Home' Hastings Mail : May 25th 2011 Contents 11
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Sound advice in a tough climate
Balancing the books: Hawke's Bay business mentor Ron
Massey wades through files from local businesses needing
By CAROLYN VEEN
As businesses continue to
crash under the weight of a
gloomy economy, Hawke's
Bay business mentor Ron
Massey shines a light on
some of the common
problems and suggests
ways of reducing the
During the past two
years, more than 100 small
and medium-sized busi-
nesses have benefited from
using the Hawke's Bay
Business Mentoring pro-
gramme which is run by
Ron Massey, Keith White
and a team of 25 volunteers.
recognised recently when
the Hawke's Bay team won
the inaugural New Zealand
Business Mentors compe-
tition, which is assessed on success and client
Mr Massey says a lot of businesses have come
unstuck, especially in the second year of these
tough economic times.
We've got businesses that are really struggling,
and most of them have been told by their
accountants or banks, who are pinging the
cheques, to come and see us. More recently, we've
been able to save about 90 per cent of those in
trouble, and with the remaining 10 per cent, we've
been able to stage-manage their exit.''
He believes the professional sector does not sup-
port privately owned businesses well.
The most common problem we come across is
the inappropriate advice businesses are getting
from book-keepers, barefoot accountants and self-
approved advisers. That's the truth, and it's abso-
Everywhere I go, I hear business owners
claiming their advisers charge like wounded bulls
and all they do is give their clients historical infor-
mation 12 months after the end of the financial
year, and then tell them by the way, you haven't
had a very good year, have you'. Too late.''
He is also appalled by some accountants'
charges for unnecessary services''.
While I have no issue with most chartered
accountants, some book-keepers and advisers
show a complete lack of understanding how busi-
ness functions -- they are number-crunchers who
do your year-end financial accounts and tax
returns. If they are not auditors; they don't need
your cheque-book butts, bank statements or GST
returns, and yet they charge for that service with-
out giving their clients appropriate options.
They are not required to analyse any of that
information. All they need is your income total for
the year, your expenditure by category, the bills
you have not paid at the end of March [and those
who have not yet paid you], your home-office
expenditure and any capital purchases or sales
during the year. End of story.''
Mr Massey says some small businesses make
the mistake of relying completely on their
accountants, who are not necessarily business
There are only three Institute of Accredited
Business Consultants -- qualified business
advisers -- in Hawke's Bay and Mr Massey is one
Business managers should be responsible for
their financial information and processing of GST
and PAYE returns.
It is a basic part of running and controlling your
business and knowing where you are at any par-
ticular point in time. Not only does it put you in
control, it also reduces expenditure and risk.
If your business is in financial strife, don't wait
for people to sue you because the court will
appoint an official assignee and you will have no
control over that.
It's best to self-liquidate and appoint your own
liquidator. They work with you, not against you,
and while the process must be followed, they deal
with you in a nice way.''
In business, the domino effect is a powerful one.
When a business can't afford to pay its
creditors, because there's no money left, those
creditors, in turn, don't get paid from their debtors
and so it goes, on and on, and they all start falling
If you could go back six months and have the
struggling company put its hand up for help, then
the problem wouldn't spread down the line.''
The Hawke's Bay Mentoring team is based at
the Napier City Council, where Keith White spent
a number of years writing a financial manage-
ment programme, which is now up on the New
Zealand Business Mentors' website for all the
mentors to use.
We give it free to our customers [via email] and
they save it on their hard drives. It has 20
columns and the instructions are very easy to
follow,'' he said. It's a financial information sys-
tem -- it can tell you what your profit and loss is
at any given time and even summarises your GST
Accountants won't show you how to do this for
yourself but they should,'' Mr Massey says.
For more information visit businessmentors.org.nz
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