McLEAN AND CO. Chartered Accountants

Accounting          Taxation         Business Advice and Development Assistance           Audits                             

 P.O. Box 10 , Clive         133 Main Rd, Clive           Tel. (06) 8700952          Fax. (06) 8700955 

Email                                  Website


Welcome again to the McLean and Co. Newsletter in which we discuss current taxation and business matters. We trust you find it informative.  



We are happy to accept new clients.  We would be happy to assist colleagues and acquaintances as new clients.



  1. Provisional Tax due 15/1/2009

  2. ACC Workplace Safety Information

  3. Annual Holidays

  4. Previous McLean and Co Monthly Emails



Just a reminder that for clients with  a 31 March balance dates (the vast majority are) and who are either not registered for GST,  or who are registered for GST for periods excluding 6 monthly with GST filing dates 31 December and 31 March, that you are due to pay the second instalment of 2009 year Provisional Tax, if you are liable to do so, by 15/1/2009.

If your 2008 Income Tax Returns are completed by now you would have been advised the amount to pay (if any) and would have been provided with a Payment Slip.

For clients who have not completed the process of filing 2008 Income Tax Returns it is suggested that you pay the same amount McLean and Co. recommended that you should pay on 28 August 2008, if you were liable to do so.

If you pay by internet bill payment ensure that you quote Income Tax is being paid and that your payment relates to the period to 31/3/2009.

If you have any queries on this subject, do not hesitate to contact McLean and Co. 



The Department of Labour has developed an online tool that provides small businesses a self-assessment guide for managing hazards, along with an introduction to the basics of managing health and safety.

ACC Workplace Safety Discount Programme

If your business is eligible, you can also use the Hazard Handler online tool to apply for the ACC Workplace Safety Discounts programme.

To be eligible for Workplace Safety Discounts, you must be either self-employed or a small business within the agriculture, construction, forestry, motor trades, or road transport industries.

To use the Hazard Handler online tool follow this link

For more information on how to apply for ACC’s Workplace Safety Discounts see




Under the Holidays Act 2003 all employees are entitled to a minimum of four weeks annual holidays.

This section has information on how to calculate annual holiday entitlements and pay, and how the transition from three to four weeks annual holidays works.




Are you looking to refer to any of our previous Email Newsletters?  Here are links to them:

December 2008

September 2008

August 2008

May 2008

February 2008

November 2007

August 2007

May 2007

February 2007

November 2006

August 2006

July 2006

April 2006

December 2005

September 2005

August 2005

May 2005

February 2005

November 2004

August 2004

May 2004

February 2004

November 2003

August 2003

May 2003

February 2003

November 2002

August 2002

May 2002

February 2002



October 2008

June 2008

March 2008

December 2007

September 2007

June 2007

March 2007

December 2006

September 2006

May 2006

January 2006

October 2005

June 2005

March 2005

December 2004

September 2004

June 2004

March 2004

December 2003

September 2003

June 2003

March 2003

December 2002

September 2002

June 2002

March 2002


November 2008

July 2008

April 2008

January 2008

October 2007

July 2007

April 2007

January 2007

October 2006

June 2006

March 2006

November 2005

July 2005

April 2005

January 2005

October 2004

July 2004

April 2004

January 2004

October 2003

July 2003

April 2003

January 2003

October 2002

July 2002

April 2002









The information provided in this email newsletter is for informational purposes only.   McLean and Co. accept no responsibility for the opinions and information expressed in the information provided and it is provided "as is" without warranty of any kind.    The user assumes the entire risk as to the accuracy and use of this document.   Readers are asked to seek professional advice pertaining to their own circumstances.    The McLean and Co. email newsletter may be copied and distributed subject to the following conditions:
  • All text must be copied without modification and all pages must be included.
  • This document must not be distributed for profit.    


If we can assist further, please email McLean and Co as follows:




How can you boost gross profit -
in dollars and the GP margin?


ery Important Tip
* higher prices are not the only way to boost gross profit margins - keep reading this LONG list!

Option 1 - Increase Dollars of Gross Profit by Increasing Total Sales
* make sure your advertising is effective - monitor each programme and either keep
  it as-is, refine it, or drop it. Don't just change it for its own sake, if it works!
* make use of in-store displays and demonstrations
* make sure the exterior appearance and identification of the business is clean,
  professional and helps customers find your store
* employ effective, hard-working sales staff (and train and motivate all people to stay
  that way!)
* seek referrals from existing customers
* seek referrals from related businesses
* use staff incentives and competitions to encourage up-selling or sales of

  companion lines - you can even use this to promote sales of older stock items or
  slow-moving stock
* measure the conversion rates in your business. For every 100 prospective
  customers, how many ask for a proposal? Of those, how many ask for a
  demonstration? then how many eventually buy? Increasing the effectiveness of the
  sales process can lead to rapid increase in sales, without any additional cost or

* increase the average sales size:
• sell higher quality or enhanced features
• use merchandising and display to group related products together or to promote
  seasonal lines
• stock displayed at close to eye-level generally sells better
• using more lineal space for a product generally promotes sales of that product (ie  
  allowing twice the shelfspace will generally lift sales of that product)
• look at your stock and sales mix to ensure that they closely match each other
• sell accessories or add-on products: either have your staff do this at point-of-sale,
  or use signs and 'deals' in the store to encourage purchase of additional, related

* increase repeat trade from customers:
• through positive, friendly and helpful staff
• sales staff members' ability to understand customer needs - promoting only the
   products of genuine value to the customer
• business image/appearance/housekeeping
• provide regular follow-up
• create 'clubs' for groups of customers; use newletters or email or letters to tell them
  about relevant products; run special events just for regular customers etc; add
  promotional pieces into (eg) your mailings of monthly statements
• provide high quality service

Option 2 - Manage The Margin

These pointers largely influence the 'cost' aspect of 'Cost of Goods Sold'. Improvements to gross margins can be achieved here without the firm's customers even realising what is going on.

Avoid the factors that reduce your closing stock:
* eliminate shoplifting of minor items with: vigilant staff; well-located cash registers; use of mirrors etc to provide good supervision of all areas
* eliminate staff pilferage of minor items, through suitable penalties, training, etc
* eliminate or minimise damage to stock while it is in storage or on display - place it in suitable locations and use display units to protect it
* make sure that all stock received is checked against delivery dockets or invoices, so that you only pay for what is actually received in good order and condition
* make sure damaged stock is returned to supplier for replacement or credit

Eliminate or minimise high-cost purchases:
* avoid placing too many small orders with high freight costs
* avoid dealing with too many suppliers - you'll lose quantity discounts
* avoid carrying too wide a range of stock (again, losing the scope for volume
* take advantage of settlement discounts where they are worthwhile
* plan purchases according to likely demand or seasonal factors

Eliminate 'Depressed Sales Values' from the level of stock sold:
* check your pricing practices (inaccurate cost prices lead to incorrect sales prices)
* make sure you re-price stock (e.g. on old lines, or after a promotion)
* make sure your sales mix blends sales of the low-margin items with sales of higher
  margin lines
* improve merchandising and display to encourage customers to buy products they
  reasonably need
* eliminate excessive discounting (e.g. 'mates rates') by your staff
* minimise the extent of heavily-discounted 'end of season clearance sales'

Option 3 - Look at Your Prices
Check your pricing:
* adjust your markups so that your prices are not out of line with competitors' prices
* price some stock lines to keep customers coming back, then set a suitable margin
  on the related product sales
* make sure all stock on hand is priced consistently (don't let customers pick the
  cheapest from amongst identical items on the shelves)
* use technology to make price changes quicker and easier; or to create price tags









An estimate is a price the seller thinks the work will cost, based on their past experience in that kind of work. It is not a firm offer to do the job for that price.

A quote is an offer to do a job for a certain price.


Estimates are useful if you have never had to buy that type of service or product before and you want a ballpark figure of how much you are likely to be charged – eg, getting a tap washer replaced or having a driveway laid.

The seller must use reasonable skill to provide the estimated price so that your decision to use the seller is based on sound information,

If you get an estimate and you decide to use that particular seller, make it clear before the work starts that you want to be informed if the final price is going to be hiqher than the estimate. If you can, get their agreement to do this in writing. Asking to be informed of cost increases will give you the opportunity to cancel the work before it costs you more than expected.

Once you have an estimate, and the work is likely to cost a lot – eg, home renovations or building a fence – you should ask for the price to be fixed by getting a quote.



If you accept a quote, the seller has to do the work for that price. In most cases, it is best to ask for quotes in writing. Then, if a problem arises you will have a record of what was agreed to.

A written quote should show:

The costs of materials, hourly rate, etc will change over time. It is reasonable to agree that a quote is only good for a set period of time.

How do I qet a quote?

Sometimes it's just a matter of finding out the standard price. But, when a seller has to look at the job to work out the cost, you should get a written quote. For example, plumbers will need to see where the drains are and how much digging is needed to reach them, before they can say how much it will cost to clear a blocked drain. Find out if they charge for making a quote.


Quotes checklist

Note about GST

A quote must include GST in the price, or state that GST is not included. If GST is not mentioned you are entitled to assume that it is included in the price given – but it is wise to check this with the seller so there is no unnecessary disagreement later.


Paying for a quote

eg, you take your watch to a repairer because it won' go. They say they will look at it. When you return for the watch they say it is not worth repairing and ask you to pay $10 for looking at it.

Some quotes are free. However, it is common practice to charge for a quote, so check this out with the seller. If you have the work done, some sellers will take the price of the quote off the repair bill.


Needing extra work after quote received

eg, you accept a quote to re-line your bathroom in water proof wallboard. When the old lining is removed it is found the timber studs are rotten and must be replaced.

The seller must get your permission to carry out extra work. You always have the right to refuse or accept any extra work suggested by your seller. But when extra work is needed to complete the job, you may have to pay more than the quoted price.

In order to reach an agreed price above your quote, contact others in that industry for information on costing. This will give you some idea of how much more you should expect to pay. If the work is done at a fair and reasonable price, then you should pay the cost.


Seller carries out unauthorised work

For example, you ask the garage for a Warrant of Fitness for your car. The garage's fee is $25. The garage fits a new tyre and charges you an extra $90. They say you would not have got the warrant without it. Because you did not agree to spend more than $25 the garage should not fit the tyre without your agreement.

You do not have to pay for work you did not agree to, even if the quote is not written down. (Of course, in this case the garage can remove the tyre and give your old one back!)

For more details, see unauthorised work.


What if the service includes goods?

For example:

  • replacement parts with repairs
  • carpet and carpet laying
  • curtain fabric plus a measure and making service.

Make sure that the quote you get includes the total cost of any goods supplied, plus the price of the service.

When things go wrong

Here are examples of two problems that can happen and what you can do about them.

Charging more than the quote

Write a cheque for the amount of the quote.

Send the cheque to the seller with a note on the back, or a separate note, which says:

This payment is offered on the condition that banking it will be considered full and final settlement of your account no... dated... 


Keep a copy for yourself. If the seller doesn't accept this amount as full payment they can either:

Although the seller may not accept your offer, sometimes it is worth trying to reach a compromise. If you are determined not to pay any extra, you may have to take action through the Disputes Tribunal or Court to sort the matter out.

Sometimes a shop will offer free measuring, making or installation when you buy goods. Compare prices of the same goods in other shops to be sure the cost of the service has not been added to the price of the goods.


High price with no quote or estimate

eg, You ask a mechanic to fix the car's radiator. When you collect the car you receive a bill for $450. You think this is too high for the work that has been done. You can ask the mechanic for an itemised account showing the cost of parts, labour, any other charges and GST. Then ask two or three other garages what they would charge for the same work. Average their prices out – this is the amount you should pay for the work done on your car.

The Consumer Guarantees Act says if you buy goods or services and the price is not set or discussed at the time then you only pay a reasonable price. You can work out what is a reasonable price by finding out what other sellers are charging for similar goods.