Five reasons why leave management is important

When it comes to handling and recording employee leave, it might be easy to take the "It will be right" approach. But there are some excellent explanations for why you should carefully manage, track, and pay leave.

Proper leave management means your business can function more successfully, meet your employees' time-off needs, and satisfy your legal obligations.

Several recent, high-profile cases of prominent New Zealand employers not staying on top of leave and holiday pay. The Ministry of Business, Innovation, and Employment- MBIE (Who is responsible for motoring the Holidays Act) - have emphasized the seriousness of non-compliance can be.

leave management system
type of leave

1. It is the law!

It is of great importance to keep track of leave, and accurately paying your

employees will keep you on the sport-on with the law.

As per the Holidays Act 2003, all New Zealand employers must keep accurate records of every employee's daily hours and the pay for those hours and the leave accrued, entitled leave, and leave taken.

The law ensures that all employees get the paid leave they are legally permitted


  • Annual leave (at least four weeks a year after every 12 months of employment).
  • Public holidays (up to 12 holidays each year, if they are days, they typically work).
  • Sick leave (up to 10 days each year, if they are days they would usually work)
  • Domestic Violence Leave (up to 10 days each year)
  • Bereavement leave (usually after six months of continuous service).
  • Parental leave Is a mixture of paid and unpaid leave depending on the employees' entitlement.

When leave is taken, the Holidays Act stipulates how this must be paid for each type of leave. However, each type of leave has a distinctive payment method, so you cannot assume a one-size-fits-all method.

As we have seen in recent years, computation for annual leave payments has triggered quite a few problems for Kiwi businesses. As a result, several big and small businesses have been trapped in underpaying employees for their leave taken.

Keeping precise tracking of leave taken and holidays accrual will eliminate or minimize leave entitlement and payment calculations mistakes. As a result, your

employees will get the right amount of leave and pay. In addition, your business will evade having to pay incorrect retrospective calculation of leave taken, or worse, being fined from the Employment Relations Authority (ERA) or a Labour Inspector and ending up in the media.

Every business needs to know their legal obligations that are available

at Business Government New Zealand

2. The bottom line

Good follow-up on leave and management can lead to a reduction in costs. Paid time-off has a substantial financial impact on a company's bottom line.

Temporary workers and contractors can cost extra than your regular employees. Or, if your current active employees could provide cover, you may even have to pay overtime.

Other indirect costs and effects include a potential drop in the quality of goods or services due to understaffing, fatigue, or less-skilled replacement workers, leading to a decline in customer satisfaction.

There may also be additional administration costs, time management to find appropriate replacements and bringing them up to speed, maintaining team confidence, etc., and possible safety issues with a replacement or overworked staff.

The additional financial consequence is that failing to manage employees' leave correctly allows employees who accrue weeks or years of leave, is a business liability. If these employees are terminated, the paid-out will be a vast lump sum.

Unpaid leave is recorded in the company's books as debt and could cause a setback if you sell the business.

leave management

3. Proper leave and holiday planning

Accurately planning with your team members' leave means you can plan absences in advance to ensure you have sufficient coverage, rather than having to struggle and risk getting caught short.

While there is nothing one can do if many employees fall sick simultaneously, planning

for annual leave and holiday cover will help reduce work stoppages, ensuring there is no drop in efficiency and continuing to meet its commitments and deadlines.

It will also mean there is no setback in team confidence. For example, no one wants to be regularly asked to do extra work because the company forgot to plan holiday cover properly.

Using a professional leave management service or software will make keeping track of

leave easier and more precise. As a result, management will spend less time supervising

and responding to leave requests. In addition, the system will maintain correct company-wide records, so you can quickly check leave totals and establish legal compliance.

4. Employee confidence and wellbeing

If your team members know they receive their correct leave entitlements, they will have more faith and trust in the business. This means happier, more engaged employees who are driven to be productive and help the business prosper.

Your employees also want to ensure that the business is well organized. If leave is poorly managed and many employees take leave simultaneously, the remaining employees may have to do extra work to cover. This could lead to bitterness if it happens regularly, and the damage will be even more major if it turns out you have not calculated your employee's leave or holiday pay properly.

Many advanced, modern leave management systems allow employees to see their leave

balances and request leave electronically. This gives clarity, and the automation also reduces admin for the business.

5. Reduced absenteeism

Taking leave is necessary. It helps is promoting good physical and mental health in the workplace and increase people's work-life balance, lowering stress and unscheduled days off.

Absenteeism can have a significant effect on any business. For example, the 2017 Wellness in the Workplace Survey found that in 2016, that New Zealand businesses lost an estimate of 6.6 million days of work due to absenteeism

which cost approximately $1.51 billion.

If you don't have the precise tools to track leave, especially sick leave correctly, you may not know how many days in a year the employees are taking and how much your

business is affected.

Effective leave management systems can give you a good understanding of leave patterns

across the business, and if there are problems, you have the chance to work on a resolution with your employees.

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You can create any structure you want by using the same tools as in the regular workflow. Add buttons and forms or anything else you'd want.

Being experienced with an accounting background, we can offer a wide range of reliable and accurate bookkeeping services. A common question often asked is, "What exactly does a bookkeeper do? "The answer to this question is shown below for our services as specialist bookkeepers. We can,of course, modify our services to suit the needs of your business whether you need a few of these services or all.

·      Accounts Receivable*-Invoice preparation and follow-up with the client

·      Accounts Payable* - Suppliers' invoices are processed and paid when due.

·    Bank Reconciliations -Reconciling Bank and Credit Card accounts with daily bank feeds

·     GST Filing                        - Timely filing of Bi-Monthly or Six-Monthly returns

·     System Training               - Training is required whenever you choose new software. We provide free training.

·    Accounting Software conversions – With our expertise, we can switch your accounting information to XERO/MYOB

·        Payroll

·        Unlimited Email Support

*Note:- Accounts Receivable and Accounts Payable are closely monitored to ensure that your business has no issues with cashflow

Payroll Management

Business Pillars offers all-inclusive payroll services that help your business run efficiently. We are committed to being legally compliant. Our services are built to simplify payroll processes for small to medium-sized businesses throughout New Zealand.

PAYROLL processing made easy

We provide the most updated payroll solutions tailored-made that is affordable to your requirement. We are committed to taking care of all the work demanded, allowing you to focus your time and energy on more essential things you love to do.

Our payroll services are:

·        Employees pay, On-time payments including benefits, reimbursements, deductions, Weekly/Fortnightly/Monthly

·        Employee PAYE

·        Payday Filing   – Timely filing returns to IRD

·        Leave entitlements– Accruals for each type of leave

·        Leave Payment - As per Holiday Act 2003

·        KiwiSaver contributions

·        Maintaining payroll records – payments and documentation

GST Filing

Timely Processing

We ensure that we file all GST Tax returns two weeks before the due date. We keep our clients informed before we proceed. This ensures that the client is at ease.

·        GST Filing        - Timely filing of Bi-Monthly or Six-Monthly returns

Monthly / Quarterly Advisory

The clients are in a position to process their reports from the software chosen. Based on the service requested, additional reports are also given that are not available in their chosen software. These reports enable the client to make corrective business decisions. Business Pillars reaches out to clients who require more assistance.

Monthly Management Meetings

The primary purpose of a monthly management meeting is to get the business to grow. This is either done through a phone call, zoom, or meeting in person.

Cash flow Management

Managing cashflow is a significant responsibility faced by most small businesses. We reach out to businesses making it stress-free to ride on the highs and lows of the cash flow throughout the year.

We assist in producing a cashflow statement which is a financial statement that summarizes the amount of cash entering and leaving the business. The cashflow statement measures how well the business can manage its cash position, meaning how well the business can generate cash to pay its debt commitments and fund the day-to-day operating expenses.

Budget Forecasting

Small business budgeting and forecasting

We need to get some relevant numbers to know what the future will look like regarding a business. Budgeting and forecasting will help to support this vision. Business Pillars can work alongside you to understand these basics so you can build a financially sustainable business.

What is a budget?

The budget estimates how much money will come in and go out from your business over time (usually a year). Budgeting and forecasting normally benefit all businesses and first-time startups to see if they can afford to run the business and compensate for all their hard work with a good return for their initiative.

What are the main principles of having a budget

Budgets forecast the money-making possibility of a business. It will also highlight things like:

  • How much will it cost to startup?
  • How much money is needed to borrow?
  • When will be the breakeven point?
  • How much should the customers be charged?
  • How many staff are needed?

Monthly / Quarterly Advisory

The clients are in a position to process their reports from the software chosen. Based on the service requested, additional reports are also given that are not available in their chosen software. These reports enable the client to make corrective business decisions. Business Pillars reaches out to clients who require more assistance.

Job Management

Job Management is software that supports project managers and teams to complete client requests and projects efficiently. Most professionals depend upon this job tracking software which assists them in supervising multiple sections of a business. Business Pillars are here to assist in setting up this service to track income and expenses related to service jobs.

XERO and MYOB both have the capability for Job Tracking

These are the advantages:-

·        Create quotes immediately

·        Easily track jobs from quote to invoice

·        Schedule the jobs on the go

·        Get paid quicker