It’s the final countdown

As this magazine issue ‘hits the streets’ it’s just two months until the IRD’s Payday Filing deadline. Will businesses and payroll providers be ready? How should business owners prepare for the change? NZBusiness went to the market.

From April 1st 2019 all employers will be required to send their payroll information to Inland Revenue whenever they pay their staff. Payday filing is billed as the biggest change to the way businesses manage their payroll in more than two decades. Yet surprisingly, according to MYOB Business Monitor research, there’s little understanding of the new process amongst the New Zealand’s business community.

Get your house in order

When NZBusiness spoke to Lisa Martin, executive director of accounting solutions specialist GoFi8ure, late last year, she suspected many business owners were “in cruise mode” over payday filing – focused on just getting through the Christmas period.

Now that New Year resolutions have been made she’s hoping that “sorting out payday filing transition” is the very first business resolution business owners will honour.

“When you think about it, everything about running a business relates to people, strategy, execution and cash; payday filing is about people and cash,” says Martin. “So it deserves to be a major priority.”

Her best advice? Look at the payroll set-up you have now, and get a trusted payroll advisor – that’s your payroll company or accountant, or your book-keeper – to ensure that its fit-for-purpose.

For business owners who don’t think they’ll be ready for the transition, Martin says although Inland Revenue will offer to help, remember that at last count (in February 2018) New Zealand had 534,930 enterprises. Inland Revenue will be rather busy for a while.

“If I couldn’t successfully prepare for a marathon I would find someone who had run one and ask them what I should do. Again, it comes down to seeking a trusted advisor.”

After payday filing Martin describes payroll auditing as the “next Darth Vader of the Death Star” coming for 2019, 2020 and beyond.

In preparation for payroll auditing she advises business owners to get onto automated software. “Basically where you can log on, enter your hours, push a button and then your payroll software calculates everything for you, including annual leave, sick leave, balances, Kiwisaver, student loans and child support.

“And it only costs the price of a couple of lattés a week.”

Get your house in order now, she urges – especially everything you do from a payroll point of view. “Because it’s people’s money and PAYE, tax-deducted at source for the IRD. It has to be right and there’s an increased chance you could be audited.”

Read the rest of the article by clicking here.

Payday Filing – coming ready or not!

With changes in the wind across the accounting and payroll sectors, business owners have much to prepare for leading into 2019. Fortunately there are software and service solution providers ready to make life easier.

Why automation matters

For business owners tempted to manually DIY their way through the new payday filing regime, Lisa Martin, executive director of accounting solutions specialist GoFi8ure, sounds a warning. If you’re paying staff weekly, it would require you to log onto the IRD site four times a month.

Things get tricky when a business owner decides to wing it, Martin says. They might go online at 10pm on a Monday night, get the PAYE calculator, work out the net pay and pay their staff. Then have just two days to get it checked.

Better to go on an automated payroll system and avoid all the stress, she says – provided you’re talking to a bookkeeper, accountant or tax agent, and despite the fact that the IRD is encouraging people to deal direct.

Martin implores business owners to never use Excel spreadsheets to manage payroll, when there are so many affordable cloud-based (SaaS) payroll software packages out there. And get the provider to set it up, she says, so balances such as accrued leave are carried forward correctly.

The recent Bunnings case relating to miscalculated leave payments is a great reason why you should get it right.

“Start now with new software, don’t leave it to April 2019,” urges Martin. “It’s all about the planning and processes, especially considering it is someone else’s money!

“There are loads of bookkeepers standing at the ready to help you get off spreadsheets and into the 21st century.”

To read the article in full click here.

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.

Lisa Martin, Executive Director of GoFi8ure completes Bachelor of Business Accounting

The team at GoFi8ure would like to congratulate our Executive Director Lisa Martin for completing her Bachelor of Business Accounting. After 2 years of constant, tireless study, perseverance and self discipline, Lisa completed her studies and has received a Bachelor of Business Accounting.

If you take the the time to invest in yourself and educate yourself, the opportunities are endless. #becomethebetterversionofyourself

 

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.

Charitable donations may be tax deductible – here is what you need to know

Donating to charity not only supports the vital work of an organisation but also has positive side-effects when claiming tax deductions.  

Donating to charity not only supports the vital work of an organisation or group, but it can have positive side-effects when it comes to claiming tax deductions. To be eligible for a tax credit, you need to make sure that your contributions meet certain conditions, and that you’re making a legitimate claim.

In general, when a charity is an approved donee organisation or registered as a ‘deductible gift recipient’ (DGR), and you donate over a certain amount, you can claim a tax deduction. You can find out if a charity is a DGR organisation by checking their website, calling them, or searching the register for charities.

But, be careful. There’s a difference between making a donation and making a contribution. When you’re making a donation, you must be doing so willingly, without receiving any ‘material advantage’. This means that you can’t be getting anything in return for your cash. So no chocolate bars, no raffle tickets, no movie tickets and no fancy dinners. If you receive anything after handing over your cash, then this is considered a contribution, and you should not claim this as a tax deduction.

Other situations which are commonly misunderstood to be donations are membership fees, expenses incurred by providing volunteer work (or the value of the time spent doing that work), donating gift vouchers, or money donated through a will.

The last two things you need to know are that a tax deduction for most gifts is claimed in the tax return for the income year in which the gift is made. However, in some circumstances, you can spread the tax deduction over five income years. And, just like any other tax deduction you’re hoping to claim, you’ll need to get and keep the receipt for your donation.

The tax department sometimes demands repayment for ineligible deductions. So, as with all things tax, it’s best to avoid penalties by checking in the with the experts.

Talk to us about your charitable donations and ensure you keep receipts for the payments you have made.

What should your role look like as a Director in 2019?

The key function of a Director is to maximise shareholder value. How much time are you dedicating to working ON your business? And, who is holding you accountable to fulfilling this role effectively?

Most business owners know that every member of their team needs a Job Description, which should include:

  • Clearly outlined responsibilities and tasks
  • Some specific and measurable KPIs (Key Performance Indicators)
  • A set of clear expectations around core competencies and behaviour

When a Job Description is clearly documented, it’s much easier to monitor and measure performance. However, as logical as this seems, many business owners fail to do this for their own role as Director of the business.

So, as Director, what should be in your Job Description?

The most important function of a Director is to maximise shareholder value. This means carrying out activities that drive up returns and business value; by working smarter, not harder.

Your key responsibilities include setting the vision and strategy, managing and mitigating risks, growing the business, establishing the right business structure and holding the CEO (who may also be a Director) to account.

How much time are you dedicating to working ON your business?

To give a general indication… as Director, you should spend an hour or two every week working ON the business. In addition to that, every quarter you should dedicate half a day to ongoing strategy planning and take one to two days every year for an annual off-site planning session or retreat. This is to remove yourself from day to day distractions to do some serious ‘blue sky thinking’.

As Director, you still need accountability.

Appoint someone independent to ensure you adopt best practice as a Director. There are several ways to get accountability. You could establish a quarterly advisory board (with an independent chairperson). Or, you could engage an experienced facilitator to coach you regularly to ensure you’re meeting your objectives. Having an independent accountability process in place will ensure better planning, better decision making and faster progress.

Remember, you’re not exempt from meeting the requirements of your Director role. Like every other role in your business, you need a Job Description for your role as Director, and it should have clear responsibilities and tasks with KPIs so that you can monitor and improve performance.

So, if you do not already have a Job Description, set that as an important task, with a due date, and start thinking about who will hold you accountable.

Xero’s new Navigation page

Xero’s new Navigation page

Have you heard? Xero are changing their navigation bar!

Why have Xero changed the navigation bar? 

To make it faster and simpler for you to find the tools you need.

What does this change mean for you?

It means by the end of November when you go to use Xero, the items that you would normally use are no longer in the same place. 

To read Xero’s update click here.

What has changed?

The biggest change with the navigation bar is that business and accounting tools have been separated, making it easier for you to find what you need.

Business vs accounting

The most obvious change is that business and accounting tools have been separated, making it easier for you to find what you need.

Business

Everyday tasks are grouped logically under the Business menu. Here you’ll find all the tools that most small businesses use on a daily basis, such as:

  • Invoices and quotes
  • Bills and purchase orders
  • Expense claims
  • Inventory, now labelled Products and services

Accounting

The Accounting menu holds the advisory and compliance tools that are more commonly used by advisers and partners of the organisation. These include:

  • Bank accounts
  • Reports
  • Advanced accounting tools and settings

Any reports, tools or settings that have been set as favourites show in the Accounting menu. By default the following tools and settings are set as favourites:

  • Chart of accounts
  • Find and recode
  • Manual journals
  • Fixed assets

Each user can set their own favourites by selecting any of the options in the Advanced accounting settings.

Now is the perfect time to get a Xero fresher training session booked in. Our qualified and experienced Xero trainers are ready to show you how the new navigation tool bar works so you can still work efficiently and effectively. 

Book your Xero refresher training by clicking here.

Setting goals and measuring performance

Setting goals and measuring performance

Goals are what drive the long-term performance of your business.

Agreeing on clear targets, and measuring your progress over time via key performance indicators (KPIs), helps you to understand exactly where the business is going.

But how does this kind of performance management work in practice?

Track your performance with KPIs

Tracking your goals via KPIs show you where the company is hitting the mark and (importantly) where you need to do better – putting real drive and motivation behind your overall strategy.

To make performance management drive your profits and productivity:

  • Set targets and work to a long-term strategy – define your key goals for sales, profit, growth and cashflow etc. And ensure these target are closely aligned to your wider strategic business plan – so you’re tracking the metrics that matter.
  • Track performance with real-time information – integrate a KPI reporting app with your accounting software, and monitor the key financial and non-financial metrics. Use this dashboard to regularly track your KPIs – giving you a current view of performance.
  • Motivate your team to be more productive – explain your key targets to the wider team, and keep them engaged in meeting these goals. Motivation and engagement levels are higher when staff can see what they’re working towards.

Talk to us about setting up a KPI dashboard

If your are looking to track, monitor and boost your business performance, we can help. We’ll help you choose the right KPI reporting app, and get you in control of your key metrics.

Get in touch to start boosting your performance.

 

 

GoFi8ure able to help with Xero training for the New Financial Year

GoFi8ure able to help with Xero training for the New Financial Year

It is generally accepted that preparation for the financial year can start from as early as February, to as late as July or August. Getting a head start can help businesses avoid rushing and making miscalculations.

The end of a financial year is a great time to take a look at business from a broad perspective, and see what worked and what didn’t. Companies have the chance to do activities such as segmenting expenditures and revenues into separate groups. Reviewing tax returns and other related processes is also a great step toward getting prepared for the new financial year.

Creating a calendar is also a common tactic to help businesses flourish instead of flounder at critical turning points. This includes creating deadlines, and sorting tasks by their priority. Such tasks could include creating a system for dealing with batch emails, creating templates for sending replies or inquiries, and delegating bank processes to automated accounting software.

Another great practice is to settle the cash flow system early. As one of the most important facets of a business, keeping a healthy cash flow is important, in order to avoid funds bottlenecking at a time a company needs them the most. Xero training can help a company’s employees track and manage their cash flow better.

Budget checks are another important stage for monitoring business’ finances. After designing a cash flow stream, companies need to allocate their resources intelligently. Creating a budget plan for the business will ensure that a lot of important sectors of the business are covered.

Technology is ever-changing, and a good business should stay up-to-date. Budget plans usually include spending for good software and new technologies, like digitising their transactions and accounting processes. It could also be used to purchase new hardware for accounting software – investing in this is a big help to companies in taking their business to the next level.

Let GoFi8ure help you set up new processes like Xero training to get ahead! Visit our website at https://gofi8ure.co.nz/ and find out how!