End of Financial YearSubscribe 12 Posts
Starting and running your own business is as much about your products as it is about the people working for you. Get your team right, and that’s already half the battle won.
Entertainment and car expenses—these are two common business expenses that I am constantly asked about. Let’s explore an entertainment scenario first: “I meet with business clients at coffee shops and restaurants. How do I account for these costs in my business?” In the ever-increasing mobile business world, client and work meetings are often held at cafés and restaurants while drinking and eating. These expenses need to be treated as entertainment costs in your business accounts, and, for tax purposes, you cannot claim back the GST paid. The expenses are not tax deductible for the client portion of the cost. Only some of the total cost can be claimed as a tax deduction, and only if your business is registered for Fringe Benefits Tax (FBT). I know what you are thinking—I need to "entertain" to assist with marketing and promoting my business. This might be true, but for accounting and tax purposes there are specific rules to adhere to (unfortunately). It gets tricky when, for example, you have a Golf Day for employees in your business, their partners and the business clients. A Golf Day is a social event and considered entertainment. If the cost for the day for the employees and their partners is less than $300 each, then these costs are considered entertainment, but for tax purposes the business cannot claim the GST paid, cannot claim the expense as a tax deduction, and no Fringe Benefits Tax is payable. In relation to the business clients’ costs, the expense is classified as entertainment in your business accounts, but you cannot claim the GST paid or claim the expense as a tax deduction.
Saddle up, we are now into the new financial year. It’s a great time to set goals for the new financial year and review your accounting practices and systems for your business. Accounting processes document all aspects of a business’s financial performance, so here are three essential practices to get you started. Your business is a separate entity to you, so keep track of what the business spends. The business you are running is yours. If you run that business through a structure such as a company, trust or partnership, then sometimes there is a tendency to blur the lines between yourself and the business. The entity running the business owns its own assets and incurs its own liabilities, and its business activities are separate to the owners. Ensure that you are purchasing items in the business entity name. Obtain the receipt and claim a business expense so that monies you take from the business are being accounted for correctly.
In the same way you currently manage your pool of money to pay family obligations including home, school, car, and health bills, a small business has the same challenges. Whether you realise it or not, you are using a budget every day. Measuring the money coming in and going out in your business is vital to keeping the operations flowing. In fact, budgeting can: Ease your cash flow constraints. Reduce the financial stress in your life. Make it simpler to anticipate costs and avoid nasty surprises. If you do not budget, how will you know if your business can afford a new employee, finance a new car, or invest in new technology, all while meeting existing everyday business financial commitments, like taxes, superannuation for the employees, and rent?
What every business needs to know about the upcoming tax changes. The end of the financial year is always a busy time, and EOFY 11-12 is set to be the most challenging yet for New Zealand businesses. The Government is bringing in a range of small changes that will make your end-of-year calculations more difficult than they’ve been before. New tax changes mean a new set of rules and regulations, and a raft of new problems for non-compliance. If you haven’t already, it’s time to check out what these mean for your company’s EOFY preparations. The key to surviving the end of financial year rush is knowing what these changes are, what they mean for you, and making sure you’re prepared ahead of time. This will help you navigate your end of the year returns and keep everything running smoothly, letting you get back to the all-important business of running your business!
Friday 23rd March 2012 Happy Friday! The countdown to the End of Financial Year is on! With just a few days left until April 1, businesses around the nation are tallying, reporting, analysing and cleaning up - getting ready to start the new FY with their business sin order. Over the next week, we'll be bringing you checklists, advice, tips and tricks to surviving the EOFY - so make sure you keep an eye on The Pulse, on our Facebook page and don't forget to follow us on Twitter! Before you run off to enjoy another weekend, make sure you check out latest from the news sites... EOFY health check for your business The looming end of the financial year is a great time to check how your business is performing. Like checking under the hood of your car, it’s a good way to make sure everything is running smoothly and you’re not in for any nasty surprises down the road. MYOB's New Zealand General Manager, Julian Smith, runs through his top tips to make sure everything's ready to go for a new financial year. IT lesson from Quakes While there are no reports of companies being put out of business due to disruption to their IT systems in the wake of the Canterbury Earthquakes, many were disadvantaged, highlighting a need to ensure proper backup and staff communication processes were in order. The end of financial year is the perfect time to make sure your business is 'disaster-proof' and these great tips will help get you on the right track. More delays for Port of Auckland dispute Wharfies at the centre of the Port of Auckland dispute now face further delays as the port company says that they can't return to work due to rostering issues. Ongoing strike action has caused delays and issues over the past four weeks, and in this post, Julian Smith outlines why it's crucial for the New Zealand economy that it's sorted - quickly. Focus on the End of Financial Year - new edition of InFocus This edition if InFocus - MYOB's magazine for business, tackles a key issue for many Kiwi businesses - the end of the financial year - and includes regular columns from key business leaders, including EMA, BusinessNZ, Business.govt.nz, and Westpac. We also look at emerging trends in the New Zealand business environment, and how businesses can manage the expected growth. Check it out now! How spreading yourself too thin can have the opposite effect So many business owners spend time and effort investing in the health of their business...neglecting their own health along the way! The latest from Ms Mad Woman, Melina Schamroth, is a timely reminder for all to keep an eye on what those long hours in the home office is doing to our waistlines... Have a fantastic weekend! Emma Mulquiney | Online Editor - MYOB