Business Services

What do clouds, rainbows and accounting have in common?

Normally those are three things that you wouldn’t necessarily hear in a sentence together. But cloud-based accounting really can make rainbows appear in your business. And that is why we think you should embrace it wholeheartedly!

Let’s face it; if you are self-employed or running your own business, your bookkeeping obligations can be a bit of a drag. You got into this to do what you love and be your own boss – not to spend hours at a computer screen trying to make sense of invoices, transactions and tax.

But then, cloud-based accounting entered the market. Many small business owners are choosing to move to the cloud due to the increased ease and efficiency. So if you are still doing your accounting the old-fashioned way, it might be time for a change!

What does it mean to be cloud-based?

Is my information literally floating in the sky?

Kind of! Cloud-based software gives users access to accounting technology on a subscription basis. You pay a monthly or annual fee, and the provider remotely and securely hosts the databases and servers. You can easily access your data from anywhere at any time by simply going online.

Let’s explore why cloud-based accounting is so much better than the old traditional paper methods!

Problems with traditional accounting systems

• It’s inflexible – Older accounting software is installed on your computer and is usually limited to exactly that – your one Data cannot be securely transferred from one place to another, it often requires the use of a USB drive or something similar. That jeopardises the security of your information and limits where you can do your work (hint – that means you can’t sneak in cafe working hours!)
• It’s risky – It’s also common to only have one account or user login, because buying additional licences for other users is very expensive. This means if your computer is lost, stolen, or has a virus – you’re up the proverbial creek. Computers can be vulnerable to viruses, and if all of your data is stored on one PC, you could lose it in one hit.
• It’s outdated – As the software gets older, it gets more out of date and inefficient for your growing business needs. It can be an expensive process to upgrade existing software and keep access to your old data.
• It’s unreliable – Speaking of data, some older systems do not have the capacity to back it up at all. We’ve all accidentally deleted something that we really shouldn’t have. Not being able to get it back is a less than ideal situation.
• You’re on your own – It’s almost impossible to get help or support when something is going wrong with your old accounting software. There is usually a customer support phone number, which is either never answered or it’s disconnected.

Benefits of cloud-based accounting systems

• It’s accessible – Wherever you have Internet or mobile data, you can access your business information. This is essential for meetings on the go or for work trips where you can’t be at your desk, but need to be able to see or edit your data. It also means that your accountants have a clear and up-to-date overview at all times. No more frantic searching for receipts and invoices at tax time!
• It’s streamlined – Cloud-based accounting systems are relatively new and have been designed to be user-friendly and largely automated. This cuts out a lot of the administrative work for you, giving you more time for other things.
• It’s really smart – Most cloud-based systems are sophisticated and go way beyond basic spreadsheets and calculations. They feature detailed budgeting and financial analysis and come with heaps of other features to help you run your business better.
• It Saves You Time – Systems like Xero offer one-click reconciliations, tax and GST reporting (with a direct link to upload to IRD), the ability to set up repeating invoices, automatic invoice reminders and so much more. That means it saves you hours of time completing these tasks manually.

As you can see, we are complete cloud advocates here at Accountants Plus. If you are interested in knowing more about how cloud-based accounting can streamline your business, or even how we can help you manage your cloud accounts then get in touch with us today.

Accountants Plus. As the name suggests, we offer more than your average accountancy firm. Saving our clients time, stress, and money is high on the priority list so we go out of our way to help people get their heads around what can sometimes be a complex, confusing part of business ownership. In this particular instance, our ‘plus’ is delivered to you in the form of some VERY handy tips. (We mean print-me-off-and-keep-me-on-your-office-wall type handy!) We have been busy with end of year accounts processing, so we thought it would be the perfect time to share some advice on the subject to help get you feeling organised and confident for the next financial year-end.

Rather than all the last-minute scrambling around like a cat in the bath for all the documentation we require to process your accounts, we have put this doc together so you have the option of gently gathering it over the year so the majority of the hard work is done by the time we send out our ‘accounts due’ email. FYI – We have already sent out that exact email for the 2017 end of financial year, which included a handy checklist (Click here if you missed it!), but if you are looking to be a step ahead of the game for the 2018 financial year, then this will be especially useful for you!

So here goes – The list of thinga-me-bobs and whats-its for you to keep track of throughout the year. When year-end finally rocks around, you can totally wow us with your file that is titled: ‘Here’s a little something I prepared earlier’.

FINANCIAL RECORDS

• If you use Xero or another accounting package, your debtor and creditor information should be accurately captured (just make sure your software balances with your bank at year-end). If not, ensure to keep a comprehensive spreadsheet of all your incoming, outgoing and pending transactions, including dates, accurate descriptions, and amounts
• At year-end, we will need your last bank statement for each business bank account (or bank statements for the entire year if you don’t use accounting software)
• Your business credit card statements (including GEM VISA, Q-Card, Bartercard etc…)
• Resident Withholding Tax Deduction certificates (sent out by your bank)
• Documents showing any hire purchase, mortgage and loan agreements you have entered into in this financial year (including statements and loan summaries)
• GST Returns/ FBT Returns for the year
• Company dividends, interest received (in the form of letters, receipts, or certificates)
• ACC invoice copies

CASH 

• When it comes time to submit your financial documentation, we will ask you for your ‘cash on hand’ amount. This is where you let us know the amount of takings you have not yet banked by the balance date, as well as the date you did bank them and the amount you hold in tills and cash floats.

INVENTORY

• Keep track of your inventory via stock takes because we will need an ‘as at year-end’ dollar amount at the end of the financial year (which is calculated at the lower of cost or net market value and minus GST).

BAD DEBTS

• Someone hasn’t paid you and you’ve written it off? Make sure to keep a record of any bad debts during the financial year and let us know the total amount at year-end.

ASSETS

• Have an asset register to record your assets bought and sold and be sure to record information such as: dates, whether the item was bought new or second-hand, how much it cost/was sold for, and whether you paid GST on the item).

PRIVATE USE

• Make sure to record any goods you take from the business for personal use.

HOME OFFICE

• If you use your home for business purposes, record information such as: the square meters of your home used for business purposes (out of the total area of your house – i.e. 45sqm out of 210sqm), your mortgage interest, rates, power bill, and any repair bills.

VEHICLE

• Record your business mileage percentage (by recording km’s travelled in your vehicle for work, vs. personal use) – If you have paid FBT, this will not be applicable to you. Please check in with one of the team if you are unsure about mileage and vehicle use.

We have reached the end of our handy tips for today. If this was a face-to-face seminar, now is the time we would ask: “Does anyone have any questions?” so please feel free to get in touch to find out more about a specific area of your business that may not be covered here (maybe you have questions about staff payments, KiwiSaver, rental properties, boarder payments, trusts, or donations – to name just a few). We haven’t been faced with a question we didn’t know the answer to yet, but you might just be the first one to stump us!