MHCo Strengths Session
On Monday 18 September, the MHCo team had the pleasure of listening to Josh Cox from Yellow Umbrella for a teams strengths session. We got to take a closer look at our unique strengths, pinpoint which strengths were ‘hangry’, and identified how we should be feeding them. Together, we engaged in team-building activities that challenged us to put our heads together to solve problems. This experience not only highlighted our uniqueness but also showcased our individual talents, pushing us to blend our distinct strengths for a common goal. So, next time you face a challenge, remember – teamwork makes the dream work, and it’s a lot more fun too! Why do we do this? At Maisey Harris & Co, we are big believers in feeding our strengths and growing as a team. We’re committed to nurturing and empowering our strengths, fostering growth, and achieving even greater success. By knowing each other’s unique strengths, we are able to leverage each person’s individual and unique skills and enhance productivity, an be the best person we can be to help our clients achieve success. Here’s what we learnt: What’s more, everyone’s strengths are unique – and each strength may look different depending on the person. Understanding and appreciating the unique ways in which each person’s strengths shine adds depth to our team, creating a more inclusive and dynamic work atmosphere. At MHCo, we believe that our strong company culture underpins our successful, resilient businesses. We understand that identifying our diverse and unique strengths is an essential aspect of a thriving, supportive company culture, and it’s a cornerstone of any innovative business. That’s why we are focused on identifying each other’s strengths, learning from them, and nourishing our team to put the pedal to the metal together.
GST Invoice Rules are Changing
GST invoice rules are changing – making life easier No more piles of receipts and invoices required! Dealing with GST invoices will be much simpler under Inland Revenue’s new rules, which come into effect on 1 April, 2023. The goal is to modernise your record-keeping systems, which means you’ll be able to get closer to a completely paperless business. Physical paperwork or PDFs no longer required From April next year, you won’t need to keep a physical copy of a tax invoice, a credit note or a debit note. Your taxable information supply can be digital – included in your accounting software, in your transaction records or in contractual information. New wording is coming into use – you no longer need to label your invoices as ‘Tax invoice’. The new wording is ‘taxable supply information’, but you don’t need to specify that on any invoices. It’s just the Inland Revenue’s way of explaining that certain information needs to be included on the documentation – you don’t need to make any alterations. These changes are necessary to make e-invoicing legal, so without any actual paperwork or even a PDF moving around, your system-to-system invoices are still valid. We’re here to help If you’re not sure which records you need to keep, just give us a call or drop us a note. We can chat with you about how these changes might impact your business, and how you can use e-invoicing to reduce your risk of invoice fraud. Get in touch! Contact us
Meeting your goals during a global slowdown
Meeting your goals during a global slowdown Business owners were definitely more optimistic coming into 2022, but we’ve found a number of factors are now making things a lot more challenging: – Global events are pushing up energy prices to astronomical levels.– Ongoing supply-chain issues are making it difficult to source materials.– A scarcity of talent is causing problems when it comes to staffing and hiring.– The dreaded Covid is still around and making trading complex and difficult. Faced with these hurdles, you might be feeling that your goals are no longer attainable. But is this true? Growth is likely to be a challenge, but not impossible. 5 steps for meeting your goals during a slowdown Moving forward during a period of economic recession is certainly more of a challenge. But what’s needed is an updated plan with awareness of the major external threats. Here are five steps to set you on the right path: Talk to us about your goal-setting for this year and beyond The sooner you start revisiting your goals and business plan, the better prepared your company will be for the ups and downs of a recession. Come and talk to us about your financial position, your core strategy and your concerns about the next six to twelve months. We’ll help you set practical, attainable goals that will push your business forward. ** You might be eligible to get our services funded up to 50%. Contact us here.
The 7 causes of poor cashflow
The 7 causes of poor cashflow. Cash is the life blood of any business. In fact, even profitable businesses can and do fail because of poor cashflow. What’s important is that you understand your key drivers of cashflow. Improving cashflow is often all about changing your business’s processes, for example, how you order stock and pay for it, how you bill for your services, and how you make sure you get paid by your customers. Don’t treat the symptoms of poor cashflow without fixing the underlying causes! Inadequate cashflow is a symptom of management problems in a business, NOT the cause. In order to fix these underlying causes, you need to make the necessary changes to your processes. By making these changes, you will build a much better and valuable business, as well as improve your cashflow. While there are many causes of poor cashflow, most relate to one or more of the following seven categories. 1. Your cash lockup.This is the cash that isn’t in your bank account because it’s locked up in work in progress (work you’ve done but not yet billed for) or you’ve billed your customer but are waiting for payment. 2. Your accounts payable process.If you don’t have spending budgets in place and aren’t taking advantage of the best possible supplier terms, your cashflow will be impacted. 3. Your stock turn.If stock is moving too slowly, it will take longer to turn the stock you’ve already paid for into cash. 4. The wrong debt or capital structure.For example, if your loans are being repaid over too short a term, this will place a big strain on cash reserves. 5. Gross profit margins are too low.Your gross profit margin is what’s left from sales after variable costs are deducted. If it’s too low, it won’t be enough to cover fixed expenses and your drawings from the business. 6. Overheads are too high.Every business should do a thorough review of its overheads each year. 7. Sales levels are too low.If sales levels don’t support cash demands on the business, then sadly, the business is not currently viable. “If I had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction, and cash flow.” – Jack Welch
Preparing for the end of the financial year
The end of another financial year is fast approaching and with that in mind we’ve put together our top tips to ensure you are ready… Top tip # 1 Get your records ready. Whilst most of the information will be in Xero we do require some items from you: Top tip # 2 Don’t forget about your home office. If you are completing work from home, a portion of your home expenses can be claimed as a business expense. Common home expenses that can be used in this calculation are rates, home & contents insurance, power, internet/phone and rent or mortgage interest. You will also need to provide the total area of your house along with the total area of the space set aside for work related tasks. For more information about this, check out our previous blog Tax tips with MHCO part 1 – Claiming Home Office Top tip # 3 Complete a stock take. If you carry stock of more than $10,000 then you will need to complete a stock take so we know how much stock you have at 31 March. Stock can heavily affect your profit, and therefore tax, so it’s important we get this right. When completing the stock take we need the GST exclusive figure. The amount you give us should be the lower of what you paid for the stock and its estimated value. (9 times out of 10 this will just be the cost value). Top tip # 4 Write off bad debts. Don’t pay tax on money you won’t receive! If you have done all you can to recover a debt and are ready to write them off, you need to make sure this is done before 31 March in order for the tax deduction to apply. If you are unsure how to write off a debt give us a call. Also if you haven’t already, consider sending the debt to a debt collection agency such as these guys: https://www.collectit.co.nz Top tip # 5 Remember the minimum wage increase. Just a reminder that the minimum wage will increase by $1.10 in April, from $18.90 to $20.00. If you have adult employees (16 years and over) earning less than $20.00 an hour, you are legally required to increase their wages from 01/04/2021. Update 23/03/2025: From 1 April 2025, the minimum wage will increase. For adults, this increases from $23.15 per hour to $23.50 per hour. The starting out and training minimum wage will also increase from $18.52 per hour to $18.80 per hour. If you employ anyone on the minimum wage, it is essential that you change their pay rate in your payroll system from 1st April 2025. 1 April 2025 falls on a Tuesday this year, meaning that it likely falls in the middle of your pay period. If this is the case, it may be worth getting in touch with your payroll provider for instructions on how to update a pay rate in the middle of a pay period. Top tip # 6 ESCT Threshold Changes The new financial year will also see adjustments to the thresholds for the Employer Superannuation Contribution Tax (ESCT). Income Range: $0 – $18,720$18,721 – $64,200$64,201 – $93,720$93,721 – $216,000$216,001 and upwards ESCT Rate: 10.5%17.5%30%33%39% Remember that if your employee has more than one job, you need to ensure you select the ESCT rate which reflects their full income. Top tip # 7 Consider your goals for the upcoming year. As we close out another financial year, ensure you take a moment to reflect on the year that was and then look forward to the upcoming year. Even more so, in these uncertain and unsettling times, it’s important to refocus and ensure you have an up-to-date business plan and third party to help you set your goals and help coach you to achieve them. We are here to help. Get in touch with us if you want to update your business plan, reset your goals, prepare a budget, or, have a business coach to help guide you and your business through the next year. Get in touch with us if you have any questions or concerns – the MHCO team.
Do you know what you don’t know?
Introducing our latest Business Mindset… There’s a simple concept called The Knowledge Pie. This concept segments one’s personal knowledge into three key areas; what we know, what we know that we don’t know, and what we don’t know that we don’t know. Yeah, you might want to read that again. Here’s an example to better explain: Dan, a young qualified plumber and business owner, knows how to do plumbing. He also knows that he does not know how to do a Tax Return… or orthopaedic surgery. However, he doesn’t know that he does not know that if he tightened his Terms of Trade and debtor management policy, he’d get paid faster and improve his cashflow, making his business life less stressful and more successful. No-one knows what they don’t know. Many people think this ‘cluelessness’ is a lack of experience thing that affects young people… but EVERYONE, even experts, are completely unaware of what they don’t know that they don’t know. Imagine the average pie for any person… it could be lemon meringue or steak and cheese – you choose. Now, cut your pie in half and cut one half in half again (creating two quarters). One quarter represents what you know, one quarter represents what you know you don’t know, and the half represents what you don’t even know that you don’t know. How do I learn about what I don’t know, even know that I don’t know? Here’s some ways to grow your knowledge over the next year: Growing your knowledge can grow your business. The fact is that for all of us there is much more that we don’t even know we don’t know than what we actually know. Breathe. It’s ok. Next fact: we will be more successful in life and business if we remain open to new learning, and learning extensions and distinctions on what we already know. Avoid having an ‘I know’ mentality about the things you do know about. Some people close their minds when hearing about a topic they have knowledge of. They may assume that they know it all. But we can always know more… and if we shut ourselves down to new learning, we could miss an important distinction that could make a big difference. — Feel free to get in touch if you’re interested in how we can help you extend yourself this year, we’d love to chat about it! We also have a bunch of books in the office here which we are happy to lend out to help with number 9 🙂 “Those who keep learning, will keep rising in life.” – Charles Munger
Key numbers to focus on in your business now
As a business owner, it’s always been helpful to have an understanding of accounting – but in the post-lockdown world, it’s never been more important to have a good grasp on your finances. With the business world irreparably changed by the impact of coronavirus, your business is facing a ‘new normal’. Priorities have changed, customer behaviours have mutated and revenue streams have had to evolve and pivot in order to create a viable post-lockdown 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 reports Whereas in the past, extra cash in the business may have been seen as a surplus that needed to be spent on something, COVID-19 has shown us that having these reserves is vitally important for the survival and long-term health of businesses. To truly be in control of this cash, it’s vital that you can dip into your accounts, financial reports and dashboards and ‘see the genuine story’ behind your financial position. So, what are the key reports to focus on? Let’s take a look: Talk to us about accounting and financial reporting for your business – we’re here to help! We’ll run you through the key reports in Xero, and can help you track performance, take action and prepare your company for surviving the new business normal.
Lessons learned in lockdown
Lockdown has been (and remains) a tough time for business. Having to shut your business at short notice, or switch to an entirely digital, remote-working model, was a stressful experience. But there are things we have taken out of lockdown. Whether it enabled us to explore new ideas or dive into some fresh thinking regarding work, life or a business venture. So, what lessons did we all learn from this enforced period of business shutdown, quarantine and remote working? Carrying over the positives from lockdown Suddenly, your office space lay empty, your employees were spread across various home locations and (crucially) your customer sales and revenue evaporated in the blink of an eye. The amazing thing about human resilience and ingenuity, however, is how quickly businesses DID evolve to cope with this situation. Teams got used to home-working, video meetings and dealing with customers in the online space. And many of us began to see the positives of this low-impact, remote-working approach. Are there things you can hang to now in the return to working life? None of us know exactly what the ‘new normal’ of business trading will look like. But if you want to be ready for a different kind of business reality, we can help. We’ll work with you to update your goals, strategy and financial model – so you’re ready for the future.
Eight C’s to help your business during Covid-19
The information overload is very real. The ramifications of Covid-19 on businesses are being felt and speculated upon every minute of each day – probably leaving you feeling like a deer caught in the headlights. Here’s eight simple words also beginning with C to help clarify your vision…. 1. Cash. It’s the oxygen for your business, do what you can now to preserve cash for the unknown future state. 2. Credit. You may need to arrange adequate credit; talk to your bank to see what your options are. 3. Colleagues. Your team are the backbone of your business and needs your leadership now more than ever. Your leadership skills will be growing day by day. Be supportive, honest and human. 4. Customers. Connect with your top customers. Call them, if for no other reason than to see how they are. Many are feeling isolated and out of control. A familiar voice and fresh perspective can make a big difference. 5. Condense. Your Marketing Plan and messaging, Business Plan and goals are likely to be temporarily irrelevant. Hit pause. Condense your efforts to focus on this crisis and adapting to make the most of the opportunities that may present themselves. 6. Change. It’s usually a choice, but right now it’s being forced by crisis. Maximise your financial resilience by imagining a new normal for your business. How can you pivot your business model to serve existing and new customers? How can you get up and running faster? 7. Communication. Whether your business is operating in some capacity or not; keep your customers and suppliers updated regularly. Social media is a big opportunity to engage your audience right now. 8. Compassion. Whether on the frontline or being unable to operate – everyone is feeling it. If we act with compassion right now, we’ll all come out of this better off. There are beautiful stories everywhere we look: from the florist donating their unsellable flowers to frontline nurses, to the musician live streaming a free concert. These gestures will not be forgotten. If you need support to help your business emerge successfully from lockdown, get in touch – we’re here to help!
Setting up the right legal and financial foundations
So, you’ve got the idea and the business plan ready to roll. But what are the main legal and financial areas you need in place to keep your new business compliant? Whether it’s registering as a limited company, or setting up an accounting system that meets the latest digital requirements, it’s important to get the basics right. How to tick the right compliance boxes: As a director, it’s your job to make sure your new business meets its regulatory requirements and stays compliant with the latest business and tax laws. To help you get the basics sorted, here are 5 core areas to consider: Talk to us about setting up the right foundations As you can see, ticking those compliance boxes can get complicated. We’ll help you lighten the compliance load by getting the legal and financial foundations sorted. Get in touch to see how we can help.