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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.

Airbnb Hosting: Nine Tax Basic Rules You Need to Know.

There are a few things about New Zealand tax you should be aware of when you enter into Airbnb, BookaBach or other peer-to peer renting. The following may help you when speaking to your accountant or may provide you a general guidance if you are preparing your tax return on your own.

Here are the nine must-know tax rules for peer-to-peer hosts:

1. The money that you get from renting out your room, house or a bach is an income. You need to keep track of any income you receive in relation to your property short-term renting.
2. From your income, you can deduct expenses that relate directly to your rental income such as advertising and cleaning. To be able to deduct expenses you will need to be accurate in keeping all receipts.
3. If sometimes you or people associated with you privately use the property you will need to figure out how many days you used it and how many days your property was unused during a tax year. You will need this information when determining how much of your expenses you can deduct for income tax purposes. Depending on your circumstances you will use either mixed use proportion or standard income tax rules.
4. You are not allowed to claim depreciation on your property. However, you can still claim depreciation on assets used in your rental activity such as beds or bigger appliances. The threshold for fixed assets is over $500 for assets purchased prior to 17 March 2020.  The threshold is over $5,000 from 17 March 2020 till 16 March 2021 and then will be permanently over $1,000 from 17 March 2021 financial year.
5. If you manage your AirBnB property from your home you may be eligible to claim your home office expenses against your rental income.
6. If your AirBnB income before deductions is $60,000 or higher in the last 12 months (or you suggest that it will be $60,000 or more in the next 12 months) you will need to register for GST and file GST returns. You will be able to claim GST from your purchases. There is always an option to become GST registered voluntarily whatever your turnover is. Read more information on tax consequencesof becoming GST-registered.
7. From 1 April 2019 ring-fencing losses legislation was introduced. In practice, that means if you make an overall loss from renting your property you are not allowed to offset your loss against your other income. There are a few exceptions from this rule for example, if your property is a mixed-use asset. However, for the properties to be considered as a mixed used asset, the property needs to be also used by the property owners for their own private use instead of being rented out for short term rentals 100% of the time. You can read more on the ring-fencing losses here.
8. Also, you need to know that some properties cannot be sold tax-free. For determining your tax obligations, you need to take into consideration the date when the property title was transferred to you. From a legal point of view, this is when you became the owner of the property. If it happened before 1 October 2015, you will pay tax only if you bought the property with an initial intention to resell it. If the purchase took place from 1 October 2015 to 28 March 2018 inclusive you will be subject to tax if you sell the property within two years after the purchase date. From on or after 29 March 2018 the five-year period applies. These rules are called bright-line test.
9. In some New Zealand cities such as Auckland and Christchurch hosts are required to pay commercial rates instead of residential rates. A peer-to-peer host needs to do their own research on local rates applicable to their situation.

The Author.

The article is written by Valiya Gafarova, Certified Xero Adviser and Accountant at GECA Chartered Accountants. If you want to know more about tax consequences of having an Airbnb or other peer-to-peer rental feel free to get in touch with us on 0800 758 766.

Please note that this blog post should be considered as a general overview but not as a tax advice relevant to your situation.

The post Airbnb Hosting: Nine Tax Basic Rules You Need to Know appeared first on GECA Chartered Accountants.

After you buy your first home and accumulate some equity on the property, it may be time for you to climb up the property ladder further. Now, when you are ready to start investing it is extremely important to do it right from the beginning. And the first question that needs to be asked is what legal structure to choose and what tax consequences it will bring.

Recently, The Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 has been enacted. It introduced ring-fencing rental losses, a new rule for New Zealand residential property investors that will apply from the beginning of the 2020 financial year, i.e. from 1 April 2019.

To keep it simple here is what it means for property investors:

• If expenses related to your rental are higher than your rental income you cannot reduce your other income by the amount of your rental loss.
• You can use that loss amount against the profit from your rental – in a tax year when it gets profitable. Before this happens, ring-fenced losses can be accumulated.
• The amount of ring-fenced losses can be used to reduce or offset against taxable gain on sale of property for example if a rental is bought on or after 29 March 2018 and sold within five years after the purchase (so called the bright-line test). Un-utilised ring-fenced losses can be used in future when an investor buys another rental.
• An investor can elect to apply the rules on a property-by-property basis or on portfolio basis. This means that if an investor has got more than one rental, they can choose to track their ring-fencing losses by property or by the whole portfolio. Also, there is an option for an investor to include some of the properties to the portfolio and keep the others separate.
• Ring-fencing losses rules do not apply to your main home, business premises, commercial property, farmland, mixed used assets, employee accommodation, property bought as part of a land dealing business or bought with the intention of resale

This is the minimum that every investor may want to know about the new legislation. Now let me come back to the main question: what structure will suit better a new investor in the changed tax environment?

1. The first and simplest structure to be used is to buy a rental under a natural person’s name.If you get profit from your rental it is going to be taxed at your marginal rate. If you get a loss then the new rules will apply and you can offset the loss against your future profit.

The biggest disadvantage of this business structure is that even though it looks like a cheap option in reality it may appear that it is the most expensive one. Rental property under your personal name is not separated from your other assets.  This means that has no protection against your creditors and relationship property claims. Also, under some circumstances the process of inheriting this property may get complicated.

2. Another option is to set up a trust and transfer your residential property to this trust. It can by a costly and time-consuming option since proper trust setting and running implies that you will need to work closely with your financial adviser, lawyer and an accountant. However, it may be worth it: your property will be kept secured and protected against claims by creditors and ex-spouses / partners. Assets kept in trusts will be inherited by the people you want, and not the people that persuade the court that they were disadvantaged.

Taxwise, if the trust makes a profit out of rental property it may keep that profit in the trust or distribute it to the beneficiaries. If the profit is kept in trust it should be taxed at the flat rate of 33%. If it is distributed to the beneficiaries, it will be taxed at the beneficiaries’ marginal rates except for children under 16 (for them, the rate of 33% applies).

If the trust makes a loss it is subject to the above-described ring-fencing losses rule. The loss cannot be distributed to the beneficiaries and cannot be offset against other income that the trust may have.

3. There is an option for you to create a limited liability company and transfer your rental to the company. It will help you protect your property better than if it was held by a natural person but not as well as if it was held in a trust. However, the tax consequences will be similar. If profit is held in the company it will be taxed at the flat rate of 28%. If it is distributed to a shareholder as a shareholder salary it will be taxed at their marginal rate. Ring-fencing losses rule will still apply to the company losses.

There is one minor exception from this rule. As per s EL 11 of The Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019, if a company is not a close company, i.e. has got more than six not associated natural persons, the ring-fencing losses rule does not apply. However, the majority of New Zealand companies are close companies and will be still caught by the new rule.

Summary

Nowadays due to the implementation of ring-fencing losses legislation, holding rental properties individually or keeping it in a trust or in a close company will not differ significantly in terms of tax liabilities. Each ownership structure allows distribution of profits to individuals and tax at individuals’ marginal rate. However, the losses will be still subject to the new rules.

Therefore, when choosing a business structure, it is worth considering other pros and cons such as security, compliance costs and accessibility of profit.

The Author.

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

Please note that this blog post should be considered as a general overview but not as a tax advice relevant to your situation.

The post How to choose the right business structure for your residential rentals after ring-fencing losses were introduced appeared first on GECA Chartered Accountants.

You will never get a second chance to make a first impression. And yes, fortunately or unfortunately, a first impression is usually a long-lasting one and changing it can be a challenge. So when promoting your business, you want to make a good impression and be remembered in the right way. One of the ways to win over potential clients is through entertaining them in a social setting.

However, you need to remember that providing entertainment while promoting your business is subject to specific tax rules.

Promoting your business at events

The general rule is that promoting expenses that include entertainment are 100% deductible as long as the promotion addresses the general public, not particular people associated with the business.

For example, your company participates in a cultural festival and organises some entertainment for anybody who comes to the event. Say, people are offered some food, get involved in games and draw prizes. These expenses are fully deductible. However, if your existing business contacts, employees or somebody else has a greater opportunity to enjoy this entertainment than the general public these expenses will become only 50% deductible.

Let’s extend the example further. At this festival you distribute samples of your products or other freebies. You can deduct the 100% of the samples costs that have been given to the general public. However, if freebies are given to your employees or people associated with your business the expenses are just 50% deductible.

Promoting your business at conferences and educational courses

If the conference, educational course or other similar event is held for business purposes the deductibility of the expenses can be known using the following scheme.

Entertainment provided for the purposes of review to an external reviewer

If you are engaged in an entertainment business and you decide to render your services for free to a person who is going to review the entertainment, for income tax purposes you can deduct 100% of your actual expenses.

Say you run a tour around New Zealand. You invite a top blogger to enjoy the tour and write a review in his blog. The expenses associated with this tour including food and accommodation are 100% deductible.

Entertainment for charitable purposes

You can deduct 100% of your expenditures if your business provides entertainment for charitable purposes. The Charities Act 2005 says that ‘charitable purpose’ must fall under one or more categories:

• the relief of poverty;
• the advancement of education;
• the advancement of religion;
• other purposes beneficial to the community

For example, if you donate food to the Salvation Army the expenses are fully deductible.

Summary

When you do promotion and provide entertainment it is worth paying attention to who is going to enjoy the entertainment. If the entertainment is meant to be enjoyed by the general public more likely the expense is going to be 100% deductible.

The Author.

The article is written by Valiya Gafarova, Certified Xero Adviser and Accountant at GECA Chartered Accountants. If you want to know more about tax treatment of entertainment expenses feel free to get in touch with us on 0800 758 766.

Please note that this blog post should be considered as a general overview but not as a tax advice relevant to your situation.

The post Providing entertainment while promoting business 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.

The risks of single person accounting:

• Key man risk: With no back up, the sudden departure of the finance person can leave the business unable to operate even the most basic finance functions such as the bank account or invoicing.
• Fraud: A single person covering the finance role prevents the use of the most basic of internal controls such as dual authorisation to limit fraud and errors.
• Compliance errors risk: With no peer review, errors can go undetected exposing the business to fines and sanctions for non-compliance with its obligations to organisations such as the IRD.
• Employee data privacy risk: Unqualified staff with no payroll experience are often responsible for Company HR and Payroll and have limited, if any, understanding of Employer responsibilities in regard to the privacy of employee data.

Reduce the risk with an outsourced finance service

A great way to reduce these risks is to outsource your accounting and finance requirements to a specialist provider such as GECA and its innovative Virtual Finance Team (VFT) service.

The GECA Virtual Finance Team service provides clients with a dedicated team covering all aspects of their business accounting and finance. It ensures the right level of resource available where and when the business requires it. As the business grows, the VFT solution can be scaled up to meet the business requirements.

The benefits in using an outsourced finance solution:

• All aspects of the accounting and finance function are covered from banking, payroll and management accounting to strategic planning and business coaching.
• Frees up management time to focus on core business activities.
• Provides the business with the right level of resource as and when it is required
• Reduces fraud and error risk through the implementation of strong internal controls
• Scalable solution that grows with the business
• Cost savings from reduced internal resourcing requirements

Most importantly, outsourced finance solutions such as the Virtual Finance Team, provide business owners with peace of mind, knowing that all their accounting and taxation obligations are being done, all the time, every time.

So if your in-house accounting department in-house is not delivering the results you want, or you want to reduce your risks and improve your bottom line, using an outsourced finance service such as the GECA Virtual Finance Team can greatly benefit you and the business.

Call Giles now on 0800 758 766 for a no obligation discussion about how the Virtual Finance Team could work for your business.

The post Why you should consider outsourced finance appeared first on GECA Chartered Accountants.

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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