Keep cash crowned as king

If you want to succeed in business, understand that Cash is King.

Your business can't survive without cash.

The following six takeaways are essential for business success:

  1. Protect your cash position, by knowing what it is.  Build a cashflow statement and always keep it up to date.  If you foresee a shortfall, start at once to fix it.

  2. Create a cash buffer as an insurance against unexpected difficulties.

  3. Protect your cash position against revenue shocks, by maintaining a balance equivalent to at least two months of operating expenses.

  4. Be realistic with revenue expectations.  Take action now if it looks like sales are not going to get you to breakeven.
  5. Read more…

Fairer tax rules affect cashflow

A tax bill passed in May made changes that affect cashflow.

Companies get more choice with RWT

From 2017-18, companies can choose to not deduct resident withholding tax on a fully imputed dividend paid to a corporate shareholder.  A fully imputed dividend has a tax credit passed on because the company's already paid tax.

A third tax option for some shareholder-employees

Shareholder-employees of close companies (with five or fewer participants) who receive regular salary or wages, and variable amounts of other employment income, now have a third option as to how they pay tax.

They can now split their income so the base salary is subject to PAYE and the variable amount is paid out before tax.  Previously they had to choose either one or the other.

Read more…

Building your dream team

In order for your business to be a success, you need to be surrounded by like-minded people with good core skills and values, aiming for the same end goal.

In essence, this is your dream team.  

But how do you ensure you're recruiting the right team players?  

Be clear
What are the qualities you require from employees?

Think, plan and be specific so that the right applicants come forward from the beginning.  

Provide clear instruction during the initial screening process and winnow out those who can't seem to follow these to a tee.

Business Payment Survey

Go in the draw to WIN a $150 Westfield Voucher by completing a short business payments survey. 

The purpose of this whitepaper is to highlight payment trends in the New Zealand business community.

 For instance: If debtors were paying more slowly in 2017, should you respond with more lenient terms of trade or more robust collection processes? 

The White Paper will be published in September 2017 with the final overview being sent to all participating businesses.

Your input would be greatly appreciated.

Click here to participate!

Turn customer complaints into opportunities

Dealing with customer complaints can be both gruelling and rewarding.  

But being able to turn the situation around so your customer is happy with the outcome can strengthen their loyalty to your brand and inspire some gold standard word of mouth marketing.

Communication and attitude are as vital as expert product knowledge.

Listen and empathise
  • Let the customer tell their story
  • Ask questions to clarify
  • Let them know you want to understand
  • Let your customer know you can see it (and feel it) from their point of view

  • Make sure you understand

    Sum up your understanding of the problem.  Ask the customer to confirm you have it correctly. 

    Read more…

    Changes in Meth Testing Rules for Property Owners

    Tenancy Services states that landlords must provide a clean property, and that both landlords and tenants should check for any signs of 'P' before a property is rented.

    If the landlord does not check and rents out a contaminated property, they breach their obligations under the Residential Tenancies Act 1986, the Building Act and the Health Act.

    According to a recent blog by Quinovic, the Tenancy Tribunal is beginning to expect landlords to have completed a meth test prior to signing up any new tenancy.  

    This is on the grounds that it is part of the owner's responsibility to provide the property in a reasonably clean and reasonably tidy state.

    This is an important interpretation because if a meth test is not completed prior to the start of a tenancy then any subsequent positive test cannot be blamed on that tenant.

    And without proof of a clean test the Tribunal may order the landlord to repay the tenant all the rent, plus the bond, accrued during that tenancy.  

    Read more…

    Cash vs Accrual Accounting - Pros and Cons

    The advantage of cash accounting is that it's easier to understand.  You see exactly what your cashflow is and you can see your cash reserves clearly. 

    The disadvantage is that you don't have an easy way of tracking how much money you owe your creditors or how much money your debtors owe you. 

    It doesn't take future expenses into account.  So it can sometimes be hard to assess long-term profitability in your business and it can be hard to spot the risks where money you owe will undercut your incoming revenues.  

    Read more…

    FYI... Cash or Accrual Accounting

    You'll often hear the terms cash or accrual accounting.  

    Is this when you tune out?

    They're the two main methods of keeping track of income and expenses.  

    They work in different ways so it's good to understand how your financials are put together.

    The cash accounting method records income in terms of the date the cash is actually received and not necessarily the date when the sale was made.

    In the same way, expenses are recorded as at the date you actually made the payment, and not the date when you committed to the outlay.  

    Read more…

    Attention Business Vehicle Owners!

    As an employer if you make a vehicle available to an employee (and their associated persons) or a shareholder employee to use privately, you must pay Fringe Benefit Tax (FBT).

    A common misconception is that you only have to pay FBT on a motor vehicle if an employee uses it privately.

    Read more…

    Delight Your Customers

    How you prioritise delighting your customers can make all the difference to your brand.  

    Free your imagination on how this might look for your market.

     As a window into how the other half lives, the Ritz Carlton's policy allows an employee to spend up to $2000 a day to meet a need, resolve a concern or ensure an outstanding experience for any single guest without requiring funding approval.

    Stories abound.  A laundry manager, unable to get the stain from a dress, flew from Puerto Rico to New York to return the dress in person.

    Read more…

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