Hugh's Views
BAS Summer Projects
Keep Up a Good Relationship with your Bank
A Reminder for Charities
Business Assistance Agency (NZTE)
Who's Out There for the Small Business?
Tax Titbits
Need a Hand?
Barbeque on the Balcony
BAS Touch Team
Disclaimer
HUGH'S VIEWS
We are a bit like the weather. This is our spring newsletter which is probably ending up more like the summer version given our timing. Fortunately there is a little more certainty in our environment. Perhaps the weather will make up its mind soon.
Having got the bulk of the year’s compliance work out of the way we are now able to look at other activities within the practice, a mixture of housekeeping and things to improve our client service.
Our major project prior to Christmas is to issue engagement letters to all clients. This may seem a huge waste of time to you as our clients, and we have to confess to agreeing with you to a large extent. Unfortunately both the Institute of Chartered Accountants and the Inland Revenue Department require a formal acknowledgment of the relationship between ourselves and our clients to be held on file and the only sensible way of achieving this is to incorporate both requirements into an engagement letter. This is a major exercise for us and we would appreciate your co-operation in making sure that the documentation is completed and returned in a timely manner. We don’t really want to be annoying you to get the stuff back to us.
We intend to run a couple of seminars prior to Christmas. One is a presentation “Understanding Your Financial Accounts” – this is an update from one we have held on two previous occasions and is designed to help you understand what your financial statements contain. We are aware that for many of you your financial statements simply take up space in your drawer. We would like to ensure that you receive some value from these, and you don’t go straight to the page that tells you how much tax you have to pay or are about to be refunded.
The most pressing activity on our calendar at the moment is to review tax positions as 7 November draws near. Many of you will be receiving calls from us to consider whether you think a review of your tax payment is appropriate. This will be done after looking at the first six months activity for the year.
See page two for further information on a couple of other projects requiring attention. Company and Trust records.
One of the more interesting exercises we are completing at the moment is investigating Xero software which is a web-based accounting software package which will be of particular interest to slightly larger businesses who require more regular reporting. We are in the final stages of reviewing this internally and would expect to be holding a presentation to clients who we consider may gain some benefit from it some time in November. If you are interested in considering this please give either Paul Checketts or Mark Tait a call to ensure you are placed on the invitation list for this presentation.
Our local economy keeps on keeping on and the construction sector still seems to be fairly busy although there are signs that the pressure is coming off a bit. We are all hoping that our rural clients receive improved prices for their produce. It would appear that the meat prices are making some progress, albeit slowly, and also fine wool. Deer appear to be in some form of recovery and we trust that this upward movement will be reflected in all sectors to provide a return which the producers deserve.
Hugh
BAS SUMMER PROJECTS
Summer is a quieter time of year for us at BAS, and gives us the opportunity to work on projects held over from the busy winter months.
This summer we have two major projects lined up, the first will be the review and update of all our client Company files to make sure they contain all the necessary information required, and fully comply with current legislation.
Our second major project involves the review and update of our client Trust files to ensure they are fully up to date and contain the relevant information needed.
It is important that our Company and Trust files are regularly reviewed and updated as any “sloppiness” in these areas can quickly turn things to custard and result in unintended consequences for the parties involved.
Both projects will be lead by Mark Tait our technical “guru” and are likely to require some input from our clients and their lawyers. Mark will make contact with Company and Trust clients prior to commencing this work.
KEEP UP A GOOD RELATIONSHIP WITH YOUR BANK
Whatever the nature or size of your business, it pays to have a good relationship with your bank or financier.
Business is dynamic and ever changing. You need to be flexible enough to move in another direction if the market dictates and that might mean securing extra capital at short notice. Or, you may face seasonal peaks and troughs and need assistance from the bank to help you through temporary cash-flow predicaments.
Whatever your situation, your up-to-date business plan, honed management skills and previous solid relationship with your bank will support your chances of securing finance or seeking assistance should you need it.
When you need capital
An application for a loan needs to be carefully prepared. It’s not usually okay to just verbally request loan funds from your bank. You need to prepare a detailed finance application and have a working business plan.
If the bank is going to lend you money it wants to know you:
- Have a business plan and can abide by it
- Know where the business is going and can manage it well
- Can meet your repayments and know when you aim to have the loan paid off
- Will stick it out when the going gets tough
If you’ve had a good, solid relationship with your bank, they’ll know your business intimately as well as knowing how well you can service a loan – that puts you a long way ahead of a business who has little prior dealing with a bank.
Once you have a loan agreement with the bank you need to be in regular communication with your banker. That means you should:
- Have regular meetings throughout the year, say on a quarterly basis
- Continue to keep the bank informed throughout the year on what is happening in your business
- Include your accountant in the meeting with the bank at the end of the financial year
- Forward to the bank copies of interim financial statements, budgets and cash flow forecasts
- Make sure you don’t overdraw your bank accounts without contacting the bank beforehand and discussing the issue
Being prepared to take some financial risks usually goes hand-in-hand with setting up and running a small business and for many entrepreneurs, at some stage of their business lives, that means getting a loan, or having access to flexible overdraft arrangements. Maintaining a good relationship with your bank is a great start for any business.
A REMINDER FOR CHARITIES
A reminder that all charities are required to register with the Charities Commission by 1 July 2008 if they want to retain their tax free status. Completing the application process can take some time, so we recommend getting in early. Correctly completed applications take at least 14 weeks to be processed. For more information visit www.charities.govt.nz
NZTE is the government’s national economic development agency tasked with helping New Zealand businesses sell their services and products at home and in the global marketplace.
With offices around the world and a wide range of services on offer, it’s got the expert knowledge to help guide your business onto the international stage. Services include market research, export advice, important local knowledge, market contacts and so on.
On home shores, NZTE also helps new and recently-established businesses through the Biz Information Service. Funded by NZTE, the Biz service offers business information and mentoring programmes to people in the process of setting up a new business, see www.biz.org.nz
For fledgling businesses and those in operation for a while, but which need some expert input, the Enterprise Training Programme runs a comprehensive range of free workshops in marketing, business planning, e-commerce, and so on. These workshops can be extremely worthwhile if you want to broaden your skills in a particular area. One-on-one follow-ups with the tutor allow you to discuss your business in detail and get valuable mentoring guidance.
You can find further information for all services on the website, www.nzte.govt.nz
WHO'S OUT THERE FOR THE SMALL BUSINESS?
When you get out and start networking, business starts pulsing.
We all know what happens when you stay locked in your office – you stop talking, you start worrying and that’s usually bad for business!
On the other hand, constantly meeting new people and talking about your businesses or about business issues has the exact opposite effect. You swap ideas, you share information, you form alliances, you learn about others, you give and receive referrals, and your business grows. It’s motivating and a highly effective way to do business.
It also pays to be up with the play on what’s happening in your local business environment, or your industry group.
So where do you find these groups? Well, you might network with business acquaintances or professional colleagues on an informal basis, but now, more and more formal groups are starting up.
Some, such as the BNI networking group, meet weekly and, to prevent competition, only allow one type of profession into each chapter, although a large town may have several chapters. BNI groups are located throughout the country.
Local chambers of commerce run frequent networking events such as ‘After 5’ evenings, networking breakfasts, women’s events or larger conferences.
There’s also the home business website catering for the rapidly growing number of home-based businesses.
You may have a specific networking group attached to your specialist industry. Look into everything and find out what suits best. And remember, good networking is not all about you – it’s about meeting and helping others.
Try these websites:
www.nzchambers.co.nz – for information on local chambers of commerce
www.ema.co.nz – the employers and manufacturers association
www.bni.co.nz – for information on local BNI groups around the country
www.homebizbuzz.co.nz – for loads of information for the home-based business
www.herbusinessmagazine.com – Her Business magazine which gives information on local groups.
Keep Copies of GST Returns
IRD now provides only one copy of every GST return. Make sure you send the whole return into the IRD as they need to process the data in each of the boxes. Be sure to keep a copy of any return you send to the IRD. We may need it for preparation of your annual accounts.
Asset Installation Costs
The installation costs associated with the purchase of a capital asset must be capitalized to the cost of the asset and depreciated accordingly.
NEED A HAND
With good experienced staff often being hard to find, the temporary secondment of an experienced BAS team member to your business may be just the answer, providing you with the expertise and resources needed to tackle those difficult jobs you know need to be done if only there were enough hours in the day. Our team can:
- Help you catch up on your office work.
- Provide relief cover while you or your staff take some leave
- Develop and document your existing systems
- Install and give training on new systems
- Complete Employment Agreements for your staff
- Analyse and suggest improvements to your business
If you feel a temporary secondment could work for your business, contact our Practice Manager - Paul Checketts 03 448 8060 or paul@basbiz.co.nz.
BARBEQUE ON THE BALCONY
Families of the BAS team enjoyed a “barbeque on the balcony” while making the most of our fantastic vantage point to watch the Blossom Festival parade this year. A good time had by all.
This year BAS has entered a touch team to play in the local touch competition held on Thursday nights. They came through their first “run around” at grading night, unscathed and are looking forward to the next round. “Go The Black Stripes”
DISCLAIMER
We don’t claim to know it all, so with that in mind here’s what we’re obliged to say; this newsletter has had input from a variety of sources, people and publications. For all input we are grateful. Grateful and careful. Whenever we can, we do our very best to ensure all the information contained in this newsletter is accurate and timely. If there’s something here you plan to place some considerable reliance on and we haven’t made the implications totally clear to you, get in touch and we’ll clarify it for you.