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What's New?...
Vision Accounting

Welcome to the Vision Accounting e-newsletter for November.  This is a great way for us to share important information you need to know, helpful tips and hints and practical resources to help you in business.
 

What's New?

Thanks everyone for the great feedback we’ve received from the launch of our new website. We appreciate the positive comments of how useful the live links and resources are.

For those of you who haven’t had a chance to visit it yet, here is the link to our new website www.visionaccounting.co.nz This is here for you to download information useful for you, and also links to all the resources. These are practical tools that can help you in business and make it easier. Our resource library includes: Newsletters, Calculators, Key Tax Dates, Tax – an overview, Questionnaires, and Useful links. 

With this edition for November, - we know how busy it is with running a business and juggling life at the same time – especially with Christmas coming up. So we wanted to provide you with some helpful information and strategies to think about now, both for your business and personally.
 

What you need to know:

Risk and Reward

In your business, cost of sale and overheads dramatically affect your profit. Understanding how they inter-relate and keeping track of them can really have an impact on your business success.
 

Cost of Sale

Cost of sale (also known as Cost of Goods Sold or CoGS) is how much it costs you to make a sale. 

In a business which sells products, CoGS is based on the price paid for the product, plus any costs necessary to put the merchandise into inventory and make it ready for sale, including shipping and handling. You can even break it down to calculate the cost of sale of individual units.

The basic formula is CoS = Opening Inventory + Purchases + Carriage In – Closing Inventory.
 
It varies, depending on what kind of business you have. Manufacturers determine the cost of sale as the sum of the direct costs of material and labour incurred in producing a product. A business that provides services would calculate cost of sales by looking at the amount of money that goes into providing a service. In this kind of business it's important to have a system to track the time the team spend directly involved with delivering the service.
 

Overheads

Overheads are general business expenses. They can’t be tracked directly to sales.  Overheads are what it costs you to open your doors every morning.
 

Seeing profit

When you're looking at your profit and loss statement, it can be a challenge to see how all the factors inter-relate.

When you look at income from sales, you won't be able to see what your profit is until you've factored in costs. After you've made deductions for items such as customer discounts and returns, and taken away the cost of sales you can see your gross profit.  When you look at gross profit, then deduct all your overheads, you'll see your net profit and get a better idea of how your business is really doing.

Your net profit is the proverbial bottom line. It’s important to also remember that tax is based on your net profit – the profit you keep will be your net profit after tax.
The important thing to understand is that every dollar you can save from your cost of sale increases your gross profit. Every dollar you save from your overheads increases your net profit. If you can't shave anything off your costs, you might need to think about whether you can increase your prices. Increasing prices without sacrificing sales is the ultimate aim, however adding value to your products should always be considered to maintain or increase sales.

This Month’s Top Tips

Your personal housekeeping

As your Accountants we deal generally with the financial side of things in your lives. However, we do like to ensure that other personal matters are taken care of too, as we have encountered over the years situations that we would like to see avoided.
 
Wills
Whilst most people understand that in an ideal world we should all have a valid Will, the reality is that only about one-third of us actually have a current one in place.

Wills are rarely a set and forget option and we recommend dragging them out at least every 5 years and reviewing them with your Solicitor or Legal Advisor. A Will is an important document and it pays to get it right and keep it relevant. When there is a change in your lives, Wills need changing too.

Ask us a question

Have you got an accounting question that leaves you worried or confused?

We love a challenge – see if we can come up with the answer that gives you the ‘ah ha! moment'.

Contact Virginia at Vision Accounting NOW on 09 415 0319
Tel: (09) 415 0319
Email:
admin@visionaccounting.co.nz
Web:
www.visionaccounting.co.nz
Postal Address:
PO Box 303 157
North Harbour
Auckland 0751

Physical Address:
106A Bush Road, Albany, Auckland
(When posting documents please use the PO Box address, as there is no mail delivery to our street address. Thank you.)
Enduring Powers of Attorney’s (EPA’s)
These fall into the same category as Wills in many ways in that ideally everyone should have them but again few people do. Situations have occurred where EPA’s were not in place and have caused major problems, delays and expense. We strongly urge those who do not have them to talk to your

Solicitor or Legal Advisor about them sooner rather than later. It is amazing the difference that having EPA’s in place can make in someone’s life and we believe that you owe it to your loved ones to make things easier for them should they ever need to look after your affairs.



The alternative to having valid EPA’s in place is having to make an application to the Court. This option is a very distant alternative choice in that it is abominably slow, painful and expensive!!! The key element is speed here and we can tell you that the Court’s understanding of speed is completely different from what you might think.  

An edited article originally written by Paul Gallagher legal.

Remember

So we literally have a few weeks left of 2014. Make the Christmas period count for your business and as always, we are here to help you be more successful and make the right financial business decisions. 

Remember - we offer the service of a one on one meeting to review your financials and help set you up for a strong 2015.
This one meeting can make a huge difference to the cashflow and profit of your business.

If you would like to schedule a business review meeting, or have a no-obligation chat – we’re happy to help.     

Thanks, and have a great month,
Virginia and the team at Vision Accounting 

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