Articles by John Heaslip


Thursday, February 26, 2015

For most clients, 1 April signals the start of the New Year for business and tax purposes and the month of March brings opportunities to minimize tax and maximize cash surpluses for the coming year.  

A well known quote “if you fail to plan, you are planning to fail!”, so with this in mind we give you some things to think about going forward. For those of you in business consider the following points:

Year End Tax Planning Check List

Before 31 March

Bad Debts
Review your debtor’s ledger. In order to claim a deduction for bad debts the debts you believe will not be collected, MUST be written off in your debtors ledger, prior to 31 March.

Repairs & Maintenance
You may want to consider undertaking any necessary repairs & maintenance on assets prior to the end of the financial year, but please talk to us to ascertain if a full deduction for taxation is applicable.

Asset Purchases
Consider the purchase of needed low value assets prior to 31 March. All assets costing under $500 (ex GST) may be claimed as an expense in the year of purchase, once again please talk to us to ascertain if a full deduction for taxation is applicable as there certain rules relating to assets under $500.

Review Last Years Fixed Asset Register
The book value of assets can be written off for taxation purposes if the asset is no longer in use by the business and the business has no intention of using the assets in the future.

Pre-paying certain Expenses
Some expenses can be prepaid in March and claimed as a tax deduction in the year to 31 March, regardless of the amount and includes, stationary, postage and courier charges, vehicle registration, rates, subscriptions for papers or journals. Other expenses have limits, these include rent, consumables, insurance premiums, travel & accommodation, advertising, periodic charges and other services. The rules surrounding prepayments are complex, if you are planning this type of expenditure please talk to us.

New Tax Year Planning Check List

Are you dreading supplying information to us so we can complete your 2015 affairs? If so why not make a New Tax Years Resolution to make life simpler in the coming year. 

Step 1
If you haven't already, talk to us about a suitable electronic cashbook such as Xero pricing from $20 per month

Step 2
Start to develop your regular accounting procedures by separating your tasks by expected frequency: weekly, monthly, 2 monthly, tri yearly, six monthly or yearly. General accounting chores will fall into each category, and tax-related tasks typically come up no more than monthly.

Weekly & Monthly Tasks

These task are bookkeeping chores and each business will differ in complexity depending on transaction volume. Generally all businesses should follow these steps.

Sort your mail into action piles (such as bills to pay and orders to fill - if applicable).
Process any new customer orders, record all sales transactions, and mail out any new accounts receivable invoices (if applicable).
Gather the day's cash and checks, make up a deposit slip, and bank (if applicable) .
Pay any invoices that are due or for which you can get an early payment discount.
Record any withdrawal and deposit transactions in the electronic cashbook.
Filing records in a suitable filing system
Reconcile bank statements to electronic cash book.

Two Monthly, Tri Yearly or Six Monthly Tasks

These tasks are GST, PAYE or Income Tax related, once the weekly and monthly tasks are adhered to the rest will follow in an orderly fashion.

Please contact us to get advice on how to start this process now.