Client Resources

YEAR-End Client Checklist 

The completion of the following year-end checklist will ensure we have the correct information to prepare your financial accounts and tax returns efficiently. 

Click here to download checklist covering the tax period 01/04/2018-31/03/2019


1. We have created a simple quick tips guide for reconciling Xero bank and credit card accounts. To download the guide click here.

2. All MDA XERO Business subscribers have unique email addresses which can be used to;

A. Forward a supplier invoice email, that has an invoice PDF attached and XERO will automatically record the information as an invoice to be paid in your XERO organisation account. Xero will create a draft bill with a side by side view of your PDF bill and thus will be ready for bank reconciliation matching when you pay the invoice.
Clever, so just an approval check is required, as opposed to manually keying in invoice details.

B. Forward an email to your organisation XERO Inbox, with a document attachment for cloud storage and access in XERO. Useful for such things as working papers and scanned PDF documents  (from any device with access to cloud email) so that they are stored, can be sorted into folders and cloud accessible in XERO. 

A tip/trick is to add your unique email addresses as a contact (in Google contacts for example or to your contacts your email account uses) with simple descriptor names such as XERO Invoice to Pay and XERO Inbox so you don't need to look up the email address again (XERO email address is quite long as has unique organisation id info) . 

We love the above features as a great step toward being as ‘paperless as possible’. This is a strategic goal of Martin Davidson as part of our digitalisation vision. 

You can find more info about forwarding emails and finding your XERO organisation email address by clicking here. Note you will need the standard or invoice only user role to view bills. If you would like help regarding the above feel free to contact Debbie Andrew


Planning To Sell Your Business One Day? Do you have an exit strategy?

You will leave your business someday, hopefully before you die, so how do you make sure it’s on the best possible terms?

This ongoing whitepaper will be updated on a quarterly basis and act as 'food for thought' ss you start to develop your own exit strategy.  We have developed this content with several leading business brokers and of course from our own experience from the school of ‘hard knocks’. The good news is, as an MDA client, with robust tax accounts and solid Xero based accounting systems, you are already well placed to build toward a favorable and optimal business exit.

In the near future many Baby Boomers will be looking to enjoy the tax-free sale fruits of many years of hard work. However, unless some critical steps are actioned readying the business for sale, it is likely your business may rot on the vine unsold. In the current Broker Market only 1/3 of businesses listed sales complete, 2/3 remain unsold , many eventually being wound up.

Before we discuss specifics, lets simply define exit strategy. An exit strategy is a plan for wrapping up your involvement in your business. For most people, that means readying the business for a change of owner. Executing a well-thought-out exit strategy will increase your sale price, while ensuring the business continues to thrive after you’ve left. 

The focus is very much on you as a vendor, and very importantly derisking the buyer. Small businesses are inherently risky, so if a vendor can mitigate as much risk as possible in the sales preparation process, all parties share in the rewards.  So the aim is to leave your business in the best possible shape for a new owner. That means it should be operating at peak profitability, the books should be ‘spick and span’, your IT systems are working as intended and key processes are documented so your target profile buyer can come in and run the place. Oh, and the business won’t need you anymore – no matter how important you once were.  You may need to learn to delegate to staff in the business sale readiness process, the higher the business value will be.

It can takes years to do all this, however with the right advice can be short tracked. That’s why it’s never too soon to start on your exit strategy.

# Topic One - Preparing Your Business For Sale – Tax Accounts and the  Role of an Information Memorandum

One of the key reasons business sales never complete is due to financial accounts or lack thereof.  Even if you agree a sale price, many businesses fall over in the due diligence phase with the buyers advisers looking for any and all ‘financial anomalies.  Smart buyers will ask to see at least two years’ worth of clean and dependable financial records. If there’s something you can do to improve profitability, do it as soon as possible. You want that upswing to show in your accounts as a sustainable trend rather than as a recent spike.

Tax Accounts can and should be used as a start point for business valuation. Filed accounts and returns, assessed by the IRD are a solid start point.

Typically during the sales process tax accounts are adjusted using an Information Memorandum (“IM”) will disclose certain key pieces of financial information. It will often tell you the total sales for the last couple of years, the gross profit, earning and the cash surplus. The key goal of an IM is to add back personal things that may not apply to the new owner.

For example, any interest expense is usually added back as the new owner may not have any bank debt. It makes no sense if a business for sale that has high debt shows low profitability due to high-interest costs, when a new owner may not need to borrow to run it.

Other things that are commonly added back can include salaries to working owners, personal vehicles, accounting fees that relate to other group entities, and some asset depreciation. Taking interest costs out of the profit and loss statement is almost always a correct adjustment to make.

The IM document is meant to be reflective of what someone can achieve if they buy the business – not to inflate things.

As we mentioned above small businesses are risky by nature and you may be surprised at the low earnings multiples being achieved in the NZ Market. Beware of brokers that tell you otherwise, unprofessional broker rogues are not different to real estate agents inflating ‘market values for houses to get the ‘exclusive’ listing and subsequently justifying it was the markets fault.

Based on our discussion with a leading business brokerage the below presents a broad guideline regarding how to assess indicative business value.  

  • Managed companies with maintainable earnings > $500k-$1.0m are achieve values at 3-6 times Earnings Before Interest Tax Depreciation (EBITDA) e.g. $500k EBITDA value range is $1.5m - $3.0m.
  • A business with full-time working owner with less than $300k is typically 1-3 times EBITDA.
  • Business > $1m < $5m earnings are sector valued with adjustments for risk. Multiples vary widely from 5 to 10 times earnings e.g. Farming V Hospitality V Technology V Construction.

It is important to note the above are indicative guidelines and several other factors will be considered such as market conditions, business lifecycle i.e. growth, stable or declining, regulatory and legal environment and changes, customer mix, contracts, and residual business risk and mitigating strategies.

# Topic Two - How to sell a business

 Business brokers we work alongside recommend you consider the following sage advice when thinking about or selling your business.

1. Profiling Your Likely Buyers

 There will be different priorities depending on who you're selling to. If it's family, take pains to make everything transparent and fair. You don’t want the transaction to cause tension or conflict between children. If you’re selling to staff, be prepared for staggered payments. They’ll probably start with a deposit and pay you the rest from business income. If you sell to the highest bidder, then get all your records in order as otherwise they won’t have any idea how you operate, or what sort of money you make.

 Some buyers, such as family or staff, won’t have the cash to buy you out straight away. You might have to keep an interest in the business and stay involved to protect your investment. If that’s the case, you’ll need to negotiate consulting fees. If you want a clean break, you’ll probably be better off selling on the open market.

 2. Articulate Your Value Proposition – Why Do Customers Buy Off You?

 Be very clear on your value proposition on how you add value to your life and why customers choose you time and time again.  Buyers need to be excited by your business, so come up with an elevator pitch that captures the essentials. Craft a story that explains why you got started, how you’ve grown, and what you’ve achieved. Paint a positive picture of the future, too, but keep it real. Incorporate stats and facts to support what you’re saying. We recommend you complete a Strengths Weaknesses Opportunities & Threats (SWOT).

 Remember potential buyers want the lowest risk and highest upside and will pay more if this story is told. They will also see things you don’t regarding opportunity. They may have better contacts than you for example or be able to invest more in updating technology.  Don’t be a know it all……. because you don’t know what you don’t know……by defintion. 

3.And it’s Time to Start to Sunset Your Ego Before Your Meet Potential Buyers

 Be humble in the sales process. No matter how emotionally involved you are with the business and the pride you have raising ‘your baby’ forget it and stand back. No one’s going to buy your business if it can’t survive without you. If you have staff, give them the training and authority they need to succeed. Scale back your involvement. Be less available to customers and clients. Delegate big decisions. Go into work less often.

 No one’s going to buy your business if it can’t survive without you. If you have staff, give them the training and authority they need to succeed. Scale back your involvement. Be less available to customers and clients. Delegate big decisions. Go into work less often.

Make sure ALL your digital assets reflect what you are telling your potential buyers and your digital story is consistent across all channels. All interested parties will review publicly available information.

If you have any questions or would like more information on readying your business for sale please contact Martin Thomas or Elyse Muirson who is currently developing a set of ‘side by side’ accounts package which will generate indicative business valuations.

In the next client newsletter (and subsequently made available in this section of the website) we will cover # Topic Three – Fine Tuning Your Business Machine. 



Living in New Zealand and within the 'Ring of Fire' means risk planning is vital as part any wise asset planning structures as explained here.

So it is vital to note that changes to the Earthquake Commission (EQC) Act that is now in effect.

If you have residential fire insurance for your home or contents, the below information will inform you of relevant details.

What: Changes to the EQC Act include the following:

From 1 July 2019:

  • removal of the $20,000 (+GST) EQCover for contents
  • an increase in the cap on EQC residential building cover from $100,000 to $150,000 (+GST). Under the Act, EQC provides cover for damage to a residential building up to the cap for each natural disaster event, depending on individual policy arrangements.

From 1 February 2019:

  • an extension of the time frame for lodging a claim with EQC for natural disaster damage from three months to two years
  • an increase in EQC’s ability to share property-related information, as necessary, to settle insurance claims.

Changes to contents cover and the increase in the residential building cap will be phased in over 12 months from 1 July 2019. If you have a current fire insurance policy, the changes will take effect on the anniversary date of your existing policy (which is generally the annual renewal date). If you take out a new policy, the changes will take immediate effect.

Who: Residential property owners and landlords who have a current private insurance policy for their home that includes fire insurance? Note tenants that reside in residential rental properties may also be affected.

Next Steps If You Own Rentals: Expert advice is the best option here from either your insurance provider or broker about home or contents coverage for your residential property. Tenants will need to check their insurance policies as well.

If you are considering the purchase of a property that may have been damaged in a natural disaster, be sure to ask the vendor for any documents they have available (e.g. historical records, previous claims). EQC  also has an extensive database on properties that have been the subject of prior claims.

EQC Act changes link for more information — Earthquake Commission



You can create a simple calendar view for your business and personal circumstances by using the IRDs tax due date calculator by clicking here.   If you need support creating your personal calendar please contact your personal Accountant on 09 294 6262.

To download the IRDs 2018/19 important dates full calendar or what you need to know claiming entertainment expenses go to the IRD download section below. 



Other useful online services links to complete many of your necessary business-related financial submissions and find helpful resources are below.

companies offICE

For Name Searches and Flied Information

Ministry of Economic Development
NZ SME Factsheet MBIE
Reserve Bank

Source for daily exchange rates and critical economic information 

Accident compensation corporation

Self-employed, a contractor or a non-PAYE shareholder-employee

Options for CoverPlusEXTRA  and Lowering Your  Annual ACC Levies 

Please discuss options with your financial advisor as there are further options for cover with Income Protection Insurance.

ACC Annual Report