Welcome back everyone. Hope you are back at it and feeling strong for the year ahead. We are looking forward to numbering up with you to make 2021 a year to remember (in a good way).
Our team is back behind the desks, tapping away on the keyboards. We’ve got a new video coming soon. Sound like artists don’t we? Make sure you check it out on our website.
This time of year can be a tricky one financially. Those self employed ones out there may not have been earning money during the silly season. Or you might have been spending up large on your downtime. Your customers can be slow payers around January. Did you know that according to Xero trend analysis, accounts receivable are on average 30 per cent slower in January than the 12 month average? Surfing the cashflow wave can be tricky for small business operators.
Here are some simple cashflow tips:
- Reconcile daily so you know where you are at with accounts receivable and payable. Don’t leave unpaid accounts hanging. Contact slow payers asap.
- Invoice immediately after completing the job. If you are using Xero or other online apps you can email an invoice to your customer while you are still on site. That gives them the opportunity to pay you faster and all the details are fresh so there is less likely to be any dispute over the job done.
- Provide a detailed description of the work performed or service provided on the invoice. Good detail can eliminate delayed payment due to customer queries.
- Set your payment terms. Why wait until the 20th of the following month when you have already done the job or paid your staff for the work done? Cash on completion is a much better way to operate a good business.
- Have someone else call your debtors. They don’t have the emotional attachment that you do.
- Make it as easy to pay as you can. Do you accept credit card payments? Is it easy for people to pay at the point of sale? Is there a pay now option on your invoice? You should contact your bank as they may have affordable solutions. The easier it is for people to pay the more likely it is that you will get paid on time.
Did you know money is all in a name? If your name is on a building, you’re rich. If you have your name on a desk, you’re middle class. If your name is on your shirt you are poor.
- Do you have a retirement plan?
- Is your debt under control?
- Do you have a safety net so that you are ready for what life might throw at you?
- Is your money working for you?
- Do you have financial goals?
Apparently, the feeling of not being able to meet financial commitments can be the equivalent to the feeling we get when we are tortured. Yikes. Not sure if any of you have tested that.
Our money makeover program is about getting on top of debt, and then progressing so that you can live your life free from financial burden. We are offering a free 12 month money makeover plan to the first person who contacts us on firstname.lastname@example.org. Start 2021 with a plan to progress financially. Just ask us about our MONEY MAKEOVER PROGRAM.
Pay Your Tax on Time
Did you know that if you are late on a provisional tax payment that IRD will charge interest and penalties on the late payment? However IRD will not calculate the interest and penalties on the provisional tax until your final tax return for that year is filed. That’s because they won’t know what the actual payment should have been until your tax return has been assessed. That means you can be accumulating debts on your tax payments without even knowing it – not until your final tax return is filed for the year.
For the year end 31 March 2021 for instance, you may have 3 payments of $2,000 due on 28 August 2020, 15 January 2021 and 7 May 2021. You may have been late at paying the August tax. There may currently not be any interest or penalty calculations on this late payment if you look at your account with MyIR. Once your tax return for the year end 31 March 2021 is filed with IRD, at that point IRD will have an actual assessment and then backdate interest and penalty charges for the late August payment. The current use of money interest rate with IRD is 7.00% per annum.
Not only will there be interest and penalties charged on the late payment of any provisional tax, but if you are late paying provisional tax the IRD will also start charging you interest on the terminal tax until it is paid in full despite it not being due until 7 April 2021. It’s a good business the government run!
If you have paid provisional tax late then you may get a surprise when we file your income tax return. Because not only will you receive a final tax bill but it will include interest until it is paid AND you will have extra charges backdated to the date the provisional tax payments were due. That’s nasty so if you have been late with provisional tax payments and are concerned please contact us so we can advise what the cost may be and the best way forward.
14 Year Old Looking For Work
Kai is a 14 year old Wakatipu High School student looking for work.
Ok so the photo might be a little out of date but he is shamelessly working on the cute factor to get a job. He does have some work experience – he worked a paper run for 2 years, mowed lawns and walked dogs – he also worked on a TV advertisement for Ssang Yong. Plus, he is pretty good on the dishes at home.
His current interests are mountain biking, rugby and basketball.
This is what Kai has to say, “ I am a conscientious hard working 14 year old, who is willing to give anything a go. I am very quick to pick up new skills.”
Obviously when he says he will give anything a go, he means anything legal. He’s looking for an ongoing job so if you have anything suitable please email email@example.com and I can put you in touch. Or you will find his contact details on the CV attached
Kiwisaver - Are You In The Right Fund??
How are your retirement plans going? Not everyone gets to get old. If you’re getting older you are one of the lucky ones.
But getting old comes at a cost. According to Sorted, if you want to live your retirement years with options, then you currently need $1,190 per week. Well that’s what the older ones are telling them. Many of you folk that we work with out there are self employed and prefer to take care of your own retirement funds. That’s fine if you are disciplined and have a plan.
Smart money commentators recommend that you put 15% of your income away for retirement. An easy way to do that if you operate a company is to pay yourself a wage on the books. You could contribute 8% to kiwisaver from your pay and have the company contribute the same. The Company’s contribution will be tax deductible to the company. Ok ,so 8% + 8% = 16% you wisecrackers. But you see what we mean. You and the company can choose to contribute at 3%, 4%, 6%, 8% or 10%. You and the Company don’t have to contribute at the same rate.
15% may not be achievable right now for you but you should chat with us if you want to put a kiwisaver plan in place. Anything is better than nothing because the cash will be invested in funds that will grow over the long term.
You should also make sure that you have your kiwisaver funds invested in a fund that works best for you. MoneyHub has some useful resources to guide you in the right direction. Click here for more information.
Well that’s about it for our first newsletter of the year. Adios partners. Got any feedback? Here is some pretty insightful feedback we found: