Chasing Debt

What To Do When You Have An Outstanding Invoice

Cash flow is a key component in the success of any business. Without it, you will soon find yourself in financial hot water.

If you don’t have funds coming into your accounts regularly, then you may not have money available to pay your bills or wages when they are due.

One of the biggest threats to good cash flow is overdue invoices.

So, what can you do if you have an outstanding invoice? Follow these simple steps to recover the funds and get paid!

Send Invoices On Time

One of the most important aspects of getting paid on time is ensuring that you send your invoices on time! Send the invoice as soon as the right milestones are hit, or the job is complete.

If you wait too long, then people may forget about the work you did for them. They will have expected an invoice right away. Delaying makes it harder to get paid as they may have unintentionally spent the funds. These delays threaten your positive cash flow.

By sending the invoices in a timely manner, you can be sure the work is fresh in the minds of your clients and gives you the best chance of getting paid on time.

Set Up Automated Reminders

If you use online accounting software like Xero, then you will have the facility to set up automated invoice reminders. Instead of worrying about which invoices are due when the system takes care of it for you.

As soon as an invoice hits an overdue milestone, the software will generate an email reminding your client that their payment is due. You can set the reminders to go out at any frequency, even a day before the invoice is due.

Get In Touch

People are busy. In all the action of the week, invoices can easily get forgotten. They get filed away or put to the bottom of the pile to ‘deal with later’. It isn’t that they mean to forget about your invoice, sometimes it simply slips their mind that it is due for payment.

Shooting them a quick email or picking up the phone and giving them a call could be the gentle reminder they need to get that invoice paid.

Have Your Bookkeeper Get In Touch

If your previous methods of collection haven’t worked, then you can involve an outside source to get things moving. This is a professional approach that will help you to recover your money without tarnishing the relationship you have with your clients.

Coming from an official associate of your business, it removes the emotion from the process and applies the gentle pressure to encourage payment.

Include Penalty Fees

In order to do this, it must state in your Terms and Conditions that penalty fees will be applied to any payments that are overdue by a certain number of days. If you don’t have this clause in your Ts and Cs, now is the time to contact a legal professional and add it in.

For most people, the thought of paying more than they have to is often enough of a deterrent of getting payment into your account or at least spark a discussion about alternative payment options. Clearly state on your invoice that penalty payments will be applied from XX date and what the amount will be.

On the flip side, you could also give an incentive to pay early by offering a small discount to prompt payers.

Advice Of Collections Process

If all your other methods of collection have failed, then you can go down the formal process of debt recovery. Again, it should state in your Terms and Conditions that any outstanding amounts will be sent to a debt collection agency XX days after the due date.

The debt collection agency will collect the outstanding amount on your behalf. Be mindful that there are often fees involved with this process, so exhaust all other options first. It is also a major deterrent for clients to want to work with you again if you have referred them to a debt agency, so only use this option as a last resort.

If you find that you are always chasing outstanding invoices, it might be time to evaluate your invoicing process. Here at Accountants Plus, we can help you come up with an efficient system that keeps your cash flow steady and overdue payments to a minimum.

Get in touch with us today for any Accounting queries.

Bookkeeper and Accountant

The Difference Between An Accountant And A Bookkeeper

As a business owner, you know that you need an accountant.

After all, who will do your taxes at the end of the year without a numbers whizz?

But then, the term bookkeeper gets thrown in the mix… what do they do?

Bookkeepers and accountants both look after the various aspects of your business finances. Many people use the words ‘accounting’ and ‘bookkeeping’ interchangeably, but they are actually quite different functions.

In essence, a bookkeeper is a record keeper, and they have an administrative, transactional function. An accountant has more of an analytical function, producing insights and information from the financial records.

Clear as mud? Let’s look into the different roles in a little more detail and the main differences between the two.

The Difference Between An Accountant And A Bookkeeper Is…


Bookkeeping is a very important part of day-to-day business. A bookkeeper maintains records of daily transactions. They record all financial incomings and outgoings, create invoices, balance ledgers, take care of payroll, and process debits and payments. It is their job to keep all financial records up to date to make sure that tax and payroll obligations can be met, and end-of-year reporting can be done efficiently and accurately.

A bookkeeper usually utilises the power of accounting software. It means that both you and your bookkeeper have real-time access to the financial position of your business. It also makes it easier to ensure all of your transactions are regularly updated.

Bookkeepers do not usually require any specific training, experience, or education. Their tasks can be learned by anyone with sufficient attention to detail and a good mind for numbers and finances.

However, many bookkeepers regularly attend training sessions and ongoing professional development to ensure their knowledge and skills remain current in an ever-changing market.


An accountant takes the information and records provided by a bookkeeper and uses them to produce financial analysis and reports. Accountants will prepare your financial statements, complete tax returns, provide analysis to help your business make financial and strategic decisions, and also assess operational costs.

An accountant helps a business to get a better understanding of its financial performance, cash flow, and profitability. They can be relied on to help with tax planning and filing and financial forecasting.

Unlike bookkeepers, accountants do require formal education and qualifications. They also have to complete a certain amount of work experience. Most accountants will have either an accounting degree or commerce or business degree with a major in accounting.

They can then go on to become a Chartered Accountant. Once completing their initial qualification, they would then undertake three years of professional accounting experience, and meet other requirements set by Chartered Accountants Australia New Zealand, to become a Chartered Accountant.

How Do They Work Together?

The roles of bookkeeping and accounting are quite different, but they are closely connected. Good accounting relies on good bookkeeping for accurate and up to date data. Bookkeepers often use systems and processes established by accountants.

Regardless of the differences in their jobs, they are both very important for managing and maintaining healthy finances in any business.

How you approach bookkeeping and accounting for your business is up to you. You could take care of your own bookkeeping or have it done by admin staff, then have a third-party service take care of your accounting obligations.

Or you could outsource all of your financial work to an external bookkeeper and external accountant. This has many benefits, including saving your own time and ensuring the accuracy and independence of any financial analysis.

So, what do we do? Here at Accountants Plus, we are Chartered Accountants, Business Advisors and Taxation Specialists. That means we can help you with all of your accounting needs.

If you would like to talk to our experienced small business accountants to find out what would work for your business, then contact us here at Accountants Plus today.

How To Get Your Financial Forecasting Right

Being savvy with your finances is at the heart of every successful business. To make your finances work there are some key elements that you need to make use of. A financial forecast is one of those things.

A financial forecast is an essential tool for any business. It predicts your future financial state, tells you how much your business needs to be making to grow, and can help you understand the steps you need to get you there.

Your forecast helps to keep your business on track and is also key information for securing funding from investors and lenders.

So, let’s look into how you can get your financial forecasting right.

How To Get Your Financial Forecasting Right

A Budget vs. A Forecast

Did you know that a financial forecast is not the same as a budget? A forecast is a prediction – it tells you where you need to go and how to get there. A budget is a lower level plan to keep spending and costs in check to achieve the forecast.

Understanding the two terms will mean that you have the skills to produce both. Each plays a different role in your business’ success.

Get Your Records Together

To set yourself up with an accurate and reliable forecast, you need to have thorough records of your past finances. The only way to see where your business is going is to look back on where it has been. Your past financial statements are a record of your business performance over time. These past trends can then be used to make your financial predictions for the future.

Your accounting software or accountant should have all of the statements you require (for example, income and gross income, cash flow, costs). If you don’t have these statements, you need to start building up a record of them before you can complete an accurate forecast.

Research and Forecast

Your forecast will be formed by a combination of two things – historical financial statements and market-based industry research.

By taking a look at the last few years of income and cash flow for your business, it is relatively easy to make an educated prediction about your future business growth. It isn’t overly complicated and doesn’t require expert knowledge. However, only relying on this information would not be enough for presenting to potential business partners or investors. It also does not take into account any trends in the wider market.

That is where your market-based research comes into play. You will need to look at new technologies in your industry and what the impacts of those have been or might be. You’ll also look at consumer buying trends and general financial performance in the industry in recent years.

This more in-depth research is what investors will be interested in, and can also help plug some gaps if you don’t have a large financial history for your own business to rely on.

Once you have completed your research, you can move on to making pro forma statements to project your income. These are your final records containing your forecasted predictions and details of revenue and sales. You’ll create a few different types of pro forma statements – one for income, one for cash flow, and a balance sheet.

As you can see, financial forecasting can be quite a complicated task. So, if you would like more information or assistance with forecasting for your business, contact us here at Accountants Plus today. We are experts in all sized business accounting and can customise hour services to suit your needs.

Successfully growing a business and a family

Successfully Growing A Business And A Family At The Same Time

The struggle is familiar for many business owners, entrepreneurs, and freelancers – how do I balance work and home life?

It is an age-old question that seems hard to find an answer to!

Especially if your business is starting to take off, maybe you are recruiting a bigger team, seeing a steady increase in business, or expanding into a new market. You might be tempted to dive in and work at full speed, but it’s not that easy when your family is growing, too!

How can you possibly make time for everything?

The key is balance. So, here are our top tips for balancing growing a business and a family at the same time.

Successfully Growing A Business And Your Family At The Same Time

Establish a (Flexible) Routine

Your days are going to be busy, but they will also need to be well planned and organised. When you have got a lot going on, it’s far too easy to lose track of what you are doing, get stressed out, and not make the most of your time.

Be sure to schedule time for specific work tasks as well as family time each day. Make sure you also allow yourself some ‘buffer’ time to account for those unexpected things. You never know when you are going to need to pick a sick child up from school or make a quick trip to the supermarket for nappies!

Make Family Time a Priority

Your business and your income are important, but don’t forget who it’s all for – the family!

Things like making it home in time for dinner or making sure you can turn up to a sports game really makes a difference for your family. They know you are busy, and they appreciate your hard work, but they also love spending time with you!

There will always be some family events that you won’t be able to make it to. But prioritise the important ones and strike a balance with the rest.

Set Day-To-Day Goals

You probably have a long-term plan and aspirations for how you want your business to grow. But, it can be harder focussing in on the more day-to-day, business-as-usual things.

So that you use your time wisely and don’t waste any of it, have a daily or weekly plan. Start your day with ten minutes of goal setting for the day or week ahead (depending on how you like to work, you might want to do this planning the night before).

Write down your key tasks and priorities for that day or week. Crossing things off a to-do list is great for your sense of achievement! However, loading your to-do list with too many tasks is not so great. List the top three things that you need to get done each day and consider anything else a bonus!


Despite what it might feel like, you don’t actually have to do everything yourself. You might have employees or business partners who can take care of some tasks for you. If not, then embrace the art of outsourcing all the tasks that don’t necessarily have to be completed by you. Accounting, bookkeeping, administration and content creation are great outsourcing areas to start with.

Don’t forget you can delegate at home too. You can use your family and personal support networks to help out with some of the at-home tasks. It takes a village!

Work While They Sleep

Many self-employed and entrepreneurial parents prefer to save some work to do from home after the kids have gone to bed. This can help to alleviate some of the “working parent guilt”, as it frees up more family time during the day when everyone’s awake.

Just make sure you aren’t working all hours of the night, every night. Have some definite boundaries for how much time you will spend working after bedtime.

Take Care Of Yourself

You can’t pour from an empty cup! While your schedule is demanding and life is just generally hectic, your health and wellbeing needs to remain a priority. You can’t take care of the ones you love if you aren’t taking care of yourself!

If you have been considering outsourcing your financials to free up some time and energy for growing a business, then we can help do the hard work for you. Accountants Plus helps small to medium-sized businesses with a range of tailored accounting services. Get in touch with us today to find out more.

I WIll Teach You To Be Rich

I Will Teach You To Be Rich

Money is a funny thing.

You can love it, you know you need it, sometimes there isn’t enough of it to go around, and sometimes you hate it.

Many people have the dream of being rich. Often, people go into business or choose a certain role to make their fortune. But it doesn’t always work out the way you had planned.

The cost of living continues to go up, while wages and salaries aren’t rising at quite the same rate. A 2019 survey by the Council of Trade Unions’ found that 70% of people surveyed felt they didn’t make enough money to keep up with rising living costs.

And even if you are running your own business and not relying on an employer’s wage, there are still many rising costs to factor in.

In a time when not all of us are benefitting from economic growth – how do you make the most of what you have?

Let’s take a look at some of the things you can do to be financially better off. 

I Will Teach You To Be Rich By…

Use The Money You Have To Your Advantage

The first step is to work out your budget. Putting down in black and white exactly what money you have coming in and going out will give you a clear picture of your financial position. You can use your P&L Statements to help you work out your incomings and outgoings each month.

Once you have mapped out your incomings and outgoings, you will know how much is left over per week. Set a portion of the leftovers aside for tax, and also a portion for savings. It is always good practice to have a buffer to utilise in case you have an unexpected expense or quiet spot in your business.

If you have a significant amount of money left over once all the bills are paid, you might want to consider how you can invest it. Investing means buying into things that grow in value or generate income, and ultimately make you more money. The best way is to invest funds into growing your business. But, you can also choose to invest in property, shares, and bonds too.

Don’t Waste Money

The key to riches is not to waste money. That means spending your business surplus in wise ways. Some things are necessary to run a great business, but some are more of a vanity metric that you don’t need.

Be frugal where you can.

That doesn’t mean that you have to keep every penny in the bank as that is clearly not going to help you grow your income. It just means that you should spend your funds wisely.

With your personal spending, you need to find a balance between saving and still enjoying yourself. You can cut costs by buying weekly specials at the supermarket, buying in bulk, getting less takeout, and carpooling or using public transport.

Ramit Sethi, author of the bestselling book I Will Teach You To Be Rich says, “Frugality isn’t about cutting spending on everything. That approach wouldn’t last two days. Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on – and then cutting the costs mercilessly on things you don’t love”.

Create A Steady Stream Of Sales

Once you have the budget set and your conscious spending in place, it is time to create the riches. That means generating a steady stream of sales.

Having a reliable base of loyal, repeat customers is essential for keeping things ticking over money-wise. But how do you create that loyal base of customers?

  • The most important thing is delivering on promises and excellent customer service. Manage your client’s expectations, so that they know what to expect. Consider VIP programmes or incentives for repeat customers to make sure they always come back to your business. Depending on what goods or services you provide, some type of subscription or retainer service could create a steady workload and income.
  • Get your pricing at the right level so that you earn what you are worth, yet remain competitive in the market. Pricing can be a hard thing to shift once established, so do some research before you create set rates.
  • Remain visible amongst your ideal clients with a solid marketing plan. Remember that you can’t sell a secret. Attracting people to your business is more than running one advertisement too, you need a consistent approach to build momentum and create growth.
  • Examine the areas of your business that are performing well to see if you can develop and build on them. Your accountant can help you to understand where your funds are coming from and if there are ways that you can improve.

Are you ready to be rich in your business? Then we are ready to help you get there.

If you are in need of accounting advice or assistance, Accountants Plus can provide small to medium-sized businesses with a customised service tailored to your specific needs.

Get Paid On Time

Tips To Get Your Payments In On Time

Do you have clients or customers who are not paying their bills on time?

This can be one of the more awkward things about running a business. It can also have negative impacts on day-to-day operations if cash flow is constantly tight, especially in small businesses.

But what can you do about it?

How can you get the money into your accounts when you need it? After all, the ball is in your client’s court there.

Thankfully, there are plenty of ways you can encourage them to be timely with their payment.

So, let’s look at some tips for ensuring you receive payments on time, every time!

Tips To Get Your Payments In On Time

Be Clear On Your Terms Upfront

Before you undertake any work or provide any products or services, you need to agree on some terms with your client. Make sure the deadlines, scope of work, fees and penalties are clearly understood by both parties.

That means your clients will know right from the start what they are expected to pay and when.

Agree In Writing

Once you have discussed the terms, it is good practice to agree all of the above information in a written agreement or contract. This way, everyone is on the same page. There is a record of what was decided so that both parties can refer back on it if needed. It will also mean that no one can try to change the agreement at the last minute.

Send Reminders

When your clients are busy with their day to day tasks, it can be easy to forget things. Even if they have the best intentions! That is why it is helpful to send out reminders for upcoming payments.

Sending regular reminders about what is due and when, will help to remind your customers when they have payments coming up. Most accounting software will allow you to schedule automated reminders for your invoices.

You choose when you would like the reminders to go out (ie. one day before the payment is due, 3 days after it is due, and so on). Set up as many reminders as you want and you don’t even have to think about chasing payments going forward!

Prompt Payment Discounts

You could consider providing a small discount to clients who pay their invoices before the due date. An incentive as small as 2% can be enough to encourage people to pay on time. This saves you money later on if you aren’t having to spend time and resources chasing late payments, so it balances out.

Late Payment Penalties

You can give your customers extra incentive to pay on time so that it won’t cost them more. Adding penalties on for late or unpaid invoices is another way to ensure people will get their money in on time. They aren’t going to want to pay more than they had initially planned to, so if they can avoid a late payment penalty they are likely to do so.

Have Various Payment Options

People and businesses have different preferences when it comes to making payments. You should make sure you cover all the bases in terms of payment options so there aren’t any hurdles for anyone.

For example, some companies might utilise credit cards or automatic payments, but others might only have the option of internet banking. Allowing instalment options and spreading the costs over a few months is also very helpful to smaller businesses.

Be Polite

Being polite in your interactions with clients and customers is a no-brainer. Something as small as putting a “thank you for your payment/business” at the bottom of an invoice might seem insignificant but it provides positive reinforcement to get the money paid on time.

Don’t Be Afraid To Ask

Sometimes people forget about their bills, or they just need a bit more time to get the money together. Politely following up about a missing payment is part of business and is nothing to be apprehensive about. A lot of the time it simply slipped their mind or they didn’t see the invoice come in, and they appreciate the reminder!

Delay Work If Necessary

A customer or client with a history of paying late sometimes needs a bit of extra management. If other attempts to get invoices paid haven’t been successful and they still owe you money, stopping services until they get caught up might be necessary.

Part of getting the money you are owned into your account on time is having a great accounting system that is backed by a great accountant. Drop us a line here at Accountants Plus if now is the time to get your payments in order as we can take this hassle away for you.

How to perfect your sales technique

How To Perfect Your Business Sales Technique

Sales are the lifeblood of every business. After all, if you aren’t getting paid, then you aren’t running a successful business!

So it stands to reason that every business could do with more sales. However, sales don’t simply fall in your lap. The market across most industries is only getting more and more competitive.

So, how do you make sure that you are standing out among the rest?

The first step is to refine your business sales technique to increase your sales. Let’s look at how you can do that.

Perfect Your Business Sales Technique By…

Be Customer-Centred

In order to offer truly great service to your customers, you have to understand who they are and what they need or want from your business. To work out what that is, you can use the “voice of the customer” when designing your customer service and sales tools.

For example, you could survey your customers to find out what they like about their experience with your company or brand. It is also important to know what doesn’t work so well and what suggestions they have for changes.

You can also utilise existing customer feedback or complaints and make improvements based on those things. If you can design a customer experience that meets their precise needs, your repeat business (and therefore sales) will increase.

Know Your Stuff

It goes without saying that you need to know the ins-and-outs of your own products and services. But it doesn’t stop there. You also need to be aware of what’s happening in your wider industry. What are the current trends or emerging technologies that could impact you or your customers?

Having that knowledge up your sleeve is a great asset. You should consider using a blog, videos, emails or newsletters to keep your customers updated and establish yourself as an expert in your field. Remember that every opportunity for contact with your audience is a chance to convert them to a paying customer or encourage a repeat sale.

Don’t Be Too Pushy

Does anyone enjoy feeling hassled by an overenthusiastic salesperson?! The answer is most certainly a no! Therefore, it is important to prevent your customers from feeling pressured – whether in person, over the phone or online.

Instead, take a more subtle approach. The most important things are to explain the benefits of your products and to be genuine, knowledgeable and helpful. Don’t spend time knocking other brands or talking about competing businesses – keep the focus on you and the amazing things you have to offer.

Keep In Touch

Maintaining contact with your customers (while keeping the above point in mind) is important. The frequency and type of contact will vary depending on what kind of business you are in and how often your customers like to hear from you. In an e-commerce setting, it is easy to send generated email reminders or updates to keep connected to people. You can also use this method to promote and upsell related products.

It is a bit different for a more traditional operating model or business-to-business sales. For these companies, it is a matter of knowing your customer’s habits and when they are due to reorder. You can also provide them with information on new products that might be relevant or interesting to them.

The key thing with staying in touch is delivering value. Your readers will get bored with a constant stream of sales offers. But if you give them valuable tips or information along with sales opportunities, then they are more likely to read those messages and create sales.

Build And Maintain Relationships

Genuine and lasting connections with customers make a huge difference to your sales. Repeat customers are essential to business. It is estimated that they are 7 times more likely to try new offers from you than first-time buyers. New customers also cost you about six times more to obtain compared with retaining existing ones.

Your existing customers know and trust your brand, and if you have provided well for them before, they are less likely to stray to a competitor. They increase your profitability and act as ambassadors for your brand! 

Look At The Numbers

A key part of being successful at sales is selling the right stuff. If your focus is on all the wrong products or services, then you are never going to reach your targets or increase your sales. Take some time to look at your financials to see which areas of the business are performing well. Popular items are easy to sell, but you need to ensure they are generating the right level of profit.

If you are unsure how to check the profitability of certain products or services, then have a chat with your accountant. They will be able to help you dig deep into the areas of the business that are working, and those that need some boosting.

Here at Accountants Plus, we are experts in reporting and analysis that helps to grow your business. Get in touch with us today if you are ready to take your business to the next level and accelerate your profitability.

Bookkeeper and Accountant Working Well Together

Why Accountants Love It If You Have A Bookkeeper

Do I need an accountant or a bookkeeper? Do they do the same thing? Don’t they work in competition with each other?

These are questions that we get asked all the time.

To be perfectly honest, accountants love it when you have a bookkeeper. The jobs each profession do are completely different, but do work in synergy with each other.

Bookkeeping is important for any business, regardless of the industry or size. It keeps all of your financial records in top shape, which makes all aspects of your accounting a lot easier.

Let’s take a look at the role of a bookkeeper and the difference they can make to your business.

The Role Of Accountants v. Bookkeepers

Sometimes the roles of accounting and bookkeeping can overlap, or the names may be used interchangeably. But there are some distinct differences between the two. The role of a bookkeeper is to have everything prepared for your accountant when it comes to analysis, auditing, or tax time.

Bookkeeping refers to the recording and maintenance of day-to-day financial transactions. This includes all purchases, sales, payments, and receipts. A bookkeeper often also produces weekly or monthly reports and account reconciliations.

This keeps everything in order for the accountant to come in and take care of data analysis, auditing, and filing tax returns. Having a great bookkeeper who is efficiently managing the day-to-day work makes an accountant’s job easier and saves you money on your accounting fees.

Below are some of the top benefits of having a bookkeeper:

Cash Flow

Your bookkeeper can track ingoing and outgoing payments – making sure that you are paying bills on time and your clients are paying you on time. This is important for making sure you have money coming in when it is supposed to, and keeping you out of bad credit with suppliers.

Matching Transactions To Correct Accounts

Businesses often have multiple accounts and things can get messy if they aren’t monitored properly. A bookkeeper can make sure money is put in the right place or quickly remedy it if it isn’t. This can be especially crucial around end-of-year accounts and tax time.

Regular Account Reconciliation

You don’t want to get to the end of the financial year and find out that you will be paying an accountant overtime to correct mistakes in your financials. Regular bookkeeping can ensure your accounts are reconciled on a daily, weekly, or monthly basis depending on how many transactions you have per day.

This means the records will all be correct when the accountant needs them.

Required Reporting Completed

Profit and loss statements or reporting to investors can all be taken care of by your bookkeeper. This means that you can check up on the financial health of your business easily by looking at these records. Also, it is one less thing that your accountant will have to worry about.

Expenses Tracked

Having a dedicated eye on your day-to-day expenses is very important. A bookkeeper will be paying close attention to outgoing costs like company credit cards, company vehicle use, and supply costs. They can also alert you to any red flags in these areas, like sudden increases in costs or suspicious activity with company money.

Everybody Wins

When it boils down to it, your accountant is not the only one who wins from having a bookkeeper – you benefit too! You will get more time for business operations (and some well deserved time off) by leaving the finances to a professional.

Got the bookkeeper but not the accountant? Or maybe you are looking for a great accountant who can work in with your existing financial team? Then get in touch with us here at Accountants Plus today.

File Tax Return

Why You Shouldn’t DIY Your Tax Return

Does anyone really love doing their tax returns? If you are self-employed or running a small business (or planning to in the future), you have no doubt considered whether you should outsource your tax returns.

Surely it can’t be too hard right? It’s just one little form…


A quick online search or a chat to Inland Revenue will confirm that taxes are a lot more than simply filing a form once a year. It is actually about keeping an accurate set of financial records that spell out how your business is performing.

Here are the main reasons why you should leave your tax return to the professionals:

Submitting A Tax Return Is A Complex Process

The Inland Revenue is currently undergoing huge changes to become a more customer centred business. This will make interacting with the agency more efficient and pleasant. But, it doesn’t change the inherently complicated regulations involved in income and business tax.

You can certainly find a lot of information about how to handle your finances online. But, the internet is not a complete resource. It often contains inaccurate or out-of-date information. And it is certainly no replacement for the years of practical experience an accountant has.

Engaging a professional to deal with your taxes will ensure that the correct processes are followed and that you will receive accurate, appropriate advice. This is especially helpful for staying up to date on any changes to tax laws, or simply being reminded when certain things are due.

There can be some pretty hefty penalties for underpaying taxes or failing to keep your records as required. So, it’s not something you want to take a chance on!

You Might Save More Money

A tax accountant is going to know all of the exceptions as well as the rules! That means they may be able to save you money on your tax return bills by making sure you are getting all of your entitlements, like tax credits and deductions.

If you work for yourself or from home, a lot of your expenses can be either fully or partially deductible. Your tax professional can ensure you don’t miss out on anything you might be owed.

Any Income Related Lifestyle Changes

If you have recently experienced a significant increase or decrease in income, had a baby, or started a hobby business – your tax obligations might have changed, too.

If you have an accountant taking care of your taxes, you just have to inform them and they can take care of the rest! Otherwise you would have to wade through the complicated (and sometimes confusing) mass of information out there. After hours of reading, you still might not have the answer!

Peace Of Mind

This reason might appeal to you the most – you simply don’t have to worry about it anymore! Dealing with taxes can be frustrating and stressful. Most of us understand the dangers of messing up your tax return. We just aren’t completely sure how to avoid it. It also means that you won’t miss any, all important deadlines and receive penalty fees.

Outsourcing your tax related tasks frees up time and helps you rest easier, knowing that your obligations are properly taken care of. This is not only beneficial for the short term. In the event that you are the subject of an audit further down the line, all of your tax ducks will be neatly in a row – prepared and assured by the experts. 

Here at Accountants Plus we have a full range of accounting, taxation, and business advisory services.

Contact us today to find out how we can help you with your tax obligations.

Profit and Loss

How To Read Your Profit and Loss Statement Correctly

Financial reports can be a bit overwhelming. With columns of numbers everywhere, coding, and subtotals, it is hard to decipher what they all mean.

But your profit and loss statement is a pretty key report to understand. If you only learn about one aspect of financial reporting, then your P&L is a good place to start!

A profit and loss (P&L) statement (also known as an income statement) summarises the costs and expenses of your business, incurred during a particular period. It basically shows the money that comes in and the money that goes out.

With accounting software you can easily and regularly produce these reports to help you see revenue trends in your business. Or of course, your accountant can do it for you.

Let’s look at this vital report in a bit more detail.

Why is a profit and loss statement important?

Your P&L statement is an essential business tool. It helps you to keep an eye on your finances and to address any issues if they arise. For example, you might notice that certain expenses are increasing significantly each month or quarter. This may highlight to you that you need to look at new providers or suppliers.

This statement is also going to show your company’s ability or inability to generate profit. It shows you a total of all expenses and all income sources. This will display your total net profit. You will be able to see immediately if your business is spending too much money to be viable.

This will be a true indicator of whether you need to reduce costs, increase sales, increase marketing, or a combination of these things.

Your P&L statement helps you to monitor any changes you are making to your income and expenses monthly or quarterly (or however often you decide to run the reports). This allows you to easily compare statements from different periods, which shows you your progress over time.

How To Read Your P&L

The P&L/income statement is fairly easy to read and understand once you know what you are looking at. They will differ slightly between different accounting programmes, but will follow a general format. Below is a quick guide to the main parts of the statement and what they mean.

  • The report begins with your revenue entries from all sources of income. This will be your income from sales, interest, and any other avenues.
  • It will then list the various business costs underneath the income. These are sometimes separated into two types – fixed costs and cost of sales. Fixed costs are things like rent, Internet, or power bills. Cost of sales is the money you spend on things like materials and/or stock. These costs can be quite variable month-to-month.
  • If the expenses are not split into these categories they will just be listed as separate lines. They will include operating expenses, cost of goods sold, taxes, interest expenses, and any miscellaneous expenses. 
  • At the end of the statement it will give you your net profit. That is your total profit (including interest received) minus all of your expenses.

There are a couple of other key points to note about your P&L:

  • It is accrual based – which means it includes all income and expenses, regardless of whether they have been paid yet.
  • It does not include personal items, capital items, owner drawings, or any business loans (or repayments against loan principal).
  • It will include interest on loans, as this is an expense. It will also include depreciation on capital items.

So there you go, your P&L in a nutshell. Once you know what you are looking at, it is a reasonably easy report to understand. If you do need some help understanding the intricate ins and outs of it, then get in touch with us here at Accountants Plus.

We can help your small to medium-sized business in all aspects of business performance. Talk to us today!