Paul Martin Chartered Accountant Ltd :: Accounting, Taxation and Business Advisory :: Auckland, New Zealand
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Small Business, Big Decisions: Why Savvy Business Owners ‘Rent’ CFO-Level Experience

Paul Martin • Sep 05, 2017

Larger businesses have a Chief Financial Officer (CFO) on staff. But what can small and medium sized businesses do in this regard?

Clearly, larger businesses can afford an in-house CFO. But it goes beyond an affordability issue: Large, successful businesses also understand how crucial the CFO role is to their business performance.

The CFO in a business:

  • Keeps a close eye on the numbers and trends,
  • Alerts management when preventative actions are required,
  • Helps management create sound forecasts and plans,
  • Ensures the cash inflows and outflows are managed well so the business never runs out of cash or needs to borrow in haste,
  • Reports on revenues achieved compared with targets,
  • Gives solid information on a range of Key Performance Indicators (KPIs) to the business decision makers, and also
  • Helps management with decision making.

This is management input that all businesses require regardless of their size. But how can small and medium sized business access CFO-level input and guidance?

The answer: You out-source it. You get a part-time, out-sourced CFO until you can afford one full-time.

That's where we play a role for many of our business clients.

Our 'Turbo Boost' service has been developed with input from our clients to make sure it's the ideal mix of support services and affordability.

As your CFO we roll our sleeves up and work with you in management meetings throughout the year on:

  • Cash flow – Efficient management of cash flow to provide cash for saving or investing in growth
  • Profitability – Identifying key drivers of profit and focusing on these
  • Business value – Growing a valuable and saleable business asset
  • Structure management – Staying on top of risk and taxation issues ?

As business owners we all need to measure and monitor Key Performance Indicators (KPIs). That is, the handful of numbers that really matter in running our business.

It is also important that you have a 'KPI dashboard' to display your KPI targets compared with your current KPI performance. This helps tremendously in monitoring and managing your business' performance and, ultimately, hitting your targets.

As your outsourced CFO, we will bring to each meeting that we conduct with you clear financial reports, easy-to-understand KPI information, as well as our commercial experience to interpret the information, make suggestions and help guide your decision making.

Items we'll discuss each meeting include:

  • Profit (historical and future)
  • Cash flow (historical and future)
  • KPIs: A mixture of focusing on Lead Indicators which drive performance and Lag Indicators that measure the outcomes
  • Marketing activity and effectiveness
  • Operational efficiencies such as work-in-progress or workflow
  • Financial indicators such as debtors, inventory, stock turn (depending on your industry and type of business)
  • Team efficiencies, knowledge management, morale and safety. ?

By helping with your forward planning for achieving the next period's targets, and by being a sounding board for you as you strive to meet your targets, our 'Turbo Boost' service and support gives you a crystal clear focus for what needs to be done to achieve the goals of your business.

Your next step ... Call us on 09 576 4166 or email us on info@pmartinca.com for a no cost and no obligation meeting to discuss how we can work with you as your outsourced CFO. We'll outline for you what's included and what costs are involved so you can see how the service can be comfortably included in your budget.

How the new Government and coalition agreements might affect owners of residential rental properties

By Paul Martin • 04 Dec, 2023
There were some key takeouts of interest to many of our clients from the recently signed coalition agreements between National, ACT and New Zealand First and the formation of the new Government. In particular there are a number of policies which will likely benefit landlord clients who own residential rentals. I have summarised some of these below. 1. Return of Interest deductibility for residential rental properties Interest deductibility for residential rental property owners will return. It will be phased back in over three tax years: • 2023/24 tax year: 60% of interest cost will be deductible. • 2024/25 tax year: 80% of interest cost will be deductible. • 2025/26 tax year: 100% of interest cost will be deductible. 2. Reduction in bright-line period National signalled in their pre-election campaign that the bright-line period for residential rental property sales would reduce from 10-years to 2-years. While the exact implementation of this policy is not yet known, it is good news on the horizon for residential property investors. 3. Reinstatement of 90-day no-cause termination notices The new government will reinstate 90-day no-cause tenancy termination notices. This will avoid many unnecessary disputes in the Tenancy Tribunal and gives landlords more confidence in letting to possibly “marginal tenants". Many landlords have avoided what they considered to be risky tenants because eviction for anti-social behaviour was so difficult. With this reinstatement, landlords might be more inclined to give a marginal tenant a chance because they know that if the tenant misbehaves, they won’t be stuck with them. If you would like more information on how these changes might affect your personal circumstances, please feel free to contact us to discuss further.

How does provisional tax work, especially in an economic downturn?

By Paul Martin • 18 Jul, 2023
If you had to pay tax of more than $5,000 in your last income tax return, you may have to pay provisional tax for the following year. Provisional tax is like making progress payments on next year's income tax.

How to handle inflation as a sole trader

By Paul Martin • 18 Jul, 2023
Sole traders have had an especially difficult few years as inflation surges. We have got three tips to help lighten the load for your sole trader business. 
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