How GECA’s Virtual Finance

How GECA’s Virtual Finance Team solution set Construct Brands up for success

In today’s fast-paced business world, it can be small innovations that give companies an edge – and sometimes it’s an operational change that can make the most significant difference.

That’s what FMCG company Construct Brands has found with GECA Chartered Accountants’ Virtual Finance Team (VFT) service.

As GECA managing director Giles Ellis explains, the service doesn’t just remove the need for an in-house accountant. It also adds business-critical expertise, for a fraction of the cost.

“If you’re a business that’s big enough to hire an internal accountant, we can replace that person with our outsourced team – a finance manager, junior accountants, clerks, payroll experts and a CFO. That means you get all these specialised experts for less than you’d be paying a bookkeeper or junior accountant – who of course don’t have that breadth of experience.”

More business smarts for less

For Construct Brands, a company already steeped in innovation and with ambitious growth plans, that smarter way of working appealed. This FMCG company creates functional confectionary such as the Wolf Energy bars that are sold globally. When the company’s internal accountant resigned, the obvious next step was to recruit for the role – until the owner, Andy Smith, was told about GECA’s VFT offering.

For less than they were paying their accountant, GECA could deliver a much broader service and deeper expertise.

“We’ve replicated the functionality of internal accounting for less, but it’s not just about cost savings,” says Giles. “We’re reducing the risk of error and fraud. Management now also has access to advice, accountability and governance coaching, budgeting workshops, annual business plans that sync with the overarching plan – and we can help with them too.”

That support goes beyond numbers to upskill business owners in corporate governance and delve into the nitty-gritty of organisational structure.

“Often I find when a business is growing rapidly, people are thrown into the mix with no real structure,” says Giles. “We help make sure that there is a structure and that it’s fit for purpose – that’s all part of it.”

CEO, Andy Smith – “The biggest cost to us with an internal hire was our time. From hiring to managing the employee, it was time spent that we didn’t have. It’s been great to hand it all off to GECA and focus on the outputs instead.”

Seamless onboarding

Any operational change inevitably comes with a bit of upheaval as new systems are embedded. GECA’s propriety onboarding methodology is designed to minimise that.

“We’ve worked out how to do it seamlessly, with no interruption to the business,” says Giles.

The GECA team works alongside any incumbent staff, going through hand-over documents and procedures, so they’re across every detail of the function. From there they build a report of recommendation. For example, a plan for shifting to outsourcing the finance and accounting function, customised for that business.

“That customisation is key,” says Giles. “We want to make sure the new way of working will fit, and that the plan to move them over makes the most sense.”

“Like any major business system change, there has been pain, however effective communication during the transition process by the GECA team has minimised the impact on business.” Andy Smith, CEO.

Harnessing software

The GECA team then springs into action, establishing new procedures, software and integration, to deliver maximum efficiency. They moved Construct Brands from its legacy accounting package to the far more flexible Xero. That meant recoding year-to-date transactions in Xero. Then running parallel reports out of both systems to confirm the data accuracy of the starting position. In the process, they also simplified Construct Brands’ invoicing process, which has to factor in three different services.

“Just that shift has delivered the business a real efficiency boost – where before each invoice had to be manually input, now Xero auto-creates many of them” explains Giles.

Accounts payable is also a lot tidier and easier to manage.

“They had a folder of paper receipts, including printed out electronic invoices. Inefficient, costly and wasteful. Now we’ve implemented Receipt Bank, which lets you scan any invoices, which are sent to Xero to be coded. That means each transaction has a receipt recorded next to it, which allows efficient compliance with the IRD document-keeping requirements says Giles.

“We love being able to photograph those annoying coffee receipts from our phones for easy expense reimbursement.” Andy Smith.

A shift from paper to Smart Payroll has also saved days of work each month. Instead of filling in paper forms, staff can now use an app to apply for leave. Then with a few clicks, managers approve it.

“It goes straight through,” says Giles. “It’s also very fast and accurate. Where they were spending two to three days a month preparing payroll, now that’s a matter of a couple of hours.”

More Effective Reporting

As part of the onboarding process, the GECA team review all current management accounting reports against reporting metrics used by similar businesses. They then compare them against functionality available from the newly implemented systems. This informs the recommendations they can make to enhance the reports.

Of most value though, is the monthly CFO Report, which provides a financial summary to the management team. This includes valuable insights and analysis from experienced management accountants and analysts.  It covers off all aspects of the VFT service including Financials, Cashflow, Payroll, Creditors and Debtors.

Improved Governance

So often, business owners understand how important a strong governance framework is for increasing business value. However, day-to-day operational issues mean this vital business function is neglected. The GECA VFT service includes regular Advisory Board meetings, chaired by the Virtual CFO who is also an experienced Director, using insights and analytics provided by the GECA VFT.

“It’s been great having Giles challenge our thinking which had been entrenched over many years and we value the insights he brings from his work with other clients in the FMCG space.” Andy Smith

For medium-sized business, delivering that all-important edge doesn’t have to come from a cornered market or trademarked products. Clever ways of working – like GECA’s VFT service – can mean smaller businesses are operating with the efficiencies and expertise you’d expect from much larger businesses. People at every level can work faster and smarter, and the business is set up for future growth.

For more information on how GECA’s Virtual Accounting Team service could give your business a competitive edge and deliver a foundation for growth, get in touch with the team now.

The post Case Study: How Construct Brands excels with a GECA Virtual Finance Team appeared first on GECA Chartered Accountants.

2. Click Tracking categories.

3. Enter the desired name of your tracking category, say, Rentals or Properties. There is also an option to enter each property name under this category.

4. Click Save.

5. Now when you reconcile your transactions you can assign payments to a particular property. The category name will appear under Why on your bank reconciliation dashboard and you can scroll down to choose a property that the transaction relates to.

6. Sometimes you can have only one receipt for expenses that relates to different properties. Say, you went to a shop and grabbed a new lamp shade for your three-bedroom house rented for a long term. You also bought a new iron for your Airbnb apartment and a kettle for your holiday home.
There are a few ways to attribute the expenses to the properties in Xero. If you use Xero Bills you can create a new bill for these expenses and while reconciling you can match that bill against the bank payment. Another easy way is to enter the receipt details at the moment you reconcile transactions in Xero. For that:

– Go to your bank account in Xero. Find the transaction then click Add details.

– Then, you can allocate expenses to your rentals. Check whether the amounts in the receipt or invoice are GST exclusive or GST inclusive.

7. Now you can track your properties performance. Click Accounting, Reports and More Reports under Financial. There, you can see Tracking Summary.

If you want to have an easy access to Tracking Summary in future click star. This report will appear under the Accounting tab.

8. Click Tracking Summary. Choose the date range and the accounts groups you want to review. Say, you would like to know the amount of expenses incurred in relation to each property.

9. Click Update. Now you can see your Expenses Summary. Unassigned expenses are those that haven’t been assigned to any property probably by mistake or because these expenses are overhead.

10. You can also see financial statements relating to each property. Probably the most interesting report for you is Profit and Loss. For that go to Accounting, then click Reports, then Profit and Loss.

In Profit and Loss choose the Date Range and click Report Settings.

11. Under Report Settings you can choose the rental you would like to look at.

12. Your Profit and Loss for the selected date range is now displayed.

13. Please note that the reports generated are based on the transactions you have coded while reconciling. These reports are for your reference only and may be subject to year-end adjustments

The Author.
The article is written by Valiya Gafarova, Certified Xero Adviser and Accountant at GECA Chartered Accountants. If you want to know more on rental property accounting feel free to get in touch with us on 0800 758 766.

The post Xero Tips and Tricks: Keeping track of different rental properties appeared first on GECA Chartered Accountants.

Nowadays many of our business meetings are held in cafes and restaurants. However, costs associated with these meetings are treated as entertainment and subject to 50% non-deductibility.

From an accounting perspective, typically entertainment expenses are treated as deductible during the year and then the 50% non-deductibility is applied as a year-end adjustment when preparing the annual accounts and tax return. However, this means your GST and profit and loss will be inaccurate during the year.

A more efficient procedure is to set up your accounting software to post entertainment expenses and automatically subject them to the non-deductibility adjustment at the time of recording the expense. Doing this will ensure you have an accurate Profit and Loss and file accurate GST returns during the year.

Read on to find out how Xero can be set up to do this for you.

First, think of using bank rules in Xero. It is a handy option for reconciling transactions that recognises expenses of similar nature and suggests how to code them. To set up a bank rule for your entertainment expense you need to:

1. In the Accounting menu, select Bank accounts.
2. Click Bank Rules.
3. Click Create rule, then select from Spend Money rule.

Now the most interesting part begins: we need to enter the conditions to make our entertainment expense bank rule work. These conditions will identify the bank transactions that our bank rule will apply to. At least one condition can be entered, apart from that you can have as many conditions as you want.

In this post I would like to show you some tips that will help Xero automatically identify and code the majority of your entertainment expenses.

1. After selecting Spend Money rule choose “Any” option.
2. The majority of places where you may entertain your clients and suppliers contain such words as “cafe”, “coffee” “bar”, “restaurant”, “kitchen”, “eatery”, or “pub” in their names. So including these words as conditions for entertainment expense bank rule can help Xero pick out the right transactions for you.
   Please note that you should choose “contains” option as it allows you to include all the names that contain the necessary words regardless where they actually are.
3. Set the contact. Here I would recommend setting the contact as the Payee from the bank.
4. Do not allocate fixed value line items since you probably don’t have them for entertainment expenses.
5. Since in most cases New Zealand entertainment expenses incurred away from the office are only 50% deductible for income tax and GST purposes, they need to be split 50/50 between deductible entertainment and non-deductible entertainment. Some accountants do relevant tax adjustments at the end of year, however, you do have the option to do this throughout the year. Here is how you can do it while setting up bank rules in Xero:
   Please note that you can have different codes for entertainment in your Xero Chart of Accounts.
6. Now you need to set up the reference. The default option may work well for this bank rule. Choose the bank account you would like to target with this rule. And finally give the created rule a title that can help you easily recognise it among other bank rules.
7. Click Save and you are done with creating the rule.

While reconciling next time you will see that Xero will automatically identify the majority of your entertainment expense and suggest you apply the created rule.

All you need to do is to check if this expense is truly 50% deductible and if so just click OK. If this expense was 100% deductible say it was a meal that you bought while travelling on business, you can choose to override the rule by simply clicking Don’t apply rule so you can code this expense manually.

The Author

The article is written by Valiya Gafarova, Certified Xero Advisor and Accountant at GECA Chartered Accountants. If you need any help with Xero feel free to get in touch with us on 0800 758 766.

The post Xero Tips and Tricks: Simplifying Entertainment Expense Accounting appeared first on GECA Chartered Accountants.

Avoid making loans between companies

Avoid making inter-company loans if you are operating two or more companies. Unless the shareholdings in both companies are identical interest needs to be charged between the two entities. If it is not charged, the value of the interest that is supposed to be charged can be deemed a dividend. This can lead to tax complications.

If you want to move money between companies we suggest using the shareholder(s) current account as an advance or drawings in both entities. This is assuming you have a sufficient balance in the current account.

We also suggest not paying another company’s bills from the other company’s bank account. It usually creates a lot of accounting work. This can be avoided by a simple transfer of funds, as described above.

If you have a complicated structure and too many inter-entity loan balances, have a chat to us to see if we can assist you with the loan restructures.

Accounting & tax tips for personal trainers

Motor vehicle – If you are using your personal vehicle, then take note of how much you use your car for work purposes.  This might include travel between clients, picking up supplies, heading to a seminar or anything directly business related.

Bootcamps – If you are running a boot camp or training session for clients outside you can claim particular expenses.  Any equipment or resources used are tax deductible. This includes mats, sunglasses, sunscreen, and hats.

Uniforms – IRD is very particular about what type of expenses fall under the uniform category.  Clothing which has the business logo on it can be claimed as an expense for business purposes only.  Note, running shoes also fall outside of this rule.

Separate business accounts – We recommend clients setting up separate bank accounts or credit cards.  Your clients can pay into this account and you can pay all your business expenses from these accounts.  This ensures we as accountants spend less time processing and separating out your business and personal expenses. Therefore, reducing your accounting costs.

Xero Invoice Reminders – With busy schedules, chasing up debtors can be a chore.  Now in Xero, you can turn your automatic invoice reminders on. This saves you time on debt collection and allows Xero to chase up any late payers and overdue invoices.

Please contact GECA if you need more tips on how to structure your business and if you need to know more on which expenses you can claim for better record keeping.

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Last week a colleague sent me a fascinating article on how the future may look, the full copy of which can be found here (it’s a short read and I thoroughly recommend it). One fact really stood out for me from a personal and professional point of view.

Artificial Intelligence: Computers are becoming become exponentially better in understanding the world. In the US, young lawyers can’t get jobs. Because of IBM Watson, you can get legal advice (so far for more or less basic stuff) within seconds, with 90% accuracy compared with 70% accuracy when done by humans. So if you study law, stop immediately. There will be 90% less lawyers in the future, only specialists will remain.  Watson already helps nurses diagnosing cancer, 4 times more accurate than human nurses. In 2030, computers will become more intelligent than humans.

And while we accountants think we are already dealing with changes to our industry with recent developments like cloud based software, what lies ahead will completely disrupt the traditional professional advisory services model. The role of an expert adviser, providing costly advice and analysis based on knowledge and experience to a limited number of clients will more than likely be replaced by an app on your phone with the intuition to know what the questions are and the processing power and data storage capacity to provide better advice than a human adviser. While this will democratise business advice and provide a level playing field for small business to complete with large business, it means I need to reinvent my business model to stay relevant. And I need to start doing something about it now because the speed of change is getting faster every year.

However, I still need to maintain profits and pay the bills whilst changing my business model and achieving this will be a critical challenge for myself and many other businesses – even the world’s biggest company Apple is facing the very same issue (read the article).

To do this, I will follow the path adopted by businesses in other industries impacted by technological change, such as the postal service, by firstly understanding and acknowledging the impact on my industry. Croxley is a global wholesaler of stationery and related products with Kiwi origins. While they know their postal mail business faces an ever decreasing market, they are determined to be the market leader of this space and make money until the last letter is sent.

Having understood the impact on my industry, I then need to decide how to position my business to adapt to the change.  Typically the technology disruption begins with the adviser acting as an technological interpreter for the client, keeping up to date with changes and acting as an interface between the new technology and the client. However, in time the technology becomes so simple there is no need for an interpreter and my role as a business adviser will change again.

So whilst computers will eventually have the capability to replace me as a pure expert adviser, this will take a number of years and the interim step is for me to embrace the new technology as a tool in my business to improve our offering as business advisers.

There is no doubt the value of compliance work, that can increasingly be done by software, is diminishing and those traditional accountants who try to maintain high margins with intensive labour rates will see clients move to business advisers who provide real value with commercial advice that leverages the software tools at their disposal. A good example of this is the Xero Business Performance Dashboard. This powerful tool is free for all Xero ledgers and yet is rarely used, however, a good business adviser can set up a simple dashboard for your business and provide real time advice about those numbers that can help you grow your business and your cashflow. A much better way to spend your money than getting a pretty set of accounts done at great expense that are used by no one.

And as the computing power increases over the next five years, I will need to refocus our offering more intensively on the empathic side of being a business adviser, providing the coaching and mentoring services that rely more heavily on a human interaction (although this will no doubt be taken over by computers as well in due course – look at how good Facebook’s facial recognition software is). Which will require upskilling my team of advisers to ensure they have the skills and experience to remain relevant to our clients in this brave new world.

Wish me luck! And if you are in an industry facing significant disruption and need an adviser who understand these challenges and can help you with strategies to stay profitable, call me now on 0800 758 766.

Giles Ellis (Chartered Accountant & Business Adviser)

The post Prepare Yourself – Change is Here appeared first on GECA Chartered Accountants.

Let’s face it – no one likes paying to get tax returns done, especially when there is a set of financial statements to be done as well. And at GECA Chartered Accountants, where our purpose is to provide affordable expertise with a personalised service, we are doing something about it.

So here are six easy ways to save on your accounting fees each year:

1. Leverage technology

Utilise technology to do things that previously you would pay your accountant to do. Let cloud based software such as Xero automate previously labour intensive tasks done by the accountants such as bank reconciliations.

2. Keep comprehensive records

Keeping accounting fees down is about reducing time spent on your work. Modern accounting software allows you to attach invoices and receipts to each transaction in your accounting system, meaning queries by the accountant can be dealt with by referring to the attached documentation.

Compare this with the inefficiency inherent in the client keeping the records offline; requiring the accountant to contact the client, request the record, receive it and then finally be able to answer the query.

3. KISS (Keep it simple stupid)

I constantly meet people with incredibly complex structures for a relatively simple situation. Often the original reason for these structures no longer applies and yet they are still required to file annual accounts and tax returns.

Review your structure. Understand why it was set up and if it is still warranted. Whilst a liquidation might cost $2400, the on-going savings in annual compliance costs will soon outweigh this.

4. Get a fixed fee agreement for your compliance work

Traditionally, accounting work has been charged on a time and cost basis, exposing the client to unexpected costs and reducing the onus on the accountant to work efficiently.

Progressive accounting firms such as GECA now offer their clients fixed accounting fees in an agreement to provide transparency and certainty of compliance costs. If your accountant isn’t offering fixed fee agreements, find one who is.

5. Don’t use a tax refund service

These services offer to process your refund from the IRD for a commission ranging from 5 to – wait for it – 15%! Instead log on to the easy to use IRD website and process your own refund – for free.

6. Simplify your investments

PIE funds are tax exempt meaning they do not need to be included in a tax return. They are also taxed at 28% instead of the top personal rate of 33%.

Compare this with foreign investments subject to complex and expensive to prepare tax calculations with unrealised capital gains subject to tax. So swap those investments to PIEs and save some accounting fees.

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So there you have it. Six easy ways to save money on your accounting fees. At GECA, we offer a range of accounting and taxation services. So if you want to save money by working with an accountant whose purpose is to provide affordable expertise with a personalised service, then we can help.

Call Giles at GECA Chartered Accountants now on 0800 758 766 for a free, no obligation discussion of your requirements.

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In case you are unaware, Xero can interface with hundreds of other software programs to provide more functionality and efficiencies. The interface through what’s known as an API allows data to be shared seamlessly between programs, eliminating the need to enter the same data into more than one program.
Some of the major add-ons include point of sale (Vend), inventory management (Unleashed), debtors management (Debtors Daddy), mobile job management (Geop) and so on. If you can think of it, it’s likely there is an add-on for it.

The add-ons are found on Xero’s add-on page and the use of user reviews provides an excellent way to identify those add-ons which work well for other businesses.
At GECA, we use Receipt Bank which allows us to capture creditor invoices from our phones and send directly to our Xero ledger, ready for reconciling. The monthly cost of $20 is far outweighed by the time we save each month not having to manually upload soft copies of invoices to Xero. We use rules to set the correct GST rates and the software remembers prior suppliers and prepopulates transactions with that information.

So if you are using Xero and not using an add-on, go to https://www.xero.com/nz/add-ons/ now to see how you can improve your systems for greater efficiencies and increased profits.

And if you need some advice on what could work for your business, call your friendly GECA adviser now on 0800758 766.

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For years, businesses have struggled with the storage and processing of receipts and invoices. From storing them in shoeboxes, and the boring data entry required to process them, its been time consuming and difficult. Now with Receipt Bank, you can get rid of all those annoying bits of paper, and have them processed quickly and easily into Xero for you!

Simply take a photo of receipts using Receipt Bank app. Receipt Bank will extract all the key details
and send that to Xero for you. We will also store the image, so if your accountant or the tax man need a copy you don’t need to go hunting for a copy.

You can throw away that pesky piece of paper. No more data entry, no more paper, job done!

Contact us for more details!

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