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 - Reminder: Small Business Cashflow Scheme - Welcome to the team: Shruti
- Question of the Month: Claiming Costs for Electric Cars - Xero Tip of the Month - The App Launcher - IRD Upcoming Tax Payment Dates |
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Small businesses are particularly vulnerable in tough economic times. When sales are slow, there are still overheads and salaries that need to be sorted. Pre-planning and being proactive can help you weather tighter economic periods and allow you to continue to thrive.
Businesses must have a clear picture of their payroll and any other planned expenses that will need to be accounted for.
If there's even a possibility that there could be a shortfall, it's essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement or compromising on other business outgoings, it's essential to make a plan ensuring that the business, or your staff, won't be negatively impacted.
To help weather the storm, here are some ways you can minimise the stress of your business cash flow: -
Invoice early - Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers whom you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.
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Chase payment - Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.
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Talk to suppliers - A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
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Review inventory - Can you find a cheaper supplier locally to avoid the shipping costs or discuss alternative products that allow you to reduce expenses?
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Review your costs - It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions, or purchases to which you can decide on an alternative approach.
Talk to us about implementing cash flow strategies:
At All Accounted For, we can work with you to implement strategies to protect your business long-term and help you alleviate cash flow worries to improve economic resilience. Interested to hear more? Get in touch with us today to discuss how we can help manage your cashflow effectively on 04-970-1182. |
REMINDER: SMALL BUSINESS CASHFLOW SCHEME |
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As you may be aware, changes to the Small Business Cashflow Scheme (SBCS) have now come into effect, with the loan amount now increased to $20,000 (from $10,000), plus $1,800 per full-time equivalent employee.
A top-up loan is also available for businesses and organisations that currently have a loan under the original amount.
To apply for the SBCS, your business or organisation must meet all eligibility criteria. Applications are open until 31 December 2023.
To learn more about the Small Business Cashflow Loan Scheme and to apply, click the button to the right.
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WELCOME TO THE TEAM: SHRUTI |
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| Originally from Mumbai, India, Shruti graduated from the University of Canterbury with a Master's in Financial Management in 2019 and has over nine years of experience in tax compliance, financial accounting, advisory, and auditing.
As our new Business Services Accountant, Shruti will be responsible for preparing and providing you with crucial financial and accounting services while supporting your business. Shruti will be based in Christchurch but is easily contactable via email or phone.
Shruti is looking forward to utilizing her skills and experience while providing and maintaining excellent service to our clients. Outside of work, Shruti likes to practice meditation, binge-watch movies, and travel. |
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QUESTION: A self-employed taxpayer has acquired an electric car. The car will be used partly for busines purposes and partly for private purposes.
What are the things to bear in mind when claiming costs for electric cars compared to petrol cars?
Is the IRD mileage rate still applicable? ANSWER: The same tax rules apply to claiming expenditure associated with an electric car as apply to petrol vehicles. These rules are set out in subpart DE of the Income Tax Act 2007.
The taxpayer can elect to use either the cost method or kilometre rate method. The election must be made during the first year of vehicle ownership and will last until the disposal of the vehicle. If no election is made, the default method is the cost method.
Under the cost method, the business proportion of actual running costs and depreciation will be claimed as a deduction. With an electric car there is the added complication of determining charging costs, the cost of which may not be as easily ascertainable as determining the cost of petrol for a standard combustion engine car. It will be necessary to determine how many kW are used charging the vehicle and the cost per unit.
Under the kilometre rate method, the deduction is determined using the formula: kilometre rate × kilometres travelled × business proportion. The kilometre rate for the 2021-2022 period and for electric vehicles is 83 cents/km for the tier 1 rate is and 10 cents/km for the tier 2 rate. The tier 1 rate applies to the business portion of the first 14,000 km of distance travelled in an income year, after which the tier 2 rate applies.
Both methods will require keeping either a logbook or actual records of the trips taken to determine the business use proportion. A logbook must be kept from a chosen start date for at least 90 consecutive days and include detailed information about odometer readings and the reason for each business journey taken. |
XERO TIP OF THE MONTH - THE APP LAUNCHER |
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Have you tried the Xero App Launcher?
A new button in the navigation bar allows users to find and switch between connected apps within Xero. Simple to use, App Launcher increases accessibility to all your favourite apps while also making it easier to manage your apps without closing Xero!
To access the app launcher, click the 9 dots on the right side of the navigation bar, as per the image below. |
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IRD UPCOMING TAX PAYMENT DATES |
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