While we encourage giving your valued clients gifts to say thank you, congratulate them on an achievement, or whatever the reason for celebration may be, there are certain rules in regards to deducting these gifts as a business expense that we want you to be aware of.
The rules around deducting client gifts can have a few grey areas, so remember that only certain client gifts can be fully deducted. The tricky part is when you are gifting food or drink – if you provide or consume the gift away from your business premise, the gift is only 50% deductible. However if you provide or consume the food or drink at or from your business premise, the gift is 100% deductible.
Any gifts outside food and drink, e.g homewares, are 100% deductible whether you provide them on or off your business premise. The IRD have given a real world example to help understand the rules around this, which we’ll put below to help you understand the rules a little more. If you have any questions or concerns about gifting, get in touch with your Sidekick Accountant and they’ll happily help you out.
Bob is a real estate agent. Each time he arranges the sale of a house, Bob delivers a bottle of champagne to the owner. He also sends a gift basket by courier to the purchaser. The gift basket contains a bottle of wine, some cheese and various household items such as tea towels and soaps.
Bob will only be able to deduct 50% of the cost of the bottle of champagne. This is because he is providing entertainment in the form of drink and doing so off his business premises.
For the gift basket, Bob can deduct the full cost of the tea towels and soap, because an appropriate apportionment should be made for items that are not food and drink. However, he can only deduct 50% of the cost of the wine and cheese (or, if the cost is not separately identifiable, an amount appropriately apportioned as the cost of the wine and cheese).
By djca. Posted in Cloud Software, Solutions.
Our clients will now enjoy an even smoother end of year process this year with the introduction of online signing. Thanks to a powerful tool called HelloSign, we can now send Financial Statements and Tax returns directly into our client’s email inboxes for immediate signing.
You can sign using your finger on a touch screen, by uploading an image, typing your name, or drawing your signature with your mouse. Here are the three simple steps of signing online with HelloSign.
1. Heads up email
When we send out your Financial Statements and Tax return, you’ll get a courtesy email to let you know that they’re coming your way.
2. Time to signFirst you’ll receive an email saying your document is ready to sign, it’ll look a little something like this:
3. View & SaveOnce all parties have signed the document, you’ll get an email to let you know and to give you the option to view and save the final document for your records.
And that’s it! We’re so pleased to be streamlining this process for our clients, we all know how slow the post can be at times! If you’re a client and you have a question about HelloSign for us, get in touch here or call us on 0800 SIDEKICK.
By djca. Posted in Sales and Marketing, Small Business, Small Business Advice, Solutions.
By djca. Posted in Cloud Software, Solutions, Xero.
Xero has it’s own document storage facility and we want you to be making the most of it!
Not only can Xero store online copies of your documents, but you can attach them to transactions when reconciling, invoices or bills, expense claims, or you can simply leave documents in your files inbox for your accountant to use when doing your end of year accounts.
Here are the simple steps to take to save you from keeping shoe boxes full or receipts, or clogging your email inbox with power bills. Scroll down to see how to use the phone App to add files.
On your computer:
Log into Xero, and click the Xero files icon that you can see circled below, this will take you to your files inbox.
On your phone:Log into the Xero app on your phone, and click on the menu symbol in the top left hand corner. Click on the “Files” option to open your Xero files inbox.
By djca. Posted in Business Growth, Cloud Software, Solutions.
We sat down with Cameron Robertson, our Senior Manager at Sidekick Christchurch to learn more about a Xero add-on that his clients are loving at the moment called CrunchBoards. CrunchBoards is an all-in-one forecasting and reporting engine with all the time-saving tools you need to grow your business. Features include business planning, budgeting, forecasting and real-time business intelligence. So Cam, what are your favourite features of CrunchBoards? “It’s a great forecasting/budgeting tool which incorporates directly into management reporting. The customisable management reports allow our clients to focus on particular areas of their business.” What do your clients like best about using CrunchBoards? “The way the information is displayed is the real upside of the software. CrunchBoards turns the numbers behind your business into easy to read graphs, that tell the true story.” How much does it cost? “It’s free in our Sidekick+ package, otherwise it’s only $25 per month plus a setup fee with our other Sidekick packages.” Who is the perfect person to be utilising CrunchBoards? “Anyone with particular points of focus. For example someone in hospitality may want to focus on % of food & beverages against sales, or wages against sales. This can all be displayed on one easy to ready graph.They also need to have good administration processes because CrunchBoards pulls data directly from Xero.” How does it work in with Xero? “It syncs daily with Xero. If your Xero is up to date, so is your CrunchBoards. It can be accessed using the browser on your smartphone, tablet, laptop or computer.” Any final words? “To me it’s a must-have tool for any business looking to grow and keep their business in check.”
By djca. Posted in Small Business, Small Business Advice, Solutions.
The new financial year has kicked off with a hiss and a roar and we’re well underway with helping our clients process their end of year accounts. To make sure this financial year starts smoothly for you, we have a few tips to share. As always, any questions you can get in touch with the Sidekick team here. Review Your Receivables Now is the best time of year to review the accuracy of your receivables. We recommend to take a thorough look through your aged receivables to see if any are bad debts, or there are any other inaccuracies. TIP: To write off a debtor as a bad debts expense, you must determine that there is no reasonable likelihood that the debt will be paid. A clear indication of a bad debt is if a debtor has become bankrupt or has gone into liquidation. In other words, you should only write off a bad debt if you have no hope of receiving the money. If you use Xero, you can review your Aged Receivables Ledger by clicking “Reports”, then “Aged Receivables”. Stock-take If you hold stock, try to set aside some time as soon as you have the time to do a stock-take. It’s in your best interest to do this as soon as you can so you can work with accurate margins and data going forwards. Donations Donations to an approved charity are deductible, so if you’ve made a charitable donation this year, be sure to let your accountant know. Fixed Assets You can claim a deduction on the purchase of fixed assets that cost $500 or less (excl gst). Now is also a good time to look through your fixed assets and ensure all assets are currently in use in the business. You can review your fixed assets in Xero by clicking Reports > All Reports > Depreciation Schedule. A deduction can be made for the book value of assets if they are no longer in use. Legal Fees Legal fees of less than $10,000 (excl GST) can be deducted as revenue expenditure. If your total legal fees are over $10,000 (excl GST) they may be recognised as capital expenditure, and therefore not deductible for tax purposes. Employee Related Provisions A deduction can be made for employee related provisions (such as holiday pay or long-service leave) as long as they are paid within 63 days of your balance date. For example if you have a standard balance date (31 March), payment needs to have been made by June 2nd for the amount to be deductible. Reconcile Be sure to keep reconciling your bank accounts in Xero. Did you know you can reconcile easily on your phone? For a step by step guide click here for Apple and here for Android.
By djca. Posted in Small Business Advice, Solutions, Tax Advice.
New Property Tax Rules & New 2 Year Bright-line TestEffective 1st October 2015, the following rules are coming into play in New Zealand. Get in touch with us if you would like to know more. Transferors and transferees must, for the transfer of land: • Provide IRD number (including non-resident persons), and • Their “Tax Identification Number (TIN) if resident in overseas jurisdiction, and • Must provide this at the time of transfer of land – This “Tax Statement” goes to LINZ as part of transfer documentation (they send to IRD) Exemption from the new rules applies to persons who are: • Not an “offshore person” and • Transferors selling their main home, or • Transferees buying with intention for their main home The Main Home Exemption • Exemption only applies to residential land • Not available where residence is on a commercial farm (economic business test) • Not available if used mainly for investment purposes nor if mainly as business premises • Exemption can only be applied once – won’t apply to other homes (eg. holiday home) Exemption is not available where: • Person is an “offshore person” • The property is to be, or was, owned by a trust (and estates) • Exemption used twice or more in last 2 years before current transaction Trusts • The main home exemption can’t be used • All trusts will be required to provide IRD number • And foreign TIN and NZ bank account if offshore person Regular Sale of Main Home • If home sold 3rd time within last 2 years IRD number required • Government aim is to catch person’s with regular pattern of selling family home • Gives IRD information to target these persons and determine whether taxable
New 2 Year Bright-line testA disposal of residential property within 2 years of acquisition will be taxable unless an exception applies. Date of Acquisition • Current rules: the date of acquisition is generally the date the S & P was entered in to • IRD state this date could be difficult to find and may not have access to S & P • Therefore bright-line acquisition date = date title registered which will show on land online Disposal Date • Date the contract is entered into • For gifts and other similar distributions where no sale contract – Disposal date will be normal rules = depends on documentation • Subdivided land: lots acquisition date same as original undivided land • Different dates for acquired and disposed make the 2 year period a tighter squeeze Transitional Rule • New rules only apply to a S&P entered into after 1/10/15 • Example – Shania Twang enters in a S& P on 2/6/15 – 1/11/15 title registered for purchase – 1/12/15 Contract to Sell • Not caught by the new rules due transitional provision Definition of Land • Any estate or interest in land • Option to acquire land, estate or interest in land • Therefore includes freehold and leasehold Main Home Exception Proposed Rules • Bright-line test will not apply to main home • Will only apply to one property at a time – different from current rules • Proposed rule: the land has a dwelling on it; the dwelling is occupied mainly as a residence by the owner; and the dwelling is the main home of the owner. • Can be owned by a trust so long as beneficiaries occupy • Must be occupied mainly as a residence • Based on actual use rather than intention • Where several residences, main home = property with most connection
By djca. Posted in Business Growth, Small Business Advice, Solutions.
There is only one thing that we love almost as much as Xero at djca and that is great food and drink. And boy do we count ourselves lucky to have Costas Taverna as one of our clients! Straight from the guys at Costas, here is a bit about how they came to be so darned popular in Christchurch.
Tell us a little bit about Costas Taverna…Costas Taverna is a place to celebrate the simple joys in life… family, friends, conversation and great food. We will always do our very best to ensure you receive great value, fast, efficient, friendly service, and outstanding food sourced from the best and freshest local and imported ingredients. We believe that eating great food, in good company is one of life’s greatest pleasures, so we want you to sit back, relax and celebrate the moment!
Where do you operate?Costas Taverna is now operating on Cranford Street 478 shop 3 in Christchurch. We are open 7 days from 5pm till late.
Why did you choose to get into that industry?In 1904, in a small village near the bank meadows of the river Evros, Greece, the Lakakis family developed a passion for cooking. Not with the advanced cooking methods used today; but it was honest. It was the best food the Village Kiani had ever tasted. Food is something that we have been incredibly passionate about for many decades. We have literally poured our hearts into every detail within our restaurant. Watching our guests enjoying our hospitality is absolutely priceless for us, that is why we are in the restaurant business.
What is one piece of advice for business owners in your industry? Can you share any lessons learnt from business struggles or challenges that you’ve overcome?Control your numbers using a food and beverage costing calculator and good stock control. The use of Xero to form an accurate budget will do wonders for you.
What accounting system (if any) were you using before moving to Xero? How did that compare to Xero?We didn’t have one. We used to use Microsoft Office Excel and we worked closely with our accountant who managed it for us.
We hope that with Sidekick on board taking care of your accounts, you have found more time to do the things you really enjoy. So what is it that you love to do with your spare time?We love to take mini holidays to relax and unwind.
Do you have any deals or specials that you’d like to share?October is coming up with some exciting promotions at Costas Taverna. Monday is 2 for 1 Souvlaki Platters (Regular), Wednesday 2 for 1 Cocktails or Coolers all night and Sunday kids eat free from 5 pm to 6:30pm. You can find our promotions and deals on our Facebook Page: www.facebook.com/CostasTaverna and on our Website www.CostasTaverna.co.nz
By djca. Posted in Business Growth, Small Business, Solutions.
Simon Telfer from Stimulus is an independent director and business adviser specialising in governance strategy and succession. He shares with us some advice on creating business plans that stick around. You can contact him via www.stimulusnz.com Let me share with you how a strategic plan can still be alive, well and far from gathering dust in the bottom drawer one year on. As my client says “It is a great feeling to know my team is enthusiastic about the future – they can now see what I see.” So, what went right?
Personal goals were nailed downThe business owners spent a couple of months thinking, documenting and refining their personal goals. What they deemed important included good health, flexibility to travel, passive revenue streams and to remain commercially active and involved. These personal goals were the foundation on which the rest of the strategy was built.
Key business themes were identifiedThe shareholders defined five high level themes for the business. They believed focus on these would be required to ensure the business supported the achievement of their personal goals. The themes were: · Remaining true to the Company values · Increasing turnover & profitability over next 5 years · Strengthening internal systems & procedures and external governance · Removing owner responsibility for staff and operations · Readying the company for a change of ownership in 2015
Careful choice of planning team membersThe team had breadth and depth, understanding that two people with similar ideas are, in effect, one person. Strength was derived from the team consisting of an employee, a customer and an independent facilitator, as well as two shareholders.
Customer wants and needs crucialThe customer was always at the forefront of the planning discussions. Their wants and needs were researched and discussed at length. This client distilled it down to three key needs: speed, quality and reliability.
Concise output resultedAlthough the benefit from planning derives as much from the process (journey) as it does from the final document, the strategic plan itself is seven pages in total. It is clear, concise, relevant and real.
Staff engagement continuesEmployees were fully engaged in the strategy’s initial roll out and this has continued via company workshops, three times a year. Examples of involvement include employees defining the Audacious Goal, allocating responsibility for actions plans and regularly being asked to present examples of the Company values being put in to action.
Accountability established earlyThe owner managers were under no illusion that an external, independent individual would be required to ensure accountability and monitor progress of the execution of the strategic plan. The plan is regularly referred to at Board meetings and the strategic goals drive real decision making around resource allocation and priorities.
The plan was durableAlmost a year in to the 4 year planning period the Company is still some way off achieving their strategic goals. This is a good thing. A robust strategic plan is not a glorified “to do” list – it took much thinking and discussion to ensure the goals were stretching yet achievable.
And the client is happy!“As an owner / manager I had a vision for the future but it was clouded with many different options of how to get there. The strategic planning has given me a clear and concise focus for the immediate and long term future. It encompassed the entire company – we are now all working toward the same vision.”
By djca. Posted in Cloud Software, Small Business, Solutions.
What is the cloud we hear you say?Why it’s only the backbones of our company! The ‘Cloud’ refers to the Internet. Instead of buying software and installing it directly on your computer, cloud software is simply accessed online. Just log in from any computer with internet access, and away you go.
Why switch to the cloud?Ever had your computer crash and lose all of your work? Well that is no longer a problem with the cloud. Any data, files, or documents in the cloud are there for good and won’t be lost if your laptop dies or computer crashes. We also think the cloud is fantastic because it is cheap! Most cloud products are inexpensive with a small monthly fee, or even better are free.
What do we love about it the most?You can take your work anywhere! At home, on holiday, waiting in line at the post office, you can access what you need to as long as you have an internet connection.
Is it safe?Yes, it is. Software like Xero have whole teams dedicated to the safety of your information. If you use internet banking, then you can trust the likes of Xero as they have the same encryption code.
How do we know?Because we speak from experience. Each djca staff member is cloud based and we are proud to say it! We use Google Apps for communication and appointment booking, Box for document storage and collaboration, WorkflowMax for job and customer relationship management, SmartPayroll for our payroll, and of course Xero… and that is only naming a few! These applications allow us to be an almost paperless and totally mobile office.
Want to know more?Get in touch with us today. We are happy to have a chat with you on how the cloud can help your business as much as it has helped us. Without the use of the cloud, we wouldn’t be where we are today helping as many people as we do.