Drumm Nevatt & Associates Chartered Accountants & Business Advisors

A business can look impressive from the outside and still have a few uncomfortable numbers sitting underneath it.

Before signing a Sale and Purchase Agreement, due diligence helps you understand what you may actually be buying.

That means looking beyond the headline sales figure and reviewing:
• How reliable the profit is
• Whether cashflow supports the day-to-day operation
• Customer and supplier concentration
• Existing debts and commitments
• The assets, stock and working capital included in the deal
• Any tax or compliance matters that may need attention

The goal is not to find a “perfect” business. It is to make sure the price, risks and opportunity make sense together.

Planning to buy? Bring your accountant into the conversation early, while there is still room to ask questions and negotiate.

“The business turns over $1 million.”

That tells you something, but nowhere near enough to decide what the business is worth.

A buyer will also want to understand the profit behind those sales, how dependable the revenue is, what working capital is required and whether the business can continue without relying heavily on the current owner.

Two businesses with the same turnover can have very different values.

One may have recurring customers, healthy margins and clear systems. The other may have one large customer, tight cashflow and an owner holding everything together.

Business value is built in the detail, not just the biggest number on the page.

Get in touch today.

[email protected] | 09 534 4382 | dnaca.co.nz

A business can look impressive from the outside and still have a few uncomfortable numbers sitting underneath it.

Before signing a Sale and Purchase Agreement, due diligence helps you understand what you may actually be buying.

That means looking beyond the headline sales figure and reviewing:
• How reliable the profit is
• Whether cashflow supports the day-to-day operation
• Customer and supplier concentration
• Existing debts and commitments
• The assets, stock and working capital included in the deal
• Any tax or compliance matters that may need attention

The goal is not to find a “perfect” business. It is to make sure the price, risks and opportunity make sense together.

Planning to buy? Bring your accountant into the conversation early, while there is still room to ask questions and negotiate.

[email protected] | 09 534 4382 | dnaca.co.nz

August is a good time to pause and take a closer look at your cashflow.

For many business owners, the day-to-day focus is often on sales, jobs, clients, deadlines and getting the work done. But what is happening behind the scenes with your cash can have a big impact on how confidently you make decisions.

A simple cashflow check-in can help you understand:
- What money is expected to come in over the next 30, 60 and 90 days
- What expenses, wages, supplier payments, GST or tax obligations are coming up
- Whether customers are paying on time
- Whether there is enough breathing room for quieter periods or unexpected costs
- Whether your reports are giving you a clear view of where the business is heading

Ready for greater confidence in your numbers? Enquire about our Cashflow Clarity service at [email protected] and start making more informed business decisions.

Numbers by day, music bingo by night! 🎶

Our Auckland team recently swapped the calculators for a little friendly competition at Beats by Bingo.

It was a great chance to step away from the desks, test our music knowledge and enjoy some time together outside the office. A few songs were recognised instantly… and a few took a little longer! 😄

A business can be profitable and still feel the pressure of tight cashflow.

That is because profit and cash are not the same thing.

Profit shows whether your business is making money after income and expenses are accounted for. Cashflow shows the actual movement of money in and out of the business - and whether there is enough available when payments are due.

You may have strong sales, but if invoices have not been paid yet, that money is not available to cover wages, suppliers, GST, tax or operating costs.

You may also be growing, but if extra stock, materials, staff or equipment need to be paid for before the income comes in, cashflow can quickly become stretched.

This is why looking at profit alone does not always give you the full picture.

At DNA, we help business owners understand their numbers, manage cashflow and plan ahead with more confidence.

Because a profitable business still needs healthy cashflow to keep moving forward.

Our office will be closed on Monday 17 and Tuesday 18 August while the DNA team heads off to our firm conference. We're excited to spend time learning from one another, strengthening our team, and exploring new ideas that will help drive DNA forward.

We’ll be back in the office as usual on Wednesday 19 August. If you need anything from us before then, please get in touch.

dnaca.co.nz | 64 9 534 4382

More sales should mean more money in the bank, right?

Not always.

One of the biggest cashflow challenges for business owners is the gap between making a sale and actually receiving the money.

That gap can create pressure when expenses keep moving, even if payments from customers are still catching up.

Wages still need to be paid.
Suppliers still need paying.
GST and tax still have due dates.
Stock, materials and operating costs do not usually wait until the invoice is paid.

So while the sales report may look positive, the cash position can tell a very different story.

That is why tracking when money is expected to arrive is just as important as tracking how much has been invoiced.

A healthy business is not only built on strong sales - it also needs the cash available at the right time.

For a deeper dive into why profitable businesses can still face cash flow challenges, read our blog on ‘why profitable businesses fail’. You'll learn the warning signs to look out for and practical ways to improve your cash flow management.

BLOG LINK: dnaca.co.nz/why-profitable-businesses-fail/

A business can be profitable and still run into cashflow pressure.

Often, it comes down to timing.
- Invoices may have been sent, but the money has not landed yet.
- Sales may be strong, but wages, suppliers, GST or tax are due first.
- The business may be growing, but stock, materials, equipment or staff need to be paid for upfront.
- Profit may be showing, but there may not be enough cash set aside for quieter periods or unexpected costs.

That is why cashflow is such an important part of business planning.

It helps answer questions like:
- What money is expected to come in?
- What larger payments are coming up?
- Are customers paying on time?
- Is enough being put aside for tax and GST?
- Is there enough breathing room if things slow down?

Profit shows how the business is performing overall. Cashflow shows whether the money is available when it is needed.

For business owners wanting to better understand this, DNA has a Cashflow Management webinar available on our website.

It is a useful resource for learning more about how cashflow works and why it matters.

If you want to understand your cashflow better. Watch DNA’s Cashflow Management webinar here - https://dnaca.co.nz/watch-our-webinar-cashflow-management/