How to Choose the Best Accounting Software for your Small Business

Choosing the right accounting software for your startup does not have to be complicated. Although there are many software vendors on the market right now, by following the below tips you should be able to reduce your list of options to a definitive few. To help you in the process of choosing new accounting software we've put together a list of 4 steps you should take before making your final decision.

Step 1 - Ask Yourself Questions:

Asking yourself the following two questions before beginning your research will help steer you in the right direction. Along with this it will allow you to create a short list of software vendors who match your criteria.

1. How much am I willing to pay?

Depending on your budget, you should decide at the beginning how much you are willing to spend on new accounting software. For example, at this stage if you realize that your budget can't accommodate a paid software solution you might choose to go with a free version such as Wave or GnuCash. Wave is free to use for accounting, invoicing and receipts although payroll is not included in this option. GnuCash allows you to track bank accounts, stocks, income and expenses and is freely licensed.

2. What features do I need in accounting software?

You'll need to take a hard look at your business' specific needs to figure out which ones are must-haves and which you can do without. For example do you manage a lot of inventory? Is project management and time tracking something you need help with? Does your invoicing process need re-evaluation? The must-have features you decide on will dictate how you research and decide on your new accounting software.

Step 2 - Ask Around:

Don't be afraid to ask other startup owners what their accounting software preference is. They will have firsthand advice on what vendors offer the best solution and how it's benefited their business. There are many other online forums where you can ask similar questions such as the Reddit Startups page or Quora.com.

Step 3 – Try Before you Commit:

Once you've been able to draw up a list of possible choices you should attempt a free trial of each before making your final decision. This will allow you the opportunity to play around with the software and get a feel for how easy it is to use and whether it fulfills all your requirements. Most accounting software solutions offer a free trial if you sign up onsite, if you happen upon one which doesn't don't be afraid to reach out and ask whether a free trial is an option for you.

Step 4 – Consult Your Accountant:

Before making your final decision on which software to integrate into your business, you should consult your accountant or bookkeeper. They will be experienced in using various types of software and can advise you on whether they feel your choice will suit your business' and their specific needs. They can also steer you away from a solution which might seem like a good fit but is a poor performer.

Contact us to see how our Bookkeeping Services for Small Businesses can help to streamline your financial processes and give you more time to focus on growing


5 Reasons Why Your Start-Up Needs a Professional Bookkeeper

Starting your business from the ground up is not easy at all. There are some things you could do alone and it is understandable that you would like to save as much money as you can. However, sometimes hiring additional help to get you started could pay off. So, why would you need a professional bookkeeper for your new startup?

1. Help for Tax Season

Doing taxes can be really frustrating and hard to understand; tax season is usually the main reason why entrepreneurs decide to get professional help and hire a bookkeeper. Of course, your needs depend on the type of business you are running, the type of startup structure you plan to run, and your estimations and budget. However, experts recommend new startups to find a bookkeeper who can cater to your small business' specific needs when it comes to taxes and other financial needs.

2. Reducing the Costs and Making Growth Easier

At first, it might seem that hiring a bookkeeper may not be good for your budget however, a professional bookkeeper can actually help you save more in the long run. Yes, maybe you can do it all by yourself. Yet, if you have not been trained and educated in bookkeeping, there is a great possibility of making a mistake which could ruin your attempt in making a successful startup. So, if you want to save on costs in the long run, think about outsourcing your bookkeeping services.

3. Paying on Time

Depending on the type of startup and the number of employees, you will probably be too busy managing your business. Late payments can mess up your cash flow and the credibility of your startup which can be detrimental to your business. By hiring a professional, you can arrange to have your bookkeeper send you reminders and keep an eye on your cash flow. One missed payment can get you in trouble. Have safeguards in place by hiring a bookkeeper who knows what you need and when you need it.

4. Saving Your Precious Time

Time is money! Especially at the beginning. It is always better to spend your time running your business properly than learning and doing something that is neither in your area of interest nor in your field of expertise. If you hire someone for your bookkeeping needs, you can spend your precious time on other more important aspects of your business. For example, you could be implementing marketing plans, developing your business strategy, and carrying out daily tasks, which are crucial for your startup. In other words, a professional can help you focus on your business.

5. Better Perspective on Your Business

Two pairs of eyes are better than one! The beginning phase of your business is critical, and at that stage, more than at any other, you will need the guidance of a professional in order to properly and safely develop your business. That's why you will need a bookkeeper. By creating neat monthly reports and putting all your financials in order, he or she can help you get a better perspective on how your business is making progress, if the funds are going in the right direction, and if your efforts are paying off.


The Ultimate GST Guide: Being Compliant and How to Register

1. Registration

The obligation to register for GST applies to both residents and non-residents who carry on taxable activities in New Zealand (s 8(2)). An individual or entity that supplies goods and services for more than $60,000 a year is required to register for GST (s 51). Any person who is carrying on taxable activities can voluntary register for GST, even if they do not reach the $60,000 threshold.

A person becomes liable to register at the end of 12 months period in which the $60,000 threshold is expected to be exceeded, or at the start of the 12 month period in which the $60,000 threshold is expected to be exceeded. Any person must apply for GST registration within 21 days of becoming liable to register.

2. GST registration: group of companies, branches

A registered person can apply to register GST for any of his branches separately, if those branches maintain their own accounting systems and are in separate locations or carrying out different activities (s 56). The $60,000 threshold applies to the person across all branches, and not to each branch. Supplies of goods and services between the parent and branches are fully taxable. If a branch fails to file GST return, the parent body is responsible for liabilities incurred.

If two or more companies form a group of company for income tax purpose (accumulated 66% voting power test), then they can apply for group registration (s 55). Group registration is available where:

  1.     Each of the companies is a registered person; or
  2.     At least 75% of the total supplies made by the companies (in any consecutive 12 months period that includes that time) to person outside the group are taxable supplies.

All companies in the group are treated as a single entity for GST purpose. The transactions within the group are not subject to GST. A company should be chosen as the representative of the group. All taxable or non-taxable supplies made by members are deemed to be made by the representative, so is input tax.

3. Record keeping

All registered persons who perform taxable activities in New Zealand must keep sufficient records in the English language to enable IRD to ascertain the person’s GST liability (s 75).  Copies of all records issued by the registered person must be kept in New Zealand for at least seven years after the end of the tax period to which they relate.

4.Tax Invoice

Tax invoices are different from ordinary invoices. Tax invoices contain all prescribed particulars.

  1. For supplies worth more than $1,000 (including GST), the tax invoice must clearly show:
  • the words "tax invoice" in a prominent place
  • the name (or trade name) and GST number of the supplier
  • the name and address of the recipient of the supply
  • the date the invoice was issued
  • a description of the goods and/or services supplied
  • the quantity or volume of the goods and/or services supplied. Examples: litres of petrol, hours of labour, kilos of potatoes etc.

It must also have either:

  •  the amount, excluding tax, charged for the supply
  • the GST and the total amount payable for the supply, or
  • a statement that GST is included in the final price if it has been.

2)      For supplies worth between $50 and $1,000 (including GST), a simplified tax invoice is acceptable. It must clearly show:

  • the words "tax invoice" in a prominent place
  • the name and GST number of the supplier
  • the date the tax invoice was issued
  • a description of the goods and/or services supplied
  • the total amount payable for the supply, and
  • a statement that GST is included.

3)      A tax invoice is not needed for supplies of $50 or less (including GST). However, it is best practice to keep records for these purchases, such as invoices, vouchers or receipts. At a minimum, record the date, description, cost and supplier of all purchases.

A supplier can only issue one original tax invoice. All other copies must be marked ‘copy only’. It is an offence to issued more than one original.

5. Return periods& due date

A registered person has a two-monthly taxable period unless an application for another category is made.

Smaller operations may adopt a six-monthly return period. Persons are eligible if, at the end of any month, the total value of taxable supplies (excluding GST):

  •     Has not exceeded $500,000 in the preceding 12 months, or
  •     Is unlikely to exceed $500,000 in the following 12 months period.

Taxpayer with more than $500,000 taxable supplies can maintain six-monthly return if the increase is resulted from sale of capital assets (eg. replace equipment, scaling down business). Also, he can maintain six-monthly return if the taxpayer has maintained a good tax record and his turnover is subject to seasonal, low volumes or high value cash flow peaks.

Returns have to be filed, generally, by the 28th day of the month following the end of the taxable period. Two exceptions applies, first, the due date for taxable period ends on 30 November is 15 January. Second, the due date for taxable period ends on 31 March is 7 May. There is a due date calendar available on IRD website.

The due date carries over to the next working day if it falls on a weekend or public holiday.

6. Amendments to filed GST returns

If a taxpayer with a turnover of up to $250,000 p.a. finds he made an error and underpaid GST in previous GST return. If the error will result in $200 or less of tax to pay, it can be corrected in the next available GST return. For taxpayer with turnover of over $250,000 p.a., the error can be up to $500. The omission of an input tax claim can usually be rectified by including the claim in the next GST return.

IRD may issue an assessment, or an amended assessment, of the amount of GST payable. IRD can do this if they are not satisfied with a filed return, or a person fails to file GST return. The assessment can be based on the information supplied in return and on any other information in IRD’s possession.

7. Deregistration

Registration ceases when (s 52):

  •  Taxable supplies are less than $60,000. The cancellation is optimal under this situation. Cancellation takes effect from the last day of the taxable period in which the application is processed.
  •  IRD can cancel a registered person’s registration if it is satisfied that the registered person is not carrying on a taxable activity.

A person who ceases to be registered for GST has the following obligations:

  • The person must finish a final GST return covering the period from the beginning of the final taxable period up to the date of deregistration.
  • The person must pay off any GST payable.
  • All records must be kept for at least seven years (s 75).

8. GST on associated persons

The GSTA contains specific rules to ensure the supplies between associated persons are at arm’s length (s 2A). These rules require associated persons to deal with each other at market value and not manipulate the price between them to obtain a GST advantage(s 10(3)). Likewise, the time of supply for associated persons is determined when the goods are supplied by a registered person from an associate (normally it is determined at the time when the payment is made or an invoice is issued). The amount of any input tax credit that may only be claimed is limited to the amount of GST paid by the associated person.