(Published in Business on 25 August 2010 by Tony Rule)
There are lots of exciting new online applications being developed to help small businesses. This is a continuation of the ‘best of breed’ model where small businesses are given access to very sophisticated but easy to use business applications. They get to choose a tailored range of online solutions to fit their needs, rather than having to buy an expensive, old-fashioned desktop system that doesn’t quite fit the bill.
Letstrade are launching their new Sales Order Processing solution. This is a powerful sales, procurement and inventory solution for small to medium sized businesses. It suits a wide range of businesses including wholesalers, importers/exporters and franchises.
Letstrade is in the final stages of development and inviting Xero customers to try it out for free during the beta period. We think Letstrade is a fantastic solution for any business that needs to account for stock movements and it integrates with Xero so you don’t need to worry about the hassle of re-entering data from one solution to another.
This is another of the new generation of sophisticated solutions being released that connect with Xero. Exciting times!
If you wish to sign up for the beta trial follow the link http://www.letstrade.com/
Wednesday, August 25, 2010
Tuesday, August 24, 2010
UnisonFibre Business Expo - you don't want to miss this...
The Hawke's Bay Chamber of Commerce is proud to host the largest event for business in Hawke’s Bay featuring leading international business brands through to local service providers.
Check out the latest business products and services, get information to manage your business better, improve productivity, increase profitability, and network with thousands of other business owners.
Join the Best Brains in the Bay on September 8 + 9 in the National Tobacco Factory (Rothmans Building), Ahuriri, Napier.
The Expo offers a range of onsite activities, including:
• More than 80 exhibitors
• Free seminars both days of the Expo
• Take a break at the EXPO Cafe
• Celebrate HB Businesses on Wed 8th at 5:30pm 2010 Westpac HB Business Awards Finalist Announcement
Visitor Information
Are you interested in either starting a business in Hawke's Bay or expanding your business here? Then you need to visit the UnisonFibre Business Expo.
Dates:
• Wednesday 8 September, 10am–7.30pm
• Thursday 9 September, 10am–7.30pm
Venue:
• National Tobacco Factory, Ahuriri, Napier
Just a selection of the Key Note Speakers:
• Richard Suhr - head of Google enterprise for New Zealand, Australia & Sth East Asia
Thurs 9th at 11am
• Cameron Bagrie, ANZ Chief Economist talking about the latest economic developments
Wed 8th at 10am
• Hannah Samuel, Reputation Champion
Wed 8th at 2pm
• Mark Robotham, Escalator Programme
Thurs 9th at 10:15am and 2:30pm
For more information go to www.hbbusinessexpo.co.nz
Check out the latest business products and services, get information to manage your business better, improve productivity, increase profitability, and network with thousands of other business owners.
Join the Best Brains in the Bay on September 8 + 9 in the National Tobacco Factory (Rothmans Building), Ahuriri, Napier.
The Expo offers a range of onsite activities, including:
• More than 80 exhibitors
• Free seminars both days of the Expo
• Take a break at the EXPO Cafe
• Celebrate HB Businesses on Wed 8th at 5:30pm 2010 Westpac HB Business Awards Finalist Announcement
Visitor Information
Are you interested in either starting a business in Hawke's Bay or expanding your business here? Then you need to visit the UnisonFibre Business Expo.
Dates:
• Wednesday 8 September, 10am–7.30pm
• Thursday 9 September, 10am–7.30pm
Venue:
• National Tobacco Factory, Ahuriri, Napier
Just a selection of the Key Note Speakers:
• Richard Suhr - head of Google enterprise for New Zealand, Australia & Sth East Asia
Thurs 9th at 11am
• Cameron Bagrie, ANZ Chief Economist talking about the latest economic developments
Wed 8th at 10am
• Hannah Samuel, Reputation Champion
Wed 8th at 2pm
• Mark Robotham, Escalator Programme
Thurs 9th at 10:15am and 2:30pm
For more information go to www.hbbusinessexpo.co.nz
Tax Changes - Xero
Have you updated your existing accounting package? Was there a cost?
Xero has already commenced the process of the GST updates and the cost to you if you were a client is NIL. If you haven’t updated your software and you are still thinking about it, we would strongly recommend that you consider Xero.
Contact Sarah today 833 6295.
Xero has already commenced the process of the GST updates and the cost to you if you were a client is NIL. If you haven’t updated your software and you are still thinking about it, we would strongly recommend that you consider Xero.
Contact Sarah today 833 6295.
Tax Changes - October 2010
The countdown is on for the GST increase and the PAYE decrease for 1 October 2010, and we hope you have given some thought as to how these GST changes will impact upon you and your business. At Walsh & Associates, it is our intention to keep you informed on a weekly basis on a range of transactions and how they will effect you between now and 1 October 2010.
GST
From the 1 October 2010, GST will increase from 12.5% to 15% on all goods and services (excluding financial). So...
• if you invoice $1,000 goods out at the net value plus GST, on the 1 October , the price will increase to your client from $1,125.00 to $1,150.00
• if you receive an invoice for $1,150.00 inclusive of GST, and you want to find the GST content of that invoice, simply divide the $1,150 by 7.666, or for the mathematicians among us, take the $1,150 multiply by 3 and divide by 23.
The general rule is that a supply is considered to take place at the earlier of the time an invoice is issued or the time any payment is received by the supplier.
Invoice Basis
For those clients who are on an invoice basis, they would claim GST when they receive an invoice (pre 1 October at 12.5%) and account for GST when they issue an invoice or receive payment in respect of that supply, whichever comes first.
Payments Basis
For those clients on a payments basis, account for GST or claim GST on any payments received or made during a taxable period, so for payments / receipts made pre 30 September they will be at 12.5%, from 1 October 15.0%.
So what happens when we raise an invoice in September but it is not paid for till October?
At the 30 September 2010, the IRD will provide a special GST transitional adjustment form, which effectively will allow you to deduct your creditors from your debtors and multiply the difference by 0.019324 (difference between old and new rate).
Next week...
We will talk about Hire Purchase Agreements, Lay-by Transactions and a few other interesting transactions that may become testing.
GST
From the 1 October 2010, GST will increase from 12.5% to 15% on all goods and services (excluding financial). So...
• if you invoice $1,000 goods out at the net value plus GST, on the 1 October , the price will increase to your client from $1,125.00 to $1,150.00
• if you receive an invoice for $1,150.00 inclusive of GST, and you want to find the GST content of that invoice, simply divide the $1,150 by 7.666, or for the mathematicians among us, take the $1,150 multiply by 3 and divide by 23.
The general rule is that a supply is considered to take place at the earlier of the time an invoice is issued or the time any payment is received by the supplier.
Invoice Basis
For those clients who are on an invoice basis, they would claim GST when they receive an invoice (pre 1 October at 12.5%) and account for GST when they issue an invoice or receive payment in respect of that supply, whichever comes first.
Payments Basis
For those clients on a payments basis, account for GST or claim GST on any payments received or made during a taxable period, so for payments / receipts made pre 30 September they will be at 12.5%, from 1 October 15.0%.
So what happens when we raise an invoice in September but it is not paid for till October?
At the 30 September 2010, the IRD will provide a special GST transitional adjustment form, which effectively will allow you to deduct your creditors from your debtors and multiply the difference by 0.019324 (difference between old and new rate).
Next week...
We will talk about Hire Purchase Agreements, Lay-by Transactions and a few other interesting transactions that may become testing.
Thursday, August 12, 2010
Seven Deadly Sins of Business
How many times over recent years have we seen businesses fail rather than succeed, in these times knowing what a business should not do is just as important as knowing what the business should be doing. Businesses that fail often exhibit the following 7 characteristics:
1. Poor financing structures
Borrowed too much money, too much reliance on and overdraft facility as opposed to a term loan.
Unrealistic drawings and lifestyle expectations, tax issues aside you cannot draw out of the business more than what the business is currently earning.
2. Poor customer base
Product obsolescence and substitute markets, what happened to all those successful second hand shops once “Trade Me” was on the scene? Polarised customer, product or market base or alternatively, lack of targeted niche market.
3. Poor supplier base
Always great to have a good supplier around but when times get tough can they give you the flexibility you need to survive. Rule with you head, not your heart.
4. Lack of vision and planning
Failure to plan, is planning to fail, - no business plan? What happens when the bank want to look at your YTD position plus estimates for the balance of the year. The last 3 years result is like looking in the rear vision mirror – how dangerous is that when moving forward?
5. Overtrading
So often you hear of apparent good businesses failing, whys that? Insufficient capital or worse still doing too much too soon or taking on a job that is too big for them.
6. Poor financial process
Lack of basic financial records, poor attempts at budgeting and worse no attempt.
7. Lack of poor performance measures
What is your gross profit, what are your stock turns, what is your debt to equity ratio
Did you know that people who go into business can be generally classed into 6 categories, which one do you fall under:
· Get rich quick – normally go bust after a period of time
· Entrepreneurs – go for it, take risks
· Passionate do gooder
· Buy a job
· Family business
· Be your own boss
The first two categories take risks, the majority of us are in that balance of five.
1. Poor financing structures
Borrowed too much money, too much reliance on and overdraft facility as opposed to a term loan.
Unrealistic drawings and lifestyle expectations, tax issues aside you cannot draw out of the business more than what the business is currently earning.
2. Poor customer base
Product obsolescence and substitute markets, what happened to all those successful second hand shops once “Trade Me” was on the scene? Polarised customer, product or market base or alternatively, lack of targeted niche market.
3. Poor supplier base
Always great to have a good supplier around but when times get tough can they give you the flexibility you need to survive. Rule with you head, not your heart.
4. Lack of vision and planning
Failure to plan, is planning to fail, - no business plan? What happens when the bank want to look at your YTD position plus estimates for the balance of the year. The last 3 years result is like looking in the rear vision mirror – how dangerous is that when moving forward?
5. Overtrading
So often you hear of apparent good businesses failing, whys that? Insufficient capital or worse still doing too much too soon or taking on a job that is too big for them.
6. Poor financial process
Lack of basic financial records, poor attempts at budgeting and worse no attempt.
7. Lack of poor performance measures
What is your gross profit, what are your stock turns, what is your debt to equity ratio
Did you know that people who go into business can be generally classed into 6 categories, which one do you fall under:
· Get rich quick – normally go bust after a period of time
· Entrepreneurs – go for it, take risks
· Passionate do gooder
· Buy a job
· Family business
· Be your own boss
The first two categories take risks, the majority of us are in that balance of five.
Opportunity to Save Tax - Or Not?
The juggling of company income between shareholders and companies to take advantage of the lower company tax rates is going to be a reasonably common occurrence for the 2010 and 2011 tax years. However, the IRD has enshrined into legislation (Income Tax Act Section BG) that any scheme that has as its principal purpose the avoidance of tax may be tax avoidance. Past behaviour, the viability of the company etc could provide non-tax reasons to vary the pattern of shareholder salaries. Risks will reduce, if the clients changed salary policy is not greedy
GST Changes - October 2010
So the next hurdle we need to start thinking about is the GST increase from 12.5% to 15.0% on 1 October 2010.
When GST increased from 10.0% to 12.5% in 1989, the market picked up heaps of momentum pre the increase but once the increase was through the market died again and so as to try and insulate ourselves against the dip as much as possible, one thought we had was do we want to hold the GST increase off until after Christmas 2010. This will mean the extra 2.5% will come out of our gross margin but in terms of building up goodwill with our customers and maintaining a good level of business leading up to Christmas, could this be an option for us?
That issue aside, some of the practical issues we will need to address with a GST increase are:
- If you are a retailer or a wholesaler or stock will have to be repriced.
- What happens if you are a bar?
- Can your current accounting system cope with the GST increase? If you use an online accounting system like Xero, you will have to do nothing, the change will be made for you.
- Most customers will want to be billed for services pre the GST increase, but if the time of supply is not till after the 1 October 2010, the IRD might have an interest in some of these transactions.
- You will have to be careful that the transactions that happen pre 1 October 2010, that they are billed out at 12.5% will have to be adjusted up to 15% when paid the money you are accounting for is 15.0% even if not paid till after 1st October 2010.
- What about transactions on Lay by? Clients selling goods on Lay by may be paying GST on each installment as it is received. However, the IRD has indicated that GST applies on the date the final payment is made. Therefore, if a lay-by agreement straddles GST change over date, the payments made before the 1 October will be insufficient.
- GST on a hire purchase agreement will operate on the agreement date.
When GST increased from 10.0% to 12.5% in 1989, the market picked up heaps of momentum pre the increase but once the increase was through the market died again and so as to try and insulate ourselves against the dip as much as possible, one thought we had was do we want to hold the GST increase off until after Christmas 2010. This will mean the extra 2.5% will come out of our gross margin but in terms of building up goodwill with our customers and maintaining a good level of business leading up to Christmas, could this be an option for us?
That issue aside, some of the practical issues we will need to address with a GST increase are:
- If you are a retailer or a wholesaler or stock will have to be repriced.
- What happens if you are a bar?
- Can your current accounting system cope with the GST increase? If you use an online accounting system like Xero, you will have to do nothing, the change will be made for you.
- Most customers will want to be billed for services pre the GST increase, but if the time of supply is not till after the 1 October 2010, the IRD might have an interest in some of these transactions.
- You will have to be careful that the transactions that happen pre 1 October 2010, that they are billed out at 12.5% will have to be adjusted up to 15% when paid the money you are accounting for is 15.0% even if not paid till after 1st October 2010.
- What about transactions on Lay by? Clients selling goods on Lay by may be paying GST on each installment as it is received. However, the IRD has indicated that GST applies on the date the final payment is made. Therefore, if a lay-by agreement straddles GST change over date, the payments made before the 1 October will be insufficient.
- GST on a hire purchase agreement will operate on the agreement date.
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