"I'm far too busy for that" or "I'm not really interested in admin tasks" are commonly heard excuses. But all the time and energy you put into making and selling your products or services could be wasted if you don’t pay attention to the administrative side of things. Not having effective business systems can have significant impacts on your business:

  • Invoices and statements are sent out late, are sometimes inaccurate, or even completely forgotten.
  • Debtors and late payers are not followed up, so the business restricts its own cash flow and in effect offers free finance to others.
  • Creditors are not paid on time, so any early payment discount opportunities are lost and lines of credit may be tightened, exceeded or withdrawn.
  • No funds are set aside for GST and tax commitments, resulting in 'unexpected' tax bill shocks and possible late payment penalties.

On the other hand, having good systems in place has a number of advantages:

  • They set you free - Once you have good systems set up, you’ll free up time, meaning you can spend more time working on your business rather than in it. Plus your stress levels are reduced because you understand how things work.
  • They give you independence - If something were to happen to prevent you from working for a while, you’ll at least have peace of mind knowing you’ve got systems in place to keep the business going.
  • They add value - If you’ve got great systems in place, your business is much more attractive to potential buyers – it’s more likely to be seen as an independently viable unit and less dependent on the owner(s), plus it means the business can be transferred to new ownership with minimum disruption.

Six steps to building good systems

Here are six key areas to look at:

1. Record-keeping

You don’t want to be worrying about the Inland Revenue, so keeping good financial records and making sure you can meet all your tax obligations is a major stress reliever. A good accounting package can be invaluable when it comes to keeping track of your finances – you can always ask an ANZ Business Specialist about accounting software providers available.

2. Business planning

Good planning helps you set goals. Without them, your business has no direction. If you haven’t created your business plan yet, review the step-by-step guide that we covered earlier in this course. But once you’ve created your plan, don’t put it in a drawer and forget about it. Review it at regular intervals – it’s a great way to monitor your progress and refine your strategy where necessary.

3. Cash flow control

In Week 4 of the Business Boot Up programme you learned how to create a cash flow forecast – and it’s likely to become one of your most important tools. The ability to forecast your cash flow means you can anticipate any problems and take steps before it gets out of control.

4. Creditor and debtor control

Sloppiness in this department is one of the most common causes of small business owners experiencing stress and anxiety. Pay your creditors on time and don’t let your debtors use you as a free banking service.

5. Monitor everything

If you can’t measure it, you can’t manage it. So keep on top of your business by monitoring its performance. Review your business plan regularly and ask an ANZ Business Specialist or your accountant about key business ratios to monitor.

6. Operations manuals

How do things get done in your business? Creating operations manuals which explain your business processes in simple, easy-to-follow steps helps ensure that if you or a staff member is sick or on leave, others can take over and ensure your customers get a consistently good experience. It also forces you (and your staff members, if applicable) to think through activities and refine them. Having operational manuals may sound dull, but they add value to your business by making sure everything’s done in a systematic way. For example, having set processes for invoicing and debt control help ensure you get paid faster. It also gives prospective buyers or investors confidence that the business is well-run and will survive if you or key staff leave.

Important information

We recommend seeking financial advice about your situation and goals before getting a financial product. To talk to one of our team at ANZ, please call 0800 269 296, or for more information about ANZ’s financial advice service or to view our financial advice provider disclosure statement see anz.co.nz/fapdisclosure

This material is prepared based on information and sources ANZ believes to be reliable. The content is information only, is subject to change, and isn’t a substitute for commercial judgement or professional advice, which you should seek before relying on it. To the extent the law allows, ANZ doesn’t accept any responsibility or liability for any direct or indirect loss or damage arising from any act or omissions by any person relying on this material.