At Xerocon 2014 I met a guy who has a product that exports from Amazon to Xero.  It might be worth a look if you have a need for it:

a2x-logo

Post invoices to Xero

A2X generates invoices from each settlement and posts them to Xero, either manually or automatically. You can select the accounts and tax rates that apply to each type of income or expense either in A2X or Xero.

When the payment appears in your bank account within Xero, you can easily reconcile the invoices to their corresponding payments.

There are some changes coming to the reporting standards for businesses.  For the year ending 31 March, 2014, the existing framework must be adhered to.  I was told also, that June balance dates will also follow the existing framework for the year ending June 2014.  Filing for 31 March (and June) 2015 will be under the new regime.

I have invested some time to try and understand these changes, as a business owner, and as the owner of Katalyst – so we can best understand the changes for our clients and the standards we need to adhere to as bookkeepers.

Acronyms

First up, some acronyms which will help:

  • NZICA – NZ Institute of Chartered Accountants
  • IRD – Inland Revenue Department, or IR as they say
  • XRB – Exporting Reporting Board – an independent crown entity who set business reporting standards
  • GAAP – Generally Accepted Accounting Practice
  • SME – Small to Medium Enterprise – or Small and Medium Businesses
  • FMC – Basically means Financial Market Conduct, but more relates to companies that have to comply with it, refers to banks, insurance companies, lenders etc
  • APs – Associated Persons
  • IP – Intellectual Property
  • CA – Chartered Accountant
  • CPA – Certified Public Accountant?

95%

95% of for-profit businesses will fall into what is named the ‘Special Purpose’ framework.  This is a bare bones, minimum criteria set by IRD.

What must be prepared:

  • Balance sheet, profit and loss and supporting notes and schedules (basically paperwork to back it up I guess)
  • Statement of accounting policies and changes thereto (maybe the accountant still needs to do this one aye?)
  • Where appropriate tax values can be used (no idea what this means)
  • A financial statement to tax reconciliation (it all has to make sense)
  • Movements in shareholder funds
  • Disclosure of the IR10 data points (righto) – I understand IRD want IR10’s to be mandatory and e-filed as the ultimate goal, I don’t think at this stage you actually have to file one?
  • A schedule of (certain) specified Associated Persons transactions – such as non-residents and non-corporates.  Associated Persons transactions such as one company or person leasing a building to an associated company or person.  Or, IP leased to another person or company.

These documents are not required to be delivered to IRD but it is expected you have them prepared.  Also, you can gather these documents from many sources.

5%

By the way, the other 5% of companies, who have to continue to comply with the GAAP framework, are made up of:

  • FMC Reporting Entities
  • Large companies with $30m in revenue or $60m in assets and overseas companies with $10m in revenue or $20m in assets.
  • Companies with 10 or more shareholders – however if 95% of shareholders agree, by general resolution, they can opt out of this regime
  • NB:  Companies with 10 or less shareholders can opt in, with 95% vote by general resolution, as this is a higher reporting standard that they would be adhering to

There is a rule that if you have under $30k in sales and expenses, you may not need to prepare anything, but you will still need to file tax – so not sure how you do one without the other…

Summary

So to sum up, you still need an accountant to file the tax and to interpret the rules and minimum requirements.  Also, if you are a business owner, the minimums are bare bones, all experts said that if you are in business to make money and to grow, you need more than the minimum.  If your accountant is a CA or CPA, they may have optional reporting framework they may choose to adhere too.  This will be a better standard than the minimum requirement but not to the full GAAP standard (which is not required).  It is a good idea to discuss this with your accountant so you know what you are paying for and getting.

Also, banks, or other interested parties like factoring companies, may express the need for a higher standard of reporting – check your loan documents for any mention of GAAP or such, maybe have a chat with the bank if you have a lot going on with them.

Xero are soon to release what they are calling V2 – Version 2 reporting.  This will make the reporting outputs in Xero highly customisable, so whether you are reporting to CA or CPA standards, minimum standards, or a standard your bank or someone else requests, you should be easily able to report from Xero.  Watch our blog, or your Xero mailbox for news – this will be released this year, I am not sure how soon.  It might be a staged release.

If you are borderline in some areas of your business, or your company has certain complications, you can choose the GAAP reporting standard for that single area of your company.

This is not advice, merely my understanding.  In all cases around financial reporting and accounting, I recommend speaking with your business advisers or accountants. These are my interpretations from a few conversations.

Links

Laptop WFM Page Slider

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I just noticed, thanks to Julia, that we are front and centre of the Xerocon 2014 advertising banner!  Crikey, not sure how I missed that 😉

Xerocon Front and Centre

Excellent News, there is a new app which will make mobile use of WorkflowMax much better – it accesses leads and uses GPS as well, so should be awesome.

I have registered for a Beta version so I can test it – I will post an update once tested.

There is a short video available now – just click the WFM Touch image below.

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My interpretations of the coming changes:

I have had a couple of discussions with people now about the new financial reporting standards which are, apparently, meant to change the accounting industry away from compliance.

It looks like the reporting has been general purpose and was mostly driven by accountants in the past, now IRD are taking the reins to determine what is required and what is unnecessary.  But don’t get too excited, the minimums look still to require similar to what is already being done and may not change anything for many companies.

Along with IRD, the requirements also look to be lead by stake holders.  So if you are working with a bank, the bank may determine the reporting required, or a factoring company maybe?  Xero reporting is changing significancy in time for the Financial Year End – which also takes this new customised reporting standards into account.  Xero will allow customisation of the reporting required.

I wonder how easy it will be to understand who determines the reporting required for each company – who will have access to this information, will there be a register – who will police it?

These are my interpretations from a few conversations, so please don’t quote me at this early stage.

 

From IRD – December 9th,2013:

Minimum financial reporting requirements under review

We’re calling for submissions on proposed changes to the preparation of financial statements by small and medium companies.

From 1 April 2014 and later, all active small- and medium-size companies would be required to prepare financial statements to a minimum level, instead of the current general purpose requirements.

The suggested minimum requirements include:

  • double-entry, cost-based accrual accounting
  • a balance sheet, profit and loss, with available specified supporting notes and/or schedules
  • tax values used to determine income and expenditure, and the preparation of the balance sheet where reasonably possible
  • a statement of accounting policies and changes
  • if necessary, a financial statement to taxable income reconciliation
  • a schedule of certain related-party transactions (for periods commencing 1 April 2015 and later).

We encourage companies who think they may be affected to submit feedback on the:

  • proposal to exclude non-trading companies, which don’t file tax returns from the preparation requirement
  • level of detail suggested for financial statements.

View the officials’ issues paper Minimum financial reporting requirements for companies.

Submissions should be made by 20 December 2013 to policy.webmaster@ird.govt.nz (subject line “Financial reporting”) or by post to:

Financial reporting
c/o Deputy Commissioner
Policy and Strategy Division
Inland Revenue
PO Box 2198
Wellington 6140

Footnote

Business Tax Update comments generally on topical tax issues relevant to businesses. Every attempt is made to ensure the law is correctly interpreted, but articles are intended as a brief overview only. The examples provided are not intended to cover every possible factual situation.

GlennisB

 

The Roadshow last week didn’t disappoint as per normal.  There is some major updates coming out over the next few months and some other unexpected releases.

 

Various releases announced or updated:

  • Reporting 2.0 – Major changes to the reporting in Xero, add formulas, move columns, select columns you want, resort etc – due shortly
  • Banking 2.0 – World leading, banking changes – integration with Xero for payables (with authority) and loan applications via Xero to your bank
  • Supplier feeds – Major suppliers are working with Xero to start data feeds for their invoices, with attachments
  • Files – Getting their own tab, you can now also use an email link to send files directly into Xero, video formats – available now, but some changes due soon.  Have you thought about taking a photo of assets and serial numbers incase things are stolen?  Then you can download and send to your Insurance broker.
  • Invoices – Bulk Export coming (not sure if this is the invoices (bills/sales, or the images attached)
  • Auto Feeds – TSB and ASB are already offering auto feed signup – including historic import of feeds
  • ACC and Companies Office – Are working with Xero to integrate systems
  • Sending sales invoices with attachments direct to Xero (currently avaialble via online invoice, but you have to save the invoice which can duplicate)
  • Quotes – Includes revisions and online; acceptance, query, revise and decline.  Also templated terms and custom templates – Next Year
  • Touchify – All areas of Xero are undergoing a touchify re-write, so all areas are easier for touch screen and mobile devices like tablets
  • Contacts – Add multiple contacts
  • Remove yourself from Organisations – previously you had to be removed
  • User role – There will be a standard role without reporting access
  • Statement search – I am hoping this is a global bank statement search
  • Reference field on bank transactions – I am not sure what this is yet

 

Unconfirmed Timeframe/no updates on:

  • Stock

 

Recently Released:

  • Purchase orders – you can turn PO’s into a sale etc
  • GST – new process has been released – will show any un-reconciled areas

 

For assistance with any changes, please call us at the office on 09 269 5466.

 

 

Windows are no longer supported XP from April 14 onwards, this means that security patches won’t be provided and it will be vulnerable to hackers and viruses etc.

Consider what this might mean to your business as well as home.  See the photo for a visual of what XP looks like to see if you have it – you can also see where to find the Windows version there.

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There are a couple of options

From Trevor as Darkwing

 

  • Upgrade from XP to Windows 7 – If your PC is new enough – Approx. $400 – $500 (software and time)
  • Replace current PC with Win7 or Win8 PC – Approx. 2-3 hours’ work + new PC cost

For the details from Microsoft

Click here for details from the Microsoft website.

Purchase Orders

The Purchase order function in Xero looks very good indeed.  You can partially receipt or fully receipt, turning the purchase order into a bill to save data entry.  You can also create custom templates to better brand your purchase orders, you can also use the email settings for purchase orders.

The full history as you expect in Xero applies here as well, as well as drafts and submit for approval.

To find purchases, so to Accounts tab, Purchases, then scroll down the screen, purchase orders appear under the bills.

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GST

The new improved GST process has also been released today.  This process will now show you any unreconciled transactions in the period, so you know to complete them.  Our rules still stand if you were taught by us – check the recon report for every account on the dashboard, prior to running your GST.  This is still a good process to follow as you will be alerted to any issues early on.

Also, make sure you save a copy of the published report off Xero.  We have found our lovely GST reports deleted from time to time by well meaning people…

 

Check out the blog for more information and other updates.  Still coming this year, I expect, are quotes and stock.  Purchase orders are a part of this set, so it is looking good that Xero have released purchase orders.