How To Succeed In Business & Minimise Tax
Kerry Packer made a lot of money in his time; he also saved a lot on tax
But most importantly he ran his businesses in a way which allowed him to generate high return on his investments
Find out how he did that in this exclusive interview from the accountant who worked for him – Allan Mason.
What I learned as Kerry Packer’s accountant. Good business advice from the past for business owners of the present and the future
Today we are presenting Allan Mason, Chartered Accountant, SMSF Specialist, Registered Tax Agent and MD of Encore Accounting, a company offering a comprehensive range of accounting, tax planning and wealth management services to help business owners and individuals win the game of money.
Our interviewer is Denitza Genova, Partner – Strategy, Marketing and Service at Sparcus Group, an organisation which helps professional service business owners develop and grow their business with smart marketing, sales and service programs and strategies.
Denitza: Allan, you’ve had a fascinating professional life, having worked for and with iconic Australian companies and prominent high fliers such as Kerry Packer, whose reputation was of a formidable businessman. As the popular opinion goes, Kerry was “one of the greatest “numbers” men going around in the day”.
Tell us about your time with Kerry and what you learned from working directly with him.
Let’s start first with some context. In what role did you know Kerry?
Allan: I worked in the Head Office of Consolidated Press Holdings. We looked after a number of entities, mainly the printing and publishing divisions of CPH.
Denitza: What was Kerry’s approach to money management and business in general?
Allan: Kerry was not a hands-on business person. His approach was to always employ the best, reward them handsomely and then let them do their job.
When you started with Kerry you were on a 6 month trial after which you either received a big raise or the door. It was as simple as that.
When I went through the selection process, I went up the line and Kerry said to me:
“You need to be worth double what I pay you”
I thought I am an accountant how can I be worth double what I am being paid. But it makes you think in a different way. It makes you think about being productive.
That thought has stayed with me all my life and as an accountant when I look after a client and their business I aim to be proactive, to add value and be worth more than what we charge.
As a business owner, when you buy goods and services and when you sell them, you’d expect to make a margin on it.
It is the same with accounting, legal services, etc. when you engage an accountant to do something for you, they need to be worth more than what you pay them.
In Kerry’s case he expected you to be worth double.
I contributed more than double through a couple of acquisitions I recommended that we did, that were extremely profitable.
In those days Kerry paid extremely high salaries, so you either got paid well, or were out the door. There was no in between.
You were either paid high or dismissed.
Denitza: That seems quite an extreme leadership approach, but in a way similar to another “giant” of the business world – Jack Welch (ex CEO of GE)?
Allan: Yes, that’s how he worked, that’s how he ran the business.
He ran the business very much on a financial basis.
By Friday each week all the various division and entities needed to send in their figures. There was no excuse on this. Each entity had different KPIs – they might have been sales, debtors, stock, purchases and creditors. We would tabulate these on a single spreadsheet. It was not the week numbers that were important but the trends.
If the sales were trending down, Kerry would get on the phone to the CEO. Then I would be sent out help deal with any issues. Maybe look at their costings, charge out rates etc. No-one would have ever welcomed a call from Kerry on these matters as he was known to use a few superlatives.
It was a case of KPIs being monitored week by week.
You could see the trends and you could see them in real time, not 6 months after the event.
You don’t want creditors (amounts owed) or GST building up to an extent you can’t jump over, so you want this information in real time and I think small business owners miss that point.
Big businesses are generally good at monitoring their performance.
Small business owners should do exactly the same. At their level, of course.
Denitza: So how can small business owners do that?
Big businesses, such as Kerry’s, can employ the best people to do that. Small business owners may not be able to afford employing the best on a full-time basis.
Should they use the best advisers instead?
Allan: Exactly! And they should.
Also, technology makes things so much easier today. Honestly, with XERO and other online accounting programs, which feed directly from the bank into your accounting software you know these figures.
You don’t need an outside accountant to tell you that.
You may need them to set you up correctly, and we may teach you to fix the errors but once you get sorted you are in the driver seat.
You have to take control of the wheel.
Download the rest of the interview by clicking the button below.
Allan shares his and Kerry’s top tax minimisation strategies as well as other great business lessons for small and big business owners.