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McLEAN AND CO.
McLEAN AND CO DECEMBER 2003
NEWSLETTER PAGE 2
INLAND REVENUE DEPARTMENT 2002-2003 REPORT- OVERVIEW
Tax revenue was $34.97 billion, 81% of the
Government's total revenue.
Student Loan repayments were $386.9 million.
$273.5 million in child support payments was
$1,017 million in family assistance was
$111 million in child support was paid to
$56 million of paid parental leave was
there were 5.529 million registered taxpayers
212,585 new IRD numbers were registered.
∑ the net taxation effect of adjustments made as a result of audit activity was $899.4 million.
BUSINESS DEBT COLLECTION STRATEGIES
Coping with ever increasing costs is one thing - making
sure you get all the money that's due you from customers or clients is
another. Here is how many business owners deal with the
Set Established Payment Guidelines. To avoid
problems in the first place, establish ground rules for how payment
should be made and stick to them. Clearly spell out your terms of
sale and payment options on your order form or brochure.
Get it in Writing. Get the customer to sign an
agreement/ contract or memo of understanding as to the payment terms,
and explain these also to the client.
If the Project or Supply is ongoing charge monthly
instead of at the end of the Supply Period. If payment is
not received within the agreed term, do no more work for them until
payment is made.
Send a series of Reminders. However if written
reminders donít work call personally and ask for the payment.
Evaluate the Situation. Present Options. If
the client is overdue by a small margin (say a week) give them some
time. But if the days turn into weeks and months, start with a friendly
phone call to follow up and let them know the payment is overdue. Try
and get a date for payment and follow up if they donít meet that date.
Be Persistent in trying to Collect
Send a Registered Letter. This has the effect of getting
your point across without having to confront them verbally or in person.
After all else fails, let them know that you are either
turning over the matter to either your Lawyer or Collection Agency, or
taking them to the Small
Be Willing to take Legal Action.
∑ Know when to Quit. Try to collect if you have the time and ambition to do so, but if not, just write it off to experience. Sometimes the money is not worth the aggravation.
TIME OUT FOR EARNERS
Earners planning on taking a break from employment or
taking unpaid leave from work for more than two weeks (e.g. for an
overseas trip, or study leave) need to think about income protection.
They will not be eligible for weekly compensation if they are injured
after the first two weeks of unpaid leave.
This is because they will be classified as a non-earner at
the time of injury (therefore not eligible for weekly compensation).
ACC Corporation has a product called ACC Time Out for people taking a break from work. A minimum of three months and a maximum of five years cover can be purchased. The person can choose to be covered either immediately from the date of incapacity (following a one week stand down period) or to defer this cover to when they are able to return to work. The person must be in continuous employment for 12 months prior to application.
McLEAN AND CO DECEMBER 2003
NEWSLETTER PAGE 3
Heres some things you should advice ACC
Corporation direct about:
ACC Corporation's telephone number is 0508 426
Franchising is a method of
distribution or marketing in which a business (the franchisor) grants a
contract to an individual or business (the franchisee) the right to
carry on a business in a prescribed way in a particular territory for a
ADVANTAGES TO FRANCHISOR
DISADVANTAGES TO FRANCHISOR
ADVANTAGES TO FRANCHISEE
DISADVANTAGES TO FRANCHISEE
McLEAN AND CO DECEMBER 2003
NEWSLETTER PAGE 4
A SUCCESSFUL MARKET NICHE
The person who finds or creates a special
niche, gets the cream of our societies financial rewards e.g
Bill Gates of Microsoft Corporation.
The niche, and the person
who creates them, is the main factor that separates one product from
others. To out-niche your competitors you must focus on these "14
Principles" of niche creation at all times. Observe the ones
you apply to your business, product, or service .
Principle of Adaptation The simplest way to
create a new idea is to do what others in another business or industry
are doing. Next, see if you can adapt it to your own business, product,
Principle of Addition Can you add
something extra to your product or service that your competition doesn't
have or isn't doing?
The Principle of
What positive elements can you combine from
another product or service to make yours better?"
Principle of Customization
Can you find little ways to personalize a part of
your product or service? That's a quick, easy, and cheap way to create
niches. Can you make your product or service more personal?
Principle of Ease and Convenience
Can you find more ways to make your
product or service easier and more convenient to buy, use, or own? Then
you'll have a strong niche.
Principle of Elimination
What negative or inconvenience can you eliminate
for your customer, with your product or service. People not only pay for
more they'll pay for less. Less irritations, less waiting, less
7. The Principle of Enlargement
Do people like your service or product? Then it's a sure-fire bet
there is a segment of your market that would like even more of it. Can
you super-size something?
Principle of Entertainment
From cradle to grave, we all have this inner urge
to be entertained, amused, or fascinated - especially before we spend
our money. A relaxed customer spends more. Find little ways to amuse
customers before, while, or after they buy your product or service.
Principle of Longevity
It's making some feature of your product or
service last longer. It can also include making a positive experience or
feeling last longer. If you can do either, you will have a niche that's
hard to match.
Principle of Portability
People hate to be tied down. So, if your
product allows people the freedom to use your product or service in more
than one place, that's a powerful niche.
Principle of Reduction
If you sell a product or service, is there
any way to reduce a certain feature to make it more convenient? More
portable? Or easier to use? Can you reduce it and make it more
affordable for another type of customer?
Principle of Reversal
Look at what features or services your
competition is offering or not offering and reverse them. If they close
on weekends, can you be open? If they cater to seniors, target more
young people. Or if they cater to high-end customers, target more
low-end volume customers etc? The list is endless.
Principle of Safety
If you can show others how your product or service
can add safety or reduce risk, you'd have a powerful niche. People hate
to experience loss, feel insecure, or waste money. Try to think of
little ways you can help people avoid the above with your product or
Principle of Speed
You should always be thinking, "What
can I do faster than my competitors- without reducing quality?" Can
you fill your orders faster? Can
you give faster service? Can
your product get faster results? Can
you resolve customer issues faster? Think
By following the above suggestions, you'll
be able to create powerful money-making niches and outperform your
McLEAN AND CO DECEMBER 2003
NEWSLETTER PAGE 5
A thriving business is so often a vulnerable business.
The increased business can mean that attention shifts away from
youíre your businessís lifeblood- cashflow.
Cash flow, or working capital as it is called, is the money available to
pay for the day-to-day operation of your business.
Without it your business, no wonder how profitable or successful,
canít survive. A
failure to manage working capital is a major cause of business failure,
so careful management of cash flow is essential.
Adoption of these strategies are important to take control of your cash
flow and ensure that your business thrives and prospers:
Never run out
of Cash- running out of cash will result
in business failure.
Cash is King-
itís important to recognize that cash is what keeps your
business alive. Manage
it with care and the attention it deserves, its very unforgiving if you
Know the Cash
Balance right now- even the most intelligent and experienced person will
fail if they are making business decisions using inaccurate or
incomplete cash balances.
Work Today- the key to
keeping an accurate cash balance in your accounting system is to do
todayís work today. When
you do this, you will have the numbers you need- when you need them.
Either you do
the Work or You have Someone Else do it-
The work must be done. You canít ignore it.
You do the work or have someone else do it.
the Bank Balance- the Bank
Balance and the Cash Balance are two different animals. You have to
reconcile your bank balance and allow for unpresented items to derive
your correct position.
Know what you
expect the Cash Balance to be Six Months from now-
this one question will give you a foresight into your future
Problems donít just happen-
an owner must be able to see a future cash flow problem in time
to do something about, thus the need for future forecasting.
positively must have Cash Flow Projections-
Cash Flow Projections are the key to making wise and profitable
Cash Flow Worries so that you are free to do what you do best
(taking care of Customers and make more Money).
TO IMPROVE CASH FLOW- CREDITORS
McLEAN AND CO DECEMBER 2003
NEWSLETTER PAGE 6
THE CASH FLOWING (continued)
TO IMPROVE CASH FLOW- SUPPLIERS
alternate suppliers to tender.
longer terms from suppliers.
Purchase Orders to reduce discretionary staff spending.
pay early unless big incentives are given
a 30 day Credit Card. This
can add 51 days to terms. Warning-
dangerous to your financial health if misused!!
TO IMPROVE CASH FLOW- STOCK
surplus stock for sale and return
Set up a just
in time Stock Replacement System
Create a Stock
Set minimum and
maximum levels for each stock line.
TO IMPROVE CASH FLOW- TO KEEP CASH HERE
sell surplus assets.
and lease back of productive assets.
Offer equity in
business for cash.
bank fees. Renegotiate if necessary.
multiple accounts into one.
and equipment and retain useful cash.
banking set up so you can see your cash position when you need too, not
when the bank sends out statements.
cash into high interest Term Deposits or Cash Management Accounts.-
Cash Management Accounts can be re-drawn if the business needs it
separate account for staff entitlements such as super, holiday pay, long
service leave. Treat
it as a savings account.
Buy shares in
other quality companies with spare cash and keep adding to it over time.
Itís easily liquidated when you need it.
WE CAN LEARN FROM A DOG
pass the opportunity to go for a joy ride.
the experience of fresh wind in your face to be pure ecstacy.
loved ones come home, always run to greet them.
itís in your best interest, practice obedience.
others know when theyíve invaded your territory.
naps and stretch before rising.
romp and play daily.
with gusto and enthusiasm.
pretend to be something your not.
you want lies buried, dig until you find it.
someone is having a bad day, be silent, sit close by and muzzle them
on attention and let people touch you
biting when a simple growl will do.
hot days, drink lots of water and lie under a shady tree.
you are happy, dance around and wag your entire body.
matter how often youíre scolded, donít buy into the guilt thing and
pout- run right back and make friends.
XMAS AND A HAPPY NEW YEAR