Running a Small Business

NZ is a nation of small businesses. Of the half a million businesses, more than 350,000 (70%) have no staff, and 100,000 (20%) employ 1 to 5 staff.

Congratulations if you own and run a small business - it's your business, but is it good?

Running a small business involves:

  • Obtaining (Selling)and retaining good clients
  • Working efficiently (time and costs wise)
  • Making money (after all that's what it's meant to be about)
  • Having a good work life/personal life balance

All of these involve time and often small business owners don't have enough time, so inevitably some things don't get done properly or at all.

We see and assist many small businesses who are behind in their GST Returns, Annual Accounts etc. - and are facing late payment/filing fees from IRD and ACC. Also with jobs not charged out yet and money owing from slow payers, and grumpy suppliers owed money.

It takes a lot to keep on top of everything, especially if you are the only person involved in the business. Apart from doing the actual work that you charge for there is:

  • Quoting
  • Invoicing of completed jobs
  • Chasing up customer payments (if you don't get paid on time you may net be able to pay your bills or even yourself)
  • Purchasing goods and services for your business
  • Reconciling bank accounts with Client payments, Supplier payments
  • Collating and filing all your paperwork 
  • GST Returns (if applicable)
  • Staff wages (if applicable) 

Paramount in achieving efficiency in the above is a good accounting package that will do Sales, Purchases, Bank statement downloads, GST Returns, Profit & Loss reports, Annual reports, and Payroll.

We recommend Xero as an accounting package as its very easy to use if you are computer literate. If not we can train you to use some of Xero's features or do the day to day administration tasks for you. We are Xero Certified Advisors and a Tauranga Xero Gold Partner.

We can also do your GST Returns and monthly/yearly accounts plus assist with payroll services, Humans Resources or Health and Safety.

Our motto is "Do what you do best, we'll do the rest!"

 

 

 

FINANCIAL YEAR END GETTING CLOSE

As 31st of March approaches, thousands of businesses throughout NZ will be starting to collate data for their year-end accounts. This can be confusing, stressful and time consuming, especially for small business owners, as they still have to do their normal work to keep their business going.

The tidier you have this information when you pass it on to your accounting services provider the better. Also the sooner you do it the better, then things won't get lost or forgotten.

We specialise in small business help and offer a range of services i.e.

  • weekly/monthly accounts and bookkeeping
  • IRD Returns (PAYE, GST, FBT)
  • year-end accounts
  • payroll
  • health and safety

We also use Xero accounting and payroll software and are Xero Certified Advisors, so we can help with Xero implementation, training and advice.

We are based in Tauranga and also have clients throughout the BOP area and elsewhere.

If you need small business help contact us.

SMALL BUSINESS PLANNING FOR CHRISTMAS

 

For many small businesses Christmas can be a tight time, cash flow wise, especially if they have a business close-down period (additional to the Statutory Holidays).

Client gifts and entertainment expenses can be high, also if you employ staff and pay them holiday pay for a close-down period, you have this expense at a time when your business is not producing or making sales. Other additional costs often include a staff function and or staff gifts.

It's best to get everything tidied up before you close down e.g. 

Get information to your Accountant/ Tax Agent, and complete your GST Return, if applicable, for the Oct/Nov period (payment has to be made by 15th January).

Ensure your Nov PAYE Return is into IRD and paid by 20th December.

Get your December charge-out invoices completed and sent to your customers.

Finally, don't forget your Debtors. Chase up any outstanding amounts a s soon as possible (this is KEY to your cash flow). DON'T be too soft as Christmas, or just after, is a common time for businesses/people to go bust.

 

 

 

 

 

BUSINESS MOTOR VEHICLE COSTS

Often when we are completing small business accounts we find people confused about what can be claimed for their business vehicle costs. In many cases the vehicle is used for both personal and business travel.

There are several ways these costs can be allocated i.e.:

1. Private motor vehicle (also used for business)

a)   If travelling less than 5,000 km per year for business, keep a Log Book of all business travel, and at the end of the year the total business km traveled can be claimed as a business cost at the IRD set rate (currently 72 cents per km)

b) If travelling more than 5,000 km per year for business, keep a log Book for 3 months showing all travel (business and personal), then calculate the business% of total km traveled over the 3 month period. This % can then be claimed from all the vehicle costs (fuel, servicing, RUC, registration, insurance, repairs and maintenance).

2. Company Owned Vehicle (listed on Company Asset Register)

Claim 100% of costs and at Year End pay Fringe Benefit Tax (FBT) for personal use (based on 20% of the cost price of the vehicle).

If you are unsure of your specific requirements contact us, we specialise in Small Business Accounting.

 

 

 

ENTERTAINMENT EXPENSES

Often when completing small business accounts we find people confused about what they can claim for Entertainment Expenses.

 

The number 1 Rule is the expense needs to be related to your business i.e. linked to earning your income.

 

For most small businesses the majority of entertainment expenses are only 50% deductible. Examples of these are:

  • Food and drink, including meetings with clients or staff
  • Friday night drinks for staff
  • Lunchtime food shout to staff
  • Christmas party for staff

The exception to this is food and drink while travelling out of town on business, which is 100% deductible.

IRD expects you to keep records of:

  • The date the expense was incurred (bill/receipt)
  • The names of people entertained and the business they represent
  • The reason for the entertainment