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Provisional tax: What you need to know

If you are an employee, your employer sorts out PAYE on your behalf. But when you’re self-employed, you need to pay your own income tax.For example, if you earned $100,000 from your business, the income tax on that income would be just under $24,000. This can be a lot to pay all at once. Provisional tax breaks your income tax lump sum into installments that are paid throughout the year, smoothing out your tax burden.How does provisional tax work?Provisional tax splits up your income tax into p...

Provisional Tax – how does it work?

If you had to pay tax of more than $5,000 in your last income tax return, you may have to pay provisional tax for the following year. Provisional tax is like paying progress payments on next year’s income tax.The amount you must pay relates to your expected profit for the year. In practical terms, the amount of provisional tax you’re expected to pay is based on the tax you were liable for in the previous year, often referred to as residual income tax (RIT).Even if you are not required to pay...

10 steps to Business Continuity Planning

‘Business continuity’ is the process of planning out how your company can continue trading – when disaster hits. In essence, it’s your Plan B for how to set up a means of trading, when you don’t have access to your usual offices, workspaces or equipment.10 key elements to include for your ongoing business continuity planDigital communication and cloud technology have given us the ability to access company information, applications and communication channels. For many businesses this wi...

Do you need to improve the cash flow position for your business?

Keeping on top of the financial management of your business can be hard work. It's possible to have a profitable business that is struggling to find the cash flow to pay expenses and fund growth. Likewise, you could have positive cash flow but are not turning a profit, particularly if you are scaling.Turning a profit is at the heart of running any successful company But without an even and predictable flow of cash into the company, you can't cover your overheads, you can't pay your employees and...

Keeping your business cash liquid – the difference between cashflow and profit

The foundational goal of any business is to make a profit. As a business owner, that’s one of your key financial aims – to make enough sales, at a big enough margin, to generate profit from your enterprise. But how does profit differ from cashflow? And why is cash king?How do profit and cashflow differ?To really understand the difference between generating profit and managing cashflow, we need to look at what both these terms mean. You might think that delving into the accounts is a job for ...

What's the difference between statutory and management accounts?

As a business owner, you know you need to produce accounts – that’s a given. But do you know the difference between statutory accounts and management accounts?Your statutory and management accounts have two very separate purposes, and producing both kinds is good practice for any business that wants a handle on its numbers.Let’s take a look at the key differences and why you need these specific kinds of accounting.1. What are statutory accounts?Statutory accounts are a legal requirement fo...

5 challenges for small business - and how to beat them!

Founding, building and growing your own small business is a hugely rewarding experience for many entrepreneurs. But the road ahead isn't always smooth.There are common challenges that crop up and ongoing issues that need to be factored into your business plan, your strategy and your own personal thinking.So, what can you do to beat these challenges and make the journey as frictionless as possible?5 proactive ways to overcome your business challengesWe’d all love to know what lies around the co...

Bring your A game (not your O game)

Success in sport is all about playing your 'A game'. Being the best you can be through preparation and training leading up to the game, as well as through your actions during and after the game - showing modesty and humility in success and graciousness in defeat.If everyone on the team plays their 'A game' the results are impressive. So, how do we apply the 'A game' mindset from sport to the workplace?Three A’s that bring it:Appraise: work out who will make up your dream team. Consid...

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 KPIsTracking 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 ov...

A strong strategy is the heart of your successful business

Businesses that have clear objectives or goals, robust accountability and a shared sense of purpose should always outperform those that just show up and go through the motions.Strategy lies at the heart of most successful businesses. To achieve this you need to resource and execute with a clear purpose. Few businesses have a strategic plan or a robust planning process. Changing this situation should be a top priority! Here are two top tips for business owners.1. Process Creates the PlanGetting s...

The difference between directing and leading

There are 10 departments in every business, no matter how small. These are:Shareholder.Director.Leadership.Product / Service Development.Operations.Marketing.Sales.Finance.Admin / IT.HR.Many business owners control multiple departments. 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 responsibil...

The importance of business development

Business development is one of the most important areas of focus for any ambitious business.If you want your business to grow, that’s going to mean having a razor-sharp focus on new opportunities and strategies. That could mean exploring new markets, or nurturing new partnerships. It might mean diversifying to create new revenue streams, or coming up with new ideas to boost your profitability. But, ultimately, good business development comes down to having good ideas – ideas that broaden you...

Managing change in your business

Successfully implement change in your businessResearch by Kotter International found that more than 70% of change projects within a business fail. Why is this?The research findings show that employee engagement is the biggest factor. Whether it is a small change to one or two processes, or a company-wide change, it's common for staff to feel intimidated by it.So what can you do for successful implementation of change? Here are the principals from Kotter’s 8-Step Program:1. Get the team onboard...

Key numbers to focus on in your business now

As a business owner, it’s never been more important to have a good grasp on your finances.For many businesses, priorities have changed, customer behaviours have mutated and revenue streams have had to evolve and pivot in order to create a viable business model.To track, monitor and drive your financial performance in this new business world, it’s increasingly important to have a handle on your key financial reports and metrics.Getting to grips with your financial reportsWhereas in the past, ...

5 ways to get in control of your business finances

Having proper control of your business finances is a big advantage. It helps you make well-informed business decisions and keeps your organisation profitable.With so many digital tools for managing your bookkeeping, accounting and management reporting, it's never been easier to manage, track and forecast your financial position.But what are the main tools you need? And how do you set up your financial systems, apps, processes and reporting to put yourself back in the finance driving seat?1. Brin...

Invest in your employees to get the maximum benefits from remote working

Remote work has become an increasingly popular way of working in recent years. Many companies now offer their employees the ability to work from home or other external locations. This is a giant shift for many companies and their workforces – so, to get the best from remote working its worthwhile reassessing your people strategy.Investing in your people and your remote strategyMaximising this new remote-working strategy can lead to increased employee engagement, as well as a reduced spend on r...

B corp companies: business as a force for good

B Corp companies are a new type of business model that aims to make business a force for good. This means putting sustainability and a positive social impact at the heart of your mission.In a world where capitalism is increasingly being seen as the root cause of many of the world’s problems, the B Corp concept aims to revitalise the idea of what a business can do, and the good that can come from running an ethical, socially conscious and green enterprise.Does this sound like the kind of idea y...

3 cloud accounting tips to save your business time and money

Keeping on top of your accounts is a big part of running a successful and profitable business. But you don’t want to spend ALL your time dealing with accounting tasks, especially when that time could be spent building customer relationships, or developing new products etc.So, how do you keep your finances in check, while also spending less time on your accounts?1. Bringing your accounting into the digital ageSwitching to cloud accounting can be a revolutionary step for many business owners, es...

10 ways to improve business performance

Here are ten ways to make sure that you continue to drive through each business quarter with purpose, vision and the courage to super-charge your business.1. Eliminate distractions: Time is the scarcest resource and biggest killer for most businesses. When we get busy we can also get distracted and focus too much time and energy on the wrong things. Be brave - slash standard meeting times, reduce unnecessary admin and delegate roles and responsibilities.2. Say goodbye to bad customers: ...

Now, where, how

For any sort of planning, whether it’s your Strategic Plan, Business Plan, or Personal Development Plan, you must first know your starting point to plan your journey to where you want to go.The Now, Where, How mindset helps us recognise where we are now, then clarify where we want to be in the future, and determine how we’re going to get there.NowTo establish your starting point, you must be brutally honest with where you are now. What is your current financial position? How many hours are y...

Identifying factors that may influence your Succession Plan

The world is evolving at an unprecedented pace. A changing landscape in your industry, global trends, and other environmental factors will influence the timing and strategy behind your succession.One thing is for sure, a successful and profitable business can’t afford to stand still.Change and disruption can eat away at the value of your business if not managed and mitigated; just consider online shopping and how that has changed retail.Businesses that ignore indicators of incoming disruption ...

Why employee onboarding is so important

Even before you start recruiting for a position, you should be prepared to make a new employee’s introduction to the business as smooth and comprehensive as possible.Onboarding (also known as induction) is a broad, structured process to provide a new team member with all the tools, information, and insight they need to quickly become an effective contributor, while at the same time integrating them with the company and its culture.Sure, you could set the person up with tools they need, give th...

How builders and tradies can survive and thrive in a downturn

The past few years have been extremely busy for builders and tradies across Aotearoa, with a booming renovation market and record numbers of new homes under construction.However, consents seem to have peaked and there’s been plenty of commentary around a slowdown in the sector. If you’re a builder or a tradie who’s worried about operating in a downturn, what can you do? Here are our top tips to help your business survive – and thrive – if demand drops away.Can you diversify?Looking clo...

5 ways to ensure you get paid on time

Worrying whether customers will pay you on time is a continual concern for business owners.Late payment can lead to cashflow issues, unpaid supplier bills and the need to dip into your own pocket to cover your operational expenses. If you can improve the speed and likelihood of customers paying on time, that's good news for your accounts receivable targets and the company's overall liquidity and cashflow position.Speeding up payment timesA sale is not a sale until the customer has actually paid ...

Understanding the Use of Money Interest (UOMI) System

Some taxpayers are subject to 'use of money interest' when they don’t pay their tax, pay late or underpay.When do you have to pay use of money interest to Inland Revenue?Taxpayers that must pay use of money interest are those who:have under-estimated their provisional taxhave earned income which has either not been taxed, or has not had enough tax deducted from it, and the end of year residual tax works out at $60,000 or morepay their taxes late.COVID-19 and other adverse events affecting prov...