Cloud Accounting – What is it and is it right for your business?

Demystifying Cloud Accounting.

Cloud computing is the use of computer hardware and software applications delivered as a service over the Internet. It allows you to store files and use applications using different devices and from different locations in a simple way.

Cloud accounting, also referred to as “online accounting”, serves the same function as accounting software, (such as MYOB or Xero,) that you would install on your computer, except that it runs on servers and you access it using your web browser, over the Internet. Your data is securely stored and processed on servers—or “in the cloud”. This means you are able to access your business financials from anywhere and using any device, as long as you are connected to the internet.

Your business is no longer answerable to time or geography. You could be open 24 hours a day, 7 days a week. Your office can now be where and when you want it to be – on the road, at home or overseas.

If you have teams in multiple locations or a remote bookkeeper or accountant they can (with your permission) work on your accounting data, saving time and increasing efficiency.

Your data is much safer in the Cloud than on your computer. Your computer could be lost, stolen or corrupted quite easily – but Cloud software providers spend millions of dollars to ensure the safety of your data.

Come and talk to our team today to find out how we can help your business enter and utilise ‘Cloud’ accounting – we provide all the training you will need – the sky is no longer the limit for your business!

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Social media savvy and fiscally adept? That’ll be us!

If you like what you read here in our blog; why not check out our Advisory Accountants website, Facebook page and Twitter account! As if that isn’t a big enough social media presence for you – wait…There’s more!

Our Tax Debt Management website has been joined by our TDM Facebook page which is now LIVE!

You already knew about our LinkedIn - right?! 

Every 100th person based in NZ to like our Advisory Accountants Facebook page wins a $100 petrol voucher! What are you waiting for? ‘Like’ us and be in to win!

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Overseas ‘Student Loan’ debtors face tougher measures and higher repayments

Tougher rules for overseas-based borrowers 

The Student Loan Scheme Amendment Bill (No. 3), introduced in August 2013, passed its final stages in Parliament today.

The new legislation includes tougher measures to deal with student loan borrowers who persistently refuse to make repayments and introduces higher repayment obligations for overseas-based borrowers to assist them to pay off their loans sooner.

Overseas-based borrowers are responsible for 80 per cent of all overdue loan repayments.

“The reality is that a minority of borrowers, who are mainly overseas-based, do not accept the responsibility to repay their loan, despite having the financial ability to do so,” Revenue Minister Todd McClay says.

“The new rules will give Inland Revenue the ability to seek an arrest warrant to deal with the most serious cases when all other efforts to persuade the borrower to make repayments have failed.”

Overseas-based borrowers with loan balances over $45,000 will also have their repayment rates increased. This brings them into line with the repayment obligations for New Zealand-based borrowers.

The new rules will apply from 1 April this year for the 2014–15 tax year.

If you have Student Debt that is weighing you down, don’t panic!

Tax Debt Management is here to help. Simply call 0800 829 277 now to get your repayments sorted in a way YOU can afford.

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End of 2013 Financial Year! A prompt from Accountants First

What growth does 2014 hold for your business?

Imran Kamal of Advisory Accountants specialises in Business GrowthA reminder from Advisory Accountants: Income tax for the year ended March 31 2013 is due shortly and must be it lodged with the Inland Revenue Department before 31 March 2014.

If your Income Tax is not filed by this time, penalties and fines from the IRD are quick to mount up.

An Advisory Accountants tax tip

If salaries and wages are your only source of income, let Advisory Accountants or your business accountant know because you don’t need to file an IR3.
For all other sources of income; large or small, rental properties or businesses, self-employed or Trusts, information needs to be provided to your accountant now.

But it isn’t all about the compiling and filing. This can be a great time of year to assess how your business has performed and make the necessary changes to enhance your performance for 2014.

Advisory Accountants manage your accounts AND provide analysis and business advice

At Advisory Accountants we have a comprehensive team of accountants, marketers and business professionals and a wide reaching and extensive network of lawyers, insurance experts, real estate agents, bank managers and more, to provide your business with the advice it needs.

So, what are you waiting for? If you are tired of your accounting purely being about the numbers, give Advisory Accountants a call today on 04 237 6825, or drop us a line at and find out how much better your business could do in 2014.

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5 New Year budgeting tips from Accountants First

Advisory Accountants budgeting tips from Imran Kamal
2014 is here!
At Advisory Accountants we know budgeting can seem like a chore to you but it is essential.
Here are some Advisory Accountants tips that may help in preparing your next budget.

Advisory Accountants tip 1: Use Xero
Xero contains a budget template which enables you to keep track of your budget when compared with actual revenue and expenses. At Advisory Accountants we refer to this as variances. Xero keeps track of everything so that you don’t have to update spreadsheets and the reports are “real time”.
Go to Reports > Budget Manager. You’ll be able to enter revenue and expenditure for the year ahead and then track variances. Xero have a helpful video available here. If you don’t feel confident using Xero, Advisory Accountants is able to organise training for you.

Advisory Accountants tip 2. Understate revenue, overstate expenditure
Something that often catches people out is being overly optimistic when forecasting revenue. At Advisory Accountants the Managing Director sometimes sees clients who apply an arbitrary percentage onto their sales for the year ahead. They are then very disappointed when the forecast sales don’t eventuate. Remember, even if you are winning new business, you may be losing existing clients. This is called churn and you should plan for it.

Expenditure has been pretty consistent for many businesses over the past few years with the economy in recession. As the New Zealand economy is forecast to grow quite strongly over the next few years, we think you should be planning for some increase in expenditure. It may be that some of your suppliers will be looking to get some revenue growth by putting up prices and those wage and salary increases may not be able to be put off much longer.
Whatever your situation, be realistic when setting your budget for the year ahead. It will help you to focus resources and energy.

Advisory Accountants tip 3. Review Suppliers
It’s important to review suppliers annually. Increased costs are not automatically bad so long as they are aligned with increased value. Have a look at your top 10 expenses that can be controlled to some degree. See whether there are is an opportunity to ask an existing supplier to review their pricing. This is far preferable to sourcing new suppliers as there is no down time involved.

Advisory Accountants tip 4. Understand Variances
If you were involved in a large business, you would have to produce monthly reports. This would require you to review the budget for your department and report to your manager or the Board. For many in smaller businesses, you are your Board so the concept of writing a report to yourself is a little meaningless. Nevertheless, you should at least review the budget at the conclusion of each month to determine:

  • Did you meet your revenue goals?
  • How is revenue tracking against budget for the year?
  • Are expenses in line with your forecast?
  • What are the variances and what action can you take now?

A little time spent reviewing the budget at least monthly will ensure that you don’t have any nasty surprises down the track. Whatever you do, don’t put that budget in a virtual bottom draw.

Advisory Accountants tip 5. Know your Break Even Point
One of the most essential figures that you should know is your break even point. This is the point where you start making a profit, or put another way, the goal you need to reach to stop making a loss. This is really easy to work out if you have a budget. It’s the point where revenue = expenses. There is no profit or loss and you have “broken even”. At Advisory Accountants we emphasise the importance of knowing this number. Some businesses break this down to weekly or even daily amounts and it helps keep them focused. If there is one financial metric you should follow in business, this is it.

Have a prosperous 2014! From the team at Advisory Accountants. Please contact us if you have any further queries.

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Merry Xmas from Accountants First!

With only 8 working days at the Advisory Accountants offices before the holiday break, I was inspired to look for a summation of our year… Too easy I thought to talk about GST returns, PAYE or Income tax. Too boring to talk about profit and loss and facts and figures – there’s been a whole year of that! So, with our very best wishes to all of our clients, networks and their families, I hope you enjoy our little accounting countdown – an ‘accountdown’ if you will (!), to the holiday season we have all been waiting for!

On the eighth day of Xmas my Xero mentor sent to me…

Eight accounting standards,
Seven tick marks,
Six degrees / convergence,
Five MYOB licences!
Four pencil stubs,
Three cups of coffee,
Two much expense,
And a debit where a credit ought to be!

From the team at Accountants First, have a safe and enjoyable holiday season. See you in 2014!

Merry Christmas from Imran Kamal and Accountants First

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Romalpa Clause Important for Tradies

How to be aware of your rights under a “Romalpa”, (“reservation of title”) clause.

What is a “Romalpa” clause?

The use of “reservation of title” clauses “ or, as they are commonly referred to, “Romalpa clauses” “ has been widespread in the sale of goods. Under this type of clause, the seller retains ownership of the goods until they are paid for in full, but the buyer is allowed to take delivery of the goods. If the buyer doesn’t pay, the seller can therefore take possession of the goods. The Romalpa clause avoids the presumption set down in the SALE OF GOODS ACT 1908 that ownership of the goods passes to the buyer when they are delivered to the buyer.
However, these clauses have no effect unless the buyer acknowledges in writing that the meaning of the clause has been explained to him or her (see below).

Further, the PERSONAL PROPERTY SECURITIES ACT 1999 has significantly reduced the effect and relevance of Romalpa clauses by requiring them to be registered before they will give the seller priority over other creditors with registered security interests in the goods (see below).

When will a Romalpa clause give priority over other creditors?

Before the PERSONAL PROPERTY SECURITIES ACT 1999 (PPSA) came into force in 2002, the benefit of a Romalpa clause to the seller was that if the buyer became insolvent before paying in full, the seller could recover the goods, and did not need to go through the normal procedure to recover the debt. This was because the seller still had ownership of the goods. The seller would therefore have priority over banks and other creditors holding security interests, who would otherwise, if ownership of the goods had passed to the buyer, have prevailed over the unpaid seller’s right to the price of the goods. (See How to recover a debt from a bankrupt; for debt recovery not involving bankruptcy, see How to recover a debt from an individual and How to recover a debt from a company).

However, the PPSA has eliminated this advantage of the seller retaining ownership. Under this Act, the seller’s interest falls within the broad definition of a “security interest” and must therefore be registered on the Personal Property Securities Register (PPSR) if the seller is to be protected. If the seller does not register their interest, then other creditors of the buyer who subsequently take security interests over the goods and register them will take priority over the seller. For more on the PPSR, see How to register your security interest on the Personal Property Securities Register if you’re a creditor and How to check the Personal Property Securities Register for money owed on property offered to you for sale.
The PPSA affects the question of priority between the seller and the buyer’s other creditors. But as between the buyer and seller, a Romalpa clause will continue to have effect, entitling the seller to possession of the goods if they are not paid for in full, regardless of whether the seller’s interest is registered on the PPSR.

Buyers must be advised of the effect of the Romalpa clause:

The CONSUMER GUARANTEES ACT 1993 gives buyers some protection against Romalpa clauses. The Act provides that for the clause to take effect, the following two conditions must be satisfied:

  • The buyer must have received oral advice, acknowledged by the buyer in writing, of the way in which his or her right to undisturbed possession of the goods is affected by the Romalpa clause. This oral advice must be sufficient to enable a reasonable consumer to understand the general nature and effect of the clause.
  • The buyer must also have received a written copy of the agreement for supply, or of the part of the agreement that contains the Romalpa clause.

Other clauses that may protect the seller:

In addition to a simple Romalpa clause, you as a seller may also include provisions so that you are entitled to any proceeds if the buyer sells the goods to somebody else, or manufactures new goods out of the original goods.

Cautionary notes:
  • Care is required both in drafting the Romalpa clause and in ensuring that the requirements of the Consumer Guarantees Act are complied with. You should therefore obtain the advice of a lawyer both for the drafting of the clause and also before you take any action to recover the goods under the clause.
  • The effect of a Romalpa clause may be complicated by the goods in question being attached to real property (for example, if the goods are the joinery for a house). You should obtain legal advice in those cases.
Copyright: Install Law Limited 2001-2012 Christchurch, New Zealand. All rights reserved. 
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Building Better Social Media Coverage

Accountants First Imran Kamal recommends social media for your business

Which ones are right for your business?

Social media are internet services that let you interact with others and share and create content through online communities.

For example here are links to some of the Accountants First social media websites:


Social media present great marketing opportunities for businesses of all sizes.

Why does Advisory Accountants recommend social media?

You can use social media to:

  • promote the name of your brand and business
  • tell customers about your goods and services
  • find out what customers think of your business
  • attract new customers
  • build stronger relationships with existing customers.

Advantages of using social media

Advisory Accountants has found that social media marketing has many advantages:

  • broad reach - social media can reach millions of people all around the world
  • ability to target particular groups – many forms of social media (e.g. Facebook) allow businesses to target specific groups, often in particular locations
  • free or low-cost - many forms of social media are free for business, and paid options are usually low-cost
  • personal - social media allow you to communicate on a personal basis with individual customers and groups
  • fast – you can quickly distribute information to many people
  • easy - you don’t need high-level skills or computer equipment to participate in social media. The average person with a standard computer should have no difficulty.

The risks! A heads-up from Accountants First
Of course, marketing through social media also has its risks. These include:

  • wasted time and money for little or no tangible return
  • the rapid spread of the wrong kind of information about your business (e.g. incorrect information accidentally posted by you, negative reviews posted by others)
  • legal problems if you don’t follow privacy legislation and the laws regarding spam, copyright and other online issues.

It’s important to be aware of these risks and to have strategies in place to avoid them if you decide to get involved in social media marketing.

Key social media services
Different types of social media are good for different marketing activities. The key social media services are:

  • Facebook - a social networking site that allows you to have conversations with customers, post photos and videos, promote special offers, and more
  • Twitter - a ‘micro-blogging’ service that allows you to send and receive short messages from customers and potential customers
  • Youtube - an online video-hosting service that lets people share their videos
  • Blogs - internet sites that contain a series of entries or ‘posts’ about topics of interest to the author, much like an online ‘diary’
  • Coupon sites - websites that offer discount coupons for goods, services and events
  • Online photo sharing services - websites that allow users to store, organise and share their photo collections
  • Location-based marketing sites - websites that deliver targeted marketing messages to customers in particular locations, through mobile devices such as smartphones and tablets
  • Customer review sites - websites that feature customer reviews of goods and services.

Getting started with social media

If you aren’t already familiar with social media, the terminology and the range of different services can seem daunting at first. But we at Advisory Accountants believe it’s worth learning more. Most social media services are affordable and easy to use, and they can put your business in touch with customers like never before.

Check out Accountants First social media for a better idea of how to use social media to boost your business profile.



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Disclosure of Shareholder Remuneration Penny & Hooper like structures

You may have heard or read about the well publicised tax case of two Christchurch surgeons Penny & Hooper who used company structures and family trusts to artificially lower their salaries to avoid a higher personal income tax rate.

The Supreme Court sided with the Inland Revenue when it ruled that “income derived from personal exertion should belong in its appropriate taxation band and should not be inappropriately diverted away”.

Inland Revenue concession to make a voluntary disclosure granted after the outcome of the Penny and Hooper case runs out at the end of this month.

Those who make a voluntary disclosure before 31 March 2013 would be required to make adjustments for only the last two income years.

Those who did not come forward might incur not only penalties, but Inland Revenue might also reassess their tax position over four years.

Advisory Accountants have developed our Shareholder Remuneration Kit for our clients, and a procedure to help you by assessing the risk that the Inland Revenue will disagree with the tax positions taken.

Please urgently arrange a meeting with me, so that we could assess the risk and advise whether we need to do a voluntary disclosure to Inland Revenue.

Should you require any further information, please let me know.

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Burning your fingers on unclaimed tax? Accountants First can help

Imran Kamal, Director of Accountants First can save you moneyDid you know you are probably paying more tax than you are legally required to?

A tip from Advisory Accountants : Changing circumstances in your business and in New Zealand tax laws mean that you may not be legitimately claiming everything you are entitled to.

As a valued Advisory Accountants  client we would like to explore with you all options specific to your business that have a bearing on how much tax you are paying.

Overpaying tax doesn’t make sense

The Director of Accountants First has prepared a special program to this end and would like to go over it with you to explain the various legal tax opportunities available.

Call Advisory Accountants to arrange a meeting at a convenient time to check that you are currently claiming all the expenses you are entitled to.

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