Managing increases to minimum wage for SME
Fri, Jul 20th, 2018
The Government’s policy to boost the minimum wage to $20 an hour over the next three years has been met with mixed reviews as well as anxiety and frustration by owners of small-to-medium businesses, including family run businesses, small farms, orchards, hospitality and retail industries. Small businesses with fewer than 20 employees make up 97% of New Zealand Businesses with those operating the hospitality and retail sectors predicted to be the hardest hit. It’s no wonder then that business owners, new and old, are fearful for the future of their businesses. This is fundamental human nature at its core. When faced with the unknown, anxiety centres of the brain light up and we often revert back to the basic survival mode of fight or flight. It’s imperative then, that business owners learn to become resilient and start looking forward to shifting the narrative towards a sustainable, prosperous business model — Plan, forecast and implement strategies starting today that will see you get the best from your business and employees.
If you own a business that operates on tight margins or is bracing for impact, there are steps you can take and strategies you can begin implementing today to mitigate the risk to your bottom line. In an ever-changing business landscape, it is the businesses that are willing to adapt and respond proactively that will come out on top. Take charge over the next three-plus years, planning ahead, absorbing added costs and minimising or eliminating any loss of income to your business.
Hopefully, with a little advice and armed with new information the majority of your concerns and anxiety will be relieved. Just having a plan and a forecast will allow you to assess your business position, see where your heading and alleviate any uncertainty. Should you require advice personalised to your business needs or want help with any of the options mentioned below please feel free to get in touch. You can contact us here.
1. Create a plan: A rolling and flexible budget that takes into consideration how many employees you have on minimum wage, and what you reasonably expect to pay your other employees, taking into account associated increases in holiday pay, Kiwisaver and ACC. Create a forecast for the coming year, and over the coming three years. We are more than happy to offer guidance on either of these action points.
2. Regular strategy, budgeting and pricing reviews: Based on the new cost of wages find your gross profit and use that information to decide whether you need to adjust the prices of your services or products. Look into your systems, AT, programmes and apps and how you can use technology to make daily tasks quicker, simpler and cheaper. Look into opening hours and roster structuring.
3. Invest in your employees: I’m not just talking money here. When employees feel that their contribution has value it becomes a self-fulfilling prophecy where they are motivated to achieve and help you grow your business. With wages being one of the most significant costs businesses face, there is nothing more important to the success of your business than investing in your employees. From the initial hiring process – hiring staff with the right skill-set for the job is vital, but often more important is finding the candidate with the right personality fit for your team, emotional-intelligence, ability and willingness to learn and initiative is vital. Skills can be taught but attitude is difficult to change.
Use the increase to foster good will in your employees. Happy staff value their jobs, create better relationships and as a result are more productive – each of these aspects incentivise employees to work in your business’s best interest. Don’t let your employees feel any ill-will or bitterness about having to pay them more – negativity breeds negativity and this attitude will manifest itself in lagging productivity.
4. Increase Productivity: The simplest way to mitigate the added cost of higher wages and continue to generate or even increase business profits is increased productivity.
Encourage employees and yourself to take plenty of breaks. This may sound counter intuitive, but have you ever noticed your staff, or even yourself start to lose focus or energy around 3pm? Breaks are necessary to our brains cognitive ability. Consider getting up every 90 minutes and walking around – even if to just to make a cup of tea. Your brain needs breaks, fresh air flow and plenty of water to recharge and function at its best. Encourage staff to take their 10-15-minute tea-break around 3pm when blood-sugar levels tend to drop off as this should see an improvement in productivity and efficiency when they are working. A lost 10-15 minutes is preferable to 2 hours of employees working at half efficiency. Have regular catch-up’s with your staff where you encourage their input – they’ll often have a different perspective of how things are going and this information will be valuable to improving day-to-day tasks.
EmployNZ offers Government funded workplace literacy training with the goal of boosting productivity in the workplace. Learn more here.
5. Prepare for the future: For every action there’s an opposite and equal reaction. In basic economics we learn that sooner or later the market will correct itself. In the meantime, an estimated 164,100 NZ workers are being paid the current minimum wage. That’s 164,100 additional people who will be earning on or above the current living-wage by April 2021 – plus those workers who will see their wages increase as part of a domino-effect – leading to increased spending, which stimulates the economy leaving you with more customers and increased productivity.
Knowledge is power! Other useful resources can be downloaded from the Ministry of Business, Innovation & Employment:
Cabinet Research, Increasing Minimum Wages
Small Businesses in NZ: How do they compare?
Author: Diana Russell
The Future of Work
Fri, Jun 22nd, 2018
The future of work and what that will look like has lately become a topic of interest — with businesses and government around the world trying to predict what the employment landscape will look like in the next 5, 10 & 50 years, while simultaneously making a plan for how to proactively manage the transition into a new future.
A few weekends back, I attended a conference where the 'future of work' was on the agenda. People wanted to know how the new normal —in terms of advances in technology and ‘The Fourth Industrial Revolution’ as the World Economic Forum is calling it — will impact businesses for the good and the bad, how the nature of jobs available are expected to change and adapt and what the roll-on effect will be for workers. Additionally, what role we each play in ensuring we use these changes in the nature of work and doing business to our advantage; to boost productivity, to move into new and innovative jobs and to foster entrepreneurship.
The take away is really that we are already seeing 1 in 4 adults in the OECD report a mismatch between their current skills and the skills required for their jobs. This brings us to a need for adult skilling and reskilling throughout a person’s career and a need for opportunities for lifelong learning both inside and outside the workplace. However, at the moment there is a significant disconnect between the supply of adult learning opportunities and the rapidly evolving demands of the labour market.
The skills required for most jobs are evolving rapidly — the World Economic Forum is predicting that over the next two years 35% of the skills currently demanded for jobs across industries will have changed — and our traditional education systems aren’t keeping up. This puts the onus on businesses to train young staff and retrain experienced staff. The best thing you can do for your business, or yourself as an employee in the business world, is to plan ahead to where you see yourself or your business heading in the next year, next two years, five years and ten years. This vision will change and evolve continuously. But, as long as you keep ahead and plan for what skills you will need you can ensure you have the right training in place to tackle the changing nature of employment in New Zealand. Reskilling, job transitioning and adult education will become vital to your ability to keep up with the changing skills demanded in the job market and your businesses ability to keep up with its competitors.
If NZ businesses want to thrive in the face of the fourth industrial it is imperative that businesses across the country communicate proactively, ahead of the game, as much as is possible with tertiary institutions and local and central government. The business sector will have to work alongside education providers and tertiary institutions at all levels to ensure students are learning the necessary skill sets for employment. Although some of these communications are already in place, to a lesser degree, our education curriculums are lagging behind. If there was ever a better time for education providers to move away from the incessant teach-to-test method it would be now. What employers and employees need is practical, project-based learning that prepares graduates and reskillers to transition from the class-room to the office.
There have also been predictions made that in the next two years, traditional accounting tasks including tax, payroll, audits and banking will become fully automated as a result of AI technologies. However, this transition doesn't need to mean mass unemployment or human-less offices manned only by AI, but it does require a proactive approach to a lifetime of reskilling and job transitioning.
Author: Diana Russell
Looking for the perfect Christmas gift for the person who has everything?
Thu, Dec 21st, 2017
Looking for the perfect Christmas gift for the person who has everything or maybe you're the person who always gives money or vouchers. Think again – you might want to give bitcoin instead. It could pose problems for you if you like putting it in the traditional envelope under the tree. However if this year's Christmas dinner talk gets a little heated over the recent power handouts you might like to calm it with raising the subject of bitcoin – so if you want to sound a little knowledgeable this is some things you need to know.
A digital wallet is the first thing you need in order to buy bitcoin. It doesn't come in leather or vinyl but is usually a physical memory stick which looks like a USB stick, or some people have a cloud wallet. Your digital wallet has to be kept safe because if you lose it through cyber hacking or you forget the passwords then your bit coins are lost forever.
Once you've got your wallet you go online to a bitcoin exchange Kiwi coin is the only NZ licenced bitcoin exchange and purchase your bit coin. You can buy bitcoin in fractions – you can purchase milli-bitcoin, micro bitcoin or a satoshi which is a one hundred millionth of a single bitcoin.
Bitcoin is a cryptocurrency and the best explanation I have read is that:
Bitcoin was invented as a peer to peer system for online payments that didn't need to have a trusted central authority. Since anything digital can be copied over and over again the hard part about implementing a digital system is making sure that nobody spends the same money more than once. Traditionally this has been done by having a central authority like Paypal that verifies all of the transactions. The innovation that makes Bitcoin special is that it uses consensus in a massive peer to peer network to verify transactions. This results in a system where payments are non reversible and accounts cannot be frozen.
Bitcoins come about by computer geeks (miners) solving a computational problem which allows then to chain together blocks of transactions.
If you are interested in more information check out Bitcoin academy https://bitcoinacade.my/webinar/?ref=4093e2.
Remember that in ancient times we had gold and silver that was valuable then we added paper to get the notes that we use today...
Merry Christmas and a Happy New Year!
Franchise Association of New Zealand
Mon, May 29th, 2017
Connect2 Chartered Accountants are proud to announce that we are now affiliate members of the Franchise Association of New Zealand.
What does that mean for you? This allows Connect2 Chartered Accountants to give both franchisee or franchiser owners, specialised business and accounting advice. We also work with other business professionals who are affiliates of the Franchise Association to ensure you are getting the best advice as franchise accounting is a specialised area.
This is great news for our current and potential clients who are either considering purchasing or selling a franchise or even had the thought of franchising their current business operations.
We promise that we will work alongside you from initial setup, the accounting package, reports and giving you non-stop support. We can assist with in-house accounting and business services if you want to have more hands on role in the business.
We want you to succeed, so we will have regular performance meetings and reports to back you and your business.
MYOB Portal
Tue, Apr 18th, 2017
First initial thoughts when you hear the word 'Portal' is something like a Vortex or Doctor Who Tardis but sorry in this case it is not. The Portal is a product of MYOB to decrease or eliminate the paperwork.
So, you are probably asking yourself "How does this benefit you?"
Well good question.
The Portal is a tool where accountants, clients, lawyers, bankers and business professionals are able to send secure documents like financial statements, cashflows and tax returns through the Portal via the Internet. You have your own unique login to the Portal and can only access information sent to you directly. I will outline a couple of examples to show when and how the Portal will benefit you as a client.
First example: We send you your client questionnaire by the Portal. You can then fill it in and send back to us without printing and signing. All you need to do is a digital signature by ticking the appropriate box. Another great thing of the Portal is that you can also send us your accounting records.
Another example is that we can send your financial statements and tax returns to you via the Portal. We can even send it to your banker and lawyers when they require a copy, so no delays, all real time and secure. The exciting part is when we send your tax returns for signing through the Portal, you don't need to physically sign the returns. When you accept and sign the tax return by ticking the appropriate box this will print a disclaimer at the bottom to state that by ticking the box you accept and digitally sign the tax return. Best news is that IRD accepts signing of tax returns with digital signatures!
With IRD now focusing on filing GST returns online, and the acceptance of digital signatures, our next step is going forward for our clients that we prepare GST returns for, we will be sending your GST returns and GST reports via the Portal for you to digitally sign and return GST records through the Portal.
Connect2 Chartered Accountants is moving towards a paperless office and will improve efficiency within the office and the Portal is one of the tools that will allow us to do this.
The Portal is a user-friendly system. You will receive an email on how to setup your own Portal account with step by step instructions. We understand you might have questions and queries regarding the Portal and Connect2 Chartered Accountants team is available to answer any questions you might have and assist you with the Portal setup.
Click the link below to watch a brief video on the Portal
https://www.youtube.com/watch?v=4R3DMz5pAec
Author: Teresa Long
Change is in the air
Thu, Feb 16th, 2017
To better reflect our core values, abc Services has embarked on a name and branding change.
Still the same people, still the same great service. We look forward to our continued relationship with our clients under our new name and new brand.