New Zealand’s Accounting Practice Is Wiser Than Ever Before

It is traditionally said that accountants know the cost of everything but the value of nothing. Accountants are always assumed to be focussed on money matters. Not all are aware of the research and methods carried out by the experts in the accounting field. Accountants in New Zealand have made a significant progress both economically and socially by embracing the latest business trends and technologies.

The major technological chunk explored is the communication services. Being on the internet or the cloud these services have a number of clients from the accounting industry. The task force, business heads and other experts have been able to collaborate better for a visible economic progress. With services like that of cloud the management system has widely improved to a standard not reached ever before.

Accounting outsourcing, though has been present in the New Zealand market for quite a while also faced a significant boost. Earlier most business heads prefered accounting to stay in-house. But the same people gradually realized that the outsourcing could bring in more profit than the cost they will have to pay for outsourcing. Seeing the presence of this business practice and the adjoining benefits, people have turned smarter and wiser for choosing a suitable team for outsourcing.

When choosing their potential partners for outsourcing, accounting practices ow look for more significant aspects like qualification, their needs, services offered, the related costs etc. They know that cheap is not always better outsourcing of accounting tasks could save reasonably more than the costs it involves.

Connect Accounting is a New Zealand based accounting outsourcing services provider. Connect has a proven record of seven years in outsourcing Auckland accounting services. Working under the operating doctrine - “By Chartered Accountants, for Chartered Accountants”, Connect offers a wide range of services including annual financials, tax returns, GST returns, work papers, business benchmarking and many more. Connect keeps up with the technology and works with all major accounting software including MYOB AO, APS, XERO, Solution 6, Bank Link, HandiSoft, BGL, DeskTop Super, Super Fund Live, Class Super, Quick books etc.

Handling Classified Data On The Cloud Is Easier Than You Think

Data privacy is an absolute need of the accounting practices as the data they deal with is very much discreet. A few papers do get here and there and it’s difficult to ensure safety of sensitive documents among huge piles. These misplaced documents, if go into wrong hands, the data leak commends to consequences that can have a potential impact on the future of one or many businesses in the market. Many companies have reinforced access policies and permissions as per professional ranks, but at the end of the day protection of physical data is not a childs play.

Considering smarter options to ensure data security, some accounting businesses stumbled upon the cloud based services. Cloud brings with it many other great features like massive storage space, flexible management structures  for improving efficiencies as well as granting global accessing power with an internet connection. In the cloud, users are defined under access privileges and perform operations as per the permissions granted to them. So the restrictions can be set, according to data as well as with respect to the operational requirements of a user.

The features like file sharing or data transfer online also excludes the use of a middleman ( and a prospect data leak ) to transmit the data from one location to another. Hence it has widely made the outsourcing services reliable as the data is directly sent to the recipient over the cloud and no third person will even be aware of the data transmission. And the confidentiality is fully safeguarded.

Observing the safety of data on the cloud, many accounting practices are increasingly shifting their base to internet. Keeping their data digital they are able to communicate and collaborate better with their teams, in-house or offshore. Further in case of outsourcing no actual transfer of data is required to the outsourcing firm. They can just be given access to the required data on the cloud, and they can work on it without having to download data to their systems. So technically the data is like viewable and not downloadable.

Connect Accounting, New Zealand is an Auckland Accounting outsourcing services provider. Accounting NZ practices for the past seven years, Connect has build its reputation for quickest and best results in New Zealand. Connect Offers a wide range of services including annual financials, tax returns, GST returns, business benchmarking and many more.

Demand And Benefits Of Finance And Accounting Outsourcing In New Zealand

The growing demand for elate business growth and efficiencies has concerned many business heads in New Zealand to look up for new and innovative ways for increasing profit levels and lowering expenses. Also, many struggling businesses were looking for a ray of hope to come out the loops and reach stability. Even the local accountants showed little interest in the core accountancy tasks and were relieved by the concept of outsourcing as it opened the doors of managerial and advisory jobs for them.

Driving productivity is an immense concern for all business heads. Finance and outsourcing relieves the key managers and business heads to work on and improve the business processes, improve control and development graphs and of course reducing costs. The current finance and accounting services are a result of constant demand of simplifying and standardizing the financial and accounting tasks. It is by all means an effective management tool.

The benefits of finance and accounting outsourcing is totally dependant on the business using them. Some use the accounting outsourcing services for a single task, like account payable. Some use it for more tasks and as per the current trend companies outsource their entire accounting operations to a remote firm. Its like the more you sow the more you reap. Exploiting the outsourcing services to the full, can make you achieve all the possible perks.

    Below are some of the benefits of Finance and Accounting outsourcing.

• Money- Money is the motive of every business. Earning, saving or investing, a business runs on the wheels of money. Outsourcing helps you to save more, the detailed reports by the outsourcing firm can help decide for wiser and long term investments. and obviously there are reduced expenses.

• Focus- Focus is essential for all endeavours. With accounting outsourcing you can get rid of all distractions and focus on what is more significant exercises.  It literally gets hard for the businesses to focus on all types of tasks while facing the tough market competence. In such cases the finance and accounting services can be made use of by focusing on the core business functions.

• Expertise- With outsourcing, you get the power to choose an expert from anywhere you wish to. This too without the hassle of training, maintenance, grievances etc. The experts you hire also are cost effective as they deliver more work at lesser cost, compared to a local accountant.

Connect Accounting is one such firm, offering you a wide range of accounting outsourcing services to choose from. Connect Accounting is an Auckland Accounting outsourcing firm catering to the accounting needs of kiwi accountants from the last seven years.

XERO Features

Xero offers a comprehensive feature set well beyond that of many cloud-based accounting systems. Here are some of Xero’s key features :

• Dashboard – An overview of accounts and upcoming accounts payable and receivable. Extremely well-organized; easy to take in the important information at a glance.
• Estimates – Xero does not have a dedicated quotes/estimates feature, though it is on the list of high priorities for development, so it’s likely we’ll be seeing it sometime in 2014.

• Invoicing – Invoices can be saved as drafts, submitted for approval, or immediately approved and sent. You can either print or e-mail invoices, and it’s easy to see what’s been sent and when. Automatic invoicing is also supported, if you have customers who you bill monthly or weekly, and you can send either activity statements or outstanding statements to all customers with the click of a button. For invoice design, you can either upload your logo to Xero’s template or custom design your own using a docx file. You can also include direct payment options for Paypal, Authorize.Net, DPS, GoCardless, Stripe, eWAY, or any other payment processor of your choice, allowing your buyer to pay immediately by clicking the link on the invoice.

• Bank Reconciliation – Xero offers live bank feeds; alternately, you can import statements manually (ofx, qif, or csv format). The automatic matching feature is on the whole very good, though I’d have liked to see a way to accept automatically matched transactions all in one go, rather than clicking the “OK” button for each of them individually. You can leave notes on transactions, create new entries, assign categories, and split entries to reflect situations such as partial invoice payments. Xero’s automatic categorization is a great time saver, and it’s easy to set bank rules for how routine transactions should be handled. There’s also a quick cash coding section with some convenient keyboard shortcuts for coding transactions which haven’t previously been entered into Xero.

• Accounts Payable – Suppliers can send invoices directly into your Xero accounts payable section, which offers an interactive timeline with a batch payment option. You can also create purchase orders, copy their contents to bills, and set automatic payments for recurring bills. Xero supports check printing with a variety of customization options.

• Reporting – Xero offers over 40 reports, from basic profit/loss and aged payables/receivables to movements in equity and foreign currency gains and losses. You can also create a budget and compare it with your actual spending and income. For the organizations using Xero for payroll, there are additional 16 payroll-related reports available. All reports can be saved as an Excel file, pdf, or exported to Google Docs.

• Expense Reports – A well-executed time saver. Employees can enter their expense reports and receipts into the system. You can then review and approve employee expenses and receipts. It’s easy to see when there are new reports awaiting your approval. Unfortunately, there is no integration with payroll. You will need to enter reimbursements manually if you plan to add them to paychecks.

• Inventory – Xero currently has little in the way of inventory management. You can create stock items, view quantities in stock, and see sales by item in Reports. However, manual journal entries must be created if you want to track inventory as an asset. According to Xero, we should see improved functionality sometime in 2014.

• Tracking – Xero allows you to create up to two tracking categories by which to sort income and expenditures. You can use this for basic job costing or to track sales by employee, location, or whatever other criteria you choose.

• Contacts – Xero offers an option for group invoicing; you can also view each client’s transaction history and analyze your client list by spending and payments. You can assign one primary and up to four secondary contacts per company, and you can configure default communications settings to cc e-mails to whichever contacts you wish. Contact entries are automatically created each time you enter a new name on an invoice; you can also import your existing client list.

• Sales Tax – Xero has excellent sales tax support. You can set taxes for as many different areas as you like (including combined taxes such as a city and state tax, compound taxes are fully supported). You can also assign a default tax rate to each customer.

• Tax Forms and Support – Xero’s 1099 Report provides you with all the information you need to fill out 1099 forms. The software also offers automatic depreciation tracking for fixed assets; enter the initial purchase and depreciation rate and the software will do the rest.

• Multi-Currency – If you do business internationally, multi-currency support will be a crucial feature. Exchange rates are updated every hour; you can invoice and set reports in any currency. Xero supports bank accounts in multiple currencies, though you cannot print checks or submit expense claims in any currency other than your base currency.

• Online File Storage – Xero offers online file storage, allowing you to import receipts, invoices, and other documents. Files can be scanned and uploaded or simply e-mailed to your Xero inbox. You can also use a webcam to photograph the files, which will then appear in your account. Files can be attached to transactions, journal entries, or accounts for paperless record keeping. Note: unattached files in your Xero inbox are visible to all users. If there are documents you wish to keep private, attach them to the appropriate entry immediately after uploading them.

• Payroll – Xero now provides payroll for US-based businesses, including direct deposit and the option to eFile and ePay taxes. This is a new feature which is not yet available in all states; read the latest information on its availability here. A light version of Payroll, for one employee only, is included in the Standard Plan.

• Employee Payroll Portal and Time Tracking – Employees on payroll can use their own logins to access a portal through which they can complete timesheets, view paystubs, and see accumulated sick and vacation time. They can also submit requests for time off and completed timesheets for approval. E-mails from Xero will alert the employee and supervisor as to the status of such requests. The time tracking function is limited. You can enter a total number of hours, but no start and end times. However, you can use the Tracking feature to assign hours to different projects or locations. Employees can also create timesheet templates to cut down on data entry if they work a consistent schedule.

• Import/Export Capabilities – Xero allows you to import and export information freely, primarily in csv format. Xero also makes it easy to switch from QuickBooks, using QuickBooks 2007 or later, just upload your QuickBooks file. Xero will handle the conversion.

Xero Review

Headquartered in New Zealand, Xero is a cloud-based accounting solution tailored to the needs of small to mid-size businesses. Its features include account management, billing, invoices, expense reporting, and payroll. Xero also integrates with over 200 other applications which facilitate nearly all aspects of business operation, including inventory management, CRM, and POS.

Ease of Use:

Xero’s interface is clean, well-organized, and easy to navigate.

• Setup - When you first sign up for an account, you’ll be prompted to set up your company through a series of fairly self-explanatory screens, each with its own easily accessible help section. There are also a series of “Getting Started” videos which, while some are slightly out of date, provide good, concise advice as to setting up your business with Xero. You have the option to save and quit at any point during setup.
• Organization – Once set up, navigating is a pleasure. The dashboard offers a quick overview of accounts, and it is easy to see items that need attention (overdue bills, for instance) at a glance. In addition to the dashboard, there are tabs for Accounts, Payroll, Reports, Adviser, Contacts, and Settings. Each provides access to a variety of drop-down options, and they’re organized pretty intuitively. Usually, things are found on the first place you thought to look.
• Instructions and Guidance – Xero provides a “Getting Started” text box at the top of some pages which provides handy tips; it’s easily hidden once you’ve mastered the content. How much you need to read instructions in order to use the software will likely depend upon your accounting knowledge and the complexity of the tasks you are attempting.
• Problems – Xero is very clean software. There are a few minor annoyances, as follows:
  • Lack of Time Tracking for Contractors – I am very glad to see a time-sheet function for employees under Xero’s new payroll function … but a bit surprised that the software doesn’t provide time-sheets for 1099 contractors.
  • Poor Inventory Support – While Xero says you can use add-ons for inventory, a quick glance at their forums gives you the impression, most of these don’t work well. Xero plans to offer improved inventory management this year; whether that will solve the problem remains to be seen.
  • CSV Imports – In the banking reconciliation, duplicate detection does not function across formats, so if you import a csv and later import a qif with overlapping dates, you will end up with duplicate entries. Also, depending on your bank, you may need to make significant adjustments to csv files before they will import correctly (Xero can’t import a bank statement csv with separate debit and credit columns).
  • Lack of Automated Features – Xero does not offer automated invoice reminders, overdue notices, or receipts upon payment. While it’s a minor point, it seems an odd omission for software which has such a great feature selection.

Benchmarking: 5 reasons why your business should do it

Do you know how your business is performing when stacked up against competitors? Where you could improve, what you are doing well and what you could do to steer your ship in the right direction?
The good news is, there’s no need for guesswork. Benchmarking can answer these questions for you.
Here are our top five reasons why your business must benchmark:

1. Benchmarking allows you to dive in deep to find out why top performers in your industry are so successful. You’ll be able to analyse the key behaviours and ingredients for success, so that you can emulate them.
2. Benchmarking enables you to identify the strengths and weaknesses in your own business. Without this insight, you could be travelling blind and making business decisions without the right information.
3. Benchmarking provides objectivity, so that you can take an objective view of your business. It’s difficult to do this otherwise – you may be just too close and emotionally invested in your business so making it difficult to stand back and be unbiased. The most successful businesses take off the rose-tinted spectacles and make realistic assessments about their performance.
4. Benchmarking empowers you to understand personnel productivity in detail, and subsequently, set reasonable expectations for staff productivity. There’s no benefit in setting expectations that simply can’t be met by humans. Likewise, it’s foolish to set expectations that are too low to drive real value in your business. Comparing your staff productivity to more successful players will help you identify your productivity gaps.
5. Benchmarking can also help you assess performance in the area of finance. A wide range of expenditure questions can be answered to help you make strong conclusions – on anything from average industry salaries, to the cost of office supplies.

Like any management activity that’s worth doing, benchmarking takes a little effort. But outside help is available. If done right, benchmarking holds the key to future prosperity, for you and your business.

Tax Tips End Of Financial Year

We, while working at Connect Accounting, have put up some tips for the end of financial year. We hope you will find them helpful. Tax can be a simple or difficult task depending upon the knowledge and experience of the accountants. For making it a simple job, the accountant must have up to date knowledge of tax laws. These tips may prove useful while getting your paperwork together.

Bad Debts 

In order for a bad debt to be truly “bad”, there must be no reasonable expectation of recovery. There must also be evidence that a bad debt has been written off. Normally this would involve a paper trail between you and the customer or potentially an action in the Disputes Tribunal.

In order to claim a bad debt, it must be written off during this year in order to claim the deduction. We can do this for you when preparing your financial statements.

 Inventory

You are entitled to write off obsolete stock. In order to reduce the value of items in stock, they should be disposed of physically or alternatively valued at their market selling value which will presumably be lower than cost.

Repairs and Maintenance

If you have repairs and maintenance that need to be done, it may be worthwhile to do these in March so that you get the benefit of a full deduction.

Home Office Expenses

A proportion of your mortgage interest, residential telephone, insurance and rates can be deductible. There is a common misconception that this amounts to a flat 25%. This is not the case. In the case of an IRD audit, the department would want to see evidence as to how the portion deducted was determined. Our advice is to get a sketch together of your home with floor areas and work our how much is actually dedicated to business use. Contact us for more information if you are unsure.

Donations

Most clients are aware that their personal donations are tax deductible but your business donations may be as well. So long as the company records a profit, you may claim any donation up to that net income figure.

Scrapping unused assets

You may write-off an asset that you are currently depreciating when the costs of disposing of it are greater than any expected proceeds from the sale.

Prepaid Expenses

You can claim the full amount of some “prepayments” regardless of the amount or period being prepaid. Items include:

• Stationery
• Subscriptions for journals
• Road user charges & vehicle registrations
• Postage and courier charges
• Rates
• Audit & accounting fees

Other expenses such as travel, rent, consumables, advertising and insurance have either dollar or time limitations so please contact us for more information.

Entertainment expenses

Most entertainment will qualify for a 50% deduction. There are a whole host of rules that apply so if you are uncertain, give us a call.

Vehicle expenses

There are a number of ways of claiming the business portion of vehicle expenses against the business. These include a mileage rate, using a logbook, actual mileage and transferring the ownership of the vehicle into the business name.

Know how to Outsource

In all businesses, accounting falls in the category of important but unexciting. From maintaining record of all the incoming and outgoing capital to maintaining proper entries in the financial records, there are many things can go wrong. And upon all of this, bearing the expenses of an in-house team adds to the headache.

But like all other problems, this too has a cure - “Outsourcing”

The option of outsourcing your accounting tasks brings peace to life as you get all the work done by professional accountants with the expenses and maintenance hassle of an in-house staff.

But before outsourcing your confidential accounting data, you have to wisely choose an outsourcing partner. For this the first step is to Track Your Business Records. By this you will get to know your requirements and outsourcing risks correctly. Secondly, understand the practicalities of outsourcing your accounting. Decide on what and how much you need to get outsourced. And thirdly, look for firms that offer you the best financial benefits. Go for firms that offer you more flexibility and trust.

Connect Accounting, New Zealand is one such firm that offers you a complete package. Connect delivers on promise, trust and credibility, making your outsourcing experiences the best one.

The Pros and Cons of Outsourcing Accounting Services

If you are running a small business, you could consider outsourcing accounting services so that you don’t have to mess with the accounting part on your own. For running your business efficiently, you should maintain your accounts properly and should keep in mind that there are several pros and cons associated with outsourcing your accounting services and one must be aware of these, for making right decision at the right time.

Pros of Outsourcing Accounting Services

One of the best pros is that if you outsource your accounting services to another firm, you won’t have to employ and pay people to work for you on a full-time basis, as part of your company. This can prove cost effective. The outsourcing firm will record and maintain accounts for your business and will deliver your work before the deadline. Accounting outsourcing firms generally hire trained professionals to work for you so that they can provide quality work on time. They work expertly on most aspects of accounting such as bookkeeping, data entry, taxation and payroll. This will save you a lot of time for attending other business requirements like growth and client relationships.

Cons of Outsourcing Accounting Services

For outsourcing accounting services, you will be revealing all your financial details to another firm, so you should think twice before you decide the firm to outsource. Before outsourcing, have a check on the firm’s reputation, their customer’s satisfaction, and their work environment. Some firms may not cover all areas of accounting for you, especially if you haven’t listed them on the contract. You may therefore feel like you’re being cheated somewhere. Some services may come at an extra charge and this may work out to be an expensive proposition on the whole.

You must definitely remember these pros and cons so that you know what’s best for your company and its overall success. One of the best options is to choose the services of Connect Accounting, New Zealand, which ensures quality and timely results. You are charged as per predefined terms and your data is secure under confidentiality agreements.

Accounting Outsourcing Services

When you are running only a small business, it is better to have your accounting work outsourced to an accounting firm without having to hire a full time accountant. By outsourcing you will be benefited in a number of ways, such as reductions in your expenses of recruitment, office space, salaries and benefits, and other related costs. Although, it doesn’t mean that this reduction in cost will result in decrease in productivity.

The significant factor is that you are able to get the service of professional accountants at little cost. To keep their reputation high, the top accounting firms that do outsourcing will offer better professional services in order to have a better footing in the industry. You are thus guaranteed a service of high quality, at lower expense. You can therefore put more effort and money into running your business and improving your profits.

The accounting services are provided by outsourcing firms in the accounting field. Connect Accounting, a leading NZ Financial and Accounting firm, caters to a vast range of accounting services including taxation, financial management and accounting outsourcing services. They help you to manage your finance better, and this will not take up your time. Accounting services are concerned with the preparation and recording of daily transactions, and quarterly or monthly preparation of accounts.

When you run a small business, you may not be in a position to have a professional accountant, but it would be to your best advantage to have one to handle your bookkeeping services. Bookkeeping, though laborious and time consuming is fundamental to a business because it represents how your business is doing – whether it is profitable or not. When outsourcing, these aspects will be taken care of by a professional and experienced accountant, if you’ve employed from one of the top accounting firms.

When you outsource your accounting work to an outsourcing firm, you know the finances of your business are in safe hands, and this gives you confidence, and you will no more have to worry about the finances. The accounting fees you pay for the services are worth it because of the professional and timely service they provide. Book keeping functions will let you know the important aspects upon which you will have to make decisions for running your business profitably and efficiently.

These firms provide you with the latest advanced accounting techniques and systems, which help with employing personnel, training them and updating your infrastructure. So you benefit from the outsourced job. Your valuable money and time can be put to other good uses.

Here is why F&A Outsourcing makes sense

Having a clear cut image of your finances and accounts is an intrinsic part of every business. Big or small, old or new, a proper and accurate documentation of all the financial business dealings enables you to stay market safe and make wise decisions based on stable data.

Connect Accounting NZ

Here are a few points that illustrate the importance of outsourcing.

- Cost Efficient

Finance is the foundation of every business and financial and accounting management, the key for its survival. Keeping an accurate record and auditing of all the business transactions is mandatory for every firm, but the cost of doing this in-house will be both expensive and unnecessary. At times you might need many employees for this task and sometimes just one. In this case an outsourced financial professional can be hired for the job on hourly or as-needed basis so that you pay only for the work you assigned and not full time.

- Time is Money

Many business owners perform their finance and accounting functions themselves because they think that they have enough time for it than hiring full time professionals. However, what they don’t realize is that they can utilize their time for better prospects like business and client relation development and they can’t do accounting with the accuracy of a professional. No matter the size or type of a business, a person should do what they do best. For better running your business, consider hiring a professional outsourced bookkeeper who can provide you accurate records and you can work better on your business.

- Persistent Results

Business owners who employ untrained employees for finance and accounting functions often find their records are incomplete or incorrect which can be very confusing and can miss match over time, making it a baffling task to take accurate financial decisions. An outsourced bookkeeper can work for you to in a strategic and consistent manner delivering you accurate and audited results you can rely on.

- Tranquility

Being a business head is already a strenuous job, then why add up accounting and finance worries. An outsourced bookkeeper can alleviate this stress very well. All you have to do is select an efficient outsourcing professional and live all the worries to him. You have all the time to focus on your business growth and enjoy life in free time.

So are you troubling yourself for preparing accurate budgets or are unable to find a suitable outsourcer? Connect Accounting, New Zealand, is a one stop solution for all your accounting headache. Connect enforces strategic planning and offers a range of accounting outsourcing services that help you consider the different opportunities you may have when making major business decisions.

Outsourcing Your Accounts Functions

Under the current market trend of continual cost cutting and novelty, businesses are finding ways to successfully trim overhead expenses, boost profits and deliver superior products and services than the previous years to stay ahead of the competition. One of the successful ways businesses are achieving this is through the principle of outsourcing.

Now a days if a firm requires professionals to carry out bookkeeping or accounting tasks, that firm would generally start looking to employ somebody to fullill this need in house. However, there are many aspects that to be considered if the firm is critically assessing between hiring internally or outsource to an external accounting firm to heed to the financial needs of their business.

While employing new staff overheads are a major concern. Beyond the basic pay you also need to consider other employment costs incurred during the recruitment and training process and for staff amenities, office space etc. The list varies from company to company, but is never short in size. Here is when the idea of outsourcing pops up, which brings in all the ease and perfection at work.

In case of outsourcing an accountant firm there is reduction of all possible overhead charges. In some situations it may even negate the requirement of having a physical office. Plus, the necessity of having to manage the accounting staff can also be avoided. Bearing in mind the edge of engaging an external accountant or bookkeeper, a manager should wisely consider their services when choosing one.

Connect Accounting, based in Auckland, is one of the leading firms catering to a large number of New Zealand based businesses. Connect provides services in a wide range of accounting tasks, like, annual financials, tax returns, work papers, GST returns, Business benchmarking etc. Connect is in the outsourcing market from the last seven years and is standing tall in terms of experience, quality and commitment.

Accounting Outsourcing – Perks of Strategic Outsourcing

Accounting outsourcing is a progressive strategy being used to reduce monitoring costs and controlling the finances by accounting systems.

Most business holders understand the fact that accounting is an important aspect in any business. The accounting division controls and monitors the finances in all businesses. Most businesses which failed were due to the lack of rigorous accounting systems. Many have fallen behind the standard of accounting, presenting them with a real impression of the flow of their money. Any business will not prefer investing in large capitals that would go nowhere. The concept of accounting is to carry the movement of finances, by providing a clear image of how the capital is being handled.

Due to this importance, companies generally employ professionals who are trained to ensure that the finances are handled as required. The professionals are more like a support group who safeguard the pace of the business capital and processes. Their function doesn’t directly involve sale generation but financial monitoring. Most businesses employ a few personnels and invest noticeable amount in training, incentive plans, keeping the staff motivated, and to ensure beneficial experience and satisfaction. But accounting professionals are still humans and at some certain point in time, they might leave for growth prospects. Eventually, the company will be left with circular process of hiring and training again, and keeping this new bunch of people keen and motivated. Hence, having a full time accounting staff proves to be more expensive. Rather than becoming a support group to the company, they become a financial concern instead. Due to this primary reason, firms now prefer going for accounting outsourcing.
Accounting outsourcing is one of the leading strategies used to minimize cost in scanning finances through accounting systems. Many companies have already started with it not by considering it to be trending in market but because they find it more constructive than any other. Some benefits of accounting outsourcing are as below:

• Revised accounting systems - Connect Accounting’s outsourcing services make use of the latest accounting systems and processes as per a company’s requirements for their accounting services. These latest systems assure an accurate, efficient, and prompt data for the businesses.
• A turnover free accounting system –  Even though most organizations have their own staff of accountants and bookkeepers for the company, they are attached with systems that are not dependent on the client’s line of trade. Even if the outsourced companies have turnovers, the accounting data and process of the clients will not be affected.
• Cost effective accounting process - Companies employing accounting outsourcing can easily save large chunks of staffing and overhead charges. Instead of  employing full time staff  and constantly trying to keep them motivated, the business can just pay on as needed basis to the outsourcing company which is a fee in exchange with the services.
• An impersonal System – This means that the people working on your accounting details do not have any interest to look into the data. With Connect Accounting, New Zealand, outsourcing is purely service to the clients. The processes are completely professional and so the confidentiality and privacy of the accounting books is very high.

With so many gains, there is no more requirement for a reasons to not employing Connect’s accounting outsourcing services. The nominal cost, the accuracy, the prompt solutions, and the latest technologies are worth trying and looking into.

Outsourcing Financial Analysis

In the competitive market, everyone is in queue to achieve success. This is an outsourcing era and the one who adopts smart work rather than hard work, leads the crowd. There are many small and medium sized companies that have grown and spread their businesses by outsourcing their accounting tasks such as accounts payable, accounts receivable or general ledger accounting etc. Businesses opt outsourcing in order to develop a competitive advantage by reducing costs and increasing efficiency amongst a traditionally high cost, skill intensive set of finance activities.

 Benefits of outsourcing Financial Analysis Services
Decision Making - Outsourcing the financial analysis services, provides a management with access to a faster and more accurate interpretation of financial data. This would result in quick decision making abilities.
Better technology – Use of superior and updated technology so that the data can be used on regular basis for the advance service levels of the company.
Cost Savings - an approximate 40-60 percent savings in analyst costs.
Transparency and regulatory compliance – CFAs the world over, are turning to financial services outsourcing for achieving improved financial reporting and regulatory compliance.
Significant top-line and bottom-line impact from analytical insights into areas such as cost management, product profitability and project appraisals.
Financial Analysis Services which can be outsourced
• Financial analysis and research
• Corporate financial statements
• Analysis of financial statements- monthly, quarterly, and annual management reports
• Analysis of portfolio structures
• Industry reports (fact books and competitor analysis)
• Financial ratio analysis, break-even analysis, NPV and IRR analysis
• Budgeting & Forecasting Reports
• Financial Accounting
Outsourcing financial analysis services is a fast growing way adopted by many businesses for taking care of their financial accounting needs. It may appear risky at some point but outsourcing will  bring you success and efficient results in real time for sure.
While financial analysis outsourcing services have numerous advantages, choosing the right person  is also critical. Connect Accounting, an Auckland based accounting firm specializes in outsourcing financial analysis services to accounting firms and small businesses.

SMSFs provides greater investment flexibility

Opening up Self Managed Super Fund (SMSF) in New Zealand, offers a number of benefits including fixed costs, complete legal control and holding of your assets, investment flexibility and retirement savings. When you have a smsf, you get a complete range of investment options that you can reap on behalf of your smsf than other traditional superannuation fund. This is because the normal superannuation fund covers a lesser number of assets like cash and bonds.

It’s not just the power to invest in non-traditional assets like gold and property, but the New Zealand investors can achieve much higher returns within a SMSF. In case of smsf you are not restricted to a few asset classes, but to a wide range of investments including direct property, gold, shares and ETFs. This availability of wide range of asset classes has easily outpaced traditional superannuation funds, that too with lower volatility.

Another strong reason to consider smsf for New Zealand businesses is the Additional investment flexibility. The power it gives is like the ability to use a simple manager to outperform the stock market.

A myth associated with smsf in New Zealand is that you need $300 - $500k to legitimize your smsf, but the meaningful part is that you can save notable capital over your working years. Connect Accounting, New Zealand can act as a great support to make this happen.

The Benefits of Online Accountants

When it comes to accounting for your business, you may be thinking that changing your accountant is as difficult as changing your bank.
Well, as has been proven over the last 10 years where banks are advertising and demonstrating how easy it is to change provider, the same applies to accountants.
In other industries, especially retail, the trend over the last decade has seen online trade become equal to or better than high street trade. It will come as no surprise that accountancy is following suit, perhaps a little behind other industries as the aforementioned statement about business owners believing it is too much hassle to change prevails.
However, when looking at the benefits of online accountancy, if you haven’t already considered this option, perhaps now is the time?
There are some key benefits, the main one being the cost. As accountant will be leveraged across multiple accounts and without the need for personal client visitation and calls, it means one accountant can do more with his or her time. This translates into a cheaper cost per client which is a cost saving that can be passed onto you the business owner.
You may be thinking that cost inst everything when it comes to your business finances, but the regulations and laws surrounding business finance, especially with regards to HMRC, means that certain protocols must be adhered to whatever type of accountant you use. So if your business requires end year accounting and tax returns which is the case for the average business, the service is exactly the same, so why pay more?
Another key benefit is time saving. Online accountants will accept accounts submissions online meaning less time filling out paperwork and posting and instead you benefit from instant receipt of submissions to your accountant, which can make all the difference especially where penalty charges are applied for late submissions by Government departments.
Another positive factor of online accountancy is that you are no longer restricted by the geographic location of your business. For high street accountants, you often had to choose a firm that was within a catchment area to allow for onsite visits and audits. With online accountants, this limitation doesn’t apply so you can pick the best firm that meets the needs of your business.
Accountancy isn’t a dark art, but it does require a qualified professional to administer your accounts and knowledge of best practice, but if the output is the same, why stick with the same accountant.
With the introduction of online accountants, the industry has seen a shakeup where a firm’s reputation is no longer enough to secure future business. With online facilities to compare the market, firms must now compete to stay ahead of the game. With competition comes better services and prices for the consumer.
It may well be that your current accountant offers an online service, in which case the transition for change is that much smoother. So if you haven’t before considered an online accountant, and your current provider doesn’t offer this service, then take a look now at what is on offer across the whole of market.

 

Foreign Superannuation – To Bring Back or Not To Bring Back

On Thursday 27th February 2014, the Taxation Bill received Royal Assent, the final part of the process that brings a new piece of legislation into effect.

While also confirming the tax rates for the coming 2015 tax year, a prime focus of the Bill was the changes to the Foreign Superannuation rules.

Historically the rules have been relatively difficult to understand, one consequence of which is a higher possibility of non-compliance by taxpayers simply not aware that they had any reporting obligations with respect to their foreign superannuation scheme.

In making the changes, the Government is desirous of removing all complexity associated with the previous rules, the obvious goal being to eliminate non-compliance completely.

Under the previous rules, taxpayers may have had a reporting issue from one of two perspectives:

• Firstly that their foreign superannuation was classed as an attributing interest in a foreign superannuation scheme and was consequently subject to annual taxation under the foreign investment fund rules, or:
  
• Secondly that their foreign superannuation scheme was held via a foreign company or foreign trust, which did not satisfy the technical definition of being a foreign superannuation scheme and was therefore not caught by the FIF rules. The foreign company/trust then made a distribution to the taxpayer however the amount received was not returned as income by the taxpayer, either as a dividend or as a beneficiary taxable distribution.

From 1 April 2014, the new rules will come into effect and in essence taxation will be purely on a receipts basis.

The amendments will predominantly affect taxpayers who receive a foreign superannuation withdrawal. A foreign superannuation withdrawal will include a cash withdrawal or a transfer into either a NZ or Australian superannuation scheme ( Australian superannuation schemes are generally exempt from taxation under the Australia/NZ double tax treaty agreement).

The receipt of a foreign pension or a foreign social security will not be affected by the new rules as these amounts have always been subject to NZ tax based on the time of receipt.

So how will the new rules impact you or probably a more pertinent question, if you presently have a foreign superannuation scheme, what should you do with it?

1. If you are still a transitional resident, then effectively the new rules have no impact on you until the expiry of your transitional residency period. However it is recommended that you utilise this four year window to reorganise your foreign investments so exposures to NZ taxation when your transitional residency period is at an end are effectively managed.
   
2. If you are a returning New Zealander but do not qualify as a transitional resident, the new rules will still provide a four year window for you to either receive a lump sum withdrawal or transfer the foreign superannuation to a NZ/Australian scheme without having to pay any NZ tax.
   
3. If you do not qualify under either 1 or 2 and you are looking at receiving a foreign superannuation withdrawal sometime post 1st April 2014, the amount of NZ tax you will be required to pay will depend on how long you have been a NZ tax resident (post any transitional residency period expiring) at either the time of transfer or the time of receipt. The new rules refer to this as your assessable period and applies a rate that ranges from tax being levied on 4.76% of the relevant amount if the event occurs within twelve months of you becoming a NZ tax resident, to 100% if the event occurs post 26 years from the time you became a NZ tax resident.
    
4. This method of calculation is referred to the schedule method and is the default method for the purpose of the new rules. The method approximates the income from the superannuation scheme that would have been derived by the taxpayer on an accruals basis and adds an interest component to recognise the deferral of the tax liability. An alternative method is available referred to as the formula method, however this method can only be used if certain specified criteria are satisfied.
5. If you plan to leave your foreign superannuation offshore, then the new rules will not impact you until you receive a foreign superannuation withdrawal at some point in the future.
   
6. If you plan to transfer your foreign superannuation from one foreign superannuation scheme to another foreign superannuation scheme, then again the new rules will have no impact on you until you actually receive a foreign superannuation withdrawal.
   
7. If you have previously returned income on your foreign superannuation scheme in accordance with the FIF rules pre 1 April 2014, then for as long as you continue to do so post 1 April 2014, the new rules will not apply to you. Note that under the FIF rules, any actual receipts are not subject to NZ income tax. Note that one criteria here is that you must have first returned the FIF income in an income tax return filed pre the announcement of the new rules – 20th May 2013.

The new rules also provide an amnesty of sorts to those taxpayers who for one reason or another have not complied with their NZ income tax obligations at the time they either received a lump sum amount from their foreign superannuation scheme or they transferred their foreign superannuation to a NZ/Australian superannuation scheme.

The amnesty applies to events that have occurred during the period 1 April 2000 to 31 March 2014. An affected taxpayer will be able to correct their non-compliance by paying tax on 15% of the lump sum/transfer amount. To take advantage of this option, the relevant amount must be included in either the taxpayers 2014 or 2015 income tax return. If a taxpayer choses to use this option, then no interest or penalties will apply (unless the tax due is not paid on time). Alternatively a tax payer can choose to use the actual rules that were in effect when the receipt/transfer occurred, however to the extent the reassessment results in a tax shortfall, they will be exposed to interest and penalties.

The 15% option will still be available to taxpayers who do not act on the amnesty but are discovered by the IRD at some later date to have not complied with their obligations correctly. However the reassessment will be made to the taxpayer’s 2015 income tax return with possible interest and penalty exposures as a result.

Additionally, in a last minute amendment to the Bill, the 15% option has been extended to those taxpayers who have applied to have funds transferred prior to 1 April 2014 however as at 1 April 2014 the funds have not actually transferred. The media release accompanying the announcement of the amendment, promoted the benefit of someone on a 33% tax rate transferring their funds pre 1 April 2014, as effectively only having to pay 5% tax on the amount transferred.

As a side issue, it should be noted that any income arising either under the new rules post 1 April 2014 or as a result of the taxpayer using the 15% method, will be treated as income for the purpose of calculating working for family tax credits, child support and student loan repayment obligations.

Finally, where a person has transferred their foreign superannuation into a NZ KiwiSaver fund, usually those funds would be locked in, however Parliament has recognised that this might create hardship issues for taxpayers requiring funds to pay the taxes assessed under the new rules and as a result an amendment has been made to the KiwiSaver rules to permit a withdrawal to the extent of the taxation payable on the transferred amount.

Super software must handle multi-asset classes

As the superannuation industry moves into the next phase of change and evolution, technology that aggregates super data and investment information must be able to manage a wider range of asset classes and providers, according to DST Global Solutions.

“What we’re seeing is one parallel when looking at the United States market where what we saw there three to four years ago was that they were taking more control of their destiny, their assets and their information,” DST chief executive Arun Sarwal told financialobserver.

“That’s a trend we’re really going to see in Australia, but there’s a lot of learning we take the other way, from Australia, as well.”

As super funds experienced a proliferation of asset classes, they had to be cognisant of scenarios where information from property, hedge funds, fund-of-funds and multi-managers, for example, not only had to be collected, but the multiple data streams had to also work in order to produce coherent performance or position reports, Sarwal said.

“At the moment, alternative asset classes in some of the larger super funds here probably make up 5 per cent to 7 per cent, but one could imagine that it could grow up to 30 per cent along with property,” he said.

“Also I think global investment at the moment is largely Australian Securities Exchange-related, certainly on the equities side.

“So as we see all of that changing, the whole management of investment data is going to get that much more fragmented in one respect, but also there will be multiple providers come in.”

DST had been in discussions recently with a number of super funds in order to understand the direction they were taking when it came to managing investment data with technology, he said. “What’s been reassuring is that there are some super funds here that clearly have a tremendous vision and absolutely the right vision – they know what their priorities have to be, particularly around technology,” he said.

“I think however quickly one wants to deploy technology, first you must understand what you need and then the implementation, but there’s also the mindset change and the strategy change.

“What’s been really great to see is that there are a number of super funds that know where they need to go and after talking to them we’re going to see some real technological developments that will set them up for the next phase.”

Accounting profits adjusted to satisfy information hungry market

New Zealand’s listed companies are commonly adjusting their accounting profits to communicate their financial performance to the markets, referring to them as underlying earnings or normalised profit.

Connect Accounting NZ

The practice of adjusting accounting profits, which is common across all the world’s major markets, has led some to question the state of accounting standards in this country.

New Zealand’s accounting standards are essentially the same as those of the world’s main markets, but the practice of adjusting accounting profits does highlight that investors are demanding to understand performance through the eyes of corporate boards and not just the accounting standard setter.

The regulation of information provided to investors is significantly more enhanced than it was 30 years ago.

While accounting profit is the primary measure for reporting earnings to investors under New Zealand’s legislation, like other markets across the world, New Zealand corporates can tell their financial story by adding measures that are not directly produced by accounting standards.

They do so under the watch of New Zealand’s Financial Markets Authority.

When making adjustments corporates must meet a number of requirements to ensure they are not misleading investors, but they tell their financial story using different measures which emphasises different views on what performance means.

New Zealand’s accounting standards are approved by the New Zealand External Reporting Board (XRB), a Crown Entity, and are based on those widely used across the world’s markets – International Financial Reporting Standards (IFRS).

The use of IFRS and the use by New Zealand’s auditors of XRB’s auditing standards are important in maintaining investor confidence in New Zealand’s capital market.

Just as there are benefits in using international standards, there are also disadvantages – in order to change them other international constituents will need to agree and this can take time.

Some of New Zealand’s corporates view IFRS as too complex and believe that its application produces financial statements that have excessive disclosures. Many in our primary sector also believe that the way some biological assets are required to be valued produces results that do not reflect performance.

However, despite requiring some improvements, New Zealand’s accounting standards are of the same standard as the world’s largest economies and the improvements need to be addressed internationally.

It is highly unlikely that investor communications will see a reduction in adjustments to accounting earnings anytime soon.

But this does not point directly to concerns with our accounting standards; it reflects an increase in demand for how corporates view their own performance rather than how a standard setter does. They want to provide further information to an information-hungry market about how they create value.

The real issue is when will this board-view approach turn into an evolution in corporate reporting?

Rear-view adjustments to accounting profit for things like one-off strategic costs may one day be subsumed by market-led information about how boards believe strategies create value for investors and how sustainable they are.