Can you tell me about your business?
I've been designing and hand-printing on fabric for more than 20 years and it's been a gradual process to turn it into a business. In 2004 I had a studio built at our home in the Waikato, so since then I've been creating work commercially.
My current business, Ali Davies - The Fabric Queen, is based in Auckland, and we produce hand-printed textiles, New Zealand-made homewares, and have just recently started making handcrafted garments. I don't have any permanent staff at the moment, but I have had part-time staff to cover administration and sales functions in the business, and I contract specific work when needed. My mother helps me print my textiles once a week, and I collaborate with an artist friend on some designs.
What are some of the things you do to prepare for the end of financial year?
I have three new year periods in my life: the calendar new year, the Buddhist new year and the tax new year. In terms of the end of the financial year, I use it as a time to set new goals and ways of doing things that are better than I did them last year.
I get in help with stocktaking and use that process as a chance to update details and pricing on stock. I book in my helpers to come in the middle to end of March and we set aside two to three days to go through finished stock and materials separately, which is then collated on the 30 - 31 March.
I also make sure all my bookwork and spreadsheets are up to date and easy to look at, and that all my accounting data is up to date online. I started using Xero and now there's definitely a lot less paper shuffling doing it that way.
I'd recommend finding some accounting software that works for you, but if it gives you a headache and makes you feel like you need a degree to understand it, then find something else.
What are some of the things you find difficult to deal with around the end of your financial year?
One challenge with moving to an online accounting system has been making a mental switch from having invoices coming in the letterbox to having them come in as emails, with no physical piece of paper. I love sending invoices out by email, but have had to learn to deal with invoices coming in that way. I use a calendar and write in due amounts for the current and next month. That way there's no printout - I hate wasting paper - and I dont forget it. I've also just started logging them into Xero, so my accounts show what's owing and when.
Any other hard copy information is kept in a ring binder with clear files for each month and for statements and so on. I try to clear out my inbox, but I have to say it still gets out of control from time to time!
I've also had to learn to put time aside to do my accounts on a regular basis. In the past I used to find myself at the end of the financial year having to fit in doing all of the accounts on top of everything else I was dealing with running the business. Doing things more regularly reduces my anxiety and keeps the finances more in front of my mind. I enjoy it more if I don't let it become a burden.
What are your key tips for making the end of financial year process run smoothly?
If you find something difficult to do, don't walk away from it, because it won't go away! It only makes things harder. The IRD and your accountant are there to help and I've found the IRD to be really helpful - and they don't mind dumb questions.
Keeping things simple is another thing I've learnt to do. I'd recommend finding some accounting software that works for you, but if it gives you a headache and makes you feel like you need a degree to understand it, then find something else.
The same principle applies in other areas of your business, because if you spend time putting things in place that make the day-to-day stuff easier then that end of year period will be a lot better. And you'll have all the data you need to in front of you to analyse and make good decisions for the next year.
For more insights on how to handle the end of the financial year, you can also check out some tips shared with Your Business from Scott Gardiner, sales manager of MYOB New Zealand's business division, and Grant Anderson, Xero's head of accounting.