For the fourth year in a row, Xero Accounting Software has been nominated for a Webby award. In the web industry, this is basically the highest achievement you can get, so well done Xero!

To learn more about Xero check out our blog posts, or call us to discuss your accounting software options today.

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When you run a business one of the first decisions you make is whether to purchase an accounting software program or to set up a manual system. You might think that your small business isn’t big enough to need a software program - surely you can manage things yourself? 

But all it takes is a busy week, or a customer who needs to pay in instalments, misses a payment, wants to split the bill, or pays the remainder owing in a lump sum and you’ve got a potential problem. Throw into the mix the outgoing invoices you have to send, the bills you have to pay, and your mother-in-law coming to stay (added external stress) and you have a bit of a situation on your hands.

Software can make this process simple and you avoid doubling up on information. It will tally figures and group numbers for you, saving frustrating hours on the end of a calculator - your hair will thank you as it remains securely in your head, and there is less room for operator error. Software helps you set up systems for handling the endless flow of paper that your business generates. It is just a program - it cannot be held accountable for you forgetting to record that you received a cheque, but with a secure system in place, it is more likely that you will effectively execute your end of the bargain. 

Here at Accountants on London, we are big supporters of Xero Accounting Software, it fits in well with our philosophy of using the latest computerised systems to turn data into solutions and opportunities that will help you. Read about Xero on our blog here.

If you are thinking about accounting software, be it Xero, or something different, now is the time to take action, with the new financial year looming, (April 1) you can start afresh and make next year much less painless! Contact us to discuss and implement – remember, your first consultation is free!

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Accounting
This is the system that tracks the transactions that make up your business income and expenses and then uses this data to create reports that show the financial and task status of your business.

Accounts Payable
This is the money that your company owes to its vendors.

Accounts Receivable
This is the money that your customers owe to your company.

Accrual Basis Accounting
This is the accounting system in which reports are drawn from accounts payable, accounts receivable, cash sales, and cash payments. Most accountants recommend accrual basis accounting if you bill your customers or incur debt. (See Cash Basis Accounting)

Assets
The are the things that add value to your company: cash in the bank, accounts receivable, property, equipment, stocks or bonds, etc.

Balance Sheet
Think of a Polaroid picture. This is a snapshot of where your company is on a particular date. It lists assets, liabilities, and produces your equity — the net worth of your company. (Download a Sample Balance Sheet, and visit our Tools Library for more samples.)

Bookkeeping
This is the process of entering data into an accounting system, including the amount, date, and source of each revenue or expense. No accounting system will work without reliable bookkeeping.

Budget
This is a process for managing cash flow in your company.

Cash Basis Accounting
This is the accounting system in which cash transactions are recorded and reports drawn from actual payments made into and out of your company. (See Accrual Basis Accounting)

Cash Flow
This is a summary of your company’s sources and uses of cash. A cash flow report will show you changes in your cash position over a period of time. (Download a Sample Cash Flow Statement, and visit our Tools Library for more samples.)

Cash Sale (Receipt)
This is a sale of a product or service that is paid for when it is delivered. The paperwork that accompanies a cash sale is called a receipt and documents the delivery and payment.

Equity
This is the net worth of your company when all assets and liabilities have been accounted for.

Invoice
This is the written record of a transaction, often given to a customer or client when a service or product is delivered, but not paid for. Sometimes invoices are called bills, or even statements, although statements are technically something else (see below).

Liabilities
These are the things that your company owes to others: accounts payable, credit card debt, mortgages, etc.

Profit and Loss Statement
This is one of the reports that your accounting system will generate to give you a picture of how your company is faring. A P&L statement will look at a period of time such as a month, a quarter, or a year. You can compare with other periods of time to make decisions. (Download a Sample Profit and Loss Statement, and visit our Tools Library for more samples.)

Statement
This is a written summary of unpaid invoices. Statements may contain several invoices and are usually sent as a reminder of payment due.
   
Glossary courtesy of howstuffworks.com

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The vanilla plant flowers just once a year, offering a mere four hours to complete the intricate act of hand pollination. In this window of opportunity a dream has flowered. The Heilala Vanilla story is a PR dream: 100% natural, sustainable, organic, transpacific, sweet and delicious, much like Heilala’s own success.

The story begins with John Ross, boat builder, farmer and frequent visitor to Tonga. In 2002, following Cyclone Waka, John recruited six Rotary Club colleagues to deliver medical supplies, help rebuild houses and restore infrastructure to the Tongan village of Utungake in Vava’u. In return, a local chief gifted him the use of dormant land. Upon discovering wild vanilla orchids growing, he developed a vanilla plantation, enhanced job prospects for locals and created Heilala Vanilla.Producing vanilla seed pods is extremely labour intensive, requiring optimum growing conditions. John engaged the expertise of his son-in-law Garth (agriculturalist and IT consultant) to harness this rare opportunity. They carefully matched organic growing principles with the virgin soil, sustainable coconut husk frames, hand pollination and the Pacific sun, achieving the first Heilala vanilla harvest in 2005 - an admirable 40 kg. This grew to two tonne in 2010.

Upon harvest, the vanilla seed pods are imported to Tauranga where the vanilla products are manufactured and packaged per order. They are then dispatched to executive chefs, gourmet food manufacturers and specialty retail outlets.Heilala Vanilla’s growing product range includes vanilla beans, vanilla extract, vanilla paste, vanilla syrup, ground vanilla, vanilla sugar and vanilla ice cream and has received numerous culinary awards.

From the early days of knocking on restaurant doors with a delicious nameless product it was clear they required a strong brand. The challenge would be enlisting the right advocates - the brand needed to entice. Margins are much tighter on small orders, but they knew this temporary pain would spark wildfire momentum and secure the big orders.Down the track, John oversees the Tongan plantation. Garth is in charge of research and product development and daughter Jennifer (a qualified accountant with a marketing degree) is onboard to manage sales and marketing. We spoke with Jennifer about their journey to date.

Biggest challenge? Giving up the security of her day job. ‘But if you have the passion then it’s definitely worth it’. Best management decision? Implementing quarterly Client Advisory Boards with specialised ‘foodies’ to drive their focus and direction. ‘In a family business tunnel vision can be a natural stumbling block’.

Advice? Jennifer was fortunate to utilise her accounting skills within the business, stressing ‘every entrepreneur needs guidance, advice and a close relationship with their accountant’. Clearly defined budgets and goals, performance measurement, viability testing and patience are also required for any long term business model.Jennifer emphasised ‘when engaging external services you get what you pay for’. Don’t scrimp on the things that support the backbone of your business, whether it be your branding, marketing, or business mentors.

Highlights so far? ‘Taking Peter Gordon and US pastry chef Natasha MacAller to the Tongan plantation’. The Heilala crew guided 20+ foodies to witness the source of Heilala Vanilla, and enjoy local produce prepared amongst the plantation by Peter and Natasha. Entering the Williams Sonoma food retail chain (boasting 200 stores across America and Canada) was another memorable milestone.

Having direct ownership of the vanilla seed pods throughout the process, Heilala are proud to have control from plantation to pantry. This ultimately guarantees the quality and integrity of their product.With each hurdle successfully mounted, the Heilala team keep moving the finish line. As they enter the American market they’re aware that initial margins will be tight, sales and profits low. But they’ll soon achieve the exposure and reputation their product deserves.

Having John on the ground has been vital to this multi-cultural business. Jennifer and Garth are equally committed to maintaining relationships with the locals, keeping in touch with the dream at its roots. When one day John steps back, their succession plan will have a solid foundation.The passion, hard work and commitment of this Kiwi family and their Tongan colleagues have made Heilala a sweet story of generosity, imagination and ingenuity. It’s about rising to the challenge and seizing the opportunities that are gifted to you.

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ACC has recently changed the way it invoices self-employed clients with regard to their full or part-time status, dependent on whether you work 30 hours or more a week. 

Information on your full or part-time status no longer flows through to ACC’s database on the IRD IR3 form.  If you held part-time status last year and this year your earnings crossed the threshold you will receive a letter from ACC automatically confirming your change to full-time status.  In all other scenarios it is up to you to formally confirm a change of status with ACC.

It would pay to check your invoice this year and call us if there’s any confusion.  Clients could get stung, for instance, if they have been paying levies on the basis of part-time status, have an accident, and then declare full-time status.  In such a case ACC may query it and can backdate levies up to four years. 

We provide an ongoing ACC administration and advisory service to our clients on an agreed annual fee basis.  Being recognised by ACC as your online agent gives us secure online access to your levy information, your cover status and invoices, allowing us to work directly with ACC. 

A simple signed authority from you and we’d be happy to review your cover structure and premiums, to ensure your cover is appropriate and levies are minimised.

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Working For Families

From April 1 2012 many of the small changes to Working For Families signalled last year come into effect:

• The family tax credit amount for children under 16 will rise for inflation:

• The net income level guaranteed by the minimum family tax credit will rise from $22,204 to $22,268
• The abatement rate will increase from 20 to 21.25 cents in the dollar
• The abatement threshold will decrease from $36.827 to $36,350

                                                                                                  

KiwiSaver

As of 1 April 2012 employer contributions will no longer be tax free.

Employer Superannuation Contribution Tax will apply at the employee’s marginal tax rate.

                                                                                                  

Minimum Wage

As of 1 April 2012 the minimum wage will increase from $13.00 per hour to $13.50 per hour.

Training and new entrants’ minimum wages will increase from $10.40 to $10.80 - 80 percent of the adult minimum wage.

                                                                                                  

New GST rules for multi-use assets

The new rules came into effect 1 April last year replacing the old charge-in-use rules by apportioning input tax deductions in line with the actual use of the goods and services. As the 2012 financial year closes, the new rules will be applied for goods and services acquired on or after 1 April 2011. In subsequent periods, when a change to the actual taxable use occurs, from what was first intended, a GST adjustment within an adjustment period must be made (a number of exemptions may apply).

There is a maximum number of adjustment periods according to the asset’s value or estimated useful life and special ‘wash-up’ rules apply when goods and services that have been subject to the apportionment rules are sold or the person deregisters.

                                                                                                 

 

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With the end of the financial year fast approaching, it is the time when we get a lot of questions regarding what records are needed now, what records need to be stored, and what records can be sent off to that castle in the sky.

Here are a few crucial ‘need to know’s for business owners regarding record keeping:

General Record Keeping

Every person undertaking business in New Zealand must:

• keep records in New Zealand in the English language.
• demonstrate assessable income and allowable deductions.
• keep records for seven years after the end of the tax year they relate to.
• record all day-to-day entries of all incoming and outgoing sums of money.
• record the assets and liabilities of the person relative to that business.
• keep electronic records in a format that allows us to readily work out the amount of tax payable.

Additional help and information is provided in Standard Practice Statement GNL 430 “Retention of Business Records by Electronic Means”

 

In addition to your business records you must also keep the following records for computer-assisted audits:

• Accounting or transaction level records, including the general ledger and other journals and subsidiary account books, in electronic format.
• Charts and codes of accounts, accounting instruction manuals, and system and program documentation that describe your accounting system.
• Record layouts you hold of all retained files. When systems have been modified, keep both the old and new record layouts.

 

 For 31 March 2011 year – please keep records from 1 April 2004

For more about what to keep, please see below:

(click on the image to download the printable pdf)

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As part of our continued support of the Waikato Society or Arts we are pleased to promote the Gala Champagne Award Ceremony for the New Zealand Painting & Printmaking Awards 2012, which will be held in Hamilton on 17 February 2012.

The Gala Champagne Award Ceremony is one of the largest art awards in New Zealand with the major prize being $20,000.00, and in the opening event for the Hamilton Gardens Summer Festival.

We have a limited number of free tickets available which will be allocated on a ‘first in’ basis, so be quick to secure your place to this prestigious event by contacting Jenny Cross (telephone 07 838 0119 or emailing jenny@aol.org.nz).

We look forward to seeing you there!

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Xero fits in well with our philosophy of using the latest computerised systems to turn data into solutions and opportunities that will help you.

By using this latest web-based Cloud Technology Xero Accounting you can spend less time working in your business, and have more time to work on your business (as well as the things you enjoy!) We have qualified consultants who can help set up your Xero account for you, and support you with telephone, email and face to face support. 

Xero’s Accounting Features at a glance

Dashboard
Instantly see all your bank balances, recent sales and upcoming bills.

Multi-currency
Reconcile foreign currency accounts. Gains & losses are calculated for you.

Payroll
Do small pay runs and track wage expenses or connect with your payroll system.

Fixed asset depreciation
Easily update fixed assets & depreciation schedules for accurate reporting.

Free online support
Unlimited, around the clock email support and detailed online help centre.

Financial reporting
Instant, up-to-date reporting with quick links to all the original transactions.

Pay bills
Manage your spending and make bill payments in bulk to creditors.

Expense claims
Handle personal expenses - just review and approve receipts.

Mobile
Do invoicing, expenses and track cashflow on the go.

Inventory
Track stock movements & make invoicing even easier with inventory items.

Retail
Run a simple yet sophisicated retail system with any laptop.

Contacts
See your most important customers & suppliers to follow up right away.

Find out more about how Xero might fit into your business.
Give us a call today on: 07 838 0119 we offer a complimentary first consultation!

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Working remotely can be an attractive proposition for both employers and employees. 

The virtual worker is rewarded with job flexibility - providing their services from home, separate or even multiple office locations. 

The Employer can streamline their business, and minimise overheads. The fundamental reason for this increasingly popular workforce is the growing access to technology.  Technology such as the smart phone and tablet are becoming mainstream amongst professionals.  We can now perform tasks very effectively from almost any location.  Quite simply, technology is driving efficiency and communication.

Remote workers can wear whatever they want, avoid traffic and related travel costs, potentially dictate their working hours, all while avoiding the bulk of office distractions and internal politics.  In some industries, it’s highly likely that this style of working and managing will be prevalent in the future.

As the world heads towards the ‘post PC phase’, now is the time to test the ‘remote office’ with your staff.  If you remain inflexible you may miss the boat and run the risk of losing touch with your employees and customers.  If your competitors are cutting operating costs by managing a virtual workplace, this will be reflected in their prices and their share of the market place.

There are possible downsides.  Workers might feel out of touch, find it harder to communicate with their seniors, losing sight of tasks and predetermined outcomes.  Achieving the ultimate remote work balance will be important and perhaps heavily dependent on management.

Not everyone is suited to this style of working - or managing.  The virtual workplace suits self-motivated employees, capable of working around distractions, and comfortable working in solitude.  If your employee doesn’t tick these boxes then perhaps they’re better off in the office.

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