Staying Fit (financially) – NZ Plumbers Magazine featuring GoFi8ure

Regularly reviewing your company’s financial fitness will keep the business watertight, says Lisa Martin of GoFi8ure.

Funny isn’t it, that when we talk about financial fitness, many bosses start to glaze over. And yet the monetary side of things is the main reason businesses start up in the first place.

To read the GoFi8ure’s article which has been featured in the October/November 2017 NZ Plumbers magazine – click here to read it.

How healthy is your business?

As business owners, we get caught up in the day to day running of our business. Business owners wear many hats including; being the Boss, Leader, Sales Person, Business Development Manager and more. The job description of a business owner is never ending. Being busy servicing clients is good (and necessary) for business success, but what about your business, who services your internal requirements?

It’s like the typical mechanic’s story; they fix everyone else’s cars, but when it comes to their own, it’s last on the list. The same happens to our accounts. Unless you enjoy doing the accounts yourself or you have a trustworthy, qualified Bookkeeper or Accountant maintaining your accounts, how do you know the real state of them? It is often not until a sudden illness, leave of absence or a death in the family occurs that problems in your businesses finances are uncovered. Emergency cover is required, other staff get involved and a “what the..” moment happens, making you wonder what has been going on in your business!

So what can you do to avoid that situation? One way of restoring “peace of mind” in this area is a worksite assessment and review of your ledger by a GoFi8urine. Consider it a “Warrant of Fitness Finance”   in your business’s risk management plan. You review your insurances annually – so why not do the same with your accounts?

What is a Warrant of Finance (WOF)?

Warrant of Fitness checks are a legal requirement. And so they should be. Annual or six monthly inspections are important to ensure road worthiness and safety for motorists. By comparison, business health checks aren’t required by law. Just because we don’t “have to” doesn’t mean that we shouldn’t. In fact, every business owner would be wise to apply the principles of the WOF to their own financial engines and repair and replace parts and processes if they’re not working effectively – or efficiently.

The ultimate question is: Do you want your company to run like a fine-tuned engine, purring along the road to profit?

If you are unsure that you need a WOF and want to further investigate the situation for yourself, then you may to ask yourself the following questions;

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.

Do you know if your GST returns and PAYE returns are being filed and more importantly paid on time? Late payment penalties and interest mount up and staff can try to hide this from you!

Do you know the latest situation for the business’s current assets, debtors, creditors, cash flow, budget variances, and year to date wages, accruals, forecasting and your shareholders current account?

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 it won’t get corrected unless someone like a qualified, certified GoFi8urine comes along and says “Goodness, 3 months of coding and it’s all NT for GST;  lets reconcile this correctly 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?

If you want to know the true state of your accounts then you need a WOF. One of our mantras is ‘you didn’t go into business to be a Bookkeeper, but we did’. And it’s true. You started your business because you had a great idea and the drive and ambition to make it happen. You didn’t do it because you love working out your tax credits, GST and payroll – unlike our GoFi8urines.