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Business Owners Can Take Charge of Their Own Finances Through GoFi8ure’s BKED Training Courses

Business Owners Can Take Charge of Their Own Finances Through GoFi8ure’s BKED Training Courses

Business owners who want to understand what being a professional accountant is like can now take GoFi8ure’s BKED Training courses. Designed specifically for business owners, the training courses will enable entrepreneurs to tackle their company balance sheets and other financial matters.

Bookkeeping Education & Training Courses are a series of business courses to help business owners focus on their company. Hiring GoFi8ure’s professional services to attend to other time-consuming elements of a business increases overall productivity, and helps businesses succeed.

The courses offered includes:

Bookkeeping for owners 101. This course covers bookkeeping fundamentals that will ease entrepreneurs into the world of bookkeeping. Business owners will learn how to reconcile all balance sheet accounts. They will also gain insight on the 12-step bookkeeping process, dive deep into GST reconciliation, and more.

Business owner duties & responsibilities 101. This is an introductory business law course. It covers shareholders responsibilities, strategic decision making, and more. This is the course ideal for business heads that want to learn about the basics of business law.

Accounting Principles into Practice. This course is designed for business owners who have already mastered the basics of bookkeeping, and are moving on to the next level – accounting. This will allow them to master practical accounting solutions, and learn how to apply accounting principles and practices.

For GoFi8ure, the BKED courses are meant to equip companies with the right tools they need to prosper. Many other courses are available, depending on specific business needs. There are people courses that focus on Employers, Leadership, Management, and courses on Business Strategy, Strategy Implementation, and Business Finance. GoFi8ure can also help clients in choosing the right course for them.

To learn more, visit the BKED page. 

Is my Accountant a cost or investment?

Reducing your overheads will help #GrowYourBusiness. So, are accounting fees a cost that should be cut or a sound business investment?

Accountants tell their clients to reduce their overhead costs as one of the seven ways to grow your business. One of your overhead costs is your accounting fees. So, is what you spend with your Accountant an expense, or is it an investment?

An expense is a necessary evil. It can’t be avoided and is a grudge purchase with very little value add.

An investment is about the return on your spend – what you get back as the benefits of the service; more cash, more discretionary time, or simply peace of mind that everything is done as it should be.

The true purpose of an Accountant is to provide enduring value to you and your business. It’s no longer just about annual accounts and tax. Accountants who live into their true purpose provide services such as:

  • Tax planning and minimisation
  • Wealth creation
  • Helping you create a plan to realise your goals – including profit and cashflow improvement strategies
  • Working alongside you to realise the plan – by combining our expertise with yours
  • Ensuring your compliance and tax obligations are met in the most cost-effective way

If you consider what you spend with your Accountant to be a cost, then cut that cost; if you consider it an investment, you need to invest now more than ever.

“The biggest expense is an opportunity cost.” – Anon

What is employee engagement and why does it matter?

What is employee engagement and why does it matter? 

Employee engagement will improve your bottom line. It leads to better quality/service/productivity, resulting in higher customer satisfaction, increased sales (repeat business & referrals), and ultimately, higher profit.

An engaged employee is a team member who is fully absorbed by and enthusiastic about their work, and who takes positive action to further a company’s reputation and interests and achieve their goals.

More importantly, what does a disengaged team member look like?
The symptoms range from a negative attitude, poor communication, absenteeism, lack of initiative, laziness, lateness, lack of participation, and doing the bare minimum at work… all the way to actively damaging the company’s work output, culture, and reputation.

The impact of having a single disengaged team member can be catastrophic.
The effects are not limited to their own poor productivity and output. This person can infect the core of your culture; damaging morale and lowering the performance of the entire team. They could even cause the resignation of a key team member or, if client facing, cause irreparable damage to your brand.

Improved employee engagement leads to improved productivity and performance.
Numerous studies have proven that companies with engaged employees significantly outperform others. Why is this? People who are engaged in their role want to come to work, therefore take fewer sick days. This ultimately leads to reduced team turnover and less unproductive time spent recruiting and inducting new employees.

Not surprisingly, team members who are engaged feel more supported by their peers and are more likely to work collaboratively, leading to significantly less re-work and wastage. Also, fewer workplace accidents and incidents occur when team members are engaged. All of the above reasons contribute to much higher productivity and profitability.

The Engagement-Profit Chain* is another take on why engagement improves performance:
Engaged employees leads to… higher service, quality, and productivity, which leads to…higher customer satisfaction, which leads to…increased sales (repeat business and referrals), which leads to…higher profit levels, which leads to…higher returns.

There is a difference between employee happiness and employee engagement.
Your team could be happy but not necessarily working efficiently and productively to deliver optimum outcomes.

A number of factors can influence and improve employee engagement. These include developing and utilising Core Values, documenting an effective Organisational Chart, providing clarity on the roles and responsibilities in your organisation, and introducing KPIs to help define what a good day’s work looks like for your team.

Need help building a happy and high-performance working culture? Get in touch.

“To win in the marketplace you must first win in the workplace.” – Doug Conant

*The Engagement-Profit Chain was created by Kevin Kruse

Minimise team turnover and time spent recruiting

Minimise team turnover and time spent recruiting  

It costs about 21% of an employee’s salary to replace them, not counting the intangible costs and frustration! Understanding what a good day’s work looks and feels like for the individuals in your team is key to improve culture and retention.

Recruiting is a hard and often a frustrating journey.
It takes you away from other important, and productive, business activities. It leads you down dead-ends; that awesome applicant who had accepted a new position before you offered them yours! Not to mention those awkward interviews, where you realise within twenty seconds that the person is not suitable, but still have to go through the motions. Ultimately, all roads lead you to taking a punt on someone who may or may not have the goods.

Research indicates replacing a lost employee costs, on average 21% of their salary.
Lower level jobs are cheaper to replace. Typically, the higher the salary, the higher the % cost to the business of replacing the employee – up to a whopping 213%! There are many intangible and untraceable costs, making it hard to predict the true cost of losing that valued team member.

There is nothing worse than an unexpected resignation from a key team member.
So, the most effective thing you can do to prevent incurring such costs, is to take an honest look at why people have left in the first place. The answer is likely to be anyone or a combination of the following:

  • Lack of career progression
  • Being under utilised
  • Being unsupported
  • Low pay
  • High pressure
  • Poor culture
  • Job not what was advertised
  • A personality clash
  • Incompetent team
  • Unfair boss

Have regular and transparent conversations with your team.
This should avoid the build-up of resentment that leads to bridge burning episodes. People have different wants and needs. Engage your team to help them define their own preferred workplace environment and management style that will enable their success. That way they’re less likely to leave.

Workplace flexibility is not ‘I lose, they win’.
Asking the question and adapting aspects of a job’s nature can build real trust and loyalty. Aside from increasing retention, it can also present real efficiency and productivity gains for the business. For example, that person who wants to start and leave an hour early – they get a whole hour before others arrive or clients call to disrupt them. That is a win-win!

Culture breeds transparency.
A good working culture can’t be built in a day and needs ongoing nurturing, but it will lead to loyalty and transparency. It can take time before the walls come down and your employees feel comfortable being honest about their true desires and workplace niggles.

Sometimes what people say can be a mask for another issue completely. A good leader seeks to understand the unique motivators and stressors of each team member, to get to the bottom of what will truly help them define and deliver a ‘good day’s work’.

Suck it up (the bad with the good).
So, whether your employee leaves graciously and gratefully (offering to recruit their replacement to minimise the fall out for the business), simply announces their resignation in a calm and dignified manner, or attempts to burn the building down on the way out, get some valuable feedback.

Ask them to complete an exit interview.
An exit interview will shed light on areas you could improve to increase your team retention. Be prepared for some ‘outlier’ comments. Don’t overreact, or rush to fix things that aren’t broken. Nor should you discuss with others mentioned in the feedback without careful consideration and reflection. One thing is for sure, there will be some gold somewhere, and everyone should strive for continuous improvement.

Interested in learning more about your Employer Responsibilities, check out our BKED training course.

Why bookkeeping is essential for your small business

Why bookkeeping is essential for your small business  

A Bookkeeper deals with the organisation, the recording and the reporting of financial transactions of a small business. But most importantly, a Bookkeeper clears the way for the accountant to work with your business strategically.

As a small business owner, do you need a Bookkeeper, an Accountant, or both? Bookkeepers can seem a little mysterious. In fact, they deal with the organisation, the recording and the reporting of financial transactions of a small business.

Simply put, a Bookkeeper clears the way for the accountant to work with your business strategically. This means: keeping track of daily transactions, sending and managing invoices, handling the accounts payable ledger, keeping an eye on cash flow, and preparing the books for the Accountant.

When you’re hiring, make sure you ask whether a Bookkeeper has an area of specialisation. Some Bookkeepers may be able to help train staff in using online accounting or POS systems or give you advice on business processes.

If you need a hand with your bookkeeping, click on this link to find out more. 

Successfully implement and embed change in your business

Eight ways to successfully implement and embed change in your business 

Research by Kotter International found that more than 70% of change projects within a business fail. Why is this?

The research findings show that employee engagement is the biggest factor. Whether it is a small change to one or two processes or a company-wide change, it’s common for staff to feel intimidated by it.

So what can you do for successful implementation of change? We have outlined eight progressive steps.

1. Get the team onboard

communicate the benefits with the whole company to build support and create momentum behind the changes you are making.

  • Start honest discussions with your team and give dynamic and convincing reasons to get people talking and thinking about the change.
  • Demonstrate what would happen if you didn’t make the change and what else it could affect in the future.
  • Request support from customers in this instance who may love the product, outside stakeholders and others known in the industry to strengthen your argument.

Kotter suggests that 75 percent of a company’s management needs to support a change in order to succeed.

2. Form a Powerful Coalition from all areas of the business

Share the support you have from all areas in the business (not just the leadership team). Visible support from key people within the organisation will bring others on board and create a sense of urgency. Give these people key roles in the change process to help progress it.

Once formed, your “change coalition” needs to work as a team, continuing to build urgency and momentum around the need for change.

What you can do:

  • Identify the influencers in your organisation for this change, as well as your key stakeholders.
  • Ensure that you have a good mix of people from different levels within your firm.
  • Ask for a commitment from these key people.
  • Work on team building within your change coalition.

3. Create a Vision for Change

Create an overall vision that helps everyone understand why you’re asking them to do something.

What you can do:

  • Determine the values that are central to the change.
  • Develop a short summary (one or two sentences) that captures what you “see” as the future of your organisation.
  • Create a strategy to execute that vision.
  • Ensure that your team leading the change are all on the same page.

4. Communicate the Vision

Embed this in everything you do so it is not lost in the day-to-day operation but a powerful part of this.

What you can do:

  • Talk often about vision and change.
  • Make sure the vision is applied to all aspects of the operations. For example, ensure it is added to the training and induction program and is encapsulated into the relevant job descriptions and evaluations.
  • Address people’s concerns and anxieties about it openly and honestly.
  • Lead by example.

5. Remove Obstacles

Check constantly for processes and structures that need to adjust to allow you to execute the vision and help the change move forward.

What you can do:

  • Look at your organisational structure, job descriptions, and performance and compensation systems to ensure they’re in line with your vision.
  • Recognise and reward people for making change happen.
  • Identify, or hire, change managers whose core role is to deliver the change.
  • Identify areas or team members that stand in the way of change, and find solutions.
  • Take action to quickly remove barriers rather than letting them fester.

6. Create Short-Term Wins

Create short-term targets – not just one long-term goal. Each “win” that you produce can further motivate all the staff especially if it’s a big change requiring a longer process and help keep them on task.

What you can do:

  • Reward people who help you meet the targets.
  • Look for sure-fire projects that you can implement without help from any strong critics of the change.
  • Don’t choose early targets that are expensive. You want to be able to justify the investment in each project.

7. Build on the Change

keep looking for improvements to the system to ensure the long term goals are achieved.

What you can do:

  • After every win, analyse what went right, and what needs improving.
  • Set goals to continue building on the momentum you’ve achieved.
  • Develop a culture of continuous improvement.
  • Keep ideas fresh by bringing in new people to lead the change.

8. Anchor the Changes in Your Culture

Finally, to make any change stick, it should become part of the core of your organisation. Make continuous efforts to ensure that the change is seen in every aspect, giving it a solid place in your organisation. It’s also important that your company’s leaders continue to support the change. This includes existing staff and new leaders who are brought in.

What you can do:

  • Talk about progress every chance you get. Tell success stories about the change process, and repeat other stories that you hear.
  • Include the change ideals and values when hiring and training new staff so it is enforced from the start.
  • Publicly recognise key members and enablers of the change.
  • Create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost or forgotten.

The principals for this article were taken from Kotter’s 8-Step Program for Leading Change.

Could your business benefit from Financial Awareness Coaching?

Could your business benefit from Financial Awareness Coaching?

Profit vs cash

Profit vs cash  

Do you understand the difference between profit and cash? Are you improving your profits but not seeing an improvement in your bank balance?

There is a massive difference between profit and cash. Let’s explore the differences to make a better plan to increase both.

1. Sales.
Profit increases when you increase sales; cash increases when you collect the money from customers. To increase both your profit and cash from sales:

  • Delight your customers
  • Generate more leads and referrals
  • Convert a higher number of quotes or proposals
  • Increase transaction frequency
  • Increase transaction value

2. Invoicing.
Profit increases when you send an invoice to a customer; cash increases when you collect the invoiced amount. To increase both your profit and cash:

  • Set clear Terms of Trade
  • Offer a small discount for early payment
  • Agree the price in advance
  • Stick to your payment terms
  • Don’t do work for people who have overdue payments

3. Margins.
Increasing your margins will increase your profit; collecting the increased margin will increase your cash. To increase both your profit and cash:

  • Increase your prices
  • Invoice faster
  • Negotiate better payment terms with suppliers
  • Reduce errors and rework
  • Train and empower your team
  • Increase your efficiency

4. Financing.
Reduce your finance costs to increase your profit; borrow money for assets to increase your cash. To increase your profit and cash through financing:

  • Spread the costs of assets over 3-5 years instead of buying them outright (e.g. vehicles)
  • Borrow from a bank instead of a finance company
  • Secure the asset purchases over ‘bricks and mortar’ (if possible)

5. Overheads.
Reducing your overheads will increase both your profit and cash. To reduce your overheads:

  • Negotiate with suppliers
  • Measure your return on your spend (e.g. advertising, accounting fees, etc.)
  • Review your subscriptions
  • Go paperless

This is not an exhaustive list of ways to increase your profit and cash. We can help you identify specific areas of improvement in your business to increase both profit and cash.

“Never take your eyes off the cashflow because it’s the lifeblood of the business.” – Sir Richard Branson

Make your business more profitable

Make your business more profitable  

Making a profit isn’t something that happens overnight – to create a good return from your business you need a clear focus and a well thought-out strategy for increasing profitability.

This means reviewing your business model and looking at every area of the business, to see where you can cut costs, increase margins and maximise revenue.

Focus on your key drivers

Having surplus cash at the end of the year allows you to invest back into the business, fund your growth plans and increase the size of your own dividends and drawings as the owner.

To achieve these profits, it is important to focus on the key financial drivers in your business.

To drive profits:

  • Boost sales – the more sales you make, the bigger your net revenue, so investing in marketing, sales activity and business development will be key to a better bottom line.
  • Increase prices – by setting a higher price point, and keeping your ‘cost of goods sold’ number low, you create a larger profit margin on each sale – upping your profitability.
  • Cut costs – operational costs and overheads eat into your potential profits. So spend management and cost reduction are vital to creating a more profitable model.
  • Reduce taxes – tax liabilities will be one of your biggest costs, so sensible tax planning and use of tax reliefs will help to reduce your taxes and ramp up your end profit.

Talk to us about boosting your profits

If your business goal is to increase profitability, we will help you review your business model, identify your key financial drivers and proactively drive your profit performance.

Get in touch and let’s start boosting your profits.

 

What do you need to do to get ready for the New Financial Year?

What do you need to do to get ready for the New Financial Year?

For many the 31st of March feels like a huge milestone on the calendar. It can be a busy and frenetic time, and can feel even more stressful for business owners. Add to that Easter and it feels overwhelming! However the end of financial year process need not be a painful one! Read on to find out how.

A recent US study found 69% of adults attribute their stress to “money-related” issues and, as the End of the Financial Year (EOFY) draws near, it is typical for thoughts of money and dreaded taxes to dominate our mental space and drive us to despair.

To help take some of the pressure off GoFi8ure has prepared some simple steps for you to follow in your accounting software so that EOFY feels more manageable:

Step 1: Gather your paperwork aka “source documents”

The more information/paperwork you give to your Accountant, the less time they need to spend chasing you (which costs time and money).

Go through your files and emails and collate your source documents (Statements, Invoices, Receipts etc) for your accounts.

Paperwork includes at a minimum bank, credit card, loan statements as at the 31.3.2019, copies of all fixed asset invoices purchased during the last financial year, GST work papers and returns/receipts to IR, year to date payroll records, ACC invoices, insurances and premiums, legal, repairs and maintenance, lease expenses, finance agreements, use of home office, out of pocket expenses and year to date personal tax information if you are a shareholder. Depending on the complexity of your accounts you may need to provide more examples of source documents. Your Accountant will ask for these so be prepared.

Tip: Use Xero’s File Library to upload all of your paperwork/source documents as PDFs. It is really easy to do and your Accountant will love you for it.

  1. On the top left hand side click on the company name
  2. Click on the Files option
  3. Create a new folder called EOFY2019
  4. Label each file with a clear name. For example: 00 Savings Bank Statement 31.3.2019 or ACC Levy Invoice etc
  5. Upload labelled files into the electronic folder – it is that easy! This will keep everything your Accountant needs in one easy to view/access location in the cloud

Step 2: Complete a Stock Take / Stock Valuation

If you are carrying stock, you are required to do a stock take to record how much and the “value” you have on hand as at the 31st of March 2019. The figures should be at cost, excluding GST. It is important when you are dealing with stock that you use the best tools available. Whatever tracking system you use, make sure you have the right software to support it. If you are currently using Excel spreadsheets to manage your inventory, you may want to consider moving to a cloud based inventory system like Unleashed.

An effective, easy-to-use inventory system eliminates human error that can occur whilst using Excel. Inventory software gives you real-time inventory control and reporting. It also helps you to understand your product margins and provides you with important information to help you make better decisions based on real-time, accurate profit reporting.

Step 3: Round up those overdue invoices and debt collect

Review your Aged Receivables detail report and identify all invoices that are 30+ days overdue. Once this has been done make one final determined effort to collect the debt before the 31st of March. If you have exhausted all avenues for collecting unpaid invoices and do not envisage collecting them at any point in the future, you can write off the outstanding invoices to a bad debt expense. Contact us to find out how.

Tip: If you are going to write off any outstanding invoices; make sure to apply a credit note against the invoice owing. We do not recommend using the “void” option in your accounting software.

Step 4: Review Creditors entered and reconcile to Supplier Statements

Do you have outstanding supplier invoices showing on your ledger? Are you confident that these are correct? GoFi8ure recommends that you reconcile all creditors to supplier statements and balances before the 31st of March to ensure any missing invoices are received and entered into Xero. You may find that some suppliers have in fact been paid, however, the payment was not allocated against the supplier invoice. If this has happened it is important to correct it soon as possible.

Need help actioning a creditors reconciliation? Send us a message so we can help.

Tip: If you are disputing an account or are no longer paying an invoice then you should apply to the supplier for a credit note and once received reconcile the credit note to the invoice in your ledger (creditors reconciliation). If you would like accounting support please contact us.

Now is the time to make the conscious decision to take action with steps 1-4. If you would like GoFi8ure to take your end of year stress away and do these steps for you, get in touch with us today via email or call us on 0800 463 488 and quote End of Financial Year Help.