Create Excellent Systems for Business Excellence

Well-run businesses have excellent systems that produce key information about the business' status. Regular monitoring is important to ensure the business owner or chief executive always has a finger on the pulse of business activity and can be quick to make changes where necessary.

Small businesses are fortunate in being able to respond quickly to fluctuations in the market place. In fact, to be successful, it is imperative they do move without delay to improve a bad situation. It is vital therefore to monitor the following information:

- Daily bank balances
- Daily sales information giving, total sales, sales of individual products and sales made to new customers
- Daily, weekly or monthly gross profit figure achieved (normally only available via a computer system)
- Weekly debtors' aged analysis, showing the amount owing to the firm and the age of those debts
- Labour productivity reports daily or weekly showing the actual time charged to clients or work on productive tasks – how does this compare to budget?
- A weekly statement of financial performance report
- Weekly creditors' aged analysis, showing the amount the business owes and the age of that debt
- Detailed monthly financial statements on all aspects of the business operations including statement of financial performance and statement of financial position, with comparisons to budget and cash flow forecasts
- Annual budgets and annual cash flow forecasts (updated monthly)
- Details of any lost customers showing details of what their annual sales had been and reason (if known) for them leaving the business
- Specific details on sales over a specified amount – who the sale was made to and what was it for.

At Paul Martin Chartered Accountant we can assist you monitor your key business metrics. Contact us today for help with you business systems.

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By Paul Martin • December 4, 2023

There were some key takeouts of interest to many of our clients from the recently signed coalition agreements between National, ACT and New Zealand First and the formation of the new Government. In particular there are a number of policies which will likely benefit landlord clients who own residential rentals. I have summarised some of these below. 1. Return of Interest deductibility for residential rental properties Interest deductibility for residential rental property owners will return. It will be phased back in over three tax years: • 2023/24 tax year: 60% of interest cost will be deductible. • 2024/25 tax year: 80% of interest cost will be deductible. • 2025/26 tax year: 100% of interest cost will be deductible. 2. Reduction in bright-line period National signalled in their pre-election campaign that the bright-line period for residential rental property sales would reduce from 10-years to 2-years. While the exact implementation of this policy is not yet known, it is good news on the horizon for residential property investors. 3. Reinstatement of 90-day no-cause termination notices The new government will reinstate 90-day no-cause tenancy termination notices. This will avoid many unnecessary disputes in the Tenancy Tribunal and gives landlords more confidence in letting to possibly “marginal tenants". Many landlords have avoided what they considered to be risky tenants because eviction for anti-social behaviour was so difficult. With this reinstatement, landlords might be more inclined to give a marginal tenant a chance because they know that if the tenant misbehaves, they won’t be stuck with them. If you would like more information on how these changes might affect your personal circumstances, please feel free to contact us to discuss further.