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Contact Us |
128 Riccarton Road |
| June 2011 Issue 5 |
In this issue:
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It's our Birthday come celebrate with us...  |
It's our Birthday and we would like to share this celebration with you... by giving your the opportunity to meet the team over coffee PLUS provide you with the opportunity to ask all those questions you have wanted to ask your accountant - for FREE - our birthday present to you. When: Friday 1 July 2011
Time: 10.00 am to 11.30 am
Where: Level 1, 128 Riccarton Road
Dress: Casual - it's casual Friday
To RSVP phone 03 341 2013 or email admin@sterlingaccountants.co.nz
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| Introducing our latest team member - Judith Voice We would like to welcome Judith to out team. Judith is our new Accounting Assistant who comes from Halkett way. She loves working with numbers and spreadsheets and is looking forward to meeting and working with you.
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| Coping with employment changes In our Special Employer Alert in April, we highlighted major changes to the Employment Relations and Holidays Acts that came into force on 1 April 2011. Of particular concern to us is the requirement for employers to maintain employee personal files from 1 July this year.
We understand all too well the administration that comes with being an employer. To make our employer clients’ lives easier, we’ve developed a simple Employer Documentation Kit, which you now have the opportunity to acquire for an investment of only $75.00 plus GST!
The kit includes almost 50 checklists, forms and letters as well as a detailed procedure that guides you through its use. The kit covers recruitment, induction, trial & probation, remuneration, training & career development, performance management, leave & sick leave, resignation & termination. (Please note that we have not included an Employment Agreement template in the kit, simply because there are a number of recognised agreement providers).
If you do want help with individual Employment Agreements, you can use the Employment Agreement builder on the Department of Labour website.
Alternatively you can use a specialist provider, such as one of those listed below:
Or, of course, your local or preferred legal specialist To acquire our Employer Documentation Kit, call or email any one of the team and we’ll get that out to you in both paper and electronic format.
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| Vehicle mileage rate amended The IRD monitors fuel prices and publishes a motor vehicle mileage rate at least once a year. The mileage rate is for expenditure incurred for the business use of a motor vehicle, it doesn't apply in respect of motorcycles.
The current mileage rate has been amended to 74 cents per kilometre for the 2011 income year. This rate applies to both petrol and diesel fuel vehicles.
As the Commissioner's mileage rate may not reflect their true costs, actual costs or the logbook method can be used instead. Employers may use the motor vehicle running cost data puslished by other reputable sources, eg, the New Zealand Automobile Association Incorporated, as an alternative reasonable estimate for reimbursement to employees.
Operational statement OS09/010 explains how the mileage rate is set. |
| Canterbury earthquake - proposed changes to depreciation rules announced On the 12 April, the Minister of Revenue announced new rules about the tax treatment of depreciation for assets that were destroyed in the earthquake. The legislation for these decisions is expected to be enacted in early August with two of the measures being extended to general tax law.
For more information click here. |
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Business lessons from the Christchurch Earthquake During the aftermath of the major earthquake that hit Christchurch and its surrounding communities we all watched news coverage horrified and saddened at the devastation. Thankfully, there were no fatalities from the 13th June aftershock, but the extensive damage to homes, offices and infrastructure will be very expensive to reinstate or replace and will take months, and in some cases years, to complete.
A disaster like the Christchurch earthquakes can happen at any time, day or night. Our nation sits precariously on islands that straddle fault lines and volcanic vents and eruptions from Mount Ruapehu have at times disrupted businesses, roads and airports. These ‘acts of God’ send a very real warning to both businesses and private citizens to check that insurance cover is both comprehensive in type and of sufficient value to indemnify losses. Some businesses are facing serious financial hardship because their risk cover was inadequate or, even worse, non-existent. An insurance broker has provided us with the following list of business risks that need to be covered:
The above list is certainly not exhaustive and you should seek advice from an insurance broker or company to ensure your business assets are protected with comprehensive cover of all risks and losses. The unthinkable is happening...
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| When reviewing your insurance policies (an example) Client X had rented the same premises for 30 years. After an electrical incident that caused delays he started to wonder whether he was covered by insurance. A quick look at his policy showed he was covered for public liability insurance for $2 million.
He then started to do the arithmetic. How many square metres of building would be destroyed if there was a fire or natural disater? There is a shop on the ground floor with expensive stock. What might that be worth? What if the owner had to relocate premises, was unable to do so and therefore sustained a loss of income and possibly a need to maintain staff while out of business?
After calculating the possible bill, he realised that he was looking at a minimum of $5 million - so immediatley increased his public liability to $10 million.
When renewing or reviewing insurance policies do check the wording, including exclusions plus how much you are covered for.
Did you know we can help you with your insurance claim's, which is covered by your insurance policy, so no additional costs to you. If you need our assistance give us a call today and we will discuss your options.
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| Trade Me traders and hobby collectors A client came to us and asked if he would have to pay tax if he sold his coin collection on Trade Me.
He had collected coins for more than 40 years and for one reason or another he decided it was time to give up. He had very rarely sold and then only to allow him to improve his collection and buy something better. As he hadn't done anything with the collection for the last 10 years, he saw no point in keeping it. We think this is a clear case where tax would not apply.
Compare this with another client who regularly busy and sells postage stamps. Most years he makes a small profit and he always aims to do so. We think his gains are taxable.
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| Paying the bills Paying your business' bills is not just a goodwill gesture; it is about meeting your obligations in a trade relationship, however in New Zealand we are falling short on fulfilling this obligation.
In a recent report released by leading credit reporting and debt collection company, Dun & Bradstreet, it was revealed NZ firms took on average 43.9 days to settle their trade accounts in the December quarter - a figure which remains two weeks above the standard 30 day payment term.
What does this mean to businesses - they are being denied access to their funds for two weeks longer than they should. It is important that NZ businesses recognise the value of their accounts receiable as it is typically the largest liquid asset on our books - unfortunately, mismangement of this crucial asset has the potential to bring a business to its knees.
A four percent increase in the number of entities paying their accounts late has the potential to inflict cash flow difficulties on a number of businesses, highlighting the serious potential financial implications of delayed bill payments. This is a worrying trend as it can draw more and more businesses into the late payment cycle, making it increasingly difficult for businesses to escape the pressures associated with slow paying customers.
Getting the money you are owed is the most important thing you should be doing. Businesses need to prioritise this as a key function of their business operation and not just after the fact. When dealing with overdue accounts make sure you are creditor number one not 21, ensure your terms and conditions are sound, take emotion and sentiment out of the equation and remind yourself that it is a business transaction.
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| Boardroom for hire - first hour free We recognise that a number of businesses may not have access to boardroom or meeting facilities. To help we are offering our Boardroom for hire.
Tables/chairs, tea/coffee making facilities, overhead projector, internet access, whiteboard Bookings can be made with our receptionist 341 2013. |
Software solutions for accountants by Acclipse
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Our location - 128 Riccarton Road, PO Box 8535 Riccarton, Christchurch.