​Earlier this year, Australia brought in their Payment Times Reporting Scheme which aims to improve payment times for small businesses. It requires large businesses and government enterprises to report their payment terms and times to increase transparency about their performance. If you’re in business, you know that having cash in the bank is crucial to financial survival – you can be making a profit but, without the cash, you can go insolvent – and getting paid on time is important to keep the flow of cash moving through your business. Many larger organisations have their own p ..read more

Cash is the life-blood of any organisation, so where should you start to look if your cashflow isn't as good as you want it to be? Cash and accounting are often two different things. Receiving cash in is not necessarily the same as generating revenue, and having a good level of revenue is not necessarily the same as receiving cash. In accounting, there are non-cash transactions, and as your organisation gets bigger, the non-cash transactions can be greater and greater. If you struggle to meet your bills each month, then you need to look at your cashflow: where does it come f ..read more

There’s a difference between data and information. Data is a collection of individual facts, information is the arrangement or sequence of the facts. In accounting, data can be represented by the individual transactions, and information as the resulting reporting of those transactions as a group leading to a total. ​ Businesses and organisations have a lot of financial data, but not all of it is converted into information.  Statutory financial reporting requires the data to be organised into certain categories, in particular ways. Each transaction is recorded in a way so as to meet those ..read more

PayDay filing will be compulsory from April this year. There have been a number of scare stories about the expense and inconvenience it will create. ​ Is it really going to be that bad? Yesterday I went to a presentation by MYOB, hosted at the BNZ offices in Wellington all about PayDay filing. A number of other finance professionals and business advisors were in attendance. The presentation covered the legislation, but the more interesting information was around the practical ways to cope with the new rules. The first thing to note is that online processing is going to b ..read more

When you’re in business, there are so many matters to deal with that it can get quite overwhelming sometimes. ​Matters such as: - what structure should you have? - where are you going to work from? - who are your clients? - do you need stationery and/or a website? - what legal documents do you need? - how do you market yourself? - should you brush up your networking skills? - how do you close sales? - do you have the materials to make your products? - do you have the skills for the service you are offering? - do you need insurances? - what software do you need? - how are you going to cope with ..read more

Transaction speed in businesses is ever increasing. So much is now instant or nearly instant. Payments over the internet - whether by credit card or third party portals - allow almost immediate transfer of funds. Convenience is everything. But is convenience costing you more in the long term? One of the things I see in business financial analysis is that the time cost of making and processing purchase transactions is all too often not thought about/ignored/considered unimportant. It is seen as an overhead for the back office. This is a huge mistake. two out of three ain't bad There is a saying ..read more

I found this article just recently that explained the results of some independent research into the knowledge of accounting graduates.  The research indicated that only 51% of tested accounting graduates had a "strong intuitive grasp" of double entry bookkeeping. Given that the understanding of how debits and credits work, and how to structure and process a journal are fundamental to basic bookkeeping, such understanding is crucial to providing a good accounting service. When you are employing someone to do your bookkeeping or accounting, it's always a good idea to check thei ..read more

In the last week, I've done a number of presentations to business owners around the Wellington region. And thinking through the sessions afterwards, I realised just how limiting the focus on a business's profit and loss account really is. When it comes to managing small business finance, most people focus on their P&L account. That makes sense, it tells them how their income and expenditure is building up, their current profit (or loss) balance to date and they can allow for the income tax liability on the profit. And, if they've created a budget, it will show how things are tracking again ..read more

Much like vinyl sales, book sales and the return of the Nokia 3310 last November, it seems that using cash for purchases is on the increase. Last month, G4S released their Global Cash Report *, and it makes for interesting viewing.  Just about everywhere in the world shows an increase in Cash In Circulation between 2011 and 2016.  Even New Zealand shows a 7% rise year on year! What does this mean for NZ businesses? Well, I think it shows that new technologies can exist alongside the old ones and businesses need to be aware of not cutting off this method of receiving incom ..read more

Tomorrow - 16th May - marks the first National Numeracy Day in the UK. Eminent financial newspaper, the FT, is reported as quoting that “Britons’ lack of numeracy ‘subtracts £20bn from the economy'.” National Numeracy Day is aiming to improve skills and confidence with numbers. In 2007, NZ organisation Education Counts reported that NZ performance in literacy and numeracy was improving, and was on a par with our neighbours, Australia. Numbers play a big part in our lives and no more so than in business accounting.  Understanding numbers can be a big help in both your business and pe ..read more