help staff find balance, build resilience, and boost their mental health and wellbeing:

Connect: feeling close to and valued by others boosts wellbeing. Take a moment every day to connect with colleagues.
Be Active: being physically active improves physical health and can improve mood and wellbeing, decreasing stress, depression, and anxiety. Go for a walk or run. Step outside.
Take Notice: pay more attention to the present moment, thoughts, feelings, and the world around.
Keep Learning: be curious. Try something new. Take on a new responsibility.
Give: acts of kindness, small or large, can increase happiness and life satisfaction. Do something nice for a teammate. Thank someone. Volunteer.

It sounds simple but it’s often the simple things that fall through the cracks. Workplaces have a legal responsibility to manage risks to mental health and wellbeing just like they do any other health and safety risk.

Employers are recognising that wellbeing is an asset. An Australian study found employers who take effective action to create mentally healthy workplaces can expect a return on investment of $2.30 for every dollar spent. Workplaces that prioritise mental health have better engagement, reduced absenteeism, and higher productivity, while people have greater morale and higher job satisfaction.

Have you incorporated measures to support wellbeing into your business’ health and safety plan? A toolkit that makes it easy to support your people to build the Five Ways into their day-to-day lives can be found on the Mental Health Foundation’s website .

Farm Equity Partnerships – the facts

Mon, 28 Apr 2025 01:20:46 GMT

Ownership models for farming businesses have changed over time. Family ownership is the traditional model but, given the amount of capital tied up in farming businesses today, family ownership may not be the main model going forward.

Various factors shape this:

Some business owners want to plan for their own retirement while wanting to provide for the business to continue.
Other farm owners want to grow their business and see that an investment in a larger property is necessary to move forward.

Equity partnerships are an option which can work well, particularly if you want to grow your business.

What is an equity partnership?

Individuals pool their capital with others in order to gain an ownership interest in a larger property. Quite often there will also be a component of bank debt as the partners borrow funds to purchase the farm.

What are the benefits for equity partners?

pool capital
share the risk
leverage specialist skills and/or capital assets improve business performance with efficiencies of scale

Equity Partnerships can be a good way for:

managers and sharemilkers to progress to farm ownership
farmers to retire but remain involved in the industry and see their business continuing with a sound succession plan in place.

How would we go about it?

Often individuals who already know each other agree to set up an equity partnership. Or you can be put in touch with other people who might be interested in this kind of investment opportunity.

How would it work?

The preferred ownership structure for an equity partnership is usually a company. The company has several shareholders, with shareholding based on the amount of share capital that individuals contribute to the partnership. One shareholder generally takes the role of farm manager, on salary. Other possible structures include trusts and limited partnerships to establish the joint venture arrangements. It’s important to work through the structuring options to establish what best suits your situation and what you want to achieve.

What would we need?

A due diligence process is critical, to assess the potential risks and benefits.

If you decide that a company structure works best for your purpose, then all shareholders will sign a Shareholders’ Agreement setting out how the venture will work.
If you decide on a different ownership structure, then there needs to be equivalent documents such as a Trust Deed or Partnership Agreement.
There also needs to be an Individual Employment Contract for the farm manager.
If you’re trying to attract investors into a joint venture with you, it’s a good idea to put together an Information Memorandum which makes it clear why your proposed venture stands out.

Keep in mind

If you would like to explore the possibility of an equity partnership further, give us a call!

We’ll meet with you to analyse what would work best for you to achieve your goals, liaise with other specialists on your behalf and prepare the appropriate documentation.

The Rise of Regenerative Agriculture: A Path to Sustainable Farming

Mon, 21 Apr 2025 22:46:40 GMT

In recent years, regenerative agriculture has gained significant traction, offering a promising approach to farming that prioritises soil health, biodiversity, and long-term sustainability. As global consumers increasingly demand environmentally friendly practices, regenerative farming is emerging as a key solution for addressing the challenges of modern agriculture while maintaining profitability.

What Is Regenerative Agriculture?

Regenerative agriculture is a holistic farming approach that focuses on restoring and enhancing the natural ecosystems within farmland. Unlike conventional methods, which often deplete soil and rely heavily on chemical inputs, regenerative practices aim to rebuild soil organic matter, improve water retention, and promote biodiversity. Techniques such as cover cropping, rotational grazing, reduced tillage, and integrating livestock with crops are central to this approach.

Why the Growing Interest?

The rise of regenerative agriculture is driven by several factors:

Environmental Concerns: Farmers are under increasing pressure to reduce their environmental footprint. Regenerative practices help mitigate climate change by sequestering carbon in the soil and reducing greenhouse gas emissions.
Consumer Demand: Globally, consumers are showing a willingness to pay a premium for products that are sustainably and ethically produced. This trend is creating new market opportunities for farmers who adopt regenerative methods.
Economic Benefits: While transitioning to regenerative farming requires an initial investment, it can lead to long-term cost savings by reducing reliance on synthetic fertilisers and pesticides. Healthier soils also result in higher yields and better-quality produce.
Resilience to Climate Change: Regenerative practices improve soil structure and water retention, making farms more resilient to extreme weather events such as droughts and floods.

Benefits for New Zealand Farmers

For our agricultural sector, regenerative farming offers unique advantages. Our country’s reputation for clean, green produce aligns perfectly with the principles of regenerative agriculture. By adopting these practices, farmers can strengthen their position in international markets while contributing to the preservation of New Zealand’s natural resources.

Additionally, regenerative agriculture supports the long-term viability of farming operations. Healthier soils mean more productive land, reduced erosion, and improved water quality - benefits that extend beyond the farm gate to the wider community.

Challenges and Opportunities

While the benefits are clear, transitioning to regenerative agriculture is not without challenges. Farmers may face initial costs, a learning curve, and the need to adapt traditional practices. However, support is growing, with organisations offering training, resources, and financial incentives to help farmers make the shift.

A Sustainable Future

Regenerative agriculture represents a shift in how we think about farming - not just as a means of production but as a way to restore and sustain the land for future generations. For New Zealand farmers, it’s an opportunity to lead the way in sustainable agriculture while reaping the economic and environmental rewards.

As interest in regenerative farming continues to grow, now is the time to explore its potential and support its adoption across the sector. We can guide you through the financial and operational aspects of adopting regenerative practices. From budgeting for the transition to identifying potential funding sources, we can help you embrace this sustainable approach.

Selling Your Business: What’s Next After You Exit?

Fri, 11 Apr 2025 21:53:16 GMT

Selling your business is a huge milestone—one that marks the culmination of years of hard work, dedication, and vision. But once the deal is done and the dust settles, you may find yourself wondering, “What’s next?” Exiting your business opens up a world of possibilities. Here are five potential pathways to consider as you embark on this new chapter of your life.

1. Enjoy Retirement

For many, selling a business is the gateway to retirement. After years of being immersed in the day-to-day demands of running a company, retirement offers the opportunity to slow down and enjoy life at your own pace. Whether it’s traveling, spending time with family, or taking up new hobbies, retirement allows you to focus on the things that bring you joy. Planning ahead—both financially and emotionally—will ensure you make the most of this well-earned time.

2. Invest in Other Businesses

Selling your business doesn’t mean stepping away from the business world entirely. Many people choose to invest in other businesses, whether it’s through buying equity, becoming a silent partner, or supporting start-ups. Your years of experience give you a unique perspective, and investing allows you to stay connected to the business community while diversifying your income streams.

3. Start a New Venture

Once an entrepreneur, always an entrepreneur! If you have a new idea or are passionate about exploring a different industry, selling your business can provide the resources and freedom to start fresh. Whether it’s launching a tech start-up, opening a café, or pursuing an entirely new market, starting a new venture keeps your entrepreneurial spirit alive.

4. Become a Non-Executive Director

Another pathway is to leverage your expertise and become a non-executive director. Many businesses value the insight and guidance of experienced business people. As a non-executive director, you can provide strategic advice, mentor leadership teams, and help shape the future of other companies—all without the full-time commitment of running a business.

5. Pursue Philanthropy

For some, selling a business is an opportunity to give back. You might choose to support causes you care about through charitable donations, creating a foundation, or volunteering your time. Philanthropy not only helps make a difference in your community or the wider world but can also provide a deep sense of fulfilment and purpose in your post-business life.

Charting Your New Path

Exiting your business is both an ending and a beginning. It’s a chance to reflect on everything you’ve achieved and to embrace new opportunities that align with your goals and passions. Whether you’re ready to relax and retire, dive into new ventures, or make a positive impact through philanthropy, the choice is yours.

Whatever path you choose, careful planning will help ensure your next chapter is as rewarding and successful as the one you’ve just completed. If you’d like support in exploring your options or preparing for life after your business, don’t hesitate to reach out us for guidance.

How to Protect Your Business from 2025's Cyber Threats

Mon, 07 Apr 2025 21:53:24 GMT

Cybercriminals are constantly finding new ways to trick businesses, and their scams are harder than ever to spot. Small businesses are especially at risk, often seen as easy targets due to limited resources or weaker security. But with the right precautions, you can protect your business and prove the scammers wrong.

Be Aware of New Threats

Staying informed is your best defence. Here are some of the latest cyber threats:

AI-Powered Scams : Scammers now use artificial intelligence to create convincing phishing emails and fake websites that are difficult to distinguish from the real thing.
Impersonation Attacks : Posing as banks, government agencies, or suppliers, attackers aim to trick you into sharing sensitive information.
Deepfake Technology : Fake audio and video messages that mimic trusted sources are becoming more sophisticated and harder to detect.

Train Your Team

Educating your team is crucial. Teach them to:

Spot warning signs, like urgent requests to act quickly.
Double-check email addresses and URLs before clicking on links.
Be cautious with unusual requests, even if they seem legitimate.

Regular training sessions and phishing simulations can help your staff stay alert and recognise scams before they cause harm.

Protect Your Business

Basic but effective security measures can go a long way. For example:

Enable two-factor authentication to secure your accounts.
Keep your software and systems up to date.
Use resources like the Business Online Security Series for practical cybersecurity tips.

It's also wise to consult with your IT provider to evaluate your business’s vulnerabilities and develop a cybersecurity training plan for your team.

Taking action now can save your business from potential threats while safeguarding your reputation. Stay informed, train your team, and strengthen your defences!

Planning for the Future of Your Business

Mon, 31 Mar 2025 21:53:22 GMT

Over a decade ago, there was a lot of talk about a huge transfer of wealth from one generation to the next, with baby boomers retiring and passing on their businesses. But that tidal wave never quite arrived.

Many business owners held onto their companies for longer than expected. The global financial crisis came and went, followed by COVID-19, which brought new challenges for businesses worldwide.

While there have been many business sales along the way, the expected transfer of wealth didn’t happen. Now, as more business owners approach their 70s, selling or passing on their businesses has become a priority.

We’re seeing a rise in demand for help with succession planning for family businesses. One important lesson applies to every situation: starting early and giving yourself enough time to plan is key to a smooth transition.

What Is Succession Planning?

Succession planning is about preparing your business for the future—making sure it’s ready for the next owner. It’s a deliberate process that involves tackling challenging issues, but the payoff is worth it. With careful planning, you can:

Identify strengths and weaknesses in your business.
Fix gaps in management, finances, legal structures, or insurance.
Be ready for unexpected events, like illness or injury.
Ensure your business is ready for opportunities to sell or transfer ownership.

Succession planning isn’t just about passing on your business—it’s also tied to your estate planning and any legacy goals for your family or philanthropy.

How the Transition Works

Choosing the right buyer or successor is a key step. Options include:

Selling or transferring to a family member.
A management buyout (where the existing team takes over) or a management buy-in (where an external team comes in).
Selling to another business in the same industry.
Selling to a competitor.

Who Can Help?

Succession planning usually involves a team of experts. You’ll need advice from accountants and lawyers to get your business processes, legal structures, and financial setup in order before a sale or transfer.

For bigger transactions, you might need help from a merger and acquisition (M&A) specialist or a business broker. When all advisors work together and have a solid plan in place, the transition can happen smoothly.

Why It Matters

Getting succession planning wrong can have serious consequences. It can lower the value of your business or, in family-run businesses, lead to tension and broken relationships.

The key to success? Start early! Many business owners delay planning, leaving less time to prepare, which can lead to rushed and less effective outcomes.

If you want to talk about your future plans and how to prepare your business for its next chapter, our team is here to help.

Is Your Business Model Still Relevant? Key Factors to Consider

Mon, 24 Mar 2025 00:01:53 GMT

In today’s fast-changing business landscape, it’s crucial to regularly assess whether your business model remains effective. What worked a few years ago may not work now due to changes in technology, consumer behaviour, and market trends. To stay ahead, here are some key aspects to evaluate when determining if your business model is still fit for purpose.

1. Understanding Market Trends and Consumer Behaviour

The first step is to assess how market trends and consumer preferences have evolved. Are your products or services still in demand? Has your industry undergone significant changes that require adaptation? For example, the rise of e-commerce and digital platforms has transformed how people shop and interact with brands. Staying informed about these shifts can help you identify both opportunities and potential risks.

2. Embracing Technological Advancements

Technology is a driving force behind business evolution. New tools and innovations can enhance efficiency, improve customer experiences, and create new revenue streams. Assess whether your business is keeping up with technological advancements, such as cloud computing, automation, and data analytics. Leveraging the right technology can help you remain competitive and streamline operations.

3. Evaluating Financial Performance

A strong financial foundation is essential for business sustainability. Regularly review key financial metrics like revenue growth, profit margins, and cash flow. If you notice a decline in these areas, it may be time to adjust your pricing strategy, cost structure, or revenue streams to improve profitability. A proactive financial review can help you make informed decisions before challenges escalate.

4. Listening to Customer Feedback

Your customers provide valuable insights into the effectiveness of your business model. Actively seek feedback to understand their needs, preferences, and challenges. Are they satisfied with your offerings? Do they see value in your products or services? Use this input to refine your approach and enhance customer satisfaction. Building strong relationships with customers also fosters loyalty and trust.

5. Analysing the Competitive Landscape

Competition is constantly evolving, with new players and innovative strategies reshaping industries. Conduct a thorough competitor analysis to see how others in your space are adapting. What are they doing differently? How can you innovate or differentiate your offerings? Understanding the competitive landscape allows you to stay relevant and find new opportunities for growth.

6. Navigating Regulatory Changes

Laws and regulations can have a significant impact on your business operations. Stay informed about any new compliance requirements in your industry, such as environmental regulations, data protection laws, or sector-specific guidelines. Ensuring compliance not only helps you avoid legal risks but also strengthens your reputation and credibility.

The Importance of Regular Business Model Evaluation

Regularly reassessing your business model ensures it remains aligned with current market conditions and industry demands. By staying informed about trends, technology, financial health, customer expectations, competition, and regulations, you can make strategic adjustments to keep your business thriving. After all, adaptability and innovation are the keys to long-term business success.

The Future of Invoicing: How e-Invoicing Boosts Efficiency and Reduces Errors

Wed, 19 Mar 2025 23:59:03 GMT

E-invoicing is becoming more and more popular in New Zealand and Australia. E-invoicing is where you deliver an e-invoice directly into your customers accounting software without it needing to be emailed to the customer. E-invoicing has a number of benefits, and best of all, you don’t need to be using the same accounting software as your customers.

E-Invoicing allows you to:

Streamline payments which improves your cash flow
Eliminate data entry errors
Reduce admin which saves time and money
Enhance security as invoices are sent directly between trusted networks which means they can’t be intercepted and altered.

The Government is already making moves to e-Invoicing. From 1 January 2026, any government agency which processes over 2,000 domestic invoices annually must use e-invoicing and pay 95% of these invoices within five business days.

Back in 2019, the New Zealand and Australian governments set up the e-invoicing framework for both countries, which uses a New Zealand Business Number (NZBN) as a global ID for every business. It has been adopted by software provider including MYOB and you can e-invoice your customers, or receive e-invoices from suppliers, even if they don’t use the same platform.

Start sending and receiving e-invoices

You can set up e-invoicing in MYOB or we can help you set this up - just get in touch and we can help. It only takes a little bit of preparation to use e-invoicing, and once you have the hang of it, you’ll reap the benefits.

Tips to help your Business Get Found Online

Fri, 07 Mar 2025 00:06:29 GMT

Establishing a strong online presence is essential for small and medium-sized enterprises – whether you run a local bakery, a boutique consultancy, or a neighbourhood hardware store you need to be able to be found online. To help potential customers find you more easily, you can utilise the power of SEO (Search Engine Optimisation). Improving (aka optimising) your SEO helps your business appear in search results when people nearby search for products or services you offer. It’s like putting a spotlight on your business for local customers and making it easier for people to find your business, contact you, and visit your store or office.

SEO seems like one of those buzz words and can easily be put in the ‘too-hard’ basket. However, here are some tips to help you increase your online visibility to potential customers.

1. Make the most of your Google Business Profile (GBP)

You’ve probably heard of ‘Google My Business’ which is an online profile for your business. It’s now known as a Google Business profile and allows you to input information such as business hours, contact information, and images of your products or services. To make changes to your listing, simply search for your business in Google, and on the right-hand side it should come up with your business. Scroll down and click ‘Own this business’ and you’ll be asked to manage this business. If you want to go the extra mile, you can ask for reviews, share updates and offers, but this is not necessary.

2. Make sure your website is optimised for mobile devices

People searching from their smartphones is becoming more popular than searching from computers and laptops, so it’s essential your website displays nicely on a mobile device. If you’re not sure, you can check by using your own mobile device and opening up your website – you’ll soon see if there’s a problem!

3. Build backlinks to your website

Having high-quality links to your website (called backlinks), can boost your SEO. For example, you can get listed in an online directory, chamber of commerce, or local pages. If you sponsor an event, ask them to link the online information to your website. KEY TIP - make sure the websites that link to yours are ‘high quality’ – which means from reputable websites rather than random websites.

4. Optimise your website’s SEO

When was the last time you looked at what you’re saying on your website? Are you using the common terms/names for what you’re selling? Is it easy to read, and have you included what people might search for in your descriptions? Make sure the words you’re using on your website match what people are searching for.

5. More complicated SEO efforts

If you feel like you’ve mastered the above and are looking for some slightly more complicated things to try, here are some ideas:

a) Ask for reviews from satisfied customers on your Google Business profile and on social media. This shows you value customer feedback.

b) Promote your products or services to a local audience through paid ads using location-specific campaigns such as Google Ads or Meta Ads (Facebook & Instagram).

c) Analyse and track how your website and paid advertising is performing by using Google Analytics and Google Search.

Our Services - Comprehensive Accounting Services to Help Your Business Thrive

Mon, 03 Mar 2025 00:09:40 GMT

At Gunson McLean, we offer a comprehensive range of accounting services tailored to meet your needs. As specialists in Agri Advisory, Bigger Business and Trade & Contractor services, we pride ourselves on delivering top-quality support in partnership with you.

Taxation Services

Our proactive approach to taxation ensures you stay ahead while minimising your tax obligations. We assist with preparing tax returns, tax payment advice, and managing GST, FBT, and ACC obligations. With our expertise, we help you navigate complex tax matters while keeping your key objectives in focus.

Business Advisory & Financial Planning

We provide strategic business advice, including budgeting, financial projections, cash flow forecasting and investment planning. Whether you're looking to refine your long-term vision or implement a 3-5 year strategic plan, we can offer guidance in achieving your business goals.

Financial planning is crucial for long-term security. We develop comprehensive strategies to ensure your financial goals are met, creating income sources beyond your business or employment. In collaboration with NZ Funds Private Wealth, we provide an integrated wealth management service for our clients.

Payroll & Office Support

Managing payroll and employment legislation is becoming increasingly complex and time-consuming. We take the hassle off your hands by providing a confidential payroll service, including IR-filing, customised payslips and general payroll administration.

If office administration isn't your strength, we can help with processing wages, managing creditors and debtors, handling secretarial duties, and training in general office tasks.

GST & FBT Management

GST legislation can be tricky, but we know it inside out. From GST registration to preparing and filing returns, we ensure you meet compliance requirements, even for special events such as property sales or purchases. Our expertise also extends to audit assistance when needed.

FBT rules frequently change and staying compliant can be challenging. We offer accurate advice on preparing FBT returns, understanding FBT implications for your business decisions, and developing cost-effective employee benefit plans.

Succession Planning

Planning for the future is vital to ensure the long-term success of your business. Our years of experience allow us to address complex succession planning issues, giving you peace of mind and relieving the stress of business continuation.

Management Consulting

We help businesses unlock their full potential through expert management consulting. Acting as a trusted advisor, we offer guidance on business growth, key performance indicators, and overall business efficiency. With our support, you can confidently make informed decisions that drive success.

At Gunson McLean, our goal is to provide expert accounting and advisory services that help your business thrive and achieve long-term success.

How to prepare for the end of financial year

Thu, 20 Feb 2025 20:32:43 GMT

The end of the financial year is fast approaching, so if you’re balance date/end of financial year is 31 March, there are a few things you need to do to help us prepare your financials.

Take a stocktake

If your business sells products or has stock, you’ll need to do a stocktake on 31 March. If you’re a business that sells products, then you need to take a stocktake of your physical inventory. If you’re a farmer, then you need to take a physical livestock tally.

Send in your EOY papers

Compile a folder (digital or hard copy) with a copy of the following documents:

Bank statement that shows the balance on 31 March 2025 for all your bank accounts and loans.
Insurance invoices.
ACC invoices.
Loan statements for the year (if applicable).
Any new loans or refinancing documents.
Invoices for assets purchased and sold.
GST workings and reports.

Submit the online questionnaire

You’ll also need to fill out and submit the online questionnaire. You should receive an email from us in April/May, with a link to fill out and submit the questionnaire. If you haven’t received an email with the link by the end of May, let us know.

Supporting the Heart of Dargaville and Whangārei Communities

Mon, 17 Feb 2025 20:46:03 GMT

At Gunson McLean we are more than just a business offering financial expertise we also support our communities in Dargaville and Whangārei. By partnering with various local organisations, we help sustain and strengthen sports, recreation, and community initiatives in the region.

Empowering Local Sports Clubs

We understand the role sports play in bringing people together, promoting teamwork, and supporting youth development. We are proud to sponsor the Old Boys Marist Rugby & Sports Club, Hikurangi Rugby Football Club Inc, Maungakaramea Hockey Club, Maungakaramea Bowling Club, Mid Western Rugby Squash Club, Kamo Rugby & Squash Club, New Zealand Vikings Rugby Football Club Inc., and the Cobham Cricket Club.

Promoting Outdoor Education

We also believe that outdoor education is essential for youth development and are proud to work with the charitable trust, Pātaua Outdoor Education & Recreation Trust (POERT). We have been closely involved in the Trust’s activities for the past 8 years – handlings its financial matters – and Craig Gunson is the current Treasurer.

Backing Community Halls & Facilities

We’re proud to support the Whareora Hall Society and Whareora Cemetery Board as well as local cycling and motorcycling groups Marsden Wheelers Cycling Club Inc., and the Whangārei Motorcycle Club.

We are passionate about the causes we support, and the opportunities and growth this enables in our Dargaville and Whangārei communities.

Optimise your business by taking care of your employees

Fri, 07 Feb 2025 20:37:07 GMT

Most people agree that optimising your business is a good idea and spend hours looking at optimising the supply chain, storage, overheads etc. However, they forget that people are one of the most critical elements in your business. By providing a caring, supportive workplace for employees you also drive the success of your business. Studies show happy workers are productive workers and, as an employer, it’s a no-brainer to provide a workplace where employees feel valued, and where they can flourish.

Here are five key ways to build employee relationships, nurture your team, and create a great workplace for your employees:

1. Invest in your employees

This doesn’t mean ‘casual Friday’s’ or a pizza night once a month. This is about offering your employees access to training programmes, workshops, conferences, and mentorship programmes. It’s about the professional growth of your employee and how you can enhance their skills and make them feel truly valued as team members.

2. Create a positive work environment

Creating a positive work environment is about cultivating a workplace culture that feels positive and supportive of your employees. Be open and transparent with your employees, listen to their feedback and have a strong focus on employee wellbeing. This could include offering flexible working arrangements, benefits such as health insurance, and other perks.

3. Recognise and reward your employees

When an employee goes above and beyond, make sure your recognise and reward them. This could by through a performance bonus, employee-of-the-month programmes or even extra time off in lieu. Feeling valued comes partially from feeling rewarded and can be an amazing motivator.

4. Give employees autonomy

One of the key ways employees feel trust, is by being given autonomy. Being trusted to come up with their own solutions, processes, and ideas is key to making people feel as if they ‘own’ their role. This helps employees feel fully involved and also brings new ideas, solutions, processes, and efficiencies to the table.

5. Put wellbeing at the heart of your culture

Life is stressful. And work-life can be stressful. A well though out wellbeing programme can help your employees manage stress and, in turn, benefits your business. A wellbeing programme is different for each business but some ideas could be checking in with team members, creating a ‘ask for help’ culture, flexible working arrangements including work-from-home days, and offering mental health support.

Making sure you’re a caring and supportive employer is vital to your business strategy. With a team who feel valued, nurtured, and encouraged, you’ll all be happier and more productive.

Is your website working for you or against you?

Tue, 28 Jan 2025 20:43:10 GMT

These days, having a website isn’t just a nice-to-have—it’s a must have! Whether you’re running an online store, offering services, or just sharing valuable info, your website is often the first impression people get of your business. But just having a website isn’t enough. It needs to run smoothly, engage visitors, and actually help your business grow. When was the last time you thought about how well your website was helping your business? Your website might be turning people away without you even realising it—maybe your site is too slow, hard to navigate, or just not appearing in search results.

Here’s why website analysis is so crucial:

Better User Experience (UX) – A well-organised, easy-to-use site keeps visitors engaged and more likely to take action, whether that’s making a purchase, booking a service, or getting in touch.
Stronger SEO Performance – Google and other search engines favour websites that load fast, work well on mobile, and are optimised for relevant keywords. If you’re not ranking, you’re missing out on traffic.
Higher Conversion Rates – Even if you’re getting visitors, are they turning into customers? Website analysis can highlight issues like confusing layouts, weak calls to action, or technical errors that might be affecting conversions.
Staying Ahead of Competitors – Regularly analysing your site helps you stay up to date with trends and customer expectations, keeping you competitive.

What to Look Out for When Analysing Your Website

Before you pay anyone the big bucks, you can perform a basic analysis of your own website by considering the following five things:

1. How quickly does your website load? How long does it take for your website to load? A long load time will turn people away. Utilise a device that you don’t often use to check how quickly your website loads. Aim for a load time under three seconds.

2. How easy is it to navigate? Is your site easy to navigate, and can visitors quickly find what they need?

3. Is your site mobile-friendly? More and more people browse on their phones, so make sure your site works well on all devices – most websites will work well on computers but what about mobile phones or iPads and Tablets?

4. Are you using up-to-date terminology? Does your site have relevant keywords to help visitors find your website? These keywords are used by search engines to help them decide which websites to show to people searching for products or services you offer. If you have articles or help guides, are these high-quality and informative? Improving both of these will help your ranking in search engines.

5. How easy is it to contact you? Check your contact forms are working and easy to fill in (no one likes having to repeatedly try and submit a form). How easy is it for customers to checkout, or make a booking? Remove unnecessary steps to simplify the process.

Best Tools for Website Analysis

There are plenty of tools to help businesses keep their websites in check. Some of the most useful include:

Google Analytics – Get insights into user behaviour, traffic sources, and conversion rates.

GTmetrix – Checks page load speed and suggests ways to improve it.

For the more tech-savvy:

Google Search Console – Track how your site appears in search results and fix any technical issues.

PageSpeed Insights – Find out how fast your site loads and how to make it faster.

SEMrush / Ahrefs – Great for SEO analysis, keyword tracking, and competitor research.

Hotjar – Offers heatmaps and session recordings to see how people interact with your site.

If you’re not regularly checking in on your website’s performance, you could be losing customers without even knowing it. People expect smooth online experiences, and businesses that don’t meet those expectations risk falling behind. A slow, outdated, or hard-to-use site means frustrated visitors who will likely go to a competitor instead. A lack of relevant keywords or a slow-loading website can hurt your visibility, making it even harder for people to find you online.

If you haven’t checked in on your site’s performance lately, now’s the time to start. A well-optimised website can be the difference between thriving online and getting lost in the crowd.

Pātaua Outdoor Education & Recreation Trust

Mon, 16 Dec 2024 18:57:41 GMT

Pātaua Outdoor Education & Recreation Trust (POERT) is a charitable trust offering a self-catering school camp facility outside the classroom, primarily to educational organisations and groups wanting to experience Northland’s east coast.

Parauwanui Beach, Pātaua North and Papuni Beach, Pātaua South are separated by Te Whangarei Heads inlet which lies below Pātaua Island Recreation Reserve, where the ocean flows into the Pātaua Estuary. Pātaua offers a coastal mecca of white-water surf combined with a sheltered estuary.

Gunson McLean have been closely involved in the Trust’s activities for the past 8 years, handlings its financial matters. Craig Gunson is also the treasurer.

POERT was established in 1979 with a focus on serving financially-challenged schools and communities, addressing a significant need by offering an affordable, high-quality venue for current and future generations.

The Trustees generously contribute their time and resources. They are a diverse group with complementary skills, united by a shared commitment and deep desire to enhance the lives and futures of young people. The adopted values that drive those involved are:

• Lifelong learning: innovation, inquiry and curiosity

• Respect for self and others

• Equality: fairness and social justice

• Inclusion: Diversity, participation and cooperation

• Respect for, and collaboration with, mana whenua

• Promotion of Te ao Māori

• Enhancing and enriching lives through opportunities and learning

• Passion for life and learning

• Integrity and dependability

• Confidence and humility

• Sustainability and resilience

After 40 years, the facilities need an upgrade. As the total cost is expected to be in the vicinity of $4 million, a staged development is being undertaken.

With funding of $1.8 million secured, Stage 1 is progressing: all consents have been obtained, a state-of-the-art wastewater system is being installed, ground works are completed, the kitchen has been upgraded, and temporary ablution facilities purchased. Stage 2 will see construction of a new hall, decks, accommodation cabins, rebuilding of the sports courts, and installation of an electricity supply to campers.

Gunson McLean’s donation of time to the redevelopment has been substantial and widely acknowledged by the general community. We are extremely proud to be part of establishing such a valuable resource for the positive wellbeing and development of our young people.

The Do's and Don'ts of Managing Annual Leave

Mon, 02 Dec 2024 19:02:51 GMT

Managing staff involves more than just overseeing work; it also includes managing holidays and annual leave effectively. As an employer, it's your responsibility to maintain accurate, up-to-date records of your employees' time off. Here are some key points to remember:

1. Annual leave entitlement doesn't expire

Employees are entitled to take their leave whenever they choose and their annual leave never expires. Employees can choose to cash in one week of leave per year (if your business chooses to do so) but this must be approved by you.

2. You can’t unreasonably refuse a leave request

When considering leave requests, businesses must act reasonably and cannot refuse annual leave requests without a valid reason.

3. You can reject requests for unpaid leave or for using leave in advance.

If your employee hasn’t accrued enough annual leave entitlement to cover their upcoming leave request/holiday, you can reject their leave request. Similarly, you can reject a request for unpaid leave.

4. You can’t force an employee to take annual leave, except during a shutdown

A business cannot force an employee to take their annual leave before it’s due, except during a company-wide shutdown. For most businesses, this type of leave typically happens during late December – early January.

5. You can require an employee to take time off, but only in certain situations

If you and your employee(s) can’t agree on when they should take leave, you can require an employee to take time off if 14 days' notice must be given.

To manage leave efficiently, consider implementing a system for tracking holidays. An annual leave planner—whether digital or a traditional wall calendar—can help you monitor leave taken and planned by your team. Ensure that Employment Agreements clearly outline all leave entitlements and any specific conditions. Additionally, provide new employees with a handbook detailing their leave rights and benefits.

Preventing Payroll Errors: Five Tips Every Employer Should Know

Fri, 22 Nov 2024 20:54:46 GMT

Payroll mistakes can be expensive. They not only cost your business money, but can also lead to fines or penalties. While some errors are unavoidable, many can be easily prevented with a little attention to detail. Here’s a look at 10 common payroll mistakes and how to avoid them:

1. Misclassifying employees in the payroll system

How you classify your employees in your payroll system directly impacts their tax rates and entitlements. If you get it wrong, you could end up deducting the wrong amounts or even owe your employees wages they should have been paid. For example, misclassifying an employee as exempt from overtime could mean paying them back pay for overtime they were entitled to.

To avoid this, make sure each employee’s details are set up correctly in your payroll system. Double-check that their classification matches their employment contract and that it complies with any specific rules in your industry. Also, remember that contractors have different tax rules to regular employees, so be sure they’re categorised correctly.

2. Using incorrect tax rates

One of the most common payroll errors is applying the wrong tax code or rate. Employees usually provide their tax details, but you should never just assume they’re correct. Mistakes can happen if tax codes aren’t updated, or if an employee forgets to notify you about a change.

To reduce the risk of errors, make it part of your process to confirm tax codes when employees first start and periodically check that the information is up to date.

3. Missing payroll deadlines

Payroll might seem like a simple task, but once you factor in hours worked, leave, overtime, and deductions, it can get complicated. Rushing to meet deadlines can lead to mistakes, and paying employees late can cause frustration and even legal issues.

To stay on top of it, ensure all your employee details (like name, address, tax code, bank info, etc.) are entered correctly and well in advance. Having a clear process to track hours worked and using payroll software that automates payment, and payslip generation, can also make life much easier.

4. Miscalculating or failing to pay overtime

Although there’s no official overtime legislation in New Zealand, many businesses agree to an overtime rate with their employees. If you’re paying overtime, it’s important to make sure your payroll system automatically calculates it based on the agreed rate.

For example, if an employee works over a certain number of hours in a week, the system should apply an overtime rate to those extra hours to ensure they’re paid correctly.

5. Failing to keep payroll records for 7 years

In New Zealand, businesses must keep payroll records for at least seven years. This includes details like how much you pay employees, the deductions you take out, and any contributions you make. Even if you’re a sole trader, keeping detailed records is a must. If the IRD audits your business, you’ll need to show exactly how much you’ve paid your employees, and how taxes were handled. If you don’t have complete records, you could face fines - up to $20,000 for multiple breaches over three months.

By staying on top of these common payroll mistakes, you’ll save your business time, money, and potential headaches. A little planning and organisation can go a long way in ensuring you stay compliant, and keep your employees happy.

Tips for Employing Summer Staff

Mon, 18 Nov 2024 20:26:25 GMT

As we head into the Christmas rush and you start to employ staff for summer, it is important to make sure you’re treating your employees fairly and according to the law. This also applies to any seasonal staff you might take on at other times. Here are three tips to help you stay on the right side of the law.

TIP 1: All employees must have a signed employment agreement before they start work.

Regardless of how long you’re employing a staff member for, they MUST have a signed employment agreement before they start work. The contract must include certain clauses, including the type of employment (fixed-term, casual, or permanent), duties, pay, and other benefits, the place and hours of work, how problems can be resolved, etc.

Make sure to give your new employees adequate time (3-5 days) to read, understand, and ask questions before they sign the contract.

If you’re not sure what to include in an employment agreement, use templates from a New Zealand employment advisory service or an employment agreement builder to help you put together a legal employment contract. Federated Farmers also have an array of employment agreements which can be bought online. These agreements cover what you must do by law, and sets out common mistakes made by employers and how to avoid them.

TIP 2: Make sure you’ve included the minimum employee rights.

All employees have minimum rights set out in law. These minimum rights include:

Minimum wage: Employees must be paid at least the minimum wage; the current adult minimum rate is $23.15 per hour.
Public holidays: Unless written in the contract, employees don’t have to work on public holidays. If they work on a public holiday, they must be paid time and a half, plus if it is a normal workday for them, they also get an alternative day off.
Health and safety: Employers must provide appropriate training and information for workers so that they can work safely.

TIP 3: Make sure the hours your employees work are following the rules

One of the common mistakes is that any set up or tidying up doesn’t need to be paid. All work activities must be paid for, regardless of their time. This includes before and/or after-hours tasks, such as team meetings, opening and closing the business, cleaning and tidying up, on-the-job training, and product familiarisation.

You also can’t offer zero work hours and expect employees to be available ,without reasonable compensation.

The work hours must include proper rest and meal breaks. For example, an employee who works an eight-hour shift gets two paid rest breaks and one unpaid meal break.

If you need advice or support with creating a new employment agreement or with staff induction, let us know – we’re happy to help.

Tips for Chasing Unpaid Invoices

Mon, 11 Nov 2024 20:53:34 GMT

It can be frustrating when you’ve done the work but you haven’t been paid. Invoices being paid late is going to happen, but managing unpaid invoices is crucial to sustain your business’s long-term financial health. Here are some tips on chasing late payers.

1. Write a payment request letter or email

When you first notice your payment is overdue, send a polite payment request letter or email. In most cases this will be enough to prompt a customer to make a payment. This allows the customers to pay if they’ve inadvertently overlooked paying the invoice.

Your payment request letter/email should include:

a brief reminder of the outstanding invoice; and
the specific invoice number, due date, and amount owed.

Politely ask when you can expect payment, and offer a brief reminder of your payment terms.

2. Send an overdue invoice/statement of account

If you don’t get a response from step number 1, the next step is to send an overdue invoice. This is the original invoice but with an ‘overdue’ stamp on it. You can attach this to a follow-up email. You can do this automatically by setting up payment reminders in your accounting software. If you have multiple unpaid invoices with the same customer, you could send them a statement of accounts which summarises all of the outstanding payments.

3. Make the phone call and prepare to negotiate

If you haven’t had a response to your emails, it’s time to pick up the phone and give the customer a call. Chasing unpaid invoices by phone can tend to yield better results. Make sure you mention the unpaid invoice numbers, ask when you can expect to receive payment, and don’t hang up until they’ve given you a payment date.

You may need to negotiate when you’ll receive payment. For example, if they agree to pay the outstanding invoices by a certain date, you can agree to this change but put a hold on carrying out any more work/supplying goods until payment is received.

4. Charge a late payment fee

Charging a late payment fee can provide an incentive for customers to pay on time. However, any late-fee policy you use should be clearly communicated upfront in your payment terms when you agree to carry out work for your customer. This can be either a percentage of the outstanding amount, or a set late payment fee.

If they don’t pay on time, notify them that the late-fee has now been added but if they pay within the next 48 hours, you’ll waive the late payment fee.

5. Cut them off until outstanding invoices are paid

If a customer isn’t paying you or responding to your messages, it’s time to cut them off. Let them know that until you receive full payment for the outstanding invoices, you won’t continue any work for them.

Still no payment?

If none of these tips work, it’s time to call in the big guns – a debt collector or lawyer. It’s best to exhaust all other strategies before doing this as it may end the relationship with your customer. Debt collectors specialise in recovering unpaid invoices but take a cut of what you’re owed, typically around 25%, so you’ll need to factor that into the decision. If you don’t have any luck with the debt collector, your last resort is to consult with a lawyer. Taking legal action is complex, so it’s best to consult a specialist lawyer who has experience in professional invoice chasing.

Are You Inadvertently Damaging the Value of Your Business?

Mon, 04 Nov 2024 20:28:22 GMT

You’ve built your business up so it’s successful and giving you a healthy return on investment. The value and equity that’s locked up in your business is your nest egg. It’s the asset that will power your future retirement, buy your family that new home, or the unrealised capital that will allow you to invest, begin new enterprises, or fund your lifestyle. But if the value in your business drops, this can undermine future plans and potentially leave you without the capital to take these next steps. You’re thinking about the next steps, whether it’s retirement or moving into a new business venture, but are you inadvertently damaging the value of your business? Here are five potential threats that could be damaging the value of your business.

1. Relying on the founder limits growth

A modern business should be systemised and scalable. If you, as the founder, are still integral to your everyday operations, this blocks innovation and limits the potential growth of the business. Consider what you can delegate to others and switch your focus to growing the business – work ON the business rather than IN the business.

2. Using outdated or inefficient equipment or technology

If you’re using outdated or inefficient equipment, technology or software, you’re holding your business back by reducing operational efficiency and increasing running costs, which makes your business less competitive in the marketplace. If you haven’t done a review of your systems, equipment and technology, now would be a good time.

3. Failing to keep pace with the market

Keep up with what’s going on in your industry as things can change quickly. New competitors, new products, and changing customer behaviour can leave you lagging behind. It might be time to survey your customers to find out what they like and dislike, and where improvements can be made.

4. Bad reputation or brand awareness

A bad reputation can damage your brand which in turn affects sales. Have you checked lately how satisfied your customers are? Have any of your employees exhibited bad behaviour or questionable sales tactics. It’s easier to keep a good reputation rather than trying to fix a bad one.

5. Poor financial health

If you are considering selling the business, potential buyers will want to see that the business is in good financial health. A high debt-to-equity ratio can make a business more vulnerable to economic downturns, and poor cash flow will hinder your ability to invest in growth, pay bills, and meet your financial obligations. These are all red flags for investors and potential buyers.

Next steps

For the business to maintain value, it needs to keep up with a changing market, adopt new technologies, and make solid plans for growth. If you’re considering selling up for retirement or moving onto your next business, give us a call and we can help you with the next steps, including stabilising the value of your company.

Why Good Financial Management is Important

Tue, 29 Oct 2024 20:31:33 GMT

Financial management can be overwhelming, especially if you’re new to running a business. When you’re operating and managing a small business, you have a finite pot of cash to work with. Because of this, it’s incredibly important to manage your cash well, and to have clear budgets and spending limits for every area of your business operations.

It’s impossible to run a successful business without having a tight rein over your expenditure. Sales may be bringing in healthy revenues, but the income and profits you’re generating can quickly be eaten up if you’re overspending on operational costs, marketing campaigns, staff payroll, or investments in new hardware and software.

Let’s take a look at why budgeting is such a vital part of your financial management, and what you can do to keep your company on budget and in a positive cash flow position. Here’s three ways to stay in control of your business budgeting.

1. Embrace the power of budgeting

A well-crafted business budget gives you the foundations to become a financially healthy and successful business that’s in control of its spending. If you aren’t already running cash flow forecasts, a simple breakdown of income and expenses in an Excel spreadsheet can be a great starting point.

i) Track your projected sales, so you understand your future revenue numbers and have a solid projection for your income over the course of the year, or budget period.

ii) Calculate your costs, including fixed costs like rent and utilities, and variable costs like inventory and marketing. This gives you an understanding of your total expenditure. Don't forget to factor in business taxes and contingency funds to cover emergencies.

iii) Set clear budgets for the coming period’s spending, based on the total income you’ve predicted, and the total fixed and variable costs you’ve estimated. Always leave some wriggle room to account for inflation and changing costs.

iv) Regularly review your budget, so the document is always evolving. Reviewing and updating your budget helps you stay on track, identify areas for cost-cutting, and make informed decisions about resource allocation. Remember, a budget is a living document, so adapt it as your business evolves.

2. Track your budgets, income, and spending

Setting the budget isn’t the end of the process. It’s important to track all income and expenses, and to update your budget in line with the current health of your business finances. Using the tools available to you in your accounting software can help you record your incoming and outgoing transactions in real time, so you can work with the most up-to-date numbers and financial data when reviewing and reworking your budget.

To improve your tracking:

Use codes to categorise your expenses in your accounting software. This makes it easy to categorise each expense as it’s incurred, and it’s then simple to review your financial reports and to analyse your spending patterns.
Review your spending – check your spending against each code and see where budgets are on track, or where there’s overspending that’s threatening your budget. Are there subscriptions you can cancel? Or could you renegotiate rates with your suppliers?
Plan for seasonal trends and patterns – tracking your income and expenditure helps you to spot, predict, and plan for the financial ups and down you’ll experience over the year. The more you understand your cash flow, the better equipped you are to stay on budget, make solid strategic financial decisions, and avoid unexpected shortfalls.

3. Forecast for the future: don't just track the past

Basing your budget and financial strategy on historic data is a great foundation stone. But you can also use this data to project the data forwards in time and create useful cash flow forecasts. For example, you can:

Get clear cash flow forecasts – based on your historical sales trends and projected expenses, you can quickly estimate your future cash flow. Having this view of your future cash position is extremely helpful when setting out your budget for the period.
Plan out your budgets and cash management – with forecasts at your fingertips, you can plan for seasonal fluctuations, identify potential funding needs, and make informed decisions about the short, medium, and long-term strategy of the business.
Be ahead of the curve – with solid budgets, forecasts, and a great overview of your finances, you can be more in control as a business owner. Whatever the market throws at you, you’re better prepared, agile, and ready to respond.

Talk to Us

We can assist you with getting on top of your budgeting. We can streamline your record-keeping, bookkeeping, and financial reporting, as well as give guidance on budgeting, forecasting, and financial management to ensure your cash flow and budgets are always looking positive and healthy.

Key Features to Consider in Payroll Software

Thu, 24 Oct 2024 22:45:52 GMT

Running payroll can be tedious and is often a thankless task. So if you’re not already using Payroll software, now might be the time to start! Payroll software simplifies payroll to just a few clicks which saves you time, admin and hassle by calculating gross wages, deductions and entitlements for you.

Benefits of payroll software

Some of the benefits of using payroll software include:

1. Time tracking

To accurately calculate wages, employers must be able to record the working hours and any overtime. Payroll software that allows you (or your employees) to record their working hours and overtime means that wage calculations will be accurate.

2. Calculates employee deductions

Employers must process payroll deductions, including:

KiwiSaver
PAYE
student loan repayments
insurance premiums
mandatory deductions, like child support payments.

Payroll software can manage all these deductions and calculate the employees’ correct net or “take home” pay.

3. Complies with payroll regulations

The IRD requires employers to keep payroll records for every employee and contractor. As an employer, you need to keep comprehensive records of wages, time worked, leave and other details. Payroll software generates and stores these records for you.

4. Provides employees with pay slips and keeps employee data secure.

With payroll software you can send your employees their payslips and then also send this information onto the IRD at the same time you run your payroll. The best payroll management systems use state-of-the-art security to protect sensitive employee data. They can run updates for you, automate your account security and remediation activities, and inform you immediately about any suspicious or fraudulent activity they detect.

5. Provides anywhere access

The best online payroll management systems provide 24/7 access so that you can manage payroll queries on the go.

If you’re not already using a payroll system, it can be a bit of a daunting task to know which payroll software to use and what to look for. When you’re comparing payroll software systems, here are some additional things to consider:

1. Enables employee self-service

Some cloud-based payroll systems come with an extra benefit: employee self-service. For instance, employees can submit their bank, tax and KiwiSaver fund details through a secure self-service portal. Employee self-service takes a heap of work off your shoulders and empowers employees to manage their details.

2. Integrates with your existing accounting software

Look for payroll management software that can integrate with your existing accounting software as well as any other software you use such as onboarding, rostering, leave requests and time tracking, so you can operate more efficiently, reduce repetitive data entry and prevent errors.

3. Provides analytics and reporting

Payroll software drives better decision-making with comprehensive analytics and accurate reporting that you can control and customise.

You can access key information online, including leave, personal info, payslips and timesheets, whenever and wherever you want.

If you need help deciding on the right payroll software for you, get in touch, we’re happy to help you find one that works for you.

How tax deductible are gifts to clients?

Mon, 21 Oct 2024 01:42:03 GMT

The season of giving is nearly upon us. If you're thinking about giving a gift to your clients, here's a reminder of the tax rules when giving these gifts.

When giving gifts to clients, remember that depending on the gift, some will be fully tax deductible while others will be only 50% deductible. The rule of thumb is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction. If you are giving out gift baskets or hampers and some of the contents are food or drink, but not all, the food or drink items are 50% deductible, but the other gift items are 100% deductible. When you come to claim the tax deduction, you will need to apportion the expense between the 100% deductible items and the 50% deductible items. And you will need to make a GST adjustment for expenses which are 50% deductible.

Examples of gifts which are 50% deductible include:

· Bottle of wine or six pack of beer

· Meal voucher

· Basket of gourmet food

· Box of chocolates/biscuits

· Christmas ham

Examples of gifts which are 100% deductible include:

· Calendars

· Book or gift vouchers

· Tickets to a rugby game (but not corporate box entertaining)

· Movie tickets

· Presents (but not food or drink)

If you’re unsure whether a planned gift is 50% or 100% tax deductible, gives us a call and we can advise you.

How automation can give you time back

Sun, 13 Oct 2024 22:57:43 GMT

On average, according to recent research by OnePoll, business owners needs an additional four hours in their working day to complete their admin. If your people are spending 20 hours per week wading through tedious and unproductive admin, that’s bad for the business and for your efficiency. Fortunately, technology and software automation can go a long way towards automating these low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, artificial intelligence (AI), machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

1. Automated bookkeeping

Simply take a photo of your receipts, expenses and invoices and ‘optical character recognition’ (OCR) technology will digitise the output and pull it through to your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.

2. Automated credit control

Cha sing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.

3. Automated payment collection

The easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.

4. Automated reporting and forecasting

The better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.

5. Automated digital marketing

Digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to create, schedule and post social media content, or email automations to send a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about how you could use automation in your business

If your admin is holding you back, come and talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review your business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

The top five questions to ask before buying a business

Wed, 09 Oct 2024 23:23:52 GMT

Purchasing an existing company is a great way to expand and diversify your business. Whether you're looking at buying out a competitor or dipping your toe into a new industry, you need to ensure you’re not buying a lemon!

Doing your research is a crucial part of the purchase process, as is asking some probing and insightful questions to help you determine if this acquisition is a good or bad idea.

Questions to ask before you make an offer

Buying another company is a major business decision. It’s a large outlay of capital and a big responsibility to take on. If you’re going to take the leap, it’s important to make sure the company in question is stable, well-managed and has a good future ahead of it. Here are five vital questions to ask before entering into a purchase:

1. Why is the business for sale?

There are many reasons why an owner might want to offload a company, not all of them good. Their sales may be dropping, they may have rising debts, there may be internal problems with staff or the market for their product/services may be coming to an end. Find out why, so you don't buy trouble.

2. Is this a good industry to step into?

Do your research on the industry, competitors, and marketplace that the business currently trades in. It's important that you step into an industry sector that has potential for sales, growth, stable revenues and potential profits. With volatile markets post-pandemic, looking at predictions and forecasts for your chosen industry niche makes good sense and helps you make an informed decision.

3. Have you done your due diligence?

Do your due diligence to make sure there are no financial, legal or HR skeletons in the cupboard that may jump out to surprise you. Is there an unpaid tax bill? Are there loans that are being defaulted on? Are there any legal cases being brought against the company? Has the business filed all its returns and accounts? As the new owner, any of these issues become your responsibility, so you want to check out the company’s records and history in as much detail as possible. This will prevent some major headaches further down the line.

4. Does it have an existing business plan?

You'll need a business plan that takes the company forwards and gives you a pathway for your next steps as the owner. Is there a business plan you can use? When was the plan last updated? How well are they tracking against the milestones in that original plan? No business plan is written in stone, so you’ll almost certainly need to review, update and refine this strategy post-acquisition.

5. Are your management team and staff up to scratch?

When you buy the business, you'll usually also be inheriting the team behind that company. Do you have a management team with the skills, experience and motivation that's needed? Are your employees engaged and do you have a big enough team to meet your own goals for the business? This team will be vital to your future success, so you want the best possible people and talent behind you as you steer a new course for the company.

Talk to us if you’re considering buying a company

Purchasing a company can be a complex and protracted process, even once you’ve completed all your due diligence and background checks. If you’re in the market for a business acquisition, do come and talk to us, so we can help you sort the top deals from the big risks. We’ll help you complete the relevant checks and will work with you to create a new business plan and strategy that’s designed to turn your new purchase into a business success.

Using AI Tools in your Business

Mon, 30 Sep 2024 23:39:32 GMT

Artificial Intelligence (AI) is no longer the stuff of science fiction. AI solutions and business tools are here right now, demonstrating new ways to operate, manage and staff your business.

According to the World Economic Forum, we're in ‘The Fourth Industrial Revolution' with AI as one of the formative technologies of this revolution, but only 50% of Australasian businesses are using AI in their business. Keeping pace with the speed of technological change is a key responsibility for any business owner. If competitors are using AI to gain efficiencies and streamline their operations, it stands to reason that your business must match this innovation and find ways to embrace AI.

Where could AI be lending a helping hand in your own business?

As with any technological or software investment, there has to be a fundamental role for the new AI tools you take on. ‘Going AI’ just to be seen to be at the cutting edge, is not the goal here. Your aim is for AI to have a function and to make your life easier.

Here are four areas where modern AI tools can help the average business:

1. Record and summarise meetings.

Pulling out the key points from in-house and customer meetings can be time-consuming. A tool like Fireflies records your in-person and online meetings and then forwards you an AI summary of the meeting, with bullets of the key themes, a full transcript and clear action points for everyone to follow.

2. Generate content

Generative AI tools, like ChatGPT and Google Gemini can revolutionise your marketing efforts. You can ask AI to draft you an email campaign, sales deck or web page, based around your foundational knowledge of the product. But make sure to edit and personalise the output to make it your own.

3. Answer customer calls and improve customer service

Fast responses to customer queries are essential for good customer service. AI-powered phone agents, like Lucy from Curious Thing . can have human-like conversations with customers, answer routine customer enquiries and free up your team to focus on high-value customer interactions.

4. Automate your social media posting.

Being present on social media is vital for brand awareness and connecting with customers. A social media tool like Buffer helps you manage your social media accounts while also using the built-in AI tool to generate posts and repurpose existing posts, keeping your feeds fresh.

The world of business-focused AI solutions is growing at a fantastic rate, so the suggestions above are just the tip of a very large AI iceberg. Remember, when considering which AI tools to implement in your business, make sure they will improve efficiencies and add value.

How cash flow forecasting is valuable for your business

Sun, 22 Sep 2024 23:18:11 GMT

In order to effectively manage future cash flow, it's important to forecast your cash flow. This allows you to project your financial position for the upcoming months and take necessary steps, where needed, to protect your cash reserves. This allows you to maintain financial stability, plan for various scenarios, reduce costs, and develop strategies to maintain your cash flow.

Effective Cash flow forecasting strategies

Remaining control of the cash coming into and out of the business is the key focus so you can accurately predict your financial position and resolve any issues. Here are some key ways to get more from your cash flow forecasting.

Conduct regular forecasts : The financial landscape is changing on a daily basis so a cash flow forecast is not a document that remains static. Variables and external drivers are changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.
Explore new revenue streams : In light of recent changes in sales and demand for services across many industries, it’s essential to explore new income opportunities. Consider introducing new products or services or partnering with new businesses to boost revenue and manage unavoidable expenses.
Implement cost-cutting measures : Minimising cash outflows is crucial for maintaining healthy cash flow. Evaluate and reduce unnecessary expenses, such as software subscriptions, or excessive inventory. Negotiating better rates with suppliers can also contribute to cost savings.
Assess staffing requirements : Nobody wants to make anyone redundant, and there are alternative ways to reduce staffing costs and resourcing without getting rid of staff completely. Reducing working hours or redeploying staff in different roles are options that reduce payroll costs, while also looking after your staff.
Run various scenarios : When running scenarios, changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Many of these will be in a long-term plan once conditions improve. Scenario-planning lets you answer questions and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.
Explore funding options : If your cash flow forecasts show a major cash flow deficit coming up, you’ll likely need additional funding to get through. We can assist your business to investigate funding opportunities from grants, banks, loan providers, alternative lenders, and crowd-sourcing funders.

Get started with cash flow forecasting

Talk to us about setting up cash flow forecasting in MYOB. Effective cash flow forecasting is key to in having the right information for sound decision-making. If you’re not already running cash flow forecasting, let us help you enhance your cash flow management and ensure you’re well prepared for the future.

Using referrals to boost your bottom line

Thu, 19 Sep 2024 23:18:16 GMT

Slow sales can be a significant hurdle for any business, impacting revenue and growth. When sales are sluggish, you need to explore effective and cost-efficient strategies to boost sales, but traditional methods like paid advertising or broad marketing campaigns don’t always deliver immediate results. And, if sales are slow, it’s likely your budget for this has already been allocated elsewhere. This is where customer referrals can play a pivotal role.

Deliver exceptional customer service

The foundation of a successful referral programme is exceptional customer service. When a client has a positive experience with your service, they’re more likely to recommend you to others. Focus on delivering outstanding service that meets the needs of your client, and address any issues promptly. Happy clients make great brand ambassadors!

Create a referral programme

A structured referral programme can incentivise your existing clients to refer new clients. If your referral programme rewards clients for their referrals, they’re more likely to refer new clients. For example, you could offer a 10% discount on their next purchase or provide a free gift card for each successful referral.

Keep your current clients engaged with your business

Keeping your existing clients informed about new services, promotions, and updates helps to keep your business top-of-mind. Regular communication through newsletters, social media, or personalised emails helps build a strong relationship with your clients. When they are well-informed and excited about what your business has to offer, they are more likely to share their positive experiences with others. This ongoing engagement not only reinforces their loyalty but also increases the likelihood of them referring friends, family, and colleagues to your business, driving new leads and fostering growth.

Leverage testimonials and case studies

Encourage satisfied customers to provide testimonials to build credibility and attract new clients. Share these stories on your website, in your newsletter, and on social media. Prospective clients are more likely to trust your business if they see positive feedback from real people.

By delivering exceptional service and creating a referral programme, you can turn satisfied customers into enthusiastic advocates. Engaging with your customers and leveraging their testimonials enhances your credibility and, with a well-executed referral strategy, you can tap into the power of word-of-mouth marketing and drive sustainable growth for your business.

Buying and selling property for profit? You may still be liable for the Brightline tax.

Mon, 16 Sep 2024 23:18:34 GMT

In July, we talked about the changes to the Brightline rule for residential property sales – property sold after two years of its purchase date would not be liable to the Brightline rule. This change meant that those who held a property for at least this long were not automatically taxed on any gains made on the property.

If you’re buying or selling properties for profit, you may get a tax bill, even if you’ve held the property for longer than two years or even if you’ve lived in the property.

The Brightline rule for residential property sales was reduced to two years from 1 July this year which meant property purchased prior to July 2022 would no longer be automatically subject to the Brightline rule. However, if you purchased a property with the intention to resell it, regardless of how long you’ve held the property, you can be taxed on the gain/profit.

The Inland Revenue (IRD) has recently released a property tax decision tool to help people understand whether their property was taxable under any of the land taxing rules. This includes those who bought a property intending to resell it, no matter how long they held it, or those who had a history of buying and selling that could have them count as a dealer, as well as those captured by the Brightline rule. Any property that is bought with the intention of sale can be taxed, irrespective of the Brightline test.

The IRD has an information-sharing agreement with Land Information New Zealand (LINZ) which would prompt the IRD to contact people it had concerns about. Although they don’t have a fast or hard rule about the number of times that people could buy and sell, or renovate and sell houses, and not be taxed, generally three prior transactions would be needed for there to be a regular pattern.

So, if you’re buying properties with the intention to resell them in the future, be aware, you could be taxed on the profit or gain you make on the property – even if you’ve held it for longer than two years.

How tax pooling can help you meet your provisional tax payments

Wed, 11 Sep 2024 23:18:47 GMT

Was your provisional tax amount more than you expected this year? Provisional tax is calculated by your previous year’s residual income tax plus 5%. But the provisional tax you’ve paid in the past may not reflect how your business has performed over the current financial year. Plus, if you underpay your tax, this can lead to use of money interest (UOMI) being charged by Inland Revenue (IRD), and UOMI has increased in recent years.

It can also be challenging for any business to keep a lump sum of cash aside to pay provisional tax on it’s due date, especially if you have cash flow issues or need money on hand.

If paying provisional tax is challenging for you, tax pooling could be the perfect solution. The way it works is that IRD-approved intermediaries collect payments from many taxpayers and put them into a tax pool account with IRD. They then allocate these payments to the taxpayers’ accounts as needed. Once the pool has made the payment to IRD, it is considered to be ‘tax paid’. If you haven’t paid enough tax to meet your provisional tax liability, you can purchase tax payments made by the pool for lower interest rates than those charged by IRD. You can set it up so you can make payments to the pool to help you with provisional tax in future years. There are pros and cons to this and the pros include:

Flexibility around when you pay provisional tax; you can overpay when you have a bit more money and have some breathing room when things get tight.
Avoiding penalty charges and use of money interest (UOMI) charges for late payments; the pool will always make time-stamped payments for you.
If you haven’t paid enough tax to meet your provisional tax liability, tax pools typically charge lower interest rates for purchasing tax payments than those charged by IRD.
If you’re short on cash, you can dip into your tax pool payments as an emergency line of credit, as long as you top up the money later.
If you do take money out of the pool, you’ll pay a lower rate of interest than banks charge.

We work closely with Tax Traders so, if you’re finding keeping money aside for provisional tax payments difficult, talk to us today to see if tax pooling is the right fit for you.

The plain English guide to cashflow

Thu, 22 Aug 2024 22:12:44 GMT

When talking about cashflow you’ll often hear why it’s so central to good financial management, yet nobody talks about what cashflow is or how to get in control of it. Not having enough liquid cash is one of the biggest reasons for companies failing, so it’s important that you keep on top of your company’s cashflow position. Here’s our plain english guide to cashflow – what it is and how you can improve your cashflow management.

What is cashflow?

Cashflow refers to the movement of money into and out of your business over a specific period. In the most basic terms, cashflow is the process of cash moving out of the business (cash outflows), and cash coming into the business (cash inflows). The ideal scenario is to be in a ‘positive cashflow position’. This means that your inflows outweigh your outflows – i.e. that more cash is coming into the business than is going out.

When you’re cashflow positive, the main benefit is that you have the liquid cash available to fund your daily operations and debt payments etc. On the flip side, if you’re in a negative cashflow position, this can be a red flag that the business is facing some financial challenges – and that some serious cost-cutting and/or revenue generation is needed.

Five key cashflow areas to focus on are:

Monitoring your cash inflows and outflows – this means regularly tracking your cash inflows from sales, loans and investments, as well as managing your cash outflows from expenses, purchases and debt repayments.
Managing your account receivables and payables – efficiently managing your customer receipts and supplier payments helps smooth out your inflows and outflows – and delivers stable cashflow that’s easier to predict and manage.
Getting proactive with your budgeting and forecasting – creating realistic cashflow budgets and forecasts helps you predict your future cash position. By anticipating your future cash needs, you can actively plan for potential shortfalls or surpluses.
Being in control of your stock inventory – having excess stock in your warehouse ties up cash. So, it’s a good idea to optimise your inventory levels and to only manufacture/order the items you need on a day-to-day basis.
Investing in your cash reserves – with emergency cash reserves in the bank, you know you have the funds to handle unforeseen cashflow issues or sustain your operations during lean periods. This makes your whole cashflow position more stable.

How can we help you with your cashflow management?

Positive cashflow is the beating heart of your business and we can help you keep that cashflow healthy, stable and driving your key goals as a company. We’ll help you keep accurate records, track your inflows and outflows and deliver the best possible cashflow position for the business. So if you'd like to check where your cashflow is at or what improvements you can make, then get in touch with us.

Why accepting online payments is smart

Sun, 18 Aug 2024 23:12:05 GMT

Payment options

The costs

The benefits

Businesses using online payments get paid faster. Of course, not every client will pay instantly just because they have the option, but it should speed up your average payment time. A bonus is that customers appreciate the ability to pay online and the hassle-free approach, so it can decrease the amount of time you wait for a payment (and can be a big point in your favour).

Setting it up

If you’re thinking about offering online payments for your invoices, let us know and we can help you set it up.

How the Digital Boost Scheme Can Help Transform your Business Digitally

Tue, 13 Aug 2024 22:16:14 GMT

If you haven’t already taken advantage of the Digital Boost scheme to help transition your business into the digital world, now’s the time. The Digital Boost scheme has a variety of services available, all aimed at helping you with transitioning your business into the digital realm.

Improve your digital skills

Digital Boost Educate features 500 video tutorials and Q & A sessions for you and your employees to help you learn about how to transform your business into the digital world. The video are available to watch on YouTube .

Digital Resources

The Digital Boost free learning resources area has a variety of sections with videos on topics such as Marketing, Cyber Security, Social Media and AgriTech. Check out www.business.govt.nz/do-business-online/digital-boost for the full list of resources.

Get advice from professionals

The Digital Boost Alliance is committed to empowering small and medium-sized enterprises (SMEs) to unlock the benefits of digital tools and technologies, ensuring you can thrive in today's digital landscape. The initiatives provide affordable access to essential digital and technology services, so you have the resources you need to succeed. Check out digitalboostalliance.nz to find out more.

Selling carbon credits and de-forestation

Sun, 04 Aug 2024 22:59:34 GMT

Last month we talked about how you could use your forestry land to earn carbon credits, but how do you calculate carbon credits, what happens when you want to sell those carbon credits, and what happens when you clear your forest land?

Calculating carbon credits

Each year you’ll need to submit emissions returns to report on the amount of carbon in your forest land. To calculate the amount of carbon in your forest land, you need to know what species the forest is as different tree species remove carbon from the atmosphere at different rates. It also differs depending on the region the forest land is in. There are carbon tables that help you do the calculations and will tell you how many tonnes of carbon (carbon dioxide) are in forest land per hectare, based on the characteristics of the forest.

An example, one hectare of five-year-old Pinus radiata can range from 15-77 tonnes of carbon dioxide per hectare, depending on the region the trees are in. When the trees are ten years old, the range is 125-219 tonnes of carbon dioxide per hectare.

When it’s time to sell your carbon credits

Ensure you're registered with the New Zealand ETS. This is necessary for participating in the market and managing your carbon credits. Each carbon credit represents the reduction or removal of one metric ton of carbon dioxide (or its equivalent) from the atmosphere. They can be purchased to offset emissions produced by various activities. Your credits are stored in your NZETR account and are called ‘units’. You can sell your units through the carbon market – anyone who has an NZETR account can buy and sell units. Currently, each carbon unit is worth $53.17.

What happens when you clear your forest land?

When forest is cleared, the carbon it stores is released which contributes to the country’s emissions. You may need to pay units for these emissions, depending on the kind of forest land you have and whether it's in the ETS.

Pre-1990 forest land

If you deforest pre-1990 forest land, you must pay 1 New Zealand Unit (NZU or unit) for every tonne of carbon dioxide released by the deforestation (also known as surrendering units). There are exceptions if the land is exempt, or you have an approved application to offset it by planting another forest elsewhere.

Post-1989 forest land

If you have post-1989 forest land, you must pay units if you deforest the land and/or remove it from the ETS. Depending on your method of carbon accounting, you may need to pay units if you clear the forest, even if you replant it (or it regenerates).

For more information on the Emissions Trading Scheme see https://www.mpi.govt.nz/forestry/forestry-in-the-emissions-trading-scheme/

What is a B Corp company?

Wed, 31 Jul 2024 22:14:44 GMT

In a world where capitalism is increasingly being touted as the cause of many of the world’s problems, B Corp companies aim to make business a force for good by putting sustainability and a positive social impact at the heart of their mission. The B Corp concept aims to revitalise the idea of what a business can do and the good that can come from running an ethical, socially conscious and green enterprise.

If this sounds like the kind of idea you’d like to embrace in your business, here are a few pointers about what being a B Corp means and how your business can move towards these goals.

What makes a business a B Corp company?

A B Corp business is a type of company that prioritises social and environmental impact alongside financial return. In other words, making a profit is no longer your sole aim. Instead, part of your vision is to be a force for good in your community and the wider world.

B Corp companies are certified by B Lab , a non-profit organisation that monitors B Corp certification. B Corp companies need to meet rigorous standards of:

Social performance – looking at how the business interacts with society and how it can use its time, resources and influence to help those in the local and global communities.
Environmental performance – measuring your carbon footprint and your wider environmental impact on the planet, plus the sustainability credentials of the business, your products, your investments and your suppliers.
Accountability – a B Corp business is held accountable to a higher standard of performance, transparency and impact. This helps drive systemic change and create a more responsible and sustainable economy.
Transparency – B Corps must publicly report their impact data on the B Impact Assessment, a document that’s available to the public. This provides stakeholders with a clear understanding of the company's impact and helps increase accountability.

What is B Lab’s aim for the B Corp movement?

B Lab's mission is to use business as a positive force for good. Its aim is to dismantle the view of Western capitalism as a destructive force and to show that businesses can provide employment, take care of their communities and pursue a goal beyond financial profit.

If you want to become a B Corp business, B Lab can assess your social and environmental impact, governance and accountability – and will provide certification to companies that meet its high standards for a well-structured B Corp organisation.

B Lab provides resources , networking opportunities and advocacy support to help your B Corp grow and achieve a greater and more meaningful impact. In essence, B Lab serves as the steward of the B Corp movement. It drives systemic change through the creation of a new type of economy that balances purpose and profit to help you do more good.

Becoming a B Corp

Becoming a B Corp is a rigorous process. But if you have a higher vision for your business, it’s a great way to demonstrate your commitment to social and environmental impact, transparency, and your overriding accountability to your employees, customers and wider communities.

For more information on the process to become a B Corp business see https://www.bcorporation.net/en-us/programs-and-tools/pending-b-corps/

Why Keeping Employees Pays Off Long-Term

Wed, 24 Jul 2024 23:17:27 GMT

When things get lean in a business, one of the biggest expenses is wages and salaries. The temptation is to try and keep that cost down, which can mean that there’s a reluctance to give employees a pay rise. Although that can be tempting, as it does keep that very large number from trending upwards, it can actually end up costing you more, if one or more employees decides to jump ship and you have to employ somebody new.

If what you pay your staff isn’t keeping up or above what others in your industry are paying, you run the risk of losing your valuable employees to your competitors. Which although that looks fine, because you can just pay the new person the lesser rate, it pays to consider the costs involved with replacing that employee. There’s the obvious cost of advertising, interviewing and onboarding a new employee. However, often the time spent training the new employee (whether that’s your time or another employees) and waiting for them to get to grips with doing things the way your business does them can result in reduced efficiency and productivity – which could impact sales and/or profit.

Once you run the numbers on the actual cost of onboarding and training a new employee, it may work out cheaper to have given your employee(s) a reasonable pay rise – as long term that benefits them and your bottom line. An Australasian survey in 2021 equated the cost of employing a new staff member at around 40% of their salary – which based on the current median wage in New Zealand is just over $26,000. So although on one hand you’ve kept your salary/wage costs lower, you’ve added $26,000 expense somewhere else in your budget.

When considering a pay rise for your employees, make sure to research what others in your industry are paying, factor in inflation as well as the current increased cost-of-living and how much value your employee(s) add to your business. It can also be a good time to have a discussion with some employees about extra benefits – sometimes it’s not about the money but about flexibility or a nine-day fortnight.

If you’d like help running the numbers to see what the real cost would be, let us know, we’d be happy to help.

Cyber Security – is your business protected?

Sun, 21 Jul 2024 23:22:05 GMT

We live in a digital world with hackers and scammers doing their best to breach security and compromise data – and then ransom it back to you. In recent years there have been a number of data breaches, some significant, but it’s not just the data that gets comprised, but your customers and suppliers trust too. Even worse, depending on how serious the breach is, you can damage your company’s reputation and some consumer’s will choose to do business elsewhere.

What information is worth hacking?

You might think that you don’t have any information that’s worth hacking, BUT it’s the customer information in your CRM system, the supplier details in your invoicing system and the financial data in your accounting software. It’s your bank account details, your confidential client information and your company’s secret intellectual property or hard-won R&D findings. All of this is worth hacking and holding for ransom (or selling it to a competitor).

So it would make sense to take cyber security seriously – but most people don’t think about it beyond backing up their data. Here are some things to consider in your business, to improve your cybersecurity.

1. Make cyber security a company wide issue

Your cyber security is only as good as your weakest member of staff’s security knowledge, so make sure to have clear protocols and processes in place for storing company data. You’ll also need to train your staff on these protocols and processes, regularly as it’s human nature to become more lax over time. The better prepared your staff are, the less likely it is that you’ll have a security incident or accidental data breach.

2. Save important data securely

Where are your employees saving their files/data? Is this on a shared drive or is it saved on their laptop/computer hard drives? If it’s the latter, you’re only one hack away from a major security breach. If you haven’t already, set up clear guidelines on where files should be stored. Ideally, all confidential information should be stored on a shared drive that is backed up and requires authentication if you’re trying to access it remotely. You can also limit who has access to any confidential folders and content to further minimise the risk of it being exposed.

3. Use proper authentication and encryption

Set up two-factor authenicationor even multi-factor authentication for access to all your cloud and SaaS tools. Make sure to have proper data encryption of any confidential information that’s shared.

4. Keep all devices and hardware secure

If you have employees working remotely, then develop a policy that means their devices are password protected and that they don’t share the password with their spouse, partner, family, flatmates etc. They should always be using the latest versions of applications and make sure to automatically enable installation of updates. These devices should also NOT be left unattended anywhere – car, coffee shop or hot desks.

5. Use a secure network connection

You can further enhance your security by using a secure network connection. This means that when your staff are connecting to work applications, databases and shared folders, they always use the company network or an approved virtual private network (VPN). By using a secure network connection, you greatly reduce the chances of your data being intercepted and stolen, with VPNs allowing employees to log in securely when off-site or working at a client’s premises.

Speak to IT security experts and protect your data

Keeping your data safe and secure is now a foundational need for any business. If you want to reduce your security worries, it’s sensible to speak to a cyber security expert. They will be able to review your current systems, networks and security practices and advise you on the key actions that are needed to tighten up your security.

Why positive cashflow is important to make a profit

Thu, 18 Jul 2024 23:25:11 GMT

You’re in business to make a profit right? Your aim as a business owner is to make enough sales with a big enough margin that you make a profit. But how does profit differ from cashflow? And why is keeping an eye on our cashflow important?

Profit vs cashflow

Profit is the surplus that’s left from your income once you’ve paid your expenses, supplier bills and tax etc. It's driven by creating a profit margin and generating value from your products and/or services.

Cashflow is the ongoing process of ensuring that the business has the available cash (or ‘liquid’ cash) needed to operate. This provides the money needed to trade, to pay suppliers, to cover wages or to buy raw materials etc.

Why is positive cashflow so important?

Good cashflow management enhances your financial health. A business can generate high revenues and big profits, but still be cashflow poor. If you don’t look after your cashflow then the business may not survive as long as the end of the year. It can have profits at the end of the period but have very little liquid cash to fund its day-to-day operations over the course of that period. So it’s important to keep an eye on your cash numbers, before things go awry.

Good cashflow management is all about being in control of your cash inflows (income you’re generating) and your cash outflows (what you’re spending). To achieve ‘positive cashflow’ you need to proactively work to keep your inflows higher than your outflows.

Struggling with your cashflow?

If you’re struggling to pay your day-to-day bills and keep things going, it’s time to give us a call. We can help you with detailed cashflow reporting and forecasting, so you can keep the business in that ideal positive cashflow position. We’ll also look at key steps for keeping your revenues high, margins profitable and meeting your financial targets.

Health and Safety

Thu, 11 Jul 2024 23:31:22 GMT

Keeping you and your staff pain-free at work

Health and Safety often focuses on the more obvious – machinery that’s likely to cause accidents or working conditions with factors that are hard to minimise. But what if your business is primarily office or store based or your employees are out visiting clients? There are health and safety risks here that are often overlooked.

Optimise your office work space

In the office you’re often sitting for large chunks of time, so the health and safety risk is that you’re NOT moving or taking breaks. Long term this can create discomfort, pain and if left untreated - long-term injury to your neck, arm or hand. Here are some things to consider when optimising your work space:

Incorrect chairs. Whether they’re at the wrong height, old, broken, or sloping, seat position is an easy fix and makes a huge difference. If you’re buying work chairs, check their seating tolerance. You need one that can withstand 6-8 hours of use. And choose one that is able to be adjusted in multiple ways.
Screen height. Our bodies like to be neutral, not straining to look up, down, or on an angle for eight hours a day. Adjust your screen height so that your eye level is at the top of the toolbar. You can buy screen adjusters or prop your screen up (old telephone books are a favourite).
Mouse overuse. The mouse is more problematic than the keyboard. By having your hand and finger poised to press the button, the muscles in your forearm are always activated. To avoid tendinitis, move the mouse closer to you and only use it when you need it.
Posture. Make sure you work with a neutral posture. This means head and shoulders are lined up, and hips, knees and elbows are at 90-degrees.
Lack of movement. Make sure you and your team are moving regularly, even if it’s just getting up for a cup of tea, chatting with workmates, or going outside for fresh air. Regular movements prevent injury and pain.
Laptop users. Ideally, you have a laptop stand, separate keyboard, and foot stand to create an optimal sitting position.

If you’re out-and-about/driving, some things to consider are:

Seat position. Getting this right is really important. Check lumbar support is adequate because if you’re sitting with arms and legs extended, it puts pressure on your nervous system and can cause back problems and sciatica.
Steering wheel height. Some people get a sore neck after driving because they’ve had their hands on the steering wheel and their neck and arms are rigid.
Stay neutral to avoid sore lower back and shoulders.
Fatigue. If you’re slow to respond, have difficulty making decisions quickly, drifting off, or don’t notice you’re speeding (or getting somewhere and not remembering driving there), you need a break. Remember, it’s not the same as being tired, it’s when your brain isn’t processing things as it should be, and without awareness, you could make mistakes on the road.

Hospitality/warehouse/retail

If you’re on your feet a lot at work and walking around, you won’t have too much of an issue. However, it’s the static standing that can cause sore feet, knees, hip and back. Long-term effects can be debilitating, including inflammation to the arch of your foot (Plantar Fasciitis), which can cause so much pain it becomes impossible to stand, and it’s tricky to fix. The chance of discomfort, pain and injury is underestimated in workplaces where people are on their feet a lot, like in a warehouse.

If you stand a lot at work, some tips are:

Footwear. Make sure everyone has appropriate, well-fitted footwear. Consider orthotics, heel cups, or gel inserts to take off some of the pressure.
Movement. Make sure staff are moving and walking, not just standing.
Rubber mats. Anti-pressure mats create a softer surface to stand on, which can make a huge difference. Or offer a seat so they can sit down and take a load off.

Health and Safety isn’t just about avoiding accidents, but about creating a work environment where your employees are prevented from long-term injuries is just as important. It also makes your employees feel valued and that you care about their wellbeing. Even implementing some of this suggestions in stages can have a positive effect in your workplace.

How you could use your Forestry Land to earn Carbon Credits

Wed, 03 Jul 2024 04:22:21 GMT

We all know that carbon emissions are bad for the environment. And whilst most of us have jumped on board with energy saving initiatives, for some industries, only so much can be done to reduce carbon emission. If they want to reduce their emissions or become carbon neutral, they’re going to need to purchase carbon credits. In New Zealand we have a large amount of forest land, which in some cases produces carbon credits. If your forest land qualifies you can earn carbon credits that you can then choose to sell on the carbon market. But first, what are carbon credits, how are they produced and how can they earn you money?

What are carbon credits?

A carbon credit represents the right to emit one ton of carbon dioxide (or its equivalent in other greenhouse gases). Each credit is typically measured in metric tons of carbon dioxide equivalent (CO2e). There are various ways to produce carbon credits including renewable energy, such as wind or solar farms, reforestation efforts, energy efficiency initiatives, or methane capture from landfills. Carbon offset projects can also deliver other benefits such as improved air quality, biodiversity conservation and enhance the local ecosystem. Trees for example absorb carbon dioxide from the atmosphere and store it within their trunks, leaves, roots and soil.

Producing carbon credits using forest land

One way you can produce carbon credits is using forest land. If you have forest land, you could earn money by registering your forest land with the Emissions Trading Scheme (ETS) and selling your excess carbon credits. You can earn units if you are registered in the ETS with post-1989 forest land; land with trees that were planted or first established after 31 December 1989. It can include:

regenerating and planted native (indigenous) forest
forests of exotic tree species
mixed-species forest.

The history of the land since 1989 also plays a part in determining if the land is post-1989 forest land. You must also ensure that the forest meets, or will meet, the size and cover requirements for land to be eligible “forest land” in the ETS.

Earning and Selling Credits

To earn units, you must report on how much carbon your forest stores. Each unit represents 1 tonne of carbon (or equivalent greenhouse gases). The number of units you can earn depends on different factors including:

how much forest land you have in the ETS

the age of the trees
the forest type
the rotation (harvest cycle) the forest is on
the method of carbon accounting you're using.

When you have units, you can either keep them or sell them. You can sell credits through the carbon market and the price of units fluctuates with supply and demand. Companies wanting to offset their carbon emissions, will then purchase your excess carbon credits. There has been significant growth in the trading of carbon credits in the past decade, partially driven by increasing awareness of the impact of climate change and how carbon dioxide is contributing to the issue.

To find out if your forest land is covered by the ETS, whether you can join the ETS, and if you can earn carbon credits see https://www.mpi.govt.nz/forestry/forestry-in-the-emissions-trading-scheme/ for more information.

Protect yourself from invoice fraud by using e-invoicing

Thu, 20 Jun 2024 22:37:05 GMT

Invoice scams are becoming increasingly more common (even in New Zealand), and are becoming so sophisticated they can be hard to spot, even for the most tech savvy among us. A common scam is to alter the bank account number on an invoice. An email with your invoice gets intercepted and the bank account details changed to that of the scammers. Your customer pays the invoice and thinks they’ve paid you, but instead it’s gone straight to the scammer, never to be seen again. Now you’re both out of pocket while the scammer scams the next unsuspecting person.

You can protect yourself from these types of scams by using e-invoicing. E-invoices replace emailed invoices by instead delivering an e-invoice directly into your customers accounting software, even if they’re using a different accounting system to you. By directly connecting suppliers with their clients, there’s no opportunity for scammers to intercept the invoices.

Government-backed e-invoicing framework

In 2019, the governments of New Zealand and Australia set up a framework for e-invoicing in both countries, designed to make it easier to trade across the Tasman. The system uses a New Zealand Business Number (NZBN) as a global ID for every business, and has been adopted by software providers including Xero. If your business uses a platform like Xero, you can e-invoice your customers, or receive e-invoices from suppliers, even if they don’t use the same platform.

Start sending and receiving e-invoices

Is your payroll system ready for the new tax bracket changes?

Thu, 13 Jun 2024 23:16:22 GMT

In the Budget, the government announced changes to the income tax thresholds for personal income that take effect from 31 July 2024. This means if you employ staff, you’ll need to be aware of these changes. The income tax thresholds will be adjusted as follows:

What employers need to do

Whether you have a payroll system or file manually, you need to make some changes to income tax calculations for your employees.

Payroll Systems

If you use a cloud-based payroll system , these systems should update to the new thresholds automatically. If you haven’t already heard from you payroll provider we’d recommend confirming with them if this change will happen automatically.

If you use a payroll system that isn’t cloud based, we recommend getting in touch with your provider, if you haven’t already heard from them already.

If you file your payroll manually, you’ll need to make sure you’re using the new tax tables in your calculations for all employees from 31 July.

Other changes

From 1 April 2025, both the Fringe Benefit Tax (FBT) and Employer Superannuation Contribution Tax (ESCT) thresholds will change so keep an eye out for more information on these changes next year.

Need some help?

If you’re unsure about these changes or have any questions, let us know. We’re here to help.

The future of farming

Tue, 11 Jun 2024 22:39:31 GMT

Utilising technology can be transformational in the way that farming businesses operate and lead to better efficiency and productivity and even innovation. One of the ways that farming businesses are utilising technology is by using IoT (Internet of Things) devices. IoT’s are just another name for smart devices – anything that has built-in technology that means it can connect to the internet. For example home security systems, smart watches and voice controlled speakers.

When it comes to farmer, IoT devices can provide information that changes how farmers and growers use land, track stock, assets, and equipment. Some New Zealand farmers already use IoTs such as soil moisture sensors or fuel level sensors. These sensors can send alerts when equipment is taken off-site, when a pipe is leaking, notify fuel suppliers when diesel or petrol tanks are low or locate a lost quad bike. Sensors can even be attached to tractors and heavy equipment to send instant notifications in the event of an accident.

Using IoTs allows you to automate tasks and have more data enabling you to make better decisions. It allows more visibility over your business with the information being feed to your mobile phone or computer.

In New Zealand, companies such as Levno offer water, fuel, and milk vat monitoring services through IoT-enabled sensors and devices. These provide real-time information on fuel and water management, feed monitoring, and milk processing.

If you think your farm or business could benefit from the use of IoTs, get in touch with Spark or Farmside as they offer advice on how to get started with IoT.

Changes to the Brightline tax rule from 1 July

Thu, 06 Jun 2024 22:38:25 GMT

The Brightline rule refers to a tax on capital gains from residential property sold within a certain timeframe. It most often applies to investment properties rather than the main home.

From 1 July 2024, the Brightline tax will only apply to a property sold within two years of purchase. This means that a property purchased before July 2022 will not be subject to the Brightline rule. Exemptions will continue for primary residences (main home ), separation or relationship property transfers, certain transfers to trusts , and inheritances .

If you’re looking to buy or sell a property and unsure if the Brightline rule will apply to your situation, get in touch with us and we’ll help you understand how these changes will affect you.

How to prepare for the end of the financial year

Thu, 30 May 2024 23:18:14 GMT

We’re nearly at the end of the financial year, so if you’re balance date/end of financial year is 30 June, there are a few things you need to do to help us prepare your financials.

Take a stocktake

If your business sells products/has stock, you’ll need to do a stocktake on 30 June. If you’re a business that sells products, then you need to take a stocktake of your physical inventory. If you’re a farmer, then you need to take a physical livestock tally.

Send in your EOY papers

Compile a folder (digital or hard copy) with a copy of the following documents:

Bank statement that shows the balance on 30 June 2024 for all your bank accounts and loans.
Insurance invoices.
ACC invoices.
Loan statements for the year (if applicable).
Any new loans or refinancing documents.
Invoices for assets purchased and sold.
GST workings and reports.

Submit the online questionnaire

In late June/early July, you’ll receive an email from us with an online questionnaire to fill out and submit. If you haven’t received this by the end of July, let us know.

The Five Ways to Wellbeing

Thu, 23 May 2024 23:14:18 GMT

The ‘Five Ways to Wellbeing’ are a set of five simple, evidence-based actions that promote mental health and overall well-being. Originating from the New Economics Foundation's research for the Foresight Project on Mental Capital and Wellbeing, these practices are:

1. Connection (Me whakawhanaunga)

Fostering relationships with others, through face-to-face, digital, or telephonic interactions, is vital for mental health. Nurturing social bonds leads to a sense of community and emotional health.

2. Activity (Me kori tonu)

Engaging in physical exercise can uplift your mood. Choose activities that you enjoy to positively influence your emotional state. Consistent physical activity, including simple exercises like walking or dancing, bolsters mental health.

3. Learning (Me ako tonu)

Pursuing new experiences and seizing opportunities for learning keeps the mind active and involved. Lifelong learning, whether it's picking up a new skill, delving into books, or indulging in a hobby, is beneficial for overall well-being.

4. Awareness (Me aro tonu)

Taking time to appreciate the little joys in life, practicing mindfulness, and living in the moment can significantly improve well-being. Noticing the wonders around you and cherishing positive moments can be uplifting.

5. Generosity (Tukua)

Offering your time, kind words, or simply being there for others cultivates a sense of purpose and connection. Kind gestures, volunteering, and helping others not only aid them but also enhance your own well-being.

Remember, you can introduce any of these actions into your life at any time, and you’ll begin to feel the benefits. Whether it's connecting with loved ones, staying physically active, learning something new, practicing mindfulness, or being kind, these ‘Five Ways to Wellbeing’ can positively impact your mental health and overall quality of life.

Mental health in our rural communities – are we dealing with this in the right way?

Wed, 15 May 2024 23:14:17 GMT

Often, we think rural mental health problems are mostly about older farmers dealing with money problems and bad weather. However, it's actually younger men, especially those under 40 with tough jobs like farming and shepherding, who are at greater risk. The combination of mental health challenges, relationship issues, conflicts, and physical injuries can escalate the risk of suicide. This risk is further compounded when isolation, substance misuse, and access to firearms are present. Contrary to popular belief, financial difficulties are not the primary cause of suicide in New Zealand's agricultural communities.

It's important to correct the wrong ideas about who is affected by mental health issues in rural areas. Understanding these issues well is key to creating support systems that meet our communities' needs effectively.

Providing mental health support to the rural sector involves a multifaceted approach. Initiatives like Farmstrong, developed by the Mental Health Foundation and rural insurer FMG, focus on promoting wellbeing through farmer-to-farmer tips, supported by wellbeing science. Similarly, a partnership between Rural Support Trust and New Zealand Young Farmers aims to enhance mental health support for young people in the rural sector. This collaboration focuses on raising awareness, improving connections, and facilitating access to appropriate support services, as well as providing free community training via workshops like Good Yarn Mental Health.

Helplines, such as the one provided by the Mental Health Foundation, offer immediate support from trained counsellors. These services are complemented by community-led events and initiatives that encourage social connection and resilience. It's also important to promote the 'Five Ways to Wellbeing' which include connecting with others, staying active, taking notice of the environment, continuous learning, and giving to the community. These resources are crucial in addressing the mental health needs of young rural men, providing them with the support and tools necessary to navigate the challenges they face.

Understanding and acknowledging the true scope of mental health issues in rural communities is the first step towards addressing them. By shining a light on the younger demographic and the specific challenges they encounter, these initiatives and support systems play a vital role in fostering resilience and promoting a culture of mental wellbeing in New Zealand's farming areas. It is through collective efforts and targeted support that the tide can be turned, ensuring that those who are most vulnerable receive the help they need to lead fulfilling lives.

Strategies to help you get paid faster

Sat, 11 May 2024 23:14:15 GMT

Ensuring timely payments is essential for the financial health of your business. The core of any business strategy involves making sales and generating income. However, without receiving payments for invoices, managing cash flow and realising profits becomes a challenge. Simplifying the payment process for your customers can significantly speed up the inflow of cash, bolstering your financial standing, covering operational expenses, and supporting your business's growth and development.

To speed up your payment processes and guarantee punctual payments, consider the following steps:

1. Establish clear payment conditions

Getting paid on time starts with setting clear payment terms. These terms tell your client when they need to pay, like right after getting the invoice or on a set date each month. By choosing a payment period 30, 60, 90, or 120 days, depending on the businessyou help your clients know when to expect bills and how to budget for them.

2. Include late payment penalties

Including penalties for late payments in your terms can encourage clients to pay on time. Often, a late fee of 1% to 1.5% per month is charged on the amount that's overdue. This helps to get payments quickly and avoid payment delays.

3. Issue invoices promptly

When you buy something as a customer, you usually pay for it right away. But in business, you often send an invoice and get paid later. It's important to issue invoices promptly to enable swift payment so you can maintain a healthy cash flow for your business operations.

4. Streamline your payment administration

Ensure that your invoicing process is well-organised by distributing the invoice to all key players involved in the payment sequence, typically including:

The primary client contact you regularly interact with.
The individual responsible for authorising the invoice for payment.
The finance department personnel who will execute the payment.

It’s also helpful to reference any relevant purchase order numbers provided by the customer and to detail the services rendered or items supplied clearly.

5. Use the available technology

Gone are the days of paper invoices; the current norm is electronic invoicing, which allows for immediate dispatch via email. This digital approach simplifies record-keeping and payment tracking. Modern e-invoicing platforms offer multiple payment methods, enabling customers to choose from direct bank transfers to various digital payment gateways through integrated payment buttons.

Providing a variety of payment options not only adds convenience for your clients but also tends to speed up the payment process.

If you need help speeding up your payment collection and improving your cash flow with the latest payment technologies, please contact us for help on improving your payment processes.

If you EOFY date is May please read…

Thu, 09 May 2024 23:14:21 GMT

If you’re balance date/end of financial year is 31 May, there are a few things you need to do to help us prepare your financials.

Take a stocktake
If your business sells products/has stock, you’ll need to do a stocktake on 31 May. If you’re a business that sells products, then you need to take a stocktake of your physical inventory. If you’re a farmer, then you need to take a physical livestock tally.
Send in your EOY papers

Compile a folder (digital or hard copy) with a copy of the following documents:

Bank statement that shows the balance on 31 May 2024 for all your bank accounts and loans.
Insurance invoices.
ACC invoices
Loan statements for the year (if applicable).
Any new loans or refinancing documents.
Invoices for assets purchased and sold
GST workings and reports
Submit the online questionnaire

In late May/early June, you’ll receive an email from us with an online questionnaire to fill out and submit. If you haven’t received this by the end of June, let us know.

GST changes for online marketplaces and apps

Thu, 25 Apr 2024 22:21:56 GMT

From 1 April 2024 “Electronic Marketplace” transactions will be subject to GST in New Zealand, even if the person delivering the service, is not GST registered.

This legislation was passed in 2023, and although National campaigned on repealing this law if they got into power, they confirmed in December 2023 that they will now leave the legislation in place.

The new legislation covers more than just properties, it also covers Uber and Uber Eats, for example. But we are just focusing on the property implications and what it means if you own or rent out a room, bach, or an investment property.

If you have booked a property for a work or family trip any time after 1 April 2024, you should also continue reading, as there are possibly implications for you too.

So, what does the law say?

That platforms like Airbnb, Booking.com, Expedia, Vrbo etc. are required to charge GST on all transactions and pay this GST over to Inland Revenue (IRD) where the owner of the property is:

GST registered:

Pay 15% to IRD.
Report your income as zero-rated on your GST return. This ensures the income is declared and you do not pay the GST twice. It also means that you claim your GST on expenses, and will likely receive refunds each GST return.

NOT GST registered:

Pay 6.5% of the GST to IRD and pay the remaining 8.5% to the property owner.
If you are not registered for GST there is nothing for you to do.

You only qualify for an exemption if:

your income from these activities is over $500,000 per year: or
you had more than 2,000 nights booked in a year.

This means that all these platforms are frantically updating their software to allow for the collection and payment of GST to IRD.

Here’s what we do know:

Expedia :

They have NOT been able to update their software and will be removing ALL NZ listed properties from 1 April 2024, unless you qualify for the exemption above.
If you have a property listed on Expedia, they possibly may remove it. There is no clear guidance as to what happens if you have bookings for the future but we suggest you contact your guests. Be careful how you do this though, as it’s against Expedia’s rules to make contact with guests outside of their system.
If you are travelling and made a booking on Expedia, you may also have an issue - contact your host to work out what to do.

Vrbo (ex Bookabach):

While owned by Expedia, they have upgraded their software and will be able to cope with the new GST.
But be aware, from 1 April they will automatically add 15% GST to all bookings. So, this will increase your nightly rate by 15% and make your property more expensive. You will have to manually update your rates to reflect this change.

Airbnb:

They, too, have decided they will add 15% GST to every booking from 1 April 2024.
Their system says they are not yet set up to deal with NZ GST.

Booking.com:

They have not yet provided guidance on what they are planning to do.
Will they be like Expedia and just stop supporting NZ properties or will they be like Airbnb and just add 15% to all bookings?

So, a warning, if you are not GST registered, and you have not told your platform provider, it appears they will default to adding 15% GST to your property and pay this 15% to IRD. How you get your 8.5% back remains a mystery.

If you are planning on booking accommodation, be wary of using Expedia or Booking.com, as a booking after 1 April 2024 could potentially cost you 15% more! In any event, landlords and holiday makers should revert to their booking platform for the latest information and policies. If you want to know more please reach out to us.

Five ways for better business efficiency

Tue, 23 Apr 2024 22:21:56 GMT

Everyone likes efficiency, the more efficient something is, the better - right? Especially with the economic climate still needing some work. If you’re wanting to save some time (and money), making your business processes more efficient is a good place to start. It also means that you can put more time into working ON your business, rather than in it. Here are five ways you can make your business a little more efficient.

Better invoicing

This sounds obvious, but the more efficient you are at invoicing, the less time you spend on it and the more time you save. And time is money. Develop a process that makes this more efficient – which is something that can vary by industry. Think about whether you can set up recurring invoices or have your staff invoice for the job on completion. Where can you reduce the headache of invoicing and make it more efficient?

Streamline expense claims

Develop a digital solution for your expense claims process. This way your team can submit their receipts and approve expenses online – which reduces mistakes, and not having everything you need to approve the expense.

Utilise online/digital software

Almost everything has a digital version, so it’s time to utilise it so you have business data wherever you are. No more going back to the office to check a number, getting back to clients with final details, or reworking quotes because the numbers were wrong. If it’s all available at your fingertips, this drives efficiency.

Maintain lean(er) stock levels

If your business sells inventory, lean inventory management could help you reduce unwanted costs, and become more efficient. The idea is you only produce or order in the stock you actually need. By optimising inventory levels, you can reduce carrying costs and align supply with customer demand, which means you won’t be falling over, or holding space for, excess stock.

Review your overheads

Another component of business efficiency is keeping costs down – like overheads. Have you checked if the costs from your suppliers, like rent, bills, and transport, are needed? Have you also looked for ways to reduce these costs?Consider whether you can achieve the same outcome for lower costs? Could alternative suppliers provide a quality service at lower cost? Are office supplies being stockpiled from habit rather than need?

If you need tailored advice on how you can make your business model more efficient, get in touch with us.

How to write a recruitment advertisement that stands out

Thu, 18 Apr 2024 22:21:54 GMT

Finding the right staff for your business can be tough. Hiring can be challenging, but the right team can really support the growth of your business. Attracting the right staff starts with writing a recruitment ad that makes your role stand out in the crowd. Here are three ways you can make your job ad more appealing:

Sell the role

Rather than beginning the ad with the job description or a list of requirements, start with what makes the job most appealing. Is it the industry, location, pay, or perks? Be up front with the advantages so that it’ll grab people’s attention and encourage them to read further.

Keep it short and sweet 

While it can be tempting to write a novel so that it paints your business in the best light, it’s better to keep your job ad short and sweet. Aim for a maximum of 700 words that are straightforward with readable language, and avoid adding unnecessary words or repetition.

Avoid meaningless clichés 

Every job ad mentions their amazing team, or how the environment is fast paced. Everyone says they’re offering a ‘competitive salary’. All jobs are looking for self-starter’s or those who can hit the ground running. Rather than using the same phrases as everyone else, be different. What can you write that makes your business stand out from the crowd – you could provide the actual salary, for instance. Describe the job, the team, and the environment clearly and accurately. This helps the candidate get a genuine understanding of the role and that’s what piques their interest – not the same phrases that everyone else is using.

Hiring

Now that you’ve attracted the right person for your team, make sure you cover your bases when hiring (especially around trial periods). If you need help with employment contracts or other employment-related questions, let us know we’re here to help.

What are some financial tools to lower your financial farming risks?

Sun, 14 Apr 2024 22:21:48 GMT

As a farmer, you have access to financial tools that help you deal with the unpredictable nature of farming. These tools are really useful for handling the ups and downs of market prices and costs, which is especially important for dairy farmers who often see milk prices change. You can protect your income from dropping milk prices by setting the price in advance through futures contracts or options.

Lock in pricing

In New Zealand, if you're a dairy farmer, you can lock in the price of your milk. For example, if you supply to Fonterra, you can fix the price of up to half of your milk with their programme. It's important to know your break-even milk price and to have a plan that helps you make decisions without getting swayed by emotions or guesses. You can figure out your break-even price by looking at your farm's past financial records, or using tools like DairyBase, and you can predict future break-even prices with your budget.

Interest Rates

It's also key to manage your interest rates to keep your finances stable. You can use different financial tools to control how much you pay on loans, like locking in interest rates to prevent them from going up, which can save you money and increase your profits. Having an overdraft, or a line of credit, can also give you the cash you need for day-to-day farm work.

Feed Costs

Managing how you buy and store feed is important to keep costs down. Buying feed in bulk, and having contracts for it, can save you a lot of money. This helps make this big farming expense more predictable and easier to handle, which is good for your financial planning and keeping costs the same all year round.

To protect your farm business from changing market prices, use strategies like futures contracts to lock in costs for things like feed, fertiliser, and fuel. This helps manage risks and could make banks more likely to lend you money because your income is more predictable.

Use forward contracts to set prices for your products, such as wool or milk, ahead of time. This makes it easier to plan your finances and trade, but you need to understand the market well to benefit from these contracts.

For farmers, especially in New Zealand's dairy industry, it's important to use financial tools to deal with price changes and make your business stronger. Knowing the market and your options is key. Our experts can help you navigate these areas and strengthen your farm's finances. Reach out for more information.

There’s a better way of handling those digital invoices (instead of printing them!)

Mon, 18 Mar 2024 22:18:28 GMT

Did you know that you can email your digital invoices or receipts straight into your MYOB In tray? You no longer need to print a digital invoice or receipt, you can simply forward them into your MYOB In tray and store them there. This saves on printing costs AND storage costs as it reduces the amount of paper you need to store for the next 7 years. The MYOB In tray lets you store documents such as bills and receipts in MYOB. Think of it like an electronic version of a physical in tray.

To get your documents into your In Tray, you can simply email them as attachments. Your In tray has a unique email address that allows you to email documents straight to your In tray. It’s easy to find your In tray email address:

click ‘In tray’; then
click ‘More ways to upload’

and you’ll see Your In tray email address.

You can send yourself documents that are PDF, JPG, JPEG, TIFF, TIF, or PNG files only.

We recommend saving this email address to your Address book/Contacts list as ‘MYOB In Tray’ or similar, so you can just type that in when you’re wanting to forward a digital copy of an invoice or receipt.

Once it’s in your In tray, you can then manage it as an expense, just like you usually would.

How safe is your customers data?

Thu, 14 Mar 2024 22:18:46 GMT

Your business faces an increasingly complex regulatory landscape when it comes to data privacy, consumer protection, and industry-specific compliance requirements.

Keeping on top of these compliance requirements is a complex task. Failing to meet your requirements can have serious implications, with non-compliance (whether intentional or accidental) resulting in legal repercussions and possible reputational damage for the company.

Taking excellent care of your customer data

We live in a digital world, where your business collects huge amounts of data from your customers. This includes contact details, financial information, credit card details, and detailed breakdowns of their spending habits and buying preferences.

In an effort to protect this data and preserve customer privacy, there are various data regulations that you must comply with.

A sample of these global data privacy laws include:

The Privacy Act 2020  in New Zealand
The Privacy Act 1988  in Australia
The Data Protection Act 2018  in the UK
General Data Protection Regulation (GDPR)  in the EU

If you trade mainly in New Zealand, it’s not too challenging to abide by The Privacy Act. However, if you’re trading overseas, you need to be aware of the data regulations you may need to comply with.

Here are five simple steps to make compliance as simple and effective as possible:

Work closely with legal advisers 

Compliance can get complicated if you’re not a legal expert. It’s sensible to seek advice from legal professionals, so you understand the specific compliance obligations for your industry and region.

Run regular compliance audits 

It’s important to conduct regular risk assessments of your in-house data compliance. This helps your organisation comply with all the relevant regulations and industry standards, and stay updated with changes to compliance law.

Protect your customer data 

Your customers expect you to take good care of their data, both personal and financial. Secure your customer and business data through end-to-end encryption and use of the best data privacy practices.

Deliver regular training and keep your employees up to speed 

Your team needs to know the latest rules around compliance and what’s required of them. This means running frequent compliance training, so there’s a culture of compliance awareness.

Use the latest data storage solutions 

With so much customer data being generated, it’s important to use up-to-date documentation management, and data storage software. This keeps the records and data you need safe, organised, and easy to access.

Could outsourcing be the solution?

Tue, 12 Mar 2024 22:19:02 GMT

When you run a business, work can ebb and flow, and unexpectedly busy periods can create too much work and stress for your team or business. But if the surge is seasonal or unreliable, you don’t necessarily want to commit to taking on another employee. This is where outsourcing could give you some flexibility during the busy times.

What could you outsource?

Some tasks are more suitable to outsourcing than others, but a good place to start is tasks that your business has low expertise in, or aren’t passed around like a hot potato.

Some tasks you could consider outsourcing are:

Data entry/administration tasks.
Social media management.
Cold calling.
Marketing/advertising.
Inventory management.
Payroll.
Bookkeeping.

If you’re tempted to start outsourcing some tasks, we can help with the last two roles on the list. We assist a number of clients with payroll and bookkeeping. For the other tasks, there are plenty of platforms and organisations that can help you. Sometimes, friends or other business owners will know of someone who’s able to assist in that area.

While outsourcing takes a bit of time to set up, the long-term benefits make it worthwhile, especially if you have the flexibility to increase the number of tasks that are outsourced based on your business needs.

Need help getting started?

Considering outsourcing and wondering how much to spend or where to start – or you need help with accounts and payroll? Get in touch, we’d love to help.

Recent government policy changes that might affect your business

Wed, 21 Feb 2024 23:35:26 GMT

With the new government well into their 100-day plan, there are some policy changes that are being made that may affect your business. Here’s the top five changes you need to be aware of:

1. 90-day employment trials are back for all businesses

The government has extended the availability of 90-day employment trial periods for all businesses, reversing changes made in 2018, which scrapped 90-day trials for businesses with more than 20 employees.

2. The clean car discount and ‘ute tax’ has ended

The clean car discount, which allowed people to claim back up to $8,625 for an electric or hybrid vehicle, has been discontinued as has the levy on higher emissions vehicles, such as utes.

3. Fair Pay Agreements cancelled

The Fair Pay Agreements Bill has been repealed. Collective agreements can still be negotiated by unions through collective bargaining, however with the repeal of the Fair Payments Agreements Bill, any person or organisation that obtained personal information for the purpose of Fair Pay Agreement bargaining must now dispose of that information in line with the Privacy Act 2020.

4. Fuel tax changes

National have previously stated that the Auckland fuel tax, adding 11.5 cents to every litre of petrol sold in the city, is set to go. This will end on 30 June 2024.. National also wants to cancel planned fuel tax increases that would have added a further 12 cents per litre.

5. Rural regulations set to go

National and Act have committed to reducing regulation and red tape in the farming sector, though it’s not certain yet what that looks like, so we’ll keep you posted.

If you’re concerned or would like advice on how these policy changes might affect your business, drop us a line and we can chat through how this might affect you.

Four steps to better cash flow

Mon, 19 Feb 2024 23:35:45 GMT

Managing cash flow can be tricky, but there are a few things you can do to help manage your cash flow and get paid faster. By getting your invoicing right, invoicing customers as soon as possible, and using tools like invoice reminders, this can all help move payments along.

1. Get your invoicing right

Make a habit of sending invoices quickly. If you’re out and about and that usually delays your invoicing, use MYOB Online Invoice Payments to invoice your customer on the spot using your smartphone – don’t wait until you get back in front of your computer. You can also take payment on the spot which is much easier than following up afterwards. If you’re an MYOB Business user, login to your account, navigate to the sales tab, and then select “turn on invoice payments” and start their application.

2. Make your invoices easy to pay

Email your invoices so that your customer receives them quickly. Use full descriptions so that your customer doesn’t need to query the invoice as this will result in a delay in payment. Offer different payment methods so it’s easy for your customer to pay you.

3. Send invoice reminders

Automate your invoice reminders so it sends an automatic reminder about invoices being due. When setting up invoice reminders, you can either set it up for all your customers or specific customers. Once this is set up, your customers will receive an email that will give them access to their list of unpaid, online invoices. You can customise your reminder message, and choose when you want them to be sent.

4. Keep an eye on your accounts receivable

Keeping a close watch on your accounts receivable allows you to see how many invoices, and for what amount, are outstanding. This allows you to follow up with customers sooner rather than later and can help prevent late payment or payment being received months down the track.

If you need help organising your invoicing, or creating an accounts receivable process, get in touch and we can help you set this up.

Outsource your payroll - and save time, money and stress!

Thu, 15 Feb 2024 23:36:03 GMT

Do you know how much time you spend on payroll every week? It's probably a lot more than you think! Payroll is one of those essential tasks that you can't afford to mess up, or you'll face serious consequences. But it's also tedious and complicated - the more employees you have, the more complicated it gets, but your team deserves to be paid correctly and on time, so payroll has to be done.

So, how can you solve this problem? The great news is, you don't have to do it yourself! Outsourcing your payroll function is a smart and efficient way to save time and money, and to reduce your stress levels!

Payroll Outsourcing Explained

Payroll outsourcing is a simple idea. You hire a payroll expert to take care of the entire payroll process for you. You save time and ensure that your staff get paid correctly and on time.

A payroll outsourcing provider can handle different aspects of payroll, such as data entry, pay calculation, deductions, fund transfers, tax filing, and record keeping. You can decide which services you want to outsource based on your business needs. Your payroll provider can also integrate with your payroll software (if you have one) so that you and your staff can access the relevant information anytime.

Why Should You Outsource Your Payroll?

Payroll is a crucial task for any business, but it doesn't have to be done by you. In fact, there are many benefits to outsourcing it to a professional service. Here are some of them:

Save money

Think about how much time you spend on payroll every week. Maybe an hour or more? If you charge $100 an hour for your services, that means you are spending $450 a month on payroll. That's a lot of money that could be better spent elsewhere. Outsourcing your payroll to a professional service will cost much less than that, and free up your time for more profitable activities.

Save time

By outsourcing, you are not only saving money, but also time. Imagine what you could do with an extra 4.5 hours a month or 54 hours a year. That's almost two weeks of extra work time that you could gain, every year.

Ensure Compliance

How familiar are you with all the laws and regulations regarding employee rights and obligations? You may know the basics, but not the details. However, you’re liable for any errors or violations that occur in your payroll. That exposes you to the risk of fines (or worse) if you make a mistake. Fortunately, payroll professionals are experts in this field and know how to comply with all the rules, protecting your business and employees.

Leverage Expertise

You probably started your business because you are passionate about what you do, and good at it. Along the way, you have learned how to do the things necessary to run a successful business. Payroll is one of those things, but not your core competency. Payroll professionals, on the other hand, specialise in this area and have the skills and experience to do it well. By outsourcing your payroll to them, you can focus on what you do best.

How do you choose the right provider?

Choosing the right payroll provider is crucial for your business, as they will handle a vital aspect of your operations. To make an informed decision, you should keep in mind these factors:

Know your needs

Different providers offer different types of service. You should compare their offerings and see if they match your requirements, without paying for unnecessary features or missing out on essential ones.

Communication level

Even if you outsource your payroll, you still need to communicate with your provider regularly to update them on any changes in your staff, or payroll policies. You should find out how they communicate and how much access you have to your own data.

Trust

You should feel confident that your provider is reliable, accurate, and compliant. You can meet them in person or online to get a sense of their professionalism and rapport.

Ask for referrals

One of the best ways to find a good provider is to ask other businesses who use their service. You can get honest feedback on their performance and satisfaction.

If you would like to know more about how outsourcing your payroll could be beneficial for your business, then get in touch with us today.

Are you making the most of customer reviews?

Tue, 13 Feb 2024 23:36:21 GMT

Good reviews of your business are like gold. You can spend all day telling people how great your product or service is, but hearing that someone else had a good experience can be what makes the difference between them choosing your business over someone else’s.

Asking customers for a review

Your most loyal and satisfied customers can sell your business for you, through their story and their words. Ask your most loyal customers to send you a short statement on why they chose you, or what they like about your product or service. Ask for them to add their review on your Facebook business page and on your Google Business profile. (Reviews show up next to your Google Business Profile in Maps and Search). Make the process easy by providing a direct link after a successful sale (you can choose to have reviews on or off in the settings of your page – so you can decide if you are ready to implement this).

For bigger purchase decisions, case studies offer prospective customers a lot more detail on why you are the obvious choice. Choose customers or clients that you have a good relationship with and ask them a series of questions to highlight how the customer interacts with your business, the problem it solves for them, why they chose your business over the competition, and what they would say to others wanting a similar experience.

Showcasing the reviews

Now you have customer reviews or case studies, you want to share them as prospective customers are more likely to believe what other customers have to say, rather than what your sales staff have to say.

Use them as part of your marketing and upload them to your website, print them on the back of your business cards or on printed flyers, brochures or other material. Make sure to share them on your social media and encourage others to leave you a review too.

Is it time to start using payroll software?

Thu, 25 Jan 2024 01:34:23 GMT

Payroll, it’s important to get it right but often that’s easier said than done! It's easy to underestimate the importance of a well-functioning payroll system, especially when caught up in day-to-day operations of the business. However, having a well-functioning system keeps your employees from becoming disgruntled or unhappy, and helps reduce administration tasks for you and your staff.

There are many online payroll systems available to help manage employee payments and benefits, ranging from the cheap and simple to fully dedicated software suites. We can deliver hands-on assistance with payroll, or help establish and train your employees in how to get the most from a payroll system.

There are a few benefits to implementing a payroll system in your business. Here are five benefits to using a payroll system:

It makes compliance easy

All organisations must comply with tax regulations, including PAYE, KiwiSaver, etc. This entails making sure that you pay your employees correctly and accurately, whilst recording any deductions, such as ACC contributions. If you don’t have a suitable system in place, it can create a headache when you file payroll returns with the IRD and result in fines or, in worst-case scenarios, even prosecution. A managed payroll service from a good provider will help ensure that you're compliant by explaining any new laws and making sure you avoid any penalties.

It saves you time

Having a payroll system allows you to spend less time managing your employees' wages and more time focusing on growing your business. If you run multiple businesses, managing each one separately can take up a lot of time. Having a single system that handles all payroll processes saves you time every month.

Your data is secure

Your data is stored securely within a secure cloud environment, meaning that it cannot be accessed by hackers. Your information is protected against loss, damage, or theft.

It reduces your risk

If you're like most small businesses, you don't want to take on too much risk. When using a payroll system, you reduce the chance of making costly mistakes. You'll know exactly how much your employees make, their annual and sick leave balances, and you won't have to worry about paying out incorrect amounts. The software will calculate holiday pay, produce wage slips, and generate reports by individual or department.

Increased Accuracy

When you process payroll manually, you must calculate every single paycheck. If you make a small mistake, you could end up overpaying or underpaying your employees. By using a payroll system, you eliminate the possibility of human error. Your employees receive accurate paychecks, and you avoid having to correct errors later.

If you’re wanting to implement a payroll system but aren’t sure which one to choose or which ones integrate with MYOB, give us a call, we can help you evaluate and choose the best payroll system for your business.

Unlock efficiency and cash flow by controlling your inventory

Tue, 23 Jan 2024 01:34:21 GMT

If you have a manufacturing or product-based business, efficient stock management is a big part of running a smooth operation. However, stock and inventory management has changed radically in the past decade, mostly due to the evolution of inventory technology.

There are cloud-based inventory management systems available for even the smallest business. These offer direct integration with your accounting and finance systems – so there's no excuse for not being in control of your inventory and stock purchasing.

Yet with the ups and downs of the global supply chain, what can you do to get more from your stock, your inventory systems, and the capital locked up in these stock assets?

New ways to enhance your inventory management

With today’s inventory management solutions, it’s never been so easy to have complete oversight of your stock levels, popular products, and restocking information. Data is king, and the more information you have at your fingertips, the easier your stock management will be.

Let’s take a look at some important ways you can get more from your inventory management:

Use the latest inventory management systems

When you use cloud-based inventory management software you get the benefits of real-time tracking, accurate forecasting, and seamless inventory control. This gives your operational efficiency a boost, reduces errors, and optimises your stock levels, all of which can make your business more efficient, productive, and profitable.

Integrate your inventory app with your finance and business platforms

By integrating your inventory system with your finance and business platforms, you streamline your workflows, automate key processes, and synchronise your stock data. With all this info at your fingertips, you can make better business decisions, cut down the time-consuming manual tasks, and enhance the performance of the business.

Keep your stock management lean and agile

Embracing lean stock management means you only produce or order in the stock you actually need. This helps you to optimise your inventory levels, reduce carrying costs, minimise wastage, avoid stockouts, and align supply with genuine customer demand. This cuts unnecessary waste and spending, and makes your stock operations far more effective and profitable as a result.

Sell off your surplus stock to free up cash

If you have stock sitting idle, why not sell this dead stock at a discount to turn these assets into cash? Your inventory management software can quickly identify surplus stock, allowing you to run targeted sales strategies such as discounts, marketing campaigns, or customer events to liquidate excess stock. This is a fast way to generate additional revenue and boost your current cash flow.

Reevaluate how big your warehouse capabilities need to be

Could you move to a smaller warehouse facility to save cash and be more effective? The data you get from your inventory management software gives you deep insights into your stock movement. This gives you the evidence you need to decide whether downsizing could reduce overhead costs, enhance your operational efficiency, and improve profitability.

Talk to us about getting in control of your inventory

Being the master of your inventory and stock management is an incredibly valuable skill for any product-based business. If you want to get in complete control of your inventory, switching to a modern cloud-based inventory management solution is an investment you won’t regret.

We can advise you on the best inventory software tools for your business, and how they integrate with your accounting and business platforms. We’ll also share the best tips on how to improve your operational efficiency, stock management, and overall revenue generation. Get in touch with us to discuss how you can enhance your inventory and stock management.

New Year, Time to Review your Business

Sun, 21 Jan 2024 01:34:25 GMT

As we’re safely into 2024 and in a traditionally slower month, now is the perfect time to review your business. As experienced business advisers, we know the value of taking the time to ask yourself some questions about your business, and what you’d like to do differently this year. It’s the perfect time to pose a few questions and gauge where you’re at with your planning, strategy, financial goals, and business goals. We can hold both you and the business to account.

Here's the top 7 questions you need to be asking yourself as a business owner:

1. Why does a customer choose your brand over another?

It’s important to know what makes your product/service valuable to your customers so that you can market what you offer effectively. Why does your brand stand out, what do you do well, what do you need to work on, and do any opportunities or threats exist? Who is your ideal customer? Who are you selling to, what problem or issue are you solving for them, and how can you better target them? We can work with you to help you pinpoint the best customers to target.

2. Are your employees/contractors happy?

Your staff are a vital asset to your business, but if they’re unsatisfied or have disengaged, then that’s a risk to your business. How do you show your staff that they’re valuable and important? Are you paying at or above market wage? What benefits do you offer your staff? What makes working for you better than working for a competitor? What can you do to make your business and workplace more attractive to potential employees? We can help you review this and the benefits you’re offering your staff.

3. Are your cash flow goals right?

How is your cash flow and are you meeting your cash flow goals. Do you have any specific costs or inefficiencies that are preventing you from achieving a positive cash flow position? Are the financial management processes you have in place working for you or against you? Do a review to identify where you’re lacking and where you can tighten your cash process.

We can review your cash management and look for efficiencies and cost-saving opportunities.

4. Are there aspects of your business that keep you awake at night?

It can be stressful being the boss and there’s likely to be a lot playing on your mind. What areas of your business are concerning you? What business issues or unexpected pitfalls are a cause for concern? What can you do to help smooth these out? We can offer advice from our decades of experience, so whatever the issue, we can work together so you can get a better night’s sleep.

5. Have you implemented tech and AI?

How digital is your business? Technology moves fast, with AI solutions and digital systems now an integral part of many business models it can be tricky to keep up with the latest innovations. So, what tasks can you automate or streamline? There are a lot of apps, software tools, and digital solutions out there. A lot of them integrate with one another, so if there’s a pain point in your business, we can suggest apps, software tools, and digital solutions to boost your business.

6. Have you thought about where your business will be in five years?

Not all businesses are focused on growth, but outlining your key goals around growth is an essential part of your business strategy. When the business is busy, the temptation is to focus on the most pressing fires, but without a forward-looking focus, you’re unlikely to meet your business’ goals. Ask yourself where you want to be in five years, and how you plan to get there. We'll help you create a detailed five-year plan so that you’re getting what you want out of the business.

7. Do you have the figures you need at your fingertips?

Your data drives your business, so do you have key financial information easily accessible? Think about where you need detailed data and metrics, and how this could put you in better control of the business and upcoming decisions. We can help you expand your reporting and management information so that you have a better eye on performance, spending, cash flow, and targets.

Talk to us about running a health check for your business

If these questions have started you thinking about your business efficiency and growth plans, that’s a good thing. If you’d like to take this process further, book a meeting with us to talk through your goals, aspirations, challenges, and strategy, so we can help you take the next step in your journey to entrepreneurial success.

When did you last review your Health and Safety Plan?

Thu, 18 Jan 2024 01:34:26 GMT

A Health and Safety Plan is important for any business and setting up a plan is crucial (and legally required). How long has it been since your plan was set up? Many things have changed in the past few years, so it’s probably time to review your plan. It will also give you the opportunity to remind your staff about the plan as the Health and Safety at Work Act 2015 requires businesses to have a high degree of engagement with staff (both employees and contractors) about health and safety.

Regardless of whether you have three staff members or three hundred, here’s three tips when reviewing your plan.

Assess new and current risks

When you set up your plan you identified the risks at that time. Are those risks still current? What new risks do you have? Discuss with your team the potential risks and hazards that might face your business including social aspects such as bullying, stress, and burnout. They’re as important as physical risks and having a plan in place can help identify what more you can do to mitigate the risk.

Tweak your plan

Once you’ve assessed risks and hazards, you’ll need to update your health and safety plan with the procedures to mitigate those risks. Consider how to adopt new procedures and focus on how those procedures are actionable and practical. You might need to update staff training, lists of first-aid equipment and first-aid qualified staff, amend the induction process for incoming staff, and policies on workplace health and safety that employees commit to. You might also want to review the reporting process for notifiable events to WorkSafe.

Put your plan into action (and share it with your staff)

Once you’re reviewed your plan, don’t let it gather dust, share it. Implement it as soon as possible and make time to make sure everyone knows the new/updated processes and any new risks or hazards the review identified. You might need to run regular courses or drills to help keep everyone up to date. It’s a good idea to encourage staff to raise any new risks and hazards – think about how you can make that process easy.

If you work in a hazardous sector or industry, you can set targets to measure the impact of your plan. For example, targets for keeping workplace injuries low, or to prevent sick days and burnout.

How to nurture your customer relationships

Wed, 13 Dec 2023 05:44:43 GMT

Customer relationships are just as important to the business as good finances – after all they go hand-in-hand. Building long-lasting relationships with your customers, creates a solid customer base who’ll think of you first when they’re looking for the product/service you offer. In order to create these type of customers, you need to nurture the relationships, but how do you keep your customers happy and satisfied? And what are the best ways to build and maintain a trusted and beneficial relationship with everyone in your sales book?

Here are a few key points for nuturing your customer relationships:

Communicate well with your customers

Any good relationship is based on honest and open communication. So it’s important to have the best possible channels for two-way communication, feedback and promotion. Talking directly to customers, and allowing them to communicate with you, opens up a dialogue and gets a conversation started. And when customers are willing to have that conversation, you can be confident that they’ll be open to your marketing, emails and other points of contact.

You could achieve this by:

Making use of the full range of digital channels  – some customers will check out your website before making a purchase. Others will follow your updates on social media. Some will prefer email newsletters and updates. Find out what your customers prefer and prioritise using the channels that have the best feedback, engagement and conversation rates.
Putting some effort into your social media channels  – social media platforms are a great way to communicate directly with your customer base. But you need to make the time to post regularly, reply to queries and respond to praise (and criticism too).
Know your customers inside out  – where possible, getting to know your customers face-to-face is invaluable. Digital channels are incredibly useful, but they can’t replace chatting with your customers in person. Hold customer events, go to conferences & events and ask your team to represent your brand in a friendly and engaging way.

Ask for feedback and comments

For your products and/or services to improve, you need honest feedback from your customers. Ask for feedback on your delivery, your customer service, waiting times and prices etc. And, crucially, find out how you can do better. The root of any product development lies in knowing what your customers want, and how their needs are evolving. If you can gather those opinions and information from your end users, that’s invaluable data on which to base your decisions.

If you’re selling a physical product, ask the customer to answer a few quick questions when completing their warranty details online. If you’re selling a service, then follow up any project with a ‘How did we do?’ survey that asks for high-level feedback on their experience. The more you ask, the more you will know – and that knowledge really is power in the business world.

Keep customers in the loop with new developments

When you’re starting your next round of product development, stop for a moment and think about who this product is for. Ultimately, you’re designing and evolving something to meet the specific needs of a certain customer demographic. So, who better to ask about the direction of your updated product or service? Talk to the end user and ask them what they want.

As a business, it’s very easy to get lost in the internal, in-house viewpoint of your development. A new idea could result in what’s seen as an excellent new product feature – but have you asked the end user if they want this feature? Aiming for a positive customer experience and meeting your customers’ needs should ALWAYS be your core aim. So get your end users involved in the development process and your beta testing of products.

Reward your best customers with perks and benefits

We all like to know that our custom is valued. When you form an attachment to a brand, and give the company your hard-earned cash, you want to know that this is appreciated. One way to make your customers feel valued in this way is to offer them perks and benefits – something that only your long-term customers will have access to. This could mean:

Giving valued customers early access to new products or services
Offering customers a healthy discounts on purchases, or giving away freebies
Introducing an ‘Introduce a friend’ scheme, where the introducing customer gets a gift
Running events for existing customers to build on their feelings of community

The more you can do to make each and every customer feel special, the more chance you have of building a great relationship – and turning these people into advocates for your brand.

Five Tips to Make Your Business More Sustainable

Mon, 11 Dec 2023 05:44:50 GMT

In an era where environmental concerns are at the forefront of global discussions, businesses are increasingly recognizing the importance of sustainability. Adopting sustainable practices not only benefits the planet but can also make your business stand out from the crowd. Here are five tips to make your business more sustainable:

1.Energy Efficiency Initiatives:

One of the easier ways to make your business more sustainable is by conserving energy. It’s a good idea to conduct an energy audit to identify areas where consumption can be reduced. It could be as simple as investing in energy-efficient appliances, lighting, and heating/cooling systems. Other simple measures include turning off lights/equipment when you’re not using it, encouraging employees to turn off their computers at the end of the day and putting lighting and heating on a timer.

2.Waste Reduction and Recycling Programs:

Businesses generate a considerable amount of waste, much of which can be recycled or repurposed. Establish a recycling program within your business encouraging employees to separate recyclables from general waste. Additionally, consider using more eco-friendly packaging that either breaks down or has been produced from recycled materials. Encourage the use of reusable materials and containers, both internally and externally.

3.Go Digital:

Implement a policy of digital communication and record keeping. Start the shift away from traditional paper-based documentation to digital platforms to reduce your reliance on paper – which both saves you money and the trees.

4.Supply Chain Sustainability:

Assessing and improving the sustainability of your supply chain is crucial for overall business sustainability. Seek out suppliers who are also committed to sustainability and buy local where possible to reduce your transport-related emissions. Consider implementing a policy where you hold less stock to help reduce the amount of wasted products.

5.Carbon Offsetting Programs:

Reduce the carbon footprint of your business by participating in carbon offsetting programs. Collaborate with reputable organizations that specialize in carbon reduction initiatives and invest in projects that offset an equivalent amount of carbon dioxide that your business generates. Offsetting your carbon emissions demonstrates a commitment to climate neutrality and aligns your business with global efforts to combat climate change.

Making your business more sustainable involves a holistic approach but incorporating these more sustainable and eco-friendly practices into your business makes you stand out from the crowd and contributes to a more sustainable future.

The Importance of Succession planning for your Farm

Wed, 06 Dec 2023 05:46:13 GMT

Many farming businesses are facing succession challenges. It’s not just helpful but a crucial step in securing the future of your business, your land, and your family. We’ve discussed this in articles before but why does succession planning matter so much, and what are the factors you should consider?   

Succession planning is essential for family-owned or operated farms, which are common here in New Zealand. Farming is more than a job, it's a lifestyle that goes from one generation to the next. But as farm owners age, they need to plan for the handover to the next owner.  

Without a plan, your business and family could suffer. You could face problems like:   

• losing your edge and vision;  

• hurting your image and trust; 

• lowering your performance and profit; 

• dealing with legal and tax issues; and 

• causing family and stakeholder conflict. 

A good plan can benefit you in many ways, such as:   

• retaining a strong team and leadership; 

• making sure your business lasts and thrives; 

• increasing the value and appeal of your business; 

• preserving family harmony and legacy; 

• avoiding tax and legal troubles; and 

• being customisable to your situation and goals. 

It needs clear and open communication, input, and cooperation from everyone involved, like family, staff, advisors, lenders, and buyers. It also needs to be adaptable to changes and chances. 

Differing preferences   

The younger generation may not want the family farm or have different goals or values than their parents. They may also lack skills, money, or other options. 

Ageing farm owners   

Stats New Zealand says farmers' average age rose from 42.5 in 1986 to 51.4 in 2013, with sheep and beef farmers close to 60. While there is limited recent data there is no indication this has reversed and if anything, it's likely to have accelerated.  

Market environment   

The business environment changes constantly because of technology, globalisation, consumer trends, regulation, climate change, etc. These factors may pose threats or opportunities for existing businesses or potential successors.  

High land values and low returns  

New Zealand farmland is very expensive and hard to buy for new farmers. Prices are mostly stable except for some areas where the government encourages carbon forestry. To own a farm, people need a lot of money or a good succession plan. 

Succession strategy  

A common problem for farm owners is the lack of a clear and communicated succession plan. They may also struggle to find the tools or resources to execute their plan. According to Alchemy Consulting, 20% of New Zealand business owners plan to sell within the next two years and up to 10,000 businesses could change hands over the next five years, many of which are in the agriculture sector.  

How do you create a successful succession plan? Follow these steps: 

Start early . Begin the process at least five years before the transition or sooner. This gives you more options and flexibility.  
Communicate clearly . Share your vision, goals, and plans with your family, successors, managers, and advisers. Listen to their feedback and concerns.  
Develop talent . Find and train potential successors within or outside the family. Set clear criteria and methods for choosing and assessing them.  
Contingency plan . Prepare for unexpected events, such as death, disability, or resignation of the leader. Name an interim successor and define their role and support. 
Consider the non-farming children . They may not get an equal share of the farm, but they should get a fair deal that does not harm the farming business or cause family conflict. 
Seek professional support . Succession planning involves legal, financial, tax, governance, and human resources issues. Experts can help farm owners deal with these issues and offer objective advice.

Succession planning is not just a ‘nice-to-have’, it's a ‘must-have’ for New Zealand farmers. It's the best way to secure the future of your farm, your business, and your family legacy. Don't wait until it's too late, start planning today. You'll be glad you did! 

We have the expertise to help you – contact us now to discuss how you’re planning the future of your farm.

Time to pause and reflect

Fri, 01 Dec 2023 05:44:52 GMT

One of the challenges business owners face is getting so caught up working IN the business that they don’t spend enough time working ON the business. Tasks that could help the business grow start to pile up and with that the stress too.

You can be flat out working but not make much headway in growing or developing the business. With the end of the year just around the corner and a time where we naturally slow-down, this could be a good time for you to pause and reflect on your business and how much time you’re spending IN the business versus ON the business. If you’re finding you need to spend more time ON the business, here are three tips to help you create time to do that:

1. Delegation

You’ve probably heard that delegation is important but not why. Delegating tasks and responsibilities to your staff frees you up to spend time on your business, rather than running around in circles trying to get everything done.

2. Plan and prioritise your workload

It’s important to plan out what you’re doing and prioritise where possible. Prioritise what’s most important and whether the other things on your plate can be divvied out or worked on when you have more time up your sleeve.

3. Look after yourself

It’s important to look after your best asset – you! It's hard to try and be everything to everybody. Step back and take a breather. What things can you incorporate regularly that will help you feel less stressed and more focused – it could be exercise, it could be a massage or getting away for the weekend.

As the face of your business, you’re seen as the driver of the business and you need to take the wheel and steer it where you want it to go. Try some of the tips above to help you have the time and mindset to work on your business rather than just in it. The results might just surprise you.

Diversifying your income stream and protecting your Business

Mon, 20 Nov 2023 22:32:18 GMT

Diversification isn’t possible if you don’t protect your assets and income earning base first. Having sound, real-time, relevant information is number one in protecting those assets. This is where we come in.

Cashflow

It’s difficult to protect your business after you have run out of cash. It is much easier to address if you know the cash crunch is coming. Knowing immediately, and at all times, what your cash flow is, or will look like now, and in 30 days, 90 days or one year from now, is critical to ensure your survival.

Profitability

The next area you should look at is profitability. Are you making profits from your business. Is it run efficiently? Here at Gunson McLean we suggest there are a number of questions you need to ask yourself about your business, which include:

• are your costs monitored

• is productivity of the team where it should be?

• is income maximized and billed per the contract

If you answer these questions honestly the answers may be a stark reminder that your business is not where you wish it to be.

Pricing

You should regularly look at your pricing model. It is extremely important that your debtors and creditors are monitored, and that you don’t let overdue invoices - either to you or from you - slip through the cracks and blow up your budget. What is your debt level – do you have too much debt, or maybe too little. The same goes for inventory, if you have it – you should maintain strict controls on what is coming in and going out each month.

Once you have all this information and your business is running smoothly, there are others areas you then should also look at such as:

Is your business structure effective - should you set up a company, create a partnership, limited partnership or a trust?
What are the tax effects of your structure – can you do better?
We have experts who can help you decide what is best for your circumstances.

Your Team

Are you doing your best to protect your biggest asset, your team? Your business cannot succeed without your team and their health and safety must always be at the front of your mind. Every worker deserves to go home safely to their family every night! How often do you review your insurance, does it cover everything and at the correct replacement values?

Only once all of these areas of your business are set and functioning well can you look to diversify your opportunities.

Diversifying within your industry is good, as you know that industry. However, you can end up putting too many eggs in the one basket. Diversification outside of your industry into well understood, long term investments helps to supplement any savings you may have. Personal preference and risk profile dictates where that diversification could be – shares, funds, other non-related businesses, property, carbon – to name a few. Regardless, getting money out of your main business into non-related investments helps to protect overall wealth.

Gunson McLean can assist you with business purchases, business planning, cash flow planning, property purchases and business structures. If you’re thinking about diversifying your assets, get in touch with us.

Some tips to keep your costs under control

Thu, 16 Nov 2023 22:32:24 GMT

If you’re looking for ways to help keep your costs under control, have you asked your team their thoughts? If you make your team part of the solution and explain how costs affect the business, they can get involved in reducing business expenses. Involving them in reviewing your systems for cost control and quality assurance as their commitment could make all the difference. Here are some tips to help you keep your costs under control.

Systems

Look at the systems around your costs – are the systems unnecessarily driving costs? If your business ships baked goods to supermarkets, is there wastage in spoiled or broken goods? Are freight and handling systems letting you down? Could different choices result in lower wastage and better delivery?

Balance inventory against customer response

If customers are loving the new products you’re adding and revenue is also increasing, you can probably tolerate holding those additional products in inventory. However, if your customers are lukewarm, then it may be to look at simplifying your product offerings so you’re not holding as much costs in inventory.

Times change

If you’re always done it this way, does it need to be done that way? Is there a cost in the system because you've 'always' paid for it. If so, review which costs are necessary as you may be able to simply this process to make savings.

Do you need a ‘name brand’ item or service? 

Is there an alternative, less expensive option? Can a cheaper brand do the job or is it worth the expense to obtain the quality essential for the business?

Scammers

When reducing costs it also pays to tighten up your financial controls. Recent scams have included legitimate invoices which have been changed to the scammers bank account details and both the customer and supplier are on the losing end of the deal. Make sure your financial controls are robust and query a change in bank account details with a real person (preferably one you already know) at the actual business.

Good cost control practices evaluate whether expenses are reasonable and affordable. Involving the whole team can help your business stay competitive and ready for growth.

Interested in developing new farming technology?

Mon, 13 Nov 2023 22:32:27 GMT

Farming is the backbone of New Zealand and our farms have some of the best, visionary, hard-working people. If you’re looking to take the next step with your beef or lamb farm, Beef+Lamb New Zealand’s Innovation Farm Programme helps farmers identify tools and practices to unlock financial improvements. The programme develops new farming technology by bringing both science and farming experts together for a period of about three years. With up to eight farmers at a time, the focus is on developing new knowledge and delivering results to benefit the wider farming industry. The projects chosen tend to involve new-to-market technologies.

The  Ballance Farm Environment Awards  celebrate farmer and grower achievement and showcase good practice. Among 2023's Regional Supreme winners,  Steven and Kellie Nichol , were celebrated for their forward-thinking approach.

Their farm, Auldamor, specialises in sheep breeding and finishing, with 4,500 ewes, 1,500 hoggets, 80 rams, and nearly 300 beef cows grazed each year. The couple were recognised for diversifying their business and considering the environmental impact of their work. By modifying farming practices and emphasising on-farm measuring and monitoring, stock productivity and profitability increased.

They introduced initiatives including a no-till drilling programme to improve soil health, improving pasture resilience, yields, stock performance, and animal health. They enhanced the farm's biodiversity, planting shelterbelts and forestry stands and fencing native shrubland and waterways. Steven and Kellie won Regional Supreme Award at the Otago Ballance Farm Environment Awards, with the judges commending their high level of knowledge about all aspects of their farm, their farming business and their guardianship of it.

If you or someone on your farm is an innovator, it might be worthwhile applying to some of the programmes available.

Quick access to pre-qualified finance with Figured for your Farming Plans

Thu, 09 Nov 2023 22:32:32 GMT

With MYOB now integrating with Figured, you can now access pre-qualified finance from Figured. With farmers facing both commercial and environmental challenges, Figured lending allows you to be smarter about how capital is accessed and provided. You can use your individual data to apply for loans seamlessly and lenders will be able to make more timely and accurate lending decisions. Heartland Bank CEO, Leanne Lazarus, said: “We are delighted to partner with Figured. We have supported New Zealand farmers for more than 145 years and currently lend to more than 2,000 farmers.

Being New Zealand’s largest provider of farm financial management software, Figured is used by more than 16,000 of New Zealand’s commercial farms. Figured chief executive, Dave Dodds, said Figured’s move into providing lending services to farmers was a logical step, as it increasingly became a financial hub for farmers and their advisers. “We know that farmers can be ambitious, developing their farm, improving the way they work, and trying new things. But it takes money, which is harder to get these days. That’s why we have teamed up with Heartland Bank and launched Figured Lending – we want to give our farmers and their advisers, smarter options for accessing new capital.”

There are four types of loans available – Project Financing, Halter Financing, Asset Financing and Dairy Flexi Credit. Dairy Flexi Credit provides seasonal working capital for contract milkers and sharemilkers. It will be able to be used to cover operational expenses, plant & equipment purchases, and unexpected expenses - and pay interest only on funds used.

This looks like;

- Revolving credit from $10,000 - $100,000, available now at 9.5% to cover cashflow and unexpected expenses

- Fast application and decision

- No asset security required (GSA and personal guarantee required)

- Flexible term up to 12 months

- Funding possible within 5 working days from the date of signing

- Available to Figured software customers - Dairy Sharemilkers and Contract Milkers (NZ only)

They have also developed a Contract Milker Expense Calculator to help those dairy farmers looking to go contract milking, to better understand the income and expenses involved https://lending.figured.com/resources

‘ The process was very smooth – once Figured reviewed our forecast and saw that we had the required sum of money in our account, they transferred the full loan amount"

- Ryan Braddock, Contract Milker, Longstream Farms

We can apply for funding through the Figured software so get in touch to discuss if Figured Lending is right for you.

Five tech tools to help digitise your farm

Mon, 16 Oct 2023 22:17:13 GMT

Apps and digital tools aren’t just for desk workers, there are apps designed specifically for farmers to help streamline your farming processes which saves you time and money.

MYOB : when you’re out and about on the farm, it’s helpful to manage accounts on the move. MYOB enables you to invoice and reconcile accounts on your phone and keep track of key financial information in a simple format.

F igured : can help farmers navigate crucial tasks such as forecasting, financial management, wage budgeting, repairs, and maintenance.

Cloud Farmer : allows you to ditch the notebooks and mountains of paper. Stay organised with everything you need in one place. Save time by entering farm records such as paddock records, stock records, agrichemical inventory, repairs and maintenance and a jobs list.

PaySauce : simplify business calculations and let employees file their timesheets digitally. PaySauce   also helps with record keeping and automates staff payments.

BrightHR : helps farm owners and managers take care of staff admin, worker contracts, sick leave, holiday requests, and enables farmers to track staff hours.

If you’re not a fan of tech, remember you don’t need to be a tech expert to use the apps – they have simple and easy to use interfaces. Plus digitisation can help you save time, money and reduce stress.

Creating a plan for your exit strategy

Thu, 12 Oct 2023 22:21:03 GMT

Exiting your business is a big commitment. You’re leaving behind everything you’ve built up, so it’s vital that you have a plan of action and a clear route to your end goal. This means sitting down with your advisers to create a long-term exit strategy, with a plan that's aligned to your key goals, aims and financial commitments as the owner.

Coming up with this plan won’t happen overnight. A business sale is a complex process with many different elements that all have to be considered. A workable plan, will give you a helpful route map to guide you along the way.

Here are some of the fundamental things to think about when writing your plan.

Know your sale price

As the vendor, you need to come up with an asking price for the business. Your sale price isn’t just driven by market forces. It’s also dependent on how much money you need to raise.

If your aim is to start a new business, think about how much capital will be needed to get this idea off the ground. If your goal is to retire, you need to work out the size of the lump sum that will be needed. You could live for 20 or 30 years post-retirement, so any cash raised has to provide you with your desired income and lifestyle for a number of years. Don't forget to allow for any tax that may be payable on profits you’ve made. We can help you estimate that.

Work out what funds you will need to retire or invest and make this total cost the benchmark for your ideal sale price. If you’d need 10Mill over 20 years, you know that your asking price must leave you with more than that after tax to provide a cushion for your finances.

Get the business valued

The next step is to understand the value of the business on the open market. This means talking to your accountant who may advise you to talk to a M&A (mergers and acquisitions) expert.

Value is a complex measurement. It can be influenced by your brand’s reputation, the business’ current financial health, the worth of your company assets or the skill of your existing team. A change in any of these elements can have a huge impact on your sale value – and, as a result, the size of the profit that you and your departing shareholders will make from the sale.

If your current value is projected as 8 million, but your initial asking price must be 10 million or more, there’s some work to do to add this value and boost your final sale price.

Decide on a successor

Every business needs a safe pair of hands at the top. Thinking about who will take over the reins, and how to make this transition run smoothly, is a vital part of your exit strategy.

A succession plan explains your own plans for retirement, who will take over your role and the timescales for this succession process. It may be that a family member is your intended successor. It could be that your intended buyer will take on the owner-manager role. Or it could be that a current member of your executive team is ready and willing to step into your shoes. Make sure you’re clear about who the new boss will be, and how (and when) this person will succeed you as the leader of the business.

Work out the timescales for selling up

Selling your business is rarely something that happens quickly. Preparing for a sale can often begin years before the proposed date of exit, so it’s important to be clear about your exit strategy and the key dates along the main timeline.

A five-year exit strategy is common, and you should allow at least two years to complete the process from beginning to end. Selling up may seem like the final scene in your business play, but in fact it’s only the beginning of a long and protracted final act. The more you can do to plan each step of the exit, the more successful your final sale will be.

If you think now is the time to start planning your exit, please do get in touch with us. We can help you value your business, work out your benchmark sale price and achieve the best possible sales price.

How to attract farm workers to your farm

Tue, 10 Oct 2023 23:33:44 GMT

Agriculture is the backbone of the New Zealand economy and farmers are great at innovation, but it can be a challenge to find workers for your farm. Not only do you have the regular challenges every business faces, but there are unique challenges such as the work being seasonal or short-term. There’s also the rural location – a challenge for workers to stay connected with their friends and family – whether in-person or digitally.

So what can you do to make your farm more attractive to work at? And to ensure you’re attracting the right person for the job? Here are some things to consider.

1. People like working with good equipment

We’ve all had to ‘make-do’ at some point in our lives, but when it comes to a job, using equipment that breaks down frequently or is more labour intensive – doesn’t make that job attractive. New gear doesn’t break, it’s easier to use and people like working with good tools that make getting the job done easier and quicker. If it’s a choice between working with older equipment or newer equipment – you know which choice you’d make, so give yourself and your farm the edge.

2. People like utilising technology

There are a multitude of options to make farming easier – how many have you adopted? Workers are more likely to work for a farm or employer that’s embracing technology and making use of the tools available to them. However, make sure what you choose to implement actually works for your farm – there can be too much of a good thing!

The other consideration is the internet connection – how fast and reliable is it? It’s important to have a good, reliable internet connection for your house and office, but make sure it’s also available in your farm workers’ accommodation and working area. They’ll appreciate being able to stay easily connected with their family and friends.

3. People like a work-life balance

The importance of a work-life balance isn’t a new concept and since the pandemic it’s become more important than ever. Bear in mind that your workers are looking for opportunities where they can have a work-life balance, so find out what they’re interested in and how you can support that. It can be a minimal investment but with great rewards of happy workers. It could be something as simple as an afternoon off, or staff discounts. Consider also what they’re goals and aspirations are within work and how you can help them learn more to enable them to reach their goal.

4. People aren’t machines (or commodities)

In recent years there’s been a rise in awareness of the impact farming can have on mental health. This applies not only to the farmers themselves but their workers. Most people are hard-working but what happens when they work too hard? Or are starting to burn themselves out? What systems do you have in place to check in on your workers? How can they raise concerns about systems or fellow workers or how things are done? Do you have tools in place to help identify when a worker is struggling (especially if they’re a new worker)? Be open and honest about the tougher aspects of the job and the processes you have in place for the stressful times.

5. Little changes can have a big impact

It only takes a little more effort for your farm to become more attractive to workers. Understanding what they’re after and how you can make you changes pays off in the long run. It also allows you have to learn more about your staff and what motivates them which means they’ll feel more ‘at home’ working for you – which is a win-win for all involved.

How much should you pay yourself?

Sun, 08 Oct 2023 23:39:17 GMT

As the boss you get to make all the big decisions about your business – including how much to pay yourself in wages, salary or drawings.

As the owner, you might need to underpay yourself in the early stages of building your business, so you can reinvest the profits. But your time is valuable – and you need enough money to pay the bills. So how can you find the right level of pay? It has to be enough to keep the mortgage paid, while also building a thriving business.

If you’re trying to decide how much to pay yourself, here are a few questions to ask yourself:

What can the business afford? 

You need to leave enough cash in the business to keep it ticking along, pay your basic costs, and meet your tax obligations. Once you’ve considered all those outgoings, how much does that leave you as a potential salary? We can help you work out what that number is, so you can establish a sustainable rate of pay.

What’s the market rate for your role? 

What would you have to pay someone to do the work you’re undertaking in this business? Maybe you wouldn’t actually be able to find anyone to work the same long hours, but if you were hiring someone with your experience, to do the same sort of work for 40 hours a week, what would they expect to be paid? That number is a good starting point for thinking about your own salary or drawings. If you’re being underpaid, it’s time to think about ways to grow your profits. If you’re being overpaid, congratulations on building a highly profitable business!

Could reinvesting profits grow your income faster? 

You can take all the profits out of your business, which should give you a strong and sustainable income. Or, could you reinvest your profits and grow the business faster, leading to a higher income in the long-term? You might choose to spend some of your profits on advertising, a better website, or developing a new offering, for example. Or you could pay for assistance in some area of the business. If the investment leads to higher growth, it might be well worthwhile.

We’ll help you run the numbers

We can help you figure out how much your business can afford to pay you, analyse the potential gains of a business investment, or weigh up the pros and cons of hiring someone to help you.

Get in touch, we’d love to hear from you.

Five tips for a greener business

Thu, 05 Oct 2023 23:46:09 GMT

There has been a huge drive towards sustainable businesses practices recently with people choosing to spend their money to support greener businesses.

A 2021 global sustainability study found that:

63% of consumers have shifted their spending toward being more sustainable in the past five years, particularly younger consumers.
Half of consumers rank sustainability as a top 5 value driver.
34% of consumers are willing to pay more for sustainability, with a higher share of Millennials and Gen Z prepared to pay more.

“ Consumers send a clear signal: sustainability will continue to become the expectation, rather than the exception ,” notes the study. “ Companies must transform their businesses now in order to stay relevant for the future .”

Transforming your business might ultimately require investing in new systems, packaging or products. But in the meantime, here are 5 quick ways to help set you on the right path.

1. Reduce plastic waste

Is your business still buying single-use plastics? Whether it’s pallet wrap, disposable cups or those coffee pods, there’s a quick and easy sustainable swap that you can make right now.

2. Recycle your old electronics

Old printers, phones and laptops can often be found lying around the office – along with a huge tangle of cables. Tidy up your space and help the environment by finding your local e-cycling centre and making the best of your outdated electronics.

3. Offset your carbon footprint

You can use an online calculator to estimate your business’s carbon emissions, then buy carbon credits to the same value to offset your emissions.

4. Use less paper

Embrace digital technology to cut your use of paper; switch to an electronic signing service so you no longer need to print and scan contracts or financial documents. If you must print something out, use both sides of the paper for internal documents. Buy recycled paper and recycle the paper waste your business creates.

5. Choose sustainable client gifts

Instead of sending hampers, consider a charitable donation – you could let the client choose from a list to get them engaged. Or send a potted plant, adopt an endangered animal, or pick an eco-friendly gift basket.

If you’re looking for more significant ways to invest in a greener business, we can help. Get in touch, we’d love to talk to you about sustainability in your industry and how to get the most out of every dollar you invest.

How running a lean business model improves your cashflow and efficiency

Thu, 21 Sep 2023 04:40:40 GMT

How running a lean business model improves your cashflow and efficiency

It can be a challenge for any business to keep both their operational expenses under control, while also remaining efficient and meeting customer demand. Running a lean business model can help you manage operational expenses and more efficiently meet customer demand by keeping operations, stock and processes to a minimum. This in turn reduces your outgoings, increases efficiency and improves your cash position. Could the lean business model work for you?

The lean business model

A lean business model aims to eliminate waste in your operational and product manufacturing processes, while still allowing you to meet your customers’ needs. The idea is to minimise your processes which helps you streamline the production of goods, reduce your operational expenses yet still meet the demands of your customers. This in turn creates an organisation that’s run in a lean, efficient and profitable manner.

The 5 key elements

Cost efficiency . Cutting waste is central to the lean methodology. Applying the lean methodology allows you to reduce waste in the manufacturing process and minimise any unnecessary spending. This allows you to optimise your resources and allocate funds strategically.
Increased agility . With a lean approach in place, it’s far easier for the business to be both agile and flexible. This makes it easier to respond quickly to market changes, customer needs and emerging opportunities you spot in your sector.
Enhanced customer focus . Promoting value is another core element of running lean. By eliminating activities that don’t add value, you can prioritise customer satisfaction and deliver tailored products and/or services that meet your customers’ needs.
Streamlined processes . The lean methodology aims to streamline your workflows, reduce bottlenecks and enhance your overall operational efficiency. This all leads to improved productivity and shorter lead times, helping you deliver your product more efficiently.
Sustainable growth . Running a lean business model promotes long-term sustainability. There’s a continuous focus on improvement, adaptability and financial stability, all of which helps to make you more competitive and ready to grow.

Talk to us about implementing a lean strategy

If you think your business could become more efficient by implementing a lean strategy (or some parts of the lean strategy), talk to us about your current processes and operational strategies. We can discuss how implementing some aspects of the lean methodology could help your business towards a more efficient and profitable future.

Tips for Debtor Management

Mon, 18 Sep 2023 04:46:56 GMT

When you sell to a customer on account or on credit terms, then you agree to allow the customer to pay you in 7, 14, 30 or however many days’ time. While you’re waiting on payment, that customer becomes a debtor. We know the importance of great customer service through the buying process, but we don’t often think of debtor management as the flip side of great customer service.

Great customer service makes it easier for your clients to buy what you sell, nurtures strong customer relationships, and helps your bottom line. Great debtor management makes it easy for clients to pay what they owe, maintains good customer relationships, and helps your cash flow.

Unlike great customer service, most people in business don’t enjoy following up with customers about unpaid debts. And often, they’re not very good at it so tend to avoid it.

Debtor control is often pushed to one side, as the team attend to more urgent or enjoyable tasks. It’s done ‘in the cracks’ when a systematic approach might achieve better results. This can lock up a lot of money in debtors that could be working for your business more dynamically. The consequences for your working capital are that cashflows are hindered because of slower payments and bad debts and funds required to meet impending liabilities are tied up waiting on your debtors to pay.

Good debtor management supports healthy cash flow and that helps you drive the business further. The key ingredients? A good strategy, the right tools and having everyone in the team understand what’s needed and how important it is.

These four tips can help:

Stay on top of your debtors’ ledger. Review it often so you can act early with late payers. Know, on average, how long it takes for your debtors to pay you and set goals to keep that average as low as possible.
Make sure your terms of trade are geared to your business and communicate them clearly to customers. If possible, ask customers to sign agreement to your trading terms.
Have well-defined policies and procedures for credit, billing, and debtor follow-up.
Get your team together for some training so everyone – whether they’re sales, accounts receivable, finance or reception staff – are on board with your debtor management strategies, understand their own role and have well-rehearsed techniques for dealing with customers.

If you’d like to review your debtor management strategies and achieve a healthier cash flow, we can recommend approaches and tools that might give you better results.

Tips to stay on top of the different rules when you have work vehicles

Thu, 14 Sep 2023 04:53:54 GMT

Tips to stay on top of the different rules when you have work vehicles

Depending on whether you’re a sole trader, partnership or company, claiming the expenses associated with work vehicles can prove a challenge. Especially if you use the vehicle for both work and personal use.

Sole Traders/Partnerships

If you’re a sole trader or in a business partnership, you can claim your motor vehicle expenses provided the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can only claim a percentage of vehicle expenses. You’ll need to keep track of when you use the business for work use – you can do this by using a logbook to track actual costs or using the logbook over a test period to work out your average business usage.

Be aware that travelling to and from home is not a business-related expense. You also can’t pop out for lunch or detour to the supermarket to pick up groceries on your way home. It’s best to keep the logbook clearly confined to travel for business purposes.

If you don’t keep a logbook but use the vehicle for private use (for example driving from home to work), then the maximum amount you can claim is 25%.

Companies

The calculations for companies are a bit different as it takes into account if the vehicle is available for personal use. If the vehicle is used for personal use or is available for personal use then it incurs Fringe Benefit Tax (FBT).

You can use logbooks (or one of the electronic logbooks mentioned above) to keep track of work-related costs and to show that the vehicles are work-related vehicles which are used for work purposes only and therefore don’t attract FBT.

If you use the vehicle for both business and personal use, the logbook can show that FBT has been accounted for correctly.

Logbook Options

You can keep a traditional logbook on paper, download a template from the IRD or use one of the eight electronic logbooks that have been approved for use in New Zealand. These are ERoad, Gravy, Logmate, Sibatec, SmartMove, Teletrac Navman, Trackit and Picobyte Solutions.

If you’re using a logbook to t estimate the average business use of your vehicle over a test period, the logbook must record the start and end of the 90-day test period, the vehicle's odometer readings at the start and end of the test period, distance of each business journey, the date of each business journey and the reason for each business journey.

Whatever type of business structure you have, we can advise you on keeping good records and with understanding what you can claim. If you need help with your logbook, get in touch and we can help you sort this out.

How to avoid the common mistakes with Provisional Tax

Mon, 11 Sep 2023 05:03:09 GMT

If you are liable for provisional tax and you don’t pay, underpay or pay late, you may be liable for both penalties and use of money interest (UOMI). There are ways to minimise your exposure to these and to manage provisional tax to best suit your business.

Adverse events affecting provisional tax

If your business has been affected by COVID-19 or certain other adverse natural events such as flooding, cyclones or earthquakes which affect your income, you may be able to request tax relief. If:

▪ you need to re-estimate your provisional tax because your income falls short of the estimate and provisional tax has been overpaid, it may be possible to arrange early refunds

▪ you are unable to pay tax by the due date, Inland Revenue has discretion to write-off penalties and interest. As soon as you can, you should indicate when tax can be paid, or request instalment arrangements. You may be eligible for a UOMI write off.

Penalties

If you’re late paying tax, a 1% interest rate is charged from the day after the due date on the tax owed. After 7 days, the interest rate rises to 4% and applies to both the tax owed and any penalties applied. If you’re unpaid tax is $100 or less, than late payment penalties will not apply.

Late payment penalties are only calculated once your actual RIT liability for the year is known and don’t apply if the unpaid tax is $100 or less.

Use of money interest (UOMI)

In addition to late payment penalties, the Use of Money Interest (UOMI) applies from the day after your first provisional tax payment was due (unless you are a safe harbour taxpayer).

From 29 August 2023, the interest rate charged by Inland Revenue on unpaid tax is 10.91%.

Methods to minimise penalties and interest

The method that you choose to use to pay provisional tax can limit your exposure to penalties and interest. For example, taxpayers using the standard option will not be liable for UOMI on the first two provisional tax instalments (provided they have paid the correct amounts calculated under the standard uplift method), but interest will be payable on any total shortfall/overpayments of provisional tax calculated from the third instalment date (if your RIT liability is greater than $60,000). If you’re using the Accounting Income Method (AIM) you should no longer have terminal tax liabilities (as tax payments will be made in near real-time and are based on actual results). We should be able to identify any shortfall and makes sure it is paid by the final instalment where the adjustments are easy to calculate. You might also make voluntary payments of provisional tax. This will help reduce UOMI charges on any known tax shortfalls. While voluntary payments may earn interest, it is typically at a lower rate than interest rates offered by commercial banks. From 29 August 2023, Inland Revenue’s UOMI overpayment rate is 4.67%.

Other options

Early-payment discount for new small businesses

If you have a new business and are self-employed (operating as an individual) or a partner in a partnership you may be entitled to a discount of 6.7% of the income tax on business income received before the year in which you are first due to pay provisional tax.

Tax pooling

Tax pooling is a where you pay an authorised intermediary such as Tax Traders a one-off, tax-deductible fee and it arranges the upcoming payment on your behalf. When you repay the principal at the date agreed with the intermediary, the independent trustee instructs Inland Revenue to transfer the tax into your IRD account. Inland Revenue treats the tax as being paid on time once the transfer is processed.

Need help?

It’s important to keep your tax plan current. If circumstances change for your business, we need to adjust your plan. Keep us updated about the situation for your business.

Figured now integrates with MYOB

Thu, 07 Sep 2023 05:07:46 GMT

Did you know that Figured now integrates with MYOB?

Figured is a financial management software for farmers that offers integrated functionality with MYOB so you can seamlessly access Figured’s production tracking, budget and forecasting tools.

Figured offers crop and livestock tracking, farm budgeting and the forecasting tools integrate seamlessly with MYOB which enables you to more confidently plan and reforecast with real-time information when conditions change. Using Figured and MYOB together means you know exactly where you’re at and where you’re going.

Benefits of using Figured include:

Having all your farm's financial and stock information in one place - cash, budgeting, operating expenses and stock-on-hand figures.
Production reporting. Dollars per hectare, per kg milk solids and per stock unit are built into Figured. You can also track crop and lifestock movements.
Time saving. Reconciliation is quick and easy, you can generate bank reports when needed and stock numbers are automatically updated.
Online collaboration. Your team can collaborate with one set of up-to-date information that allows for accurate decision making.

If you think you’d benefit from using Figured, get in touch with us and we can talk through whether this would be a good tool for you.

5 Signs you’re undercharging

Mon, 21 Aug 2023 00:33:52 GMT

Are you undercharging for your services? It can be hard to tell, particularly if you’re in a niche industry, or you’re a contractor. Costs have been rising, so it may be time to rethink your own pricing.

Here are five signs that you might be undercharging:

1. Nobody ever questions your quotes

Do all your new clients accept your quotes or invoices without asking any questions, requesting a breakdown, or wanting a discount? It’s possible they’re delighted to be getting such a great deal.

2. You’re run off your feet, but you can’t afford to get help

When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low.

3. Your prices have been the same for two years or more

In most industries, prices increase slightly each year. If you leave your prices flat for too long, you’re doing yourself a disservice, and then if you increase your prices to match others, it’s a big hike for customers. It’s a good idea to review your pricing each year.

4. You’re overbooked

Unless there’s a shortage in your industry, if you’re overbooked and can’t take on new clients, it’s likely you need to raise your prices.

5. Clients don’t treat you as well as they should

If you feel like your clients have more say than you do and that they’re taking you for granted, it could be that they don’t value you because your prices are too cheap. If they don’t see your time as valuable, they’re more likely to muck you around.

What should you be charging?

It can take a little time to find your pricing ‘sweet spot ’. Do some research on your industry, ask around and find out what your competitors are charging. We can help with this as we have clients in similar industries so we might be able to give you some indication of typical fees, so give us a call or send us an email.

Improving cash flow in your business

Mon, 14 Aug 2023 08:56:00 GMT

Keeping on top of the financial management of your business can be hard work . It's possible to have a profitable business that is struggling to find the cash flow to pay expenses and fund growth. Likewise, you could have positive cash flow but are not turning a profit, particularly if you are scaling.

Turning a profit is at the heart of running any successful company, but without an even and predictable flow of cash into the company, you can't cover your overheads, payroll, or day-to-day operations. That’s before thinking about expansion and growth of the business. You need both, so it’s important to get your head around the important process of cash flow management.

Let’s look at some of the key things to understand about your finances.

1. Profit is a by-product of a successful business

As the owner, you want to make profits, but profitability isn’t the only goal. A business can easily be profitable, but also be highly unstable in the longer term. What you want is stability and consistent revenue.

2. Cash flow keeps your business alive but know your costs

Good revenue (income) brings cash into the business. Without cash to cover your operating expenses, you have no means to keep the lights on in the business. The flipside is your costs. In an ideal world, you want more cash inflows than cash outflows, so it’s important to know your expenses and costs and to manage them carefully.

3. Be proactive about spend management and easing expenditure

If you can keep your costs down, that will improve your cash flow position. See if you can negotiate with your suppliers, extend payment terms, and reduce the amount of stock you keep on hand.

4. Drive more revenue, through increased sales and marketing activity

If you can increase your revenue, you boost your cash flow. It’s important to be proactive about running targeted sales and marketing campaigns to increase your sales. Think about who your ideal customer is and what they buy from you – how can you make this more attractive so they consistently buy from you.

5. Keep the cash flowing and the profits take care of themselves

If you achieve the ideal cash flow position, the company sits on solid financial foundations, the cash is there for investment, and the business can grow. It’s that simple.

Talk to us about improving your cashflow management

If you feel your cash flow could do with a helping hand, give us a call. We’ll review your finances and cash flow, and come up with key ways for you to increase your cash income and reduce your cash expenses. It only takes a few small changes to achieve a far better cash flow position for your business – helping you maintain positive cash flow and generate profit.

How does provisional tax work?

Fri, 11 Aug 2023 00:56:23 GMT

Provisional tax payments are payments you need to make if you paid more than $5,000 tax in your last income tax return. Think of provisional tax as paying progress payments on next year’s income tax.

The amount you must pay relates to your expected profit for the year. In practical terms, the amount of provisional tax you’re expected to pay is based on the tax you were liable for in the previous year, often referred to as residual income tax (RIT).

Even if you are not required to pay provisional tax, you may still elect to do so, to spread your tax obligations over the year. This can help you manage cash flow and take away the pressure of paying a lump sum at the end of the year.

For a new business, the first-year provisional tax payment can be tough. You must pay last year’s income tax at the same time as the first instalment of next year’s provisional tax. There are a couple of ways we can help you reduce this pain.

If you are self-employed or a partner in a partnership you may be entitled to a discount of 6.7% on your first year’s income tax. This is to encourage you to pay tax early and relieve the financial strain before you must pay provisional tax for the first time.

Tax relief measures

To shrink compliance costs for small business taxpayers and allow them to retain cash for longer, there are some tax relief measures to help businesses cope with adverse events affecting provisional tax:

If you need to re-estimate your provisional tax because your income falls short of the estimate and provisional tax has been overpaid, it may be possible to arrange early refunds.
If you are unable to pay tax by the due date, Inland Revenue has discretion to write-off penalties and interest. As soon as you can, you should indicate when you can pay the tax, or request instalment arrangements. You may be eligible for a UOMI (use of money interest) write-off.

It’s important to keep your tax plan current. If circumstances change for your business, we need to adjust your plan. Keep us updated about what's happening in your business so we can work through the problem with you.

Workplace trials in NZ

Wed, 02 Aug 2023 08:22:10 GMT

Workplace trials, they’re great for assessing potential employees, but there’s often confusion about how they work and if you’re compliant with employment law. Are they paid or unpaid? Does it need to be a simulated trial, or can it involve real tasks? How long is too long? Here are some key things to remember when conducting workplace trials.

1. Your business can’t benefit financially from the trial

During a workplace trial, a business shouldn't gain financially from the tasks the candidate undertakes, so you can’t get a person to do work that one of your paid employees would typically do.

For example, if you’re trialling candidates for a role as a barista, you can ask them to make a coffee for themselves or the hiring manager, but not for your paying customers. This helps ensure that the trial focuses on the task at hand or the skill you’re assessing, and makes it clear that the candidate isn’t an employee on a ‘try before you buy’ approach.

2. No payment during trials

Workplace trials should never involve payment of any kind, whether that’s company products, vouchers, or money. If your candidates receive payment during the trial, it may establish an employment relationship, which creates specific legal obligations for the employer. For example, if you didn’t offer the candidate a job, then you could be found to have unjustifiably dismissed the person (who would be an employee as you had paid them to carry out duties).

You need to be clear with job applicants that the trial is unpaid and solely for assessment purposes. That way you maintain the integrity of the trial process and avoid potential (expensive) disputes.

3. Keep it short

The duration of a workplace trial should be fair and proportional to the role being evaluated. There are no specific legal guidelines, but it's important to strike a balance between allowing enough time to evaluate the candidate’s skills and fit for the role while respecting their time and effort. Be aware that the longer a trial goes on, the more it could appear like actual employment to the candidate. Less is more: we recommend work trials last a few hours, at the most.

4. Clearly define the trial terms in writing

Before engaging a candidate on a workplace trial, make sure you write down the terms and conditions of the trial to ensure both parties understand what is expected.

When creating the document, clearly state that the trial is a recruitment tool to ensure the candidate is matched to the role before you proceed any further with the hiring process.

It should also set out:

details of the trial and what tasks the person will perform - these should be specific to the role;
its duration;
that completion of the trial doesn't guarantee a job offer; and
that participation in the trial is voluntary and the person won’t be paid for their time.

Having everything in writing and signed by both parties minimises the risk that an actual employment relationship is established, and prevents misunderstandings that could lead to disputes and legal issues.

Done correctly, workplace trials allow employers to make informed hiring decisions while giving candidates a fair chance to showcase their skills and suitability for the role.

Like all employment matters, planning and process are key. If you use workplace trials to assess potential employees, approach them fairly and carefully, design the trial, and be transparent about terms and conditions, duration, and their voluntary nature.

If you need longer periods of time to assess a person, we recommend employing them using a valid 90-day trial (if you are a business of less than 20 employees) or probationary period (if you have 20 or more staff).

Are meal expenses tax deductible?

Sun, 23 Jul 2023 07:29:16 GMT

Did you know that the income tax and GST treatment of meal expenses differs if you’re self-employed compared to being an employee? It’s different again under the entertainment expenditure rules.

Self-employed

If you’re self-employed, usually you can’t deduct meal expenses as they are deemed a private or domestic expense, although in certain situations there may be some exceptions. However, an extra expense may be deductible where you are required to work in a remote location or unusual hours. It’s not enough to just be ‘working away ’, you must have no choice but to incur additional expenses for meals. That cost, above normal meal expenses, is deductible.

Employees

If you’re an employee, meal expenses are deductible when it’s a straightforward reimbursement for out-of-pocket work-related expenses. The amount is tax deductible when you require an employee to work away from their workplace, to travel for work, attend a business meeting, conference or training course, or perform overtime.

Claiming GST

Whether you can claim GST on the meal(s), is based on how the income tax was treated. If you can’t deduct expenses for income tax purposes, you can’t claim GST on the expense. If you can deduct the expense for income tax purposes and you’re GST registered, then you can claim the GST on the expense.

Entertainment Expenses

Where it can get more complicated is entertainment expense rules. These rules don’t distinguish between types of business entities but instead on the type of entertainment and the connection between the expense and business income. If you’re self-employed and incur meal expenses that are classed as entertainment expenditure, you can deduct 50% of the cost, including the cost of your meal.

Need some help?

We can help you figure out whether business meal expenses are tax deductible with advice for your specific situation. Get in touch to discuss any questions you may have on this.

Keeping your cashflow strong in a tough economic climate

Wed, 19 Jul 2023 01:14:03 GMT

In a tough economy, small businesses are particularly vulnerable, with overheads and wages that still need to be paid, despite slow sales. To help you weather tighter economic times a bit of pre-planning and proactiveness can make all the difference. You’ll need to have a clear picture of your payroll and any other planned expenses. If running those numbers means there’s a possibility of a shortfall, it’s important to meet this head-on and not hope it works itself out. This could mean talking to your supplier(s) or creditors to figure out an arrangement, or re-evaluating other business outgoings to ensure that the business and staff won’t suffer.

Minimise the stress of cash-flow

Invoice early

Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance

Chase payment

Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.

Talk to suppliers

A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.

Review Inventory

Are you holding a lot of inventory? Could you devise a way to hold less inventory that won’t affect your ability to do business. Could you switch suppliers for some products, to reduce shipping costs and allow you to hold less inventory at a time?

Review your costs

It’s a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide to take an alternative approach to.

Talk to us

If you predict cashflow could be tight, talk to us about ways to implement strategies to protect your business for the long term and help you alleviate cashflow worries.

Keeping your customers happy and loyal

Thu, 13 Jul 2023 10:10:20 GMT

The stability of your business isn't just based on sound finances. Forming rock-solid foundations comes from having a solid customer base and building long-lasting relationships with your end users. To achieve this, you need to work hard on nurturing these relationships.

But how do you keep your customers happy and satisfied? What are the best ways to build and maintain a trusted and beneficial relationship with everyone in your sales book?

Here are a few fundamentals for keeping those relationships sweet.

Great communication with your customers

Any good relationship is based on honest and open communicatio n. It’s i mportant to have the best possible channels for two-way communication, feedback, and promotion. Talking directly to customers and allowing them to communicate with you, opens up a dialogue and gets a conversation started. And when customers are willing to have that conversation, you can be confident that they’ll be open to your marketing, emails, and other points of contact.

Some ways you could achieve this could include:

Make use of the full range of digital channels – some customers will check out your website before making a purchase. Others will follow your updates on social media. Some will prefer email newsletters and updates. Find out what they prefer and use the channels that have the best feedback, engagement, and conversation rates.
Put some effort into your social media channels – social media platforms are a great way to communicate directly with your customer base. But you need to make the time to post regularly, reply to queries, and respond to praise (and criticism too).
Know your customers inside out – where possible, getting to know your customers face-to-face is invaluable. Digital channels are incredibly useful, but t hey can’t re place chatting with your customers in person. Hold customer events, go to tra de conferences an d ask your team to represent your brand in a friendly and engaging way.

Ask for feedback and comments

For your products and/or services to improve, you need honest feedback from your customers. Ask for feedback on your delivery, your customer service, waiting times, and prices etc. - and, crucially, find out how you can do better. The root of any product development lies in knowing what your customers want, and how their needs are evolving. If you can gather those opinions and information from your end users, that’s invaluable data on which to base your decisions.

Reward your best customers with rewards and benefits

This could mean:

Giving valued customers early access to new products or services.
Offering customers healthy discounts on purchases, or giv ing away freebies.
Introducing an ‘Introduce a friend’ scheme, where the introducing customer gets a gift.
Running events for existing customers to build on their feelings of community.

The more you can do to make each an d every customer feel special, the more chance you have of building a great relationship – and turning these people into advocates for your brand.

Tips to avoid being scammed

Mon, 03 Jul 2023 06:28:42 GMT

We’ve all seen the news recently showing more and more people are becoming unwitting victims of scams – whether that’s an email, phone call or text scam , with the latter being on the rise. So, how can you protect yourself from inadvertently sharing information that results in you being scammed of your hard-earned cash? Here are 3 tips to help you avoid being scammed .

1. Never click on links

If you’re sent an email or text message with a link to confirm or authorise something and you weren’t expecting it – don’t click on it. If you do click on the link, don’t enter any information. Scammers are getting increasingly clever and are fooling more people with spoof websites that look like the real thing. So, although the text might say you’re clicking onto your bank’s website and you go to a website that looks like it, it’s probably fake and you’ve just unknowingly given them your login details. Only ever visit the website by typing it into your browser yourself. And if in doubt about whether a text message is real, contact the place it supposedly came from.

2. Be wary about who you share your contact information with

If you’ve ever been annoyed by a text message or phone call in the middle of the night, you might be wondering how they got your information. Anytime you’ve shared your personal information to download a free copy of a pdf, or enter a competition, you’ve given them access to your contact details. Most reputable companies won’t share it, but some will sell your data to the highest bidder. These people then attempt to scam you out of your hard-earned cash. So next time a form asks for your data, consider who’s going to be receiving this information, if it’s a bank or government department (and you’ve confirmed it’s legitimate), of course give them your real information , but if it’s a competition giveaway – consider whether it’s really worth entering.

3. Screen your text messages, calls and emails

Should your contact details be sold, and, let’s face it, most of us have freely given our information at times without thought about who might end up with it, you need to be a little more suspicious of any communication you receive. If you receive an email, what is the sender’s email address? Often those trying to scam you will make pretty close replicas of websites, but they can’t replicate the email address. Is it from @ird.govt.nz or is it a random looking email address? If it does have ‘ird’ in the email address, is it something like @irddept.nz? If you’re still not sure, contact whoever was supposed to be sending you this email – but get their contact details from their actual website NOT from the email.

For text messages, most of the time, legitimate texts will come from a 4-digit number. Often, text message scams have been received from longer mobile phone numbers. If you do receive a text that contains a link, don’t click on the link, but instead, contact whoever is supposed to have sent the text, to see if they sent it. Most of the time, legitimate texts from banks and IRD, won’t include any links to click on. Even if they’re sent from a 4-digit number, if you weren’t expecting a text, ignore the text and contact the company directly.

Scammers are becoming more sophisticated all the time, and many scams look very real. Remember banks and other institutions will never send you an email or text message with a link requesting you to click to log in and theyw ill never ask for your account number, name, address or password in an email or text message. Always err on the side of caution, never take the risk and think it is legitimate because it may cost you dearly!

Using forecasting in your decision making

Fri, 30 Jun 2023 06:22:07 GMT

In your business, you want to know what the future holds. In order to make informed decisions about your future, you need to utilise your forecasting tools so you can project your future data. Running projections (forecasts) using your historical figures can help you have a clear idea of the road ahead – and that’s invaluable!

Run regular forecasts

Positive cash flow is vital to the short, medium, and long-term success of your business. Without cash, you simply can’t operate the business efficiently. Running regular cash flow forecasts helps you overcome this challenge. With detailed projections of your future cash flow, you can spot the cash gaps that lie further down the road and take action to fill these cash flow holes.

Income can often be unpredictable, especially in challenging economic times. If customers fail to pay an invoice, or suppliers increase their prices, this can all start to eat into your available cash. Using forecasting, you can extrapolate your numbers forward to which weeks, months or quarters are looking financially tight. And with enough prior warning , there’s plenty of time to look for short-term funding facilities, or to get proactive with reducing your spending.

Run sales and revenue forecasts

Keeping your business profitable, sales stable, and revenue predictable is important to generate enough capital to fund your growth plans. You need to know how those revenues will pan out over the course of the coming financial period.

Revenue forecasts work much like a cash flow forecast. Instead of looking at your future cash position, a revenue forecast gives a projection of your sales and how much revenue is likely to be brought into the business in future weeks and months. With better revenue information, you’ll be more on top of your profit targets. You can manage your working capital in a more practical way, and you can improve your ability to invest in new projects, additional staff, or funding of the long-term expansion of your business.

Run different scenario plans

What’s going to happen to your business in the future? None of us have a crystal ball to predict this future path, but by looking at different possible scenarios , you can run projections to see what the potential outcomes and impacts may be.

These ‘What-if’ scenarios can be exceptionally useful tools when thinking about big business decisions. What if there’s an economic recession? What if our sales increased by 25%? What if we raised our prices by 10% next quarter? What if we lost a quarter of our customers? By plugging the relevant data into your forecasting engine, you can run these scenarios and see how each option pans out. That’s extremely useful when the worst (or the best) happens.

Update your strategy, based on your forecasts

By making the most of your forecasting tools, you give your stakeholders the most insightful data and projections to work with.

A good business plan is designed to be flexible and evolve to meet the needs of the changing market – and the changing needs of your own business strategy. By making use of your cash flow forecasts, revenue projections, and what-if scenario planning, you give yourself the insights needed to update your strategy and your business plan. You can make solid, well-informed decisions and keep yourself one step ahead of your competitors. In the dog-eat-dog world of business, that’s a competitive edge that can make a huge difference .

Let us help you with your forecasting

We can help you delve deeper into forecasting and show you the latest features of forecasting software and apps. Working with us, together we can see the value that’s delivered through well-executed forecasting and longer-term projections.

Personally guaranteeing a loan - what are the risks?

Tue, 20 Jun 2023 03:22:30 GMT

When offering a personal guarantee on lending – whether this is a business loan or guaranteeing a loan for a friend or family member – you need to be aware of what you’re getting yourself into and the risk you’re taking.

Offering a personal guarantee on a secured loan means you’re essentially promising to repay the loan if the business or person can't make the repayments. These repayments would come out of your own money or assets. While this might seem unlikely to occur, giving a personal guarantee can have serious consequences if the business or person is unable to repay the loan.

Here are some of the risks of giving a personal guarantee:

Personal liability – by signing a personal guarantee for the loan, you're putting your own personal assets on the line. If your business or friend/family member defaults on the loan, the lender can come after your personal assets to collect the debt. This means your home, car, savings, and other personal assets are all fair game and could be at risk.
Negative impact on credit score – if the lender comes after your personal assets, this can have a negative impact on your personal credit score. As a result, it could become more difficult for you to obtain credit in the future. Lenders will see you as a higher risk, which could affect your ability to borrow, take out a mortgage, or obtain personal finance in the future.
Strained relationships – when you're asked to give a personal guarantee by a business partner or friend/family member, this can put a strain on your business and personal relationships. Having to repay the loan from your own assets can cause resentment, mistrust, and ongoing problems between you and that person. The relationship may break down altogether.
Difficulty obtaining credit for your business – giving a personal guarantee for a loan may get the business out of a short-term financial hole. However, when a business relies on personal loans from directors, this can impact your ability to obtain credit for your business in the future. Lenders see this as a risk and may be less likely to extend credit.
Risk of bankruptcy – if the business can’t repay the loan and the lender comes after your personal assets, this has the potential to push you into personal bankruptcy. Becoming bankrupt can have serious long-term consequences, including difficulty obtaining credit, loss of assets, and damage to your credit score.

Talk to us about your finance plans

If you’re thinking about taking out a loan, or becoming a guarantor for a loan, it’s important to know and weigh up the risks. Make sure you understand the risks involved, and that you have a plan in place for repaying the loan if the worst happens and you end up having to make the repayments yourself.

We can help you work out a strategy, as well as connect you with a suitable independent financial adviser or legal expert to explore the risks.

Cashback on crush protection devices for quad bikes

Mon, 12 Jun 2023 04:30:09 GMT

Each year, quad bikes are a major cause of death and serious injury in New Zealand, but installing crush protection devices could help lessen that impact.

If you’re thinking about installing crush protection devices on your quad bikes but are struggling with the cost, ACC and WorkSafe are offering a cashback to help ease the strain. If you’re self-employed or own a small-to-medium-sized farming business, you could be eligible for a cash back offer.

If you’re eligible you’ll receive $180 (+ GST) for up to two Quadbar, Quadbar Flexi, or ATV Lifeguard crush protection devices. They can be bought at Farm Source, Quadbar NZ and Trax Equipment. This offer does not include the QuadGuard product from LifeGuard. To claim the cashback, login to MyACC for Business and upload an itemised invoice or receipt of your purchase.

West Coast farmer Colin van der Geest can vouch for the importance of roll bars following an incident where one of his workers was driving a quad bike while herding a cow out of a paddock and into a lane.

"It’s a flat site and at the end of the land there is a narrow 1.5m gap between a strainer post and a drain," says Colin. "The crafty cow decided to go through there and our guy tried to cut her off with the bike. The cow made it through, but my man rolled the bike into the drain. He escaped with bumps and bruises, but if it had not been for the roll bar, the bike would have fallen on top of him in the drain.”

Let us know if you'd like more information on the ACC/WorkSafe NZ cash back contribution.

Why all businesses need to plan for succession

Thu, 08 Jun 2023 04:07:31 GMT

If something happened to you, or other key people in the business, how would the business cope? How seamless and easy would the transition be for both your business and your customers? Succession planning isn’t just about retirement but about what would happen to your business and how it operates should something unforeseen happen.

It’s not just about securing your future

Even if you’re planning to retire in 20 years or if you already know who your successor will be, succession planning is still valuable. It allows you to plan for the unexpected and takes what could be a major crisis down to a significant but manageable event.

By having the conversations now, and documenting clear intentions, you could save yourself, your stakeholders, and family a lot of pain should an unexpected event occur.

It’s also about efficiency.

Planning for unexpected scenarios forces you to assess who does what, why, and how they do it best:

Is the right person performing the task?
Is this process the best way of doing the job?
When multiple people perform the task, are they doing so consistently?
Have we defined and documented the best process?
Should this task be the responsibility of a single team member?

Succession planning is about providing a safety net for your team by documenting the key business processes in your company. It also enables you to devise the most efficient system for each task. Having clear procedures to follow is helpful when a staff member is absent, but, most importantly, when the time comes that you need to transfer this knowledge to a new staff member, manager, or owner.

A robust and effective succession plan takes three to five years from initial planning to implementation.

Having said that, any plan is better than no plan. Generally, the longer you have to execute your plan, the bigger the opportunity you have to maximise the value of your business and, therefore, the capital you extract on exiting.

A succession plan is not something you write and leave to rot in a dusty drawer. Succession planning is an important part of your business strategy that requires regular attention and ongoing development!

Involving key team members in aspects of planning will engage and empower them as the journey begins.

Want help developing your succession plan? Get in touch!

Changes to the clean car discount from 1 July

Fri, 02 Jun 2023 04:34:26 GMT

From 1 July 2023, there are major changes to the Clean Car Discount scheme. Many cars that previously qualified for the full rebate will no longer be eligible, so if you’re considering buying a new vehicle soon, you might want to make your move now.

The rebate on clean cars will be lower

Zero emissions vehicles are currently eligible for a $8,625 rebate. This will be cut to $7,015 from 1 July. However, the rebate on zero emissions used imports will increase from $3,450 to $3,507.50.

Many vehicles will no longer be eligible for a rebate

Hybrids and small petrol cars are eligible for a rebate. However, the emissions threshold for a rebate has been lowered and many of these vehicles will no longer qualify. For example, the Suzuki Swift, Honda Jazz, and Toyota Yaris were all eligible for rebates of $1,000 to $2,000, but will no longer attract any rebate. For hybrids like the Toyota Corolla, rebates will be reduced, and they will no longer be available for models such as the Hyundai Kona.

Feebates will apply to more vehicles

Feebates are increasing on high-emissions vehicles; for instance, the Ford Ranger feebate is currently $2,645 and is rising to $5,290. For the Toyota Hilux, the fee will move from $2,990 to $5,635. Some vehicles that don’t currently attract a fee will do so after 1 July. This includes the petrol Toyota Corolla and petrol Hyundai Kona.

Should you buy a car now?

To take advantage of the current Clean Car Discount programme, you’ll need to buy a car and register it before 1 July 2023. There could be a significant discount if you move quickly; an extra $1,600 on zero-emissions vehicles, for instance, while on a Mitsubishi Triton the new fee is $2,600 higher than the old one.

If you’re wondering whether it’s worth making the move now, get in touch with us and we can calculate the potential costs and benefits of buying a vehicle this month.

Ten tips to help improve your business

Tue, 23 May 2023 00:55:21 GMT

The past few years have been rocky for business. More recently, the impact of inflation, increased shipping costs, and minimum wage rises have meant running a business has become trickier than before.

Here are ten tips to help you improve your business so you can drive business growth and achieve your purpose, vision, and goals.

1. Eliminate distractions

Time is our scarcest resource and is the biggest killer for most businesses. When we get busy, we can also get distracted and focus too much time and energy on the wrong things. Be brave - slash standard meeting times, reduce unnecessary administration, and delegate roles and responsibilities.

2. Say goodbye to bad customers

If possible in your business, get rid of ten time-wasters , bad payers, or customers/clients who cause you pain. You will feel instant relief and free up your time to be better spent elsewhere.

3. Invest more

Having freed up time and headspace from implementing the two tips above, make sure you ring-fence your time, your key people, and money for some of the initiatives below. Implement with passion!

4. Get a plan

You don't go on a journey or trip without a map or any idea of where you're headed - so why are you flying blind in your business? Develop a planning process, create a great plan – and execute it.

5. Surround yourself with positivity

Make sure the people in your business understand and share your vision. Bring them onboard, listen to them and give them ownership. Don't let people who don't ‘get it ’, or don't care, weigh you down. If they're not right, do them a favour and free up their futures.

6. Use technology

Technology can help you decrease administration, improve communications, improve reporting, and accountability. Whether it's for team communication or cloud-based tracking, reduce paper use and automate where possible.

7. Keep on top of the numbers

Do you have enough information to monitor business cash flow and see emerging trends? We can help you track your cash flow on a regular basis, so you can run your business efficiently.

8. Be different

Break the mould and position yourself to attract ambitious, growing, and engaged clients and employees.

9. Start marketing

Create a simple marketing plan and set aside a budget. Start by making sure you really understand your customers. Keep existing customers happy as it’s easier and cheaper to retain customers than attract new ones. The more you know about your customers, the easier it will be to attract more of the same.

10. Take a break

Don't underestimate the benefit of time away from your business. Plan mini-retreats or team planning/building days. Time away allows you to come back refreshed and look at things with a new perspective and refuels your enthusiasm and inspiration for the future.

Minimum wage when farming

Thu, 18 May 2023 00:37:57 GMT

It is relatively straightforward to ensure you’re paying your workers at least minimum wage when your employees’ hours of work are regular and are usually an 8-hour day, a 40-hour week or an 80-hour fortnight.

It can be more complicated if your business is seasonal, which is common for many farming businesses, as peak seasons require longer hours than usual, or irregular hours. You need to check you have systems in place to check your business is fully compliant with minimum wage requirements. Even if you pay above minimum wage, you need to check.

From 1 April 2023 the minimum wage rates have increased. The rates for adult workers are:

Hourly: $22.70 ($18.16 for Starting-out workers/Trainees)
Daily (based on an 8-hour day): $181.60 ($145.28 for Starting-out workers/Trainees)
Weekly (based on a 40-hour week): $908 ($726.40 for Starting-out workers/Trainees)
Fortnightly (based on an 80-hour fortnight): $1,816 ($1,452.80 for Starting-out workers/Trainees)

In the past, some employers averaged wages out over busy and quiet times. However, under the current law, the maximum period wages can be averaged over is a fortnight (and there are conditions that must be met). Averaging over a season, or longer periods of time, is NOT permitted.

If you provide accommodation or other benefits to your employees, when you’re calculating wages, the Minimum Wage Act allows you to count some of these benefits as ‘wages ’, but not all. You can mutually agree in advance that you will deduct an agreed amount from their wages as reimbursement. The Wages Protection Act means this MUST be in writing.

It's a legal requirement to keep records of hours worked, wages paid, and all holiday and sick leave for all employees. Your records must be detailed enough to show that you’re complying with minimum employment requirements including minimum wage requirements. Your agreements with employees about accommodation and other benefits should be documented and should be separate from employment agreements.

If you need help checking that you’re complying with the new minimum wage requirements, give us a call. We can check your systems to ensure you’re minimum wage compliant.

Healthy thinking for better farming

Mon, 15 May 2023 00:45:21 GMT

Thanks to Farmstrong for this article. Written by Hugh Norriss

There is a lot going on in farming at this time of year with added stresses, physical demands and the cold, wet short days. As a result of all these added pressures it’s easy to fall into some bad thinking patterns. Hugh Norriss, Farmstrong’s wellbeing advisor, shares some tips on healthy thinking techniques and how you can catch the thought, check it and change it.

All of us can probably remember a time when we lost our temper and ended up breaking something or even hurting ourselves or someone else.

Recently I heard a story about a farmer who was under time pressure to load his cattle and lost his temper when the last one didn’t fit in. He was fired up and slammed the gate shut. The only problem was, he didn’t remove his hand and ended up breaking his arm. An extreme example, but it does show how strong emotions like anger and frustration can end badly.

It’s understandable that occasionally we have a short fuse or feel negative, but is it useful and productive? According to psychologists, angry and negative emotions make us less:

effective at coming up with creative solutions to problems
productive
able to relate and get on with people.

Changing the way you think

Can we change the way we think and behave to be more positive, while also acknowledging our difficulties and challenges? This is all possible and a simple tool we can use to do this is called Catch it, Check it, Change it.

The negative thought cycle

When we notice something negative happening, or even when we think about something going wrong, it triggers an emotion. The emotion might be frustration, anger or sadness and will lead to a behaviour. Depending on the emotion the behaviour might be lashing out, berating others, or withdrawal. These behaviours can be unhelpful and can drive our negative thinking further, creating a downward negative spiral where negative thoughts, emotions and behaviours reinforce each other.

Having a level of awareness of what’s going on with this cycle will mean that we can monitor our responses and break the downward spiral, benefiting ourselves and others.

Often, the easiest way to break the cycle is by noticing the negative thought and applying Catch it, Check it, Change it.

How does Catch it, Check it, Change it work?

Catch it

When you get upset about a situation imagine standing outside yourself and hitting the pause button. Take a deep breath then see if you can catch your thought, notice the emotion you are experiencing, and any impulse to behave in a certain way.

Check it

Then examine the thought and decide if there is a more positive interpretation without denying the reality of the situation. Try to be curious about what’s going on, rather than assuming you have all the facts. We often decide that the thought we’re having is the one and only reality, whereas almost always there are a number of interpretations about what’s happening, or what someone meant by what they said.

Change it

We can then change the thought to a more positive interpretation, or at least reserve judgement. More positive thoughts will lead to easier emotions and calmer behaviours, which will help you problem solve better. If you do discover that the situation is the worst possible scenario, at least you have given yourself breathing space.

Applying the above technique helps us get better at understanding how our thoughts affect our emotions in the long term and will ensure we are less prone to depression, anxiety and angry outbursts.

What else can you do to help when stressed?

A good coping mechanism for stressful situations is to take five or six deep breaths. This stops us acting and thinking impulsively and calms our nervous system leading to better choices about what to do and say next. Another positive behaviour is to take a short walk, which has a similar effect.

For longer-term benefits we can keep our emotions and thoughts more positive by being aware and putting into practice the five ways to wellbeing, which include:

giving back
keep learning
connecting with others
taking notice
remaining active

Farmers are often pragmatic problem solvers. However, sometimes the problems become overwhelming. This is when we need to look carefully at our thoughts, emotions, behaviour cycle and talk with people we trust about what is going on.

Helpful advice

Throughout the day notice the pleasant and unpleasant emotions you’re having and try to give them a name. A helpful list of emotions that might help you can be found here .
Alternatively you can just label your emotional state as green, amber or red. Green is when you are calm, happy and relaxed. Amber is starting to get riled up and red is when you are heated and getting out of control. Sometimes this helps people share how they are feeling. Eg ‘I need to go for a walk I’m getting into the red zone.’
Where possible, try to limit spending too much time with people who are negative about life, as this can infect you with negativity too .

For more information go to

Dr Tom Mulholland and his approach to Healthy Thinking here.
Sam Whitelock and the five ways to wellbeing
BBC online health programme Headroom who first came up with Catch it, Check it, Change it .

For more great tips on wellbeing and how you can be looking after yourself, have a further look around Farmstrong . Make sure you take the Farmstrong wellbeing checklist too.

FBT - which employee gifts are exempt?

Tue, 09 May 2023 01:00:00 GMT

Sometimes you want to reward your team for reaching a sales target, for their birthday, at Christmas time, or just to say thanks. And sometimes, the nice gesture can prove to be more complex when you factor in fringe benefit tax (FBT). Not all perks are treated the same, some, like subsidised gym memberships and discounted products, will attract fringe benefit tax, while cash and cash-redeemable vouchers are taxed as part of PAYE.

Any cash or vouchers redeemable for cash are taxable

If you gift an employee cash, or something that can be exchanged for cash, it’s considered part of their total remuneration. That means it must go through your usual payroll system. However, there is an exemption for employer gifts, provided they stay below a certain value threshold.

You can give your employees vouchers, prizes, or gifts up to a certain value without triggering FBT if the value of the gifts does not exceed $300 in a quarter for any one individual - or $1,200 a year if you file annual returns. The maximum exemption you can claim is $22,500 each year, for all your employees.

There are a few other exemptions, including uniforms, car parks, and membership reward schemes that can also be provided to employees without you needing to pay FBT.

However, once you exceed the exemption threshold, you will need to pay FBT.

We can help with your FBT questions

Rewarding employees can be complex, whether it’s company vehicles, vouchers, discounts, or insurance policy contributions. We can help you understand the complete costs of those perks in the upcoming tax year and explain how the different options might work for your company.

What is the bright-line tax and does it apply to my property?

Fri, 21 Apr 2023 03:48:24 GMT

The bright-line tax (also known as the “bright-line test”) is tax you pay on any gains made when a property is sold. If you sell a residential property you have owned in New Zealand for less than 10 years, you may have to pay bright-line tax on any gains made. The tax does not apply for properties acquired before 1 October 2015.

There are some exemptions such as when selling the family home, or inherited property.

While not exempt from the bright-line tax, any ‘New Builds’ purchased after March 2021 still only have a 5-year bright-line period.

If you acquired a property on or after 27 March 2021, and dispose of it within 10 years, the bright-line rules will apply to the sale of that property, and any gains you made will be taxable unless an exemption applies. If you acquired a property before this date, the bright-line rules may still apply, but they are slightly different.

Bright-line rules

If your property was acquired:

· on or after 27 March 2021 and sold within 10 years (or 5 years for a new build), you will pay bright-line tax on any gains made.

· Between 29 March 2018 and 26 March 2021 and sold within 5 years, you will pay bright-line tax on any gains made.

· Between 1 October 2015 and 28 March 2018 and sold within 2 years, you will pay bright-line tax on any gains made.

· Before 1 October 2015, the bright-line tax doesn’t apply and you won’t pay any tax on the gains made.

Bright-line Tax Rate

The gains you make on the sale of the property, are taxed at the same tax rates as you pay for income tax so the tax rate you pay depends on how much you earn.

For example, if you earn $180,000 and make a $200,000 gain/profit on the sale of the property, you’ll pay tax of 39% on th e $200,000 gain (as any income over $180,000 is taxed at 39%).

Tax on $200,000 X 39%: $78,000

Total tax: $78,000

However, if you fall in multiple tax brackets, you’ll pay differing amounts of tax on the amounts.

For example, if you earn $100,000 and make a $100,000 gain/profit on the sale of the property, you’ll pay tax of 33% on the first $80,000 and 39% on the remaining $20,000.

Tax on $80,000 X 33%: $26,400

Tax on $20,000 X 39%: $7,800

Total tax: $34,200

Exemptions

The bright-line test doesn’t apply to the family home, inherited property, business premises or farmland (so long as you meet the criteria). If you used your property as your main home 100% of the time during the bright-line period, the main home exclusion should apply. When you sell, you won’t pay bright-line tax on any gains made.

A transfer of your main family home may continue to be exempt in certain circumstances, however, ‘change-of use’ rules have been introduced. This means that gains on a sale may be taxed if you haven’t used the property as your home for the entire time.

Need tailored bright-line tax advice?

We're experts when it comes to tax compliance, so if you’re unsure if the bright-line tax will apply to your property, or how it will apply to your property, get in touch and we'll help you navigate it.

The key to successful Succession Planning

Mon, 17 Apr 2023 03:37:43 GMT

You created your business from the ground up, poured blood, sweat and tears into it, nurtured it and now retirement is looming – what happens next? If you already have an exit strategy, well done! If you're unsure, then it’s time to think about succession planning. This could be handing the reins to a new generation, having someone in the wings ready to buy you out, or selling your business. Regardless of which option you pick, you need a plan.

Developing a plan

Before you prepare your plan, you need to ask yourself two important questions:

1. What needs to be done to prepare your business for succession?

2. Do you have a timetable for handing over the business?

There are certain things you need to consider and do when developing your plan. These include:

a complete analysis of all your business’ financial and non-financial matters;
a thorough due diligence of your business risks;
looking for and removing any obstacles that might hinder succession planning; and
seeking ways to enhance your company’s value, if you're preparing for a sale.

Handing over to family member

If your plan involves handing your business over to a family member, you'll still need a careful plan to navigate the often-complex issues around this.

A family succession plan recognises and accommodates the various needs, goals, and objectives of each family member. It should avoid creating ill-feeling, and take everyone into account – those who are taking over the business, those who are not, and yourselves (what will you need from the business for your retirement?). Compromise where necessary to ensure smooth transition.

Gauge what different members of your family want from the succession process. This can help families work out how they feel, what different people want, what the business needs to thrive, how much money and equity is changing hands, and who gets what.

Selling up

You might assume that selling your business is a fairly straightforward process, but often , in reality, it’s far from straightforward. There are many businesses on the market, what makes yours stand out? Only the good ones will fetch a good price , bad ones will just sit on the market.

Assess the current position of your business - Perform internal due diligence and conduct fina ncial and non-financial analysis.
Valuing the business with an independent party is a key part of succession planning - It’s common for there to be large gaps between an owner’s expectations and what the market is willing to pay. Do this early.
Reflect on what you can do to make your business more attractive to potential buyers - There are four key drivers of business value that need addressing: growth, profitability, efficiency and capacity, and risk management.

Succession is a journey

Developing, improving, and grooming your business is just the start. Good advisers, including accountants and lawyers, are invaluable in helping you on your journey.

Get in touch to see how we can help shape your succession plan.

What is actually tax deductible?

Fri, 14 Apr 2023 04:14:46 GMT

Many people tout many things as being ‘tax deductible ’, bu t what is actually tax deductible may be a different story. As a business owner, you need to know which expenses are tax deductible and which are not.

Work clothes

Work clothes are only tax deductible if it’s a uniform or if it’s safety clothing. Cloth es that you wear to work, that you could wear elsewhere (even if you don’t ), ar e not tax deductible. A good rule of thumb - anything that could potentially be worn for other purposes is not tax deductible.

Car expenses

If you are travelling for work, then vehicle expenses are tax deductible. However, your commute from your home to work is not tax deductible. If the vehicle is solely used for work, you can deduct all the costs, otherwise you can only claim a portion.

Meals on a business trip or shouting clients

There are three types of entertainment expenses – som e are 100% deductible, some are only 50% deductible. This can be confusing, so get in touch with us to help yo u work out what you can claim.

Working from home

If y ou have a home office, you can claim a portion of all your household expenses , including:

rates
electricity
home and contents insurance
rent, or the interest portion of your mortgage repayments.

The amount you can claim varies depending on how much of the house you use for your business. We can help you calculate this and ensure the right portion of expenses are claimed as a tax-deductible expense.

Subscriptions

If you subscribe to work-related magazines, journals, or professional association memberships then these are all tax deductible.

Mobile phone

If you have a dedicated business phone, it’s 100% deductible. If you’re using it for both work and non-work activities, then it will be partially deductible.

Need tax advice that’s tailored to you?

You’re an expert at your small business, and we’re the experts when it comes to helping you with tax compliance. We’ll help you sort out your tax questions so you can get on with growing your business. Get in touch - we’d love to hear from you!

Preventing Farm Injuries

Thu, 06 Apr 2023 03:51:13 GMT

In New Zealand, agriculture is our biggest export earner, and we’re among the best in the world for looking after livestock and crops. However, it’s also one of our most high-risk industries, and we’re not always so good at looking after our people, and preventing injuries.

In the past 5 years, the total figure for farm-related injuries is $383 million dollars. In 2020, over 60 farmers were injured every single day, for a total of 22,796 farm-related ACC injury claims. Not only does this come with a price tag for recovery, $84 million in 2020, but it has a flow-on effect for their work, families, and communities.

Stress is a factor in some injuries. A survey of recently injured farmers had 58% of them linking their accident to stress associated with farm work, with 25% saying it was a major factor. Research shows that lack of sleep, exhaustion, farming stress, isolation, and feeling unable to ‘take a break’ are all risk factors for injury.

Preventing injuries

Farming is a unique job, in a unique industry, with a unique set of challenges – only some of which are predictable. To help farmers, a wellbeing programme has been created for the rural community, and it’s available nationwide. Farmstrong is an initiative to help farmers, growers, and their families, to cope with the ‘ ups and downs ’ of farming by sharing things they can do to look after themselves, and the people in their business. The aim is to help farmers live well to farm well.

Farmstrong shares farmer-to-farmer tips which are supported and informed by wellbeing science, with the aim to help farmers and farm workers be better able to cope with farming life. There are many pressures in farming and increasing wellbeing builds resilience and allows you to recover quickly from setbacks. For more information, and free resources, on how Farmstrong can support you and your workers, see www.farmstrong.co.nz

Could a four-day work week be the boost your business is looking for?

Fri, 31 Mar 2023 03:11:05 GMT

The idea of a four-day work week has been thrown around for a number of years, but how do the figures stack up?

A recent pilot involving 30 companies and almost 1,000 employees in businesses in Australia, Ireland, and the US found that the four-day work week is a winner. Companies rated the four-day work week trial a 9 out of 10, expressing extreme satisfaction with their overall productivity and performance. Employees also rated the pilot highly, with 97% saying they want to continue on a four-day week.

Despite employees working only four days, the companies involved saw a 38% increase in revenue year-on-year, despite no reduction in pay for employees. Every single business involved in the trial is sticking with the four-day week, and employees loved their day off so much that most said they would need a significant pay rise to go back to working five days.

Maybe it’s time to think about whether it could work at your business. It could be just the thing you need to attract good talent – which has been in short supply in New Zealand lately.

The advantages of the four-day week are:

It improves staff morale, wellbeing, and retention.
It can cut overheads by up to 20%.
Productivity is likely to remain at 100%; some studies show an increase.
It’s easier to recruit new team members.
Emissions created by commuting will be reduced.

The disadvantages of the four-day week:

Your total revenue may suffer.
It simply won’t work for many businesses, particularly those focused on customer service.
You’ll have to decide whether to limit your operating hours or try to manage workers’ schedules and workloads to allow a four-day work week to succeed.
There are no long-term studies of the positive effects on staff morale – there are some indications that it may fall back to the baseline over time.
Squeezing more into four days of work could prove stressful for you and your team.

We can help you run the numbers

If you’re considering a four-day week, or another flexible arrangement, we can help. It’s useful to identify your least profitable days, for instance, if you plan to simply shut up shop for one weekday. Or we can help you work out optimal staffing requirements based on revenue streams.

Our team can work with you to do a cost-benefit analysis of what a four-day work week might look like for your business, discuss how you can change the way your business operates – and help you reap the rewards.

What is open banking and what does it mean for you?

Sun, 19 Mar 2023 21:57:28 GMT

New Zealanders will soon have better access to open banking, but what is it? And what does it mean for how you shop and do business?

Open banking is a secure shared infrastructure for moving financial information

Open banking is the future of banking. It’s a financial technology that uses an open API (Application Programme Interface) to send information safely. It creates a shared digital infrastructure to transport information securely between registered parties.

The open API lets you send a business or institution a chunk of financial information, which should make it faster and easier to complete transactions.

The Government has established a consumer rights framework to support open banking and all the major banks are now on board. Open banking is already in place in the UK and Australia and growth has been impressive in both countries.

Open banking in action

We already have one open banking product available, which you may have used: Online EFTPOS. This is a secure online EFTPOS transaction that goes through your banking app, available with all the big four banks. It’s popular with merchants because it prevents charge-backs and has very low transaction costs compared with credit card payments.

A safe, user-friendly and affordable payment option, this demonstrates the type of products that can become available with the open banking infrastructure.

What will it mean for shoppers and businesses?

The possibilities for open banking are huge. Open banking should allow other types of low-cost transactions, which should cut costs for your business and give consumers more payment options. For example, a complete online wallet is in development which could eliminate the need to carry loyalty cards, ID and proof of address. This should make it easier to apply for a loan, buy alcohol and make use of new financial products. Open banking is also a first step on the journey to a central digital currency, which could be kept in your digital wallet.

It’s likely to spark the development of more apps and services for businesses, which may give you options for managing your finances and getting added value and security from your online accounting tools – for instance, paying directly between you and your suppliers to prevent invoice fraud.

What are the opportunities in your industry?

Open banking is a massive sandbox of possibilities for fintech – we’re not experts, but we’d be happy to chat about the potential opportunities for your business.

Support for your business that’s been impacted by Cyclone Gabrielle

Sun, 19 Mar 2023 21:22:15 GMT

If your business has been impacted by Cyclone Gabrielle, you may be eligible to receive support from your bank and/or the Government. Here are some links to some of the support available to businesses across New Zealand.

Government Support

Government grants for businesses

If you own a business in one of the seven regions that have been affected by Cyclone Gabrielle, or the January flooding, you can apply for support to help with recovery. The affected areas are Northland, Auckland, Bay of Plenty, Coromandel, Tairāwhiti, Hawke’s Bay and Tararua.

Eligible businesses can apply for a grant of up to $40,000. Businesses must not already be receiving funding from the Ministry for Primary Industries recovery fund.

Some criteria will apply and applications will be via local partners. More information on the criteria and how to apply is available on the Ministry of Business, Innovation and Employment website .

Civil Defence payments

Anyone who has been displaced or can’t work due to Cyclone Gabrielle can apply for a Civil Defence payment. Eligibility is limited, so check the website for more information .

Flood recovery payments for Auckland businesses

Individuals, marae and community groups affected by this year’s extreme weather events in Auckland can apply for a grant from the Auckland Council Emergency Relief Fund. You can find out more and apply here .

Inland Revenue waives late payment penalties

Inland Revenue has announced it will waive late payment penalties for businesses unable to file or pay tax on time due to the recent extreme weather. More information here.

Support from your industry

The Ministry for Primary Industries (MPI) has announced funding to mobilise and co-ordinate recovery efforts for farmers, growers, whenua Māori owners and rural communities.

Many industry groups have emergency support information available on their websites:

Banking Support

$2,500 cash support available from Westpac

Westpac’s small business customers can apply for a $2,500 cash grant from the Small Business Flood Relief Fund. This also applies to businesses hit by the earlier Auckland floods. Visit the Westpac website and apply now .

$2,000 cash support available from ASB

ASB’s business and personal customers can apply for a one-off $2,000 cash payment for support. You’ll need to supply some evidence of the impact that Cyclone Gabrielle, or the recent flooding, have had on your operations. Apply on the ASB website .

Support packages from other banks

Other major banks – including ANZ , BNZ , and Kiwibank – are offering businesses temporary overdrafts, zero-fee loan restructuring, interest only periods on loans, payment deferrals and other support. Get in touch with your bank to see what’s on offer.

We can help with securing funding and support

If you need help in demonstrating the impact the weather has had on your business, we can help. We can also complete funding applications on your behalf as well as talk to the Inland Revenue about support for your tax situation. Get in touch with us; we’re here to help.

End of Year Review

Tue, 14 Mar 2023 21:53:05 GMT

The end of the financial year is upon us, so now is the perfect time to review the year and make plans for next year.

Review last year’s performance

The first thing is to reflect on what worked well, what didn’t and the changes you’d like to make. This is also the time to consider the new things you’d like to implement. What were your key drivers of growth, what work do you want to do more of, what work do you want to do less of, what could you outsource, what do you want to bring back in-house and what can you celebrate achieving.

Set goals for the new year

Now you’ve analysed the previous year, what goals are you going to set for this year. Make sure your goals are specific, able to be measured, are actually achievable, are relevant to what you do and there’s a timeframe of when you can realistically achieve the goal.

Develop a plan

Using your analysis and goals, make a plan for the year. The plan will help you outline the steps/tasks you need to take to achieve your goals, identify what is a priority for your business and what may arise that could hinder the process. This is a good time to involve your wider team in the process, so that everyone is on the same page and has a clear idea of what to focus on in the coming year.

Set your budget

Now you have your plan, you’ll need to create a budget to enable you to successfully implement your plan. What do you need to add into the budget and what changes do you need to make to the budget to ensure you can meet your plan?

Don’t forget to monitor your progress and make changes as needed. If you’d like advice on your business goals or plan, we can provide valuable insights and guidance – sometimes having someone reviewing your goals and plan can be invaluable. If you’d like to chat to us about what you can do differently this year, let us know.

We want you!!

Sun, 12 Mar 2023 23:12:18 GMT

We want you!

Fancy logging in from home most days? Do you have a taste for Agri and Commercial accounting? Well, we have the role for you.

We are seeking an Intermediate or Senior Chartered Accountant who has experience of working in an accounting practice to join our team.

As we mentioned above, you wouldn't necessarily have to live in either of our locations, but you will need to be OK with heading into one of our offices, every now and again to see clients.

The team is super fun to be around, however we work bloody hard to service the needs of our client base. Our salary is competitive and we can't tell you here, but it is an exciting time to be joining us.

You will be responsible for timely processing of Financial Statements, GST Returns, payroll and other accountancy services including budgeting and management reporting. You will be working with our clients and assisting them with their financial and business requirements. An outgoing personable natured person is what we are looking for. Our main accounting system is MYOB and we also work with our clients on Xero, so experience in both of these software programs would be advantageous.

This is a full-time position.

To be considered for this role, we are looking for a person with:

- Effective relationship management skills
- Ability to problem solve and display good analytical skills
- A high degree of accuracy, responsibility and attention to detail

Please email your CV and covering letter to admin@gunsonmclean.co.nz

Are you using the free Flood Recovery app?

Wed, 08 Mar 2023 21:49:48 GMT

Cyclone Gabrielle caused extensive damage to many farms in Northland, Auckland, Waikato and Hawke’s Bay. Cloud Farmer, in the Hawke’s Bay, created the Flood Recovery app to help farmers with recovery. The app is free and stores all important information in one place.

The app allows you to record animal health, information for insurance companies as well as receipts and quotes for grants. For example, you can take photos of the damage and store it in the app, as well as documents associated with your insurance claim.

Cloud Farmer took their existing farm management app and software and customised it for flood recovery. Although their farm management software is a paid subscription, they have made the flood management app free for anyone to use.

You can find more information and download the app at https://cloudfarmer.app/farm-flood-recovery/

Payment of overdue accounts

Thu, 02 Mar 2023 04:42:22 GMT

With businesses experiencing a combination of inflation costs, a potential economic downturn as well as unexpected costs from recent weather events, asking for payment of overdue accounts can become a challenge. Protecting your business from unpaid invoices and bad debts is important and you’ll also want to minimise the risk to your cashflow. Here are some ideas to help you get paid.

1. Ask how customers are
Many businesses receive a lot of emails in a day, so an email may get missed or lost in an inbox. When you call your customers, make sure to first ask how they are. Your assumptions may be wrong and they may have been more impacted than you realise. Be respectful and kind in your positioning. If your customer is genuinely struggling, demanding payment is unlikely to yield the results you’re looking for, but empathy can go a long way.

2. Triage your debts

Consider those customers who are likely to be the most impacted – they’ll need to be treated with empathy and flexibility. Those who are likely to be less affected and may have a lesser debt, are probably the first people to call as they are more likely to be able to pay you.

3. Offer options to repay debt

Be honest and tell them why you’re calling. Offer them options to pay their overdue account such as spreading payments across the next 3-6 months. Empathy and professionalism are key and likely to go a long way.

4. Reach a repayment agreement

Once you’ve reached an agreement, record the details and set a reminder to check when due again. If payment doesn’t come through on the agreed date/dates, follow up with the customer. Again, empathy, flexibility and repayment options are more likely to result in the debt being repaid.

If your customer’s ability to repay you is an issue or is causing you cashflow difficulties, talk to us about how we can help. We can support you to manage your accounts receivable and ensure you have your best shot at getting paid.

Getting your head around agri employment contracts

Mon, 20 Feb 2023 00:08:29 GMT

Whether you’re employing workers on a permanent, fixed term, or casual business, all employees must, by law, have a written individual employment agreement. This includes people like relief milkers who are only on a farm irregularly (casually) or for a set period of time (fixed term).

The agreement must set out the basic terms and conditions of employment, including what each party’s rights and responsibilities are, and what is expected of them. It can also protect both the employer and employee if things don’t work out.

Inclusions

An employment agreement must include the names of the employer and employee, a description of the work, place of work, agreed hours (or indication of the hours of work) and the wages/salary to be paid. The agreement must also comply with the Holidays Act 2003 and explain the process for employment grievances.

Trial periods

Trial periods can only be used by employers with fewer than 20 employees. If there is a trial period in an employment agreement, it should only be for up to 90 days from the start of employment.

If you and the employee agree to a trial period, this must be included in the agreement and signed by the employee before he or she starts any work for you (even 5 minutes after starting has been held by the courts to be too late). This employee must also be a new employee which means he or she must never have worked for you, even on a casual basis, before.

Agreements

Federated Farmers provide an array of employment agreements which can be bought online – permanent and fixed term employment agreements, a casual employment agreement, and a contract milking agreement. These are updated regularly and contain all the essential terms you need in the contract. If you need something more bespoke then your local rural professional (lawyer, accountant, farm consultant) can help you draft an agreement that meets your specific industry/job needs.

Once work has commenced

As an employer you must keep accurate records of hours worked, wages payable (and paid), and leave taken for each employee. You are legally required to keep these records for at least seven years, so it pays to have a good, secure record keeping system.

Minimum wage from April 1st

Sun, 19 Feb 2023 23:55:00 GMT

From April 1 ^st 2023, the minimum wage will increase by 7% to $22.70. The Starting-Out and Training minimum wage rates will also increase so that they are 80% of the adult minimum wage.

This wage increase may impact your business, even if you don’t employ any of the 175,000 Kiwis who earn minimum wage. Wages rise steadily over time, and employees who missed out on a pay rise this year will probably expect one next year, especially if your business has been doing well.

As well as the rising cost of labour, inflation will also likely increase your running costs, and the price of materials. This is a good time to consider whether it’s time to put your prices up. Ideally, businesses should increase costs by a small amount each year, rather than a big jump every five years. Small increases help prevent price shocks for customers and keep your business in line with the rest of the market.

You may also need to think about whether you can cut back areas of spending. Most businesses are already running lean after COVID, and due to inflation, but we can help you identify areas where you might be able to trim the fat.

Give us a call or drop us an email – we’re here to help.

If your business cannot operate do you have to pay staff?

Wed, 15 Feb 2023 23:47:26 GMT

The weather has impacted various regions recently and official advice has included reference to people working from home where possible. For some businesses, this isn’t always a feasible option, so if an employee isn’t able to work from home, the next question is who pays their wages/salary and what are your obligations as an employer.

Defaulting on work obligations – employer or employee?

If an employee is unable to work from home, or other options cannot be mutually agreed, then the question of ‘who pays’ comes down to who is defaulting on their obligations to work, or to provide work under the terms of an employment agreement. For example, if a child’s daycare centre or school is closed due to a MOE directive, but staff are ready, able, and willing to work, then the employer is defaulting and should pay staff their normal pay. However, if an employer has work available, and their premises are undamaged, but an employee is unable to get to work due to the roads being closed, or damage to their vehicle, they are therefore not ready, or able to work, so the employee is defaulting, and the employer is not obligated to pay them their normal pay.

Before assumptions are made about the time away from work, and whether it would be paid or unpaid, you need to look at the employment agreement, workplace policies, and the specific situation you find yourself in. Some employment agreements may specifically cover this type of situation and the extent of any contractual obligations that might apply. If there’s nothing in the employment agreement, then it is up to both the employer and employee to talk about it in good faith and agree what the time away from work will be classed as.

Sick Leave for Dependants

If the employee's partner or dependant family member isn’t injured or sick but requires care, (i.e. because the child's school is closed), the employee can’t take sick leave because their dependant is not sick or injured. If it’s not appropriate or possible for staff to continue working, employees and employers will need to agree on what basis the employee is off work and how that period is going to be managed.

Alternatives to working from home

If you’re employee is unable to work from home, there are various options for leave and/or payment. These include:

annual leave;
annual leave in advance of entitlement;
using any entitled alternative holidays;
discretionary special leave, either as provided for in employment agreements or workplace policies, or by an ad hoc agreement between the employer and employee;
leave without pay;
sick leave (if their partner or dependents are injured or sick);
other paid or unpaid leave either as provided for in employment agreements or workplace policies, or by agreement between the employer and employee;
advance on wages, i.e. a temporary loan with the obligation to repay.

Some examples:

Whatever option is agreed on may depend upon the circumstances, including the nature, extent, and duration of the disaster. Once all leave entitlements are exhausted, further options will need to be considered, in good faith, between employers and employees. Employers will need to consider the impact these options will have on business recovery later.

Employers should also carefully check any terms in their insurance policies, particularly any concerning paying staff wages during a natural disaster, and contact their insurer, or insurance broker as soon as possible.

*Force majeure, or as it is often referred to ‘act of God’, is when a natural disaster, or similar unexpected event, makes it impossible to keep a business running. Because of this, the employee’s job may no longer exist.

GST invoice rules are changing

Tue, 07 Feb 2023 00:00:11 GMT

Dealing with GST invoices will be much simpler under Inland Revenue’s (IRD) new rules which come into force from 1 April 2023. The changes provide more flexibility. If your invoicing practices are compliant with the current rules then they will continue to comply with the new rules. However, all businesses will need to be aware of the changes to ensure their business processes can manage the new GST requirements.

The biggest change is you’ll no longer have to issue and hold a “tax invoice” document. Instead, tax invoices will be replaced by a more general requirement to provide and keep certain records known as taxable supply information (TSI). This is a set list of information that must be provided to any GST-registered customers within 28 days of the date of supply. Information over and above current tax invoice requirements includes:

The ”date of the supply” — when the time of supply is triggered, rather than the current tax invoice requirement of the date on which the tax invoice is issued.
For supplies over $1,000, the TSI must include the recipient's physical address (if that information is available).
For supplies over $200, the changes mean it is mandatory to issue TSI to GST-registered customers within 28 days of the date of supply, and for supplies made to non-GST registered persons you have 28 days from when the customer requests the information.

Previously, you needed to keep a tax invoice to claim GST on any supplies costing more than $50 (including GST). From 1 April, this threshold will rise to $200 (including GST). You must still keep records to support your expense claims, including a tax invoice if you receive one. However, if you do not receive a tax invoice, you can keep other records that are sufficient on their own, or in combination, to support your expense claims. For example: invoices, supplier agreements, contracts, and bank statements.

The IRD has also removed the requirement for buyer-created tax invoices to be approved by IRD. These will be replaced by written agreements between parties to confirm self-billing.

From 1 April, you can continue to issue tax invoices, or you can provide the taxable supply information (TSI) in any format you choose. Examples could be a list of information in an email, electronic invoice, or information supplied via an e-invoicing system. You don’t need to use the words “taxable supply information” or include these words in the information you provide as part of the TSI.

Similarly, to claim GST on a payment you make to your supplier, what is required from the supplier would simply be a list of information, rather than a document called “tax invoice”.

If you're unsure about the changes or need more information on the taxable supply information, let us know - we're happy to help.

Train your staff and expand the skill-set in your business

Thu, 02 Feb 2023 23:28:05 GMT

When a business trains its staff, not only are employees upskilled, but this also expands the skill-set in the business. This is why staff training is a must. When employees can see you're invested in their future, they feel valued, empowered, and engaged with your vision. That's great news for the productivity of your business.

Investing in your team

If you want great things from your people, you’ve got to give them the very best support. A job is not a static thing. It’s a role that will evolve and change over time, with new skills, new job descriptions, and new responsibilities along the way. To offer your team the best opportunities, make staff training and development a key area on your business leader’s to-do list.

As a starting point:

Find out what training and education your people want. There’s no point second-guessing what your staff wants to learn. Talk to each staff member and ask them where they feel they need extra skills, or where there’s room for progression in their training. This can be an enlightening process, and helps you get an angle on where these new skills could be used within the business.
Help them find the relevant courses or in-house training. You may be able to offer some key training in-house, as long as you have people available to do this, who have the skills. There are also plenty of professional bodies, industry institutes, or colleges that will offer courses in the right areas.
Set clear targets for their education in the business. Once you’ve identified the learning and development that’s needed, make sure this is added to the employee’s development plan for the year. Your employee’s goals could be to complete an online training module, go on a residential course, or take part in mentoring sessions with a senior colleague. The important thing is to agree on the goals, set the right timelines and track each person’s progress against their plan.
Set a career path and give employees increased responsibility. A key goal for most employees will be to aim for a promotion. With their learning and development goals set, you could also think about giving your employee new responsibilities, testing out their managerial skills, or giving them specific projects to manage and curate. By taking on these challenges, and testing their new skills out in the real world, you’ll help them build confidence and gain valuable hands-on experience.
Check in with your staff regularly to see how they're doing. Hopefully, you’ll have a review process already set up for your staff, but don’t leave discussions about development purely for these review conversations. Check in with your people regularly and use these informal, relaxed chats to see how each person (and each team) is doing.

Setting up a staff training programme

An investment in employee development is an investment in the future of your business. It’s a sign that you want to support the careers and progression of your people. We can help with training in bookkeeping, business accounting, strategic planning, and many other areas of business management.

The ‘Friendly Field Days’ are coming!

Thu, 26 Jan 2023 04:22:06 GMT

The Northland Field Days are coming on 2 – 4 March 2023. This is the largest agri-event in Northland, with something for everyone - rural or urban.

There will be hundreds of exhibitors showcasing the latest in farming innovations along with plenty of food and entertainment. Don’t miss the opportunity to visit the home & leisure exhibitions or the fun of lawn mower racing or the mighty tractor pull.

The field days started in 1985 at the Dargaville racecourse as a project run by the Dargaville Jaycees with some 80 exhibitors!

In 1986 permanent power was added to 60 sites, which provided a welcome facility for exhibitors. After a period of economic downturn, 1990 had a huge increase in attendance of both exhibitors and visitors. The increase has continued each year resulting in the event becoming the largest in Northland and the second largest agricultural event of its type in New Zealand.

In 2006 the land where the Northland Field Days is held now, was purchased by the society, and is now home to the annual event.

Since 2009, through grant funding and other financial assistance, the Northland Field Days has been able to maintain, upgrade, and expand the existing facilities.

The event eventually outgrew the Dargaville Jaycees but it is still organised by a group of volunteers’ The Northland Field Days is now an Incorporated Society, registered with NZ Charities Commission and annually provides community grants for scholarships, research etc aimed at reinvesting back into the rural sector. Wherever possible non-profit volunteer community groups are invited to be part of the event which has become a major source of fundraising for some of these groups.

Bring the whole family and come together to celebrate and support our region.

Where: 33 Awakino Point East Road, Dargaville

When: 2 March - 4 March 2023

Thursday 2nd March 2023: 9am to 4.00pm (gates close for entrants at 3.00pm)
Friday 3 ^rd March 2023: 9am to 4.00pm (gates close for entrants at 3.00pm)

Saturday 4th March 2023: 9am to 3.30pm (gates close for entrants at 2.30pm)

Get your tickets now! For more information see https://northlandfielddays.co.nz

Regional Anniversary Days

Wed, 25 Jan 2023 23:35:28 GMT

A little confused on payroll and Regional Anniversaries? We asked Smartly to break down the details.

Regional anniversary days can now be automatically added to your payroll – the same as other public holidays, like Christmas Day. In the Employee Details screen, you’ll find a field for you to choose your employee’s regional anniversary day. Once chosen, the relevant regional anniversary entitlements will be automatically added to that employee when the anniversary rolls around. Easy as!

If you need to make a change to any of your employees in this screen, you will also need to either choose a region or select Not Specified as it is a mandatory field to save the page.

How do I know which regional anniversary my employee is entitled to?

In New Zealand, there are 12 regional anniversary days, but there are 16 regions across the country. To make sure your employees are assigned to the correct regional anniversary day, we’ve created a helpful table below:

For more information check out Employment NZ’s public holidays and anniversary dates , and Te Ara’s provincial anniversary days map .

Health & Safety 101

Mon, 23 Jan 2023 04:14:14 GMT

Since the Health and Safety at Work Act 2015 came into place, specialised advisors and consultants have been popping up all over New Zealand. But how do you know who’s genuine? It’s all about doing your groundwork.

What to look for when seeking help

The old saying ‘you don’t know what you don’t know’ is very true. Start with asking questions and learning about health and safety. Then find someone you trust who can advise you clearly about what you actually need. Check to ensure they have qualifications in H&S, NEBOSH (National Examination Board in Occupational Safety and Health) or at least Level 6 in Health and Safety. Interview them just like you would an employee.

There are misconceptions about consultants

One of the most common misconceptions is that it costs an arm and a leg. It’s true that the higher the risk in your business, the more you need and the more regularly you need to be covering it (hence higher costs). However, it’s completely possible to cover the basics and do it well in most businesses, without it costing the earth. Talk to your consultant about what would work for your business and how to incorporate that in your normal activities.

How to start the process

Many consultants offer a free, initial meeting to answer questions. Experts in HR and H&S can advise on both and how they interact with each other. For example: Does your job description include expectations around H&S? Many don’t.

Saving money and time on health and safety

The more planning you do, the better. Have copies of your job description, employment agreements, and any health and safety processes you already have in place. Secondly, get some training. A one-day course to gain an understanding of what the law requires is about $250, which is a small price for valuable information.

And finally...

· Get valuable health and safety information from WorkSafe

· Find a health and safety professional at www.register.hasanz.org.nz/

· Check out Active+ for workstation assessments, occupational health advice, and more.

The barriers to mental health services for young rural men

Fri, 20 Jan 2023 03:47:49 GMT

Living in rural and remote areas often means people can feel socially isolated. This can contribute to stress, anxiety and depression which can have a detrimental effect on people's mental health and wellbeing. Those in rural areas seem to be less likely to seek help in comparison to their urban counterparts.

A recent study by Southland counsellor and researcher Kathryn Wright on the state of mental health services for young rural men has found that many of the perceived barriers for those needing help can be overcome.

Wright, who is herself a farmer’s wife and the mother of a 22-year-old shepherd who had been in the farming industry since she had left school, has completed a project to determine what barriers young rural men, aged 16-30 face when they need help with mental illness. She undertook this project after she discovered there was hardly any academic research available particularly focused on the effects of rural living in New Zealand.

Farmers were exposed to financial problems, stock prices and Government regulations; but the worst statistics were around suicide which was about six times more likely to occur in young rural men than in the general population.

It appeared to be all about interpersonal conflict, something she was hearing through the work she did with that demographic both in schools and privately. From what she had seen, the issue needed to be looked at. Rather than seeking help, it appeared young men seem to be "suffering in silence".

Her study has revealed there are three main barriers preventing young people from accessing help but that young rural men can get the help they need if they are told where to look.

First, many had no idea when and where to seek help – a lack of awareness of what is available. Wright says a general practitioner is a good starting point for those thinking they need help. She believes this is a fact that needs to be more widely promoted and understood.

“They don’t know where the bar is when they need to seek help, and they didn’t know where to start looking for that help - am I bad enough or are there people worse off than me?” she said.

The second perceived barrier is the stigma and feeling of shame associated with needing help. Anonymity and privacy are particularly challenging in rural communities. Because of societal stigma, young ones may be embarrassed if friends or family members find out they are seeking mental health treatment - a fear that can be viewed as the end of the world.

In the rural sector another fear is that seeking help or treatment for mental illness could result in the forfeiture of a firearms licence and firearms. “Hunting is so important, a way to interact and socially connect with friends but also providing exercise and a source of healthy fresh food,” Wright said. On this issue police told Wright that each situation is treated on its individual merits, and that there is no blanket ruling resulting in the forfeiting of licences.

The accessibility of counselling sessions is considered another barrier, but Wright said technology means consultations do not need to be in person but can be done by video. It can be difficult for someone from a rural area to travel to an urban centre for a face-to-face session with a health professional and it requires time off work. Video allows engagement with counsellors anywhere in the country and it can remove the potential discomfort of someone running into their counsellor in the local community.

Cost is also considered an impediment, but, according to Wright, it shouldn’t be a barrier as there are multiple funding sources that a general practitioner can source.

Wright said studies show rural people are twice as susceptible to suicide as those in the general population. In the general population 75% of suicides are males but in the rural sector this jumps to 92% and studies show 50% of those rural suicide victims are aged 15-40

Wright said young rural men dislike seeking help at school, seeing it as a weakness, and this trend continues once they enter the rural workforce. For many it is their first time living away from home and away from their traditional support structures.

Her study also reinforces the importance of social connection with other people - young rural people can feel quite isolated - they need a sense of belonging and being needed. Living on a farm or in a small community, she said, young men can struggle to cope with the pressures of relative isolation, dealing with a relationship breakdown or conflict with their employer, working long hours while living on a nutritionally poor diet, capped off with easy access to alcohol, vehicles, and firearms. This makes social networking through clubs, teams and organisations crucial.

Mental health symptoms can include isolation, changes in appetite, mood, sleep patterns, and short temper. Wright said employers and managers should be aware of mental health symptoms so they know what to look for and when their staff need assistance. They should not judge them but rather should offer help such as time off to attend counselling. Wright also urged managers and owners to be supportive and to praise young workers, when warranted, for the effort they are making. A happy, productive employee is more beneficial to both of you.

Wright is promoting the study to practitioners and interest groups as a source of knowledge for how to help young rural men. She does some speaking at the likes of Young Farmers events and she intended to use the findings in her talks. She says we need more education and we need to work out how we can best cater for this generation of young people.

Need help?

Rural Support Trust: 0800 RURAL HELP

Need to talk?: Call or text 1737, free 24/7 phone and text number

Healthline: 0800 611-116

Lifeline Aotearoa: 0800 543-354

Suicide Crisis Helpline: 0508 828-865 (0508 TAUTOKO)

Samaritans: 0800 726-666

Alcohol Drug Helpline: 0800 787-797

General mental health inquiries: 0800 443-366

The Depression Helpline: 0800 111-757

Youthline: 0800 376-633, txt 234 or talk@youthline.co.nz

What’s Up (for 5-18 year olds; 1pm-11pm): 0800 942-8787

Section 215 Emissions Pricing Report Shows Progress

Tue, 17 Jan 2023 23:20:34 GMT

A section 215 report, released by the Government shortly before Christmas, outlines several changes to the proposed emissions pricing system that give greater certainty for farmers, and better recognises on-farm sequestration.

According to Beef + Lamb New Zealand (B+LNZ), “The Section 215 agricultural emissions pricing report and accompanying commentary released by the Government today is a step forward, but there is still significant work to be done on critical details before sheep and beef farmers can feel confident in the final agricultural emissions pricing system.”

It confirms that the Government has agreed to a farm-level split gas levy rather than agriculture entering the NZ Emissions Trading Scheme (ETS).

Then Prime Minister, Jacinda Ardern said, “The most important thing is getting an emission reduction system set up that lasts. We are working hard alongside the agriculture sector to strike the balance between building good levels of sector buy in, while also ensuring the system is robust and meets our emissions reductions goals. With or without the Government’s proposals the world is changing and New Zealand needs to be at the front of the queue to stay competitive in a market that is increasingly demanding sustainably produced products.”

B+LNZ chief executive Sam McIvor says the report is a significant improvement on what the Government proposed in October and follows the He Waka Eke Noa partners’ consultation submission (see the earlier article on Climate Change in the Beef & Lamb February 2022 newsletter which discusses He Waka Eke Noa) and ongoing work to address a range of issues. “The Government has committed to designing a system that is practical to implement while ensuring that a viable and productive agricultural sector continues – we’ll hold them to account on that.”, says Sam McIvor and adds, “In this regard the Government has committed that methane and nitrous oxide prices should be as low as possible and be fixed for a five-year period to provide certainty. Given that New Zealand is the first country in the world to price agricultural emissions, it’s essential a cautious approach is taken and that we ensure what farmers are asked to do is fair and equitable, doesn’t threaten farm viability or result in emissions leakage.”

The sector will be given greater input into pricing decisions and widen the criteria of factors to be considered to include social, cultural and economic impacts. Agriculture Minister Damien O’Connor has said, however, that oversight of this levy setting system will rest with the Climate Change Commission, but that they are establishing a board with representatives from the agriculture sector and Māori to provide advice and act as an avenue for sector input. B+LNZ disagrees with the proposal that the Climate Change Commission advice should have priority: “The Government has recognised the disproportionate impact on sheep beef and deer farmers of its earlier proposal and committed to ensure that the impacts are equitable across sectors – we’re working with them on potential provisions to ensure sheep and beef farmers do not face an unfair burden of emissions management. The viability of sheep and beef farming cannot be threatened through this pricing scheme.”

Sequestration remains a key area of focus for B+LNZ. It believes that, though the report commits in principle, to recognising all categories of sequestration and transitioning to the ETS, there is more clarity required on this.

B+LNZ’s message is consistent on this – if farmers are to pay for their emissions, they must be recognised for their sequestration at a fair value and it needs to be from 2025.

Sam McIvor also notes B+LNZ is heartened that the Government has acknowledged and committed to act on two issues that B+LNZ has long advocated for.

The first is the consideration of different ways to track warming impacts, such as global warming potential, on the related issue of emissions reduction targets.

The second is noting the impact of offsetting rules within the ETS on sheep and beef farming and rural communities, and the admission of the need for urgent efforts. McIvor asserts that “We won’t stop pushing for them to turn concern into action.”

McIvor says the Government has listened to feedback to date. “I want to acknowledge the willingness of Ministers and officials to make changes, and their commitment to work with He Waka Eke Noa partners including B+LNZ to find the right solutions. We now need to nail down the detail to ensure equity, fairness and a viable pathway for our sheep and beef farmers.”

Final decisions on agricultural emissions pricing will be made by Cabinet in early 2023 with the aim to introduce legislation by the middle of the year.

How GST works

Mon, 16 Jan 2023 03:20:53 GMT

New Zealand’s Goods and Services Tax (GST) system is often praised for being a simple broad-based tax. But this doesn’t mean mistakes don’t happen.

What is GST?

GST is a tax added to the price of most goods and services, including imports. If you carry out a taxable activity in New Zealand and your turnover is more than $60,000 in a 12-month period, you are required to register for GST. GST is charged at a rate of 15%. ‘Taxable activity’ is generally defined as an activity which is carried on continuously or regularly by any person, and involves the supply of goods and services to another person for consideration.

When do you charge GST?

In general, GST should be charged on most taxable supplies. However, some goods and services are either zero-rated or exempt. Common exempt supplies include renting a residential dwelling and providing financial services, while exported goods/services and land transactions between GST registered persons are examples of zero-rated supplies. For most other goods and services, GST should be charged on the sale. GST can be claimed on goods and services purchased for use in your taxable activity. This means there must be a connection between the taxable supply produced and the good/service a claim is being made on.

Claiming GST

A GST claim can only be made to the extent that the goods and services are used to make a taxable supply, i.e., a supply to which GST applies, including a supply that is zero-rated. As a result, GST-registered taxpayers should be mindful as to whether the good/service they are producing or purchasing is an “exempt” supply or a taxable supply. Furthermore, no GST claim can be made for personal expenditure, as personal expenditure is not connected to a taxable supply.

Take for example a company that has both a commercial investment property and a residential investment property. The supply of residential rental accommodation comprises an exempt supply. Because the company is simultaneously carrying on both a taxable and exempt activity, care needs to be taken to ensure GST is not claimed on expenses relating to the exempt activity, such as GST on the rates and insurance relating to the residential rental.

Where there is an element of both business and exempt use of an asset, the GST claimed on purchase should be apportioned based on the estimated business use. For example, where a phone is purchased in the business, an estimation should be made as how much it will be used privately, and the GST claim should be adjusted accordingly.

Examples of instances where GST is incorrectly claimed include payments for:

• Loan/mortgage principal
• Interest
• Personal drawings
• Construction of residential dwellings that will be held long-term as rentals
• Wages

A common missed opportunity is where a GST-registered person purchases a second-hand good from a non-GST-registered person for use in their taxable activity. In this scenario, a GST credit is claimable by the purchaser, even though GST was not charged by the vendor – e.g., the purchase of a business motor vehicle off TradeMe.

Even though it is called simple and broad-based, having your GST returns periodically independently reviewed is a good idea.

Christmas Message from Gunson McLean

Tue, 13 Dec 2022 03:45:22 GMT

What a year it is has been! 2022 has certainly had its challenges. While it has been one of the busiest (and most stressful) years to date, it has also provided us with many reasons to be thankful.

We’d like to take this time to thank you for being with us through this year. It’s been our pleasure working with you and we hope to continue our relationship with you for many years to come.

The Gunson McLean team will be taking a well-earned break from 3pm on Friday 23 December and reopening on Monday 16 January.

May you have a peaceful and relaxing Christmas and holiday season and we’ll see you in 2023.

Could an overseas worker fill a vacancy at your business?

Mon, 12 Dec 2022 03:33:20 GMT

It’s tough to hire new staff at the moment – the labour shortage has reached a critical level, with record employment, and very low immigration. If you’re having trouble filling crucial job vacancies at your business, you might still be able to employ someone from overseas.

Migrants already in New Zealand

Migrants already living in New Zealand, who have visas, have had their visas extended. They can usually work for any employer, although they may be some restrictions depending on the individual visa. You can find out more about employing migrants already in New Zealand here .

Bringing in an employee from overseas

As an employer, you can also bring workers into New Zealand. This requires an investment of time and money, but it can be worthwhile if you are really struggling to find someone for that pivotal role. There is quite a long list of approved classes of critical workers, and you can request entry if you’re looking for someone in one of these jobs. This includes tech. sector workers, vets, advanced manufacturing specialists, auditors, and many more (you can see the full list here ).

The role you’re offering needs to be paying at least $27 an hour for these approved classes of workers, and you need to demonstrate that you can’t find someone local to do the role. You can also employ other workers, whose roles aren’t on that list, but you’ll need to pay at least $40.50 an hour and, also, show you couldn’t find a Kiwi to do the job.

One option is to use an agency to help guide you through the process of bringing in an overseas worker to fill a role within your company. Expect this to take up to three months and cost up to $10,000.

Is it worthwhile going through this process?

Considering the time and money involved, would it be worthwhile to hire from overseas? We can help you run a cost-benefit analysis to see whether it stacks up.

We also have ideas for ways your business could become more productive, through systems or tweaks, to help get the most from your current team. We’d love to help you build a more profitable business, so give us a call.

Is ‘just-in-time’ manufacturing dead?

Fri, 09 Dec 2022 03:39:44 GMT

‘Just-in-time’ (JIT) manufacturing has been a key model in high-volume manufacturing industries for many decades. But the current supply chain crisis is becoming an increasing challenge for many manufacturers. With JIT manufacturing models reliant on sourcing cheap, globally-sourced supplies at short notice, JIT’s days could be numbered.

What is just-in-time (JIT) manufacturing?

First instigated by Toyota in the 1970s, this lean approach to car building aimed to reduce the waste and over-stocking that was common at the time in the US car industry. The JIT methodology states that parts, components, and raw materials should only be ordered or produced once a customer order needs to be fulfilled.

Parts were ordered ‘just in time’ to reduce all non-essential waste and to deliver on the order as effectively as possible. This resulted in:

Reduced operational costs and improved cash flow.
Smaller inventories that could be replenished when needed.
A leaner and more streamlined production process.

Overcoming the big challenges to JIT

A JIT model is lean and efficient – but it can only work if you have a fast and reliable supply chain. Components and raw material MUST arrive quickly, once ordered. If they don’t, you can’t produce the required goods and can’t honour customer orders. In short, if the supplies don’t arrive in time, a JIT process falls apart. So, how can you overcome this challenge to reduce cost, improve cash flow, and streamline production?

These are key changes to action:

Review your supply chain and move to local suppliers where possible - International parts and components may be cheaper, but they have to be sourced and delivered over great distances. If you can switch to local suppliers, this reduces the problem of a slow and partially broken global supply chain.
Reduce your wait times and improve efficiency – with a local supply chain, your parts and components can be ordered and received far more quickly. This overcomes the issue of long wait times, and allows your production process to stay on track. Shorter journeys and simplified logistics also help you make your supply chain leaner and more efficient – always a key aim of a JIT model.
Use automation to streamline your production process – modern digital systems make it easier than ever to create lean systems. Cloud tools and automation all help to reduce inefficiency, and boost productivity. Where a process can be automated, automate it and help the business reduce costs, achieve better scale, and produce higher volumes with reduced overheads.
Be an advocate for a sustainable supply chain – With ordered parts only coming from a short distance, you cut out the need for carbon-emitting plane freight and large container ships. Being greener and more sustainable doesn’t directly enhance the JIT production process, but it does help you position and market your brand.
Manage customer expectations from the get-go - Give your customers information about longer delivery times and keep them updated so they feel valued.

Talk to us about rejuvenating your production process

When a JIT manufacturing process works well, it gives your company a valuable competitive advantage. Despite the current issues of slow supply chains, high inflation, and global geo-political upheaval, there are still ways to innovate.

We’ll help you review and upgrade your supply chain processes, so you have the solid production foundations for creating a JIT process that’s designed for the future.

How to stay competitive in your industry

Thu, 08 Dec 2022 03:21:42 GMT

It’s difficult to make your business stand out from the crowd, especially in the 21st century digital environment where businesses, large and small, are competing for the same customers. Remaining competitive is vital for any business. If you stay ahead of your competitors, and hang onto your customer base, your sales stay stable, and your revenues remain predictable.

But how can you do that in today's increasingly challenging business environment?

Key ways to remain competitive in your market

No market sits still. The competitiveness of your company’s brand will also fluctuate and evolve over time. But this doesn’t mean that you can just sit back and let your competitive edge fade away. The more proactive you are about your position in the market, the more you can do to preserve your advantage, and keep your business ahead of your competitors.

Here are some helpful ways to boost your competitive edge:

Provide a personalised experience for your customers – customer experience is everything in the digital age. A happy customer will buy more, so you need your customer experience to deliver every time, no matter what. Try analysing your customer data and feedback, and then use that information to tailor the customer's experience with your company.
Carry out competitor intelligence activity on your main competitors – competitor intelligence is an important activity for any company. It involves gathering data about your competitors, including their strengths and weaknesses. You’ll need to identify the competition, find out what they're doing, and analyse the data you've collected.
Offer high-quality products or services at reasonable prices – you won’t sell high volumes if you don't have a quality product or service. And you also need to offer a price point that your customers see as good value. If you're not sure if your prices are competitive, take a look at what your competitors are charging. This will give you an idea of what people are willing to pay for the same products or services that you offer.
Develop new technologies that are not yet on the market – investing in new technologies is risky but can also be profitable. To help mitigate the risks of developing a new technology, it is important to research the market and make sure that there is a genuine customer need for your product. It's also important to ensure that your product will be affordable, and has potential for growth in the future.

Talk to us about reviewing your business strategy

Keeping your business at the competitive edge of the market can be a challenge. But by analysing your customer and competitor information, you can do your best to remain competitive and keep your dominant position in your market or industry sector. We’ll help you identify the risks, spot the opportunities, and amend your business strategy to remain competitive, stable, and profitable in the future.

Can you turn the supply chain crisis into a business opportunity?

Wed, 07 Dec 2022 03:09:54 GMT

The ongoing supply chain crisis is slowing down production and pushing up prices. But there might be a way to turn this business challenge to your advantage. If you’re a business-to-business (B2B) supplier, this could be a golden opportunity to become a supply chain saviour.

If a competitor is struggling to supply customers, can you be the alternative that saves the day? By delivering your goods to customers more quickly, more cheaply, and with less hassle, you make your company invaluable as a local trusted supplier – and that’s great for your revenues.

Become the supplier that saves the day

Companies are crying out for reliable suppliers who can meet their needs. If you can streamline your processes, and rethink your business model, this is a gap that your company is capable of filling. It just needs a few changes in thinking and strategy.

Reduce the impact of the pandemic on your operations – none of us were fully prepared for the impact of the COVID pandemic. But, several years into the crisis, there are plenty of preventative measures you can take to protect your staff, reduce employee absence, and offer a safe environment for employees and customers. By mitigating the negative threat of COVID, you make it easier to run your operations at full capacity.
Focus on sustainability and providing for local customers – globalisation and ‘offshoring’ of the supply chain has increased choice and reduced costs. But a global supply chain has become increasingly difficult to manage when faced with the current geo-political challenges. By offering a local, sustainable alternative, you help your customers cut down wait times, and reduce their carbon footprint. You also give customers a way to support their local economy.
Review your margins to offer a competitive price – businesses are paying over the odds for scarce materials and supplies. Try offering a better price, while still maintaining a reasonable profit margin, so customers see the benefits of your cheaper, local alternative. The key is to streamline your manufacturing and logistics costs, using time-saving automation and economies of scale. By lowering your cost of goods sold you keep your profit margin, and can still offer an extremely competitive price.
Update your systems and software to go digital – digital systems can do a lot to improve the efficiency of your operations. Modern cloud-based inventory, project management, and logistics solutions help you automate the time-consuming manual tasks. This not only speeds up your pipeline, it also frees up time for your employees and management team to focus on customer-facing tasks. This resolves customer problems more quickly, provides a better customer experience and builds a trusted supplier relationship.

Taking steps to make your B2B business more attractive in the market is always a sensible move. But with the supply chain crisis set to continue well into next year, giving yourself a competitive advantage has rarely been more important for B2B companies.

We can help you review your business model and your key targets for the coming months. With the right plan behind you, there’s nothing to stop you maximising the supply chain opportunity and making your business the 'go-to supplier of choice.

Common payroll mistakes to avoid

Tue, 06 Dec 2022 02:56:59 GMT

When you’re managing payroll, you can’t really afford to get it wrong. Best case scenario, the mistake costs you time and money. Worst case, it can result in legal issues as well. Payroll mistakes can and do happen, so here’s some mistakes to watch out for.

1. Bonuses & Annual Leave

This can be a tricky one to get right. The Holidays Act 2003, states that holiday pay is calculated based on an employees’ gross earnings – INCLUDING any productivity or incentive-based payments. An incentive-based bonus for achieving a particular outcome, should be included as part of the gross earnings. However, one-off no-obligation bonuses, not tied to productivity or incentive, are not.

2. Casual Contracts

Some businesses leave staff on casual contracts when they’re no longer a casual worker. Although there’s no legal definition for a casual worker, Employment NZ, says the term applies to an employee who “has no guaranteed work hours, no regular pattern of work, and no ongoing expectation of employment.” This means there’s no obligation for you to offer work, and there’s no obligation for them to accept work. Annual holidays and leave are managed differently for casual employees – usually they are paid an additional 8% on top of their wages/salary.

This is all well and good as long as that employee is truly a casual employee. As soon as an employee starts a regular work pattern, then he/she becomes a permanent part-timer and is entitled to annual holidays.

3. Making payroll deductions

Deducting money from an employee’s wages is protected by law. Under The Wages Protection Act 1983, you can only make deductions from an employee’s pay if it’s required by law, such as tax, student loan repayments, or child support. You can also make deductions if the employee explicitly agrees (and not under duress). If you make a payroll mistake and overpay an employee, you can’t just deduct it from the next pay. You need to consult your employee before making any specific deductions and he/she can withdraw his/her consent for you to do so, at any time. So before making any payroll deductions that aren’t for tax, student loan, or child support, make sure to get consent (ideally written) from your employee.

4. Final Pay Calculations

Final pay calculations can be a bit of a headache, especially when employees are entitled to be paid for public holidays that occur after their termination date. It applies to employees who’ve worked for you for at least 12 months and is a result of unused annual holiday entitlement.

To work out if this rule applies, imagine that your employee is taking his/her annual leave from the day after employment with you has ended. If there is a public holiday within that period (on a day when the employee would normally have worked), then you must pay for that public holiday, as you usually would.

You must also extend the period the annual holidays covers by one day for each public holiday.

5. Using Integrated Systems

Payroll mistakes are commonly made because employers get confused about employment law and employee entitlements. An integrated payroll system can help avoid payroll mistakes, especially if you’re using multiple systems to record HR info, timesheets, and payroll. Integrating a payroll system with other software can make payroll a much simpler process!

Holiday pay sorted?

Mon, 21 Nov 2022 02:26:35 GMT

Working out what an employee gets paid for taking a day off on annual leave is not always easy.

According to Employment New Zealand , employees must be paid the right amount at the right time for holidays and leave. Annual holidays and worked public holidays are paid differently from other types of leave.

Annual holidays are paid at whichever rate is the higher of the employee’s:

ordinary weekly pay at the beginning of the annual holiday; or
average weekly earnings for the 12 months just prior to the end of the last pay period immediately before the annual holiday.

Remember, Christmas and New Year’s Day fall on a Sunday this year.

For an employee working on these days who wouldn’t normally work on Sundays, the public holiday is treated as falling on the following Tuesday.

If your employee would normally work on Sunday, then the public holiday is treated as falling on Sunday (the calendar date of the public holiday).

Whichever day the entitlement falls on for them, if the employee works on that day, they will get time and a half for that day and may get an alternative day off. If the public holiday falls on what would otherwise be a working day for them, and they work on that day, they are entitled to an alternative holiday.

Find out more about calculating payment rates for holidays and leave at Employment New Zealand , or Wolters Kluwer's New Zealand Workforce Manager.

Holiday pay can put a strain on your business’ finances – talk to us about your financial planning for the holiday season.

Business tips: Getting in control of your spending

Fri, 18 Nov 2022 02:15:02 GMT

Keeping the business in a positive cash flow position is vital. But you can only do this if your cash inflows (sales revenues and other income) outweigh your cash outflows (overheads, supplier costs, and other liabilities like tax costs or loan repayments).

One way to re-balance the cash flow scales is to get in better control of your spending. This process of ‘spend management’ is all about reviewing your expenses, negotiating better deals with suppliers, and getting a razor-sharp focus on reducing your cash outflows.

Review your current suppliers

Once you have a reliable supply chain set up, it’s very easy to fall back on using the same suppliers time and time again. But the reality is that there’s real value in reviewing the suppliers you’re using, so you don’t miss out on any better deals.

Prices will go up and down in the marketplace and new suppliers will appear in the market. So, it’s worth regularly checking for alternative providers that can offer cheaper rates, better value prices, or longer payment terms etc.

Negotiate better prices with your trusted suppliers

You may be happy with the supplier relationships you have, but still want to cut down on your spending. In this situation, it’s well worth negotiating. Very few suppliers will want to lose a valued customer, especially if you’re a long-term client who’s bringing in reliable revenues. If the relationship is strong enough, they’ll be open to negotiating a deal that works for both of you.

See if you can push the prices down, or get discounts for buying in bulk etc. If possible, see if you can get them to agree to a trade credit agreement, where you can pay for the goods and services over a longer period of time, to boost your cash flow.

Rein in your expenses

It may sound obvious, but one of the easiest ways to cut your overall expenditure is to be a bit more frugal with your overall spending. Don’t overspend on stock, raw materials, or services. Just buy what you need to stay operational, and keep a close eye on when new orders will be needed, rather than overspending and using up your available cash.

Where day-to-day spending has got out of hand, you can make a big difference to your expenditure by making small changes to your outgoings. If you look at your spending with a fine-tooth comb, you’ll soon find costs and expenses that can be cut back or stopped entirely. Other cash-saving options could include putting a limit on staff expense cards, or cancelling unnecessary software and magazine subscriptions etc.

Use a purchase order number system

A purchase order number system makes it easier to keep track of your spending. In essence, any purchase made by the business needs a purchase order (PO) number assigned to it, prior to a member of staff buying anything. This allows you to allocate a budget, and track the spending against this particular purchase or project.

Having a PO number also makes it easier to track incoming invoices. Suppliers can quote the PO number on their invoice, so you can match the bill to the allocated job and budget.

Use tech to get in control of the numbers

In an ideal world, you want as much oversight over your spending as possible. And with today’s cloud accounting software, expenses apps, and inventory tools, it’s easier than ever to manage your expenses and stay in control of the main numbers.

You can use an expense management system, like the MYOB Expense Manager add-on to get better oversight of spending and put yourself back in the expenses driving seat.

If you want to streamline your spending, come and talk to us. We’ll help you spot the areas where costs can be cut and use the latest tech to manage the numbers.

5 ways to reduce your business energy bills

Thu, 17 Nov 2022 02:07:35 GMT

Rising global energy prices are a worry for all business owners. When the cost of your predicted annual bill goes up, that’s likely to stretch your cash flow thin.

So, what can you do to overcome the problem of rising electricity and gas prices? We’ve outlined five simple ways to reduce your energy bills.

Simple ways to reduce the impact of the energy crisis

The obvious way to beat the energy crisis is to reduce your company’s energy usage.

With prices going up, cutting your energy consumption makes good sense and should help reduce your annual bill. As an added bonus, cutting down your energy consumption also makes your business more sustainable, more energy-conscious, and a better global citizen.

Here are five ideas for bringing down your energy usage:

Properly insulate your buildings – you obviously need to be sensible about heating and cooling your workspaces during the hot or cold months of the year. Using heating and air conditioning (air-con) 24/7 can be expensive, so it’s a good move to properly insulate your workspaces. If your rooms stay warmer in winter, and don’t bake in summer, your heating/air-con won’t be working so hard – reducing your energy spend.
Be sensible with your lighting – lighting is another essential overhead, but also an area where smart gains can be made. Use energy-efficient light bulbs that draw less power. Don’t leave exterior lights on after business hours. And fit sensors in offices, meeting rooms, and workshop spaces that turn off the lights if no-one is using the room. These are small actions that can quickly start to cut down your bill.
Switch to energy-efficient equipment and technology – the business tech we use is gradually becoming greener and more energy-efficient. Review your company’s main electrical equipment and see how much energy could be saved by moving to updated, energy-efficient tech. With so many pieces of equipment always plugged in and turned on, having tech with low-power modes and automatic standby modes can greatly reduce your energy consumption as a busy office or factory.
Consider using renewable energy – one way to escape the monopoly of your energy provider is to provide your own off-grid power. Climate change is an ever-growing problem, so switching to renewable energy not only gives you an independent power supply but also reduces your carbon footprint. If you are looking at solar, think about how much power you consume, and when you consume it, to understand the return on your investment.
Shop around for the most affordable energy provider – finding the most cost-effective energy supplier can go a long way to bringing down your bills. Prices are obviously rising across the sector, but check out what deals are being offered by other energy providers and shop around. Consumer's Powerswitch website offers a useful comparison tool, but it's worth noting, that not all retailers participate. You'll also find lots of tips on this website.

Energy prices are likely to remain unstable for some time, so it’s important to keep a close eye on your energy overheads and their overall impact on your finances.

How to improve your procurement spending

Wed, 16 Nov 2022 02:02:28 GMT

One of your biggest areas of business expenditure will be buying the goods and services that you need to operate the business. Whether these are raw materials, wholesale goods, or cloud services, you need someone to be in control of this procurement process.

Managing your procurement spending is a vital part of keeping the business cost-effective and competitive in the market. If you’re overspending on materials, or paying over the odds to your delivery partner, this can soon have a significant impact on your bottom line. How, then, do you get on top of this procurement spending and start becoming more efficient?

5 key ways to enhance your procurement spending

Managing cash flow is all about balancing out your cash inflows against your cash outflows. If your procurement costs are high, it will be very difficult to maintain a positive cash position, so reducing your costs, and agreeing better terms is all part of the procurement process.

In short, the less cash that’s burnt up in procurement costs, the better your business’ overall financial position will be. So, how do you go about reducing these costs?

Here are 5 key ideas to focus on:

Reduce your base cost per item – where you’re buying in goods, one of the most important costs to consider is your basic cost per unit. This price is probably the most difficult cost to alter, but there are ways to reduce it. Get quotes from a variety of suppliers and look for the supplier that offers the best mix of value, quality and reliability, at an economical price. Negotiating with competing suppliers can help to knock the price down further, helping you cut that initial base cost, and reduce your everyday spending.
Cut your logistics and delivery costs – when dealing with physical goods, these items will need to be transported to your premises and/or delivered to your end customers. These transport costs are unavoidable, but can be reduced as part of the procurement process. Look for well-priced carriers and logistics providers and see if their base prices can be negotiated down. Ask about discounts for faster payment, or options for joining a preferred customer programme, to help reduce prices. If you can offer a long-term relationship with the carrier, this can result in greater trust and openness over time, and more potential for negotiating price reductions.
Nurture the best supplier relationships – the foundation for good procurement management is building solid relationships with your suppliers. The more stable your supply chain is, and the deeper the trust between you and your supplier partners, the easier it will be to negotiate good terms, beneficial prices, and flexible contracts. Nurture these relationships, pay on time, and set a good reputation with these suppliers. When renegotiating prices to cut costs, this will be far easier to do with solid foundations supporting your business relationship.
Reduce tax and duty costs – depending on which goods and services you’re selling, there will be certain territory-specific taxes and duties to pay when buying and transporting goods. If you engage a tax adviser with industry-specific knowledge, they’ll be able to check that you’re paying the right taxes on your goods/services, and that they’re correctly categorised for taxes like VAT or GST. Working with a customs broker can also help to organise and streamline the customs process, and ensures that you’re paying the correct duty on all your imports and exports.
Using tech to get in control of procurement – in the modern digital world, there are plenty of cloud-based procurement solutions to help enhance the management of your processes. Having all your procurement information in one place, accessible 24/7, in the cloud, has huge advantages. You can streamline your internal processes, manage risk more effectively, and regularly check your spending against budgets, cash flow, and expected expenditure. Where there are big variances, or instances of overspending, you can quickly take action to reduce the problem – by putting caps on spending, or switching to new suppliers that offer a more cost-effective option.

Talk to us about your procurement management

When you’re in control of your procurement spending, that’s good news for your cash flow, your end profits, and the long-term health of your supplier relationships.

Getting in control of your budgets, expenditure and overall spend management is a big part of the procurement process, and an area where we can help guide you in the right direction.

It’s now over $11,500 a year to run your vehicle

Tue, 15 Nov 2022 01:58:06 GMT

Inland Revenue just released its kilometre rates for the latest tax year, which indicate running costs for vehicles. For the first 14,000km travelled each year, the rate is 83 cents per kilometre, which comes to a total of $11,620 – up from $11,060 the previous year. But this is an average cost and does depend on what type of car you drive – an old petrol ute will cost much more to run than a new compact EV.

Larger cars are more costly to run

The AA also recently released its cost of running reports, which show that petrol car costs have risen by 9% compared to last year. For petrol cars driving 14,000km a year:

Small cars had total costs of 61 cents per kilometre
Compact cars: 67c/km
Medium vehicles: 89c/km
Large vehicles: 119c/km

Diesel cars cost almost exactly the same as petrol, while battery electric vehicles were slightly cheaper.

Company vehicles save employees money

With a company vehicle that an employee can also drive for personal use, the driver makes some major savings. Insurance is likely to be around $1,250 a year, plus $600 in maintenance, $500 towards tyres and $180 for the WOF/registration. That’s $2500 before you’ve even considered the cost of buying the car or paying interest on the finance – and all those costs would need to come from their after-tax income. Even without a fuel card, a car adds significant value to a salary package.

Running your car through the business

When you’re using the car for work purposes, the expenses you would incur, plus the cost of fuel, are tax-deductible. You should keep a logbook and we can recommend some apps for that. Talk to us about vehicle expenses.

Fringe benefit tax is tricky

For businesses that provide company cars, there may be fringe benefit tax to pay. This can be a little tricky to work out, but we’ll help you. We can also help if you’re considering offering company cars for employees. Give us a call if you’d like to discuss this.

Supply chain issues: can you bring things closer to home?

Mon, 14 Nov 2022 01:53:58 GMT

Global supply chain challenges are changing the reality of doing business. It’s increasingly tough to source raw materials, supplies, and products in the right quantities. And when your supply chain breaks down in this way, that can have serious consequences for your business.

So how do you combat the supply chain problems, while also tackling the additional issues of increasing costs, rising inflation, climate change, and a forecasted global slowdown? One way is to de-globalise your supply chain, as we’ll explain.

What’s causing these supply chain problems?

It doesn’t take much to throw a spanner in the works of a smooth-running supply chain. A scarcity of a particular raw material or ingredient can quickly de-rail an efficient chain of supply, causing delays to deliveries, raising demand, and pushing a rise in prices.

We are currently facing a perfect storm:

The COVID-19 pandemic – very few industries were prepared for the massive impact of the COVID pandemic. Many sectors and key industries were forced to shut down completely. Staffing levels dropped as employees fell ill. And a large number of businesses were faced with falling revenues and poor cash flow. Some sectors are still not functioning at full capacity, which is holding back production and slowing down deliveries.
The problem of globalisation – cheaper air travel and improved freight conditions for shipping has turned the world into one giant global market. You can buy bananas from Costa Rica, lamb from New Zealand, and gas from Russia. During normal conditions, this works fine. But faced with the growing threat of climate change, and the huge carbon footprint of a global supply chain, global exports are no longer a sustainable option. To combat this, many sectors are aiming to de-globalise their imports and exports – but the infrastructure that’s needed for a whole industry to de-globalise won’t appear overnight.
Geo-political issues in key territories – with so many global supply routes still in place, any unexpected geo-political changes can have a profound effect. The Ukraine/Russia conflict may have been brewing for years, but no-one was expecting out-and-out war. This terrible conflict is costing lives, but it’s also having a damaging effect on world trade. As a major supplier of oil and gas, sanctions against Russia are pushing up energy prices. And with Ukraine being a key exporter of corn, the Russian blockades in the port of Odessa are reducing grain supplies and pushing up prices.

In business, we crave stability. Uncertainty, and surprise threats, are the enemy.

A move to local supply chains and greener operations

De-globalising your supply chain and ‘going local’ with your providers is one key option.

By de-globalising your supply chain you can:

Switch to local suppliers – review your current supplier network and gauge how reliant you are on international and overseas providers. Where possible, build a local supply chain that removes some of the key problems of being reliant on an international supplier network.
Cut down on delivery times – If you can find suppliers who are based closer to you, you might be able to cut down on delivery times, and speed up the efficiency of the whole supply chain.
Reduce the cost of logistics – shipping, air freight, and logistics costs can all be slimmed down if you’re working with a local supplier. The additional logistics costs of being part of a globalised chain can be significant. Choosing a local supplier removes some of these costs entirely, and reduces your main delivery expenses.
Simplify your tax and customs costs – When you import and export across borders, you’ll almost certainly find yourself paying customs fees, and some form of goods & services tax (GST) or value-added tax (VAT). If you can find a national supplier within your own region, you simplify the whole customs and excise process, and reduce your liability to cross-border taxes too.
Reduce your carbon footprint – one of the big drivers of going local is the business focus on becoming greener and more sustainable. By going local, you reduce the air miles that your supplies cover. This cuts back your logistics-driven carbon footprint, and helps you meet your sustainability targets. Which is good for marketing too!

Talk to us about going local with your supply chain.

Dismantling your existing supply chain is a big task. But after a decade or so of ‘offshoring’, it might be worth looking at options to bring supplies and production closer to home.

What a SaaS accounting solution means for your business

Mon, 24 Oct 2022 01:22:44 GMT

Here, at Gunson McLean, we know a lot about finances, taxes, people and businesses. We know, that for your business to survive, you need to provide modern solutions, and business and people management platforms that can provide this. And we know just what to recommend to our clients.

We are huge fans of MYOB which provides one central platform to manage your business and your payroll. MYOB is what’s known as a SaaS (Software as a Service) system, meaning that it removes the hassle of installation, storing and upgrading software, as it is all done for you online. They provide automated accounting software to help you avoid being bogged down in bookwork.

Sometimes called browser-based or web-based software, SaaS applications typically run on the providers hardware and can be used for a wide range of core business functions.

If there is one thing we have learnt from the Covid-19 pandemic, it’s that flexibility is key. Flexible working environments, flexible hours, flexible …. well, everything! MYOB links that flexibility with effective solutions. They have online accounting and payroll solutions for any business, of any size.

Other advantages to using SaaS solutions is that it is subscription based so you pay for what you use, and can upgrade product type as and when you may need to do so, meaning reduced expenditure plus flexibility. SaaS services are often paid via an annual or monthly subscription which covers the cost of the software licensing, service, and support.

MYOB allows you to do your accounts and business needs wherever you choose to do so. It provides the help you need for business growth including automated expense management, payroll, and collaboration from any browser. This makes it easier for staff who work in flexible environments rather than at the same desk every day. Cloud storage also ensures that staff work with up-to-date data, and backups of your data happens automatically.

With Gunson McLean being a full service, expert MYOB practice this means that we have the ability to recommend which MYOB package is the right fit for you and your business. If you also use MYOB then there is no time taken moving data from one service to another, it’s easy. This reduces expenses too, as the time taken is minimised.

If you think that a refresh of your current software is needed, or if you would like to discuss moving to MYOB and the benefits it can bring you and your business, then get in touch with us - we’ll buy the coffee!

Payroll essentials and what you need to know

Fri, 14 Oct 2022 03:44:05 GMT

Payroll, while an essential part of your business, is also one that is commonly undervalued, especially for smaller businesses where dedicated payroll software may not be used.

We’ve come up with a list of payroll essentials to ensure that your payroll is hitting the target month after month.

1. Inaccuracy in your payroll system

One of the more commonly seen payroll errors goes back to data input when adding in an employee. If any part of this process is done incorrectly it could result in incorrect payments being made and unhappy employees. For example, an incorrect tax code or tax rate means that your employees could be paying more tax than necessary, which can be a headache for you to sort.

You also need to ensure you have accurately accounted for, and paid, the hours worked by each employee. Similarly, your payroll information needs to be kept up to date with any local laws or tax law changes, otherwise your payments can be incorrect.

Triple check this data and get it right to ensure less payroll drama, or employ the services of a chartered accountant to guarantee your business’ payroll responsibilities are delivered on time, every time.

2. Security

All payroll information needs to be kept confidential and secure. Any personal information on your employees, including names, IRD numbers, address details, and wage / salary information, needs to be covered.

Many payroll packages allow for encryption software, meaning the information is scrambled unless you have the correct key to allow you to read it. If you don’t use encryption software then making sure passwords and file protections are used is crucial.

3. Overtime

It isn’t uncommon for businesses to pay overtime rates to their employees. Your payroll software can be programmed to allow for an increased rate for an employee’s weekly or monthly hours over a specified number. This means goodbye to potential miscalculations of overtime.

4. Record keeping

Payroll records, from sole traders through to large multinational organisations, are required to be kept for a minimum of at least six years.

Auditors look at this information and, therefore, it’s important to show what happened and when. Supporting information is particularly important to help provide quick and accurate answers when any payroll errors have been made or there are other discrepancies. Well-kept records is a must for any successful business and failure to keep payroll records can see you fined.

5. Failure to make payroll deadlines

Processing payroll can be a big time commitment. Like many office administration tasks, payroll can seem like it will take no time at all but before you know it, it’s taken hours.

Ensuring you have all employee information prior to payroll (IRD number, tax code/rate through to name, address and bank account), and correctly capturing the hours that your employees have worked, means an easier ride when it’s payroll processing time.

There are many ways that a poorly functioning payroll system is costly for your business – from overpayments to employees through to time commitments. Outsourcing your payroll could give you the ability to focus your time on other areas in your business that need attention.

If you’d like to discuss outsourcing your payroll, or payroll systems and processes, then get in touch with us. We can create a system to work alongside what you have already, or suggest ways of taking the headache out of a poorly functioning system. Give us a call.

Is your cost of sales affecting your gross profit?

Thu, 13 Oct 2022 03:39:23 GMT

How much does it cost you to produce your product(s)?

The better you understand your cost of sales, or cost of goods sold (COGS) as it’s more commonly known, the better control you have of your company’s profit margin. Once you know your COGS, you’re able to set the right price point, get good profit margins, and know you’re maximising your gross profit.

However, in order to do this, you need to understand your COGS and the impact this has on your finances.

Knowing your COGS
Each product your company takes from inception to delivery, incurs a number of costs along the way. For example, the costs for a manufacturing business may include raw materials, labour costs, overheads, and delivery costs. Not to mention sales and marketing expenses for each product your company manufactures. These are all necessary costs and are the direct costs to produce your product for sale.

To calculate your COGS number for a time period, take the value of opening stock (inventory), add the costs from producing the goods, and then minus the value of the closing stock balance.

The COGS formula looks like this:

Opening Stock + Purchases – Closing Stock = COGS

For example, if you started with an opening stock/inventory of $10,000, your COGS calculation would be:

Opening Stock: $10,000 + Purchases: $25,000 – Closing Stock: $8,000 = COGS: $27,000

Reducing COGS to boost profit
The more sales you make, the higher your income will be. Deducting your COGS number from your income figure will give you the gross profit figure. Tracking gross profit is key to the health and profitability of your business.

If your COGS cost is high, this will reduce your profit margin. A small margin will start to have a negative effect on your gross profit. Controlling and managing your COGS, and in turn your gross profit, is vital for any product-based business.

Here are some ways to improve the profit margin of your COGS:

· Reduce supplier costs – If you can reduce the cost of the purchases made to produce your goods, that means less expenditure and a positive impact on profit margins. Investigate cheaper suppliers or negotiate bulk pricing with your existing suppliers to help bring down costs

· Streamline the production process – the more complex your production process is, the more overheads and production expenses there will be. Streamlining the process helps you to remove unnecessary processes and, if you follow a lean approach , you will continually evolve your processes. This cuts costs while still delivering a quality product.

· Increase prices to boost your profit margins – if your COGS is eating into your profit margin, you may need to increase your price point. This will increase both income and your profit margins but ,if prices get too high, you will lose existing customer relationships and it may make you uncompetitive in the market. Think carefully about any price increases to ensure you’re remaining competitive.

If you want to boost your gross profit and get COGS under control, come and have a chat with us. We’ll look for opportunities to reduce your goods-related purchases and push for a better profit margin on your products.

Tax Traders and the benefits of tax pooling

Wed, 12 Oct 2022 03:27:27 GMT

With inflation rising, coupled with COVID supply chain issues affecting business, you might find things are a bit tight. Provisional tax payments can be tricky to get right and tax pooling is one way to alleviate the burden.

Tax pooling is legal in New Zealand, and was established by Inland Revenue (IRD) in 2001. It's designed to help small and medium businesses meet their provisional tax requirements, and allows you to pay provisional tax when it suits your business’ cash flow, as well as reducing your tax liability risk.

The idea is simple, you, as the business taxpayer, pay your provisional tax into a ‘pool’ rather than paying it directly to the IRD. When you know what you need to pay in provisional tax, you then transfer this out of the pool. There's then the option to sell any extra to others (at a higher rate), or if you're left a bit short, you can buy off someone else.

We work closely with Tax Traders who are an IRD-approved service. Using a tax pooling service also helps to eliminate late payment penalties charged by the IRD.

If you are keen to know more about tax pooling and how it could help your business, please get in touch with your Gunson McLean accountant. We can help you decide if this is right for you, and offer advice around managing your tax payments and cash flow.

What is payroll?

Tue, 11 Oct 2022 03:22:02 GMT

One of the easiest ways you can upset your employees, and leave them feeling undervalued and annoyed, is to have a payroll system which doesn’t process their wages correctly. Nothing riles employees quicker and fair enough too! Most people rely on these wages.

That one word ‘payroll’ doesn’t convey the complex part of your business that it really is. It is easy to lump it together with other administration tasks without realizing the impact that it truly has.

What exactly is payroll?

Simply put, it’s the process of paying employees based on the hours they have worked. This includes leave entitlements, sick days, tax, and any benefits. It also may include sensitive information such as bank account numbers and employee personal details.

A payroll system pays the correct people the correct amount of money. If you have a very small business with one of two employees then it can be run by hand. However, it is commonly done using payroll software, or outsourced to an accountant or specialist provider. Gunson McLean can help you from the early stages of setting up a payroll system, through to training your employees on how best to use that payroll system.

The importance of a well-oiled payroll system

Payroll systems come in many shapes and forms from the cheaper end of the scale, suitable for a very small business, right through to full packages that only process payroll. Having a system that fits your business helps keep employees happy, and also reduces payroll tasks.

Generally, a payroll system includes these tasks:

· calculating pay (which includes benefits and reimbursements)

· taking out taxes and other deductions such as Kiwisaver contributions or insurances

· paying taxes to Inland Revenue Department

· keeping accurate records to show that all payroll requirements have been done correctly

· making the payment of the net pay to the employee.

Having accurate records is critical as there can be hefty fines if records are not kept correctly. A managed payroll system helps to ensure you are up to date with any relevant employment laws and that you remain compliant. Another critical factor is that payroll data is sensitive. A managed system means that your businesses payroll data is safely stored in a secure cloud environment, meaning it’s less likely that it can be accessed by hackers.

If you wish to discuss your business payroll then get in touch. We can help from initial discussions through to setting up complete payroll systems leaving you more time for other things. Give Gunson McLean a call, we’d be happy to help.

5 online tools to help you save money

Wed, 14 Sep 2022 03:52:04 GMT

With the cost of living on the rise, this is the perfect time to review your spending and see if you can make a few cuts. Here are five online tools that can help you manage and reduce your spending:

1. MoneyHub.co.nz - Local website MoneyHub has fantastic Kiwi-focused advice, helping you make great financial decisions. It will help you choose the most cost-effective credit cards, KiwiSaver funds, home loans, and more. MoneyHub’s reviews of local options across almost every aspect of life are especially useful when you’re trying to weigh up your options.

2. Sorted.org.nz - The independent Sorted website is completely free, funded by Te Ara Ahunga Ora Retirement Commission. It's a great source of tools and information to help you manage your money successfully – like the budgeting tool, the retirement planner and the KiwiSaver calculator.

3. Grocer.nz - It’s a very basic site, but Grocer.nz can show you how to save money on groceries. It compares items across stores, including four major supermarket chains, Super Value and the Warehouse. You might find that switching stores could save you a significant amount each week.

4. Gaspy.nz - Gaspy is a free app that compares fuel prices across more than 2100 New Zealand stations. It has over 1 million ‘gas spies’ and it’s available on android and Apple, so find it in your app store. The app also tracks fuel prices on its online stats page, which identifies the cheapest stations in the country. Its Kiwi inventors say Gaspy saves the average user $800 a year.

5. Interest.co.nz - When you want to know what’s happening in the economy and how it will affect New Zealanders, Interest.co.nz has you covered. You can find brilliant calculators, the latest interest rates, and of course financial news and commentary.

Talk to us for personalised advice

You can’t always find what you need online. If you’re looking to trim spending or boost your income, we can help. Just get in touch – we’d love to hear from you. The body content of your post goes here.

Which social media platform is right for my business?

Wed, 14 Sep 2022 03:35:32 GMT

We get it. You’re already working overtime on your real job – your business, the job you’re actually good at. Your marketing approach may move with the times but if it’s not giving you the results you want, look at your social media game and think about whether it’s aligned with your target audience.

Take a quick look at which platforms might best showcase your business:

Twitter – where you can chime in on any conversation
Pinterest –-focused on design, fashion, fitness, lifestyle, and food content
Instagram – photos and videos for a millennial demographic (30 – 40’s)
YouTube – show them AND tell them
Snapchat – tell a fun, authentic story for a millennial audience
LinkedIn – B2B social network professionals
Tumblr – micro-blogging site for niche audiences
TikTok – short-form user videos aimed at the younger market
Facebook – the original platform for brands looking to attract Baby Boomers and Gen X (40 – 60’s ).

Some platforms are more obviously geared to marketing than others. Facebook targeted advertising helps you choose your audience and track the success of each post.

Facebook shows your ads to people most likely to find them relevant. You can further target your ad delivery:

Core audiences - Define an audience based on criteria such as age, interests, and geography.
Custom audiences - get in touch with people who have engaged with your business.
Lookalike audiences - reach new people whose interests mirror those of your best customers.

We recommend 1-3 posts per week (minimum) to touch base with your customers.

Cash is not profit and vice versa

Tue, 13 Sep 2022 03:28:39 GMT

The purpose of a business is to make money, and that means you have to know the difference between profit and cash flow.

Net profit is what you have left after you deduct all your business expenses from all your revenue. You change net profit only by changing the things that affect revenue and expenses, for example, if:

You renegotiate with your suppliers, you may get stock cheaper, or carry less inventory.
Your staff engage with customers better, you can learn more about what they do and don’t like – and get more business.
You can roster staff differently, you may be able to run your business more efficiently.

Cash flow comes from various sources. However, it also covers operating expenses, taxes, equipment purchases, repayments, distribution, and so on.

Note that a profitable business does not always have good cash flow, and a business with good cash flow is not always profitable. An example of this being that you can have good cash flow, and loss-making expenses.

To work out how fast you can grow your business, you need to look at your projected cash flow. We can advise you on this.

Keeping cash crowned as king

Your business can’t survive without cash.

The following six takeaways are essential for business success:

Protect your cash position by knowing what it is. Build a cash flow statement and always keep it up to date. If you foresee a shortfall, start at once to fix it.
Create a cash buffer as an insurance against unexpected difficulties.
Protect your cash position against revenue shocks by maintaining a balance equivalent to at least two months of operating expenses.
Be realistic with revenue expectations. Take action now if it looks like sales are not going to get you to breakeven.
Credit checking up front will reduce the risk of customer non-payment. Make sure you follow up with clear payment terms agreed in writing. Communicate regularly with customers, and automate where possible.
Every dollar you spend reduces cash reserves. The best way to protect your cash is to create a budget for the spend you know you need, and stick to it.

Looking to improve cash flow?

Make a time to talk to us. We're here to help.

The fifth cause of poor cash flow – low gross profit margins low

Mon, 12 Sep 2022 03:21:08 GMT

Your gross profit margin is what is left from your total sales after variable costs are deducted.

For example, if you're a retailer and your sales in a given period are $1,000,000 and the cost of the goods you sell in that period is $650,000, your gross profit margin is $350,000, or 35%.

In the above example, if you implement some strategies to improve the margin from 35% to 39%, your gross profit will improve from $350,000 to $390,000. That’s an increase in profit of $40,000. You may need to increase your overheads a little to get that increase, however if you get the results, it will be well worth your investment and energy.

There are many ways to lift gross profit. Some will be appropriate for your business, and some won’t.

If you’re a retailer, you could focus on reducing stock shrinkage, theft, avoiding some discounting, and making sure that you minimise stock becoming obsolete.

If you’re a contractor, you might focus on rework and wastage, making sure all work and materials on jobs gets billed, and team member productivity.

We can help you determine the best strategies to lift your margins. We can then run your figures through our ‘Growth Equation’ calculator to show you the impact of seemingly small changes and help you wrap those goals into your annual business plan.

Don’t let poor margins destroy your cash flow and working capital. Get some help from us to make a better plan.

Be Canny with Cashflow

Fri, 09 Sep 2022 03:14:36 GMT

In the race to have everything done before the Christmas closedown, make sure you take some time to look at your cash flow and plan for the new year.

January is a month with some key tax dates, with a lot of things falling due on 17 January, in particular. As well as the usual PAYE return dates, GST returns for both November and December are due in January. For many, January can also be a big month for provisional tax.

In December and early January, while many businesses can reap the seasonal retail reward, balance sheets can also show heavy expenses with gifts, entertainment, holiday pay, summer hiring, and penalty rates. If the Christmas closedown is followed by a lull in consumer spending, while your regular customers take a break on the beach, cash flow can slow to a trickle.

Make sure you can take a break yourself, without staying awake wondering how you’re going to pay for it. Plan ahead to make sure you’re covered. Contact us if you think cash flow will be tight and you’d like to talk through options for how to manage it best.

Using cashflow for cost control

Tue, 23 Aug 2022 22:09:45 GMT

Whether your business is in growth mode or recovery mode, cashflow is a vital part of staying in business.

Profit, your bottom line, income streams and outgoing expenses all have importance when we are back to “normal” (however “normal” is going to look) so now more than ever cashflow and keeping everything running should be the priority. Regular cashflow forecasts will help you keep that in focus. Here’s why:

Cost control

If you can't reach your targets for income, reining in your costs may give you a little extra head room to manage cashflow while you plan your next move.

Visibility on outgoings

Cost control can be a challenge when it’s hard to pinpoint hidden costs or where established ways of doing things cost more money than they should. You may also have been coping with unexpected expenses, as you’ve adapted your business for unplanned circumstances.

Improving business practice - It's more than just keeping an eye on outgoings (though that's important). It's about looking at each aspect of your business and business systems (or the gaps where there should be business systems) to see if poor practice is driving costs up unnecessarily.

It can be useful to break it down

You can look at cost centres such as office supplies or freight. Or you can look at what those costs do for your business. It can help to analyse costs in terms of cost of sale and overheads.

Cost of sale and overheads

Cost of sale (also known as Cost of Goods Sold or COGS) is how much it costs you to make a sale. In a business which sells products, COGS is based on the price paid for the product, plus any costs necessary to put the merchandise into inventory and make it ready for sale, including shipping and handling. You can even break it down to calculate the cost of sale of individual units.

Overheads are general business expenses

They can’t be tracked directly to sales. Overheads are what it costs you to open your doors (whether online or actual) every morning.

What’s your plan?

Talk to the team - Analyse your costs and involve your team, including frontline sales staff.
Negotiate with suppliers - Can you work with your providers to ask for discounts or more favourable payment terms on either cost of sale or overhead expenses?
Reduce unnecessary expenses - Now might be the time to trim every expense that’s not related to your core product or service.
Advertising - It might be false economy to cut back on advertising, as customers are online looking for bargains and price-checking alternatives. Targeted campaigns might work better.
Prioritise - Can you pinpoint the products most likely to bring the fastest or best return and hold back on products that are slower to sell?
Promote or discount - If you have old or slow-moving stock, can you discount it and convert old stock to cash? If you can attract customers now, you may be able to use it to spotlight your other products.

Every dollar you can pull back from your costs can go straight into cashflow. Talk to us if you'd like to review your costs and your systems to keep costs under control. Whether your sales are boom or bust, you want to make sure that your costs aren't holding you back.

Keeping your business cash liquid – the difference between cashflow and profit

Sun, 21 Aug 2022 03:50:08 GMT

We know that the goal of many businesses is to make a profit. Ideally enough sales at an approved margin to generate enough profit for you and your business. But how does profit differ from cashflow? And why is cash king?

How do profit and cashflow differ?

To really understand the difference between generating profit and managing cashflow, we need to look at what both these terms mean. You might think that delving into the accounts is a job for your adviser, but being in control of your profit and cashflow is an invaluable business skill.

Let’s take a look at the differences:

What is profit?

What is cashflow?

Why is positive cashflow so important?

‘Cash is king!’ may be a cliche these days, but it’s a maxim which underpins any successful business model. Yes, it’s great to make a profit at year-end, but if you don’t look after your cashflow, then the business may not survive until the end of the year. What’s needed is good cashflow management to enhance your financial health. And without a careful eye on your cash numbers, things can quickly go awry.

A business can generate high revenues and big profits, but still be cashflow poor. In other words, it can have profits at the end of the period, but have very little liquid cash to fund its day-to-day operations over the course of the period.

As your advisors, we’ll help you set up detailed cashflow reporting and forecasting, so you can keep the business in that ideal positive cashflow position. And we’ll also look at key steps for keeping your revenues high, margins profitable and meeting your financial targets. Get in touch with us if you’d like to talk through your cashflow management.

Business tips: Budgeting and managing cashflow

Fri, 12 Aug 2022 03:39:09 GMT

If you are in the position of growing your business, then you are probably in the position of working to budgets. Project management of cashflow twists and turns can be hard work, but it can be easier when you have given time and thought to an agreed budget so you can easily track spending and performance.

So, what’s the best way to stay in control of the budgets you’ve set? And how can you manage your cashflow position to make sure there’s always enough cash to fund the project?

Understand the costs of each project

Starting a project without fully understanding how much it will cost is a no-no. To keep on top of costs, overheads, staff expenses and general spending, you need at least a ballpark figure for this expenditure. In an ideal world, you’ll want to be as precise as possible with these costs.

Run through the project from start to finish and highlight every point costs will be incurred. It might be the cost of your raw materials. It may be the cost of buying new equipment. It could be payroll costs for the people actively working on the project. Break everything down and come up with a total expense for the project. This is your starting point.

Set your budget and track it over time

Once you know your baseline cost for the project, you and your team should decide on the amount of funds to allocate to the budget. Your baseline cost is a starting point, but don’t forget to include extra for specific contingencies. What if the project overruns? What if your raw material costs go sky high? What if you need more people to get the job over the line?

Agree on a clear budget and set up your finance system to track spending against this budget. With a cloud accounting system at the heart of the business, it’s very easy to create a budget and then record and track your spending over time.

Keep a close eye on budgets and project cashflow

One of the big things to remember is that a budget is not a static thing. You’ll obviously aim to stick to your initial costs, but prices and availability will affect the total spend over time. Because of this, it’s vital that you don’t just write the budget and then forget about it.

Keep a close eye on your budget performance and the cashflow for each project. Being able to review this performance, in real time, should help you avoid overspending, or running out of cash for the project. And when the cash in the kitty is getting low, you can get proactive and look at ways to top up the budget, or rein in spending in other areas of the project.

Take action to maintain your positive cashflow position

Balancing the cashflow scales on a project isn’t easy. But when you spot that there’s a potential hole in the budget, the important thing is to do something about it, pronto!

Running any project with your fingers crossed that ‘it will all work out in the end’ is a recipe for disaster. And the easy availability of detailed budget reports and cashflow forecasts on any number of finance apps means there’s no need to be disorganised about your spending.

Think about:

Setting up key metrics for each project, to measure spending, cashflow and progress
Running worst-case and best-case cashflow scenarios, so you’re prepared for anything
Regularly reviewing your spending and looking for areas to make savings
Taking on finance facilities to plug any cashflow holes as they appear

If you’re thinking about scaling up your established startup, please do get in touch. We’ll help you build solid, workable budgets that can be easily tracked through your accounting system.

Don't burn out this winter

Tue, 09 Aug 2022 23:03:24 GMT

This winter has been a tough one, with several illnesses rampaging through our communities. This has caused much disruption across the country, with no industry or workplace unaffected.

With the labour market tight, businesses are already understaffed. Add high rates of absenteeism, and remaining workers and business owners are under incredible pressure. When you love your job and always want to do the best for your clients, it’s easy to start overworking yourself and run the risk of burnout.

It’s vital that you take care of yourself this winter, so here are three ways to help prevent burnout:

Start saying ‘No’

Small business owners are experts in saying ‘Yes!’ and then figuring out the details later. It’s how you grow a small business and build your reputation for being able to solve problems for your clients. Unfortunately, if you’re overworked and stressed out, it’s time to start saying ‘No’. Begin by turning down work from difficult clients, or work that’s outside your core business, so you’re focused on where you add the most value.

Identify at least one area you can outsource

You can’t do everything yourself, particularly if you’re understaffed. Look at your processes and try to identify an area that’s not a part of your core business you can outsource. It might be social media posts, or office cleaning, or even just subscribing to a meal kit service to take the stress out of cooking. Usually, the cost of these initiatives will quickly pay for themselves: once you feel less stressed, you’ll be more productive.

Hold onto your interests outside work

Running a business can be all-consuming, but hang onto your friends, sports and hobbies even when it gets busy. Letting your relationships, health, and pastimes dwindle away will undermine your emotional, physical, and mental health.

Not sure if outsourcing tasks will pay for itself? We can work with you to analyse the costs and benefits of any business investment. Get in touch, we’d love to hear from you.

Keeping on top of small business cashflow

Thu, 21 Jul 2022 02:59:50 GMT

Cash flow is important for business health. Tracking money in, money out sounds easy, but it’s not always that simple. Roughly 65% of businesses that failed, say they closed their doors because of financial mismanagement, including lack of cash flow visibility. In other words, they didn’t know if they were making more than they were spending.

Why are people losing sight of cash flow?

Everyone knows a business needs to stay in the black. It’s not a new idea. So, it can be hard to imagine why a business would lose sight of cash flow. Until you’re in business yourself and you realise that tracking small business cash flow isn’t as easy as it seems.

For small businesses, this can involve:

keeping track of all your expense receipts - which gets really tricky if there are multiple people making purchases;
recording all your sales revenue - making sure to account for discounts you might have given; and
entering everything into your cash flow Excel spreadsheet or Google Sheet- including double and triple checks to make sure everything is entered correctly.

You may have to rely on employees or business partners to supply a lot of this information. Their paperwork will sometimes have scribbled notes in the margins, requiring a follow-up phone call to get more information. It takes a lot of time, patience, and energy before you’re even ready to punch the numbers into a spreadsheet.

But even if you're vigilant, there’s a lag between when a sale or expenditure happens, and when it’s entered into your spreadsheet. You’re taking a series of snapshots of your cash flow, and there can be big gaps in between.

As business picks up, with more sales and more expenditure happening all the time, those gaps become more significant. More things happen in between each cash flow snapshot. And cash flow snapshots get further apart because you’re too busy to update spreadsheets.

Consider using cloud accounting software

Because money in and money out is the ultimate measure of business health and sustainability, you know you must watch it carefully. Cloud accounting software can automate the process for you. In fact, 98% of users of accounting software recommend it to others.

Here’s how it works:

Cloud accounting software is generally sold on a flat monthly subscription. You don’t need to download anything, and you can run it easily off your existing laptop, desktop or smartphone.

It can link to your business bank account (and point-of-sale system, if you have one) to track sales and expenses as they happen, with no data entry from you. Because the data comes straight from the bank, it’s clean and accurate. Smart accounting software will also send out your invoices, so it shows what you’re owed. Next, the system pools all the data to create a dashboard of your financial situation, which is automatically updated every day.

Accounting software probably only needs to save you one or two hours a month to pay for itself. In reality, because it will save you time that you can spend on other areas of your business, it will do that many times over.

Talk to us about your cash flow forecast and how to easily track it

What is inflation

Mon, 18 Jul 2022 03:58:33 GMT

High inflation is hitting us all hard this year. Inflation is running high across the whole world, due to factors like pandemic disruptions, supply-chain issues and monetary stimulus – but what is inflation?

Inflation is the term used to describe an increase in the average prices for goods and services through the economy. Inflation is a loss of purchasing power over time - it means your dollar will not go as far tomorrow as it did today. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.

Inflation is typically expressed as the annual change in prices for that basket of goods and services. The annual rate of inflation is the price of the total basket in a given month compared with its price in the same month one year previously.

Every household has different spending habits. For measuring inflation, all goods and services that households consume are taken into account, including:

everyday items (food and petrol);
durable goods (clothing, mobile phones and washing machines); and
services (hairdressing, insurance and rented housing).

When calculating the average increase in prices, the prices of products we spend more on – such as electricity – are given a greater weight than the prices of products we spend less on – for example, sugar. The average spending habits of all households together determine how much weight the different products and services have in the measurement of inflation.

The usual underlying cause of inflation is that too much money is available to purchase too few goods and services, or that demand in the economy outpaces supply. In general, this situation occurs when an economy is so buoyant that there are widespread shortages of labour and materials. People can charge higher prices for the same goods or services. Limited oil production can make gas expensive. Supply chain problems can keep goods in short supply, pushing up prices; or companies may choose to charge more because they realize they can raise prices and improve their profits without losing customers.

COVID-19 has caused manufacturers/factories to shut down and has clogged shipping routes, helping to limit the supply of cars and couches, and pushing prices higher. Airfares and rates for hotel rooms have rebounded after dropping in the depths of the pandemic. Petrol prices have also contributed to heady gains recently.

But it is also the case that consumers, who collectively built up big savings thanks to months in lockdown, are spending robustly and their demand is driving part of inflation. They are continuing to buy even as costs for exercise equipment or spa pools rise, and they are shouldering increases in rent and home prices. The indefatigable shopping is helping to keep price increases brisk.

The Reserve Bank tries to keep inflation at a sustainable level by increasing the official cash rate (OCR). Banks then follow and react to high inflation by raising their interest rates. This, in turn, slows the economy and puts a brake on inflation. If you’re a business owner, you’ll see this reflected in a higher cost of borrowing and if you have a home loan, this will be true as well.

Inflation can be very damaging for a number of reasons. First, people may be left worse off if prices rise faster than their incomes. Second, inflation can reduce the value of an investment if the returns prove insufficient to compensate them for inflation. Third, since bouts of inflation often go hand in hand with an overheated economy, they can accentuate boom-bust cycles in the economy.

Sustained inflation also has longer-term effects. If money is losing its value, businesses and investors are less likely to make long-term contracts. This discourages long-term investment in the nation’s productive capacity. The flip-side of inflation is deflation. This occurs when average prices are falling, and can also result in various economic effects. For example, people will put off spending if they expect prices to fall. Sustained deflation can cause a rapid economic slow-down. The Reserve Bank is as concerned about deflation as it is about inflation. In New Zealand, however, it has historically been more usual for prices to rise - there have only been brief periods of deflation in the past 150-odd years, and these have been associated with economic depressions.

Business tips - making it easier to get paid

Fri, 15 Jul 2022 03:37:26 GMT

Making sure you get paid on time is crucial to your success. The process of making sales and generating revenue lies at the heart of any business model. But you can't manage your cash flow effectively, or raise any profits, if customers don't actually pay their invoices.

The easier you can make it for customers to pay you, the faster you'll see cash coming into the business. That’s good news for your financial position, your ability to cover your operational costs, and your capacity to fund the growth and expansion of your business.

So, how do you speed up those payments and make sure you get paid on time?

Set out clear payment terms

Your payment terms are the starting point for healthy payment times. These terms set out when you expect to be paid and form a legally binding contract with the customer. You may expect immediate payment on receipt of the invoice or on the 20th of the month following. You might set out a specific number of days that the customer has to pay the invoice (generally 30, 60, 90 or 120 days, depending on your industry). This allows your customers to pay for goods and services at a later, pre-agreed date – helping them to spread the cost.

Your payment terms should also include details of any late payment penalties. If the customer doesn’t meet your agreed payment times, most businesses will add a 1% to 1.5% monthly late payment fee to the outstanding bill. This acts as a great incentive for the customer to pay the bill, before the penalty fees start mounting up.

Invoice customers as soon as you can

In a business-to-consumer (B2C) environment, your customers will generally pay for their goods and services immediately. But when you’re working in the business-to-business (B2B) world, you’ll need to send your customer an invoice, asking for the money to be paid.

Customers can’t settle their bill until you send them an invoice. So, it’s vital to send out the invoice as quickly as possible, so you can minimise the gap between doing the work and being paid for the work. In some industries, the project will be broken down into multiple invoices, paid across a period of time. This makes it easier for the customer to pay and means you (as the supplier) don’t have to complete the project before receiving the money you’re owed.

Ideally, you want your invoices to go out as early as possible. This allows your payment terms to kick in and makes it easier to predict when cash will be coming into the business.

Be organised about your payment admin

Getting paid is a process – and the more organised you make the process, the quicker the payment will be received. When you send out the invoice, make sure you send it to all the relevant people in the payment chain. This will usually be:

Your main contact at the client – the person who you usually deal with.
The person who will approve the bill – the person who will green-light the payment.
The finance team – the person (or people) who will actually action the payment.

It’s also a good idea to quote any relevant purchase order (PO) numbers that the customer has raised, and to give a very clear description of the work done, or the goods purchased.

Embrace the available payment technology

Invoices used to be hard-copy printed bills, but in the digital age the vast majority of companies will send out e-invoices. Electronic invoices are easy to raise and can be emailed out instantly. Doing everything in the digital realm also makes it easier to keep records and keep track of payments.

Many e-invoice systems will also let you add a variety of different payment options for the customer. You could just include your bank details and wait for the customer to make a direct payment to your account, but you can also include payment buttons in the e-invoice that give customers the option to pay via digital payment gateways.

Offering more ways to pay makes the whole process more convenient for your customers – and will generally result in faster payment times as a result.

If you want to speed up your payment times and boost your cash flow, please do get in touch. We can help you streamline your payment processes and embrace the latest in payment technology.

The value of cashflow forecasting

Wed, 13 Jul 2022 03:27:42 GMT

So, now you’re tracking your cash flow and you know where your money is being earned and spent, the next step is cash flow forecasting. Cash flow forecasting is a projection of what your financial position is expected to look like in the next few months so you know when you need to take action to safeguard it. It also enables you to plan for different scenarios, identify areas where you could save costs, and create strategies to keep your cash flow where you want it to be.

Forecasting your future cash pipeline

Remaining in control of the cash coming into and going out of the business is the real focus, so you can accurately predict your financial position and can resolve any issues.

Key ways to get more from your forecasting

Run regular forecasts  – The financial landscape changes on a daily basis so a cash flow forecast is not a document that remains static. Variables and external drivers are literally changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.
Use the latest cash flow forecasting apps  – there are various cash flow forecasting apps that integrate with online accounting systems. These give you a more detailed view of how your cash inflows and outflows will look over the coming months – information that will inform and justify the decisions you make.
Explore the right revenue streams  – most sectors will have seen sales affected due to staff being away sick and other pandemic related restrictions. Now’s the time to explore other revenue streams, such as selling online, and new opportunities for income. The idea is to find ways to increase the money that’s coming in the door and balance out your unavoidable expenses.
Get proactive with cost-cutting  – if you can reduce cash outflows to a minimum, that will have a real impact on the health of your future cash flow. Pare back your operations and aim to reduce things like unnecessary software subscriptions, or over-ordering of basic supplies. Negotiating cheaper rates with suppliers, if possible, will also help.
Review your staffing needs  – assess your staffing needs to minimise the costs of staffing and resourcing. Consider changing working hours for some staff, redeploying staff in different roles, and work-from-home/hybrid options.
Run a variety of scenarios  – changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Scenario-planning lets you answer questions, and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.
Look at various ways to access funding  – if forecasts show a cash flow issue coming up, we can assist your business to investigate how to minimise expenses and what funding opportunities are available.

Talk to us about setting up cash flow forecasting

Cash flow forecasting is an important step to give you the business intelligence to support your decision making, so get in touch with us if you’re unsure what your cash flow is.

Should you buy or lease your business assets?

Mon, 11 Jul 2022 03:47:53 GMT

There are certain items of equipment, machinery, and hardware that are essential to the operation of your business – whether it’s the delivery van you use to run your home-delivery food service, or the high-end digital printer you use to run your print business.

When a critical business asset is required, should you buy this item outright, or should you lease the item and pay for it in handy monthly instalments?

To buy or to lease? That is the question

Buying new pieces of business equipment, plant, machinery or vehicles can be an expensive investment. So, depending on your financial situation, it’s important to weigh up the pros and cons of buying, or opting for a leasing option.

First of all, let’s look at why you might decide to buy the item…

Buying: the pros and cons

Pro:  It’s a tangible asset – when you buy an item, you own the item outright and it will appear on your balance sheet as one your business assets. As such, by owning these assets outright you increase the perceived capital and value of your business. You can also claim the cost of the asset against your capital allowance for tax purposes.
Pro:  It’s yours for the life of the asset – once you own the item, you have full use of the equipment for the duration of the life of the asset. Your use of the asset isn’t reliant on you being able to keep up regular lease payments, and, if your financial circumstances change, then you can sell the asset to free up the capital.
Con:  It’s an expensive outlay – paying for the item up-front is a large outlay for the business and will require you having the cash to cover this cost. Spending a large lump sum in this way may take cash away from other areas of the business, so you need to be 100% sure that this purchase is the right decision and a sound investment.
Con:  You may require extra funding – if you don’t have the liquid cash available to buy the item outright, you may need to take out a loan. Asset finance is available from funding providers, but does tie you into a loan agreement that will add to your liabilities as a business – reducing your worth on the balance sheet.

Leasing: the pros and cons

Pro:  Leasing has a cheaper entry point – if the item you need to purchase has a large price tag, leasing allows you to make use of the asset without the cost of buying it in full. For startups, and smaller businesses with minimal capital behind them, this can make leasing a very attractive option. You may not own the asset, but you can make use of it – and this may be the difference between the success or failure of your business.
Pro:  You can spread the cost – there is still an associated cost of leasing, but you can spread the cost over a longer period, making it easier to find the necessary liquid cash to meet your lease payments. With this money saved, you can then invest in other areas of the business, helping you to expand, and bring in more customers and revenue.
Con:  You don’t own the asset . There are, however, different types of leasing agreements. Under a capital lease, you do own the asset (once you’ve paid if off). But ,if you opt for an operating lease, this is a more short-term lease and you won’t own the asset at the end of the contract. Ownership does have its advantages (including being able to sell off the asset if required), so it’s important to consider what kind of leasing agreement you’re entering into and what the advantages/disadvantages may be.
Con:  You may pay more in the long run – most leasing agreements will attract additional costs and interest on your agreement, so you may well end up paying more than the market price for your asset in the long term. If you can cope with the higher cost, this is fine, but bear in mind that buying outright may have offered greater value.
Con:  You may lose the use of the asset – if you can’t keep up your lease payments (for example, due to poor cash flow) then the owner of the lease agreement may recall the asset. If this item is crucial to your business, losing this key asset can have a profound impact on your ability to operate. In this respect, leasing is more risky, but also an easier option for businesses with less cash to splash.

Talk to us about whether buying or leasing is the best way forward

Whether you opt to buy or lease your equipment isn’t always a straightforward decision to make, so it’s a good idea to consult with your accountant early on in the decision-making process. We’ll help you review your current financial position, assess your available cash flow, and look at your regular cost base to decide whether buying or leasing is the right thing for your business.

Building your business exit strategy well in advance

Tue, 21 Jun 2022 07:10:50 GMT

If you are looking to exit your business or plan to do so in the future, you need a strategy. When you sell up, you want your business to have as much inherent value as possible in order to receive a good price, a great return on your investment, and the best possible payout.

So, how do you take yourself ‘out of the business’ as the founder, add the best value, and set up an effective and financially beneficial exit strategy?

Adding value to the company

The more attractive the business looks in the market, the better the price you’ll achieve, or the better the yield you’ll see on selling your company shares.

To drive that value:

Work on the business, not in it – so you’re no longer a fundamental part of the day-to-day operations, and can focus on the higher-level strategic elements. We can help you restructure the operations so that your business stands up for a potential buyer, when you are no longer in it.
Invest in adding value – keep profits in the business, reduce your personal drawings, and plough that money back into growth and investment.
Improve your financial health – by taking control of your finances and building a strong balance sheet, positive cashflow and attractive profit forecasts. A buyer will want to see how your business has performed over the last two years.
Have a business manual – that describes the processes and tasks in your business so a new owner can hit the ground running.

Talk to us about exiting your business

If you’re looking to sell up, you need a plan. Come and talk to us about creating a workable exit strategy, with a clear focus on driving value and delivering a solid return on your investment.

Recent changes to GST on exported goods

Thu, 16 Jun 2022 07:16:00 GMT

Goods that are exported from New Zealand can be zero-rated, with GST being able to be claimed on purchases or expenses incurred in providing those exports. Recent changes to the GST rules which impact the export of goods include:

Where goods are imported or exported, the domestic (New Zealand) transport portion of the goods can also be zero-rated.
Goods provided ‘free on board’ to both residents and non-residents can be zero-rated, provided the goods are entered for export by the supplier, and the recipient physically exports the goods from New Zealand (previously this only applied to supplies of such goods to non-residents).
While not affecting New Zealand farmers directly, non-residents can now claim import GST (NZ GST levied at the border) provided the imported goods are sold to GST registered persons in New Zealand. This will allow for more efficient processing of GST costs on imports where this applies.

Tips from Doug Avery

Wed, 08 Jun 2022 07:23:56 GMT

There’s change happening in agriculture at a rate we’ve not seen before, with vast opportunities for those able to take them. However, this may mean developing resilience as no opportunity is without its challenges.

Doug Avery, author of The Resilient Farmer, has overcome drought, earthquakes, mental health challenges and spiralling debt, and now runs one of the most productive farms in New Zealand.

Here are 5 great tips from Doug on how to build resilience.

1. Get a mentor

Having quality people with good advice around you, makes you learn and grow. Imagine it like this – a flock of geese take turns for the hard work flying at the front; are organised in a V which gives them 71% greater flying reach; honk to each other for encouragement; and work together by collaborating. You need to employ and find clever people to help you, and don’t be scared to ask for help. Having the right people around you will help you fly higher.

2. Work smarter, not harder

Work smarter not harder. If you’re putting in long hours in your business, there’s a sign something is wrong. “Hard work will never win you anything, but smart work will.”

3. Keep learning

Strive to do things better and more efficiently. Doug challenges 10% of his business every year to see if he can do things better. He said: “The past matters for sure, but the future is where you need to be focused. Attend meetings, look at research and learn from others.”

4. Let go of the past and focus on what you can influence

Letting go of the past can be tough, but although the past teaches good lessons, it’s a horrible master. “Living in the shadow of the past can shackle your imagination and leave you feeling small. You need to learn to let go of it to truly be able to move on.” Focus on the things you can control or influence. “To get myself into the right headspace again, I had to learn to stop worrying about things that were out of my control,” Doug Avery says.

5. Commit, Courage, Confidence and Capability

In order to become resilient you need to commit, have courage, confidence, and capability. Doug encourages farmers to embrace failure, get out of their comfort zone, and have a positive mindset. You won’t get it right the first time, no one does, but thinking differently and trying new things can pay off. “When I started grazing lucerne I was called the ‘lucerne lunatic’ by my neighbours.” His pastures then returned 1/10th of what the return is now.

Are you resilient or resistant?

Resistant people:
• Feel threatened by others’ success
• Give up early
• Ignore negative feedback
• Don’t like to be challenged

Resilient people:
• Embrace challenge
• See effort as a path to mastery
• Grow
• Learn from criticism
• Find lessons from successful people
• Persist in the face of setbacks.

Four Easy Steps to Better Cashflow

Mon, 23 May 2022 03:10:29 GMT

Managing cashflow can be tricky and if you’re in need of a hand, you’re not alone. The key with managing cashflow is to invoice correctly and as soon as you can. Also take advantage of the MYOB invoice reminders to remind customers of your invoice.

There are some other key things you can do, to keep your cashflow in check and get your invoices paid quickly.

1. Keep your books up to date – that way you can see at a glance your cashflow and the state of your finances.

2. Separate business and personal finances – to better understand your true cash flow, you need to separate your personal finances from your business. Mixing the two can make the performance of your business unclear.

3. Have a cash reserve – have a cash reserve for a rainy day, or unexpected events, so you can take advantage of any opportunities and ride out that rainy day.

4. Be polite but professional about overdue invoices – you can be direct, but still polite, when dealing with customers who have overdue invoices. Keeping a close eye on your accounts receivable also allows you to act sooner rather than later should you have any issues.

So, get your invoicing right, send invoices quickly, and use the steps above to make sure invoices are paid and you know where you’re at with your finances.

Get in touch if you need guidance around invoicing, reminders or the cashflow of your business.

Redefining Succession to Transition

Mon, 23 May 2022 02:58:18 GMT

With an ageing population in New Zealand, succession planning is becoming more important as time goes by. For some businesses, the planning is purely around positioning a business to sell. However, for most privately owned businesses in New Zealand, succession planning comes with the added complexity of keeping the business in the family.

Nearly everyone in a family will have a differing view on succession and how and when the transition should take place. Most of the time, family values underpin these views and this makes the transaction personal. Treating family with equality and fairness often results in compromising the business in some form and there’s not a simple “one-size-fits-all” approach.

What if the complexity around succession changed to transition?

Often the focus with succession is transactional. The business or farm is simply sold to the next generation. This can result in an established business with new owners who might not be fully equipped with the skills to move the business forward successfully. If you reframe succession to transition then one phase of the transition could be a focus on the evolution of skills and capability within the business. This would also reduce the complexity and increase the focus on what’s required for the future of the business.

Things to consider are:

· Documenting the vision and strategy of the business so that successors/families understand where the business is heading.

· Growing your business, as this opens up options for succession.

· Having a structure that holds management accountable for the decisions made in a business.

· Outlining the roles and responsibilities within the business as this provides pathways to nurture and develop successors/family members for future succession/transition.

· Seeking professional support to help manage family dynamics.

Gunson McLean has the expertise and can help with all aspects of your transitional planning and processes.

High Inflation

Mon, 23 May 2022 02:48:27 GMT

High inflation is hitting businesses and households hard this year and you’ll be seeing of inflation at the supermarket, the fuel pump, and in your business.

Across the world, inflation is running high, thanks to factors like pandemic disruptions, monetary stimulus and supply-chain issues. Here's are some ways inflation is affecting your business.

Eroding your buying power

Inflation increases prices, which eats away at your buying power. For business owners, that means you’ll encounter higher costs from your suppliers. Materials are more expensive, transport has become more costly and everything, from office supplies to utilities, is rising in price.

In addition, your staff may be asking for pay rises. To keep up with inflation, your income needs to increase by at least the same amount as inflation and to achieve that could mean a seriously large wage bill increase for your business.

Rising interest rates

Banks try to keep inflation at a sustainable level and react to high inflation by raising their interest rates. This, in turn, slows the economy and puts a handbrake on inflation. As a business owner, you’ll see this reflected in a higher cost of borrowing and if you have a home loan, this will be true as well.

Inflation does have some positive side-effects for your business. First, it tends to push up the value of big-ticket assets such as property. Second, it makes debts seem smaller – the amount of debt stays the same but hopefully your income rises.

It’s time to raise your prices

The rise in prices means you’re spending more so it may be time to consider raising your prices. If you’re wondering how much you need to increase prices in order to keep up with inflation or maintain your margins, give us a call. We can work with you to find the best price for you and your customers.

5 Things to Consider with Farm Accounting

Mon, 23 May 2022 02:37:10 GMT

Farming is a completely different business to any other and is more complex when it comes to assets, liabilities, costs and revenue.

Here’s 5 things to consider with farm accounting.

1. Land is an asset

If your agricultural land is properly managed it shouldn’t depreciate in value, in fact it might even go up. However, mismanaged land can take many years to return to productivity, especially if the land has become highly acidic or is nutrient poor. Whatever it costs to keep the land in good condition is money well spent. The cost of maintaining the land should always be accounted for including fertiliser, irrigation, drainage, soil pH management, weed removal and pest control.

2. Know your stock

Most farmers will know how many animals they have - of what type, breed and age - to within a small margin. However, animals breed and die, so the number will not remain static. The old saying, “where there is livestock, there is also deadstock” still applies, especially during cold winters and lambing or calving season.

Your stock numbers will change over time and it's important to record these changes in your accounting software. Every head has a value, and that value should be recorded.

3. Make use of the internet and the cloud

Most farmers have some form of internet connection these days. It's not always as fast as you’d like – rural life has its downsides. Some uses for the internet, in general, and the cloud, in particular, include:

· Checking stock prices and trends: Keeping up to date with these numbers can help farmers decide how best to utilise their land.

· Accessing kill sheets, tracking milk solid prices, etc: Usually faster and easier than getting this information by mail or word-of-mouth.

· Long-range and short-range weather forecasting: Vital, required knowledge for just about every type of farm.

· Using cloud apps: These new tools offer much faster access to information, accounting tools, resources and bank accounts.

· Cloud based accounting: Keep up to date with your cashflow.

4. Depreciation

The cost of new equipment can be offset against tax, using depreciation. The value will depreciate over time as it becomes older, wears out, or is made obsolete by newer technology. You can depreciate:

· Tractors, trucks, harvesting equipment and other farm machinery.

· Computer equipment.

· Hand tools, machine tools, and repair equipment.

Keep track of what you buy and account for its depreciation each year.

5. Account for loss

Farming is dependent on the weather, and sometimes the weather wreaks havoc. A hot, dry summer might be great for wine growers but it can be catastrophic for dairy farmers. Unseasonal storms can destroy entire crops and unexpected rain can leave hay rotting in the fields.

It's important to record any losses in your accounts, to reduce your overall tax bill. You don’t want to be taxed on something that's been destroyed, or on a profit that you haven't made.

Key Points from the 2022 Budget

Fri, 20 May 2022 00:18:43 GMT

Off the back of yesterday's Budget, we take a look at the key points. Cost of living, Health, Housing, Education, Māori, Equity finance for SMEs, Income Insurance and other Allocations... take a read of our breakdown.

Cost of living

A cost-of-living package has been announced. The cost-of-living measures in the Budget are mainly temporary and targeted at those on lower incomes.

New Zealanders aged 18 and over will be eligible for a $350 payment unless they earn more than $70,000 a year or already receive the Winter Energy Payment.

The sum will be paid in three instalments over August, September and October, working out at roughly $27 a week.

This payment, which will be funded out of the money remaining in the COVID-19 fund, is estimated to cost $814 million.

The fuel tax reduction and half-price public transport will also be extended for a further two months. New Zealanders who have a community services card will continue to get half-price public transport permanently from mid-September.

The government will also address the problem of competition in the supermarket sector, with urgent legislation going in tonight to ban the use of covenants, which make it hard for new players entering the market.

Ministers flagged that there will be further announcements in the coming days in response to the Commerce Commission's recent report on the sector.

Health

The health sector is being given $13.2 billion over the next four years.

An initial $1.8b in new spending in the coming year to address historic cost pressures, including DHB deficits.

$188 million for the Māori Health Authority to commission services and develop iwi partnerships.

$102m over the next three years to provide better, earlier GP and community care and to ease pressure on hospitals.

Pharmac will also get an extra $191m over the next two years. It is Pharmac's biggest boost in history to make more medicines and other health treatments available. Pharmac said it welcomed the $191m boost and was already working through the medicine options for investment list. It brings total funding to $1.2b.

More than $166m has been set aside over four years for ambulance services, adding more than 60 vehicles to the road fleet and about 250 more paramedics and frontline staff. Another $90.7m will go towards air ambulance services to replace ageing aircraft with modern helicopters.

The Budget increases dental grants for low-income families from $300 to $1000 in line with Labour's 2020 campaign promise.

A new Ministry for Disabled People is also being established at a cost of $100m.

Housing

The Budget includes more support for first home buyers with funding available for about 7,000 extra first home grants and 2500 more first home loans available every year.

House price caps across regions have been increased in most of the country, for example shifting to $875,000 in Auckland and Tauranga and $925,000 in Wellington and Queenstown.

The income caps remain the same but will be reviewed every six months along with the new house price caps.

A new $350m housing fund has also been set up where not-for-profit developers can apply for grants to build affordable rental accommodation.

Education

Nearly $3 billion is going towards the education sector as it moves away from the decile system and addresses pay parity issues. Replacing school deciles is the single biggest area of new spending for education.

The Budget provides more than $80m a year for the equity index which replaces deciles as the measure of disadvantage in schools.

Most of the money, $75m a year, will go directly to schools, adding to the $150m they currently receive through the decile-based system.

The budget increases school operations grants and tertiary and early childhood education subsidies by 2.75 percent.

There is also $266m over four years to give early education teachers pay parity with school teachers.

In tertiary education, the Budget provides $56m a year to pay for an expected increase in enrolments next year and in 2024. There is also $40m for modernising polytechnic facilities.

Māori

More than half a billion dollars is being pumped into the Māori Health sector with $579.9 million going towards Māori health and wellbeing.

The new Māori Health Authority, Te Mana Hauora, will receive $188.1m over four years for direct commissioning of services.

$20.1m will go to support iwi-Māori partnership boards, and $30m will be invested into Māori Providers and health workers to provide support and sustain capital infrastructure.

Lack of workforce capability has been identified as a key factor in being able to bolster Te Mana Hauora - and $39 million will be used for Māori workforce training and development to support them within the new health system.

The $579.9 million invested in Māori health and wellbeing is on top of the $11.1 billion health allocation.

Finance for SMEs

The Government is planning to team up with retail banks to create a new fund that will invest in small and medium-sized enterprises (SMEs).

It has committed to investing $100 million, alongside banks, in a new Business Growth Fund. The Crown will have a minority shareholding in the Fund, which will be privately operated and independently managed.

The Government has discussed the proposal with the Reserve Bank, which will consult on it publicly.

Income Insurance

The Finance Minister is working towards getting his proposed Income Insurance Scheme underway in 2024.

The Government has committed to providing the Accident Compensation Corporation (ACC) funding to do preliminary work to establish the systems and operational processes for the scheme.

It is allocating $4m towards ACC in 2022 and 2023, and set aside a further $56.5m in "contingency" funding over 2023, 2024, 2025 and 2026.

The proposal is that employees and employers pay levies to the scheme, which would pay a claimant out in the event of job loss due to redundancy or illness.

The value of the pay-out would be equivalent to a certain portion of the claimant's previous income – up to a certain level. The payment would be available for a set time period, after which the claimant would need to go into the regular welfare system if they're still unemployed.

Participation in the scheme would be compulsory. However, the proposed scheme's details are still being worked out.

Other Allocations

$200m towards the first stages of the light rail project in Auckland, feasibility studies for a new port in Manukau Harbour and for a dry dock at Northland's Northport.

Understanding your Statement of Cashflow

Tue, 26 Apr 2022 00:27:23 GMT

The statement of cash flows, (also known as the cash flow statement), shows how your business has generated and used cash (and cash equivalents) within a specific time period.

For each of the reporting categories, receipts and payments are listed (money in and money out), and this is reported as a net increase or decrease in cash held for that category.

The net change in all categories is added to the amount of cash on hand at the start of the reporting period to arrive at the current cash on hand figure at the end of the reporting period.

It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide a good understanding of the financial position of your business.

How Does it Work?

The cash flow statement integrates the information provided by the profit and loss statement and the balance sheet into a current cash position. The cash flow statement is reported on a cash basis, while your other financial statements are usually reported on an accrual basis. Accrual income (from the profit and loss statement) is converted to cash by calculating the changes in the balances of asset and liability accounts.

Report Categories

The statement of cash flows is organised into sections that report on different types of business activity:

1. Operating activities - all business income, expenses, assets and liabilities (except for those assets and liabilities reported in investing and financing activities).

2. Investing activities - the purchase and sale of long-term investments, property, plant and equipment, as well as security deposits paid to suppliers or received from customers and dividends received.

3. Financing activities - the changes in balances of equity accounts, for example, issuing and repurchase of stocks and bonds, and payment of company dividends, if applicable. Loans are also included in financing activities.

Formal financial report packages usually include notes to the financial statements. The notes contain supplemental information that explain significant items or activities that did not involve cash transactions. The notes may also include detailed reporting of categories that may have been reported as summary totals only in the profit and loss, balance sheet and statement of cash flows. Other items such as taxes, employee provisions, risk management or related party transactions may also be detailed in the notes.

Why is it Useful?

The statement of cash flows gives you a valuable measure of cash flow in and out of the business over a given period. It shows the ability of the business to pay its bills and fund its operating activities. This gives you a picture of overall performance.

It also shows the relationships between assets, liabilities, equity and cash accounts. It shows changes and movements over time, whereas the balance sheet and profit and loss reports show account values at a single point in time.

The statement of cash flows gives you vital information on your business.

How strong is your cash position?

· What is the long-term outlook for your business?

· What activities generate the most cash flow?

· What is the relationship between your net income and your operating activities?

If you’d like to understand your financial statements, cash position and future outlook in more depth, arrange an advisory session today. We’ll help you identify and appreciate the strengths of your business.

Succession Planning

Thu, 14 Apr 2022 01:38:10 GMT

You have a successful farming business, but what happens if something happens to you? What plans do you have in place and what does your succession plan look like?

Your business is successful and you have assets, knowledge and skills to pass on, but when is the right time? Retirement is often when these issues are discussed but what about in the case of an illness, accident or death? Succession planning is important for both your business’ and family’s future. It’s important to start succession planning as early as you can so everyone involved knows what will happen and what is expected of them. Don’t be one of the 9 in 10 businesses who don’t have a succession plan in place.

A succession plan is simply the process where assets, knowledge and skills are transferred to the next generation. This process will include your family and can elicit strong emotions - who will run the farm or will it be sold if nobody wants to run it. The plan needs to be inclusive, outline how the transition process will take place, and be reflective of your wishes. It should be fair to everyone, agreed upon and updated if things change.

Informal discussions with family members prior to developing your succession plan can help prepare them for the transition. The needs and wants of the family and individual members can change over time, so it’s a good idea to be open, honest and transparent about everyone’s wishes. You’ll also want to consider where the business is at currently and your vision for the business. If you don’t wish to pass your farm onto your children, you should be upfront about this.

You should discuss your expectations for the future with your family and what the structure and obligations are for those who will take over. Consider getting a consensus so that the succession plan is inclusive and is about how the business will continue on – it's not just the transference of assets but about the people and how to manage the business. You should also consider how viable the business is overall – it needs to give you the lifestyle you want and if it isn’t, you need to consider what your options are.

If one of more of your children want to run the farm either by themselves or together, this needs to be communicated clearly and what they may need from the business. The earlier you know, the more you’re able to build the skills and capability in the next generation and train them to take over the business. For those children who are not taking over the farm, it could mean providing some other financial support such as with a home loan or a gift. You may also want to consider what (if any) sacrifice you make with regard to capital and security to help the next generation become established.

If no one wants to take over the farm business, consider partnering with other young people who are motivated and passionate about your business. Teach and upskill them with a view of passing the business onto them in the future.

It is important to receive specialised advice and reach out to someone with succession planning experience as well as your other advisors (lawyer, accountant etc) as they can help you clarify your vision for the business and put in place a strategy and structure to achieve this. Having a group of advisors who’ve been involved in your business for some time can make the transition much easier when it comes time to implement your succession plan, as they will know you and understand your business.

Things to consider are business profitability, business life cycle (good times and lean times) and it may only have assets at the time of transition. Just looking at the accounts may not be enough but understanding the strategy and vision for the business gives a much better overview. You may have some hard decisions to make during the transition phase and your advisory group can be invaluable during this time. For example, the new generation will want to make their own changes but it can be sometimes harder than expected for the outgoing generation to hand over the reins and the advisory group can look at it from a different viewpoint.

Finding the best time to retire will be different for everyone but consider if it’s time to transition. If your business is anticipating growth, it might be a good time to transition to the next generation. Your experience and knowledge will always be valuable.

Succession planning can seem difficult but it is essential for the future of your business. If you haven’t already started, then the time is now, while the choice is yours.

Gunson McLean can help you with all aspects of succession planning, from identifying where you are at in the process, to helping you develop a plan for your farm business that is relevant to you as well as providing assistance with the structure of the advisory board. Our focus will be delivered with the aim of providing transparency and fairness for your family.

Rental Properties – Interest Deductibility Rules

Sun, 20 Mar 2022 22:59:00 GMT

The initial effects of Government’s proposal in March 2021 to remove the ability to deduct mortgage interest on rental properties will be felt by taxpayers with residential rental properties in their 2021-22 income tax year. Property rented out some of the time, including holiday homes, will also be affected by the rule change. This is likely to result in higher income tax payments for taxpayers owning residential rental properties.

The interest deductibility rules means that Interest deductions on residential property acquired on or after 27 March 2021 will not be allowed from 1 October 2021. Interest on loans for properties acquired before 27 March 2021 can still be claimed as an expense, but the interest deductions will be phased out over a four-year period between 1 October 2021 and 31 March 2025.

The phase-out period means that in the following income years landlords can make these interest deduction claims:

1 October 2021 to 31 March 2022 – 75%
1 April 2022 to 31 March 2023 – 75%
1 April 2023 to 31 March 2024 – 50%
1 April 2024 to 31 March 2025 – 25%
1 April 2025 onwards – 0%

If money is borrowed on or after 27 March 2021, to maintain or improve property, rather than subject to the phase-out rule, the interest on those newly borrowed funds will not be able to be claimed as a deduction from 1 October 2021.

An exclusion will apply for ‘new-builds’. This includes purpose-built rentals and social housing as the Government hopes that this will stimulate investment in new housing. Purpose-built rentals are large residential developments designed for ongoing rental, rather than sale.

For any new-build, a property that received its code compliance certificate on or after 27 March 2020 will be eligible to deduct interest for up to 20 years from the time the property’s code compliance certificate is issued. The exemption will apply to both the initial purchaser of the new build and any subsequent owner within the 20-year period.

Property developers should not be affected by these changes and will still be able to claim interest as an expense.

Interest deductions will continue be available in full for the following types of property:

A portion of the main home if it is used to earn income (for example, from flatmates or boarders).
Properties used as business premises (except for an accommodation business), like offices and shops. This includes residential properties to the extent they are used as business premises (for example, a house converted into a doctor’s surgery).
Hospitals, hospices, nursing homes, and convalescent homes.
Retirement villages and rest homes.
Hotels, motels, hostels, inns, campgrounds.
Houses on farmland.
Bed and breakfasts where the owner lives on the property.
Employee accommodation.
Student accommodation.
Land outside New Zealand.
Māori collectively owned land and housing.
Emergency, transitional, social, and council housing.

The change to the interest deductibility rules will be a concern for many landlords as it increases the amount of tax owed each year and investors will need to pay for the interest costs incurred out of income that they have already paid tax on. An unintended consequence may be that existing landlords increase rents to cover the increased costs of ownership for the lost interest claim.

If you are uncertain of how this policy change may affect you or you have any questions on this or other tax matters, please contact us. Our team is here to provide any assistance you may need.

Slide into the New Financial Year

Sun, 20 Mar 2022 22:52:51 GMT

The end of the financial year is creeping up quickly. While you want to make sure you’ve covered all bases correctly, it doesn’t have to be a stressful time. We’ve put together a few tips to help you prepare and sail as smooth as possible into the new financial year.

Get the right advice
Just as you wouldn’t rely on an internet search for a health diagnosis, the same applies for the health of your business. Now is a good time to talk to us and work through what needs to be done before the year-end. We can help answer questions such as, what documents do I need to gather up? What sort of tax should I have paid? How much more do I need to pay and when do I pay it? Plus, everyone’s favourite question – can I pay less?

Know as you go
If you’re using MYOB you can check in on your data at any time. If you don’t have access, then your accountant will need to invite you in. You can create a P&L (Profit & Loss) statement or a balance sheet in accounting software whenever you like - not just at year-end. This lets you know exactly how your business is performing at any time. This is key to understanding and managing your business’s financial health.

Plan your year ahead
Now is a good time to talk to us to work on a plan for the new year. It’s a very good idea to make sure you have a business strategy in place to ensure there are no surprises – we can help with that.

Start the year with a clean slate
Tying up loose ends can make financial year-end much smoother. Make sure you’ve invoiced all customers correctly, and you’ve paid any due bills. Bank any cash and check that all payments have been recognised. Also ensure outstanding bills have been entered into your accounting software, and all work you’ve done has been invoiced. This will make going through your records a much smoother process for us or others involved.

There is an easier way
A cloud accounting platform makes running your business easier and helps us or your accountant complete your year-end accounts faster. This is because everyone is working from the same set of data and it is always up-to-date – no messy backlog to deal with. Keeping on top of bank reconciliation also helps you stay in touch with what’s happening in your business. All of this, plus storing key financial documents in the cloud during the year, makes your financial year-end a breeze!

Business support measures
Make sure you consider the business support and tax relief measures introduced because of COVID-19 so you can sail as smooth as possible into the new financial year. There are some things you may not be used to thinking about when you prepare for end of tax year, which is why it’s good that you talk to us sooner rather than later.

The team here at Gunson McLean are busy preparing tax plans and forecasts for many of our clients in preparation for end of year. If you need help, please don't hesitate to get in touch.

Using a mentor gets you results

Sun, 20 Mar 2022 22:49:23 GMT

A recent article in the Whangarei Leader extolled the benefits of having a business mentor. We agree!

The article told the story of how Lachie McLean, a client of ours, moved from milking 120 dairy cows to 360 while cutting back his own physical hours on the farm and coming out financially on top. Lachie said this big leap was made successful by the three years of free mentoring and business support that he received through a Northland Regional Economic Development Agency programme. One of Lachie’s ongoing mentors, outside this programme, is Gunson McLean.

Lachie says, “Working with the team at Gunson McLean over years has also contributed to the success of our farm. Without Shiralee, Craig and the team guiding us through our EOYF and quarterly cashflow reviews we wouldn’t be in the position we are today. Their in-depth knowledge of farming and their experience in accounting has supported us immensely. Their straight-talking, no-nonsense language is a welcomed support.”

Farmers are often so immersed in the day-to-day running of their farms that they don’t have the time, or the energy, to stand back and see the bigger picture. It can be hard to get new ideas and have the confidence to implement them. There is often a feeling of being isolated.

Mentoring is about encouraging and guiding you to achieve your farming goals and the potential that you and your farming business have. We are independent of your immediate farm business which allows us to provide clarity about where the big goals really are. We want you to succeed.

Having advisors that you trust look at your farming business with fresh eyes and a fresh perspective can make all the difference to the success of your business - and to your stress levels. Our Agri Advisory team has the skills and knowledge to provide confidential advice, assistance and support for our farmers.

Through regular advisory meetings, or check-ins, we can provide support that will help you overcome business challenges, set new goals and achieve success, and seek opportunities for your business to grow and improve beyond those that are obvious.

If you need help seeing the bigger picture for your business or help getting a structure in place that gives you more overview of your business then please don't hesitate to contact us.

Hey have you invoiced your client yet?

Sun, 20 Mar 2022 22:39:34 GMT

Getting paid can only happen if your client has been billed. You need to invoice your client, in a timely manner, with clear details of what you did, your charges for this, how to pay you and your timeframe for this payment (including any penalty interest charge for late payment).

To enable you to invoice effectively you need to create an invoice template for your business. If you are using an accounting software product like MYOB, use their template. Make sure your invoice includes all the details to make it easy for your client to pay you such as your full bank account details, your GST number, the date of the invoice and your payment terms. Also include their full contact details, description of the work done with dates, and full contact details for you. Make it easy and clear for the client to get hold of you if they have a query about the invoice or a problem with payment.

It always helps to talk about cost estimates up front so you can prevent any nasty surprises or misunderstandings with the client later on when you bill them. It doesn’t matter what the work you are doing for them is, an estimate provides a basis for the later invoice that is understood by both you and the client before you start the work. During your initial discussions with the client make sure you get their contact details and who is being billed for this work. It may not be the person instructing you so get all these details clear between you at the outset.

If the work changes during the course of the job, then confirm these changes with the client, preferably in writing (a short email or message) and make sure these are noted in the invoice – particularly if these are outside the scope of the original quote and are extras that will cost more. You don’t want the client refusing to pay because they said you didn’t tell them about these changes/extras.

You can’t be paid if you haven’t billed the client for the work! It is vitally important that you invoice as soon as possible once the work is completed.

Create efficient systems for invoicing. Use e-commerce if possible – accept EFTPOS and credit cards. It makes paying easier for the client and you. Set shorter terms – use a 7-day payment term rather than 20th of the following month. If the sum involved is larger or the work will be carried out over a lengthy period of time then you may choose to offer flexible payment methods – a payment before the work commences with regular instalments at specific milestones or dates. If the job involves a lot of money you may wish to check the creditworthiness of your client before commencing the work.

Chase up outstanding debts promptly. Set timeframes for yourself to chase these up, for example, 7 days late, a reminder email with a copy of the outstanding invoice. If not paid within 21 days consider putting the customer on a payment plan or charging penalty interest for late payment. Cut off credit (if used) to this client if necessary.

Gunson McLean can support you with getting your outstanding debts paid and with all aspects of invoicing your clients. You need to stay on top of your cashflow so regular catch ups with your financial advisor to discuss this is very important. We have the experts to help you and your business succeed.

COVID-19 Cashflow scheme

Sun, 20 Feb 2022 09:29:08 GMT

The Small Business Cashflow Scheme (SBCS) is still available for small businesses who are struggling with a loss of actual revenue due to the effects of Covid-19. The SBCS has been extended until 31 December 2023.

You may be eligible to receive a one-off loan if you employ 50 or less fulltime employees. The maximum amount loaned is $10,000 plus $1,800 per fulltime employee.

There is an annual interest rate of 3% charged from the date the loan is provided however, if the loan is paid back in full within two years, then no interest will be charged. The 3% interest rate is for a maximum term of five years.

You must have been in business on 1 April 2020 to be eligible and have experienced a 30% decline in revenue as a result of COVID-19.

Administered via the Inland Revenue, your business could be eligible for this loan scheme. The full eligibility criteria that need to be met for this scheme and the repayment structures that are in place are set out if full on the Inland Revenue website.

Find out more about the SBCS below, and feel free to reach out to us to discuss if this might be right for your business.

https://www.ird.govt.nz/covid-19/business-and-organisations/sbcs

Farm Focus

Sun, 20 Feb 2022 09:26:06 GMT

Let’s talk agri software. Farm Focus is one of our favourite agri programs, and it’s been developed by Kiwi farmers for Kiwi farmers. It’s cloud based, which means your information is stored securely and accessible at any time. It also allows for easy collaboration between farm owners, managers, accountants and advisors.

Farm Focus is the ultimate system to help manage your farm business. It’s easy to use platform, easily integrated features, and regularly updated systems, mean that it’s simple staying on top of ever changing environments.

Just a few of the Farm Focus features we love are…

Forecasting Dairy Production
We are loving the Forecasting Dairy Production tool, integrated into the Farm Focus software. It allows for our clients to view and manage their projected milk production and related income for the year. Milk prices from a number of dairy companies all update in the software automatically, so it’s easy to keep on top of anticipated income.
Livestock Monitoring
Another key feature of the Farm Focus system is the livestock monitoring feature. This allows you to track livestock movement; easily tracking sales, purchases, deaths and births.
The aging up process is automatic, and you can also include production and financial information such as $/head and $/kg in the same event. This creates easy livestock reconciliation and cashflow forecasting.
Other features you should look at are
Working Planner
GST Filing
Invoicing

If Farm Focus sounds like it would be right for your farm, then give Gunson McLean a call today and we can help guide you through the system and set up.

Climate Change

Sun, 20 Feb 2022 09:23:05 GMT

Aotearoa committed to the international global agreement to take action on climate change under the Paris Agreement which came into force in late 2016 and took effect from 2020. Under this agreement we have committed to halving our current net greenhouse gas emissions by the year 2030. To help meet this target, our primary industry will be required to measure and manage its greenhouse gas emissions or be introduced into the Emissions Trading Scheme (ETS). Doing nothing is not an option – the Government has already decided to price agriculture emissions. As a primary industry we need to be proactive so that any scheme developed has our input and is entered into on our terms.

A Primary Sector Climate Action Partnership – He Waka Eke Noa – has been formed between the government, Iwi and primary industry to reduce agricultural emissions. This partnership is our industry’s best opportunity to design a sustainable alternative to the NZETS, for farmers and growers to report, manage and reduce their agricultural emissions.

This partnership, which is in its second year, is creating a practical framework in which agriculture, horticulture and arable farms will account for their emissions and adapt to climate change.

This includes:

a pricing system for agricultural greenhouse gas emissions as an alternative to the ETS;
a system for reporting on-farm emissions;
an approach for recognising on-farm sequestration; and
farm planning guidance and other supporting research and extension activities.

However, in order for the government to accept this framework and a suggested pricing mechanism, the partnership must meet a number of milestones. If the legislated milestones aren’t being met, the Government can bring agriculture into the ETS at the processor level before 2025. If the farm-level pricing system is not in place by 2025, agriculture will come into the ETS at the processor level.

These milestones, and the dates they must be met by, are:

31 December 2021

25% of farms must know their annual total on-farm greenhouse gas emissions – “your number”.

1 January 2022

25% of farms must have a written plan in place to measure & manage their greenhouse gas emissions.

31 December 2022

100% of farms must know their annual total on-farm greenhouse gas emissions.

31 December 2024

100% of farms must have a written plan in place to measure & manage their greenhouse gas emissions.

1 January 2025

100% of farms are using the accounting and reporting systems to report their 2024 emissions.

The partnership has defined a farm for this purpose as:

all farms over 80ha (includes pastoral, horticultural, arable);
all dairy farms with a milk supply number; and
all feedlots.

This captures around 25,000 farms. It is important to note that this is not a final definition of a farm. For the purposes of pricing agricultural emissions, properties that are outside of this current definition may still be included in the scheme.

What is “your number”?

If you haven’t already, now is a good time to find out what your annual total on-farm greenhouse gas numbers are. You will have to know this information by December 2022.

There are 10 assessed greenhouse gas calculators available: Farmax, Overseer, Beef + Lamb NZ GHG Calculator, Fonterra/AIM, Hort NZ, Foundation for Arable Research, Ministry for the Environment (MfE), Alltech, E2M and Toitū. These systems all vary in complexity & level of detail, and which one you use will depend on what part of the industry you are in.

These models require data to be entered relating to livestock numbers and movements, fertiliser use, cropping practices and vegetation areas able to be offset to mitigate your greenhouse gas outputs. This may seem overwhelming but you are surrounded by an advisory team that can help you: Dairy NZ, Beef + Lamb NZ, Horticulture NZ, FAR, your bankers, consultants and accountants.

It is essential that the He Waka Eke Noa partnership is successful in ensuring NZ farming isn’t forced into the ETS at a processor level. Being able to account for your emission mitigations at a farm level will help to reduce the cost to your farm business. He Waka Eke Noa is also recommending that revenue generated from greenhouse gas pricing is recycled back into research and development in the agricultural sector which will further help to reduce emissions.

We are here to help you work out the requirements you need to meet. Call us at any time.

How the Co-operative Difference Payment works

Sun, 20 Feb 2022 09:20:42 GMT

Fonterra introduced the Co-operative Difference Payment (CDP) in 2021. It introduced this because it believed that farms that sustainably produce higher quality milk help to increase the value of all the Co-operative’s milk. From 1 June 2021, up to 10 cents of each farm’s milk payment will be determined by the farm’s sustainability credentials and milk quality.

“The new payment recognises farmers who are already going above and beyond because they’ve innovated and invested early, and it also offers farmers more encouragement for taking the steps required to meet the changing expectations of customers and communities, both today and into the future” says Richard Allen, Group Director, Farm Source at Fonterra.

The Co-operative has introduced a new milk payment parameter to implement this payment. The parameter is used to value a particular farm’s milk to the Co-operative. This means each farm may be paid a different amount per milk solid relative to the Co-operative average.

At present the parameters include the fat and protein composition of the milk, and the volume. Going forward these parameters will include the achievement of Te Pūtake and Te Puku. The CDP will be made at the end of the year in the final retro payment.

How can you reach Te Pūtake? You will need to meet achievements in four focus areas:

Co-op and Prosperity – you need to keep full and accurate Farm Dairy Records and submit them by 30 June 2022
Environment – you must have a Farm Environment Plan in place that focuses on the achievement of all good farming practices by 2025 and must be achieving at least three of four of the following key practices:
the farm’s purchased nitrogen surplus is at or lower than the target;
all on-farm plastics and unused agrichemicals are managed through an approved product stewardship scheme such as AgRecovery or Plasback;
there is no discharge of dairy shed effluent to water;
80% farm-grown feed across the season.
Animals – have and implement an Animal Wellbeing Plan developed with and signed by your veterinarian addressing nutrition, health, environment and behaviour.
People and Community – you will need to complete all three sections of the DairyNZ Workplace 360 assessment and achieve 100% on the foundation level.

If you reach Te Pūtake you will receive 7 cents per kgMS.

For farms that meet Te Pūtake, the next step is Te Puku. To achieve Te Puku, you’ll need to achieve milk quality excellence on at least 30 days during the season. These do not need to be consecutive days. You’ll then receive an additional 3 cents for every kgMS supplied during the season that meets the excellence standard.

The amount and targets will be set annually by the Fonterra Board. The total amount available to be paid to Fonterra’s farmers does not change, but a proportion of the Farmgate Milk Price will be available to be redistributed between farmers to better reflect individual farm’s achievement against the Co-operative Difference Framework.

Fonterra’s Living Water Partnership

Sun, 20 Feb 2022 09:13:52 GMT

Living Water started in 2013 as a 10-year partnership between Fonterra and the Department of Conservation. This partnership brings together farmers, scientists, councils, mana whenua, and local communities to make a real difference for freshwater in New Zealand.

The partnership works in five regions across the country:

Northland, Kaipara Harbour – Wairua River catchment;
Hauraki, Firth of Thames-Tikapa Moana – Pῡkorokoro-Miranda catchment;
Waikato, Peat Lakes – Areare, Ruatuna, Rotomānuka catchments;
Canterbury, Te Waihora-Lake Ellesmere –Ararira-LII catchment; and
Southland, Awarua-Waituna – Waituna catchment.
Each region has its own strategic plan and annual works plan.

A new project supported by the Living Water Partnership which was announced in January 2022, will help on-farm advisors grow their understanding of biodiversity, with a view to further building biodiversity objectives into Farm Environment Plans.

“Farming with Native Biodiversity” is a 20-month project coordinated by the NZ Landcare Trust and funded by the National Bioheritage Science Challenge (Ngā Koiora Tuku Iho), Living Water, Silver Fern Farms and the Ministry for Primary Industries.

For more information on this project see the link below:

https://www.fonterra.com/nz/en/our-stories/articles/fonterra-brings-biodiversity-to-the-forefront-of-farms.html

It’s full steam ahead for Dargaville Honda Motorcycles and Marine

Thu, 09 Dec 2021 09:30:48 GMT

Like a well-oiled machine, the team at Dargaville Honda Motorcycles and Marine understand the need for a great ‘Accountanic’ (aka Advisory Mechanic) to ensure the longevity and top-notch performance of their business not just for now, but for the future too.

It’s a family affair at Dargaville Honda Motorcycles and Marine. Bruce and Judy, along with son Bryan have owned the business since 2003. Bruce and Judy’s daughter Chloe helps out managing the business when’s she’s not at home raising her young family. In addition, the McKenzie family looked to Gunson McLean for advice and support around their family farm for many years, until recently selling it to focus on the expansion of Dargaville Honda Motorcycles and Marine.

Shiralee McLean is their lead Advisor and Bertus manages their compliance work.

Bruce tells us that thanks to their long-standing relationship, the trust and great advice provided by Shiralee, and the team isn’t questioned. It is held in high regard and used on a day-to-day basis.

“The role that Shiralee plays in the business advisory space is an essential part in the success and growth of the McKenzie business,” says Bruce.

As business advisors, we see our role as helping Bruce and the team to keep growing, moving forward and maintaining personal enjoyment and satisfaction in these ever-changing times.

Dargaville Honda Motorcycles and Marine have diversified in recent years to include lawnmower services, as well as high end services for luxury vessels, to their offering.

Make sure you head to their shop to get the boat ready for summer and even stock up on summer fishing supplies, including bait. Don’t forget to follow them on Facebook and Instagram or, if you’ve been a customer recently, write them a review.

The team at Gunson McLean are super privileged to be working alongside such a great bunch of Northlanders and are excited about the future ahead of the McKenzie family.

Gunson McLean’s Big Catch

Thu, 25 Nov 2021 09:42:20 GMT

Carl Watkins & Philip Smith have partnered with Shiralee and Craig since the early beginnings of Gunson McLean back in 1994.

Carl owns and manages the Whangarei stores, while Phil owns and manages the KeriKeri store. Along with their teams the pair are experts in anything related to the outdoors. Their friendly teams are always on hand to help those people who frequently enjoy hunting, fishing, diving, camping and tramping. They make sure their customers are properly prepared to enjoy what they set out to do, successfully and safely.

Both Carl and Phil meet regularly with Shiralee to review and manage their financial and taxation information, and chew the fish on the future strategy and direction of their businesses.

Business advisory plays an important part in the success of all businesses, and we love being an integral part of seeing our clients’ businesses grow from strength to strength. It is great to witness both these Hunting and Fishing stores as they develop and establish themselves as the providers of Northland’s largest range of hunting and fishing products available. You will always see Carl and Phil on the shop floor, helping and advising their customers with the best products for them. Their wealth of knowledge in this industry is second to none – keeping their finger on the pulse of their business ensuring it continues to thrive and grow.

As business advisors, we see our role within their business is to assist them to keep growing and moving forward while retaining their personal enjoyment and satisfaction in these forever changing times.

We can’t go past their two summer competitions this summer. Have you heard about them?

Win a Kiwi Legend Ute Competition

HOW TO ENTER: Spend $50 at any Hunting & Fishing New Zealand Retail store.
Enter online at www.winathuntingandfishing.co.nz to submit your entry.
Every $50 spent gives you one entry into the draw.
The competition runs from 12.01am on 1 November 2021 to 23.59pm on 28 February 2022

Win an Extreme 605 Game King Boat Competition

HOW TO ENTER: Spend $50 at any Hunting & Fishing New Zealand Retail store on Shimano, Rapala & Sufix products.
Enter online at www.winathuntingandfishing.co.nz to submit your entry.
Every $50 spent gives you one entry.
The Competition runs from 12.01am on 1 November 2021 to 23.59pm on 28 February 2022

Interest deductibility proposals at a glance

Thu, 25 Nov 2021 09:39:29 GMT

The Government intends to limit the ability to deduct interest to make residential properties a less attractive investment option and to help level the playing field for first home buyers.

The proposal is that, from 1 October 2021 (yes this October), interest will not be deductible for residential property acquired on or after 27 March 2021. For the properties acquired before 27 March 2021, generally investors’ ability to deduct interest will be phased out between 1 October 2021 and 31 March 2025. Some properties are excluded from these rules and some exemptions are proposed.

Below is a quick overview of the proposals. Please note these are set to be considered by Parliament so may change.

Phasing out interest deductions for properties acquired before 27 March 2021:

Acquired date for tax purposes

For tax purposes, a property is generally acquired on the date that a binding Sale and Purchase Agreement is entered into – even if some conditions still need to be met prior to settlement.

An investment could also qualify for phased-out deductions even if the property is acquired on, or after, 27 March 2021, provided the purchaser did so as a result of an irrevocable offer made on or before 23 March 2021.

Generally, any residential investment property in New Zealand that is suitable for people to live in long-term will be affected by these proposed changes. Typically, this would mean a house or an apartment, whether it is used for providing short-term or long-term accommodation.

Exemptions

There are exemptions, however. To minimise any impact on housing supply; property development and new builds will be exempt from the proposed rules.

Types of property to be excluded from the changes.

The main home is not affected by these proposals.

Commercial property unrelated to the provision of accommodation is not affected by the interest limitation proposal.

There are types of residential property that are proposed to be excluded from these rules are they are:

Main home
Farmland
Certain Maori land, papakainga and kaumatua housing, and land transferred as part of a settlement under the Tiriti o Waitangi/Treaty of Waitangi
Emergency, transitional, social and council housing
Commercial Accommodation
Care facilities
Retirement villages
Employee accommodation
Student accommodation
Land outside of New Zealand

Previously denied interest deductions may be available when residential property is sold if the sale is taxable, although the deduction may be limited to the gain of the sale. As you can see these proposed changes are complex and we strongly suggest you talk to us should you think that these proposed changes may affect you and your business. We deal with these types of amendments often and will guide you through the rules and proposals in plain English, so you are clear about the changes and how they could affect your business.

Preparing for Christmas payroll – what you need to know

Wed, 27 Oct 2021 09:56:14 GMT

Payroll can get a bit more complex during the silly season, so we’re sharing some special tips for you.

We discuss common payroll pain points and things you should be aware of leading up to the summer break. We’ll touch on points on how to get through and how to run your Christmas pay and key things to remember.

Our Top Tips are:

Getting it sorted early
Closedown periods – what are the rules
Running your Christmas pay — key things to consider
Working out how much annual leave a team member will accrue by Christmas
Bonuses and paying out leave
Working on a public holiday
When are banks open to process payments?

Now it’s time to get into the detail and make sure you and your payroll team are ready this Christmas.

Get Sorted Early

Leading up to Christmas is often a busy period and the last thing you want to worry about on Christmas Eve is paying your people! Communicate with your team early and get your Christmas break roster locked in. This way you can organise pay cycles and annual leave. Remember, keep it simple!

You’ll want to ask yourself some of the following questions to help prepare:

Are we closing down during Christmas and New Years?
Who’s taking leave? What type of leave are they taking? (e.g. annual leave or leave without pay)
If you’re open, who’s working and when?
When are the public holidays? Will anyone be working on those days?
Do I need to run multiple pays in advance of Christmas?

Once you’ve covered off all these questions, and worked out a plan, then it’s important to let your team know, especially if there’s any changes to the norm.

What are the rules in Closedown periods?

Closedown periods are common in a lot of workplaces, and differ between industries and organisations. Some organisations opt to closedown, others decide to stay open. What’s important to remember is that if your business has an annual closedown, you need give your people at least 14 days written notice. This is so the appropriate leave arrangements can be put in place and payroll can be submitted and ticked off.

When you closedown, employees will need to do the following:

take annual leave while your business is closed down, and
take leave in advance or leave without pay (agreed) if they don’t have enough annual leave available to cover the closedown period.
This is only applicable for employees who are entitled to annual leave. Under the Holidays Act, employees not entitled to annual leave at the time of the closedown must be paid 8% of their gross earnings as at the start of the closedown date and their anniversary date for annual leave reset.

Closedown periods often include public holidays. Remember to pay your team if the public holiday falls on a day they’d usually work. Employment NZ has more useful information and tips about closedown periods and annual leave.

Key things to consider when running your Christmas pay

There’s a few things you’ll want to consider when running your Christmas pay:
Make sure you’re running a regular pay cycle and don’t mix things up. Set it up in advance so you can manage different periods of leave appropriately.
Ensure the pay period matches the dates your team member is being paid for.
It’s common to be considering paying your team leave in advance or leave without pay during the Christmas period. Make sure you and your team are aware of the different types of leave available and how they can use them. Things like Leave Without Pay can add extra steps to your payroll.
If it all lines up, then you’re good to go. Hit go!

Working out how much annual leave a team member will accrue by Christmas

Everyone wants to know how much leave they’ll have by Christmas. Thankfully, we’ve got a friendly formula for you and your team to use if they’re on standard hours each week. This way you can work out their leave.

For team members on the same standard hours each week (e.g. 37.5 hours)

Here’s a formula to help you work out the amount the employee will accrue between now and Christmas.

[standard work hours] x [number of weeks until Christmas] = [sub-total hours]

[sub-total hours] x 4 = [total hours]

([total hours] ÷ 260) x 5 = [hours of annual leave accrued before Christmas]

For example, with a scenario:

Janet will accrue 14.4 hours of annual leave by the time she reaches Christmas. She’ll have 60 hours (8 days) of leave available to use over the Christmas and New Year’s period.

Note: Your leave balance in hours/days is an approximation only, it’s the leave balance in weeks that will always add to four weeks for every 12 months of consecutive employment. You can read more about leave in weeks here .

Bonuses and paying out leave

Christmas is a common time for businesses to pay out a bonus or cash up annual leave, generally as a lump sum (annual or special bonus). These are considered one off payments and you’ll want to make sure the correct tax is deducted. Most payroll systems should do this automatically for you. If not, here’s a basic guide:

Work out your employees income bracket (e.g. $48,001 to $70,000) and apply the tax rate for that income bracket to the bonus.

To do this:

Work out what your staff member has earned, before PAYE, over the last 4 weeks.
Multiply this figure by 13 (or 12 if they are paid monthly).
Add the bonus (lump sum) amount to the outcome above.
See what tax bracket this figure sits in ( Inland Revenue ).
Deduct the appropriate PAYE amount from the bonus.

Inland Revenue has detailed information about how to get this right, along with information about PAYE tax brackets and secondary taxes.

Tip: In some payroll software, you can reduce the Kiwisaver contribution rate for a specific pay, it could include a lump sum payment. The employee may request this one-off change and then revert back, as long as you agree. For example, if the employee is contributing at 8%, they could drop their contribution rate to 3% for this pay period.

It’s also the time of year for employees to request to cash up annual leave, also considered a lump sum payment. You can follow the same process as above.

A maximum of one week (of an employee’s four-week entitlement) can be cashed out every 12-months of continuous employment. Cashing up annual leave needs to be requested by the employee in writing, and agreed by both parties. The employer may say no. Employment NZ has some useful information about cashing up annual leave.

Working on a public holiday

To determine how your team should be paid when they work on a Public Holiday, you need to check if they usually work on this particular day.

If the public holiday is their normal working day, the employee should be paid time and a half for the hours worked plus they are also entitled to earn an alternative public holiday (day in lieu).
If it’s not their normal work day, the employee is only entitled to be paid time and a half for the hours worked.
An employee doesn’t need to work a public holiday unless they would normally work on this day and it’s stated in their employment agreement. Employment NZ have put together five employment tips for Christmas where they dive into public holidays and other common questions.

When are banks open to process payments?

Payments between banks aren’t processed on public holidays, for example Christmas and Boxing Day. The best way to manage this is to set up payments to go through early and avoid any doubt.

Outgoing and incoming payments:

For example, outgoing payments that normally happen on a Monday (Christmas Day and Boxing Day are observed on Monday and Tuesday 2021) won’t be processed until the next business day, Wednesday.

For incoming payments, you may see money coming through to your account earlier as organisations often setup payments to go through earlier during the Christmas period.

Business Basics: MYOB’s 10 tips to improve cashflow

Wed, 27 Oct 2021 09:47:22 GMT

You can run a profitable business, but unless you have cashflow under control the odds are against you. Here are some simple accounting tips to get it right.

According to Dun and Bradstreet , 90 percent of small business failures are caused by poor cashflow management.

As the world is undergoing challenging times, it’s never been more crucial to be on top of cashflow and business performance.

The MYOB Business Monitor, which surveys local business owners, regularly finds cashflow listed as a chief concern or cause of stress for around a third of respondents.

Want to make sure you’re not just another statistic? Here are ten tips to set you on the course for improved cashflow.

1. Invest in a reputable online accounting package

With a reputable online accounting package, you’ll be on your way to better manage your cashflow from the outset.

You’ll have a handle on your accounting information and will can make more informed decisions around your finances.

MYOB online accounting will provide just that.

You’ll be able to automate your invoicing to your clients and set the payment terms that suit your business.

You can even see when your clients receive, open and pay their invoices. And, you can email regular statements as reminders as well.

As a result, you’ll spend less time on debtor management and get paid faster.

2. Debtor management in a mobile world

With your accounting software is in tow, you can better manage your debtors and cashflow with the use of mobile invoicing features in your accounting software.

There’s no reason why you can’t be creating an invoice on your phone or tablet before you’ve even left a client consultation or provided a service.

You can also process credit card or EFTPOS payments on the spot whilst your accounting software is automatically updated to save you time.

3. Creditor management

On the other side of the equation, businesses should manage the timing of payments of creditors too.

If you’re paying suppliers too quickly while clients drag out paying your invoices, then you will put your business under cashflow pressure.

That’s not to say you need to withhold timely payment of creditors, but rather keeping a closer eye on how you spend your business’s money.

With online accounting software, not only can you receive and pay bills, these days you can even capture and upload physical receipts via a mobile phone app — all of which allows you to get a much clearer idea of what you’re spending and what you owe.

4. Prepare a cashflow forecast

A cashflow forecast is a deeper dive into your business’s incoming and outgoing funds over a particular time frame.

It will help you plan for those looming bills and other planned expenditure and plan for the timing of the outflows so that don’t overspend when cash is tight, and you stay in business.

For example, a lot of businesses will go out and buy a company car when they’re flush with cash – without taking into account coming lean times.

Cashflow forecasts show the cash fluctuations caused by such actions.

Software like MYOB allow you to setup a cashflow forecast to help you better navigate performance.

5. Create a budget

Budgets are such an important part of running a successful business.

They’re the road map for your finances.

Budgets are an estimate of how your business will perform in the coming year.

It’s so easy to quickly lose control of your finances without a budget, and they set you on the path of achieving your goals by helping you make smarter decisions around your finances.

At times, you may need to adjust your budget as your business changes as an unexpected bill creeps in.

Budgets can be made easy with the use of your MYOB AccountRight and Essentials.

They’re very easy to set up, use and manage. They also allow you to compare past years and compare actuals too.

By monitoring your cashflow and reviewing your budgets regularly, you should be able to identify any issues early and making plans to avoid any tough times.

6. Review and update cashflow budgets

During challenging times, it is wise to keep your finger on the pulse so you can better manage any impact a crisis or slowdown may have on your business cashflow.

By reviewing and regularly updating your cashflow budgets or forecasts you are better placed to make changes before issues become major problems.

Therefore, using a cashflow tool to help you will make it so much easier to stay on top of your business.

7. Reduce overheads

Business owners should always look for ways to reduce their overheads, so they maintain a healthy financial position.

Savings can be made by reducing marketing and advertising budget, minimising spend on consumables and any other non-essential costs.

Reducing labour costs with minimal disruption to the business is also a good way to preserve cash. Consider reducing contract hours and distributing work to permanent staff (provided it is within the realm of your industry award).

8. Maintain stock levels

Cash is consumed if a business buys too much stock – so by keeping the right amount of stock on the shelves, cash is released to be used in other areas.

It’s better to buy frequently and less, to keep the cash in the business.

There are many additional apps that will help your business to maintain the optimal levels and avoid over ordering.

9. Seek other revenue streams

During times of revue decline it is important to evaluate how you can continue to trade by seeking alternative revenue streams. Pivoting your business can be crucial to your survival.

During the pandemic we saw many businesses pivot and create new revenue streams which helped them survive. By opting for online options and staying current will help you to drive more sales.

10. Go app crazy

Speaking of apps, there are a raft of apps available to complement accounting software such as MYOB.

These apps can automate the way you run your business so that you have more time to make sales.

Products such as EzyCollect (debtor management tool) and Calxa (cashflow and budgeting tool) you are armed with all that is required to keep you on top of it all and run your business more efficiently.

A business doing good

Wed, 27 Oct 2021 09:43:45 GMT

We wanted to shout out to the good folks at Cooper Tyres Whangarei. Like us they needed a break from some of the negativity that is going on around us at the moment, so they decided to give back. Earlier this month they gave away to the community a whooping 25 boxes of fresh vegetables to those families in need during Lockdown. We love hearing about good companies doing great things for our community and wanted to share their story.

The produce for these vegetable hampers were kindly donated by Rob’s Veg. They are based here in the Winterless North. You can find Robert and Simone’s stall at the Whangarei Markets on a Saturday morning to the left as you enter from Water Street. Next time you are at the markets let them know that they have done a great thing for our community.

What a collaboration from two of our local businesses. Thank you for doing your bit in these challenging times.

If you needed new tyres contact the team at Cooper Tyres on 09 430 2180 and you are always in need of veggies. Next time you need to fill the fridge reach out to Rob or Simone on 021 237 5874 .

Business Basis: Cashflow Management

Tue, 28 Sep 2021 11:10:53 GMT

For small-to-medium businesses in particular, cashflow is one of the most important elements of business financial health. In fact, inadequate cashflow is one of the major causes of business failure.

So, what is cashflow? And how can you calculate, plan and manage it to your business’ financial advantage?

Cashflow measures the net amount of money going in and out of a business over a set period of time. It also shows the financial health of a business by helping you to understand your ‘liquid cash’ position and helps you predict how much cash you can expect to have available at any given point when used for forecasting.

Managing your cashflow is essential for planning ahead. You’ll be in a much stronger financial position if you understand how much cash you need, where it’s coming from and how long it takes to get it.

Here are some steps to help you with your cashflow management:

1.Understand Your Working Capital Requirements

Understand the amount of working capital your business needs to keep running. You’ll want to consider how much inventory you need to hold, what payments are due and when, and the length of time it takes to cycle from cash out to suppliers to cash in from customers.

2. Establish Your Working Capital Needs and a Buffer

Make sure your business has enough cash in the bank to meet your working capital needs. You’ll also want to ensure you have a buffer – either business savings, personal funds, overdraft or a revolving credit facility to fall back on in the event of a rainy day.

3. Plan Ahead

The unexpected will always happen, and it’s never a good thing to find out that you can’t survive when it does. Plan ahead by preparing cashflow forecasts for the upcoming year as well as a month-by-month basis.

4. Review Your Systems

Review your systems to ensure that you’re invoicing your customers regularly, and that you’re consistently updating how much is owed to you and how much you owe. Always review incoming invoices as well to ensure charges are accurate.

Your accounting invoicing software keeps track of outstanding payments and sends automatic reminders when invoices are overdue. Income is updated automatically when paid, so you always know where you stand.

5. Speed Up Your Cash Conversion Cycle

A cash conversion cycle measures the time span between disbursing and collecting cash. You can speed up this timeframe by asking for a deposit, putting customers on retainer or requesting monthly payment. You could also cut back your inventory levels or negotiate shorter delivery cycles or longer payment terms with your suppliers.

6. Make it Easy for Customers to Pay You

Always give your bank account details on your invoices, accept EFTPOS and credit cards, and set up a PayPal account. The easier you are to pay, the quicker you can receive funds and the better your cashflow position will be.

A Deep Dive into Profit Margins

Tue, 28 Sep 2021 11:06:23 GMT

As a business owner, a crucial part of the role is keeping an eye on key financial metrics — understanding and calculating profit margin is a great place to start.

If the money doesn’t keep flowing, you won’t be able to keep the doors open for long.

One element of keeping track of cash flow and profits is calculating margin, so let’s explore this idea in a little more detail.

What is a profit margin?

The profit margin is a percentage that measures an organisation’s profitability.

It gives you the amount out of every dollar of a sale that turns into profits and gets kept as earnings.

For example, if your company achieved a 25 percent profit margin, that means the net income is $0.25 for every dollar of sales generated.

This margin is what you get when you subtract expenses from revenue.

What are the different types of profit margins in business?

When someone refers to a margin in business, they typically mean an organisation’s bottom line. That is, the final figure after all other expenses, including taxes, have been subtracted from revenue. This is the ‘net margin’.

However, there are also three other types of profit margins you can calculate.

The gross profit margin is what you get once you take the direct costs of your product or service (the cost of goods sold, COGS) from sales revenue.

This figure is the simplest margin to determine.

If you produce multiple goods or services, you can average out the costs of creating each or calculate a separate, gross margin for each offering.

The gross profit number doesn’t include other expenses, though, so also consider operating profit margin.

This margin acknowledges operating costs, sales expenses, admin costs, asset depreciation, research and development, marketing charges, amortisation rates, and so on.

As the name implies, the operating margin lets you know how much of each dollar you have left in profit after all the operational costs to run your business get factored in.

Pre-tax profit margins are the leftover amounts you have after taking your operating margin and deducting things like debt, interest, and any other charges or inflows (for example, income from investments) that don’t relate to your venture’s main business.

Finally, as mentioned above, the net profit margin is the final amount after taxes get paid.

Net profit margin is the trickiest one to track since it involves so many different elements, but it’s the one that will give you the most significant insights into your company’s position.

Using MYOB Essentials? We talk you through how to Prepare a Budget

Tue, 28 Sep 2021 11:03:49 GMT

You can create as many budgets as you want, and for whatever period length you want – from just one month to a budget that spans a couple of financial years. You can also create multiple budgets for the same period.

To create a budget

Go to the Reports menu and click Budgets .
Click Create budget and enter your budget name and the period you want to enter details for.
Click Create and a blank budget will appear.
Fill in your budget details in one of three ways:
Start from scratch: Type the income and expenses you expect, or hope to achieve, for the period directly into the budget edit area.
Import the previous year’s actual figures: If you have been using MYOB Essentials for more than 12 months, you can import last year’s actual figures into the budget and make any adjustments for the new year.
To do this, click Import > Import last year’s actuals . Note that this will overwrite amounts already entered in your budget.
Import a CSV file: You can use Microsoft Excel, or another spreadsheet application, to prepare your budget. You can do this by exporting the budget as a CSV file, working on it in Excel and then importing it back into Essentials. Learn more .
Click Save

Check out the MYOB video here

Gunson McLean out in the Community

Tue, 28 Sep 2021 11:00:53 GMT

We are so proud to once again be sponsors for the third year running of the Fred Ogle Memorial & Lynley MacDonald Cycling Event

This is a key event in the Northland cycling calendar and helps to bring awareness around the importance of road cycling safety. Organised by the Marsden Wheelers Road Cycling Club , this event is now in its 13th year and is fun for all ages and all levels of cyclist – all you need is a road worthy bike and a safety helmet!

Join us on the 7th of November! Click below to register and to find out more!

https://www.webscorer.com/register?raceid=249521&fbclid=IwAR0Kg48r7mOohfxN7QVcvOcprv15H2Hb1xJ9DtBaEKKZAau4lmI5ipv4CKQ

Applications closing for current wage subsidy, opening soon for new subsidy

Wed, 01 Sep 2021 11:12:47 GMT

Applications for the initial two-week Wage Subsidy August 2021, which opened on 20 August 2021, close at 11.59pm on Thursday 2 September 2021. Applications for a second round of Wage Subsidy – to be known as Wage Subsidy August 2021 #2 – open at 9.00am on Friday 3 September.

The COVID-19 Wage Subsidy is to support employers and self-employed people throughout New Zealand, so they can continue to pay employees and protect jobs for businesses affected at Alert Levels 3 and 4.

For further information click here

Wage Subsidy Update

Mon, 23 Aug 2021 11:23:23 GMT

Breaking News!

New Zealand will remain at Alert Level 4 until 11.59pm on Friday 27 August, with a review on Thursday 26 August. Auckland will remain at Alert Level 4 until at least 11.59pm on Tuesday 31 August, with a review on Monday 30 August.

Significant Government support for businesses and workers has been triggered following a rise in alert levels to combat COVID-19 in the community.

The Government has activated several business support measures to provide certainty to businesses and workers and ensure we get money out the door quickly to protect jobs and keep firms’ operating.

The measures include:

The Wage Subsidy Scheme (WSS) which is available nationally when there’s a regional or national move to Alert Levels 3 and 4 for a period of seven days and helps eligible businesses keep paying staff and protect jobs. The rates have been raised to reflect increased wage costs.
The Resurgence Support Payment (RSP) is a payment to help support businesses or organisations with one-off costs due to a COVID-19 alert level increase to level 2 or higher. This is available to eligible firms at the same time as the WSS.

More details on applying for the WSS will be available soon on the Ministry of Social Development’s website, and information on the RSP can soon be found on Inland Revenue’s website.

Other existing support for individuals includes the Leave Support Scheme (LSS) and Short-Term Absence Payment (STAP) rates will also be increased in line with the WSS, as each of these payments is set at the same rate.

The Government remains well-placed to respond to COVID-19. We have over $1 billion left over from the money set aside for WSS and RSP and if needed, the COVID-19 Relief and Recovery Fund has around $5 billion. Our net debt position is much lower than forecast and well below other countries.

A strong public health response has given us a strong economic response and puts economic activity back to pre-COVID levels. Our response will continue to be based on those principles.

More information can be found on the COVID-19 website: https://covid19.govt.nz/

Additional details:

The Wage Subsidy Scheme (WSS) allows eligible employers anywhere in the country can apply for the WSS if they expect a loss of 40 percent of revenue as a result of the Alert Level increase announced today. The WSS rates have been increased to reflect the increase in wage costs since the scheme was first used in March 2020. Businesses will be eligible for $600 per week per full-time equivalent employee, and $359 per week per part-time employee. The Wage Subsidy will be paid as a two-week lump sum. Applications open on Friday 20 August with the first payments usually available after three days.
A Resurgence Support Payment (RSP) is available if firms incur a loss of 30 percent of revenue as a result of the Alert Level increase. The RSP is worth up to $1500 plus $400 per full-time equivalent employee, up to a maximum of 50 full-time employees (so up to a total of $21,500).
The Leave Support Scheme (LSS) provides a two-week lump sum payment of either $585.80 per week for full-time workers, or $350 per week for part-time workers, who must self-isolate and cannot work from home. More information is available at https://www.workandincome.govt.nz/…/who-can-get-it.html
The Short-Term Absence Payment (STAP) provides a one-off (once per 30 days) $350 payment for workers who must miss work due to a COVID-19 test and cannot work from home. Further information about this payment is available at https://www.workandincome.govt.nz/…/short…/index.html

We are here to support you where we can, so if you are unsure if you qualify for a subsidy, please get in touch.

Business Basics: A lesson in Cashflow statements

Mon, 23 Aug 2021 11:20:15 GMT

Whether you’re a sole trader looking to improve your business finances, or just starting out in a small business, understanding cashflow statements should be top of your priorities list.

Not everybody’s comfortable working with numbers and coming to terms with financial statements can feel overwhelming for many freelancers and new business starters.

Cashflow statements are a great example of this because they’re also one of the most important types of statements to get your head around. We here at Gunson McLean, coach you through these so that you truly understand how your business operates.

This article will cover:

What is a cashflow statement and why you need one
How to create a cashflow statement
Ways to use your cashflow statement

Learning to read cashflow statements will offer you an insight into the health of your business at any one time, which is an important first step to being able to create a cashflow forecast. Let’s start from the top.

Cashflow statements: What are they and why do they matter?

Firstly, a cashflow statement is one of three financial statements used to provide information about a business. You may also have heard of the balance sheet or a profit and loss statement.

Like the way a business plan helps provide an overview of your offering, financial statements can provide a similar snapshot of the monetary side of your business.

A cashflow statement shows us how much cash is moving in and out of our business over a certain period. A business owner needs to know if there is enough cash in the business to pay expenses. This statement is the one to help you determine this.

Depending on your business, a cashflow statement can be for any particular time period, but monthly statements are most popular. A monthly cashflow tells you how much money the business has at the beginning of the month, money that came into the business during that time and money that went out of the business.

The cashflow statement is sometimes called the ‘honest form’ for depicting how your business is going. This is why cashflow statements are so important to business owners: they put the reality of a business in black and white.

You may have heard the term ‘cash is king’. It refers to having positive cashflow in your business — in other words, having more dollars coming in than going out. For this reason, a cashflow statement allows the business owner to answer these basic questions:

How much cash has come in?
How much cash has gone out?
What needs paying?
Can I afford to pay what I need to pay?

Cashflow statements will also be useful when it comes to seeking further funding, as it’s one of the chief documents an investor or bank will want to see.

Producing a cashflow statement

The most common way businesses produce cashflow statements is through accounting software, like Xero and MYOB.

The reason for this is that accounting software allows you to set up your financial information once and have it update on the go. With the full benefit of mobile devices and the internet, invoices and receipts can all be secured and accounted for with the tap of a finger.

A more traditional approach will require you to take detailed records of your business transactions before laying them out in a spreadsheet, potentially adding hours to your workday and greatly increasing the risk of errors.

Like any business report or plan, it’s vital to understand what the financial statement or report is telling you, and that means going over it in detail. And, when in doubt, you’ll need someone who’s an expert in business finances to help clear things up. It’s never too early or too late to consult with an advisor.

Making the most of your cashflow statements

The power of the cashflow statement lies in its ability to reveal how much cash you will need at any given time in your business.

Getting into the habit of running this kind of business report will help you work out what your expenses are and when you need to pay them over longer timeframes. It then becomes a tool for you to identify any red flags that could hamper your growth, or make it hard to pay for staff or suppliers, for example.

By heeding these warning signs, you help avoid future financial trouble and create a reliable, more sustainable business in the process.

As you begin to invest more into gaining clients or expanding your operation in some way, you’ll do so with confidence knowing exactly what you’re able to afford.

Cash flow forecasting

Mon, 23 Aug 2021 11:16:58 GMT

Cash flow is king when you’re contracting, self-employed or running a successful small business. Here’s where you’ll find information on how to get it right.

Forecasting when money will come in and out will help you plan for the future. Being able to predict peaks and troughs helps you avoid financial difficulties.

It’s also a vital business planning tool. Use cash flow forecasts to plan for expansion and growth without overstretching your resources.

What is a cash flow forecast?

A cash flow forecast is in essence a cashbook that projects you or your business’s income and outgoings for any given period in the future, eg week, month, quarter or financial year.

For each period, it lists:

your projected starting account balance
your predicted income
your estimating outgoings, eg bills, salaries, raw materials
your projected ending account balance
any money left over.

It’s typically presented as a spreadsheet, but many contractors, sole traders and small businesses use accounting software and work with their accountants or bookkeepers to ensure greater accuracy.

A cash flow forecast is only as valuable as the information and detail put into it.

Predicting income

This needs careful thought. You’ll have to make an informed judgement call on how much income you think you’ll generate.

Include three variations of your predicted income:

A pessimistic estimate.
A realistic, or most likely, estimate.
An optimistic estimate.

You’ll be better prepared for different scenarios — and if you’re seeking capital, you can show investors and bank managers you’re not just planning for the best-case scenario.

If you are keen to understand more about Cashflow, reach out, we are here to support you.

Caring for your mental health – use Smiling Mind

Mon, 23 Aug 2021 11:14:37 GMT

Try the Smiling Mind free mindfulness app and practice your daily meditation and mindfulness exercises from any device. The Smiling Mind app is a unique tool developed by psychologists and educators to help bring balance to your life. All it takes is 10 mins a day.

Jump onto their website for further free information

Business 101: Profit Margins - Gunson McLean Ltd

Wed, 18 Aug 2021 11:42:44 GMT

As a business owner, a crucial part of the role is keeping an eye on key financial metrics — understanding and calculating profit margin is a great place to start.

If the money doesn’t keep flowing, you won’t be able to keep the doors open for long.

One element of keeping track of cash flow and profits is calculating margin, so let’s explore this idea in a little more detail.

What is a profit margin?

The profit margin is a percentage that measures an organisation’s profitability.

It gives you the amount out of every dollar of a sale that turns into profits and gets kept as earnings.

For example, if your company achieved a 25 percent profit margin, that means the net income is $0.25 for every dollar of sales generated.

This margin is what you get when you subtract expenses from revenue.

What are the different types of profit margins in business?

However, there are also three other types of profit margins you can calculate.

The gross profit margin is what you get once you take the direct costs of your product or service (the cost of goods sold, COGS) from sales revenue.

This figure is the simplest margin to determine.

If you produce multiple goods or services, you can average out the costs of creating each or calculate a separate, gross margin for each offering.

The gross profit number doesn’t include other expenses, though, so also consider operating profit margin.

This margin acknowledges operating costs, sales expenses, admin costs, asset depreciation, research and development, marketing charges, amortisation rates, and so on.

As the name implies, the operating margin lets you know how much of each dollar you have left in profit after all the operational costs to run your business get factored in.

Finally, as mentioned above, the net profit margin is the final amount after taxes get paid.

Net profit margin is the trickiest one to track since it involves so many different elements, but it’s the one that will give you the most significant insights into your company’s position.

Want to know more about Business 101? Reach out to us on 09 438 1001

Becoming a profit for purpose business

Wed, 18 Aug 2021 11:39:52 GMT

For some business owners, making money isn’t the only motive for running a company. Here’s what it means to operate a profit-for-purpose business, and how to approach transitioning your existing business into one.

Businesses are made up of a range of different facets. They offer products or services that are needed by a specific market, they provide fulfilment and a livelihood to their employees, and they are generally run with the aim of turning over a profit.

https://www.myob.com/nz/blog/profit-for-purpose-business/

In recent times though, some business owners have been looking to add another dimension to their offering: a purpose that goes beyond profitability – a purpose of social impact.

These ‘profit-for-purpose’ businesses are not to be mistaken for non-profits or charities. While they operate like any other for-profit business would, they also utilise their resources to support and advocate for a particular cause and run their operations in line with the ethos of that cause.

Running a profit-for-purpose business can be very rewarding, but it doesn’t come without its own set of challenges, so being aware of the benefits and knowing how to navigate the difficulties is crucial in taking on this endeavour properly.

To gain practical insight into how operating a profit-for-purpose businesses works, we reached out to entrepreneurial sisters Jess and Stef Dadon, who recently morphed their profitable shoe business, Twoobs, into a profit-for-purpose company.

Despite seeing great success in their for-profit business, the Dadon sisters decided that they wanted something more out of Twoobs and chose to make environmental sustainability an intrinsic part of their offering.

“We realised that we wanted to use our brand to affect genuine change and recognised the opportunity we had to move toward a completely sustainable offering,” Jess told The Pulse.

The benefits of going profit-for-purpose

According to the Dadon sisters, aside from the obvious benefits associated with social impact, there are many other positive aspects of running a profit-for-purpose business.

“We found that taking our business down the profit-for-purpose pathway changed our business for the better,” Stepf said.

“Many of our customers were excited about this change, and changed from regular consumers to brand-ambassadors, something which is very difficult to achieve without standing for a purpose.

Stef also emphasised the benefit that this move had on their business’s employees’ approach to their work.

“It’s difficult to motivate young people solely based on mercenary rewards. We found that adding a purpose beyond profitability to our offering gave our employees a level of excitement and fulfilment that had not been there before.”

“The follow on impact on the rest of the business was just amazing to watch.”

Having successfully transitioned from a regular for-profit business to a company that is driven by purpose, the Dadon sisters had a number of pointers to share with other business owners contemplating making this change as well.

1. Consider your motives

The first pointer, which came from Stef, was for founders to make sure that their motives for making the transition come from the right place.

“Making the change to profit-for-purpose should not be in order to introduce something exciting into a mediocre business model,” she said.

“Impactful change occurs when founders are confident about their ability to run a successful business and have strong relationships with their customers and employees.

“Make sure you tick those boxes before venturing down the profit-for-purpose route.”

2. Transparency makes all the difference

The next piece of advice came from Jess, and it was all about being genuine.

“Don’t oversell your impact,” Jess said.

“Offer full transparency to your customers and employees. Don’t just use buzzwords and throwaway lines in your marketing communications. Make sure to find out where your ability to affect change actually lies and tell that story to your customers.

“By being honest with your people, you’ll receive the credibility you need in order to bring them along the journey with you.”

3. Purpose requires education

The next tip that both Jess put forward was the important role that education plays in devoting your offering to an important purpose.

“Self-reflection and education are two of the most important parts of starting a profit-for-purpose offering,” she said.

“When we started, we had no idea about what sustainability actually was, and what it meant to the two of us as individuals and business owners.

“We did months of thinking, reading and learning, just to make sure we were setting ourselves up to do it right, and the learning is ongoing.”

4. Expect some disappointment

The final pointer came from Stef, and it was all about bracing oneself for the downsides of changing your business offering to operate in line with the ethos of your purpose.

“Running a profit-for-purpose business requires passion, and the reality is that not everyone will share this passion, and some may even take a disliking to it,” Stef said.

“If you’re not disappointing someone, you’re not pushing forward, so when taking on this big task, don’t be afraid to lose some of your customers.

“The depth that you will create within your business will not only make up for it but will ultimately make your business stronger than ever.”

Running a profit-for-purpose business isn’t for everyone, but for those who do decide to take it on, the advice here is clear.

Having genuine motives, being completely transparent with your people, upskilling on your particular area of impact and preparing for some disappointment along the way will enable your business to enjoy all the benefits that running a purpose-driven company has to offer.

What’s new in sick leave entitlements

Wed, 18 Aug 2021 11:36:00 GMT

Sickness and leave entitlements have become a concern since we entered a global health crisis. So it’s not too surprising that our national sick leave rules are about to change in a way that affects pretty much every employer in NZ.

What is changing?

Basically from 24 July 2021, your team’s 5 annual sick days will increase to 10.

The 5 extra days will kick in when an employee reaches their next entitlement date – so either after their 6 month anniversary, or on their next sick leave anniversary (every 12 months from the first 6 months).

So let’s say you have two staff. One of them, Shiralee, is pretty new – she just started a few months ago. She’ll qualify for sick leave in another few months, which is well after July 24th, so on that date she’ll get the new 10 day entitlement. The other, Craig, has been around for a few years, and he just had his usual annual month sick leave anniversary a few weeks ago. Craig won’t move onto the 10 day allowance until his next anniversary – which won’t be till this time next year.

The maximum amount of unused sick leave that anybody can build up stays at 20 days.

What do you need to do?

Update your employment agreements – the sick leave clause for any new employees should now read 10 days. Entitlement dates (from first 6 months of employment) and the 20-day cap don’t need to change. If you’re already giving 10 days as a gesture of generosity to your staff, you might want to consider upping this even further, or giving them a different perk.
Check your payroll system – if you’re with a provider, make sure they’ve announced an update or are prepared to make the changes in time. If you’re managing payroll yourself with a manual system, make sure you’ve updated your sick leave entitlements and calculations, and that you switch this over for your team as they reach their entitlement dates.
Notify your staff – this isn’t compulsory, but it’s a good idea to just let your team know that their entitlements have changed and when they should expect to see it come into effect, just to head off any questions.

We are payroll experts, so reach out if you need help, we are only a phone call away.