Keep up-to-date with us and what's happening in the business world |
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- Keeping Your Cashflow Strong in Tough Times: Part 2 - Xero Tip of the Month - Emailing your invoices directly into Xero
- Financial Preparations for the Holidays - Question of the Month: Donation by trust: is it deductible or a tax credit?
- Spotlight: Restaurant Amok - New Premises Update - IRD Upcoming Tax Payment Dates |
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Cashflow is the key componenent of operating a successful business, regardless of whether your business is in in a holding patterm or in growth mode. Revenue, profit and your bottom line all deserve your attention. With energy prices soaring, supply chain challenges, rising living costs and high inflation, cash is likely to be tight over the coming year and beyond.
Over the past few months we have been posting a series of cashflow tips via our All Accounted For Facebook page and, as we have now released our final cashflow tip, we'd like to briefly summarise and share some final points for you to consider.
What can you do to improve your cashflow situation?
The more informed you are about your cash position, the more you can do to prepare for any cashflow gaps. It’s this foresight that can make all the difference when you’re battling against tough external economic forces and a downturn in sales. Understanding your cashflow is key, utilising the right tools and practices is secondary. If you want to safeguard your cashflow, these are just some of the many sensible steps to take:
Update your prices and your sales strategy – Raising your prices is one way to bring in more cash, with the same volume of sales. But it's a balancing act. Putting your prices up can alienate existing customers and could see you losing customers, but if you can find the sweet spot for your pricing AND also drum up more sales, you can quickly increase revenue and give your cash inflows a healthy boost. -
Plan ahead for the cashflow gaps – When your forecast shows a shortfall of cash coming up, that’s the time to take action. If you can see that there’s a cash hole approaching next month, it’s time to look at ways of raising extra finance to fill that hole. That could mean extending your bank overdraft, taking out a small business loan or taking out an invoice finance facility with a lender.
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Look for opportunities to cut your overheads – One way to improve your cashflow is to cut down expenditure. If you can cut back on overheads, expenses and unnecessary costs, this can help re-balance your the position, even when cashflow is getting tight. Look for cheaper suppliers, buy in smaller quantities, take every opportunity to cut costs and keep your spending more sensible.
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Review your cashflow reports regularly – It’s important to look at your cashflow numbers and reporting regularly, not just at period-end. This is particularly important when economic times are tough. With the most current cash information to hand, you can make informed business decisions and aim to keep the business operational.
Switch to cloud accounting and integrate with cashflow forecasting apps – Accounting and finance technology has moved on in leaps and bounds in the past decade. Cloud Accounting Platforms such as Xero, offer a detailed reporting of your cash position in real-time, giving you up to date cash numbers. Xero also lets you add third party apps to create a custom app stack of helpful business tools. With over 1000 apps, there are plenty of cashflow forecasting options to choose from, giving you the ability to forecast your future cashflow position.
Talk to us about your cashflow processes
With the business in a healthy cashflow position, you provide a solid financial foundation for riding out the global recession. No business is invulnerable in these conditions, but with liquid cash in the business, you have more flexibility and more capital to play with. Contact Ben Duflou or Sarah Toner via advice@aafl.nz today and we will steer you on the right track forward to improve your cashflow processes. Haven't seen our recent cashflow tips? Not sure how to access them?
To access our cashflow tips, you can either visit our Facebook page or our blog section via our website. |
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XERO TIP OF THE MONTH - EMAILING YOUR INVOICES DIRECTLY INTO XERO
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Want to reduce the amount of paper you store in the office?
Instead of printing your invoices, email them directly to Xero! This will allow you to send invoices from your email directly to your Xero inbox, saving you time and hassle. To access your Xero email address, follow these instructions below: - Login to Xero and click on the business tab - bills to pay
- Click the "Create bill from email" tab
- Copy the email address into your address book
- Email all invoices to this email address so that they will be waiting for you in Bills to Pay - Draft
- Code accordingly and submit for approval for the next person to authorize
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FINANCIAL PREPARATIONS FOR THE HOLIDAYS |
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While brighter times are ahead and lockdowns are a thing of the past, we understand that many businesses may be experiencing the financial repercussions of the pandemic along with the high inflation rate so we want you to know that we are with you and your business every step of the way as we navigate through these challenges, giving you the confidence you require to get ahead.
Whether you are closing down for the holidays or operating the whole way through, we have put together a short to-do list below to help you best prepare for the holiday season. |
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- Create a staff roster to manage staff leave over the holiday season, making a note of when each staff member will be working and when they are taking a break so you've got enough hands on deck over the holiday period.
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Pay any outstanding invoices or upcoming invoices.
- Plan for your upcoming tax payment obligations.
- Schedule your staff pay runs if you aren't able to do it on the day.
- Send out your invoices early - this will allow you and your client to have your accounts sorted before you close.
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Plan your 2023 goals: Your review of 2022 goals will give you a good insight into your next steps heading into 2023, so now is the time to write them down.
One Final Note: When in doubt, reach out
We understand that going over this year-end financial checklist might feel daunting. Even though you know the steps, putting them into practice isn’t always easy. If you’re struggling with your finances and need assistance to tie up any loose ends and answer any queries you may have, All Accounted For can help. We have a talented, highly knowledgeable team of professionals ready to help. Get in touch with our team today on 04-970-1182 so we can make your holidays as stress-free as possible.
We understand that this can be a busy time of the year for many. But, with a bit of planning underway, you should be able to ease into 2023 smoothly, allowing yourself a bit of extra time to enjoy the holiday season. |
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QUESTION:
A trust is a complying trust that engages in a business activity. The trust is not a charitable trust, but under its trust deed, the class of discretionary beneficiaries includes any trust, society or institution established exclusively for charitable purposes.
The trustees of the trust are proposing to make donations to a several charitable organisations. All the organisations are approved donee organisations.
The trust has more income than the donations it intends to make, so the donations would not create a loss position in the trust.
Will these donations be a deductible expense for the trust? If they are not a deductible expense, can the trust claim a tax credit for the donations?
Alternatively, can the trust treat the donations as distributions of beneficiary income?
ANSWER:
Under the general permission in s DA 1, an item of expenditure requires a connection to the deriving of assessable income or excluded or the carrying on a business to derive assessable income or excluded income for it to be a deductible expense. (This is subject to any specific statutory provision that overrides the need to establish a connection to deriving income.) A donation to a charitable organisation is not deductible, because it does not contribute to the deriving of income or the carrying on of a business to derive income.
A specific provision applies to companies. Section DB 41 allows a company to claim a deduction for certain donations provided the donations do not exceed net income for the year before the deduction for donations. This provision is not applicable to individuals or trusts.
Individuals are entitled to a tax credit for charitable donations under s LD 1, but trusts are specially excluded from claiming this credit by s LD 2(f).
Where the beneficiaries of a trust include charitable organisations, the trustees can decide to distribute income to the charitable organisation if authorised to do so by the trust deed. Provided the distributions is in accordance with the timing requirements in s HC 6 for a distribution to be treated as beneficiary income, the amount of the “donation” to the charity will be beneficiary income of the charity and not included in the taxable income of the trustees for the income year.
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SPOTLIGHT: RESTAURANT AMOK |
All Accounted For is proud to introduce Amok restaurant, an exquisite modern antipodean bistro and wine bar located on Marjoribanks street in Mount Victoria, Wellington.
Amok offers an authentic and homely dining experience; from their interesting, varied, and delicious menu, to the warm ambiance of a cosy restaurant with welcoming staff.
From a melting pot of cultures and influences (much like its famed steak tartare and fried potato dish), the menu follows the owners' food philosophy of preparing fresh, local, and seasonal ingredients with thoughtfulness and simplicity. The menu is ever-changing, but rest assured, there’s something for all occasions. A number of the team at All Accounted For have personally dined at Amok and highly recommend the food and services provided by Tom and Tashie.
For more information about Amok Restaurant, click on the button below. |
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All Accounted For is excited about our brand-new exterior signage which has just been installed!
A huge thank you to Speedy Signs Wellington for creating this great display for us. We couldn't be happier with the final outcome! Stay tuned for more improvements as we work to finalise our space. |
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IRD UPCOMING TAX PAYMENT DATES |
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