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Engine Room Blog

New Digital Education Hub: Xero U

Monday, November 24, 2014 Jade Love

It’s not uncommon for business owners to use their accounting software on limited occasions throughout the year or perhaps even not at all. This is fine if you are looking for a full service from your accountant, however if you are looking to take a more active role in your financials, or have someone who's role entails part of a financial process and you need to refresh on how to complete tasks in your accounting software this can become an issue. 


At Engine Room we offer training services for clients and new to xero users, which is a fast, effective and customisable way of finding out all of the features and functions you will need to use in your role, depending on your intention and level of interaction with the software. 


But what happens when you have done your training, gone home to put your training into practice and... oh no... how do I do that again...


Xero, the emerging global leader in online accounting software, recently took the first step towards solving this problem with Xero U – their digital education hub. Xero U is education focused on the learner, whether they be accountants, bookkeepers or other advisors. Small business owners and their financial staff can also choose education based on their role in a business.

 

This means a person can find and learn what they need more effectively to succeed in their jobs, rather than 1) having to spend time learning things they don’t need to know 2) going back to their accountant or advisor to get their question answered. Xero U is a much more efficient and rewarding experience than the previous model of software education.


Xero U is designed to let learners customise their experience to help different learning styles including video and webinars, as well as live events, so people can learn what they need to know in a way that suits them best.


The outcome is people who are confident that they know how to use Xero: no matter what they use it for. It’s the first software education program that recognises that people need to learn differently based on the role they play in an accounting practice or small business.


Xero U is just the beginning of a journey to transform the education journey with Xero. There’s a lot more coming down the pipe, so stay tuned. In the meantime, jump into Xero U and start learning or watch a brief video here to find out more.

Not on Xero yet? No problem! Contact the team at Engine Room on 0800 2 ENGINE to arrange a free initial consultation and find out how easy it is to move your business across to Xero.

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Overseas Pension Fund Transfers

Monday, November 17, 2014 Philippa O'Mara

A must read if you have an overseas pension fund!

The Inland Revenue has radically changed the way it treats overseas pension funds for tax purposes and any lump sum transfers bringing funds to New Zealand.  There has been a lot of media coverage to raise awareness of these recent changes.  If you have already brought over your pension fund or are thinking about bringing it over, read on. 

(Please note: This doesn’t apply if you are in retirement and receiving regular payments.)

The IRD are specifically targeting residents who brought over their pensions between 2000 and 2014 and did not declare the transfer in their tax returns.  There are some complex issues and calculations to consider what tax is due in this situation but the IRD has given an easy-to-calculate and low risk concession. Any past transfers must be addressed urgently. 

For residents who still have pension funds overseas and are thinking of transferring them to New Zealand, there are a mixture of tax, financial and foreign legislative issues to consider that mean you need to take advice from a range of experts.

Whatever your situation or your past or future actions around these overseas pension fund issues, ignoring it is not a good course of action!  

If you would like to find out more or have any questions, please do not hesitate to contact Philippa O'Mara, Director of Engine Room on 09 238 5939 or 0800 2 ENGINE or get in touch using our Contact Us page. 

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Xero Update - New User Rights Permissions

Tuesday, November 04, 2014 Margaret Holmes

Xero have updated the user permissions this month to now separate a “Contact Bank Account Admin” function. If this permission is enabled then the user will be able to edit and add customer/supplier bank details to contact information.

With the ability to make batch payments and with future prospect of direct payments straight from Xero it is becoming increasingly important to have control over who within an organisation has access to update contact bank information.

From an auditors perspective it is important to have “separation of duties” within an organisation, the person setting up the batch payments and entering contact bank details should not be the same person who approves the payment, this is to try and eliminate the potential money laundering or fraud that could occur within an organisation. Xero’s user rights access update has taken this on board.

Important: There has been no change to existing Xero users from the update; this means that all existing users still have the ability to update contact bank details. Only new users won’t have this permission to update bank details, it will have to be specifically given to them. So it is important that users permissions are checked (under Settings -> General Settings -> Users) to make sure users only have access to the areas they require.


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Cash is King

Friday, October 03, 2014 Margaret Holmes

Most businesses that fail in the first five years do so because they run out of cash! 

Often still profitable, the business owner has usually lost sight of the important principal that “cash is king”, instead adhering to the principal that growth is good.

As a business grows their cash requirements grow, more money is tied up in stock and debtors, less money is available for paying creditors, wages and overheads.

In a simple world the business collects the cash from their customers before they pay for the stock they sell.


 

In a business where they have rapid stock turns and they carefully manage their stock with a good understanding of their customers future needs they may only need to fund the gap between paying for the stock and receiving payment.

 

In the real world it is much more complicated.  In the worst case they might buy materials – often paying for it in full or partially before it arrives, then they process them and add value – paying wages and overheads as they go, finally selling the product, to find they wait 50-60 days for payment.  A cash cycle of 200 days between paying for the goods and receiving funds from the sale common.

Each step can impact significantly on cash reserves, and need to be carefully monitored.

Unfortunately many business owners continue to run their business by guesswork.  

A growing business needs a cash forecast – and needs to use it to manage their business.  As we saw in the recession businesses with large stock holdings are at a higher risk when there is a sudden downturn, delays in clearing stock impact quickly on cash.

Fortunately for business owners the cost of systems to manage their business has reduced significantly with the advent of subscription software.  Products like Xero mean there is no excuse for not understanding how your business is performing.  There are even Xero add-ons to help you collect your debtors.   Quality stock management systems are now affordable, and enable businesses to see which stock is clearing slowly, then take action to move it along.

 

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XERO Add-on: Thank you payroll

Monday, July 21, 2014 Margaret Holmes

A weekly blog on the add-ons we have come to know and love.

Payroll is increasingly one of the most complicated bits of being a business owner.  In recent years there have been changes to the holidays legislation around things like the calculation of holdiay pay rates and bereavement leave entitlements, not mention parental leave, and casual versus permanent employees.  Then there is Kiwisaver, student loan repayments, child support deductions and the list goes on.

For small employers mastering all this is often one job to many!  We sent our Implementation team  to check out the options for cost effective management of payroll.

Thank you Payroll Logo

Thankyou Payroll is new provider on the local scene, having been around for about 12 months.  With a social responsibility bent they bring a different option to the market.

They give you a platform to work to enter time-sheets, calculate and keep track of holiday balances and calculate all of the deductions.

As an IRD approved payroll intermediary, they will also pay your employees direct, email them their payslips, pay the IRD and file the relevant forms. And all of this for FREE ! (using their 2 day plan) If you are in a hurry, their overnight plan is only 75c per payee per pay day.

How?! I hear you asking.

The Inland Revenue provide a subsidy to “Payroll Intermediaries”, like Thankyou Payroll, for employers who pay less than $500,000 in PAYE each year. The subsidy is to encourage small employers to outsource their payroll services so they can focus their efforts on growing their business. It also  ensures your returns are filed on time and PAYE payments made when due.  Currently the subsidy is $2 per employee per pay.

This company from Dunedin has already had huge growth and it doesn't look like it will slow down. Their solution is simple yet effective, you won’t get confused with millions of options but it still feels like a robust system.

 If you don’t have too many employees and cash flow will allow you to pay the PAYE taxes together with the wages, then there is no reason not to start using a payroll solution like Thankyou Payroll.

And because of that social responsibility thing each time you use their service they will even donate 25c per person per pay (up to $5) to charity.

You can check them out here: https://www.thankyoupayroll.co.nz/index.html


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XERO Add-on: Fergus

Wednesday, June 25, 2014 Margaret Holmes

A weekly blog on the add-ons we have come to know and love.

With so many add-ons emerging under xero’s wings it can get a little confusing to figure out which one works for your business (now that you’re on Xero of course). This is where Engine Room steps in, over the next couple of months we will be going through our favourite add-ons that we not only use for our own productivity but also for many of our clients. Our dedicated implementation team know all the ins and outs of many of the add-ons, they’ll spend time on the research so you don’t have to.

Fergus is the new kid (or puppy) on the block, relatively fresh faced and bringing innovative ideas and a new approach to, what has become, a crowded job management solution market. You could be easily bamboozled when deciding which job management solution would work for your business as they all seem to offer the same functionality. Here we will list some of the great features of Fergus that make it stand out from the crowd.

Project based jobs

Fergus is designed and works extremely well with businesses that organise jobs for multiple visits, extended periods past a day and are prone to variations. These are all easy to use features that separate this software from the others.

Separation of Quotes/Actual Chargeable Amounts/Invoices

These three stages of income, although interlinked, are kept separate until they are required. This makes for a very flexible system. You are able to choose between using a quoted amount, charging actual time and parts or just creating an unrelated invoice.

Great approach to viewing jobs – where are the bottlenecks?

The dashboard is a great way of viewing all jobs at all their different stages, from sending out the quote to invoicing once the job has been completed. It can really give you an idea of what stages are taking too long, and urge you to spend more time on bottlenecks within your business.

Decent GPS tracking

We have seen many job management solutions and most of them really struggle to get the GPS tracking quite right for it to be useful enough to use in the field. This is mainly down to GPS services using up battery and field workers tending to turn the function off, or the fact that sometimes the signal can be a bit temperamental when in rural areas. Fergus seems to work at a faster pace and we can see it being used effectively.

Ability to use as full timesheet function

Lunch, travel, coffee breaks, even picking up the kids in between jobs, if time has not been added to one of these then it will be towards a job. A great way of having paperless time sheets and keeping track of unproductive time.

An effective approach to allocating costs

Purchases made while out are not added in by the field workers themselves, they take a picture of the receipt/order and allocate it to the job. The reconciliation is done back at the office meaning never missing cost allocation again.

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Funding Growth in your Business

Wednesday, June 18, 2014 Margaret Holmes

One of the biggest problems for small businesses is funding growth – as businesses grow it is very easy for the business owner to get caught up with growing sales and take their eye off the ball when it comes to managing cash-flow.  As they grow both income and expenses increase – for service business the biggest increase can be in wages, often paid before a job is completed, and well before the money is collected.

A business can only grow as quickly as it’s cash reserves will allow. (This is the reason Xero does regular capital raising!)

Business owners need to remember they aren’t a bank!  There are several options for business owners before considering external finance sources:

1. Credit check the customer before you do business with them – make sure they have a reputation for paying on time before they become a customer.

2 Change the payment terms – 20th of the month following is an NZ phenomenon arising from the farming industry where they have always been paid in arrears. 7 day terms are considered normal overseas. 

3. If the price is agreed before the job is started the business owner can request a deposit before the job is started or progress payments

4. Make sure invoices are paid on time and take prompt action against anyone who doesn’t pay. 

There are effectively four options for financing growth. 

1. Confidential debtor financing – one or more invoices are sold to the financing company at a discount of 10-20%, and the business collects the debt repaying the financier plus the fee.

2. Disclosed debtor financing – the financier undertakes the collection process and releases the balance of the funds on collection, less the finance charges.

3. Bank invoice financing – the bank effectively provide an overdraft up to 80% of the value of the debtor ledger.

4. The customer is provided with extended payment terms through an external funder at the customers cost. The business owner gets paid on raising the invoice and the customer pays it over 6-12 months, including an interest charges.

The major considerations are the costs of finance and whether your customers are regular payers, finance cost of 4% for 30 days funding is substantial.  Furthermore all private financiers insist on recourse, if your customer doesn’t pay on time the invoice will be sold back to you. Ultimate responsibility for debt collection always remains with the business owner.  

Bank funding still remains the cheapest option for business owners, but for short-term requirements the option to finance a single or small number of invoices can appeal, particularly as it is quick to action.

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Xero Add-on: GeoOp

Thursday, June 12, 2014 Margaret Holmes

A weekly blog on the add-ons we have come to know and love.

With so many add-ons emerging under xero’s wings it can get a little confusing to figure out which one works for your business (now that you’re on Xero of course). This is where Engine Room steps in, over the next couple of months we will be going through our favourite add-ons that we not only use for our own productivity but also for many of our clients. Our dedicated implementation team know all the ins and outs many of the add-ons, they’ll spend time on the research so you don’t have to.

 

GeoOp was developed in the early stages of cloud technologies just when the smartphones (particularly the iPhone) were booming. GeoOp uses the power of mobile devises to connect with workers in the field, informing them of jobs, allowing them to enter real time data while at the job, only leaving the admin for the office.  If you have workers out on the field then this is the solution for you, field workers can see, and are notified of, all allocated jobs, they can add time & parts and notify you when they are at all the different stages of a job. GeoOp connects to Xero so you are able to invoice out without having to enter information twice.

We have been involved in many implementations over the last year and have become very intimate with the software, its capabilities and it’s little niggles. We love the interface and the fact you can easily create jobs and seamlessly assign them to workers. Its simplicity really appeals to us and gives confidence to our clients to use the software, they have achieved an Apple Inc./Xero look and feel.

Since the listing back in 2013 the company have become a little sluggish when it comes to dealing with problems and software updates, but this may be down to the fact they are working on a much larger full system update. We have also discovered that updates to contacts (which have fed through from Xero) in GeoOp do not then subsequently update in Xero – no 2-way syncing – you have to update the contact in Xero first for it then to update in GeoOp. This is a real bug bear seeing that you are creating jobs within GeoOp – you shouldn’t have to go to Xero until you are at the invoicing stage.

All in all we feel it is a great solution (when combined with Xero) for your finance and job management function and we have no hesitation in using GeoOp with our small/medium sized businesses.

 

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Xero Add-on: WorkflowMAX

Wednesday, May 28, 2014 Margaret Holmes

The first of a regular blog on the Xero add-ons we have come to know and love.

With so many add-ons emerging under Xero’s wings it can get a little confusing to figure out which one works for your business (now that you’re on Xero of course). This is where our Work in the Cloud team at the Engine Room can really help. Over the next couple of months we will be going through our favourite add-ons that we not only use for our own productivity but have also implemented for many of our clients. Our dedicated implementation team know the ins and outs of many of the add-ons, and they’ll spend time on the research so you don’t have to.  You are always welcome to call the team to find out more…

So, what do they do?

WorkflowMax is one of Xero’s top add-on’s, they are an all-in-one package to for the job management side of your business.  Particularly suited to creatives we have implemented it for architects, designers and engineers.

Features include:         lead management,

project management,

job scheduling,

 job tracking,

timesheets,

quoting/invoicing,

client/customer management

job costing

a powerful reporting tool.

We have been a dedicated user of WorkflowMax ourselves for some time, and have seen the efficiencies within our job management.

Impressive functionality enables you to track the progress of each job, and of course being in the cloud, you can work remotely. 

One downfall of the system is the lack of a planning/scheduling feature. To cover this side of things, however, there is an add on available – WFM Plan or WFM Touchscreen – move jobs between staff, schedule the day / week with the cool drag and drop ability.

We find some clients don’t particularly like the ‘look’ of WFM, but the great news is that a new user interface is soon to be released which is going to make it have much more of a Xero look to it – which we all love!

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15 Statistics That Should Change The Business World But Haven't

Thursday, June 27, 2013 Margaret Holmes

Colin Shaw, CEO of Beyond Philosophy recently blogged:  “It still surprises me, even in this day and age, how many people still need convincing that improving the Customer Experience will generate revenue and save costs.”


Below are his top 15 favourite stats from this list:

1. Price is not the main reason for customers churn, it is actually due to the overall poor quality of customer service – Accenture global customer satisfaction report 2008.

2. A customer is 4 times more likely to defect to a competitor if the problem is service-related than price or product related – Bain & Company.

3. The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.

4. For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.

5. A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.

6. 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.

7. A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.

8. Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affair.

9. 70% of buying experiences are based on how the customer feels they are being treated – McKinsey.

10. 55% of customers would pay extra to guarantee a better service – Defaqto research.

11. Customers who rate you 5 on a scale from 1 to 5 are six times more likely to buy from you again, compared to ‘only’ giving you a score of 4.8. – TeleFaction data research.

12. It takes 12 positive experiences to make up for one unresolved negative experience – “Understanding Customers” by Ruby Newell-Legner.

13. A 5% reduction in the customer defection rate can increase profits by 5 – 95% – Bain & Company.

14. It costs 6–7 times more to acquire a new customer than retain an existing one – Bain & Company.

15. eCommerce spending for new customers is on average $24.50, compared to $52.50 for repeat customers – McKinsey.

 

You can read more about how to improve your customer’s experience at www.beyondphilosphy.com


Colin Shaw is founder & CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author of four best-selling books & recognized Business Influencer by LinkedIn. Beyond Philosophy provide consulting, specialised research & training from offices in Atlanta, Georgia and London, England. Follow Colin Shaw on Twitter: @ColinShaw_CX


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