Empower Your Business

Accounting is Just the Beginning


Accountancy + Business Advice Centre has moved

Accountancy + Business Advice Centre

Have you caught up with the news? We’re very pleased to announce that we have moved to new premises at 1010 Heretaunga St East, Parkvale, Hastings 4122. Our PO Box number remains the same but our new telephone line is 06 876 5599 and fax line 06 876 5598.

Our new office is easy to find on Heretaunga Street East (just two minutes towards Havelock North from Hastings New World), has three reserved car-parks for clients as well as unrestricted on-street parking, two private meeting rooms and a custom-designed training facility for up to eight participants.

Our new premises will enable us to provide an even better service to our existing clients and additionally, allow us to look after even more business owners, horticulturists and farmers who are seeking down-to-earth, easy-to-understand, straightforward and honest accounting and business advice at a reasonable price.

Pop on in and see us!


7 Reasons to Trade as a Limited Company

7 reasons to trade as a limited companyIt costs a few hundred dollars to form a limited company but despite that, many thousands of Kiwi’s continue to start businesses as sole traders or even worse, partnerships. In more than 30 years of looking after small businesses I’ve seen so many unfortunate and unnecessary situations and countless examples continue to crop up, so here are a few I’ve seen in the last year or so.

 1.    Outstanding GST. It’s a fact that the IRD in NZ are rubbish at collecting tax, so much so that many business owners use the IRD as a source of finance. Take a new client of mine in Hawkes Bay, a husband and wife partnership who now owe $85,000 in GST. Their business is failing but guess what – as a partnership they are fully liable personally for ALL the GST. If they were a limited company they could have walked away. Bankruptcy and ruin beckon……………

 2.    Accounts Receivable. Another husband and wife partnership client has received a demand for $175,000 from the liquidator of one of their former customers, who says they have to repay the money they legitimately received for sales made. Ridiculous maybe, but as a partnership they are fully liable and needless to say, they haven’t got $175,000 sitting around!

 3.    Legal Claim. Another client, a sole trader, was on the receiving end of a totally unexpected claim of $260,000, and guess what, his insurance company refused to pay up! Bye-bye house!

 4.   Partner’s Debt’s. Another client was in a two-man partnership. His business partner ran up debts willy-nilly and then cleared off. Guess who had to pick up the tab for the partner’s debts?

And it’s not just debt or financial ruin that makes a limited company so valuable:

 5.    SelfEmployed Status. We are very lucky in NZ. You can trade as a limited company yet still retain your self-employed status so it’s crazy not to take advantage of this.

 6.    Tax. Both sole traders and partnerships are pretty useless for income-splitting to minimise tax. A company, on the other hand, is far more flexible.

 7.    Ease of Ownership Transfer. It’s so much easier to transfer wealth or assets when you have a limited company. No legal fees or tax issues to worry about!

Business is risky, so why take any more risk than you need to? If you need help with your business contact Nick on 0800 ASK NICK or email nick@abac.co.nz.


Top Tips For Business Growth

20 somethingIt’s easy to sit back and enjoy the fruits of your labour and become comfortable with your current business position.  But don’t become too comfortable.  Isn’t that why you got into business in the first place?  To step away from that zone and challenge your way of thinking?

Always be aware of and listen to your market.  It’s easier to swim with the current than against it so make sure you are offering a product or service that people are actually buying.  Do your research and find out about your target market, their needs and their wants then provide something that delivers on these.

Business growth will come by changing your mindset.  If the market is not doing well, don’t look at this and use it as an excuse for your business not to grow.  A positive attitude is the first step towards growth.  If you surrender to your current situation, you’re not going to grow.

When you think of growing your business, don’t let it stress you out.  Try to do just a little bit every day, not everything.  Make concise lists about what’s important and what steps you need to take to ensure these tasks are completed, before moving on to the next.  If you don’t complete them on time, don’t worry too much but try to set realistic timeframes where possible.  Try to be as motivated as possible.  Be aware of productivity killers such as procrastination and distraction.

Productivity Killers

One of the most important elements to business growth comes from managing productivity.  This can be done by being aware of your habits and making basic changes to the way you work.

The wrong mindset. We all know that attitude has a lot to do with our productivity.  By having a more positive outlook on the day or week ahead, your motivation will accelerate and lead to better productivity.

Distractions.  Some people go so far as to remove distractions such as social media from the workplace.  However it wouldn’t actually matter what you removed, there is always something to distract us from our work. Whether it is the view out the window, personal emails, a fly in the room or idle chatter with a colleague, these are all productivity killers.  What we need to do is be aware of these distractions and learn to work through them.

Lack of routine. Without structure, it’s easy to become lazy.  Set a regular pattern and stick to it each day, and not just in your work environment.

Awareness and little changes over time to some of these productivity killers will subconsciously improve your work ethic over time and help steer your business toward positive growth.

If you need help with your business growth contact Nick on 0800 ASK NICK or email nick@abac.co.nz.


Direct Marketing – An Essential Tool for Small Business

Small business is about identifying and servicing niche markets. If you know what your niche market is you have a fantastic marketing opportunity already at your doorstep – as long as you know how to reach it.

Knowing where the market is and how to reach it should all be written in your marketing plan. This is where you include all the information about the market in which you operate – what you’re selling, where you’re selling it and for how much, who else is selling it, who wants to buy it and who your specific target audience is.

Your marketing plan should also include how you are going to tell people about your products or services. The way you choose to market your business could easily determine how successful you become.

Marketing target

Advertising versus direct marketing

Where general advertising builds awareness and creates a positive image for a new product, direct marketing asks straight up for the order. It’s about going straight to your target group, often with a personalised letter, and giving them a direct opportunity to buy.

Direct Marketing is not advertising. It is selling to existing and potential identifiable customers and its result is measurable.

The whole concept of direct marketing is that it is direct communication to a particular target: either a current customer, former customer or someone who you believe fits the characteristics of your current customers. General marketing, on the other hand, is not addressed to any particular customer.

But for direct marketing to be successful, the business must have a database. This is where you collect as much information as possible about your customers – their demographics (contact details, age, occupation), how often they buy, what they buy, how much they spend and so on.

When planning your direct marketing campaign, decide which type of customers you want to approach. Whether it’s your top customers, or particular customers you think will genuinely be interested in the product you are promoting, the database should be able to tell you which customers to target.

Direct marketing, which can also use email, telemarketing or personal visit as a means of delivering the message, is a very powerful tool for small businesses because they can:

  • concentrate and dominate niche markets
  • generate additional sales from existing customers and new customers
  • generate sales leads from groups of persons who are very similar to existing customers

Test your product or service

Before embarking on your campaign make sure you are completely satisfied with the product or service you are selling to your customers. The last thing you want is for these customers – especially your top customers – to go somewhere else because of a faulty product you tried to sell directly to them.

Decide on a theme to be emphasised – keep it simple and focused; don’t fall into the trap of cramming too much information into the letter. Highlight one important aspect of the product, for example, price, quality, uniqueness, and use this as the theme throughout the letter.

You’ve got to keep the person reading from the opening paragraph to the order form.  Once a reader loses interest, it is likely the business will lose a customer.

As the responses from direct marketing are measurable, you can experiment with mail-outs on different themes sent to different groups of customers and analyse which strategy works best.

Next Steps – Plan Your Direct Marketing Campaign

  • Set-up a customer database – All direct marketing campaigns need the support of an up-to-date customer database
  • Determine your ‘top’ customers – The most successful direct marketing campaigns are likely to be targeted at your top 20% of customers who generate 80% of the business
  • Know your customers – Target other segments of your database depending on what you are offering for sale, as specific products or services will be attractive to some customers and not others
  • Plan your campaign thoroughly and test the product or service being offered
  • Maintain a theme throughout the letter. Keep the message simple, brief and focused
  • Make an offer they can’t refuse. Remember the ‘what’s in this for me?’ question
  • Contact New Zealand Post for information on mail-out discounts and for a record of the number of business and private households in each postcode throughout New Zealand
  • Measure the results of the direct marketing campaign. Think about trying something different next time and compare results

Tips on Effective Mail-outs

There is less chance of people reading your literature if it screams out to them:


To overcome this:

  • Put your direct marketing letter into a plain envelope with an actual stamp and a hand written, or laser printed, name and address – not a label
  • Be absolutely correct with spelling of names and addresses as errors can really infuriate people
  • Use testimonials wherever possible in the letter
  • A photograph might be useful – make sure it includes people
  • Don’t approach too often as this will annoy customers
  • Freephone numbers can make it easier for your customers to contact you
  • Follow up phone calls – various surveys indicate following up phone calls can significantly improve the overall response rate

If you need help with your marketing contact Nick on 0800 ASK NICK or email nick@abac.co.nz.


7 Tips To Organize Your Small Business Finances

organize_financeBeing organised with your finances is a sure path to success and profitability in business, so here are 7 tips to help you get there:

1. Maintain Adequate Working Capital

One of the problems I see time and time again in business is the lack of adequate working capital. Even a small business can soak up money like a sponge when buying equipment, investing in inventory or funding work-in-progress or Accounts Receivable. If you lack the necessary cash yourself to plough into your business, there are only two other ways to get it: external borrowings or by leaving profits in the business to build up cash reserves, which means keeping your drawings to a manageable level. Don’t struggle on month after month — get your working capital sorted now!

See Full Story Here


Cloud Accounting – MYOB v Xero

Boxing GlovesNow that MYOB have released a new and much quicker version of their AccountRight Live which is much cheaper than Xero the battle between MYOB and Xero is hotting up!

I asked A + BAC’s Samantha, an experienced Xero user, to review the new MYOB cloud software and compare the two. The views expressed are Samantha’s alone and do not necessarily represent or reflect the views of the Accountancy + Business Advice Centre


Xero has a cleaner, less cluttered screen than MYOB which appears blurry, dated and is difficult on the eyes after a period of time – particularly when working on a laptop.

The Xero desktop can easily be customised to promote greater ease of use and to suit the client’s needs.

Ease of Use

Navigation within Xero for users new to accounting software is much easier as all core functions are easily identified on the desktop.  Navigation in Xero is consistent with Google and internet navigation.  For instance, by selecting the “back” option to return to previous screens and the ability to open multiple “tabs”.  Overall, this makes navigation much easier, particularly where the user is familiar with the internet.

However, if a user is already familiar with the MYOB layout, they are both straight forward to navigate, though the “internet” type of navigation is not available with MYOB.

For simple daily transactions, for instance bank statement coding, entering and emailing invoices/ purchase orders and sending statements Xero is much quicker, entry is more straightforward and overall easier to use.

For more complex tasks such as applying bank rules (coding rules) receipting payments to existing accounts and matching invoices, MYOB is easier to set up and use, however Xero has greater functionality and flexibility and works more effectively.

Under payments, prepayments and overpayments are a little more hassle to complete in Xero than in MYOB.


MYOB has far superior reporting options, flexibility and ease of use.  Transferring to Excel is simple and well formatted. With Excel transfers, complex analysis reporting is accessible, with some limitations.

Xero reports are satisfactory for all basic and common reporting requirements.  It is, however, difficult to gain more complex analysis reporting.


MYOB has a consistent, across the board pricing which is affordable and probably better value with the basic software at $21 per month. Xero’s pricing is dependent on number of transactions.  The starter package has similar pricing to MYOB live at $25 per month; however at this level is only be relevant to a small number of businesses.  The Standard and Premium packages are $50 & $65 per month.


Essentially, MYOB is a more basic version of Xero with one distinct advantage in being able to work offline as well as online and more in-depth reporting options are available.  Another core advantage with MYOB is the ability to complete desktop back up’s of your data files, which means data can be retained by the owner and if necessary, can allow the user to restore from a previous backup if data is corrupted or totally screwed up, by say, an inexperienced user.

Xero’s has enhanced features, greater flexibility and can be more fully customised to suit the user’s needs. Xero is probably more “modern” with iPhone and iPad apps and a number of add on’s available to purchase.  If set up correctly by and experienced Xero user, with a number of well written bank rules Xero is probably easier to use with greater accuracy for small to mid-sized businesses in which accounts are managed by a user with limited accounting software experience.


MYOB and Xero both offer reliable accounting software solutions which can be matched to different users according to needs.

MYOB is an effective solution for a business with very basic accounting needs, where the volume of transactions exceeds Xero’s starter package criteria.

For a larger organisation, with an experienced office administrator MYOB Premier or Xero’s Premium package will be equally suitable.  In this instance, MYOB Premier may be a more cost effective solution, particularly if you have inventory (which Xero doesn’t do) unless of course, you’re wed to the Cloud as MYOB Premier is not up there yet!

For a small to mid-sized organisation, that can utilise the enhanced features of Xero, Xero is probably a better match, particularly if an office administrator is not completing the processing.  To gain maximum benefit from Xero it is important that set up of the accounts, general ledger, comparatives and bank rules is completed by an experienced Xero user.

What to do Next

Don’t get carried away by fashion or public relations hype. Seek expert advice from an experienced accountant who can advise you on what’s going to suit you and be best for your business. At the Accountancy + Business Advice Centre we are experts on accounting software so contact us on nick@abac.co.nz.


Success in a Post Recession World

Small Team Wins

Over the last few years I have often been asked “when will things return to normal?” My answer has been a paraphrasing of a recent quote from Jeff Immelt, CEO of American based GE, “This is the new normal”.

If your expectation is that business conditions will return to those we had pre the 2008 economic meltdown, such as easy access to credit or consumers who would buy on a whim you may want to think again.

What we are finding is that the key to success is increasingly about differentiation. As the economy starts to grow again and customers realise even more the power they have in their hands, businesses that can truly differentiate themselves to meet customers’ needs will come out winners.

In order to gain a competitive advantage in the post-recession world, you’ll need to differentiate your business in the eyes of your potential customers and in addition, be effective, efficient and systemised. Here are 8 steps to success:

  1. Plan: Develop short- and long-term plans. They don’t have to be extensive (just a couple of pages), but they must be action-oriented and give you some early wins to celebrate.
  1. Business Intelligence: Know your financial numbers so you can manage your cash flow and understand what is helping you grow and what is stopping you. Review your products and services through the lens of profitability.
  1. Focus on efficiency: By getting to grips with your financials you will see opportunities for efficiency gains. This can be little things, such as saving on power by switching off machinery off, or by talking with your employees who will often know where efficiencies can be made.
  1. Make the tough calls (early): Once you know what has to be done, do it and do it as quickly as you can. Engage the right people to help you so that you minimise any unintended consequences such as a personal grievance case over a badly managed redundancy.
  1. Cash flow: Cash is king so do everything you can to keep cash coming in. As part of understanding your numbers, work with someone who can go beyond the basic financials, for example, helping find ways to speed up the working capital cycle or assisting you with negotiations with the banks.
  1. De-clutter: Go back to your core purpose and focus on what matters. Cut loose unprofitable products or services you’ve identified through your financial review and, above all, keep focused on your core customers and suppliers.
  1. Innovate: Get to grips with what’s happening in the marketplace to highlight opportunities to innovate and differentiate yourself. This can be as simple as asking your customers about what they do and don’t like about dealing with you. Or, if you can afford it, market research through a respected research company can pay huge dividends.
  1. Marketing: Studies going back to the 1930’s show that businesses that continue to market themselves during a recession recover much faster than those that don’t. This doesn’t have to cost you a fortune. When talking with customers, ask how they found out about you. New media options are very effective in maintaining relationships with customers, but the research continues to say that personal recommendations through word of mouth are still vital and the most effective form of marketing.

Ultimately differentiation is winning out in the new economy and it’s all about thinking differently. As Albert Einstein said, “the significant problems we face cannot be solved at the same level of thinking we were at when we created them.” Challenge yourself and your team to do this, and your future success is much more likely.

If you need help with your business contact Nick on 0800 ASK NICK or email nick@abac.co.nz.


Reviewing Your Business Progress

When was the last time you checked performance against your business plan?

The business plan needs to be under continual review to make sure you are successfully implementing each planned stage. It won’t be any use to you unless you use it.

By writing a business plan you’ve taken the time to plan in detail what your business goals and objectives are – it’s a living, working document, not something to be filed away and then dusted off for review in a couple of years’ time.

This concentrated thinking, discussion and debate is the key to the formulation of a workable and achievable business plan. And as long as actual performance is monitored against it, the plan should significantly assist in the long-term survival of the business.

Ideally you should review performance on a regular monthly basis, or at the very least on a quarterly basis. Ask the fundamental questions:

  • Where are we?
  • Are we heading in the right direction?
  • Will we achieve the goals and objectives of our business plan?
  • Should we review pricing structures?
  • What has been the effect of the consumer price index increase?
  • What has been the effect of price rises in our particular business?
  • Should we raise our prices?
  • Should the gross profit percentage be higher?
  • Have we got empathy with customers?

On an annual basis you need to compare actual financial performance to the budgets and cash flow forecast. Ask:

  • How did we perform?
  • What went wrong?
  • Have we learnt from the mistakes?
  • Did we exceed budget expectations anywhere? Why?
  • Can we capitalise on these improvements?

A valuable assessment is to compare your business figures to industry statistics (ask your accountant about obtaining this information).

You’ll also want to know: What is the general business climate in your area? Is it conducive to your type of business? Should you be expanding, drawing back or diversifying? What is the status of your investment in stock?

Don’t forget that the business review should also include an appraisal of what has been happening within your team. You need to look at:

  • Recruitment
  • Training and development
  • Meetings
  • Employment agreements
  • Wage/salary reviews

Use your business plan as a day-by-day, week-by-week, month-by-month reference point to compare where your business is against what you planned it to be. If there are any deviations, immediately investigate them and try to take corrective action.

If you need help with reviewing your progress contact Nick on 0800 ASK NICK or email nick@abac.co.nz.


How to save tax AND sleep at night


I once had a client in the UK who used to save tax by never paying any of his takings into the bank. He was a sort of cross between Arthur Daley and Del Boy—a loveable rogue—but I liked him a lot, as he was always cheerful and smiling, no matter what scrapes he got into. Eventually, however, he came to grief; his wife left him because she never had any money to pay their bills and the IRD bankrupted him when they caught up with him!


Marketing Made Easy – Search Engine Optimisation (SEO)

SEOYou may have a fantastic website but if no one sees it you’re wasting your money and time, so use Search Engine Optimisation (SEO) to make it more visible.

Search Engine Optimisation enhances the visibility of your website or web page in a search engine.  Leading search engines use software called ‘crawlers’ that scour web pages to find information that matches their search results.  The importance of SEOs is that people searching the web want prompt immediate answers and generally click on the first results they see.  Being at the top of the results list will mean your business is the first port of call, not your competitors.

When you use search engines such as Google or Bing, the results listed at the top represent companies with good SEO skills, meaning they have been savvy in order to gain a higher search ranking.

There are some steps to help your website or blog appear in a higher ranked position in web searches:

Keywords:  Include key phrases that are relevant to your business and that will direct people to your site.  If you want to find out what people have been searching for, Google provides a service where you can enter a particular word and they will give you statistics on how often it is researched on the web.  These results are also put into context in terms of what the search refers to, so you can streamline your key phrases and target prospective clients accordingly.  A key to remember is not to make your words too specific, or too broad.  They must always be relevant to be picked up in a search.

Cross-links:  Cross-linking is the process of linking two or more pages from your site together to increase visibility in search engines.  You can also cross link to other related websites that have agreed to be linked to yours in some way.  Do your research on cross-linking first.  Some search engines will penalise you for overdoing the linking within your site.

Up to date content:  When the search engines perform their regular crawl, they are always looking for new and updated content.  If your content is out of date, it may be missed and you automatically have decreased chances in gaining a higher ranking.  Remember to research, track and update keywords regularly.  If you feel overwhelmed or that your time is limited, there are many marketing and web professionals available to assist with driving traffic to your site, but watch out, there are plenty of sharks out there!

If you need help with your marketing contact Nick on 0800 ASK NICK or email nick@abac.co.nz.