Empower Your Business

Accounting is Just the Beginning


How to succeed with cash flow forecasts

Preparing an annual cash flow forecast can tell you a lot about your business.

It can warn you with plenty of time to spare that you’re not going to have enough cash to survive the next year without getting additional working capital — which is vitally important to know.

Or it could be the wake-up call you need to make some changes in your business. You might need to make a tweak or two, like increasing prices or shedding ineffective staff, or you could discover something more serious, such as you’re in a twilight business and it’s time to move on.

Read more on how to prepare and read your forecast here.


8 Vital Things You Need To Know about Your Business – Each and Every Month

Just how much do you know about your business? No, not about what you sell, or how you make or deliver your products and services, I mean the really important things that determine whether you’re going to make it through to retirement or maybe even successfully selling your business.

These are my top eight favourite things each and every one of us business owners should know about our businesses: Read More


Simple Business Systems

I’ve said this before (and no doubt I’ll say it again) but I’m always surprised at the lack of simple systems utilised in owner-managed businesses. Using the word “systems” can be off-putting because people immediately think it’s going to be too complex, too costly or too time consuming but a system can be very, very simple. For example, it could be a referral system whereby: Read More


Importance of Online Security

For some years now we have been told repeatedly that we must get online for just about everything, whether for software, apps, shopping, communication, data storage – you name it – we must do it online! It’s worrying then when there are regular headlines about the latest hack into someone’s data or whether someone has seen someone else’s data online accidentally. Read More


Four Vital Things You Need To Know about Your Business – Each and Every Month

Just how much do you know about your business? No, not about what you sell, or how you make or deliver your products and services, I mean the really important things that determine whether you’re going to survive the ongoing recession (just how do they work out those GDP growth figures by the way?) and make it through to retirement or maybe even successfully selling your business.

Here are four of my eight favourite things each and every one of us business owners should know about our businesses:

Whether you’re exceeding your Current Break-Even Point
Whilst all the other things listed in this article are very important, knowing whether you’re exceeding your current break-even point is just about THE most important thing about your business you need to know. Even if you have a cash reserve stashed away, sooner or later you’re heading for trouble if you don’t sell enough to cover your outgoings. And I stress the current, not a historical figure based on your costs two years ago or a gross profit margin you haven’t achieved since the start of the last recession!

If you’d like to know how to calculate your break-even point click here and to make sure it’s the full picture click here.

Read More


Four reasons why BankLink is a proven solution for rural clients

“Stressful! Disorganised and time consuming.”

That was life for beef and deer farmers Kate and Nathan Stratford before moving to MYOB BankLink.

“We didn’t really have a handle on what was happening, we had minimal formal budgets and didn’t know if we were moving forwards or backwards with our business”.

Fickle internet connections, lack of time, need for reliability, and (for the Stratfords) a need for financial visibility – these are some of the reasons New Zealand’s primary producers turn to BankLink as their preferred accounting solution.

Let’s take a look at how BankLink has earned its position as leader in rural accounting solutions.

Read More


Bolster your bottom line

For new businesses in that critical early period, cashflow is a vital part of staying afloat to establish and grow the business. Established businesses also know the importance of cashflow to help you keep everything running while you grow the business. If you can’t reach your targets for income, reining in your costs can help give you a little extra head room to manage cashflow while you’re planning your next move.

Cost control can contribute to business success or failure but it can be hard to get a handle on it as your business costs can work on a number of levels. It can be a challenge to pinpoint hidden costs or where your established ways of doing things cost you more money than they should.

It’s more than just keeping an eye on outgoings (though that’s important). It’s about looking at each aspect of your business and all your business systems (or the gaps where there should be business systems) to see if poor practice is driving costs up unnecessarily.

It can be helpful to break it down a little. You can look at it in terms of cost centres such as power or office supplies. Or you can look at what those costs do for your business. It can help to analyse costs in terms of cost of sale and overheads (see the article on this page).

Every dollar you can pull back from your costs can go straight onto your bottom line.

Get in touch and chat to us if you’d like to review your costs and your systems to keep costs under control. Whether your sales are booming or busting, you want to make sure that while you’re focused on revenue, your costs aren’t ballooning and you’re still delivering on your bottom line.

Email nick@abac.co.nz or phone 0800 ASK NICK


What’s Good (and Bad) about Cloud Accounting

Cloud Accounting, ABAC Hastings, Hawke's Bay

Fashion and clever advertising has a huge influence on our lives, especially where technology is involved. Sometimes this can be positive but often it’s bad for us e.g. you see folks out and about who don’t look like they have two pennies to rub together with the latest expensive smartphones or 60” surround-sound TV’s in houses that are unbelievably tatty. So is cloud accounting a fashion or is it here to stay?

There’s no denying there’s loads of good stuff about cloud accounting:

  • Back-ups. For those who can’t get into the routine of backing-up cloud accounting can save some pain and cost, and to be fair, sometimes the back-ups are not backing up or they fail, which is why it’s wise to have two systems to back-up as well as testing the back-up’s regularly. Assuming, of course, terrorists or hackers don’t get to your data in the cloud or the underground server room floods!
  • Software Updates. You’re always on the latest version and there’s no dilemma about whether to spend the money to upgrade to the latest version which in actuality, is probably not a lot different to the existing.
  • Access. With some (but not all) cloud accounting software you can access your data from any computer with an internet connection, or on mobile phones or tablets if you have sharp eyes.
  • Only One Data File. With cloud accounting there’s only one live data file which means there’s no chance of entering data on the wrong file or getting confused as to which file is the live one. A client the other day had 4 data files on her desktop – talk about the potential for a stuff-up!
  • Security. They say that cloud accounting software has much better security than desktop software. Hmmm………..not sure that’s very relevant to small businesses but maybe for bigger ones?
  • Sharing Data. The best thing about cloud accounting is that you share your data with others from a distance, whether it’s your business partner, your accountant or your business coach. Prior to cloud accounting sharing data meant getting in the car to collect a back-up, or emailing a file to another or via Dropbox all of which take time or can cause confusion.

You may have noticed that I haven’t listed automated bank feeds as an advantage of cloud accounting. This is because there is some fantastic accounting software available with automated bank feeds utilising coding rules which is not cloud based. Not only is this cheaper but it’s much easier to use by non-accountants and bookkeepers.

So are there any downsides to cloud accounting?

  • For smaller businesses the ongoing monthly fees can be a disincentive. If you’re paying $50 a month over 10 years this is $6,000, a huge amount more than the few hundred dollars you used to spend on desktop software. Some of my clients are still using 10 year old accounting software which cost them $250! 
  • Although internet speeds and coverage is improving it can still be frustratingly slower to enter data or run reports using cloud software, especially if the software itself is launched prematurely and is just too slow! 
  • Third-Party Software. The ability to integrate with third-party software is often quoted as an advantage of cloud accounting software but to me, it’s often just a nuisance because there’s more cost and hassle and often, they just don’t work together. Why on earth would you want to pay for two different software brands if you could get everything in one?
  • Difficult to Use. The clever marketing of one cloud accounting software brand puts forward the idea that it’s easy to use for non-accountants or bookkeepers. Unfortunately I don’t find that to be the case and whilst desktop accounting software is not exactly easy to use either at least there was no attempt to pretend that it was!
  • Whose Data is it? There’s been various stories floating about the internet about the difficulties business owners found when they fell out with their accountants (who for some odd reason owned their data!) or when they stopped paying the monthly fees and found they could no longer access their data. Neither of these issues would occur with desktop software. 
  • No Internet = No Software! It’s rare these days I must admit but what happens when your internet fails?

So don’t be swayed by fashion or clever advertising, do some research and ask around before you take the plunge and commit to a particular brand of accounting software. Get advice too from an honest accountant, not one who’s been bribed by a cloud accounting provider!


Changes to Director Requirements to Take Effect From 1 May 2015

Hastings accountants

Unlike many other countries (e.g. Australia), there has historically not been a requirement for a New Zealand company to have a New Zealand resident director.

This has made it fairly easy for non-residents to set a company up in New Zealand and not have to engage a person in New Zealand to act as director for the company.

Some time ago proposals were raised that would significantly change the director requirements in New Zealand.  These proposals resulted in the Companies Amendment Act (No 4) 2014 being enacted on 24 June 2014.  This legislation has increased the information requirements and strengthened the registration process of New Zealand resident companies.

Effective from 1 May 2015, all New Zealand incorporated companies will be required to have at least one director who:

  • Is resident in New Zealand, or
  • Lives in an enforcement country and is a director of a company registered in that enforcement country.

As noted above, this criteria is an “or” therefore having a New Zealand resident director is not critical provided a director satisfies the alternative criteria.  At present only Australia qualifies as an enforcement country.

There may be an option for companies to appoint an ‘alternate director’ who is resident in New Zealand to help satisfy the new requirements.

If a company is found to be in breach of the new resident company requirements, this could result in the company being removed from the register.

In addition to providing the residential address details of each director, companies will also be required to provide the Companies Office with details of the director’s date and place of birth at the time of registration.  These details will not be made publically available.  Existing companies will be required to provide this information in relation to any changes to directorships or alternate directorships from 1 May 2015.

The board of directors will also be required to advise the Registrar of the name of any ultimate holding company, the country of its registration, the registration number or code (as applicable) and its registered office.  This information will need to be provided on registration or within 20 working days of any change.  These details will be made publically available.  Existing companies will need to provide the Registrar with this information in the next annual return that is filed after 1 May 2015.

For more information on the changes to the Companies and Limited Partnerships Amendments Act click on the following link:  http://www.business.govt.nz/companies/news-updates/companies-and-limited-partnerships-amendment-acts


How can I run my business more efficiently?

A+ BAC Business efficienciesIf you’re going to risk your future and personal prosperity in a business, it makes sense to run the business as efficiently as possible. This will reduce stress, give you more opportunity for leisure, boost profits and increase the value of your business.

1. Plan in advance

Business surprises are usually expensive, so advanced planning is very important in maintaining efficiency. What production capacity will you need? Do you have enough employees or contractors, or too many? Will you run out of cash? Is your sales pipeline running dry? What preventative maintenance do you need to organise for your plant and equipment? Have you ordered sufficient stock or run out of warehouse space? If you aren’t detail oriented, find a mentor or colleague who can help you focus on planning.

 2. Maintain consistency

Being consistent with how you do things in your business is an important way of increasing efficiency. If everybody does everything the same way each and every time, it will save time (and therefore money), cut down on potential rework in the event of things going wrong and ensure your customers and clients receive a quality offering every time.

Read full article with additional tips here