Business Results Group Articles Archive:

Avoid the Bad Payers



The first rule about debts is to try and avoid customers who don’t pay what they owe you. If the amount is going to be large, get a deposit first, get a credit report, or both.

When you get a bad payer:

  • Get onto the customer quickly.
  • Follow up on a planned basis and minimise the time between each follow-up.
  • When ringing the customer, get a commitment of how much will be paid and when.
  • When following up by phone, write notes of the commitment made and preferably the actual words used by the customer.
  • If you still have trouble collecting the debt, confront the customer with each of the promises and what was said.
  • If you still can’t get paid, warn the customer you are going to take debt recovery action. If this does not produce results, carry out the threat promptly.
  • If you're dealing with a company, the threat of winding it up can be very effective for those who are first in.

That's why it pays to act quickly. You don't want to be last in line when the money runs out.

The second rule is to avoid having your business dominated by one firm. If you possibly can, diversify your customer base as quickly as you can.

What if the company is too big to be concerned about your threats? There is little you can do other than reread rule 2. If the bad-paying corporate is only a small customer, some people load their bills to them to allow for bad payment practices.

Changes to Use of Money Interest

Previously Use of Money Interest charges from IRD were back dated to the date of your first instalment of provisional tax. This could sometimes prove to be a bit of a problem for clients where income went up unexpectedly through the year – for example if the milk pay-out increased in the later part of the season, you could end up with a use of money interest bill even though you paid the required amount of provisional tax on each due date. 


For the financial year we are in now (2018) this is no longer the case. For normal provisional tax payers, interest will only be imposed from the date of your third instalment of provisional tax – and then only if the total amount of tax you pay is over $60,000. This is a really sensible change which makes managing your tax a lot simpler.

Worksafe - Health & Safety

Question: How do I manage the Health and Safety in my business?

Answer: Don’t kill anyone!


We all know that Health and Safety requirements are a big part of doing business in NZ. Many businesses have spent a lot of time and money developing procedures and processes to manage the risks involved in their business. Despite this, the number of fatal deaths in agricultural activities is not reducing. Worksafe believe that more businesses need to focus on what is causing the catastrophic accidents that are killing our people.

Recently Martin and Trudi attended an Agri Summit in Napier. Over two days there were a number of really interesting speakers. Worksafe NZ was one of the presenters and given the concern we often hear from our clients about this aspect of their businesses we thought it would be opportune to pass on some of the messages we got out of their presentation.

Worksafe say that the two most common cause of all fatalities are Vehicle accidents (quad bikes, tractors, bulldozers, etc.) and falls from heights (ladders, etc.). Agriculture has by far the worst record when it comes to vehicle accidents than any other sector and the numbers are not reducing.

The people most likely to be killed in agriculture have the following criteria:

  • They will be aged 65 and over – this age of worker is by far the predominant age for agricultural accidents
  • The accident will happen between either 8am and 9am or between 5pm and 7pm
  • Dairy farmers are the most common types of agricultural activities to be represented in the statistics.

So, what can be done to avoid a serious injury or death in our agricultural workplaces? Every farmer or orchard owner needs to think about what is the worst thing that could happen in their workplace that would lead to a death or serious injury. We all know that Quad bikes are a major cause of these serious incidents so let’s use that as an example. This is a top down approach – so the most effort should be focussed on point one and then move down the list

  • The first thing to consider is elimination – can you eliminate the use of quad bikes in your business? Land Corp has just gone through a process looking at the quad bike use on their farms. In many cases, they decided that a quad bike was not actually an appropriate tool for a particular task so they eliminated their use where appropriate.
  • If the use cannot be eliminated – can it be substituted? Would a side-by-side be a better option? Could drones be used in more dangerous places?
  • Can engineering controls be used to reduce the risk? I’m no engineer but maybe there are ways to make the quad bikes safer or to allow their use to be limited in areas where there is a higher risk of danger.
  • Next comes administrative controls. This is the policies and procedures manuals – if we can’t eliminate or substitute the risk, then we need to make sure the policies are clear about how the quad bike is used.
  • Personal Protective Equipment (PPE) should be used to mitigate any remaining risks.

Worksafe make the point that if every business in New Zealand actively managed and reduced the amount of quad bike usage, there would be a huge reduction in the number of deaths in NZ agriculture.

Traditionally businesses have focused their H&S attention on events that have a high probability of happening but with low consequences (e.g. a rolled ankle). Worksafe would like the area of focus to shift to events that are of low probability but have high consequences (e.g. death)

By placing more emphasis on the possible catastrophic events in your business, the number of fatal accidents will be reduced over time.

We all know however, that no matter how good our controls are, it all comes down to how we carry out those day-to-day activities. If we as business owners only pay lip service to the H&S policies, how can we expect our staff to take H&S seriously.

80% of all injuries happen when one of the two scenarios following is present:

  1. While carrying out a regular but potentially hazardous task and a key rule or control is broken,
  2. While carrying out a regular task (potentially hazardous or not) and some condition changed and this was not noticed or acted upon.

Your whole team must be able to understand and appreciate the rules and controls that you put in place in your business. If there is no understanding, there will be no compliance. Communication is the key followed closely by the business owner’s actions. 

Changes to Farm House Deductions

As highlighted in previous newsletters, IRD have been looking at deductions applicable to housing for farmers and orchardists. They have recently released their decision.

Until now there has been no difference between deductions applicable to “real” farmers and those deemed to be “lifestylers”. From the 2018 tax year, there will now be a difference.

If a farmer/orchardist buys a property and the house makes up more than 20% of the value of the property, the farmer will be a “Type 2” farmer. As a Type 2 farmer, you will be not be able to claim a full deduction for rates or interest on mortgages. Those expenses and others related to the property (such as electricity for the house) will need to be apportioned between the business and the private use. Each case will vary and will depend on the facts of a particular situation.


All other farmers will be deemed to be “Type 1” farmers. This is where the house value is 20% or less of the overall value of the property. In these cases, full deductions are allowed for rates and mortgage interest. When it comes to claiming things like electricity, previously farmers were allowed a “no questions asked” deduction of 25%. This was an historic deduction with no proof needed. From the 2018 year this will now be limited to 20% for Type 1 farmers and orchardists. For Type 2 farmers, the deduction is limited to their actual usage – so a calculation is needed.

In most cases (particularly in relation to farms), it will be obvious whether the property is a Type 1 or Type 2. Orchards, however may be a little different. IRD has provided some guidelines on how the difference between Type 1 and Type 2 properties should be made. If historic purchase prices are not appropriate, you are able to use rateable valuations. In examining rating valuations for orchards however, we have found them not to be particularly helpful when determining the split between the house/section and the rest of the property. In these cases, it may be that some sort of valuation is needed to determine the value of the house compared to the total value of the property. IRD have said this can be done by a real estate agent or of course a formal valuation by a registered valuer is ideal.