As a small business owner, you’re probably keeping a close eye on every cent you spend. You need to have a good eye on your income and expenses to manage your cashflow, so that’s a good thing. However, it might mean that you are wasting time micro-managing your finances and not hiring people to help give your business a boost. Hiring a bookkeeper can be a great investment fro any small business.

What Does a Bookkeeper Do?

A Certified Bookkeeper will take care of your daily business financial management. They’ll make sure your books are up to date, balanced and reliable so they can support the best possible decision making. They’ll manage your invoicing (accounts receivable), track your receipts and general expenditure and reconcile your accounts payable.

All of the frustrating daily and weekly financial tasks that you hate or that just sucks up half your day, they love doing. Not only do they love that work, they are likely a lot faster and more efficient at doing it than you are.

Hiring a Bookkeeper Saves You Time

Unless you’re a bookkeeping whizz and love those debits and credits, you might find your bookkeeping to be a headache-inducing waste of time. Chances are, you’ll put off your bookkeeping until its a massive chore. This means it takes up more time and you like it even less. Even if you do enjoy it, doing this day-to-day book work is dragging you away from the parts of your business where you should be focusing your energy and passion. Your time is valuable. You’re much better investing your time in value-adding activities like sales, networking and marketing your business.

The time you spend trying to understand your financials could be better spent on tasks you’re good at. A Certified Bookkeeper will be more efficient than you, they won’t spend all day reconciling bank accounts and attaching invoices and receipts. They’ll have it done in minutes. They won’t have as many errors and overall, they will save you a mountain of stress.

Your time, and your sanity, are worth investing in a Certified Bookkeeper.

A Bookkeeper is on Top of Your Cashflow

Hiring a bookkeeper means that you’ll always have someone with an eye on your cashflow.

They’ll help you get paid. Many small business owners have a hundred things to get on and do. It’s easy for things like invoicing and accounts receivable t fall down the list. It is essential to your business survival that you send out invoices as soon as possible. It is equally as important to follow up with late payers to see what’s going on. These are harassing calls, just a friendly, personal reminder that the invoice is outstanding and due for payment. You might feel bad doing this, which is why its the perfect task for your friendly, professional bookkeeper.

Your bookkeeper will also ensure that you don’t end up getting any of those calls from your creditors. They’ll ensure that your bills are paid on time.

Id there any better investment in your business than one that makes sure you’ve always got cash flowing and money in the bank?

Hiring a Bookkeeper Prevents Costly Errors

A Certified Bookkeeper knows their stuff. They are committed to professional excellence and undergo ongoing professional development to make them experts in their field. They won’t make the same mistakes that you’ll make, either because you’re rushed or because you haven’t got around to reading the latest 53 page IRD tax bulletin.

Some mistakes might seem small and insignificant at first. However, data entry errors, mixing up expenses and mis-claiming GST, can all quickly add up. These mistakes cost you more time and more money.

If you are doing your bookkeeping and then relying on your accountant to clean things up a year-end, you’re burning money. What you are doing is then getting your accountant to be your bookkeeper, at accountant’s hourly rates! It also takes a lot longer to unpick and re-reconcile transactions that happened months or even years ago.

At the worst end of the scale, consistent mistakes, even little ones, could flag you for an IRD audit. An audit can cost thousands to resolve, and that’s even if things are nice and tidy!

It’s best, and cheapest, to get it right from day one. Get in an expert to keep your books in order.

Certified Bookkeepers are Experts

Are you up to date on every movement in tax law? Do you understand how small changes to the rules effect your business? A Certified Bookkeeper is. They can advise you about any changes that are coming that may impact on your business and can offer insight into how to prepare and minimise any impact or maximise any benefit.

Hiring a bookkeeper can also provide you with insight into your company’s financial position. If you’re short on cash, overspending in certain areas or struggling to collect accounts receivable, your bookkeeper will tell you. They can also work with you to help remedy these issues. If there is something you don’t understand about your business finances, your bookkeeper can help to explain it to you. Because they are slightly more human than accountants, they can even explain it all in plain English, not accountantese. So your business financials will never be a mystery again.

Hiring a Bookkeeper is an Investment in Your Business

With a Certified Bookkeeper on board, you can sleep easy knowing your business books are in the hands of a professional.

Not all bookkeepers are created equal. At MBP, all of our bookkeepers are trained professionals and are Certified Bookkeepers with the Institute of Certified New Zealand Bookkeepers (ICNZB). The ICNZB ensure that they are professionally competent and that they uphold the highest standards of continuing professional development and ethics. And the best part, our Ceritfied Bookkeepers are about half the cost of an accountant, so you get exceptional value from your investment.

Want some help with your bookkeeping? Get in touch with the team of Certified Bookkeepers at MBP, or book in a chat with us today.

Most small businesses experience cash flow problems from time to time and urgently need working capital. Many business owners immediately think of the bank or loans when they’re short of cash. But there are other resources you can tap before you ask for that expensive overdraft or business loan. The money you need might already be there, locked up in inventory, assets or your debtors’ book. We’ll run you through a few ways of unlocking cash in your business that you may not have thought of.

You can often free up funds from within your business by re-examining your business systems, and these funds might in themselves be sufficient for your immediate needs.

We’ve collected below some of our top tips for unlocking cash in your business.

Efficient Management

Even if the funds you free up from within your business are not sufficient, there is another payoff: the efforts you make in searching for them helps to ensure that you are running your business in the most efficient way possible.

To free up funds from within your business, look closely at:

  • Assets
  • Customers
  • Suppliers

Unlock the Value in your Assets

Your assets include debtors, stock, pre-paid expenses, vehicles, plant and equipment, fittings and property. Each of these is a possible source of funds.


Are you letting some customers have the free use of your money for months? This is a common occurrence in small businesses where the owner(s) are so busy getting the business off the ground, products out the door, or services completed, that they don’t pay enough attention to basic business procedures. Many customers will take advantage of this ‘free money’. Your business is not to serve as a free bank.

Here’s how you fix the problem and unlock cash in your business from your debtors:

Get your invoices out promptly

Whatever else you do, become efficient at getting invoices out early. This is your future cash flow—the lifeblood of your business! You want to receive it as soon as possible. Start this new system NOW. Depending on your business, you can often cut out statements simply by printing at the bottom of the invoice: ‘Please pay on this invoice as no statement will be sent.’

Send the invoice with the goods or immediately the service is completed

Date the invoice from no later than the day it is sent rather than following the standard ‘last day of the month’ date for invoices. The earlier the invoice date, the better your chances of getting paid earlier.

Change the terms

This could be for some of your customers or for new customers only. For example, can you reduce ask for immediate settlement or set reduced payment terms such as  7 days or 14 days from date of invoice?

Follow up promptly when invoices aren’t paid by due date

This is critical. Be polite but firm. If you haven’t the time to do this yourself, then appoint someone to do it for you.

Monitor your debtor collection days

Set an improvement target each quarter. For example, can you find out the benchmark standard for your industry? IF the average in your industry is 30 days, but you are taking an average of 45 days to collect outstanding debts, then there’s clearly room for improvement. If your customers or clients have been taking advantage of you because of your previous laxity in invoicing, then you may need to re-educate them. Do this politely so you don’t offend customers:

“Have you received our invoice, Peter? I’m just checking that you’re happy with the goods/services we provided? “We’ve got a new invoicing system going here, because we’ve been a bit lax in the past. My accountant has set some tough goals for me to meet in reducing our average debt collection cycle, so if you could settle that invoice promptly I’d be most obliged.”

Consider factoring

This simply means selling your outstanding invoices to a finance company. So instead of having to wait 30 days or more until an invoice is paid, you receive most of your money up-front from the finance company that then in turn collects the money from your customer. The finance company will of course charge you a commission for this service. Be aware, though, that there are pros and cons to factoring. For example, check that the finance company will not antagonize your customers with a heavy-handed approach. Talk to them first about their collection methods.

Consider offering a discount for prompt payment

If you’re going to pay a fee for factoring, why not try offering a discount to your customers instead? Discounts are not a good option for low-margin businesses, but can be an option for high-margin operations. You have to work out whether the use of money gained earlier is worth the discount you’re offering. NEVER give the discount if the person has missed the due date for the discount offer. (Yes, some will try this on.)


Do you have excessive capital tied up in stock? This can occur in two ways:

  • carrying high levels of items that you could obtain from suppliers at short notice
  • having too many SLOBs (slow-moving and obsolete items)and too few fast-moving items.

Can a sale help in unlocking cash in your business?

Regularly track your stock levels, your stock turnover rates and your purchasing policies. Can you free up money by reducing stock? What about moving out of the slower-moving lines or having a quick sale of dust-collecting stock? It might pay you to reduce some items quite heavily to get some money in quickly.

Can you approach suppliers to take back any excessive stock you may have ordered? They might help you out of a temporary tight corner as a goodwill gesture if you explain you have a temporary cash flow crisis, but that you do wish to build a long-term relationship with them.

If you need additional funds to purchase more stock, make sure that you’re replacing slow-moving stock with the faster selling lines.

Pre-paid Expenses

This is another area you could look at. These pre-paid expenses often relate to services. For example, you might pay your insurance bill for the year all in one hit, but you could arrange to pay small monthly amounts. There might be an additional cost for doing this, but you must weight the extra cost against the advantages of 12 small payments which your cash flow can comfortably handle versus one large annual payment. Try a similar approach with your accountant. Instead of facing a substantial bill once a year, ask if you can pay a set amount monthly.

Fixed Assets

Assets can drain significant amounts of cash out of a business. Do you really put all your assets to full use? You might be able to:

  • Sell off little-used assets and hire suitable replacements when you require them.
  • Lease or rent assets and equipment that depreciates rapidly such as computers and or vehicles

Customers and Cashflow

Don’t forget your customers can be a source of unlocking cash in your business. Apart from debt collection improvements already discussed, try these tactics:

Here’s a ‘thinking outside the square’ tactic. Ask some of your credit customers (start with the ones you know best) if they would be willing to use their bank credit cards for purchases from you, instead of using the account facility they have with you. For example, if they purchase say $2,500 worth of goods or services from you, they would pay for this by means of a business credit card. They still get 30 to 55 days credit before having to pay the credit card company, but you get your cash as soon as the payment clears the bank. You have to pay the merchant fees, but otherwise it’s almost as good as a cash transaction.

If you’re starting a new business, consider establishing it on a cash only basis to keep the funds inside your business rather than locked up in Accounts Receivable.

Ask for Progress Payments

If you supply goods over a period of time, or if you’re a service business, ask if you can invoice for progress payments. This is quite a common method of ensuring you get some cash flow during a project instead of waiting until the end of a project or delivery period to invoice—and then still waiting at least another 30 days for payment.

There’s another benefit here too. If the customer turns out to be problematic, you’ll discover this quite early on instead of at the end and you can cut your losses before they mount up and perhaps drag your business down. This tactic is therefore very suitable for tradespeople subcontracting to a developer.


Finally, consider your suppliers as a possible source of funds. Ask for extended payment terms to give you the opportunity to sell the goods first before you have to pay. If the supplier won’t budge, try this tactic: split the order in two and offer to pay normal credit terms (30 days) on the one half of the order and 90 days on the other half. Your suppliers will be more likely to agree to this kind of arrangement if you’ve paid them promptly in the past. After all, they have a vested interest in helping you succeed.

  • Quantity breaks – incentivise customers to order more through quantity discounts.
  • Re-order levels – Setup minimum stock levels to avoid stock outages on important lines.
  • Default reorder quantity – Setup re-order quantities so the most economic order quantity is placed.
  • Receive Stock – Receive items into stock so you can sell them before receiving the final bill

Take advantage of discounts

Pay accounts that give discounts on time. This is an easy one. If any suppliers offer a discount for early payment, then take it (and there is no harm in asking for a discount).

Reach Out to Discuss Your Options

These are just suggestions and may not all be suitable for your business. Feel free to contact us about ways of unlocking cash in your business. Book in a free 3 minute consultation about your business needs here.

If you’re a small business owner whose company hasn’t gone through hard times, that’s great but it’s likely to happen at some point. As much as we dream about being brilliant enough at business that we’ll never face slow times, there are many things beyond our control that can negatively affect our business. How you go about managing the impacts of unexpected events and getting your business through tough times will set you and your business up for success for years to come.

Here are our top four tips for getting your business through tough times.

Focus on your Existing Customers

When companies go through tough times, many owners turn their focus to bringing in new business. The downside is that existing customers are often forgotten, but those are the most efficient people to make sales to. You don’t need to stop marketing yourself to new customers, but make sure you give extra focus to the customers you already have, to ensure they remain loyal. Find out what their current needs are, how successful you are at meeting them, and what you can do to maintain an ongoing relationship. Communicate with them, and always provide exceptional customer service.

Reach out to Others

Chances are, you aren’t the first person in your industry to experience tough times. Talk to other people who have been in similar situations to learn how they navigated those challenges. Ask them what did and didn’t work for them, and what they learned from the experience. Some—if not all—of their answers could be applicable to your business, or could at least inspire a solution.

If you need a chat, a sounding board or someone to run through ideas in tough times, reach out to the team at MBP. Regardless of whether you’re a client or not, you can book a free 30 minute chat with one of our team here.

Examine your Marketing Plan

Your marketing plan brings in new customers. Now is the time to consider fresh marketing ideas to bring in new revenue. Is there an area of your business you haven’t promoted before but could bring in clients? Is there a new way to market yourself you haven’t tried?

Examine previous marketing efforts to determine how successful they were. If they weren’t successful, stop wasting your valuable time and money on them. Use your efforts on something new.

Improve your Cashflow

Assess your company’s financial health to see if there are ways to improve cash flow. Can you charge clients a deposit or encourage payment up front to increase cashflow? Are there products you sell or services you provide that bring in revenue more quickly than others? Are there ways to save money that won’t hurt your business in the long run?

It can be tempting to eliminate staff, but when things are good you’ll just need to hire employees again. Doing so costs time and money. See if you can find small ways to save money that won’t negatively affect your business when it starts booming. Cutting overtime, for example, can save you money without losing staff.

Make sure you can account for every dollar your business spends. Don’t hide from creditors, communicate with them to find out if you can restructure your debt or extend your terms. Free up as much money as you can without setting yourself up for failure when things turn around.

Final Thoughts

Chances are your business will go through tough times at least once. It’s important you take action to help get you through it, rather than crossing your fingers and hoping the difficulties pass.

The steps you take during these challenging periods will help you, but they can also help set you up for increased success in later years.

Got a question? Please don’t hesitate to get in touch.

The process to apply for the Covid-19 Wage Subsidy is pretty straight-forward and the turn around in payment has been very quick. We initially fielded hundreds of queries about the application process and having dealt with these are now receiving queries about how to reconcile the payments. If you use MBP for you bookkeeping, rest assured, your MBP Business Support Administrator or Advisor will deal with all the details of this for you. If you are handling your bookkeeping yourself, we have set up this hand guide to help you out and answer a few of the most common questions we get asked. If you have any queries, please don’t hesitate to get in touch with the team.

What is the COVID-19 Wage Subsidy?

Understanding what the wage subsidy is, helps to inform you how it should be treated in your accounting system and in your tax returns to Inland Revenue.

For employers, the wage subsidy is a lump sum payment that helps you to pay the regular wages and salaries to your employees over the 12 week contracted period you agreed to in the declaration. As it has been defined by the government as exempt income, the income is not declarable and the associated wage and salary expense is not a deductible expense. The easiest way to think about it for employers is that the wage subsidy is a wage expense offset.

For contractors and the self-employed, it is a lump sum payment received to help ease the loss of income for you over the 12 week period outlined in the application declaration. The easiest way to think about it for self-employed people is that it is an income replacement.

Reconciling the COVID-19 Wage Subsidy in Your Accounting System

Reconciling and accounting for the wage subsidy is an simple three step process. First, you’ll need to set up some new Chart of Accounts codes to record the lump sum and the weekly income/ expense offset. Secondly, you’ll need to allocate the lump sum to the right place. Lastly, you’ll need to account for the weekly amount of the subsidy ‘earned’ or used to help you pay wages.

Setting Up New Chart of Account Codes

You’ll need at least two new account codes to nicely keep track of the subsidy and its associated income or wage expense offset. These accounts are:

  • Current Liability style account, called something like ‘COVID-19 Wage Subsidy’, No GST. For the lump sum you receive.
  • Other Income style account, ‘COVID-19 Subsidy’, No GST. For the declarable income replacement or the wage expense offset.

If you have both regular and shareholder employees, you’ll need a separate ‘other income’ style account to offset the wages of each different class of employee as the expenses are declared in separate line items of the financial statements.

For the self-employed, it’s possible that your Chart of Accounts already has an account called something like ‘Unearned Income’ as a current liability and an account called either ‘Sundry Income’ or ‘Other Income’. You can use these existing accounts if you are not confident with adding new accounts into your accounting system.

Reconciling the Lump Sum Payment Received

The lump sum should be reconciled to the current liability account. This is because you will be using the subsidy over a 12 week period that likely spans two financial years. The part that you have not yet used to help pay your staff or that you have not yet ‘earned’ as other income is a liability you’d otherwise be required to pay back to MSD if you decided to fire all your staff or shut down your self-employment business.

Accounting for the Use of the Wage Subsidy

For employers, you’ll need to journal the amount of the wage subsidy you are using each week to help you pay your staff across from the current liability and into the wage offset account set up as an other income style of account. For example, if your weekly payroll for all staff is $4,675.00, debit the current liability by that amount and credit the other income account by that same amount. You do not need to consume the subsidy evenly over 12 weeks. You simply need to commit to your best efforts to keep all the staff you claimed for employed for at least 12 weeks. That may mean that you can use the subsidy to cover a highly paid pool of staff for 6 weeks or a lower paid pool of staff for 13 or more weeks. It all depends on the make-up of your staff pool and the needs of your business.

For the self employed, you’ll need to set up a recurring journal to allocate the weekly amount of the subsidy that you have ‘earned’ as replacement income. This will just be a simple process of setting up a recurring journal that Debits the current liability account you’ve created and Credits the other income account for the weekly amount of either 585.80 or 350.00 depending on which level of subsidy you claimed. Remember that these journals should have no GST but that the income is taxable to you once it hits that other income account. This is why its important to declare it with these weekly journals rather than in a single lump sum.

This process helps to establish an audit trail that will show any MSD auditor when you used the subsidy and just what you used it for.

Paying Your Staff with the Wage Subsidy

The wage subsidy does not change any employment law or alter your contracts with your staff.

Your staff should be paid as normal, or paid as you have agreed in writing with them to be paid, during the lock-down and beyond. If you need to agree updated terms of employment with your employees, reach out to the team at MBP. Our team of HR advisors can advise you on your options, draft the appropriate documentation and help you to communicate with your employees.

The wage subsidy simply provides you with the cash you need to keep paying your staff normally while your business activity is constrained due to COVID-19. If you wouldn’t change your payroll processes for using an overdraft to pay your employees, you wouldn’t change it for any other form of funding, like the subsidy.

The only time that the COVID-19 Wage Subsidy should be referenced in your payroll system or on your employee’s payslips is if you have no choice but to pay your employees nothing but the amount of the wage subsidy. In circumstances where a business can not afford to pay their staff at all, they are able to claim the subsidy and pay their staff by passing on the value of the subsidy and nothing more. In this instance, the employee is not being paid regular earnings and so adjustments to payroll will need to be made. Many cloud-based payroll systems have rolled out new default pay items to their systems to make this process easier. However, some have done a better job of it than others. Please double check everything and if you are in doubt, reach out to the team at MBP for some help.

Potential Implications of Taking Short-cuts

A lot of people doing their own bookkeeping (and even some lazy bookkeepers) may be tempted to take shortcuts and not reconcile and account for the subsidy correctly. This may seem harmless at first but can have a lot of unintended consequences.

For employers, receiving the lump sum in a single tax year when the subsidy period covers two tax years will throw off your payroll reconciliation. It will artificially lower your wage expense in one year and inflate your declared out of pocket cost in another. This has potential implications for your tax position as well as your ability to get financing in future.

For the self-employed, declaring the lump sum in a single tax year instead of spreading it over the full 12 week time-frame may inflate your taxable earning more than necessary in one year. This could have a considerable impact on things like Working for Families Tax Credits. So there is a chance that by incorrectly declaring the subsidy you could be losing thousands in additional tax credits.

Is the COVID-19 Wage Subsidy Taxable Income?

There is a lot of talk about the COVID-19 Wage Subsidy being non-taxable. However, this can be confusing and misleading unless you understand the subtle differences between things like non-taxable, excluded and exempt income.

GST on the Wage Subsidy

The COVID-19 Wage Subsidy is exempt from GST.

Make sure there is no GST on any of the codes you’ve created to record the subsidy.

Income Tax on the Wage Subsidy

The COVID-19 Wage subsidy is taxable in the hand of the end recipient.

For employers, this means that the subsidy is taxable in the hand of the employees you pay using the subsidy funding (through their regular PAYE deductions).

For the self-employed, as you are the end recipient, the subsidy is declarable as income for you and will inflate your taxable profit. Ensuring that you properly follow the reconciliation process above will make sure you don’t over declare your income in any tax year covered by the subsidy.

If you have any other queries or would like to discuss any specific query with the wage subsidy, reach out to the team at MBP. You can book a free 30 minute slot to discuss any issue have here.


This advice is general in nature and should not be relied on as a recommendation. Every situation is unique and requires tailored advice. Get in touch for a free consultation by clicking here, emailing or call us free on 0800 86 85 86.

If you sell or make products then you’ll likely have stock on hand or work-in-progress at year end. In order to get accurate figures for your tax and annual financial statements, you’ll need to know the value of this stock. This means you’ll need to do a stocktake.

The end of the financial year (EOFY) comes around like clockwork but for many business owners it can be a stressful time. It doesn’t have to be with the right planning. Planning your stocktake in advance  can save you time and stress and is the best way to ensure that your closing stock figure is accurate and that you aren’t under or over declaring your business performance and financial position.

An EOFY stocktake will show you how much of your capital is locked up in stock. This is a serious consideration for cashflow and will inform your budgets for stock ordering for the year ahead. When planning your stocktake, you should also plan to follow it up with your annual business plan and cashflow forecasting. This will help to inform your overall strategy and help you make sure you are carrying the right amount of stock.

The closing stock figure you get with your stocktake has a big impact on your taxable profit. This means it has tax implications as well as effecting your KPI‘s by making an adjustment to your Gross Profit Margin. This means it really important to get it right. If you need a hand, get in touch with our expert bookkeepers or tax advisors, they can give you some tips tailored to your specific requirements.

With the right plan, help and advice, your stocktake can be painless.

Plan For Stocktake Success

Successful, painless and accurate stocktakes don’t just happen, you need to plan.

The first thing to consider is timing. When you do your stocktake is important. For tax purposes, your end of year stocktake needs to be done reasonably close to your financial year balance date. This is so that you get an accurate and relevant figure for your financial statements. However, you need to select a time that has the least possible impact on your business. It may be that you need to close up early or open late and put in some extra work on stocktake day to make sure you get everything you need done while not impacting your customers too much (and missing sales!).

To keep track of stock throughout the year and make each stocktake easier and less of a ground-up exercise, we recommend planning mini-stocktakes throughout the year. Your end of year stocktake will then be based on more up-to-date figures and should be less of a chore. Software like Vend makes it easy to run partial stocktakes.

Get The Right Software

These days there is a niche piece of software to simplify every part of your business. Your stock is likely one of your biggest assets so deserves a dedicated, expert solution. Using inventory management software makes monitoring stock a breeze throughout the year. Solutions like Vend and Dear are worth the investment. They allow you to get accurate information in a timely manner and make informed decisions.

Get The Stocktake Team Together

If you have a lot of stock, getting some help will make things a lot easier. If you have staff then it makes sense to use them. They know your business and your products so they will be able to spot things that are out of the ordinary, damaged or obsolete. Using your own staff is likely more expensive than using students or other casuals but you’ll often get a better and more reliabel result, allowing you to make better informed business decisions.

Clear The SLOBs

March is often full of stocktake sales. There’s a simple reason for this, stores want to clear their SLOBs while optimising their tax and financial positions.

SLOBs are your SLow-moving and OBsolete stock. This is the stock you really don’t want to carry through to next year and is a much greater benefit to you converted to cash. Carrying too much stock isnt a good thing for many reasons. Holding stock that isnt selling takes up space in your warehousing and shop floor. This costs money in lease and other overheads for every day it sits there. There is also a daily risk that items get damaged and their realisable value decreases as a result. There’s also an added benefit, it’s also a lot easier to count less stock.

Sort Out The Stock Room

When you first set up your store you probably had a meticulous warehousing layout. However, as soon as the orders start flowing the order tends to go out the window. Its common for stock rooms to devolve into a bit of a mess with the same items stored in several different locations. This can be an expensive issue as its harder to fulfill customer orders on time, its harder to monitor stock levels and you’re more likely to order replacement stock that you don’t actually need.

To make your stocktake easier, quicker and more reliable, invest some time in making sure your stock room is well organised.

A well organised stock room not only speeds up stocktake but also speeds up order fulfillment and monitoring for the right time to order replacement stock.

Verify Your Purchase Data before Stocktake

Take some time to look through your inventory system and check that the cost prices you have recorded are accurate.

If you import stock, ensure you have accounted for the full imported cost, including customs charges, duty and currency fluctuations.

Store Sold Or Shipping Stock Separately

If you’ve sold something and the customer has paid for it, it shouldn’t be included in your stocktake. This is another reason why you need to sort out your stock room before stocktake.

Items that are sold should ideally be stored in a separate area of your stock room so that you can ignore them easily during stocktake.

Count Everything

Accuracy is essential. Your stocktake determines the value of your stock that is deducted from your direct costs. This increases your taxable profit. It is tempting to simply make a guess, especially if the total value of your stock is below $10,000 and you are allowed by the IRD to make an informed estimate rather than do a physical count.

Taking the time to do a physical count is a valuable exercise for your business. It informs you what is selling and what is just sitting on shelves, it lets you confirm that you do in fact have exactly the products that you think yo do but most importantly, it makes sure you pay the exact right amount of tax you need to.

Count every item. Open boxes to check the correct stock in in there (and isn’t damaged). Mark off the sections that are counted but leave a note pad there to record any movement of items out while the stocktake is underway.

Review Everything

Once in a blue moon, a physical stocktake matches perfectly to your industry software. In most cases, there are variances. If the variance is material (more than a certian percentage you deem to be significant) then recount the stock affected to double check.

Missing stock can be cause by any number of issues. These could be simple accounting errors, software coding errors or even theft. Regular partial stocktakes can be an early warning system for issues in your business, allowing you to make any required changes before they become serious issues in a years time. This could be implementing better warehousing, security or ordering process.

Start Planning For Next Years Stocktake

Every stocktake is a valuable learning experience. It can help to inform your stock purchasing for the year ahead but also the way that you store and move stock through your business. Use it as a time to optimise your stock room layout, establish efficient and simple systems for partial stocktakes throughout the year, and up-skill yourself and any staff on best practices with stock ordering, dispatch and warehousing.

If you would like to discuss your options for more efficient business systems, software or processes with your stocktake, get in touch with the team at MBP. Our Business Support Administrators, Business Advisors and Accountants can help your to plan for a painless stocktake. It might seem like a chore, but it can be a really valuable exercise when done properly and with the right support.