question for small business owners

[Voltaire]

I was self employed for a few years prior to the GFC, did a night school for Small Businesses with the manual ledger book.

My accountant said spreadsheets were fine but everyone does them differently, takes him longer to do ( more $) and errors creep in, and asked

( told) me to use Cashmanager

which was then a CD you downloaded. Worked really well. I would use similar again.

Main thing I think is IRD seeing your using an Accountant and they then tend to leave you alone.

Make sure you claim tea and bikkies.

[lb99]

Ird don't seem to care if I use an accountant or not.
They have all sorts of templates on their website that make taxes really easy

[husaberg]

Ird don't seem to care if I use an accountant or not.
They have all sorts of templates on their website that make taxes really easy

IRD care if you get it wrong or are late though and they never accept ignorance of the law as an excuse.
I still remember the tax lady giving me that speech.
The accountants pay for themselves in saving you money the IRD won't point out or take the trouble to find.
The accountant also is allowed to process the returns months after the deadlines for the financial year.
A couple of things
Make sure you sort out the provisional tax in your first year. otherwise it will bite you.
Advice from accountants is worthwhile in how to set up the company for liability etc to lessen tax implications
There is no reason or need for the accountant to do your GST though.
We do it monthly so it gets all done at the same time as invoicing hassle is less, less get forgot lost etc.
But as and take their advice as to what system hybrid invoice or payment.
If you are self employed you might be better off on payment or so if someone doesn't pay or drip feeds you, can still claim back the materials gst.

we used to use MYOB, But now just simple spreadsheet. Which we set up for zero dollars using the exact coding the Accountant wanted.
He gets the info and does the return he sits on it for months then the office lady does the return while he plays golf.

Ps if your working from home you can claim the sqm2% of the space used office and materials storage etc off your mortgage and power water rates etc etc.
Ya phone rental is job type dependent from memory. lots of other stuff can be claimed or part claimed laundry powder etc etc etc.
The Accountant might be even able to get some of the GST back on your tools you brought earlier.

[MarkW]

And this is from the other side – sort of. I’m an accountant who specialises in small clients, most of whom ride or did ride motorcycles. And no, I’m in the process of retiring and, I’m not looking for new clients.

You need software that you can use and does what you want it to do. Accounting hasn’t changed much since about 1400AD so any decent accountant will be able to get whatever is needed from whatever you end up using.

Whilst the OP doesn’t use an accountant at present that may change or not.

My clients use all sorts of software and these are my comments on the use, by my clients, of the software that they use and my interaction with it.

Xero – clients find it easy to use and pay the fees each month. Most have found the Xero consultants pretty useless when it comes to setting things up and I have generally had to do quite a lot of debugging and retraining so that the data input by the client goes to the correct place the first time. You need fast internet to get information out which is not a problem in the big cities but means that I do my client work in Xero at 3am which is when my internet works best. Don’t live in rural Northland. Xero reporting was initially absolute crap but has, after 5 years of development, finally got to the point of Accounting 101. Accountants love Xero because they can make good money doing all of the fixes and adjustments.

MYOB in the clouds – clients are regularly frustrated that MYOB in the clouds was such a backward step from MYOB not in the clouds. But the internet interface for invoicing does work well and I haven’t had too many problems getting what I need from their systems – again fast internet is needed. Clients seem to make fewer mistakes in MYOB than they do in Xero. Still monthly fees.

Reckon/Quickbooks – not used by many clients [thank god!] because it seems to have lots of problems. Overseas software modified and then modified some more. It loses things, gets easily corrupted particularly if things get changed. My most disliked software in the clouds.

Accredo – again not used by many clients and isn’t used in the clouds. But for a batch processing system that is multi-faceted the software works well and reliably and I have no problems in getting what I need from it. But I do have to go to the client’s premises to get what I need to do/finalise the financial accounts.

Cashbook programmes – are many and simple and most seem to work pretty well as far as GST, income and expense coding go. But they are ALL useless if the client does not balance the cashbook to the bank account to the cent. It takes longer to find an error [more likely multiple errors] than it does to do a new cashbook. And no Accountant will be happy with an almost correct cashbook.

Spreadsheets – many of my small clients still use these and I am more than happy with this – with the same proviso above for Cashbook Programmes. If the spreadsheet is almost right it is useless. Either it is right or it is not. And I have lost count of the number of times I have seen spreadsheets created that are simply garbage. Not generally by my clients because my clients have been trained in how to get things right.

The overall rider with all of this is that the prime purpose of software is to do the work FOR YOU that you want it to do. If it isn’t going to do this then don’t start to use it. And if your Accountant [if you use one] says you have to use a specific software to be a client change Accountants.

When reference checking software there’s a simple question to ask an existing user of the software:
“Knowing what you know now, would you purchase this software again?”
If the answer is a complete “yes” the software works. If a halting “yes” or a “maybe” then the software has some nasties that may or may not be crucial to you. And if a “no” ask why if you like and then look elsewhere!

[lb99]

And this is from the other side – sort of. I’m an accountant who specialises in small clients, most of whom ride or did ride motorcycles. And no, I’m in the process of retiring and, I’m not looking for new clients.

You need software that you can use and does what you want it to do. Accounting hasn’t changed much since about 1400AD so any decent accountant will be able to get whatever is needed from whatever you end up using.

Whilst the OP doesn’t use an accountant at present that may change or not.

My clients use all sorts of software and these are my comments on the use, by my clients, of the software that they use and my interaction with it.

Xero – clients find it easy to use and pay the fees each month. Most have found the Xero consultants pretty useless when it comes to setting things up and I have generally had to do quite a lot of debugging and retraining so that the data input by the client goes to the correct place the first time. You need fast internet to get information out which is not a problem in the big cities but means that I do my client work in Xero at 3am which is when my internet works best. Don’t live in rural Northland. Xero reporting was initially absolute crap but has, after 5 years of development, finally got to the point of Accounting 101. Accountants love Xero because they can make good money doing all of the fixes and adjustments.

MYOB in the clouds – clients are regularly frustrated that MYOB in the clouds was such a backward step from MYOB not in the clouds. But the internet interface for invoicing does work well and I haven’t had too many problems getting what I need from their systems – again fast internet is needed. Clients seem to make fewer mistakes in MYOB than they do in Xero. Still monthly fees.

Reckon/Quickbooks – not used by many clients [thank god!] because it seems to have lots of problems. Overseas software modified and then modified some more. It loses things, gets easily corrupted particularly if things get changed. My most disliked software in the clouds.

Accredo – again not used by many clients and isn’t used in the clouds. But for a batch processing system that is multi-faceted the software works well and reliably and I have no problems in getting what I need from it. But I do have to go to the client’s premises to get what I need to do/finalise the financial accounts.

Cashbook programmes – are many and simple and most seem to work pretty well as far as GST, income and expense coding go. But they are ALL useless if the client does not balance the cashbook to the bank account to the cent. It takes longer to find an error [more likely multiple errors] than it does to do a new cashbook. And no Accountant will be happy with an almost correct cashbook.

Spreadsheets – many of my small clients still use these and I am more than happy with this – with the same proviso above for Cashbook Programmes. If the spreadsheet is almost right it is useless. Either it is right or it is not. And I have lost count of the number of times I have seen spreadsheets created that are simply garbage. Not generally by my clients because my clients have been trained in how to get things right.

The overall rider with all of this is that the prime purpose of software is to do the work FOR YOU that you want it to do. If it isn’t going to do this then don’t start to use it. And if your Accountant [if you use one] says you have to use a specific software to be a client change Accountants.

When reference checking software there’s a simple question to ask an existing user of the software:
“Knowing what you know now, would you purchase this software again?”
If the answer is a complete “yes” the software works. If a halting “yes” or a “maybe” then the software has some nasties that may or may not be crucial to you. And if a “no” ask why if you like and then look elsewhere!

Awesome response to my questions, thank you. I don't suppose you could recommend someone who thinks like you down my way could you?

I will have to see an accountant at some stage, as I am sure we can do much better, however as with any startup, cash flow can be an issue, so I have to keep costs down any way I can

[jellywrestler]

describe a small businees, is it a dairy, trucking company, tradesman, etc?

[lb99]

describe a small businees, is it a dairy, trucking company, tradesman, etc?

tradesman.....

[jellywrestler]

tradesman.....

i'm a tradesman and use myob, dunno why, was set up with that, own two vehciles which depreciate and very little else except for landline/internaughty and cell phone.
my issue is how do you know when you accountant is doing the best for you?
there's no benchmark, ie i can see how good a plumber is or how bad
i can shop around for materials etc but i have no idea about my accountant.
mine doesn't even have his bank account number on his invoices, fuck me, that's not hard to do, and do just once, why hasn't he even got the clues to see that's a simple smart thing to do so people pay into the right account and fast?

[johcar]

i'm a tradesman and use myob, dunno why, was set up with that, own two vehciles which depreciate and very little else except for landline/internaughty and cell phone.
my issue is how do you know when you accountant is doing the best for you?
there's no benchmark, ie i can see how good a plumber is or how bad
i can shop around for materials etc but i have no idea about my accountant.
mine doesn't even have his bank account number on his invoices, fuck me, that's not hard to do, and do just once, why hasn't he even got the clues to see that's a simple smart thing to do so people pay into the right account and fast?

Take your most recent set of accounts to another accountant and ago then if you're claiming everything you are entitled to. However, expect to pay for his time.

I changed from a Chartered Accountant a few years ago when he retired (had been with him for about ten years) to another recommended by a colleague. The new one had worked for the IRD for years and he has saved me thousands over the last five or six years.

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[johcar]

Take your most recent set of accounts to another accountant and ago then if you're claiming everything you are entitled to. However, expect to pay for his time.

I changed from a Chartered Accountant a few years ago when he retired (had been with him for about ten years) to another recommended by a colleague. The new one had worked for the IRD for years and he has saved me thousands over the last five or six years.

Sent from my ONEPLUS A5000 using Tapatalk

Ask them, not ago then. Damn autocorrect!


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[scott411]

I use MYOB Online, was MYOB before that, i was not a fan of going online at first, but it has been better, the back up system is probably the best reason why,

i have 11 employees and use MYOB payroll as well, (was ace payroll when i started but MYOB brought them out)

I studying accounting at Tech so i know how to run stuff, i like MYOB but know alot of people with XERO and that works for them,
i run off a fibre connection so don't have trouble with internet speeds like listed above, although sometimes it takes about 20 seconds to come back online if you have been away from the terminal for long,

setting up what ever system you are running properly from the start, with help from your accountant is more important than the actual programme IMO,

[MarkW]

Just like motorcyclists and motorcycles accountants come in many shapes and forms. Some are good and some not so. Many are specialised.

If you are a very large operation then one of the big organisations [EY, KPMG etc.] may be best. I worked for what is now EY more than 35 years ago and their staff training and up to date-ness was first class. And expensive. And I remind myself that it was these organisations that gave clean bills of health to ALL of the big companies that went broke in the GFC.

Then there are the 2nd tier firms – much smaller but still affiliated to other Accountants around the world. Cheaper fees and more likely to be found in the suburbs than the CBD of the big cities. Not so useful if you are a foreign controlled superannuation fund looking to invest in an oil exploration well in the South Taranaki bight. But still suited to larger organisations than the OP.

Then you get the small operators with one or two partners and 5 or 6 staff. The advantage of such an organisation is that the phone will probably be answered during business hours and that some economies of scale will exist. Disadvantage is that a different junior staff member will do your work each year and so you will have to answer the same stupid questions every year if there is anything unusual in what you do. And the quality of the work will vary from year to year as staff members change. The ultimate quality will depend on the partner/director that you end up with.

Finally there are people like me – when you talk to me you are talking to the boss and also the tea lady. And if I’m not where the phone works then you’ll get the answerphone. But working from home means that you may well get a telephone call answered on a wet winter’s Sunday afternoon. Not so likely on a fine summer Sunday – I’m out playing on my local roads with one of the motorcycles. And the quality of people like me varies. HUGELY. My clients seem to like having me as their accountant and most retire or die before they leave. But some have never had a different accountant so they have no idea as to how good, bad or indifferent I am. And I was a member of the Accountants organisation until 1996 when I quit and became what some people call a “kitchen table accountant”. So membership of a Professional organisation may be a guide but there are just as many “Chartered” Accountants in jail for fraud as there are non Chartered Accountants.

You need to match your requirements to the accountant that you choose. So in the case of the OP talk to your local owner operated small businesses and find out who they use. Look in the telephone book [online if you no longer get a printed version] to find out how many accountants there are in your area. Talk to other friends who are in business and see who they use. Pass by the business premises and have a nosey – clean and tidy or a dog’s breakfast? Accountants need to be organised to get everything done on time and in the right order. Which is why you should never let one run your business. Many accountants are narrow minded backward thinking people who rarely come up with an original concept. You know [hopefully] how to run your business but the accountant should know the finance and tax side of things better than you do. So having made a business decision to do something major you should then run it past your accountant BEFORE implementation to see if there is a great way to undertake the process for tax or financial reasons.

Ideally your accountant should be slightly younger than you are as it is good to make the best choice at the start and then build a relationship with the same person or organisation. And the younger that the accountant is [within reason!] the more up to date they will be on current rules and regulations. Everything that I learned when I was young has been superceded/changed/updated or tossed out at least twice in my working career. And it is hard work keeping up to date.
When you are a small owner operator you need to get on with your accountant if you have one. The accountant can turn a good business into a great one by working in behind the owner. Having an accountant also helps with extra time available to get your tax return[s] completed and an extra 2 months before your terminal tax needs to be paid.

And finally, if you do end up with an accountant we sell time. Normally in 6 minute blocks. So give us a box full of shit to sort through and we’ll happily charge you $150 or more an hour to be your filing clerk. Plus GST. I’ve trained my clients on simple easy ways to supply me what I need to do whatever they need me to do and this keeps their fees down.
And one of the things that makes me unusual is that when they are running from home using a computerised system I go and see them, normally in the evenings or weekends, to get whatever I need from their system. If they have a computer system and run from business premises I still go and visit them to get what I need but I can normally do this during business hours.