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McLEAN AND CO.
Registration of Charities under the Charities Act
Check List for Buying a Business
This year Inland Revenue Department are introducing a new style Certificate of Exemption from Witholding Tax
The new certificate takes effect from 1 April 2007. Contractors who successfully re-applied for an exemption certificate will receive their new certificate over the next few weeks.
The eligibility criteria for a Certificate of Exemption remains the same. A contractor qualifies for a certificate if they have a good record of filing returns and paying their tax on time. IRD take the tax record into account when considering the exemption period.
NEW NAMES FOR FAMILY ASSISTANCE
New names for Family Assistance payments through IRD are being phased in from mid-February this year. Eligibility criteria remain exactly the same.
Family Tax Credit- replaces Family Support. This is the main payment for people with dependent children who meet the eligibility criteria
In-Work Tax Credit- replaces In-Work Payment. This is the payment for families where one or both parents work a minimum of hours per week.
Minimum Family Tax Credit- replaces Family Tax Credit. This is a top-up payment for lower income families to ensure a minimum annual income.
More businesses fail for lack of cash flow than for lack of profit. Why is this? Two main reasons:
Its important to know the difference between profitability and cash flow:
Profit is the difference between income and expenses. Income is calculated at the time the sale is generated, rather than when full payment is received. Likewise, expenses are calculated at the time the purchase is made, rather than when you pay the bill.
Cash flow is the difference between inflows (actual incoming cash) and outflows (actual outgoing cash). Cash In is not achieved until payment is received and Cash Out is not calculated until payment is made. Cash flow also includes infusions of working capital from investors or debt financing.
Cash flow is often calculated on a monthly basis, since most billing cycles are monthly. Most suppliers will typically allow somewhere close to thirty days to pay. However, in a cash-intensive business with a lot of inventory turnover, such as a restaurant or dairy, it may be necessary to calculate on a weekly or even daily basis.
How to Project Cash Flow
Create a spreadsheet or other like analysis in chronological order . If at any point you have negative cash balance, or even a very small one, you have a potential problem.
It's best to be extremely conservative, i.e., estimate inflows lower and sooner and outflows higher and later. If you end up with a cash surplus, it can cover you for an unanticipated cash shortage in the future, or be invested in something to help grow your business - you won't have a problem finding something useful to do with the money. On the other hand, if you end up with an unanticipated cash shortfall, you can end up damaging your credit, losing suppliers, having to cut employees, or out of business entirely.
Track Your Actuals
Keep a copy of your forecast, but track your actual cash flow as well. Comparing it to your forecast will help you realise where you have mis-estimated or overlooked something in your planning. Past Cash flow statements and future Cash flow projects are among the core financials you will need as part of your business plan for potential investors.
REGISTRATION OF CHARITIES UNDER THE CHARITIES ACTRegistration of charities under the new Charities Act commenced 1 February 2007.
CHECK LIST FOR BUYING A BUSINESS
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