Are you floundering when it comes to managing the books?

Are you floundering when it comes to managing the books? Struggling to get your head around all the rules and regulations? Relationship with your accountant or bookkeeper not that flash? Then buckle up for your financial literacy check-up. 

New Zealand is one of the easiest places in the world to go into business – with just a few clicks of the mouse you can be up and running. No training, no specialised knowledge, no great investment, no worries.

It’s almost too easy. And that can be dangerous.

Lisa Martin, executive director and founder of accounting and bookkeeping specialists GoFi8ure, is a trained accountant with a Bachelor of Business (Accounting) and knows of at least two university papers that would benefit business owners just starting out.

You can read the article by CLICKING HERE. 

Provisional Tax explained

Provisional Tax explained

Provisional tax is income tax paid in advance of the end of the financial year, or paid as you go. And, it is important to get it right.

If you are employed, your employer deducts income tax from your regular pay and pays it to the IRD.

But if you get your income from other sources such as self-employment, rental income or shareholder income, then you need to pay your income tax to the IRD in other ways.

Generally, after your first year in business, your accountant will finalise your accounts and determine your tax position. If your business has made a profit you will have income tax to pay on that profit. This is also called terminal tax or residual income tax. You have until the end of the following financial year to pay it.

Provisional tax can come into play at this point because if you have more than $2,500 in residual income tax to pay, you will have to start paying provisional tax. Provisional tax is income tax paid in advance of the end of the financial year, or paid as you go (not in arrears).

As a default, provisional tax is generally calculated at 105% of last year’s end-of-year tax (standard option) and usually paid in three instalments over the year (28 August, 15 January, and 7 May).

Talk to us if you think that your income is going to be substantially more or less than last year and we can help estimate a more accurate figure.

Other ways to pay provisional tax are by using the ratio option, where you pay a percentage of your GST return – this can be good for people with fluctuating or seasonal income – or by the AIM (Accounting Income) option, which uses your accounting software to calculate your provisional tax based on your profit (or loss) for the period. You generally pay in line with your GST periods for both of these methods.

It’s important to get provisional tax right. If you under pay or don’t pay on time, the IRD may charge you interest.

Get in touch to make sure you’re paying the correct amount, or to see if there’s a better option for paying provisional tax.

Transforming Businesses and Optimising Accounting Processes with Cloud-based Solutions

Transforming Businesses and Optimising Accounting Processes with Cloud-based Solutions 

Preparing business plans and reconciling accounts regularly are imperative in any business’ accounting process. However, as a business owner, the accounting to-do list is hard to manage without the help of experts.

Entrepreneurs need to keep up with the changing times, and be open to using new tools that help with operating one’s tax and accounting operations. With the emergence of cloud accounting, businesses need to adapt, as time is becoming more and more of a valuable resource, and consumer behaviour and client expectations shift every day. Businesses need adequate tools and proper training to use these tools in order to keep up and remain competitive within their industry.

GoFi8ure values these emerging technologies, maximising their worth to help level up clients accounting systems and processes. The accounting services company offers Xero training, accounting, and cloud integration that can transform businesses and the way they tackle their accounting tasks. As cloud integration specialists, GoFi8ure eases companies’ load when it comes to administrative and time-consuming tasks.

GoFi8ure wants business owners to leave their requirements to the experts, to arrange all of their accounting requirements, tax obligations, and more – providing them with first-rate accounting solutions. GoFi8ure’s in-house tax experts and tax accountants help business owner employ effective strategies that will benefit businesses. One of GoFi8ure’s area of expertise is helping business owners file their business and personal tax returns accurately and on time. GoFi8ure is a proud member of the Accountants and Tax Agents Institute of New Zealand and a recognised Tax Agent with Inland Revenue.

GoFi8ure prides themselves with having the ability to cater to small and medium-sized businesses giving them the support that they need. From GST reconciliation to payroll, tax returns, and tax compliance, GoGi8ure can develop a suitable financial solution to fit a client’s needs.

To learn more visit The GoFi8ure website at https://gofi8ure.co.nz/

The importance of tax planning for directors

The importance of tax planning for directors 

Paying tax is something you are likely to see as a necessary (but not hugely enjoyable) part of running your business. But are you doing enough to plan your own personal tax liabilities?

As a director, you will pay your income tax annually on a self-assessment basis. But there are plenty of ways to make this a less costly and onerous task to complete.

Planning ahead when it comes to tax

By taking a forward-looking approach to your own personal finances, and working with an experienced advisor, you can start to minimise your tax costs and maximise the value you enjoy from your own earnings and company profits.

Working closely with us helps you:

  • Know your future tax liabilities – by looking at factors like expected dividend payments, pension provision and additional income to determine what you will owe.
  • Set up an annual tax plan – with provision for when payments should be made and when to set aside the funds needed to pay your income tax bill.
  • Make use of any tax reliefs – so you can claim the relevant reliefs and tax initiatives that are available, to bring down the amount of your overall tax bill
  • Maximise your earnings – by taking your earnings in the most efficient ways and managing your own personal wealth in a proactive manner.

Talk to us about your personal tax planning

If you are a director looking to achieve the best results from your earnings, come and talk to us. We can review your tax situation, create a robust tax plan and make sure you are getting the maximum value from your business earnings,

Want to achieve the best results from your earnings as a director? Come and talk to us. We will review your tax situation to ensure you are getting the maximum value from your earning.

Business expenses – are yours legit?

The second in a series of Small Business Basics by Lisa Martin, Executive Director of professional bookkeeping and accounting firm, GoFi8ure.

If you’re running a business you’ll have business expenses – that’s a given. Every so often, usually two or six monthly (to coincide with your GST returns), you’ll have to reconcile these expenses from your bank account to your accounting/bookkeeping software. That’s all fine. However, it might be worth double checking that everything you claim is legitimate.

Amongst your transactions there’ll likely be a good mix of petrol and parking receipts, office stationery, advertising and entertainment (that’s the round of sandwiches you bought at lunchtime when you met with one of your clients). But sometimes, personal expenses can slip through. It could be that you combine a business trip with a visit to see friends and you don’t adjust the business vs personal proportions of your travel claim. Or, you make a personal purchase with your company credit card by mistake and, in the name of keeping things simple, you just put it through under ‘general expenses’ anyway.

You might think these examples are just minor inconsistencies and that they don’t really matter. After all we’re not talking about the claims that some people make which are obviously un-related to business (the British MP famous for claiming to have the moat around his house cleaned springs to mind). But they do matter. You might not have a moat, and you might not be so silly or greedy to put something like that through, but you don’t want to get into the habit of being blasé about what goes through your books. You want every transaction to be a legitimate one.

The best way to keep your bookkeeping squeaky clean – remembering that your industry could be the next one to be audited – is to check, check and double check when you reconcile your expenses. If you know a purchase didn’t directly benefit your business then it’s not a business expense and you can’t claim it. If you are unsure, simply ask your Bookkeeper or Accountant.