Organisation

Matt Barbershop – Tax Returns – Case Study

Does this sound like you?

Don’t mind doing the daily or weekly transactions, but not GST Tax returns?  Need time to grow your business, so looking to outsource some accounts work?  We can help with your financials, so you have more time to focus on other areas of your business or social time in your calendar.
Matt is a barber, with a Barbershop business located near the Cuba Mall, Wellington.

Matt has one staff member, Lance, who has almost completed his barber apprenticeship. Trade is good, there is plenty of foot traffic outside his store being Cuba Mall. Now he is considering opening another barber shop over in Thornton, near where his partner works.
Lance is well regarded by regular clients now and he has indicated to Matt he is willing to help manage the Cuba Mall barbershop business, whilst Matt starts up the new barbershop in Thornton.

Matt is pretty account savvy and quite comfortable with processing the weekly accounting transactions for his books, but still, engages a bookkeeping business to oversee his Xero Cashflow books.  Because Xero is cloud based, they can easily go online into his accounts and review them remotely.  At GST filing time every two months, they check in and make any corrections needed.  The tax returns are filed for him and his bookkeeper sends an update of work done and advice of any amounts due to Inland Revenue.

At financial year end, his bookkeeper will also process both business and personal tax returns too.

Matt can control user access to his Xero business accounts, and currently, he has it set up for Lance to access the payroll portal only and enter his own time-sheet hours in there.  That means Matt can just check in weekly and approve Lance’s hours before payroll processing.

Later in the year, when Matt hopefully opens his second store, he’ll ask his bookkeeper to set up tracking in Xero too, so he can see how each store is doing.  Xero can handle this with a tracking option to transactions for either certain clients or locations/stores.  He’ll be able to see how Lance is doing in managing sales in his original store.

Matt reckons life is for living, and after a long week on his feet cutting, supervising Lance and maintaining the barbershop – he just wants to chill with his partner in the evenings. And Sundays. They often head out to local bars or cafes with friends.  Or take out their surfboards after work if the waves are right.  He enjoys balancing his life with time to play, against his hard work on his business.

Does this sound like you?

Don’t mind doing the daily or weekly transactions, but not keen on doing much more, or the tax returns? Need time to grow your business?  Yearn for more social time for family and friends?

Do The Sums Book Keeping and More can help. We are happy to fit in with your bookkeeping needs and do as little or as much as you require. Contact us today, and discuss bookkeeping options for your business. Outsource your business tax filing returns, and focus on growing your business. Create some balance in your life and make some time for hanging out with your mates or family.

balance-in-the-books-and-balance-in-your-life

balance-in-the-books-and-balance-in-your-life

A good hearty laugh relieves physical tension, leaves your muscle relaxed for up to 45 mins after, and even boosts the immune system?   Do you remember the last time you enjoyed a good deep belly laugh with your family or friends?

One crucial thing many small business owners often overlook – is looking after themselves and balancing their lifestyles.  It’s so very easy to find your business gradually swallowing up all your free hours.  Doing everything in the business is demanding, you get stretched with needing to manage everything, especially if you’re a sole business owner – there isn’t anyone to share your load with.  You can’t afford to get sick or ill.   After all, who will run the business?  Growing demands begins to wear you down.  So what can we do to help create ‘balance’ in our lives, feel more in control, and make time to step away from our businesses to relax and have fun.

First – check your physical health and diet.

Being healthy does strengthen your mental ability to be able to manage stress.  Even a 40 min daily walk around the block with the dog helps.  It’s not about super long gym sessions to get a prime body – we’re talking about maintaining a good general fitness. Find some activity you enjoy doing – if it becomes boring – do it with a group or ask a friend to join in.  Try blending doing physical activities with your partner or family to gain more social and physical time – backyard soccer game anyone?

(Think – what’s the point of investing this time and money into the business now if you aren’t going to strive to be healthy enough in future years to enjoy possible financial benefits derived from all this hard work you’re putting into your business today?)

Monitor your business hours.

Finished work? Done enough today?  Close that laptop, and put down the cellphone and walk away. Go interact fully with the family and friends.  In your time away, if it’s crucial to check in, then be strict – check in once the late afternoon.  Avoid checking devices during late evenings – do you want to fall asleep with business on your mind? Create a friendly auto-answer messaging system on both your emails and business numbers to clients who call out of hours.  Schedule your breaks, and take them.   Sometimes it’s not possible to avoid after hour work because of the nature of your business, like a food business. But try scheduling two-three hour blocks of time in evenings for say two or three nights a week and then keep the other evenings free to give yourself a break away from work.

Work Smart on your business.

Review your goals on a regular basis.  In working so hard, we can forget to step away and check we’re on track or not.  How’s your income? Your current business systems – are there better way of doing this process now?  Spend so much time looking for and sorting paper invoices and writing outgoing orders?  Go paperless – move to an integrated accounting system and encourage suppliers and clients to order online.  Social media marketing … do you need to be on all of them – why not get selective and focus on two.  Streamline, and then review again later.

Outsource.

Eeeek – that means bringing in ‘outsiders’ into your business.  But when it grows, sometimes it’s just not possible to keep our fingers on all the pulses of the business. Multi-tasking doesn’t work if it’s spreading your energy thin all over the place – accounts, marketing and processing sales – and you can’t focus properly.  Contracting out some of your workloads, or hiring experts can reduce your time demands within the business.  Experts with their knowledge base can suggest fresh ideas and processes to help enhance your business.  Outsource what you aren’t good at or haven’t time to train on, and refocus your passion on what you do love doing best in your business!  So we’ll ask now – how are your accounts?  Do you understand where your money is coming from and where is it going?

Here at Do the Sums, we work hard to be updated on the best bookkeeping systems, keep abreast of tax compliance rules.  We’re always the lookout for cool system add-ons that can help minimise business processes and save time.  We can train you on bookkeeping systems, or you can hand it all over. Or just some.  By the way, we Network often – so if it’s not accounting – but something else you’re needing help with, feel free to ask me as we deal with a wide range of business professionals and may be able to recommend the right person.

So, there it is.  BALANCE.  Work on your business – but make your lifestyle balanced too, and create some time off to go relax and laugh .. with family or friends. 

GST Tax Returns     Annual Tax Returns    Tax Agents   

Bookkeeping Online   FBT Tax Returns   Payroll Processing

Friendly Personal Service at Do The Sums Bookkeeping and More – can we help you?

Rebecca on 027 379 0992 or email rebecca@dothesums.co.nz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overdue Invoices: How to get these paid faster

My process for following up overdue accounts – to get these paid faster.

Get your overdue invoices paid faster

I hate being the bad guy. And I hate chasing late payers. But I need to be paid (I want to eat this week after all). So in this post I share my process for following up on my overdue invoices. But first, my Number One Tip for getting your invoices paid….

Set up a system and BE CONSISTENT!

These are the steps I follow once the invoice is overdue. To find out about tips you can use before due date check out my post on getting your invoices paid faster.

  • 1 Day Overdue – yep that’s right as soon as the invoice is overdue. I send a very friendly reminder email, advising that I haven’t seen payment in my account, and that I wanted to check that they had received the original invoice, and didn’t have any questions. Include a copy of the original invoice. Keep it nice and friendly, it’s just a reminder at this stage. Give them the benefit of the doubt – they have likely misplaced your invoice or forgotten to make payment.
  • 7 Days Overdue – If you haven’t heard from them yet, it might be time to follow up with a second email or phone call. Still polite, no need to be harsh. You don’t know what could be going on for them.
  • 14 Days Overdue – Time for a phone call if you have not previously heard from them. Keep it polite and to the point. After the call follow-up any agreements with an email so you have everything in writing. E.g. Hi XXX, As per our earlier phone discussion, I look forward to receiving your payment on the 20th. Please let me know if you have any problems. Regards.

Xero have released a fabulous tool called invoice reminders which means you can automate all of the above reminders to be sent out via email at dates you choose. The message inside each email can be completely customised. Find out more about this feature here.

If you can’t get hold of them and have still had no response, it’s time for a Letter and copy of invoice to go in the post to the client.

  • Statements – I send these out (via email) on the 1st of the month to any clients with overdue balances.
  • Payment Arrangements – If your clients seem to be struggling get a payment arrangement in place ASAP. Getting even $10 per week is better than nothing.
  • Interest on Overdue Accounts – Make sure you have it stated on your invoices that all overdue accounts will incur interest charges at xx% per month. If you have had no contact from a client for payment, and the invoice is 1 month overdue, add an interest charge. This will get most people to pay up fast…. often without paying the interest, but at least they paid 🙂

So those are the things I do for overdue accounts. What do you do?

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Organising your Accounts

How to organise your accounts like a pro!

Are your receipts and invoices all over your desk? the kitchen table? in the Car? Do you struggle to keep track of them all? Not any more!

In this post I will show you how I sort my own papers and this works for both electronic and paper based storage. You can get your accounts organised and working for you in no time.

Organise your accounts now

You will need:

  • 3 Ringbinders
  • 2 Sets of monthly dividers
  • 1 set of un-marked dividers

Name your folders as follows:

  1. Creditors (Bills/Receipts) – this is for money going out
  2. Debtors (Invoices/Receivables) – money in
  3. Bank Statements, GST & Misc – everything else

In the first two folders add the monthly dividers. Instead of putting them in Jan-Dec put them in with April on the bottom and March on top. This is a great tip as it means that your files are in order for the financial year and also means that as the months progress you aren’t trying to turn 1000 pages from all the previous months to get to the one you want.

Organise your accounts to streamline your work

For the third folder add the unmarked dividers:

  • Bank Statements – one divider for each account
  • GST
  • Payroll/PAYE (if you have employees you may need an extra folder to store timesheets)
  • Miscellaneous – for everything that doesn’t fit anywhere else

How to file your papers using this system:

  • File inside each month alphabetically (this makes it easy to look back if you need to find something at a later date).
  • If there are multiple bills from one supplier file with newest on top (you are most likely to have a query with the most recent bill).
  • The Miscellaneous tab is perfect for filing all your Interest certificates, mortgage interest certificates etc.
  • You can also take an extra copy of any invoices for fixed assets. File these under miscellaneous. Then you have them ready for end of year.
  • Do it as soon as the bill arrives on your desk, or weekly at the most. A bit of time spent now will save a huge headache later on.
Organising your accounts will help declutter your desk and your mind

If you keep it up your desk should look more like this….

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Basic End of Year Financial Checklist

End of Financial Year end Checklist

So with the end of another financial year almost upon us it is time to check that your business accounts are in order ready to hand over to your accountant or for you to complete your tax return yourself. Some of these things you can get onto now, while others can’t be completed just yet (but you can always make a start)…..
To continue reading this guest post pop over to The Baby View article here

If you have any questions you can get in touch with me at dothesums.nz@gmail.com

Top tips to get your invoices paid faster

Follow these top tips to get your invoices paid faster

You have put hours of work into your providing your service or selling your product. You have sent the invoices to your clients…. but instead of payments all rolling in on due date, things just aren’t happening…

 

Get your invoices paid faster

1. Be Specific
Being specific is key to reducing time spent both answering queries from clients, and getting invoices paid. Make sure you include as much detail about the service or product provided. Use the columns available include quantity/hours. Ask yourself…. Is it clear? are the services/ products provided understandable.

For Example: If Sarah runs a Virtual Assistant Business and she completes some social media work and some website updates for James, what does her invoice need to include?

including lots of detail will help get your invoices paid faster

Invoice to James for work carried out by Sarah (Virtual Assistant)

 

2. Include Payment Details 

You need to make it as easy as possible for your customers to make payment. Include all the payment options you offer Paypal, Bank Account, Creditcard/EFTPOS. Also make sure you include the account details to actually make the payment. No point saying customers can pay by Bank deposit if you don’t put your bank account number on the invoice.

 

3. Include your Terms on the Invoice
The main one is your due date…. this is essential as many businesses will assume that payment is the 20th of the following month if you don’t state a date for payment. If there is no date how will they know it is overdue?
Other important terms to include are things like interest on overdue accounts (you should have this on your invoice even if you don’t use it often). It is amazing how quickly many people will pay if you send them an invoice for the interest on an overdue amount. So this is a key tool in your debt collection belt.

Also, many businesses offer a prompt payment discount if payed early (either before due date or within x days from invoice). This is a good positive way to encourage early payment of your invoices. It only needs to be a small amount say 5%.

4. Be Regular
Create a system that works for you and stick to it… (if you don’t have time, pay someone to do it). By this I mean choose when you are going to send your invoices? Will you send as soon as each job is completed, at the end of each week, or at the end of each month. Which option you choose is up to you, the key is sticking to it. You also need to decide if and when you will send statements? Only when payment is overdue, at the end of the month. If you don’t have the time to get your invoices sent regularly then I do recommend paying someone else to get them done for you. This is after all your income we are talking about.

Keep your invoices and contact with clients regular to help get invoice paid faster

5. Follow Up
This is probably the most crucial step…

Persistence with following up overdue accounts can help invoices get paid faster

You need to be persistent and consistent in your follow up. That means having a process in place for dealing with any unpaid invoices as soon as they become overdue. I recommend starting with a friendly follow-up email the day after due date, checking to see if they received the invoice and if there were any problems that explained why payment had not yet been made. Nine times out of ten the person will have either misplaced the invoice or simply forgotten to make payment.

From there you need to establish a process of regular contact both via email and phone. Make notes of conversations and note down dates of expected payment. Sometimes it could be an idea to offer a payment plan. If nothing seems to be working interest can be added and further steps taken.

Final Note:
The biggest key to keeping control of your debtors and avoiding huge amounts of overdue invoices is getting a process sorted and sticking to it regularly. If it is something you don’t have the time for, or don’t want the hassle, then outsource. There are bookkeepers (like me), accountants, and virtual assistants that would be happy to help with this.

5 Top Tips and Tricks to Make your Budget Work

These 5 tips will help you get your budget sorted…

With the New Year often comes resolutions or good intentions to get a budget sorted. Often that’s as far as we get with it, as it always seems so hard, or something always crops up leaving you feeling like you’ve failed. Getting a household budget going doesn’t have to be like this, take a look at my top 5 tips and tricks below:

budget tips and tricks

Budget Tips & Tricks

1.       Give every dollar a job to do… If every dollar is allocated it’s harder to spend it on something else.

2.       Budget per pay period – each period is different, save up for those bigger expenses

3.       Get the whole family involved – set a goal everyone will enjoy (Disneyland anyone) and get working towards it.

4.    Be FLEXIBLE – budgets are fluid, they can change if something crops up  like a flat tyre (no, unfortunately chocolate and wine are not emergencies), do some shuffling and make it work for you.

5.       Pay off those debts (permanently) – with a good budget system in place using the tips above, you can get out of debt and stay out. Imagine the joy of that family trip to Disneyland knowing you don’t have to stress over the maxed out credit card when you get home.

And please get in touch if you have any questions or if I can help in any way dothesums.nz@gmail.com

Source Documents

Source Documents

So you have just started you new business or perhaps you have been going for a while now… And someone mentions ‘Source Documents’ to you. Do you know what a source document is and why you need them, do you know how long you need to keep them for?? Yes, Sort-of….  Okay, lets break it down for you.

What is a Source Document?

“A source document is the original record containing the details to substantiate a transaction entered in an accounting system.”

Types of Source Documents

  • Invoices to customers or from suppliers
  • Receipts for purchases or sales
  • Credit Notes
  • Cheque & Deposit Books
  • EFTPOS and/or Credit Card Chits
  • Bank Statements
  • Purchase orders
  • Hire Purchase Agreements
  • Loan Documents
  • Sale & Purchase Agreements
  • Petty Cash Book

Why do you need to keep source documents?

Source Documents are important for many reasons, firstly that they allow you to enter the transaction accurately into your accounting system. Secondly, source documents provide a document as proof of a transaction and the amount etc. for example if a supplier sends you an invoice for goods that you have already paid cash for. The receipt can be shown as proof to the supplier to show that you have in fact paid for the goods. Thirdly, EFTPOS or Credit Card Chits are also essential to have if your Merchant (e.g. bank) has a query come through from the credit card company, you need to provide details of transaction including the chit and receipt showing what the purchase related to.

Source documents also have an important accounting function if your business needed to be audited (either by the IRD or for other reasons). An auditor will select transactions at random and check that you have the source documents to prove that the transaction actually took place, and that it has been entered correctly into your accounting system.

How long do you need to keep these documents for?

In New Zealand the Inland Revenue Requires that you keep all Financial Records (including source documents) for at least 7 years. It is a great idea to add these all into a single box for each year, so the details are easy to find if you need to access them.

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