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What's New?...
Vision Accounting
Happy New Year!! As this is my first newsletter for the 2016 year, I think I am still allowed to say this, just.

Welcome to the Vision Accounting e-newsletter for February 2016. 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 for 2016.
 

What's very urgent?

Have we received your 2015 end of year records yet? If not, time is now really running out for us to be able to get these attended to, so please bring them in urgently. 


 

 

What's very important - CASH?

Debtors and cash-flow

Business is good. Customers love your products. You provide a superb service. So why is your cash-flow trickling not gushing? You have analysed the numbers. Your overheads are reasonable and there’s no wastage. But what about your debtors?

If your business isn’t strictly ‘cash over the counter’ you probably already understand the work - and the pain - of chasing money from overdue payments.

Good debtor management can make a real difference to cash-flow in your business. Poor debtor management can be a major roadblock. You can have a lot of money tied up in debtors that you could use better elsewhere to keep driving the business forward. Think about it this way: the money you have tied up in debtors is your (reluctant) investment in your customers’ business. Wouldn’t you rather invest in your own business?

A cloud of negativity sits over debtors. People don’t like to deal with and so it usually just gets worse. It sucks up time as you try to unravel the paper trail in invoices, statements and call logs. It can be a nightmare to figure out with not much to show for it.

The key to managing debtors is not to let it get away from you. Call us if you want to talk through your debtor numbers and put together a better system to manage debtors in your business.
 

Keys to managing debtors

Be upfront with your trading terms. Let your customers know as early as possible about your terms of trade and bill promptly after product delivery or work completed. This makes it easier to contact clients to follow up on unpaid bills.

Manage credit risk. Wherever possible, if it’s appropriate for your industry, run a credit check before you offer credit. Or ask customers to complete a credit control application.

Stay on top of your debtor ledger. Review it frequently and sound the alert on overdue payments.

Do the numbers. Work out how much money you have currently tied up in payments pending and then, on average, how long it takes you to collect debt in your business. These are the numbers you continuously want to reduce. Let your team know that these are achievable goals.

Have a system. Delegate the task and give your debt manager the tools to make it work. Too often debt collection ends up back with the business owner simply because they are the one most passionate about their business and most closely concerned with cash-flow. Their customers know them so a phone call from a business owner carries weight that a call from the office assistant just doesn’t have.

However, while tempting, it is not best use of your time to chase bad debts. Much better for you to be out there, growing the business, pulling in new customers. And separation is essential between your relationship with your customers - which you want to be as good as possible - and the ‘dripping tap’ approach which a good debt manager should have.

Train your debt manager to be systematic. Scripts for regular follow up calls and templates for emails and letters work well. Whoever takes on the task might well hate making the calls just as much as you do. Turn this around. Go over the script and prep your debt manager with all the payment options your business offers.

Make it easy to pay. Customers are your favourite people. You want them to feel great about your business. You don’t always know what’s happening for them but you want to make it as easy as possible for them to pay you and continue to enjoy your awesome products and services. Offer payment plans. Set them up with payment options such as FeeSmart.

Have a plan B. Set a time limit for when you turn debts over to a collection agency. If all else fails, know when to write off a bad debt and record this clearly for your year-end figures. But before that, systemise your debtor management so you know that you have done all possible to unlock the funds you have tied up in debtors.
 

‘Remember that credit is money’ Benjamin Franklin

 

What's very handy?

Doug Warren and his team at HiFX Currency Services have kindly provided us with another FX exchange rate comparison for these last few weeks.

For those of you that have to contend with foreign currency transactions, don’t forget that HiFX can assist with ensuring you have the best exchange rate and funding option available.





 

 

What you need to know

Health and Safety when working from home 

If you work from home you already have to look after your own health and safety (H&S). But what will the upcoming law changes mean for you?

Changes to the Health and Safety at Work Act will come into effect in April 2016 – see the WorkSafe website for more detail.

As you already have to do under the law, if you’re working from home, it’s your responsibility to look after your own H&S. If you run a business which has staff working from their home, you are responsible for talking through and developing policies with them on how they’ll manage their health and safety when working at their home.

In a home office, you might, for example, move electrical cords to avoid tripping, and set up your office chair and desk at the correct height to avoid occupational overuse syndrome (OOS).
 

Tip

Keep things in proportion. Identify the likely risks in your workspace, do something about them, and you’ll be in good shape to meet the new laws.
 
Just as you have to look after your own H&S, you also have to look after your workers’ H&S no matter where they work, including at home, “so far as is reasonably practicable”. This could range from providing safe equipment for their work, to providing information to help set up their workstations ergonomically to making sure the home worker keeps in touch with their boss and team members in cases of emergency.
 

This Month's Top Tip:

Sharing news from my clients with my clients


Organise your Tax Records in 6 Simple Steps 

Nathalie Brantsma of iOrganise is a Professional Organiser who has kindly provided us with this wonderful article about how to organize your tax records. As you all have tax records, this is definitely a worthwhile read. Need a bit more help, call us and we will put you in touch with her, so you can make your life more organised.

Do you know where all of your tax documents and receipts are? If you keep efficiently organised and accurate finance records, you can make your GST and income tax return as easy as possible. You can also reduce your tax bill, avoid penalties and interest, and save time searching for important documents. Not to mention how much better you will feel if your business is selected for a tax audit. Follow the six simple steps below to create an organised record keeping system.

STEP 1: Label manila folders with categories of documents that you need to save for tax time, such as records to calculate your income, expenses and GST liability of your business. Please speak to your accountant to find out what deductions you are able to claim. Keep the folders near your desk for easy processing.

STEP 2: Create tax lever arch files or use an expanding file and label with the same categories as your manila folders. Place A4 pockets in the back for loose receipts. Organise these by month. Keep the files in a filing cabinet in or near your office. If you prefer to keep digital files then name the folders identical to the categories in manila folders. The IRD accepts paper records, electronic records or a combination of both.

STEP 3: Keep a document wallet in your bag or car and when you make a purchase, place your receipts directly into that wallet. Once you get back to the office, take the receipts out and transfer them to the manila folder on your desk. If you are a paper person, print electronic invoices or receipts and save them in the manila folder for processing later. Otherwise, save the documents on your computer in the designated folder. Make a clear distinction between items ‘to enter’ and ‘entered’. 

STEP 4: Once a week pull the receipts out of the manila folder and open the electronic files with invoices and receipts ‘to enter’ and log them into your online bookkeeping program or Excel spreadsheet. Then, clip them together and save in your monthly receipts folder in your filing cabinet. Move the electronic papers to a folder marked ‘entered’.

Make sure to keep back-up copies of your online program or spreadsheet in case your system breaks down. Scan and save receipts on your computer. This way they can be safely stored and they will not fade. If you store records on a computer you must continue to keep all relevant paper records.

STEP 5: When it is time to file your taxes, send your up to date Excel spreadsheet by email or invite your accountant to access your on-line accounting software data file. I suggest you give your accountant full access. Hand a print-out of all legal documents to your accountant as well.  
STEP 6: Once your taxes are filed, place them in an archive storage box, labelled with the year. Keep a paper copy if you have electronically filed your tax return. You must hold onto your documents for seven years so store your papers off the ground and in a dry place to keep them in good condition.

Make it a habit of dealing with and filing your tax documents and receipts on a regular basis. Your taxes will be up to date and organised, and there will be no surprises (except maybe a larger than expected refund!) at the end of the year.

Feel free to contact us if you need assistance with setting up your tax record organising system. 

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.)

Remember

We offer the service of a one on one meeting to review your financials and help set you up for a strong 2016.
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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