A simple NZ cash-management system to take control of your money, protect your profit and never get caught by another tax bill.

Here’s one of the biggest mistakes we see in business:

You look at your bank account and think that money is yours to spend.

It isn't.

Some belongs to the IRD.
Some needs to become profit.
Some needs to pay you.
Only some is actually available to run the business.

The solution is simple:

EVERY DOLLAR GETS A JOB BEFORE YOU SPEND IT.

Set up 6 separate bank accounts.

BUCKET 1: INCOME

All customer payments come into this account.

This is your collection bucket.

Rule: Don't pay bills from here.

Money comes in, then gets allocated to the other five buckets.

BUCKET 2: GST

This money isn't yours.

For a GST-registered NZ business, separate the GST you've collected from your underlying sales revenue.

Example:

Customer pays $11,500 including GST

$1,500 = GST
$10,000 = Revenue excluding GST

Protect the GST rather than accidentally spending it.

Rule: Never treat GST collected as available operating cash.

BUCKET 3: TAX

Put money aside for income tax and provisional tax.

Don't wait for the IRD bill and then wonder where you're going to find the money.

Build the money up as you earn it.

Rule: Tax should be planned, not an emergency.

BUCKET 4: PROFIT

Your business exists to make a profit.

Don't run the business for 12 months and hope there's something left at the end.

Allocate a percentage toward profit as you go.

Even if you start small:

1% → 2% → 3% → 5% → 10%+

Start somewhere and improve.

Rule: Profit is intentional, not accidental.

BUCKET 5: OWNER PAY

Pay yourself properly and consistently.

Your pay for working in the business is different from the return you receive for owning a profitable business.

Stop randomly taking money from the company whenever you need it.

Rule: Pay yourself deliberately, not randomly.

BUCKET 6: OPEX

OPERATING EXPENSES

This is the money available to run the business.

Wages.
Rent.
Vehicles.
Insurance.
Marketing.
Software.
Overheads.
Normal operating costs.

After protecting GST, tax, profit and owner pay, this is what the business has available to operate.

Rule: Run the business from your OPEX bucket.

THE SYSTEM

Every time money comes in:

MONEY IN

↓

1. GST

Protect what isn't yours.

↓

2. TAX

Prepare for the IRD.

↓

3. PROFIT

Build a profitable business.

↓

4. OWNER PAY

Pay yourself consistently.

↓

5. OPEX

Run the business with what's left.

THE MOST IMPORTANT RULE

YOUR BANK BALANCE IS NOT YOUR SPENDING BALANCE.

If you've got $100,000 in the bank, that doesn't mean you have $100,000 available to spend.

Your OPEX balance tells you what you have available for normal operating expenses.

And when OPEX gets tight:

DON'T RAID THE OTHER BUCKETS.

Instead ask:

How can we increase sales?

How can we collect our money faster?

How can we improve our margins?

What waste can we eliminate?

What costs can we reduce or renegotiate?

How can we become more productive?

A constraint forces better decisions.

DON'T CHASE PERFECT PERCENTAGES

Your business is different from everyone else's.

Start by understanding where every $100 currently goes.

Then improve it.

If you're currently making 2% profit, don't suddenly try to force 15%.

Go:

2% → 3% → 4% → 5% → 7% → 10%

TDI.

Tiny improvements compounded over time create massive results.

YOUR BUSINESS GYM ACTION PLAN

Don't just read this.

Implement it.

• Open your 6 bank accounts

• Send all customer payments into INCOME

• Work out your current allocation percentages

• Start separating GST

• Start allocating for tax

• Start allocating profit

• Set consistent owner pay

• Run normal expenses from OPEX

• Review the balances every week

• Improve your percentages over time

REMEMBER:

SEPARATE IT.

ALLOCATE IT.

PROTECT IT.

CONTROL IT.

IMPROVE IT.

Don't wait until the end of the year for your accountant to tell you whether you made money.

Take control of your cash every week.

This is general business education, not personalised accounting or tax advice. Work with your accountant to determine the appropriate allocations and tax treatment for your business.