The government’s latest COVID-19 support package includes further measures to try and ease the pain of the lockdown. It includes ‘tax breaks’, business advice funding and guidelines for tenants and landlords.

At first glance it seems this package, unfortunately, may not do a lot for small businesses and leaves a lot to be desired. There are no in depth details available yet, so we will have to hold on, likely until 27th April.

Tax Loss Carry-Back Scheme

A large portion of the package is the tax loss carry-back scheme which will allow some businesses to access previous tax payments as refunds. Essentially this means a forecast loss in the current financial year can be offset against the tax paid on a profit from the prior year. Basically 2 tax years become 1 year.

This scheme relies heavily on perfect forecasting for more than 11 months into the future. Any mistakes in the calculations or forecasts will result in Use of Money Interest being charged by the IRD, likely back to early in the 2020 tax year when the adjusted provisional payments will have arisen originally.

This scheme has the potential to help some larger, more established businesses with steady monthly turnover year to year, but really does nothing for growing or smaller businesses with less certain profitability.

We recommend that in the short-term, your efforts are much better spent looking at ways to make your business thrive after lockdown. Don’t distract yourself with this poorly thought out policy until it actually has some usable detail or some tweaks that make it more applicable to the businesses its supposed to help.

Commercial Landlords and Tenants

The Government has announced its intention to put in place some temporary law changes to support commercial tenants and landlords impacted by COVID-19. The goal is to make it easier to keep lease arrangements and get back to business as usual after the epidemic. Many businesses have been unable to operate due to the level 4 lockdown alert, so they may have difficulty payment rent. Landlords, in turn, may have trouble making mortgage payments.

Important Note: Landlords and tenants will not receive financial support in the form of cash payouts.

The temporary bill that is set to come is designed to give commercial tenants more time to catch up on overdue rent before a landlord can take steps to evict them.

Some details:

  • For the next three months, landlords can’t apply to end the tenancy for rent arrears unless the tenant is at least 60 days behind in rent.
  • Landlords will have to give 30 days notice to cancel a lease, up from the current 10 days.

The official advice for tenants that can’t pay their rent is to let their landlord know right away. Be honest about the situation and get a payment plan in place.

If you will continue to have trouble, you may be able to access financial support from the Government’s Wage Subsidy and Leave Payment scheme that is available to eligible employers and workers.

We hope to have more details on this after April 27th, but please get in touch with us if you have any questions.

The website is regularly updated with the latest COVID-19 news and announcements for businesses.

Are you Worried about Cashflow?

If you’re worried about your cashflow, please don’t hesitate to get in touch with us.

We will do all we can to help you implement cash management processes and forecasting techniques to help. There are also some finance options available to you as well. Facilities may be provided quite quickly, so just ask if you need some help and we’ll work out what’s best for you. Remember, we are in this together.

We have the ability to provide you with FREE cashflow forecasting software for the next three months. Reach out to the team to talk to us about your options.

Thank You

Thank you for your continued support and patience as we work to wade through government packages, announcements and updates each week. Please get in touch if you have any questions.

We are in this together.

Using stock photos for your website or other advertising media sounds appealing, especially if they are free. But before you start taking images off the internet, it pays to understand exactly what the rules are for using stock images. And we’re talking pays because if you get things incorrect, you could end up paying big bucks.

Beginners Guide to Using Stock Photos

Stock photos generally come into two groups: free and paid. Paid images are mostly sold by giant stock image websites. They let you use the photo for a fee, where the fee varies according to the size and quality of the image, what you want to use it for and how often you want to use it.

Free stock images are free to use, but often have specific limitations on them. Not following their guidelines can also prove costly. Here is an explanation of some of the major terminology regarding using stock photos:

  • Rights Managed – this license gives you the ability to use a photo for a specific purpose for a specific length of time. Usually, it is for the sole usage of the image and if you want to extend its use, then you pay.
  • Royalty Free – this is not a free photo, but rather one you must pay for. The term royalty free is referring to a flat rate you pay to use the photo wherever you want, to a set limit.
  • Extended Licenses – should you wish to use a Royalty Free image beyond the limits of what the seller has set, you’ll need to pay an extended license for it.
  • Creative Commons – there are two parts to this. The first, CC0 is where you can use the image without attribution because the owner has given up all rights. The second is CC 2.0 where you can use the image but must give attribution to the image owner.
  • Public Domain Image – this is an old image which copyright has expired, or there are no longer any ownership rights.

The next thing on your to-do list is to find the right stock images to use.

Finding Free Stock Photo Websites

Who doesn’t like things for free, including stock images? Here are some of the most well-known websites which offer free stock images (not Royalty Free, by the way):

If you are happy to pay for a photo, you could try Shutterstock, Adobe Stock or Getty Images. What are your favourite stock photo sites? Let us know in the comments below!

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.

In these unprecedented times, it’s important to remember that we’re all in this together; everyone is impacted by Covid-19, from our team, to our customers and suppliers.  We’ve prepared this guide to help our clients navigate through these uncertain times by working together to help keep businesses alive and people employed.

We can’t stress enough the importance of communication at this time.  You’re not alone in this.  Communicate with us, your accountants; we’re here to help.  Communicate with your team; they’re worried about their job security and supporting their families.  Communicate with your customers; reassure them that you’re still open for business and of the steps you’re taking to protect them.  Communicate with your suppliers; they’re a business just like you, with similar concerns.  Communicate with your bank and financiers; sooner rather than later – act now for your best opportunities.

These are scary times for everyone, but it’s a time for planning, not panicking.  We can all make a plan to minimise the impact as much as possible.  Things will change, that’s a given.  But with this change comes opportunities.  Think about how your business can evolve.  It’s likely your customers still need you; but you may need to pivot your business.

We encourage our clients to reach out to us.  We are keeping up to date with the latest from the government and will share the latest developments with our clients.

Many, if not most, team members will be working from home.  Most, if not all, of your usual face-to-face meetings will now take place online or by phone.  The value we provide you won’t change; our delivery will just look different.

We can all do our part to keep ourselves safe and protect our community.

We are committed to safeguarding the financial health and wellbeing of our team and our clients.

Please get in touch, by phone or email, to discuss your options and make a plan for the continuity of your business.

We’re here for you,

The MBP Team


Click HERE to access your free copy of our Business Continuity Plan template.

Your Resilience


The coming months are inevitably going to be tough for a lot of people.  As a business owner, you’ll need to make some tough decisions.  It’s essential we look out for each other and speak out when we need help.  This is a stressful time and it’s important we look after our mental health as well as offering mental health support to our team.

Some tips for managing your mental wellbeing:

  1. Select your information sources carefully. Access information from official sources when required.
  2. Try to maintain your daily routine. Some adjustments will need to be made but try to keep to your routine as much as possible.
  3. Exercise each day. Go for a walk or run and get some fresh air and sunshine.  Even if you’re self-isolating, you can get outside while maintaining social distancing.
  4. Get enough sleep. Easier said than done at times.  Put technology away earlier and read or listen to an audiobook to help you relax.
  5. Maintain a healthy diet. Eat a range of fresh and nutritious food.  Reach out to your community and swap produce if possible.
  6. Stay calm. Choose a relaxation practice, e.g. yoga, meditation, etc. and commit to doing it daily.
  7. Stay connected. Spend time with your family and keep in contact with friends; call instead of texting.
  8. Be positive. With crisis comes opportunity.  Seek out opportunities and don’t catastrophise.

If you’re struggling to cope and need to speak to a trained counsellor, you can call or text 1737 any time.  In an emergency, dial 111.

For more information on managing your mental wellbeing, see the Ministry of Health website.

Xero Assistance Programme

If you’re on any MBP Business Partner Assist, Assist Pro or Assist Insight plan, you can access XAP, the Xero Assistance Programme.  This allows you and your team to access free and confidential counselling and support, either face-to-face, online or over the phone.

Find out more on the Xero website.

Family first

Your family should come first, always.  It’s likely they’re your main reason for being in business; setting your family up for success.  Discuss your options with your family and make a plan for working from home.

If you have children, speak to them about what’s happening in an age appropriate manner.  Find out what they know and correct any misinformation.  Listen to their fears and offer comfort while being honest.  Reinforce the need for proper hygiene and getting lots of sleep.  Make sure you have technology, books and resources available for them to continue learning.

Personal budget

Review your personal budget and ‘trim the fat’.  Identify areas where you can save money.  Your personal budget doesn’t need to be complex – it could be as simple as totaling your expenditure from the last month or 2 to identify your monthly personal costs.  From there identify where you can make savings e.g. on entertainment, coffee, gifts, and any other unnecessary expenditure.  Every saving you make takes pressure off what the business needs to provide to you.

Don’t cut costs for essential utilities; a strong and reliable internet connection is a must if you’ll be working from home.

Personal asset planning

Personal insurances

Review your personal insurances to ensure you have sufficient cover for you and your family.  Speak to an insurance broker for advice on your insurance options.


If you don’t already have a Will, make sure you get one written up sooner rather than later.  If you do have one, make sure it’s up to date and reflects your current wishes.  Speak to your lawyer for specific advice on drafting your Will.

Memorandum of Wishes

If you have a Trust, ensure you have a Memorandum of Wishes to guide your appointed Trustees on the purpose and desired outcome for your Trust assets.  While it may not necessarily be binding on the surviving Trustees, they will usually follow it.

Because a Trust continues after your death, a Memorandum of Wishes is important as it outlines your intentions for the Trust assets.  It’s a personal document that doesn’t need to be written by a lawyer.  You should write it yourself, in plain English, and update it whenever circumstances change.  We have a template available to guide you through the creation of your Memorandum of Wishes.

Powers of Attorney

There are two types of Powers of Attorney: general and enduring.  A general Power of Attorney is appointed to help you look after your affairs and you can choose what it covers, e.g. money and property.  A general Power of Attorney ceases to be valid as soon as you no longer have the mental or physical capacity to instruct them.

An enduring Power of Attorney allows your nominated person to act for you if you become mentally incapable but must be arranged while you are mentally capable to make that decision.  You can nominate an enduring Power of Attorney for your personal care and welfare, and for your financial affairs and property.

If you don’t current have a Power of Attorney arranged, now is the time to think about who you could nominate and the types of authority they’ll have.  Remember, it must be arranged prior to you becoming mentally incapable or it will be invalid.

Important documents and information

Ensure you store your important documents and information in a safe place which can easily be found by the person who will be dealing with your affairs in the event you become incapacitated.  Don’t forget to include passwords to online accounts, and key contact information such as your lawyer, accountant and doctor.  We have a Life Organiser which records all these important details in one place, stored electronically with us.

Supporting Your Team

Your team members will be worried about job security.  The government has stated that there will be job losses during this time.  Be open with your team.  Share your plan with them and be honest about the potential impact the pandemic will have on your business.  If there are to be job losses, ensure you obtain legal and HR advice on the best way to handle restructuring, stand down, reduced hours, and redundancy processes.

Covid-19 Prevention and Response Policy

If you haven’t already developed a policy setting out the actions you’ll take to prevent the spread of Covid-19 and respond to its impact, now’s the time to do so.  This policy should set out best practice for your team, including:

  1. Clear self-isolation policies.
  2. Postponing all travel and work-related events.
  3. Cancelling in-person meetings.
  4. Practicing social distancing.
  5. Measures to take at home.

We’ve developed our own policy and we’ve made our template available to our clients free of charge to use as a comprehensive starting point.  Get in touch if you’d like a copy.

Updating your team and ongoing communication

After you’ve completed your Business Continuity Plan, share relevant sections with your team.  Ideally, share this online either via email, video recording (Loom is a great tool for making video recordings), or online meeting such as Skype, Zoom, GoToMeeting or Google Hangouts.  Answer questions honestly, even if the answer is “I don’t know”.  Be realistic and honest about any risk to jobs during this period but reassure the team that you’ll do everything you can to protect their jobs as much as possible.

Outline how you’ll communicate with the team on an ongoing basis.  This may be a daily update email while things are changing rapidly then become less regular.  For large teams, ask team members to send any questions to their direct manager, who can then collate questions to be addressed in future communications.

Continuity of work

Changes to roles

It’s likely there will be changes to roles within your business as you and your team adapt to the impact of Covid-19.  Spend time reviewing your current organisational structure and updating key responsibilities and tasks where appropriate.  Ensure everyone is clear on their updated roles and responsibilities.  Remember to seek HR and legal advice on how best to handle significant changes in roles or redundancies.

Updating goals and KPIs

It’s likely each team member’s goals and KPIs will need to be updated.  Targets which seemed achievable a few weeks ago may now be unrealistic.  While it’s hard to estimate the exact impact on sales and revenue over the coming months, reset your team’s KPIs and goals to realistic targets.

Working from home

It’s likely that people will remain in some form of lockdown in the coming weeks and possibly months.  Decide what additional resources you need to provide your team with, if you haven’t already.

Consider how you can best utilise technology to maintain team communication.  Using an application, such as Microsoft Teams or Slack, can encourage your team to regularly communicate.  You could also run an automated daily standup within your chosen app or via a third party app, such as Standuply or Standup Alice, which allows you to set questions for your team to answer each day, e.g. how are you feeling, what are you working on, what are your roadblocks, etc.

Instead of face-to-face meetings, utilise Skype, Zoom, Google Hangouts or GoToMeeting for one on one or small team meetings.  Consider using Trello, or Asana to manage workflows while working remotely.

Flexibility of working hours

Consider whether you can offer flexible or reduced working hours to your team.  Team members may be willing to reduce their working hours for a period of time.  Encourage team members with outstanding leave to use this now.  In some instances, leave without pay may need to be offered.  Ensure legal and/or HR advice is obtained if hours need to be reduced or changed.

Financial support

If a team member is sick with Covid-19, or is caring for a dependent who is sick with it, and cannot work, they should first use any available sick leave.  They can then quality for the Leave Payment Scheme for hours above their available sick leave.

Work-related travel and events

It’s likely that a phone call or online meeting will generate the same results as face-to-face contact.

If you hold customer or team events, consider how these can be delivered online.  If you have booked venues for upcoming events, contact each venue as soon as possible to minimise costs.  Do not assume that venues will not provide a refund or will hold you to binding contracts.  Some suppliers will be understanding of your situation and will offer relief.

Restructuring and potential redundancies

During these unprecedented times, the legal ramifications of employment decisions may differ from standard.  It’s important to negotiate with your team where possible and give them options to choose from.  In some cases, team members may need to be given the option of either accepting reduced hours or having their role being made redundant.

Review your Employment Agreements to determine whether there are clauses which cover this current crisis and enable you to reduce working hours in these situations.

You may need to restructure your business with resulting redundancies.  It’s imperative you obtain advice to ensure proper processes are followed.

Supporting and Retaining Your Customers

The support you offer your customers now will impact the support your customers give you in the future.  Customers need to be reassured that you’re still operating.

Covid-19 Prevention and Response Policy

Your policy should cover the steps your business has taken to protect your customers.  Share this information with them to offer reassurance that you’ve taken every practicable step to reduce the risk and protect both your customers and your team.

If you regularly have meetings with customers, switch to phone or encourage online meetings using Skype, Zoom, Google Hangouts or GoToMeeting.

Changes to your services

It’s likely that aspects of your business will need to change.  Ensure all changes are clearly communicated to your customers.  This includes any potential delays to delivery times or products being unavailable.  Use your website, social media and email to communicate well to customers.

Terms of Trade

Review your Terms of Trade and update the terms to reflect your changing business practices.  Share your updated Terms of Trade with your customers, highlighting key changes.  In particular, review your payment terms and delivery terms.  Remember to enforce your Terms of Trade at this time.  Don’t let customers avoid paying you, as this could have a material impact on the sustainability of your business.

We have a Terms of Trade Template available for our clients to develop robust Terms of Trade.  Please get in touch if you need help developing yours.

Offer incentives to retain customers

You customers may be facing job losses or reduced hours and lower income, so they’ll be prioritising where they spend their money.

Consider the types of incentives you can offer customers to keep buying during this period.  Can they spread the cost over a number of weeks or months?  Companies such as Afterpay or Laybuy can enable this.  You may be able to arrange consignment stock at this time, whereby you only pay your supplier once you’ve been paid by your customer.

Communicating with key customers

Ensure you regularly communicate with your key customers so they’re aware of what’s happening, particularly if you have an ongoing relationship with them to supply goods or services.  They’re likely being inundated with communication from numerous sources, so keep all communication brief.  Make your communications as personal as you can.

Working with Your Suppliers

Payment arrangements

Negotiate new payment terms with your suppliers if you can.  If you are able to pay upfront, ask for a prompt payment discount.  If you don’t have sufficient cashflow to pay upfront, ask to pay over a longer period of time.  Ask if it’s possible to hold stock on consignment where you only pay the supplier once you’ve sold that stock.  Don’t be afraid to ask for help here.  You and your suppliers are in this together.

Purchasing policies

Ordering of stock

Discuss your supplier’s supply chain and the measures they’re taking to continue supply.  Ask about their contingency plans for what may happen if deliveries can’t be made or supplies can’t be obtained.  Consider whether you need to order additional stock while it’s available, if it’s likely to become scarce in the coming months.

Alternatively, you may need to reduce your current minimum re-ordering levels.  Consider whether there are some items of stock that should not be re-ordered at all.

Return of stock

Review your supplier contracts in regard to the return of stock.  Discuss whether you can return excess stock that isn’t selling.  Ensure contracts are updated if any terms change.  If you cannot return stock, then consider discounting slow-moving stock to convert it back to cash (and don’t re-order that same stock).


Review the contracts you have with suppliers.  Is there a clause which would allow you to cancel orders or change the terms in this current crisis?  If you cannot meet the terms of your contract, seek legal advice and negotiate with the supplier.

Review all other key contracts, with lessors of premises, vehicles, and equipment.  You may need to renegotiate significant terms.  Do not assume that these contracts cannot be renegotiated.  As your current cashflow and ability to meet financial obligations may be significantly impacted, some of these key providers will be prepared to renegotiate terms.

Your business

Managing cashflow is essential for a business at all times but becomes even more important during times of crises.  Bear in mind that your customers and suppliers will also be concerned about their cashflow.

Preserving and bringing forward cashflow, and creating a war chest of cash reserves is important right now.

Cashflow Forecast and Cashflow Management

The first step to managing your cashflow is to create a Cashflow Forecast.  Projecting your cash position forward gives you the ability to make far more informed decisions.  Your previously prepared Cashflow Forecast will no longer be valid.  We can help you review and update it to reflect the impact that Covid-19 may have on your cashflow.

Some businesses will need to look at their cashflow and their cash burn on a weekly basis.

Accounts receivable process

Now’s the time to review your accounts receivable process and look for strategies to minimise your debtor days (the number of days, on average, it takes your customers to pay you).  Strategies include tightening and enforcing your Terms of Trade, engaging a debt collector, interim or staged invoicing, asking for deposits, offering prompt payment discounts and streamlining your billing process.

Follow up outstanding invoices and request payment early and regularly.  Make it easy for your customers to pay directly through Xero or by online payments or direct debit.  If customers are struggling to pay, offer payment options, such as spreading the payment across a period of time, to ensure you have cash coming in.

Accounts payable process

Review the terms you have with your suppliers and identify potential areas of improvement, e.g. asking for prompt payment discounts, better pricing, consignment stock and spreading payments across a longer term.

Review the support being offered by Inland Revenue to delay payment and access additional tax relief.  See the Inland Revenue section for more details.

Inventory process

Conduct a stocktake so you know exactly how much inventory you have on hand.  Determine how robust your supply chain is and whether you need to order more inventory now to get you through the next few months, or whether you need to cancel forward orders.

Debt / capital structure

Review your existing debt structure and work with the bank to negotiate debt consolidation, an interest only period, seasonal finance, revolving credit or overdraft extensions or better repayment terms.  See the Bank Assistance section of this guide for more information about how your bank can help with cashflow.  Review your drawings from the business and make adjustments if necessary.  Consider whether you could invest more cash into your business to get through the next few months.

Overhead expenses

Review all overhead expenses and identify areas where you could reduce your spend.  Are there costs that can be avoided through this difficult time?  Speak to your telecommunications, power and other suppliers about better rates.

Gross Profit margin

Your gross profit margin is the amount left of your sales income after variable costs have been paid.  Review your processes to reduce re-work, errors and wastage and monitor team productivity to identify areas for improvement.  Review the margins you’re achieving from different areas of your business, e.g. different departments or classes of product or service.  Focusing on the products or services that have a better margin and reducing or discontinuing products or services with a lower margin may contribute to your business survival.  Engage with your team about process improvement and increasing efficiency to help preserve and improve your margin.

Sales levels

Consider how you can maximise sales levels over this period to preserve cashflow.  Focus on the five ways to grow sales and determine which areas will give you the greatest return:

  1. Increase customer retention: Strategies to stop your clients switching to your competitors.
  2. Increase leads or enquiries: Ramp up your marketing to your target market, using cost-effective marketing channels that work in your industry.
  3. Improve sales conversion rates: Focus on the benefits you offer and the problems your business solves for your customers.
  4. Increase transaction frequency: Ensuring you have a follow up process for your next sale.
  5. Increase transaction value: Upsell to existing customers by offering them additional value.

Unused assets and equipment

Consider whether you need to keep unused assets and equipment.  Selling these, even at a loss, will give you much needed cashflow.

Asset purchases

Avoid purchasing assets outright with cash.  If asset purchases are essential, consider leasing or obtaining loan finance spread over a longer time period.

Bank Assistance

Contact your bank and any other financiers to find out how they can help you manage your cashflow over the coming months.  Get in touch with them now so you have access to additional funding when you need it.  Your bank may be able to offer the following assistance alternatives:

  • Increasing temporary overdraft facilities
  • Reviewing and extending trade credit
  • Asset finance funding
  • Loan repayment holiday, deferment of repayments, or interest-only terms
  • Extension of term lending periods
  • Short-term and hardship loans
  • Short-term mortgage holidays
  • Business credit card options


A number of business insurances policies will not cover the impact of Covid-19.  Your policy may have a standard exclusion clause regarding infectious diseases.  However, contact your broker or review your policies to see if this is the case.

It is also important to review your business insurances to cover risks such as:

  • HR and employment related matters
  • Theft / loss of property
  • Statutory liability
  • Professional indemnity
  • Shareholder buy-out / key person

Inland Revenue Support

In addition to the tax relief announced in the government’s Business Continuity Package, Inland Revenue can help free up cash by allowing instalment arrangements, remitting late payment and filing penalties, and writing off debt in severe hardship.

We can advise you of the options available to your business.  It’s essential that we are open and honest and notify Inland Revenue of the hardship you’re facing as soon as possible to reduce the likelihood of additional penalties and interest.

We are experts at negotiating the best possible outcome from a tax minimisation perspective.  Please speak to us.

Government Support Package

On 17 March 2020, the government announced a Business Continuity Package to address the impacts Covid-19 will have.  If you meet the criteria, you can receive government payments to subsidise wages.  Please note that this information was correct at the time of writing, but the government is regularly announcing more support packages.

Please contact us for the most up to date information relating to your business.

Wage subsidies

This package includes subsidies for lost wages for businesses who can demonstrate a decline, or forecasted decline, in monthly revenue of 30%.  The government has recently updated the package to ensure new businesses and businesses who had been experiencing high growth prior to the Covid-19 pandemic can access the support.  If you need help calculating the financial impact on your business, please get in touch asap.

Affected businesses can receive $585.50 per week for employees working 20 hours or more per week, and $350 per week for part time employees.  This payment will be paid as a lump sum and covers a 12 week period.  There is no longer any cap on the amount payable to businesses.

It’s important to note that a declaration must be made that employees will remain employed at a minimum of 80% of their usual pay for the subsidy period and that you are taking active steps to mitigate the impact Covid-19 has on the business.

If you need help completing application forms, please contact us.

For more information about the wage subsidy, see the Work and Income website.

Leave and isolation support

This was initially rolled out when only a few people were sick or in isolation. This has now been rolled into the wage subsidy.

If you are operating an essential business and your staff need to take sick leave or isolate related to COVID-19, please get in touch with us to discuss your options.

Business cashflow and tax measures

To further support businesses, the package includes cashflow and tax measures, including:

  • Allowing Inland Revenue to remit use-of-money interest (UOMI) for customers significantly adversely affected by Covid-19
  • Increasing the Provisional Tax threshold to $5,000 from the 2020/2021 financial year
  • Increasing the small asset depreciation threshold to $1,000 and up to $5,000 for the 2020/2021 financial year
  • Allowing depreciation on commercial and industrial buildings from 2020/2021
  • Removing the hours test from the In-Work Tax Credit from 1 July 2020

For more information about these measures, see the IRD website.

Talk to us about how this may reduce your upcoming tax commitments.

Support available and useful links

It’s essential to obtain your information from official government sources.  Your industry associations may also have industry-specific information.  If you need advice or support, we’re here to help.  We recommend reviewing the following websites for up to date information:

New Zealand Government

Inland Revenue

Work and Income NZ

Ministry of Health

Ministry of Business, Innovation & Employment

New Zealand Trade and Enterprise

Employment New Zealand

Next Steps

At this critical time, doing nothing is simply not an option.  You must prepare for the impact this pandemic will have on your family, your business and your team.  We’ve made key resources and additional services available for our clients to help them prepare.

Business Continuity Plan Facilitation

If you want to maximise your entitlements in the most cost-effective and efficient way, and get access to best practice (combining your expertise with ours) we recommend we facilitate the development of your plan online.  Depending on the size and complexity of your business, this may take between one and four hours and we can split our time into two-hour sessions if required.  Contact us for more information or a proposal for this service.

You may not be aware of all of your entitlements.  By working with us on your plan, we can make sure you receive your maximum entitlements.

Business Continuity Plan Review

If you would like to draft your plan yourself, using our guide to assist, we can review your draft and ensure you’ve covered everything.  We’ll do this over a 60-90 minute online review meeting.  Contact us for more information or a proposal for this review service.  The advantage of this option is that you get access to our expertise to ensure you access all the assistance you’re entitled to and we can make sure your plan gets done.

Business Continuity Plan Template

Used in conjunction with this guide, the Business Continuity Plan Template allows you to identify and record the steps you need to take in your business.  Provided in a Word format, you can complete this yourself or engage us to complete it with you online.

If you want to complete your plan yourself, without any assistance from us, we recommend you send us a copy of your completed plan.

Please also contact us with any support you need as we move through the coming weeks and months.

We’ll be holding all client meetings online or by phone for the time being.  We use online meeting software that enables us to see each other and to share documents on screen.  Prior to any online meeting, you’ll receive a link to join that meeting.  We know you’ll get as much value from these online meetings as you would face to face.

Click HERE to access your free copy of our Business Continuity Plan template.


Click HERE to book in a free chat with an MBP Business Partner.


We are here to support you in this difficult time.  Please take care.



This guide has been designed to assist New Zealand businesses to develop their Business Continuity Plan in response to Covid-19.  Planning your response is critical; every business will be impacted in some way.  

This guide is not intended to be exhaustive or replace official advice provided by the New Zealand Government.  The information contained in this guide is of a general nature only.  Contact us for advice relating to your specific circumstances. 

All data was correct at the time of writing; however, this is a constantly evolving situation and we recommend you utilise official government or industry specific websites or contact us for the most up to date information.

Employees at businesses both large and small are now telecommuting/ working from home. Many companies around the world are restructuring their management practices to meet the challenges and opportunities of managing remote teams.

Now with the spread of the COVID-19 and workers being asked to work-from-home the need for managing remote teams is higher than it’s ever been.

Because they tend to be more agile and open to change, small businesses are particularly well positioned to adapt to telecommuting. Increased productivity and happier employees who appreciate the added flexibility are just a few benefits winning over small business owners.

But telecommuting also presents some challenges – in particular, two core issues: keeping track of what remote workers are doing and ensuring that remote and in-house teams form a cohesive unit.

These tips can help you effectively manage and support your remote employees and ensue the ongoing success of a remote business.

Promote Communication and Accountability when Managing Remote Teams

Defining expectations and setting up methods to track results are essential elements of remote team management. Here are a few ways to make sure your remote workers understand what is expected of them:

  • Set up a shareable daily work log your remote workers can use to report their progress on ongoing projects (Google Drive offers some good options).
  • Utilize a project management system to exchange messages, assign tasks and monitor projects rather than relying solely on email.
  • Determine key indicators for success for each remote worker and share these indicators with your employees (these might be daily, weekly or monthly goals).
  • Conduct regular reviews with remote workers to assess their performance.

Include Remote Workers in Office Culture

Positive work culture and employee engagement are quickly becoming top priorities for business managers who want to retain top talent. These tips will help your remote workers feel just as valued and validated as your in-house team.

  • If your in-house workers enjoy a monthly pizza party, don’t forget to include your remote workers. Invite them to attend, have a meal delivered to them or offer a gift certificate to a favorite restaurant.
  • Get to know and spend time with your remote workers, just as you would with in-house staff. Set aside a few moments each day to inquire about their families, personal interests, recent challenges and successes.
  • Consider pairing up remote workers to complete complex tasks. You’ll improve efficiency while helping remote workers feel like part of the team.

Ready to Enjoy the Benefits of Managing Remote Teams?

If the benefits of  managing remote teams outweighs the risks in your view, try offering your staff a work day from home a week – then, if it works out, you can try hiring remote employees. Some small business owners hire a remote employee in another region – a great way to expand their market.

If you trust your employees to work hard no matter where they’re located, the main thing to remember is fostering teamwork. A monthly meeting that everyone is required to attend can encourage stronger relationships, allow opportunities to clear the air or discuss any challenges – and improve a sense of teamwork and camaraderie.

Got a question about your business? Get in touch with the team at MBP. We can help you develop a remote working tech stack, implement HR policies for remote working and health & safety as well as work with you on your business culture and performance.