Contact Us

Find us on the map

Send an enquiry

128 Riccarton Road
Christchurch
New Zealand
Ph: (03) 341 2013
Fax (03) 341 2016
0800 650 585 (outside Christchurch)
    

 September 2011 Issue 8
 In this issue:
  • Meet the team
  • Key Performance Indicators Benchmarking
  
  • Reminder- IRD Mileage Rates
  • Don't let your Customers use you as a Bank
 Meet the Team
 
L to R: Back- Sophie, Ann-Maree, Chris, Cameron. Front- Athene, Adrienne, Sue, Judith, Veronica

Key Performance Indicators and Benchmarking

Key Performance Indicators (KPI) are pieces of measurable data so you can look at how your business operates and then you can measure your performance. Key performance indicators can include:

  •  How many staff you have and how ‘productive’ they are in terms of selling your goods or  services.
  •  How many clients and customers you have and how much they spend with you.
  •  Cash flows and how often your customers pay on time or not as the case may be.
  •  Revenue generated by the different goods and services that you offer.

Benchmarking is an important tool when you are looking at the performance of your business. Benchmarking compares your important KPIs to those of businesses with similar operations.   This can be difficult if your business is unique, but great if you are a mainstream business such as a builder, restaurant, dentist, gardener etc. You can then ask yourself:

  • Are your operating costs as low as similar businesses?
  • Is your gross profit percentage comparable to your competitors?
  • Are you on top of your debtors as effectively as those of your competitors?
  • Is your staff productivity comparable?

Benchmarking can provide the not so obvious solutions to a number of small margins which in turn, when tweaked, dramatically improve your bottom line. It can give you something to aim for.

If you wish to know more about benchmarking and if there are similar business for you to benchmark against, please call Ann-Maree on 341-2013 to discuss your business and the reports that can help measure your KPI’s. 
 Reminder - IRD Mileage Rates

Starting from the 2011 tax year, IRD mileage rates are 74c per KM. The rate applies to all petrol and diesel fuelled vehicles regardless of their CC capacity. This does not include motor cycles. 
 Don’t let your customers use you as a Bank!

Overdue payments can be crippling for any business. While customers have a right to receive goods or services within agreed deadlines, it is your right to be paid on time.

  • Good commercial practice starts with an effective credit policy protecting your revenue. Here are some ways to improve your credit control:
  • Trade on your terms. By drawing up water-tight terms and conditions of trade, you can ensure that you trade on your terms. This can include a payment period, a late payment fee, and interest charged on late payments.
  • Be relentless when pursuing overdue payments.  Don’t let customers use you as a bank and abuse your goodwill by deliberately delaying payment. Late payment and non-payment are habitual behaviours.  Experience shows that late paying customers are unlikely to change without pressure to do so.
  • Pursue your debts, but don’t lose your customers in the process. There is a delicate balance to strike here. Overdue invoices may be pursued, but without offending your customers and potentially losing business in the future.
  • Don’t accept excuses. Ignore the excuses as to why you have not received payment, or why payment is delayed from your customers. However legitimate they sound, none are valid.
 



Software solutions for accountants by Acclipse  |  Site Map  |  Search  |  Copyright Sterling Accountants Limited ©
Our location - 128 Riccarton Road, PO Box 8535 Riccarton, Christchurch.