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Check out this months Go Fi8ure tip!
June 2011
Are your business’s mail procedures robust enough to manage risk?
Receiving the mail seems like an easy enough task. But when you’re running a business, it takes on new importance. In terms of keeping your cash flow healthy, the mail is a business’s main artery. Managing directors or business owners should see every piece of correspondence that arrives in the mail. They don’t need to sit down and read it all, but a good business owner should sight everything and be aware of anything that could impact the business. Nobody else should be making decisions about what mail is passed on and what is just put in a drawer or dealt with straight away.
In particular, IRD correspondence is a huge risk area where a lot of debt can rack up quickly if no-one’s monitoring it. Business owners are legally obliged to be trading in a positive, solvent situation, so they can’t afford not to be keeping a close eye on anything that comes from the IRD. For some people, this can be a challenge. I’ve known several business owners who were afraid of mail from the IRD and would delay opening it for weeks. One missed out on a $23,000 refund on their Income Tax because they didn’t open a letter and fill out the form it contained on time.
Bank statements are equally important. These should always be official statements that come through the mail from your financial institution. The business owner must sight and sign them off.
Emailed or online statements aren’t sufficient or safe in my opinion: it’s too easy to manipulate them. Regularly citing the latest expenses means you have a relationship in your head between daily operations and what you’re seeing on the business’s balance sheets. Managing directors should always have a dashboard feel of fortnightly payment streams.
Even if you’ve been working with your staff for a long time and trust them completely, that’s no excuse for complacency about your mail systems. People’s circumstances change. And your staff could change unexpectedly. What happens if your reliable admin person is unable to come to work for two weeks and there’s no formal process in place for managing correspondence?
Even small businesses should have simple processes in place that anyone can pick up and follow. These processes are based on straightforward principles, like requiring all mail to be opened and date-stamped on arrival. Risk mitigation measures such as making sure the person who receives and receipts the mail isn’t responsible for entering incoming cheques into the accounting system are important, too. (And while I’m on the topic, that accounting system should always assign sequential numbers to receipt incoming cheques so that anything raised and deleted stands out immediately.)
Having a few of these simple risk management processes in place around your business’s mail, payment streams and formal processing will help your bottom line stay healthy. So why not take the chance now to put some processes in place for the year ahead? If you would like to book a complimentary assessment on how these procedures could be implemented book online www.gofi8ure.co.nz.
May 2011
Looking for smarter direction in your business? GoFi8ure will find the right direction for your accounts!
Go Fi8ure offer an efficient, economical, bookkeeping service at your door, and general accounting solutions for professionals and small to medium-sized businesses. Whatever the nature of your business, we will help to put direction into your general business accounting, doing the things you hate or simply don’t have the time to do yourself. You’ll be worry-free to focus on running your business.
We offer a nationwide mobile service that allows you to take an accounts person on site at important times each month without actually employing an account manager. Be smart and save on hiring staff that require management direction - engage an expert! Our service packages start from just a few hours per week right through to our premium accounts package which provides full financial management.
GoFi8ure is an Approved Training Organisation, MYOB, and Xero Certified. We are also proud members of the New Zealand Bookkeepers Assoc Inc. We use all accounting and payroll software and can provide full staff training. GoFi8ure specialise in the following;
- Full financial administration; we’ll develop and manage a financial solution tailored to your business needs.
- Reliable bookkeeping services; we take on your accounts and look after the details. And our special mobile service means we can do it with you on-site.
- Financial reviews and training; our qualified team of accountants will provide regular reviews and train you to do your own bookkeeping and accounts management.
- Financial reconciliation; we’ll reconcile historical numbers, sort out the tax man and ensure your accounts stay on track.
Make smarter financial decisions! Call GoFi8ure today and book your free no obligation assessment on 0800 463 488 or visit www.gofi8ure.co.nz to get your very own mobile financial controller today!
April 2011
THAT time of the YEAR!
What does the 31st March 2011 mean to you? For many it could mean “yikes has my tax return for 31.3.2010 been filed!” Better late than never! However not an optimum plan or position to be in!
At GoFi8ure we focus on financial management of all your accounting and bookkeeping needs throughout the YEAR, so that each month we report to the business owner as if it is the end of a financial year. This involves a “best practice” methodology of checking and reconciling all items so that performance and position are accurate and adhere to the accounting principles. The theory being, by the time March rolls around, hey presto its 12 out of 12 months and quick as a flash we can update and hand the “file” over to the Chartered Accountant! Why? Well so they can complete on their financial compliance, statements and tax returns within a few months of balance date, not 12 months after the event!
Why is this good news and something to hurrah about! If you are in business, you are in it for the long haul, and more than likely in a position of responsibility and accountability. An important part of your job description is managing the people, strategy, growth, marketing and cash/finance functions of the business. Your accounts should be updated and reconciled regularly so you are reporting to stakeholders accurate information. Also if you are able to give a clean trial balance to your Chartered Accountant your financial compliance is likely to be processed in quick smart time, at a lower cost, and impressively you are able to give a copy of your financial statements to interested bank managers and other professional consultants who require information. As a example Insurance Brokers/Companies need up-to-date information for quoting on Professional Indemnity cover. Being in business is all about planning, leadership, organisation and control. Seriously, if you are behind on the accounts, are you really on top of it? Are you really IN Business?
In April we ran a joint workshop for explaining year end account preparation to save you time and stress. If you missed it call us now for a complimentary worksite assessment so we can give you some top tips for getting On Top and IN Business. Call GoFi8ure on 0800 463 488 – the TEAM are at your service!
March 2011
Are New Zealand businesses frittering away a fortune?
A recent Westpac Bank survey showed that the New Zealand public fritters away $16M a day on frivolous purchases, but are businesses losing even more through simple expenditure that could be curtailed and put to better use?
The answer, according to Lisa Martin of specialist accounting and bookkeeping firm GoFi8ure, is absolutely yes. She says that many SMEs waste considerable money around people, which is their biggest expense area. Her first recommendation for improving businesses’ bottom line and lowering long-term costs is documenting the operating procedures that people use on a regular basis.
“Turnover is a fact of life for all businesses. It’s a particular cost area for SMEs, where people often have responsibility for a lot of different tasks and hold substantial knowledge about how the business operates,” Lisa pointed out. “It’s important to document their knowledge and the processes staff use to do things, otherwise, when people leave, a huge amount of time and effort has to go into reinventing the wheel.”
“That up-front investment in recording the steps that let your business operate efficiently more than pays for itself if you consider how much it will cost to learn how to do things over again with all the mistakes and wastage that will occur along the way. The reality is that learning from mistakes costs a lot of money. If somebody has already made a mistake, why wait for the next person to make the same one?”
Lisa also highlighted the value of monitoring timesheets and measuring where staff are spending their time relative to the business’s revenue streams. This helps identify where time is wasted and allows business owners to focus their attention and resources on productive activities.
“Every business should have some form of timesheeting software that can be measured against budgets once per week. Custom software is better than an Excel spreadsheet: there’s a plethora of software options available and online trials so you can get familiar with the product before you make a purchase decision.”
“My recommendation is MYOB time billing and Workflow max with Xero. These are great for tracking time and costs,” she said. “Whatever you choose, time costing should be integrated with your accounting software so productivity and performance ratios can be pulled through in one step and not two. This is a good tip for time saving!”
Lisa recommends that all organisations have an external strategist or coach with proven business acumen who can provide direction and monitor progress towards strategic imperatives.
“A strategic execution specialist is an initial cost, but it improves accountability and keeps managers and business owners on track to achieve their goals,” she said. “A good person might cost anywhere from $1—2,000 a month, but if you measure that against the cost of missing your targets and not getting a return on investment for all the time and money you’ve spent planning and strategising, then it’s comparatively small.’’
Her final tip for business owners who want to keep a lid on costs and ensure they aren’t frittering money away is to model good behaviour at the top of the organisation and treat business resources appropriately.
“Whether that’s making an effort to call around regularly for quotes instead of using the same suppliers you always do, or ensuring that you don’t dip into petty cash or business funds and treat them like a personal spending account, you can set the tone for the way the rest of the organisation behaves. The goal is to create a culture where people are cautious with the business’s money, not casual about it.”
February 2011
Goal Setting for the future! One month ago today was the future, and I am looking back and assessing
– is 2011 turning out the way I planned? Not exactly! 6 weeks into this working year and I am juggling mixed emotions. In many ways the last year was fantastic and our accomplishments were not to be sneezed at.
As the team grew and flexed their abilities to grow the brand promise for themselves and their clients, I was also able to seek out opportunities for strategic growth. Every so often I reach out and stretch just a little bit further and find a strange pulling sensation from behind. Invariably it is a dilemma of detail that requires my urgent attention – and the same old argument arises – is it urgent AND important or....?
As Business Owners there are definitely issues we have to deal with – no dispute there, we just have to realise “just when you want to move on, they drag you back in!” There is comfort in knowing the Boss has to deal with it, so there are certainly comfort blanket comparisons within the staff. However a really good team with exceptionally skilled people spilling over in spirit and tenacity will mean they will leap to the challenge and want to bring the Boss the solution to the problem before there is even a problem. A great team thrive on progress and advancement and we know that if you always get someone else to sort out the mess your day is fairly lack lustre. To be fair you are just collecting the magic money that turns up in your account on payday. At Gofi8ure we say “we are here to make a difference, not just a living”.
So given the professional and personal growth of last year mixed with the pull back of this year I have decided it is ok to have mixed emotions. It shows I care. I care so much I am going to put trust in myself to keep forging ahead and working towards my goals for myself and the business, because the TEAM can do it, and maybe I think they need me more than they do, when actually if they see me advancing, they will know they have made the difference.
2011 will be THE year and if you need a great team member in your finance area of your business may I recommend one of the GoFi8urines – they will make a difference in your business as they have in mine!
January 2011
With the New Year underway, what should small and medium businesses be doing to make good on their financial resolutions? A lot of business owners might have decided they’d like to improve their financial transparency and stop doing their accounts badly.
One of the first steps to take is getting some expert advice from an external accountant or specialist bookkeeper. Consider it an investment in your business intelligence. There’s no excuse for not understanding—or learning how to understand—what’s happening on your business’s bottom line.
Organising some training for the person who’ll be keeping your books and giving them a robust system to follow is also a worthwhile investment. A specialist bookkeeper can work with you to set up a standard operating procedure for managing your accounts. This will save you time and money over the long term. It’s much better—and cheaper!—to be proactive than waiting for a problem to build up and then trying to untangle it twelve months later.
Even if you’re on the right track, an external provider can give you confidence that you’re doing things right. A good accountant wants to save you money and make your business perform better. To choose a good accounting or bookkeeping firm, look for client testimonials from a variety of different sources. A reputable, established business should have no trouble providing them. Speak to your local bank manager and ask their advice. Good accounting firms will have positive relationships with most bank managers in town.
Keeping an eye on the mail is important. Everything that comes into the business should be opened, date-stamped, and seen by the managing director or owner. Business owners must sight all IRD correspondence and bank statements. Don’t be afraid to open those envelopes. Putting money aside is another regular piece of advice that always bears repeating. Whether you’re learning $15,000 or $150,000 a month, one third of that should be going straight into your savings account. That’s the minimum you need to put aside to cover GST and income tax. It’s not your money.
If you’ve reviewed your business’s books over the holidays and realised that there are some shortfalls, get in touch with the Inland Revenue Department (IRD) sooner rather than later. Let them know you’re going to have problems and need to put a payment plan in place. This will usually reduce the interest they charge and any penalties they levy.
You should also have a plan in place to make sure your PAYE and GST returns are filed on time and can’t be delayed by last minute events. After all, in Business how many things go according to plan? If you would like some advice or a review of your systems contact the GoFi8ure team on 04 499 8460.
December 2010
Edgy about numbers and finance this year?
Do you see red, black or nothing at all when you look at the accounts of your business?
Do the numbers make sense to you?
If you are a business owner we all agree it can be a comprehensive day, what with client relationship management, staff management, meetings, marketing, estimating, networking, a lot of words ending in –ing let alone talking, listening, communicating. For some the art of “being” with people comes naturally and when you are passionate about why you got into business and love spreading the word, the thought of quietly sitting down with the bean counter and going over the black and white stuff can seem worse than pulling your toenails off one by one!
Let’s be fair, the finances of your business are important and they need to be done regardless of how boring it might seem. Just as in life you need money coming in to pay for your day to day lifestyle, so too does your business. So do you understand the mechanics of your business and how the administration works to ultimately get money back through the front door? Newer businesses are probably more aware of the day-to-day happenings than more established businesses only because the business owner is probably doing the book keeping! However if you have now grown to a size where you are running a team of 6+ ask yourself this, is your finger still on the pulse?
As the business grows systems are born to accommodate growth, but are they robust systems willing to withstand the test of rapid growth? Have you sought out advice and expertise or just re-invented the wheel within your own business? Do you have a standard operating procedure document or a substitution operations policy in case key people get run over by a bus? Have you created a double checking system with strong internal controls, or do you rely on stuff getting done right first time? Because we all know when people are involved, miscommunication happens and this does not always happen – right?
With the New Year underway, what should small and medium businesses be doing to make good on their financial resolutions? A lot of business owners might have decided they’d like to improve their financial transparency and stop doing their accounts badly.
One of the first steps to take is getting some expert advice from an external accountant or specialist bookkeeper. Consider it an investment in your business intelligence. There’s no excuse for not understanding—or learning how to understand—what’s happening on your business’s bottom line.
Here are some guidelines for business owners to adopt in their business;
The mail should be opened, date stamped, categorised in piles and the business owner/boss should see ALL of it prior to distribution. Never allow a junior in the office to determine what the boss sees or does not see.
The business owner should sight the original monthly bank statements and sign them off. The boss should be visually aware of monthly activity incoming and outgoing. Bank reconciliations should be actioned by accounts staff and then signed off by the owner. Likewise creditor payment schedules should be sighted and signed off by the owner so they can reconcile in their own head the value of payment batches on a monthly basis.
Payroll systems are a must! IMS, iPayroll, Smart Payroll, Ace – use a system that can record leave balances as this is an area of expense that the business owner must be aware of. The largest expense items for any business owner are; staff, accommodation and IT, so a system is essential! Staff timesheets should be entered and reconciled to payroll records and each payroll process should be approved and authorised by the owner or supervisor to ensure a second pair of eyes. Adding time, fiddling the leave records, not entering sick leave or deductions are all possible so to reduce the risk introduce a double checking mechanism to ensure transparency and accuracy.
The boss should review leave balances and make sure staff take leave. Encourage the “gate-keepers” to go on holiday and train others to do their role in their absence. If you are not around to “cover up”, the risk of “fiddling” reduces dramatically.
ALL correspondence and assessments from Inland Revenue must be opened and signed off by the business owner. This way he/she can be sure PAYE, GST, Income Tax etc are all paid on time and interest and penalties are not accruing – IRD debt is your debt – be proactive! Over time this can really build up so the boss needs to know!
Do you have processes and procedures around the company use of;
- Taxi cards
- Petrol cards
- Company credit cards
- Petty cash
The leakages around spending on these can add up, and you do not want to encourage a culture of “this is the way it is done round here”, especially if that means spending the bosses money willy nilly because “it’s just there!”
Make sure you go over the aged debtors report regularly to see who owes you money and make sure debt recovery happens! Sometimes staff feel embarrassed to ring your clients up and ask for money, but they would certainly hold court if you couldn’t make payroll one week!
Make sure you go over the aged creditors prior to payment runs and sign them off especially the bank account details of the suppliers matching the invoices! Please get an idea of bank balance plus debtor recovery minus payroll and creditors equals working balance. Know your key numbers and breakeven point for accrual accounting and profit as well as cash flow tracking for at least 6 weeks out!
Putting money aside is another regular piece of advice that always bears repeating. Whether you’re earning $15,000 or $150,000 a month, one third of that should be going straight into your savings account. That’s the minimum you need to put aside to cover GST and income tax. It’s not your money.
I lose my mojo if I feel out of control of what I can control, if your business finances get you down and you are not as proactive as you would like as a business owner, order a complimentary assessment from the people who can help – get a new edge for 2011 – you deserve it!
November 2010
2010 has nearly reached its ultimate conclusion! So with that in mind, the Christmas break and the chance to unwind and wind up before 2011 is firmly in our sights, we ponder the New Year’s resolutions so that 2011 might be “THE Year”! Here are a few “inspirational pearlers” to keep in mind and go YES when forming those resolutions!
“Without having a goal it’s difficult to score”
“Give away everything you know, and more will come back to you”
“Don’t promise what you can’t deliver”
“It’s not how GOOD you are, it’s how GOOD you want to be”
“The person who doesn’t make mistakes, doesn’t make anything”
“Being wrong isn’t in the future, or in the past, being wrong isn’t anywhere but being here”
“There are no short cuts to any place worth going”
“Some people take no mental exercise apart from jumping to conclusions”
“There is nothing that is a more certain sign of insanity than to do the same thing over and over and expect the results to be different”
2011 is your year to “Dare to Dream” and if you want a different result then you have to do things differently!
The Christmas shutdown is a fabulous time to see your accounts activity slow right down and then gear back up again when everyone returns to work. It is also a time to have a really good look at the figures and see what they are telling you as a business owner. If you would like to see beyond the numbers and feel they are adding up we would love to offer our complimentary warrant of finance to Hutt Chamber members so you get an accounts “program” to help you do things differently in 2011. Call us now 04 499 8460 to book in a session for the New Year – we deliver what we promise!
Have a great break and all the best for a very safe New Year from the GoFi8ure team.
October 2010
Tick tock..., two months to Christmas!!! If you stopped and thought "tomorrow I find out I have only weeks/months to make a difference - what would I do?" Well what comes to mind?
If like most of us you think "I'd stop working so hard and do what I want for a change!" - What would that be?
Maybe find people who would rather do the "hard stuff" for you - that's one big change right there! (Indirect sales pitch to help you with your financial admin and book- keeping!)
I'd like to think every day would be a "hug" for the day that was - really enjoyable. I heard this phrase today and it rings true... Yesterday was the past, tomorrow the future, and today I say thank you as it is the present! What did I do with my present today, did I say thank you to the people that helped me get it?
It has been said by many that this year is even harder than last, so instead of being thankful and showing your appreciation there are still those out there who are quite frankly, rude! If you think of the help, advice, time people have spent working for you, or with you, to help achieve your goals, give a thought to the last time you said thank you to them or returned the favour. Instead of a demanding email, or no phone call at all - maybe a simple thank you given in person is the treat we all need.
Make good on your promises, live your word, give to gain, and say thank you. We like to promise a lot at GoFi8ure and spend over the odds to get our clients to deadline and beyond. We deal with subject matter most in business find boring but necessary. We give you long lists of what we need and go hell for leather to get it into shape for you so you have information in your business with which to make informed decisions with! We lead many horses to water and in times cannot always make them drink, however we do hope we communicate why it is important, so you have a part to play in that also.
For some we realise it is tough times and paying for it is hard however if you get any gift of complimentary information from a trusted advisor then a "thank you" is always well received. And if you are in the fortunate position to provide services for your clients then simple manners are a must in today's tough times. Communication is key! No news is not good news, it is bad manners!
Even if you found out tomorrow you have decades to make a difference - start by saying thank you. Watch people respond to you - there is your change right there!
GoFi8ure - says thank you for the year that was and the one that is coming!
September 2010
It came to me in blinding flash as I drove back from a job in Wanganui last week – if the saying is “he’s just not that into you!” could it be said... so many of us “are just not that into our accounts!”
Well not me as I say time and time again I just love doing a bank reconciliation but hey keep doing what you are passionate about! However generally doing the accounts, tackling the books, paying the bills, sending out the invoices, chasing debtors, trying to update the bank register so the bank manager can look at the current position and performance for that bank overdraft extension is about as palatable as a pile of cold sick.
In essence you would rather be doing something else. And yet so many of you think you have been bad in a previous life so must endure the torture, miss out on family time, complain bitterly to your partner it doesn’t make sense, and box on regardless! When offered help or the shining beacon of light that perhaps someone else (professionally trained) can do it in half the time and right first time you say “no it’s ok that’s my lot in life”.
So what are the warning signs that you are “just not that into your accounts!”
- Post comes in and you pile it up unopened – let’s face it if you ignore it long enough it will go away – right?
- You have a computer say on the left of your desk and this overwhelming pile of paper on the right – and never the twain shall meet!
- The words “bank reconciliation” makes you lurch for the loo to hurl!
- You put off updating anything; accounting software, archaic spreadsheet until midnight the night before GST is due or you don’t even bother to do that – ever!
- You sneer at the shopping bags of unidentified receipts in your study because they are taunting you with their possible deductibility!
- You keep hearing this word GST GST GST but just think it’s some men’s health issue that again if you ignore it long enough it will go away!! Ps it doesn't!
There is more but right now you are already confused/slash/bored by everything listed therefore you are just not that into your accounts! So if you want to bring the passion back or the fitness back into your figures there is only one answer! Call me to bring the sexy back into book keeping – Lisa 04 499 8460 – it’s the only answer and there can be only one!
August 2010 - The 5 Levels of Focus; 1 Vision, 2 Planning, 3 Detail, 4 Problem, 5 Drama
Every month I have the privilege of writing a newsy piece for the Hutt Chamber. This month I thought it would be a great idea to focus on something newsworthy like staff fraud or changes in GST, and then when I want to focus on what I would like to do there is a knock on my door, a phone call, a text, an email, a drop –in, a heated discussion right next to me! .... all these distractions are urgent creating “rush of blood to the head” moments and rush of expletives to the tip of my tongue!
Because, as most of my readers will probably well appreciate, sometimes being in business is hard (or should that be ^#$@#&* hard?). You know what I mean, don’t you?
It’s relentless, and even more so when times are tough like they are now. As business owners, it’s really hard to find the time to look up from the day-to-day detail and get on with the stuff you’re really supposed to be working on – like growing your business, or planning for the changes in GST.
If we are all busy dealing with the drama in the detail of today, when do we get time to deal with the big stuff looming in the future?
The short answer to that question is, “you don’t”. But its not the right answer, either. So, while I was trying to filter that rush of expletives down to something that Microsoft Word wouldn't reject as a spelling mistake, I had time to stop and think about what being in business is all about.
So I got to thinking about my old mantra – business is about four things: People, Strategy, Execution and Cash. And if you keep those things top of mind, even when the world has gone bonkers around you, it will help put the relentlessness into perspective and help you focus on what really matters in your business.
And I calmed down – sort of. I hope you also find a way of forcing yourself to look up from the detail and out towards the horizon. Even if it’s just for a few minutes. Your spell checker will thank you for it. Book in for one of our workshops on the F Word and the GST word – check the box on vision and planning for your business today to help you tomorrow.
July 2010 - Five top tips for doing your own books!
Maintaining your own financial records – AKA doing your books – can seem daunting when you’re new to it. However, it’s an essential part of running your business and ignoring the accounts will lead to big problems later.
- Start From Day One
As soon as you set up your business, start recording your all costs and sales you make. In fact, you may incur costs before you start up. These can still be deducted from your profits, which will reduce your tax liability.
Start recording everything from day one, keep up to date and make sure you know the dates your accounts, tax, GST, PAYE, etc are due. Late payments and returns can incur heavy fines and penalties.
- Get a system
Set up an accounting system from the start. This doesn’t have to be a sophisticated software package. In fact, you could start with a manual system, but it’s wiser to at least use a computer spread sheet or easy accounting system.
If you intend to use an accountant, agree the system with them before you start your business. You will be surprised how much this can save on fees if you use one with which your accountant is familiar or recommends. You may even find that some of them offer a free, ready-made spread sheet.
- Go on a free workshop or order a worksite assessment from GoFi8ure!
Yes, we do give away our time and expertise to get you on the RIGHT path!
- Budget for tax
Although you may have made a profit (income minus costs), not all of this money is yours. Obviously, you’ll have to pay some to the taxman. Make sure you budget for this as you go, so you won’t get any great shocks at the end of the year. Open a deposit or business savings account and put money aside for your tax. Saving 25-30 per cent of all income you receive is likely to mean you’ll easily be able to pay your tax bill.
- Claim for all business expenses
The general rule is, you can claim for any cost incurred ‘wholly and exclusively for business’. Remember to keep all receipts for your business purchases – even the smallest costs, such as stamps, stationery, bus and train tickets etc.
Record all your business trips and claim for these – even trip to the local post office in your car to send a business letter or parcel. In fact, you can claim for cycling to the post office. The allowed rate for cycling is 20p per mile – so get on your bike instead of using your car.
If you use your home as an office, you can claim for a proportion of your domestic bills – including lighting, heating, Internet and telephone charges, even a percentage of your rent or proportion of your mortgage interest! Whilst there is no exhaustive list available of what you can claim, common sense should prevail when applying the ‘wholly and exclusively’ rule. If in doubt, speak to a very helpful GoFi8urine on 04 499 8460 to book your meeting now!
June 2010 - Financial mismanagement costing small businesses - the sequel
It’s often not until a sudden illness, leave of absence or death in the family occurs that problems in your businesses finances are uncovered. Emergency cover is required, other staff get involved and hey presto “what the ….” comes up in an embarrassing, shocking, and sometimes soul destroying way – what has been going on in my business?
One way of restoring “peace of mind” in this area is a worksite assessment and review of your ledger by GoFi8ure. Consider it a “warrant of fitness” in your business risk management. You review your insurances annually – consider it the same tick and check for peace of mind when it comes close to your business bank account!! We get in there and review the accounting ledger, files, IRD filings, paper management and coding and reporting structures to management. If you are not sure we are required and want to investigate for yourself, ask the following questions of your accounts staff; - When was the last time you sighted a bank statement and the bank reconciliation report from your ledger system to support it?
- Do you sign off the monthly bank statements when they arrive by mail or online?
- Do you sight the incoming postal mail with debtor ’s receipts and supplier invoices and statements?
- Who reconciles the banking?
- Have you asked about old debtors and how they are being chased up or are they left because there is an issue that's just too hard for a staff member to deal with?
- How much money do you really owe to suppliers and are you making payments? This is your reputation here so it pays to check.
- When was the last time you signed off your PAYE and GST returns? And looked at the reconciliation reports behind them?
- Have you checked the paper filing is all up to date? A messy desk and out of control filing or lack of is a huge sign of "I am not on top of it- help!"
- Do you know if your GST returns and PAYE returns are being filed with IRD on time and more importantly paid on time? Late payment penalties and interest mount up and staff can easily hide this! (Well they try to but we find it and reconcile it ~ I'd rather you have the money though so check it out!)
- Do you get a dashboard from your accounts staff with current assets, debtors, creditors, cash flow, budget variances, and year to date wages, accruals, forecasting and your shareholders current account explained?
- If you don't process payroll, who does and who checks their work for accuracy on leave and payments made? These should be signed off by business owner!
- When was the last time the general ledger was checked for its coding and classification? Once a year by the CA is not enough - it needs to be reviewed at least monthly!
- Do you know how the income and expenditure is coded and with correct GST etc - you would be surprised how mistakes creep in and if you don't check won't get corrected unless someone like me comes along and says blimey 3 months of coding and it's all NT for GST great lets reconcile this shall we!!
- Petty Cash, company credit cards, business mobiles, petrol card, company vehicles - if you are letting staff use these are they being used appropriately? And you are not leaving yourself wide open for misappropriation? Who checks?
It Pays to!!! If you cannot get answers to the above – you need GoFi8ure! If this feels like it might end up being an uncomfortable conversation then you have lost control of your role as a business owner - talk to us now about organizing a Gofi8ure warrant of fitness on your ledger and we can reconcile the file, get you back on top, prepare a report and put you in touch with the experts who can help with the tough conversations! You don’t know what you don’t know because you won’t know that you don’t know it! Get to know it! Seek out peace of mind - contact us now! If you want to find out more about focusing on what you do best, and how bookwork, honesty and general ledger reconciliation freedom drives Go Fi8ure contact Lisa Martin on 499 8460 or email her today!
May 2010 - Focus on what drives you!
What a month we have just had! If you had asked me in March, “is it possible to work any harder?” Well… we have just proved ourselves real superheroes of the accounting world!
In addition to the “end of the financial year push” which we at Go Fi8ure endeavor to complete with the last GST of the year being the 7 th May 2010, we have also pushed forward with our new “E-Go” service offering and forging new territory in Auckland. New clients, new products, new regions, all reinforces that SME’s all over still face the same business challenges; People, Strategy, Execution and Cash.
If you want to grow your business you need to focus on what drives you! Your passion and mojo are sparked daily by your creative juices and the excitement of doing what you do best! There is nothing more of a kill-joy that spending time on business efforts that, whilst are necessary, you dislike, sap your energy and take twice as long as an expert, because you would rather be spending time on more creative pursuits. Yes I am talking about bookwork! And the great thing is you don’t have to do it – here at Go Fi8ure we love the paperwork and getting that accounting system of yours “fine-tuned”! That is what drives us! Take cleaning for example, I’d rather pull a set of accounts together than clean the loo, but it all needs to be done! At Go Fi8ure we are passionate about our work and because of the quality of our service offerings we were nominated as a finalist in the recent Vero Excellence in Business Support Awards 2010. The award night was last Thursday and the PM John Key gave a fabulous speech commending all of the finalists for focusing on what drives us. After all it is the Key to Business Success in NZ. If you want to find out more about focusing on what you do best and how bookwork drives Go Fi8ure contact Lisa Martin on 499 8460, or make an enquiry online today!
April 2010 - Financial mismanagement costing small business
As small businesses grow to medium they often need to employ a finance manager – but pick the wrong person and you could be risking everything. In my work as a mobile bookkeeper I’ve seen small businesses being taken advantage of time and again because they don’t know what questions to ask about their finances.
Finance processes can be seen as time-consuming and baffling. Once a finance manager is hired, some business owners heave a sigh of relief and never ask any more questions because things are being “taken care of.” However, if your finance manager never takes a day off, talks about their work as something “you wouldn’t understand” or can’t provide finance information at the press of a button, be cautious.
All business owners should be able to ask for a balance sheet or a profit and loss statement and be presented with it without an issue. Most theft or fraud will begin small and build over time. Dishonest people might tell themselves they ‘deserve’ a little extra for their hard work or be hiding a more serious problem like a gambling or drinking addiction.
In one case I saw a trusted financial administrator writing $50 cheques to petty cash then changing them to $5000 without anyone noticing! And when it comes to your businesses finances, laziness and not paying bills on time can be just as dangerous – I’ve seen a business miss out on a 24K tax refund because information was repeatedly not filed on time.
A businesses finance systems should be totally transparent. Bank reconciliations don’t lie – they detail exactly what’s going in and out of a business’s bank accounts and if you’re using online banking that will be very detailed. It’s often not until a sudden illness, leave of absence or death in the family occurs that problems are uncovered. One way of restoring “peace of mind” in this area is a worksite assessment and review of your ledger by GoFi8ure. Consider it a ‘warrant of fitness’ in your business risk management.
If you would like to know more contact Lisa on 04 499 8460 to make an appointment, or send her an enquiry online now!
March 2010 - One of the most commonly used phrases on a Friday must be “have a great weekend”
I must admit when I am not working them I love to hear this and speak it out loud myself. It makes complete sense to say week - End being that it should be the End of the week – a taxing week – where as a SME business owner you have expended the massive amounts of high energy required to keep up with the People, Strategy, Execution and Cash functions of the business.
Therefore as night follows day it makes sense that the weekend should be time out and the end to anything related to the business. A two-day respite from the grinding challenges to recharge those batteries ready for another power house Monday to Friday! And those weeks fly by – before you know it another year will be over!
Why then do some business owners punish themselves with doing paperwork and updating the books on their cherished days off? Also, if you think about it, every long weekend like Easter, Queens Birthday, Labour weekend seem to fall just before another critical compliance deadline so why would you spend these catching up on the whole years worth of bookwork? Surely a break away with the family is far more fulfilling?
Another phrase I hear around the traps is, “a happy wife is a happy life!”. Or “you will never get back that child’s 5th birthday again!” So spend time “living” on nights and weekends! Claim your life back and hand over your accounts and bookwork to the experts who will get it done in half the time because it’s what we love doing!
Financial administration, bookkeeping, GST, GST and GST and oh yes rebuilds (if you are a few years behind) – call us now for a lifetime of nights and weekends off from bookwork!
Contact Lisa on 04 499 8460, or make an online enquiry today – we value your weekends and so should you!
February 2010 – putting Fitness into your Fi8ures!
Following on from your New Year’s resolutions, one might have been – get fit, go to the gym, lose excess, get trim! The basic rule is that energy outputs should exceed energy inputs to achieve a desired result over time. A similar methodology can be applied to your business finances. Outputs being income should exceed inputs being expenses.
In an effort to get your outputs greater than your inputs you should implement the following;
- Focus on what you do best and charge for it that is, earn fees!
- Spend time earning money as opposed to spending it
- Invoice your clients and debt collect quickly that is, implement debt collection controls and always know the value of your debtors and their age!
- Review your expenses and cut back on wastage! Every cost to your business that is, inputs should be reviewed to make sure all of these add value to your business!
- If there is no return on investment or a direct line to increased outputs the answer is easy – cut back, but you need to know what these actually are so you can.
If the above is difficult to measure at present, ask yourself; does your accounting system provide you with the information you need? Your performance and position statements should identify your outputs and inputs in plain English.
If you need a system or need to understand the one you have and make it work for you and your business, contact Go Fi8ure now. We can design a system for you like a training program at the Gym or put your current system through its paces to find out where the strengths and weaknesses are and where improvements can be made to widen that gap between outputs and inputs! We can help put fitness into your fi8ures – end of financial year is looming and it’s never too late – Start NOW!
January 2010 – New Year’s Resolutions
Welcome back to a bright new year and a new decade! This is the time to make a difference starting RIGHT NOW!
Statistically speaking most of us make resolutions on the 31st and well into the 1st day of each new year – approximately 5-9 resolutions! I thought that was an amazing number. Sadly by the 5th or the 9th day of January they are long forgotten and distant memories, boxed away to be trotted out 365 days later no doubt.
One constant theme that surprises me is “I will get on top of my paperwork this year”. I can understand the “make a budget and stick to it because I need to save this year” one but as salt and pepper and fish and chips go together so too does the above two resolutions.
Being in business means paperwork and invoices in and invoices out and receipts and forms and endless envelopes from IRD, ACC, and MORE! And believe it or not, it does not go away or get processed without a bit of help, oh and a “system”.
If you are fed up with being behind, if the stack of bills or unopened envelopes fills you with dread, if you have no idea whether your business is even making any money, if you really just want to take control of that burning issue in your head and cast away the nagging worry of when will I get on top? It’s simple! Make a resolution starting RIGHT NOW!
Call Go Fi8ure for a complimentary worksite assessment so we can design a solution for your accounts and paperwork that suits your business and means you can get on top of it and stay on top of it! Call 04 499 8460, or 021 730 279 right now and tell us “My 2010 new year’s resolution is – Take control of my business and get on top of my accounts!” Remember 2010 is the year to make a difference – make an enquiry today!
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