I have a long held hope of one day just swiping my chipped wrist over a pay machine and getting rid of my wallet and store loyalty cards altogether. ASB have put me one step closer to that dream by releasing a clever little sticker thingy for your phone. I ordered mine already via my online banking.
Click for the ASB page – to learn the proper information about it.
See below for the Longlist finalists for the Community Impact Awards at the Sustainable Business Network Awards.
Katalyst – Longlist Finalists
How Often Should You Recocnile Your Accounts? We Ask the Experts – posted by Aimy Chen – 12 March, 14.
Click below to view the article.
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
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 [email protected] (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.
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.
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.
Definitely one to pass around.
This e-book provides a brilliant and impartial guide to choosing a real estate agent and you can find the link to it at http://thepropertymarket.co.nz/market-intel/guide-to-choosing-a-real-estate-agent
So you have the following in a single column in Excel:
Glennis Stuckey
Highlight the whole column, then from the Data menu, select Text to Columns. Select Delimited, then next, then select Space. This will now be two columns – Super Easy! :-)
Sponsored by Deloitte and ASB (I love ASB!)
Speakers:
- Xero – Rod Drury
- Vend – Nick Holdsworth
- Spotlight Reporting – Richard Francis
- Unleashed – Greg Murphy
- Receipt Bank – Michael Wood
- Deloitte – Grant Frear
This was an excellent seminar about the way things are, they way they should be and they way they are heading for Cloud services and IT in general. There was a lot of mention to going mobile. The desktop PC is out and mobile is in.
There are 500k businesses in NZ, 70k are on Xero. There are 5 million businesses in the UK, so NZ is well placed to be an excellent base for global software developments. Our market is small in comparison, so anything we create has to be global to be worth while, developers in the UK or USA have a large enough market not to have to consider other countries, so naturally limit themselves.
Best Practice now for business accountancy software is being in the cloud. It is now safer and more secure than having desktop software.
It’s not the big that eat the small, it’s the fast that eat the slow – Rod Drury
Michael Wood from Receipt Bank had some interesting things to say about software – you need to be a software company to stick now – consider Amazon, they sell books, but they do it using software, they have swallowed Borders (booksellers). You can become a software company by building it or buying it.
|| Consider: How can your company can best use software to better serve clients and to become a better company?
Richard Francis from Spotlight Reporting talked about KPI’s
> Aspire > Dream > Goals > Focus > Direction – you get there using KPI’s
> Set > Data Capture > KPI’s > Monitor > React
A saying I remember, that suits this is: “If you aren’t measuring, you are only practicing”
|| Consider: What do we need to monitor and measure?
Well worth looking at is Deloitte’s Digital Disruption video – http://www.deloitte.com/au/digitaldisruption
So,
We have a client that needed help with MYOB Online accounts…
I requested the client to give me an invite to their online accounts. Get sent an invite, accept the invite through my email and then get taken the the MYOB “live” accounts.
I thought hmm might be interesting to see what the competition is about so eagerly I login and go to look for the clients file.
No company file.
The instructions on MYOB website – please download the latest software to use these accounts – huh – I thought they were online.
So I follow the instructions and wait to download the file (20 minutes later for 243mb File).
Once downloaded I eagerly click to set up the software. Myob starts wizzing and whiring. I wait in anticipation watching the progressbar. Meanwhile I have boiled the jug made a couple of phone calls, reconciled a client In xero. Check Progress bar of software setup of the “cloud” software.
Make cup of coffee, Reconcile another clients account – answer a couple of emails…
Voilah – Accountright is ready to use. WOOHOOO. I do my desk ergonomics flex fingers and pounce over my keyboard ready to go with fingers flying.
I login into the “cloud” software from my desktop to locate the clients file “in the cloud”
“Sorry you cannot access this file as you have the 2013 version of the software and the company file is 2012. Please contact the company administrator to upgrade the file to 2013”
ARRRRGGGGGHHHHHHHH
I then call MYOB – explain my predicament. They need to reset my password and then send me a link to the 2012 version of the “cloud” software.
At the end of the conversation the help desk notices that the subscription for MYOB is expiring in 10 days would I like to renew it…
Ummm I don’t think so buddy!
Now don’t even get me started on the exporting of information. That’s a whole other issue.
If you want an accounting system that will make you smile, try Xero, see our Xero setup and support services.
