Auckland Accountant: Articles
Choosing the right Auckland accountant is a critical decision for the health of your business.
When you do not choose the right accountant, you may end up paying much more than you owe because deductions and credits were never factored in.
If you are looking for the right accountant to manage your expenses, you must find a professional firm you can trust.
Follow the tips below and choose a professional accountant who will help you manage your payroll and handle your bookkeeping.
Auckland Accountant: Choosing the Right Service Provider
Auckland accountants provide a variety of different services. When you own a business, you should consider the advantages of hiring an accounting firm who offers bookkeeping and payroll services.
If you do not need all of the services, there are also accounting firms who deliver only tax services. If you want to get the most for your money, hire a chartered agent offering financial planning and consulting services.
When you hire a financial planner, you can review what expenses are necessary and which ones you can cut back on.
Auckland Accountant: Choosing the Right Professional
Not all Auckland accountants deliver quality services. Some accountants have a degree in accountancy where others have trained through the Chartered Accountants firm.
As a business, you should only trust accounting firms that are registered and respected in Auckland. Use reliable and unbiased review websites to choose an Auckland accountant in your area. If you know other business owners who rave about the quality of their accountant, ask for a referral and sit down with the firm.
When you take time to research accounting agencies, you will have peace of mind in knowing you are making an informed decision.
Accountants who are members of the New Zealand Institute of Chartered Accountants are qualified and work by a code of ethics.
If you want to find the best accountant, turn to this membership organization and only choose an accountant who makes it on the list. Choose an accountant dedicated to educating you on payroll and financials.
Once you hire a reputable accountant, the financials side of your business will be overlooked.
For more information or a free consultation please click below.
The word accountant can be used in different ways. Generally speaking, an Auckland accountant can be described as a person who has a degree in accountancy.
It is also possible to be an accountant without necessarily having a university degree in the field. In some cases, people can train as accountants by working for a firm of Chartered Accountants and learning the ropes. The training is then rounded off by passing professional examinations in accountancy.
For the purpose of this article, Auckland accountants can be described as qualified professionals who work in a firm of Chartered Accountants.
Auckland Accountants: Some Services Provided
These people are licensed by the government to carry out a number of important functions for both large and small corporate organizations.
Business owners who want to hire accountants need to know exactly what accountants do for a living. They also need to have very clear ideas of what they would like the accounting firms in question to do for them.
Among other functions, accountants audit accounts for their clients. They also handle tax matters, recommend cost-saving measures and even help to detect or eliminate fraud in some cases.
In cases where businesses have in-house accountants, a chartered accounting firm can also come in handy. The chartered accounting firm can serve as external auditors and ensure that the figures presented by the in-house accountants are reliable and fraud-proof.
For public companies, annual reports and accounts need the endorsement of chartered accountants to make the figures authentic. These are some of the jobs that accountants handle for their clients.
There is no disputing the fact that accountants perform very important functions for their clients. This is why it is very important for business owners to be very careful in choosing the right firms.
Auckland Accountants: A Firm You Can Trust
For a start, only registered and reputable firms should be entrusted with handling a company’s books. Finally, agreements made with accounting firms need to be read carefully and understood.
Documents and correspondence from accounting firms need to be taken serious and acted on with minimum delay. This is how to enjoy a mutually beneficial relationship between the business owner and the firm of accountants.
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What to Consider When Choosing an Auckland Accountant for Your Business
As Auckland accountants, dealing with businesses every day, we are well aware that as business owners that we are getting closer and closer to Christmas, and the typical Christmas rush is just beginning.
As Accountants in Auckland we quite often get asked the following questions:
What will happen to your business over the holiday season?
Well one thing that we quite often see is a real cash flow shortage in January.
Why is this you may ask?Well as Accountants we can suggest that:
1 People who you invoice in December are not always going to pay as promptly in January.
2 PAYE will be due in January for Wages and Holiday Pay paid in December.
3 GST is due for most businesses on the 15th January.
4 Provisional Tax is also due for most businesses on the 15th January.
SO, we have two options to consider regarding the above.
a) Ostrich Mentality – Hope it all goes away
b) Plan you cash flow with your Auckland Accountant and start discussions with you bank if required, NOW.
Taking action now may not be comfortable, but the pain that can come from lack of cash-flow in January makes it OK.
If you need help with your accounting in this Christmas season, and ideas to reduce financial stress in the new year, then please contact us.
Tips for Choosing a Business Accountant
Auckland Accountant
As an Auckland Accountant ‘Cash-flow’ plays a main role with specialised services we provide our clients. Undoubtedly the ‘Lifeblood’ of any organisation: mismanagement leads to business grinding to a halt.
Can you relate to this? You have done excellent work in completing a job for a client and suddenly you are faced with the issue of the customer not paying…
Common Excuses
- I did not receive an invoice from you
- Our email system has been down
- Problems with our mail service
- I didn’t know it would cost this much
- If you’d told me prior I wouldn’t have gone ahead with it
It never ceases to amaze us how these lame responses are used time and time again.
So why do so many businesses tolerate this from so called ‘valued clients’?
Our Current Legal System
Being an Auckland Accountant the single factor that is very frustrating is how inflexible our current legal system. We’re well aware of the Disputes Tribunal (which supposedly is a cost-effective, easy method for debt recovery) however have you ever been successful? Furthermore, how much of your time was used in the attempt to resolve the matter?
A Sound Solution
So I was contemplating this the other day, whether or not there’s a particular system, not too different to the bonds system that housing NZ operates.
Let’s use the example of you and I involved in a dispute over an unpaid invoice. If you’re serious (and I am serious), then both you and I could effectively pay 50% of the amount in question to a mediator- type company/agency. This mediator-type company/agency would then be able to put the funds towards settling the dispute which means yours and mines time involvement in the process would be pretty much zero.
Auckland Accountant Christmas
When we, at Auckland Accountant, calculate a business’s taxable profit (this is the profit business’s are obligated to pay tax on) the idea is to deduct as many expenses as possible that can be legitimately claimed.
Some of the more obvious expenses include: Rent, Wages and Overheads etc.
However an accountant is frequently asked by business owners whether or not claims can be made on the cost/expense of his or her own home in relation to taxable profit.
These expenses are identified as ‘Home Office’ expenses (as an accountant prefers to label them). These claims are calculated on the following:
- (The area of an office proportional of the total area) multiplied by costs/expenses of the home. This means if an office takes up 10% of the total area of your house, you’d claim 10% of your home expenses.
These expenses would include:
- Mortgage interest
- Rates
- Power/Electricity
- Repairs
- Insurance – to name a few
Here’s a great story any accountant will know of….Quite some time ago a teacher took exam papers home for marking purposes that took place on a kitchen table, and ended up claiming the cost of the kitchen, including the cost of the office. Although there was a strong appeal from the IRD, the verdict stood and the teachers claim was allowed!
This means that you, in most cases, can claim more than just your home office area.
Auckland Accountant: How To Calculate A Tax Deductible Claim
Let’s imagine you have a home office and use your garage to store records and important business related documents (also the location of where your company car is parked), and furthermore use your lounge for client meetings and presentations etc…Now the above formula changes:
• (The use of each room for business purposes* the area of each room) divided by the total area. Multiplied by your Home expenses.
So let’s assume, for this example, 10% of time for business purposes is used up in the lounge and 50% for the garage (your company car) and your home office is used 100% of the time for your business.
- Multiply the area of your lounge by 10%
- Multiply the area of your garage by 10%
- Multiply the area of your home office by 100%
Now take the total amount of the above expenses then divide by the total area of your house. The final sum will show you the total percentage of business use.
The next step is to multiply this percentage (business use) against your total home costs.
Well done, you now have a tax deductible claim.
For further advice from an experienced Auckland accountant contact us today.
Auckland Accountant on the Importance of Cashflow
Now as we all know your budget is never going to be exact, but is a useful tool for providing a realistic estimate of where the business is going. To make this tool more precise, we, at Auckland Accountant, suggest that the budget be reviewed every quarter and any assumptions requiring alteration are input and a new budget prepared for the remaining months.
This means over a period of time, you get to understand the cash flows of your business in even more detail and now have the ability to make more informed decisions about future strategies.
Not only is your budget going to a useful tool in knowing where we are going it is also highly valuable in:
- Setting targets that can be used as a basis for future incentives. For instance, if income exceeds budget by x%, an incentive of $x will be paid.
- Gives everyone a longer term focus rather than the short term “fire fighting” that exists in some Auckland businesses.
- Banks will love you for having a budget as it makes there job easier when deciding whether or not they should lend to you. The bank can see how the bank account will fluctuate and can provide the appropriate product to help.
- A potential future investor in your business will want to see a budget and how the business has been tracking against the budget.
- Assisting in spotting future problems well in advance so strategies and actions can be put in place before it is too late. The budget may show that the business needs to be setting aside funds for a future tax payment.
- Helps manage costs and shows areas for improvement.
- Improve your debt structures by understanding what the business actually needs as compared to what the business wants. Your budget may show that more or less borrowings are required.
- Provides an answer to the key question for all business – What If? This is where an Auckland accountant can help..
Auckland business owners: How many times have you asked yourself?
- What tax should I be paying?
- Can I afford to take on that new employee?
- If I could improve my margin what would that mean to my bank account?
This is one of the key benefits of a budget. In most cases businesses don’t know the answer to the above questions until after the event. With a budget we can ask as many “What If?” type questions and know the answer before the event.
And remember the old management rule – measure and manage. If you don’t measure how can you manage? The budget now provides you with future measurement so you can manage proactively rather than reactively.
So don’t put it off any longer, get stuck in, and with the help of an Auckland accountant get a budget in place.
Then keep measuring and managing to ensure the assumptions used in the budget are still relevant and that they accurately measures the business processes and cash flows. Then enjoy the savings and growth that you are now able to control. You now know how much money you will make and also when and how.
Good budgeting…
Auckland Accountant Explains Claiming Home Office Expenses
Auckland Accountant: Sounds too good to be true, but what we are talking about is one of those business fundamentals that often gets overlooked in the rush of day to day business.
Have you ever stopped and asked yourself if what you are doing is helping the business achieve its future goals or do you work on the principle that as long as everyone is working hard it must all work out in the end?
A useful exercise for Auckland business owners is to imagine for instance that you have decided to go on an overseas holiday tomorrow. Do you turn up at the airport and pick a destination at random? Of course not (even though this sounds like a lot of fun), you have already organised where you are going and how you are getting there.
You may also have figured out how much cash you will need while on holiday. And yes it never seems to be enough once the shopping starts!
So why is it then that some Auckland business owners seem to have an aversion to planning and budgeting? Why is budgeting thought of as this thing that I should do but I don’t really know why?
Auckland Accountant: Budgeting Explained
An accountant will show you that budgeting is simply a version of your future plans and strategies converted into dollars and cents. Budgets can take several forms and everyone seems to have their own way of doing things.
A basic budget should include the following:
- Estimates of income for the next 12 months taking account of seasonality. In New Zealand terms this means allow for a potential drop off in income over the summer holiday months for most businesses.
- Estimates of expenses for the next 12 months. Some expenses are fixed while some vary depending on the time of year or the level of income. Make sure that each expense is realistic and to be conservative, build in the odd buffer.
- Once we have estimates of income and expenditure the next step is to work on the timing of the actual cash flow. Now we need to review how quickly we get paid and how quickly we pay people. This will then start changing our Income and Expenditure estimates into Cash Inflows and Outflows.
- Next, take account of taxation, GST, loan repayments (Principal and Interest) and Capital Expenditure.
- Don’t forget your own income, usually referred to as owner drawings.
Once we have worked through the above we should now be able to estimate Profit, Cash Flow and Financial Position over the next 12 months.
Are you an Auckland business owner wanting help with budgeting from a professional Auckland Accountant? We’re offering a free initial consultation for Auckland business owners. Take action and contact us today.
Auckland Accountant Explains Key Advantages of Budgets
Auckland Accountant
Auckland Accountant: If you are a business owner, you need to know that you can ‘race-tune’ your enterprise to achieve victory…and consistently win. It’s a fact.
It is equally true that some Auckland business owners do not really care about business success. That’s why, due to business owners like you and our desire to be more than just an Auckland accountant, we’ve invented a brand new type of business and accounting model. We call it Performance Accounting.
The idea is straightforward. Sure it has all the traditional things that an accountant would normally provide. These accountant services include things like IRD compliance and forecastin, budgets and more. But in addition to that, we also cleverly combine strategic and step-by-step management assistance where needed.
Accountant practices of the past is a bit like peering into your rear-vision mirror in your car and reviewing what’s happened in the past. Performance Accounting is all about looking ahead & anticipating the road in front of you. As well as this, it is about ongoing tweaking and tuning and ensuring the ‘machine’ (your business), is working properly so it can help you achieve your commercial and personal objectives…with a sense of fun.
To summarise, we turn our attention to the following 3 areas:
- More money and a healthy business
- Lower stress levels and more time to do what you want
- Improved quality of life, for you the business owner.
Auckland Business Owners: Do it On Purpose, Not by Accident
Our approach is focussed on: “Assisting Auckland Business Owners to Succeed ON PURPOSE”. This means much more than bean counting services that a traditional Auckland accountant might dish up! It requires a purposeful improvement with the help of a dedicated team who have the actual experience in arange of different areas. It also takes smart systems and processes to support the operation.
And that is what we deliver.
If you are an Auckland business owner and want more than an accountant, or if you would like to know how we might use Performance Accounting concepts in your enterprise, then please get in touch with us today for a free initial consultation.
Auckland Accountant Shows How and When You Can Make More Money
Auckland Accountant
