There Has Never Been a Better Time to Get onto Xero

There Has Never Been a Better Time to Get onto Xero

GoFi8ure, a company that provides premium accountancy solutions, urges customers and businesses to look into Xero training. Xero is an online accounting software designed to aid small businesses and their advisors to adopt more efficient processes.

GoFi8ure has developed a tailor-made training programme that makes use of your unique data for ease of learning. It utilises a 12-step ‘best practice’ checklist to ensure ease of learning.

The team at Xero explains, “With Xero’s online ‘in the cloud’ accounting software, your accounts are transparent, giving you a real-time view of your business at a glance with a snapshot of all of your transactions on the dashboard and so much more.”

GoFi8ure also provides custom-fit Xero training designed to tackle specific needs. Xero Training is available in four options:

– Xero Fresh is a refresher course designed to test the checklist in-action in your business, and covers output requirements, management reports, GST reconciliation and end of year preparation for chartered accountants.

– Xero Mate is an entry-level course where you learn steps 1 to 6 of the checklist and cover basic Xero concepts, such as the Xero dashboard, accounts basics, bank accounts, contacts, finding help within Xero, and general Xero queries.

– Xero Hero is a comprehensive course where you learn steps 1 to 12, and cover reports, price lists, charts of accounts, organisation, tracking, fixed assets, foreign currency, and more!
Last but not the least, Xero2Max is a course for business owners who have completed the Xero Hero course, and are now able to harness the data in Xero in order to measure their performance, and reconcile their financial position monthly.

Contact us to discuss your Xero training requirements further. 

6 ways to measure the health of your business

6 ways to measure the health of your business

When you are running a business, it is easy to get caught up in the day-to-day activity and lose sight of the big picture. Taking stock of the health of your business is important. Knowing where you are allows for more effective planning, early warning about any issues, and the chance to better chart a course for success.

There are some quick ratios that will help you in order to gauge the health of your business. We can help you to assess your business health and show you how to calculate these vital checks. Click here to book your business Warrant of Finance. 

Liquidity Ratios

Liquidity ratios are about how quickly you can turn your business assets into cash – which helps you assess whether you’ll be able to pay the bills.

High ratios are better, as this means you’ve got more assets than liabilities.

Current ratio

Current ratio = Total current assets / Total current liabilities

As a general guideline, 2:1 is a good current ratio, but this does depend on the kind of industry you’re in, and the nature of the assets and liabilities.

Quick ratio

Quick ratio = (Current assets – stock on hand) / Current liabilities

This measure excludes your existing stock, which you may not be able to quickly turn into cash, and is seen as a more realistic quick snapshot of your position.

Solvency ratios

Solvency ratios look at sources other than cash flow to see whether your business will be able to settle debts.

Leverage ratio

Leverage ratio = Total liabilities / Equity

This is a measure of whether your business is reliant on debt financing or equity to fund your assets. A higher ratio can make it harder to borrow money.

Debt to assets

Debt to assets = Total liabilities / Total assets

This tells you what percentage of assets is being financed by liabilities.

Profitability ratios

Profitability ratios will let you know how efficient your business operations are. Where possible, it’s good to measure your business against others in your industry.

Gross margin ratio

Gross margin ratio = Gross profit / Total sales

This ratio tells you whether you can cover the necessary business overheads from your sales.

Net margin ratio

Net margin ratio = Net profit / Total sales

This measure tells you the percentage of sales dollars left after you’ve settled your expenses, except for your income taxes.

Checking in on your business health is a great habit to get into. Using these ratios helps you to understand your current business health and allows you to plan. Talk to us about how to calculate the factors in these ratios in order to keep your business on the right track.

Set your business up for success with the right structure

Set your business up for success with the right structure

 

The structure of your new business has repercussions in terms of tax, costs and the protection of your assets. When you decide on what structure you’ll use, keep in mind your future plans, because this may impact your decision.

There are three main structures you could consider.

Sole trader:

If you’re operating on your own, this may seem an obvious choice. It’s a quick one to set up and incurs minimal costs. Bear in mind that a sole trading business can be trickier to sell, and you are taking on greater personal risk in establishing the business. It may be worth looking into how you can protect your personal assets, should anything go wrong.

Partnership:

If you’re working with a partner, you could consider this option. It lets you share the load, along with the costs of getting a business established. You’re also sharing the risk and potential liabilities.

Company:

Setting up a company means more admin and higher costs to get going. You’ll become a ‘director’ as the person who runs the company, and a ‘shareholder’ as a part-owner. Companies have additional reporting duties, but you assume less personal risk. Also, the clear structure and reporting involved, may set you up for an easier sale when the time comes.

You could also consider setting up a trust, but as this is a relatively expensive and complex undertaking, it’s less likely you’ll go this way initially. You can change the structure as your business develops, but it’s important to consult with your accountant, lawyer or advisor as you go.

Before deciding, think ahead to the future you want for your business.

Ask yourself:

How am I hoping to grow the business? If you plan to bring on additional people to run the business alongside you, a company or partnership arrangement may suit.

When do I want to sell the business? Again, while selling any kind of business is possible, the clarity provided by a company may be an advantage and make your business more attractive to a buyer.

How sure am I that this business will succeed? It may be that you are setting out to prove a concept or explore a business idea. If this is the case, you may not look to incur too many costs up-front, and a sole-trader or partnership model may appeal.

Whatever you decide, make sure you understand the tax implications. Talk to us before setting out on your new venture.

 

The difference between directing and leading…

The difference between directing and leading…   

Are you being a Director or a Leader? Director is a strategic role; Leadership is an operational role.

There are 10 departments in every business, no matter how small. These are:

  1. Shareholder.
  2. Director.
  3. Leadership.
  4. Product / Service Development.
  5. Operations.
  6. Marketing.
  7. Sales.
  8. Finance.
  9. Admin / IT.
  10. HR.

Many business owners control multiple departments. Now imagine each department has a hat – worn by the single leader of each department. Many business owners wear multiple hats. The secret to the success of your organisation structure is to understand the key differences between the departments (and their responsibilities), to understand which hats you’re wearing, and most importantly, to make sure none of your hats are being neglected.

So, what’s the difference between wearing the Director hat and the Leadership hat? In a nutshell, Director is a strategic role and Leadership is an operational role.

Eight key differences between Directors and Leaders:

  1. Directors maximise shareholder value; the Leader maximises business efficiency.
  2. Directors set the plan; the Leader implements the plan.
  3. Directors have governance responsibilities; the Leader has leadership and management responsibilities.
  4. Directors work ON the business; the Leader works IN the business.
  5. Directors mitigate risks and set policy; the Leader implements the policy.
  6. Directors have a strategic focus (big picture); the Leader has an operational focus (makes it happen).
  7. Directors establish the business model and structure; the Leader implements the model and manages performance.
  8. Directors have no accountability line to the team, except to the Leader; the Leader holds the team to account.

Getting your structure right and developing your strategy are critical foundations for achieving business success.

Understanding the difference between the Director hat and the Leadership hat is fundamental. The Directors set the plan and the Leader engages and empowers the team to deliver on that plan. After all, it’s your team who must be engaged in your plan for it to become a reality.

Now, ask yourself how well you are living into the Director hat. And, what three things could you do better as a Leader? Finally, what support do you need to lift your business performance to the next level?

We can help you build a sustainable, scalable, and ultimately, saleable business. This distinction is key to the success of your business – need help? Get in touch

‘If there’s a way to do it better… find it.’ – Thomas A. Edison

Want to improve accountability and outcomes?

Want to improve accountability and outcomes?

Most business owners understand that the only way to ensure something gets done is to document what is expected, assign it to the right person, and set a due date. But what do you do if the task isn’t done? What are the consequences of this inaction?

Think back to your school days when you had homework… maybe you were super organised and got stuck in as soon as the work was assigned, or perhaps you completed it on the school bus the morning it was due. Either way, why did you get it done? Chances are there were clear consequences set by your teacher if you didn’t complete it – a few whacks with a stick or a lunchtime detention – that’s what we call accountability and consequence.

Unfortunately, many business owners forget these lessons from school. Sure, we set the tasks and actions, assign them to people and, if we’re really good, set a due date. From there, we so often forget to hold the person to account. Very rarely is there a consequence for the person responsible for the task. The consequence for the business owner, however, is ultimately a poorer performing business.

Here’s seven rules to tighten up your accountability:

  1. Ensure at the outset that everyone is clear about why the task is important.
  2. Assign the task to the right person and be available to give support.
  3. Be specific and crystal clear with all communication. Remember, they don’t know what they don’t know.
  4. Ask them to repeat back the instructions, to ensure the message was interpreted correctly.
  5. Set a realistic timeframe and provide delivery instructions and expectations.
  6. Agree on consequences for inaction.
  7. Have quick catch ups to check progress is on track.

Now, ask yourself… what actions can I take to improve accountability and outcomes for my team? What changes or improvements do I need to make to my planning processes and reporting systems? And most importantly, who is the best person to hold me to account as a business owner? Accountability goes both ways, especially if you want to be an authentic and effective leader.

‘Accountability is the glue that ties commitment to the result.’ – Bob Proctor

To find out how GoFi8ure can help you become more accountable and achieve outcomes that you WANT for your business – send us a message or call us on 0800 463 488.

New Year, New Accountant: Improve your Financial Year with GoFi8ure

New Year, New Accountant: Improve your Financial Year with GoFi8ure

With the New Year coming around, people are thinking about resolutions. ‘Getting the books in order’ might not be most people’s first thought, but it’s something many business owners should seriously consider. The beginning of the year is the perfect time to hire an accountant for mapping out the company’s finances for the upcoming year.  

Going into the new year, it’s best to think about creating a steady stream of finances and having someone to do proper tax return calculation for you – it can make the difference between a good year or a bad one.

Getting a new accountant has a number of benefits you may not be aware of, such as access to cutting-edge accounting apps and systems. Keeping your accounting updated is the best way to stay ahead of the curve, and an accountant well trained in handling cloud-based systems or new apps is a big asset.

The new year is also a new time to review expenses and refine cash flow. Hiring an accounting firm to do the books for the business allows for a thorough breakdown of where the company can improve—what expenses to forego, which paths to divert the cash flow to, and how to generally keep the business afloat by allocating resources to areas with the opportunity for more profit.

It’s the best time for taking your company to even greater heights. With solid bookkeeping, an updated forecast, and clear-cut goals, your company can achieve greater success than you ever thought possible.

Interested in improving your company’s financial year? Get the help of GoFi8ure’s expert accountants! Benefit from their sound advice and make the most out of your company’s profits! Visit https://gofi8ure.co.nz/ now for more information.

Avoid A Year’s Worth of Accounting Regrets by Working with GoFi8ure

Avoid A Year’s Worth of Accounting Regrets by Working with GoFi8ure 

Running a business requires the right mix of innovation and common sense. However, having these skills doesn’t necessarily mean you’re adept with numbers.  

Most business owners don’t have the luxury of spare time for Xero training, in order to understand how the financing of their business works. With this in mind, small to medium businesses can do much better if they work with accounting firms.

Businesses might think they can get away by not hiring such firms, but most often they eventually reach a point of realising they should’ve started working with bookkeeping companies from the start. For one, these firms give businesses the luxury of more time by working efficiently than a small company would have been able to on their own. They are more focused on understanding the financial side of the business, something a busy CEO or multi-titled staff worker wouldn’t be able to do.

Some people build businesses because they want to have more money to provide for their families. A bookkeeping firm would be able to help them get the work-life balance they are looking for by eliminating accounting from a list of their things to do.

Calculating taxes can be tricky, and having a bookkeeping firm handle them helps small or medium companies avoid penalties. Tax penalties can cost enough to pose a problem to even the biggest companies.

With all these benefits, overlooking the efficiency of a bookkeeping firm can be a costly mistake. Let Gofi8ure help set up your cloud accounting or do your bookkeeping before the year ends! Get in touch with us by calling us today on 0800 463 488.

 

How to create a transformational strategy for 2019

How to create a transformational strategy for 2019

How was 2018 for your business? Did you have a great year and achieve all your goals? Or did you just stay afloat? If you would like a more successful year in 2019, now is the time to think about implementing a transformational change strategy.

In the business world, transformational change requires a business making radical changes in their business model, often requiring changes in company structure, culture and management. Companies may undergo transformational change in response to crisis, or in order to re-position themselves in the market. Transformational change also occurs in response to changes in technology, or as companies adapt to take advantage of new business models.

Truth is, when a dramatic shift in consumer behaviour or a new competitor enters the market, transformational change becomes a matter of survival if a business is going to be able to keep up with competition and move forward. As we all know, many business transformations fail. In a recent McKinsey Quarterly survey, only 38% of leaders believed their transformation had a “completely” or “mostly successful” impact on business performance.

There are 3 core parts to achieving a successful, effective transformational strategy. They are:

1. Content of Change
The business focus of the change (structure, strategy, business process, systems, technology, product, or service).

2. People in Change
People’s mind-set, emotional reactions, behaviour, degree of engagement, acceptance, commitment, and cultural dynamics.

3. Process of Change
The way in which change is planned, designed, and implemented, how it unfolds, its road map, governance, and course corrections.

So you want transformational change for your business, where do you start? Here are a few things to consider and think about when creating the business you want:

  1. Magic wand time – If you were to achieve the business or personal goals of your dreams, what would that outcome look like? Your business should be able to provide you with the lifestyle and business you desire. Be very specific as you imagine exactly what your outcome would look like in terms of work, health, family, love life, finances, and also in fun.
  2. Entry points – These are the means of moving away from the “find it, fix it” modes of solving problems and moving towards the first steps that would advance you towards a new goal. For example, saying “I’ll get fit when my business is thriving and profitable” is a “find it and fix it” approach. But what about finding a way to begin steps in the right direction towards greater health and fitness right away, beginning today?
  3. The driving force of your values – What are the values that define you most heavily when you run into a stumbling point or a roadblock? Which ones represent your finest and highest priorities and goals? It is important to use these values as a roadmap for your desired destination, the author maintains.
  4. Speedbumps, detours and roadblocks – Many times on the path to dramatic achievements we feel stopped or entirely stuck. These are chances to cast our occurrences into a broader light for further reflection on what these experiences are meant to teach us, and how we can use these obstacles to help us instead of slowing down or preventing our ability to achieve remarkable goals.
  5. The power of your vision – The expression “If you can’t see it, you can’t be it” holds strong weight. It is vital to understand exactly what your outcome will look like. Using a Vision Board can be a useful exercise for this. Have you ever sat down and thought about what you really want your business to look like? What do you desire?
  6. Acknowledging where the gap is – What is out of alignment that is standing between you and your goal? How could you reconcile this chasm? Instead of fearing or resenting the space between you and your desired achievement, learn to “lean in” to that empty space and take steps, knowing that you will require time and help and even without the exact knowledge of how you are going to get to the goal. Now it becomes achievable. What are your gaps and what can you do to fill them?
  7. Software and tools that add value – This one is an important one to consider. There are always ways to be more efficient and effective with your business by having the right software and processes in place. Take your accounts for example – are you able to get the right data and information from them? Are your accounting processes seamless or are they causing you stress? According to Xero, there was a 24.9% growth in New Zealanders getting onto Xero. Image how well your business could do with the right tools in place.

Tip: Use a hybrid model – During a transformational change effort, acceptance hinges on hybrid methods that tailor the tactics and solutions to the people, processes, tools and infrastructure components.

To find out more about how GoFi8ure can help with your internal accounting processes, systems and software requirements, send us a message or call us on 0800 463 488.

Adaptable small firms focus on value – GoFi8ure

Smaller accounting firms are part of the fabric of many New Zealand towns and cities but they, like the large firms, have to adapt to a rapidly changing market.  

Hear from GoFi8ure’s Executive Director Lisa Martin about what she believes SME business owners need from their Accountant.

Check out this great article write up by clicking here.

How to plan for a holiday from your small business

Leading up to the holiday period, is your business cash flow in good health to carry you through? This time of year can be hard on small business. Make a plan early to ensure healthy cash flow over the holidays.   

Whether you are heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it is important to keep your cash flow under control. This means pre-planning and being proactive.

When you are not in the office, there are still overheads and salaries that need to be sorted. If taking time off means that less cash will be coming in, it is essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.

If there’s even a possibility that there could be a shortfall, it is essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, will not suffer.

Tips to minimise the stress of 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 – 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 Inland Revenue – if cash flow is tight, make sure you have conversations early so you have everything in place to see you through.

When you are planning for a break, book an appointment with us. We can help you navigate the holiday period and help you alleviate cash flow worries. So you get a well deserved break.