McLEAN AND CO.
Creating a Successful Market Niche www.mcleanandco.co.nz/Page83.htm
Finding Customers www.mcleanandco.co.nz/Page82.htm
Goal Setting in Business www.mcleanandco.co.nz/Page81.htm
Cutting Costs in Your Business www.mcleanandco.co.nz/Page80.htm
Are you making one of the 10 Deadly Business Mistakes? www.mcleanandco.co.nz/Page85.htm
Taxpayers are no longer required to value their closing stock or include any
change in the value if:
Taxpayers are no longer required to value their closing stock or include any change in the value if:
their turnover (total gross income) is $1.3 million or less for the year, or
they reasonably estimate that their trading stock on hand at balance date is less than $5,000
In such cases taxpayers are entitled to use the same figure for closing stock in
the financial statements as the opening stock.
In such cases taxpayers are entitled to use the same figure for closing stock in the financial statements as the opening stock.
Please note that even if taxpayers qualify for this simplified method for
valuing stock, they dont have to use it- its optional. They are still entitled
to do stocktakes and get a true value for their trading stock if they wish to.
Please note that even if taxpayers qualify for this simplified method for valuing stock, they dont have to use it- its optional. They are still entitled to do stocktakes and get a true value for their trading stock if they wish to.
This change is designed to reduce compliance costs associated with valuing and
making adjustments for small amounts of trading stock at the end of the year.
This change is designed to reduce compliance costs associated with valuing and making adjustments for small amounts of trading stock at the end of the year.
|REBATES AND LEGISLATION CHANGES|
Currently there is legislation before Parliament which will change the maximum taxpayers can claim for donations to $630 for donations made totalling $1890 or more. It is intended that the new amount will take effect from the 2002-2003 year
For donations made in the 2001-2002 and earlier years, the maximum rebate claimable is $500 for donations totalling $1500 or more.
If you send in a claim for more than $500 the refund will be held until the legislation is passed. this action is expected to occur in April 2003.
These products are promoted as minimising interest costs and the term of the loan. But the ability to redraw, if exercised, will negate some of the savings. And, if the facility combines business and private borrowings, the apportionment of interest can create a tax headache and in extreme cases a complete haemorrhage.
For example, a farmer has a flexiloan which permits deposits and redraws up to a set limit at any time. Deposits are made to reduce the loan balance by $60,000. Later on the farmer draws down $40,000 for a new boat.
Here’s the rub. The interest on the boat is not tax deductible – ouch! Tax deductibility requires a link between the money borrowed and earning taxable income. No link - no deduction.
Our farmer example was straightforward. Imagine what happens when the flexiloan goes: up for a boat, down for a dairy cheque, up for a trip to Aussie, up to buy more cows and pay provisional tax, down for a stock sale deposit. Technically each draw down must be tested for a link to the farming business. Analysing the interest is an accountants nightmare. He/she has to look at each and every transaction and calculate a new percentage of interest to claim for business from that transaction.
To avoid the work involved in analysing the loan interest, we recommend:
and business transactions are kept separate.
· Planning before paying extra off your business loan. It may be more efficient to hold surplus cash in a savings account rather than repay the business loan and have to draw again for private spending.
up two flexiloans:
one for the business and the other for private transactions.
Loan interest is often a “big ticket” item for businesses. Losing part or all of the tax deduction for interest can be a big cost, and taxpayers may get pretty upset if their accountants have to tell them some of their interest bill is not deductible.
CUTTING COSTS IN YOUR BUSINESS
you know where to start? You know when something big goes wrong in your
business when a contract isn't renewed, or a product line doesn't sell. But
not every business owner knows when little things go wrong. little expensive
things, that have a big impact on the bottom line.
When business is good, it can be easy to ignore the little things and spend your energy on the bigger picture. but when the economy takes a downturn, it really pays to take a good hard look at every aspect of your business.
Which of your customers are actually costing your money? I'll bet there are more than you think. Customers who require a lot of support, who aren't satisfied with the work you do, who demand large discounts or special deals, who never seem to appreciate your service or product. Find out who they are - it may be time they looked elsewhere, and you concentrated on the customers that value your company.
Don't take things for granted, While it's true that long standing relationships with trusted suppliers can make things smoother and easier, you need to be aware of competitors' prices and services. you want to be sure you're getting the very best deal you can on every transaction. And don't be afraid to ask for a discount.
Got a feeling that someone's not pulling their weight? Think you might have to downsize, but don't know where to make the cuts? Keep track. Get people to write down what they do each day. Find out who's doing what and how long it's taking them. Because without that knowledge, you'll end up hiring and firing on a hunch. And you might just lose your most valuable employees.
Negotiate, reduce, cut. But first, find out how much you're paying now. What does your phone cost per month - is there a cheaper plan out there? How many color copies, faxes, printed and bound reports does your company produce each month? Do you track and charge for them? What about travel expenses? Stationary supplies? Rent? Before you start cutting, you've got to know where to cut. If you're not keeping track and recovering this type of cost, you're loosing money.
Big pictures are painted with small brushstrokes
Being successful during difficult economic times means paying attention to each small brushstroke that makes up the big picture of your profitability. Because what you don't know will hurt you. And what you do know will help you build a stronger, leaner, more profitable company.
If we can assist further, please email McLean and Co as follows: