Issue 38 – May 2012
Inland Revenue has published a new tool for businesses on its website – 'Industry benchmarks'. Industry benchmarks are a tool to help small and medium enterprises assess and improve their performance by comparing their business with others in their industry.
Benchmarks for specific industries have been calculated by Statistics New Zealand from raw data supplied by Inland Revenue. The data was collected from the tax returns and financial statements of small and medium businesses with annual turnovers between $60,000 and $10 million.
The benchmarks are given as a range and a median for small, medium, and large-turnover businesses.
The benchmarks will give you a better picture of your competitive position. You can use them:
- to compare how your business is performing against others in your industry
- for your business planning and/or budgeting
- to evaluate the likelihood of being reviewed by Inland Revenue.
Industry benchmarks can help you identify matters requiring your attention. For example, a gross profit ratio that's lower than the industry norm can indicate an insufficient mark-up, competitors sourcing inputs at lower costs, or a failure to record all sales in financial accounts.
So far, benchmarks for 16 industries have been released and more will be released in November 2012.
Summarised from business.govt.nz's 'Business Insider' newsletter, April 2012.