Is the IRD behind you or ahead of you?

Is the IRD behind you or ahead of you? Business automation is the future

The IRD is a massive and forbidding organisation, yet it is showing some fancy footwork that has lessons for every business on how to make more money with less effort.  

For many small businesses, the spectre of the IRD conjures up primal fears about complex GST calculations, penalty interest – and other phrases leading to sleepless nights.

Rest easy. Right now, the sleepless nights are within the IRD as the organisation undergoes the biggest shakeup in its history: a business transformation that will see IRD shed up to 4000 staff – with a total 30 percent reduction in staff numbers by 2021.  

But at the same time, no customer-facing jobs will go. The IRD is setting out to collect taxes more efficiently, while making it easier for individuals and businesses to transact business online, and with greater levels of personal help available to help everyone navigate the tax system better, easier and faster.

Good news.

All of this being made possible by the launch of phase two of the IRD’s new computer system. To sum it up in a word: Automation.

You don’t have to be a mega Government department to reap the cost savings and productivity improvements that automation enables.

One of Enprise Solution’s customers recently implemented new systems that included an electronic data interchange (EDI) with one of their major suppliers. This enabled them to double their turnover in a 12-month period without the need for additional staff.  A big contributor to the turnover increase was the freeing up of staff from routine drudgery and giving them new skills which added value to the overall business.

Another customer springs to mind – a small fuel wholesaler in Hamilton. The owner of this family-owned business was spending two or three days every month writing invoices which involved complex variable calculations depending on the fuel mix supplied. Automating this process reduced the invoicing time to under an hour. This meant more time to sell new business and the ability to manage that new business without hiring new staff. Once again, annual turnover and profit more than doubled.

The human elements

Automation can enable your business to grow without the need for additional staff. But although new IT systems, or upgrades to existing systems, enable that growth, technology is just one of the elements in applying automation to your business.

People do business with people. Automation is only valuable in that it frees you and your people from routine, time consuming tasks. This gives you more time to hone your business strategy and retrain and refocus staff on business process improvement and business growth.

Reviewing the impact of systems on people is important. For evidence of this, look no further than the changes announced by the IRD. They are proposing to dramatically reduce the size of their team over time, but the more critical factor is what those staff that are retained will be doing.

Your business faces the same challenge as the IRD. Automation can unlock transformation, but the human elements of the transformation are absolutely key. You as a business owner need to ensure you invest time and resources on retraining and upskilling the staff you have, to ensure they are taken along with you on the transformation journey. The skills that are required today to grow your business may not be the skills needed tomorrow. It’s important you understand the strengths and weaknesses in your team and develop strategies to upskill the team to deliver the right products at the right time. This is the surest path to continuous business growth.

(This article first appeared exclusively in the September 2017 issue of NZBusiness Magazine, p48.)

About the author

Elliot Cooper

Elliot Cooper is Enprise Group's CEO. He is a qualified accountant with deep accounting and financial controller experience.

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