Tips for keeping your business data secure

It’s no secret that data loss can be a costly nightmare for a small business, with recent estimates citing the total cost of data breaches exceeding $2.1 trillion by 2019.

Unfortunately, cyber attackers increasingly target small businesses because they are less likely to have security protection in place. Accidental loss or loss due to a natural disaster can be just as harmful to a business, with recovery efforts and delays grinding productivity to a halt.

Follow these tips to improve security and protect your small business from data loss.

Educate your staff

When you think of data loss, you may immediately think cyber attack. But the reality is, nearly half of data loss happens when employees don’t know how to protect company data or are guilty of being careless.

Let your staff know how important data security is to your business. Discuss potential security risks and restrictions on employee access to HR, customer and financial data. Go over specific strategies for keeping paper and computer files secure – such as keeping personnel files locked in filing cabinets, restricting access to sensitive data with security passwords and taking care not to download apps that might carry malware.

Make a security plan

Every company, big or small, should have a customized plan in place to outline their information assets, identify security risks and the specific steps your organization will take to mitigate those risks.

Think of your data security plan as a living document; it will need to be updated regularly to keep up with shifts in technology as well as changes in personnel. A key aspect of your security plan will be to outline how you’ll ensure employee access to data terminates when they leave your company.

You’ll also want to conduct regular audits to test the effectiveness of your security plan, by monitoring how well your staff follow protocol. Following an audit, you’ll be able to revamp or fine tune your strategies to keep your business safe and your data secure.

Include a device policy

It’s hard to imagine small businesses functioning these days without mobile devices. The reality is, many small business employees work from home or remotely, staying in contact via a tablet, laptop computer or mobile phone.

Unfortunately, the risk of a mobile device being lost, stolen or damaged is high. You can protect your company data by requiring staff to keep company data off their personal devices – and set up work devices to be wiped remotely in the case of theft or loss.

Other key security measures are data encryption, up to date anti-virus protection and tracking software – as well as a system of regularly scheduled, automatic back-ups.

Final tips

Your data security plan is only as good as how well you and your staff follow it. Take time out to meet as a group, discuss security planning and address any questions about protocol. Be clear on the consequences of a data security breach should it be discovered the cause was due to employee negligence or outright theft. Think about how you can reward your staff for the efforts they make to protect your business by strictly following security protocols.

Why giving back is good for your business

If your business hasn’t made it a habit to support a good cause, here’s why you should: giving back does more than make a difference in your community. Participating in charitable activities can have a positive impact on your staff, your customers and your bottom line.

Customers want to support companies that demonstrate a commitment to more than earning a profit. A 2010 study by Cone Marketing showed that 85 per cent of customers respond positively to companies that give to a charity they care about.

Moreover, collaborating on charitable activities encourages team building among your staff, which can improve morale and even increase productivity.

Including volunteer days in your company’s benefit package can also attract top talent and encourage staff loyalty. A 2015 study revealed that 62 percent of millennials would take a pay cut to work for a company that demonstrates a commitment to social responsibility.

Convinced giving back matters? Here are a few easy ways to become a more socially conscious company.

Implement staff volunteer days

Allowing your staff time to volunteer in the community once or twice a year is a win-win for everyone involved. Your company’s commitment to community giving can make a meaningful difference to a charitable organization while raising your company’s profile and earning the appreciation of your staff.

Host a community event

Schools, hospitals, libraries, community centers and children’s clubs can always use extra financial support. Choose which community organization you’d most like to support, keeping your company’s core values in mind – then start a campaign to raise funds for your cause. A carwash, BBQ, bake sale or fun fair can become an anticipated annual event with the help of your staff and the support of other businesses in your community.

Sponsor a donor matching program

Pledge to match donations up to a certain amount for a cause of your choice. Donor matching is a great way to inspire people to give more generously, knowing their donations will go further –and your company will be remembered for your collective generosity and goodwill. Use your company’s social media channels to spread the word about your donor matching program and encourage your followers to give to your cause.

Final tips

You’ll get a more positive response to initiating charitable efforts when you invite your staff’s involvement. Ask your employees to come up with a list of charitable initiatives that matter to them and that align with your company’s mission and values. Then take a vote on the top two or three charities you’ll work together to support that year – perhaps one local community initiative and a campaign to help a larger national charity.

Acknowledge your staff’s participation in your corporate giving projects and reward them for their personal contributions. Time off, a free t-shirt or a group draw for a gift card can go a long way to increasing participation and making your efforts to give back both rewarding and fun for everyone involved.

Provisional tax improvements

Provisional tax improvements

New legislation enacted in February substantially simplifies obligations under the provisional tax regime.

Most taxpayers pay their provisional tax at three times through the course of their financial year, being the 28th day of the 5th, 9th and 13th months after their balance date.

The ‘standard uplift’ method determines a person’s liability based on a prior year’s tax payable (105% for last year, or 110% for previous). The problem is that if a person’s final liability is more than the estimate, Inland Revenue will charge use-of-money interest (UOMI) on the difference (currently 8.27%).

This is a source of frustration as taxpayers are either rewarded for having a great year by being charged interest by IRD, or they have to scrutinise their own tax position as they trade through the year and make increased payments to IRD when they could be focusing on their business.

In a positive change, the UOMI rules are being amended from the 2017/2018 income year. UOMI will no longer be charged from the first two provisional tax dates on the difference between a person’s ‘standard uplift’ liability and their actual liability based on their completed tax return.

In order to defer the start of the interest charge the taxpayer must meet the minimum payment obligations under the standard uplift method on the first two instalment dates. Where the taxpayer does not make the required payments, UOMI will apply on the first two instalment dates based on the lower of the difference between: the amount due under standard uplift and the actual payment; or one-third of the residual income tax liability for the year and the actual payment.

To be eligible for the concession, companies within a group will all be required to use either the standard uplift or GST ratio method for calculating provisional tax. This rule is designed to prevent related entities gaming the differences between the standard uplift and estimation methods to reduce exposure to UOMI.

In a similarly positive change, the existing concession, which defers UOMI for individuals with a tax liability of less than $50,000 to their terminal tax date (typically the following 7 February or 7 April), is being increased and widened. From the 2017/2018 income year, the concession is being increased to $60,000 and extended to all types of taxpayers, such as companies.

As with the first change above, there are requirements that need to be met in order for the concession to apply, such as meeting obligations under the standard uplift method. IRD expects that the change to the safe harbour threshold will eliminate UOMI charges for approximately 67,000 taxpayers, at least 63,000 of these being non-individuals who did not previously qualify for the concession.

Finally, the late penalty regime is also changing. Currently, a 1% late payment penalty is charged the day after tax is due, a further 4% penalty is charged at the end of the first week and a 1% incremental late payment penalty is charged each month thereafter. For most taxpayers the incremental 1% monthly penalty will no longer be charged on GST periods starting from 1 April 2017 or income tax and working for families debts relating to the 2017/2018 or later years.


Tips for more productive meetings

Increasing efficiency and minimizing costs are essential to running a profitable business. Yet many small business owners waste countless hours on meetings that lack focus, run on too long, and pull staff away from more productive tasks.

Follow these seven tips to make your meetings more efficient and cost-effective.

What’s your goal?

Every meeting should have a clear objective, and a reason the meeting is needed (versus an email or informal conversation). Your meeting goal should be focused – see if you can state its purpose in five words or less. One study showed that a simple, brief statement outlining a meeting’s objective can reduce meeting length by 17 minutes.

Draft an agenda

Outlining a meeting’s discussion points in advance can keep everyone on track at the meeting. If it seems the discussion is veering off course, any attendee can point to the agenda as a reminder of your objectives. Distributing an agenda a few days in advance with supporting paperwork can help everyone arrive prepared.

Invite the right people

The cost of including staff in meetings for which they have no stake in the outcome is costly. This infographic suggests the annual cost of wasted time in work meetings is approximately $37 billion in the US alone. Consider including only those directly responsible for carrying out the tasks required in your discussion. You can ask your managers to pass on information to staff later.

Start on time

Begin every meeting promptly, no matter what. Those who arrive on time will immediately start to feel restless if they have to wait for others. Schedule meetings for mid-afternoons on Tuesdays rather than 9:00 am on Monday. People need time to get back into gear after the weekend, and by Tuesday afternoon, they’ll have had time to prepare for your meeting.

Keep it short

Perhaps business owners set meetings for 30 minutes or an hour out of habit, but the ideal meeting length is somewhere between 15 and 18 minutes. Any longer and attention spans wane and productivity drops. Follow your agenda and invite a timekeeper to help everyone stay focused. Your timekeeper can signal when the discussion is running too long, or time is nearly up. When the timer rings, make it clear the meeting is over.

Ban devices

Ask meeting attendees to turn their cell phones off, or better yet, leave them at their desks. Devices are an annoying distraction in meetings, and some people find it difficult to stop checking their phones for incoming texts and calls, even when set to silent. Ask staff to leave their laptops at their desks, too. Research shows that conceptual recall improves when we handwrite notes rather than type them. If a record of your meeting discussion is needed, appoint someone to take minutes.

Facilitate the discussion

If you’ve invited more than one or two people to a meeting, act as a facilitator, ensuring everyone gets a chance to contribute. Often one or two people do much of the talking in a meeting, but a meeting is most productive when shier personalities share in the discussion, too. Often introverts are highly creative thinkers, but they need encouragement to jump into a discussion.

Final thoughts

A final point to consider when scheduling meetings is how long it takes staff to re-adjust to the day’s workflow when they’ve been pulled away from their desks – additional support for the notion that meetings should be brief whenever possible, and only include those that absolutely need to be there.

Making life your life easier with Smart Payroll

Despite only using Smart Payroll for 5 months now, I have personally found it not only easy to use but really useful and efficient to use compared to other online payroll systems.

Let’s be honest, no one really likes to worry about payroll and why should you? Using Smart Payroll has been a breeze and has made the worry go away. By cutting down the time spent on processing payments, you can use the time on things that matter.

Smart Payroll is not just for small businesses. Almost any size business in New Zealand can use it. All you have to do is enter the payroll information and press submit and Smart Payroll will take care of the rest. They will transfer the money from your bank account to your employees and take care of all the government deductions.

You are able to get various reports that can cater to your every need. It is quite clear and easy to check leave balances for each employee and see which dates they have taken leave in the past.

Also with Smart Payroll, you can have a third party, like us, that can process the payroll. We do payroll for numerous clients using Smart Payroll. They send us the payroll information, we enter and send them a pay run report which they confirm and we process the pay. This process is not only efficient but also a good internal control with separation of duties.

With Smart Payroll, you do not just get an online payroll system, you also get full support from the team at Smart Payroll who are always helpful whenever you need assistance.

If you would like more information on Smart Payroll or payroll in general, we at The Accounting Hub are more than happy to help you sort your payroll.

Parties, Christmas and Tax

office-christmas-p_2746810bEntertainment rules over the Christmas season

Let’s look at the tax treatment of saying thanks to customers and staff typically with gifts, wining and dining.

Inland Revenue’s IR268 guide gives the following examples of where entertainment expenses are 50% deductible:

  • Taking customers, suppliers and business associates out for dinner or putting on a function for them
  • The traditional Christmas party for staff
  • Shouting customers, suppliers and staff to an event, e.g. a rugby game or a show
  • Taking them on a jaunt in your launch (running/hireage costs and food and alcohol)
  • Giving them the use of your bach or time share apartment as a thank you gesture (the occupancy costs)

We’ve been asked ‘why only 50% deductible?’ Apparently it’s because we get some personal enjoyment or benefit from quaffing a wine and tucking into a steak (too right!).
In lieu of a Christmas party you may give your employees restaurant vouchers to use at their discretion. This cost is fully deductible but is subject to fringe benefit tax (FBT), although there is an exemption of $300 per employee per quarter (a maximum exemption can apply). The same treatment applies to staff gifts, again fully deductible but subject to FBT under the ‘other benefits’ category.

As a thank you gesture many firms give their customers gifts during the festive season. The cost of the gifts is fully tax deductible as marketing and promotion expenditure.
Many firms pay their staff a Christmas cash bonus. These payments are classed as ‘extra emoluments’ and are fully deductible but have PAYE deducted at the employee’s marginal tax rate e.g. 33% if earning over $70,000 per annum.
If in doubt about where you stand tax deductibility-wise with your generosity to customers and staff, check with us and we’ll help you get it right.

Business Structures for Medical Professionals

We are often asked by people who are setting up in business “Which entity structure is suitable for my business?”.

A typical answer would talk about the options of using a sole trader structure or a trust, but would focus on the asset protection benefits of using a company. Companies are the default trading structure for most businesses in New Zealand, due to the creditor protection benefits and ease of selling a portion of the ownership. There are more tax options with a company than using a “sole trader” structure.

For many doctors or other medical professionals, this answer is fine for their needs and they don’t need to look any further.

However, using a company structure does have some downsides. Some of the benefits of a company structure are unlikely to be needed in medical practice in a New Zealand context (where ACC protects medical practitioners from legal action in most situations). Medical professionals rarely have significant creditors or liabilities. Where they do, perhaps in the form of a lease obligation or a bank loan, the landlord or the bank usually require a personal guarantee.

The main disadvantage of using a company is ongoing compliance cost in the form of companies office filing requirements and accounting fees.

A bigger problem for some in the medical profession is the need for confidentiality. New Zealand has a very transparent company registration system, where company ownership details are publicly searchable. The details available in a search include the address of the owner of the company as well as the directors of the company.

Many medical professionals will feel that they would prefer not to have their address published on the internet, so therefore may want to look to alternative business structures.

For a doctor or dentist (or physiotherapist, osteopath etc) working as an independent contractor, there is limited tax benefit from using a company structure. In this situation, contracting as a sole trader would provide the best confidentiality and would also reduce ongoing compliance costs.

For those running bigger businesses who were concerned about confidentiality, a trading trust is an option.

In all cases it is important to match the structure to an individual’s situation and for the individual to seek specific accounting and legal advice prior to setting up in business or starting to work as a contractor.

Skimming Stones talks about The Accounting Hub

Here at The Accounting Hub we are lucky enough to work with Kelly Hunt and the team from Skimming Stones. Skimming Stones is small video editing and TV content production company based in Auckland. Kelly is a highly experienced television producer, director, editor and a proficient camera operator. He produces corporate, promotional, short film and TV work. Skimming Stones is a one-stop shop for scripting, shooting and editing.

Kelly Hunt from Skimming Stones

We have enjoyed being part of building Kelly’s business so we sat down to chat about how business is going and here is what Kelly had to say. Read More »

Property tax alert: new tax rules

Property tax rules changed on the 1st of October 2015 so if you’re buying or selling residential property this information is important to you, especially if you are a property investor. A new ‘bright-line rule’, which states you’ll pay tax when you buy and sell a residential property within two years, is now in place.

What is a bright-line rule?

A bright-line rule is a clearly defined rule that leaves no room for interpretation. You can think of it as someone drawing a line in the sand and it’s clear when you cross that line.

houses in city

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FAQs on company structure and minimising tax

So you’re setting up a new business or thinking about changing the way your existing business is structured… do you go for the added protection that a limited liability company provides, or do you keep things simple and operate as a sole trader or partnership with fewer tax compliance obligations?

Tax expert John Shewan, formerly of Price Waterhouse Cooper, gives advice on structuring your business to minimise tax and meet your business and personal goals. He discusses the advantages and disadvantages of forming a company versus operating as a partnership or sole trader.

business man reading newspaper Read More »

8 money saving tips for freelancers

While working at home as a freelancer sounds like the ultimate dream for anyone tired of the rat race and daily commute, freelancers still have more than a few financial issues to worry about. Perhaps the most important trait that you should have as a freelancer is the ability to be fully responsible and accountable to yourself, and saving money is something that you should think about on a daily basis! So let’s walk through the basics of saving money when you work for yourself.

working from home man

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Inventory in Xero

For those of you that sell physical products, keeping track of inventory has historically been a weak point of the Xero software. Xero have spent some time and energy (and money!) to create an inventory module that will work for most small businesses and organisations. Read more about it and watch the Xero video here.

Of course, you may have special requirements that Xero does not cater for. For those situations there is likely to be a Xero add on inventory management system that will do the job – for example Unleashed or Tradevine for Trademe traders.

bean counter

Payroll in Xero

Xero has introduced payroll functionality into its “standard” and “large” plans. This means that you can now calculate staff pays, PAYE etc and prepare your PAYE returns from within Xero. Find more information on Xero Payroll here.

We still like the increased levels of automation from Smartpayroll.

We can help with the implementation of either of these options – or else manage your payroll for you. Contact us to discuss the options.

businessman on computer

Document storage in Xero

We believe that storing a copy of your receipts and invoices electronically in Xero is the best and most efficient way to do the business filing for most organisations. There are many benefits to this – not just that you can do something else with the space where the filing cabinet went! Read more about document storage using Xero Files here.

For those organisations who have a lot of invoices or receipts, or for people who just like to use the best labour saving tools available, Receipt Bank is a great option that can automate a lot of the data entry process.

Contact us if you want to discuss options for training or implementation in your organisation.

flying paper cropped

Teleworking – Buzzword or reality?

There have been some articles in the media recently dedicated to the rise of “teleworking”. To me the term already seems out of date as it seems to refer to the use of a telephone (invented around 1876) when today it is much more likely that internet technology will be used.

According to Wikipedia, the term telework was coined in 1973, which will explain its old fashioned sound. However the term now refers to the use of any communication technology to enable workers to work outside of a centralised office, which for most people will be at home.

Usually the tone of any discussion on telework follows the theme that telework is possible now but that it is perhaps underutilized.

Enough about the theory though, can teleworking work in practice? And is it something that is suited to small business? Read More »

Surprisingly Destructive Habits You Should Avoid as an Entrepreneur

Entrepreneurs want to have their hands on every aspect of their start-up. This is understandable, as many entrepreneurs come into their respective industries from a place of passion. Their passion will drive them to spend long nights at the office, working hard every hour of every day. Unknown to them, this kind of attitude can actually lead to some destructive outcomes.

You must avoid these habits, despite the allure of their short-term benefits.

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9 reasons to switch to cloud computing

Don’t be left up in the air by traditional IT solutions. Check out the top 9 advantages for small businesses switching to cloud computing.

Cloud computing is fast becoming the norm because storing information and using software hosted on the Internet has many advantages.

Read More »

Should you lease or buy equipment?

Many small business people wonder whether it’s better for them to buy or lease capital equipment for their businesses. Your options regarding leasing or buying depend upon the nature of your particular business, but there are nevertheless a few guidelines you can follow to help you decide what you should do.

If you have the money available, and the item is really necessary to your business, then it will usually benefit you to buy the item outright. If there is no way you can find the finance (i.e., you have no money) then you will have to finance the purchase out of cashflow, which means leasing it. Read More »

Provisional tax

Provisional tax is often a source of confusion for new business owners as well as a source for frustration for owners of existing businesses.  This article gives a brief overview of some aspects of the system to help which may be of assistance to all business owners. Read More »

10 quick growth tips for your small business

Small businesses can grow in boom times as well as periods of difficulty by working smarter and taking advantage of opportunities. Put these following effective tips into practise to help grow your business.

1. Utilise new technology

Modern technology can save you time, improve productivity and reduce your operational costs. Make use of Facebook, Twitter, Google+ and other social media tools to market your business.

Dropbox is a cloud-based service that can be used for document creation and sharing, while Skype is commonly used for calling or video conferencing. Read More »