Accounting                    Taxation                      Business Advice and Development Assistance                              P.O. Box 10 , Clive        133 Main Rd, Clive          Tel. (06) 8700952         Fax. (06) 8700955 

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

McLean and Co. is a home based chartered accountancy practice based in Clive, Hawkes Bay.    Readers are invited to peruse the practice website lists services provided, gives contact details and indicates how to become a client, contains an extensive base of articles on business and taxation matters,  and has links to other websites that may assist your business.    Being a small firm itself,   McLean and Co. strives to provide a personal and professional service largely to a self employed person and small business client base.  Enquiries are welcomed.



We are happy to accept new clients.  Please contact ourselves at the contact points highlighted above if we can assist you in your accounting and taxation requirements. Our website lists information required for this in the following link:



  1. Relevant Business and Taxation Articles.

  2. Creating Cash Flow Projections

  3. Checklist for Starting a Business

  4. Useful Inland Revenue Department Publications

  5. Credit Card Fraud- 21 Tips to Protect yourself



The McLean and Co. website contains an extensive number of articles prepared by McLean and Co. relating to taxation and business matters.    Here are a selection that will be of interest:

Company Incorporation                             www.CompanyIncorporation.htm

About Tax Agency                           

The Franchise Agreement               

Goal Setting in Business                 

Family Trusts                                   



Cash flow projections provide you the visibility you need to avoid problems and create the financial success.


Cash Flow Projections Made Easy

Creating cash flow projections does not have to be a difficult process. It is really a matter of using a few basic principles together with your intuition and knowledge about your business.

Here is a 5-step process you can use to create cash flow projections you can trust.

1. The Near Future Almost Always Looks a Lot Like the Recent Past.

The starting point for creating accurate cash flow projections is to have the last six months of actual results in front of you. You have a perfect view into what the cash flow is likely to be because you have the last six months of actual cash flow results there to look at.

You will be amazed at how this principle will help you create accurate projections. It also helps make the process so much easier and faster for you.

2. Consider What is Changing.

Is anything in the business changing right now in a significant way?

If you just negotiated a 10% discount in the cost of a product you re-sell to your customers, then you should consider whether it should be reflected in the month you will experience the reduced cost.

The key here is to make sure it is significant enough that you are certain of its impact. Otherwise, it would be better to see the impact in your actual results before including it in your projections.

3. Be Conservative.

One thing about a projection you can be certain of: it will not be perfectly accurate. You can be 100% certain that the actual results will vary somewhat from what you project.

The trick is to get close.

It's like meeting someone for lunch. You agree to meet a good friend at a restaurant at 12:00. You set 12:00 as the time to meet so you will both be there at about the same time. You set a very specific time so there is no confusion.

Despite the precise time you set, you know that both of you will not show up at exactly 12:00. The only question is whether you will be there a little before 12:00 or a little after 12:00. Will you be early or will you be late?

It's the same with your cash flow projections.

4. The 90% Test.

Here is a simple test that will work wonders for you.

Are you 90% sure the cash balances will come in at or better than you projected? The key here is the phrase "at or better than you projected". If you can answer yes to this question with confidence, then your projections are sufficiently conservative.

5. Use the "Smell Test".

Take a look at the projections again. Look closely at the resulting cash balances. Are they in line with your general expectations? Are they in line with the actual cash balances over the last six months?

Give the projected cash balances the "smell test". The smell test is a quick way to make sure everything smells right. It's a way to make sure nothing unusual or unexpected has made its way into your numbers.

It's like picking up a pint  of milk from the refrigerator. It's not a bad idea to give it the quick smell test to make sure you are not about to pour yourself a glass of soured milk (better to smell a problem in advance than taste it in the present, right!).


Taking Control of Your Cash Flow

Your cash flow projections provide you the visibility you need to make more profitable business decisions.

You can regain control of your cash flow by creating and maintaining cash flow projections.

You will be surprised at how this simple process can transform the way you manage your business.



What are all the things you need to do to get your new business up and running? To make it easy for you we’ve prepared a checklist which covers the main things you will need to take care of.

The Key tasks are:

  1. Prepare a Business plan
  2. Form Professional Relationships
  3. Set up the Business.

1. Prepare a Business Plan

do a SWOT analysis (assess your own strengths and weaknesses, and opportunities and threats in the marketplace)
prepare personal goals and then those for your business
identify your potential customers and do research to determine if there is a need for your product / service
identify your competitors and research them to determine how you will position your business in the market place
develop a marketing plan
choose your business location
determine the start-up costs
prepare operating budgets and cashflow projections
identify what, if any, funding you will require

It may be useful to download and print the publication Planning For Success -a do it yourself kit for developing your own business plan either as a whole document (PDF 947KB) or by smaller chapter sections. (Further copies of this publication can be obtained in hard copy or on CD-ROM from New Zealand Trade & Enterprise 0800 888 555, or by emailing BIZ at


2. Form Professional Relationships

Select a lawyer
Talk to other business owners for recommendations. Look in the Yellow Pages, consult the law society website


Choose a legal entity (sole proprietorship, partnership, or company)
Talk to your lawyer and accountant about this – see the Inland Revenue website for information on business structures


Use the online services at the New Zealand companies’ office for information on registering a company or company name


Create your business (register your name, incorporate the business, etc)
Your lawyer or accountant can assist with this or you can use the online services at the New
Zealand companies’ office to register a company or company name


Select an accountant
Talk to other business owners for recommendations. Look in the Yellow Pages, consult the Institute of Chartered Accountants website for information on selecting an accountant


Select a banker
Make sure that your banker is interested in your business and keep them informed of your plans and likely business needs.


Get financing
If you need financing then it is essential to have a well thought out and professionally presented business plan. Sources of finance can be your family, bank, a business partner or Venture Capitalist. See the vcapital website for information on seeking finance from a venture capitalist or business angel and information on the Escalator service at


Establish a line of credit

Select an insurance agent
Talk to other business owners for recommendations, look in Yellow Pages, consult the Insurance Council web site for a list of members


Obtain business insurance
Your business insurance should include your premises, stock, public liability and income
protection. In addition there are a number of specialist products available depending on your business type. See the Insurance Council of New Zealand website for information about commercial insurance:

3. Set up the Business

Organise business cards and letterheads


Secure a lease over, or purchase, your premises
Always consult your lawyer before negotiating or signing any lease agreement.


Acquire all necessary furniture and equipment
If part of your equipment is a vehicle, then you will need to keep a log book so you know how much you are allowed to claim. For an example of a Vehicle Logbook visit:


Obtain all necessary licenses, permits and resource consents
Consult your local council and industry groups for information on compliance issues. Make sure also that you comply with any Health and Safety issues. For further information on this, download the fact sheet Taking All Practicable Steps which can be found at:


Register with Inland Revenue
You must obtain a tax number for your entity for the
recording and payment of business taxes, PAYE for employees, GST and ACC levies. Your accountant can help with this. Check out the Inland Revenue website for information on requirements:

To apply for an IRD number you need to fill out an application form. You cannot complete this online, but to save you ringing up IRD you can download the application form at:

If you want to register for GST, then you can do this online at:

If you would like more information on your decision to register for GST, then you can view and print the document GST – do you need to register? at:


Join a professional organisation (your local chamber of commerce, your industry association)
See for a list of all Chambers of Commerce in New Zealand. See for employers and manufacturing associations (they have merged). There are others including retailers, tourism, agriculture, farmers etc. Most industries have their own association or support group.


Arrange suppliers
Make sure that your suppliers know you and understand what you intend to achieve with your business


Hire staff
Only hire staff when you start up if you have to and have discussed this with your accountant, lawyer and preferably an employment consultant.

If you do decide to employ staff, you must registeras an employer. This is so the IRD can send you the right information each month (such as the PAYE forms for your staff). You can register on line at:

If you do hire staff, then you will also need an accident register to document anything that happens which could harm staff. The accident register does not have to be kept in any particular format and can bedocumented on your own forms or photocopies of OSH forms. For an example of an incident and injury report form visit:


Set up accounting information system
Discuss this with your accountant. There are many suitable computerised options available but you can waste a lot of time and money buying the wrong package. At the very least you will require a cashbook to keep track of all your income and expenses. You can view an example at:

You will also need a petty cashbook for small amounts of purchases (like milk for the coffee). For an example of a Petty Cashbook visit:

Set a starting date
Go for it, and good luck!



You may find some of the following publications useful.

Explains the depreciation rules, including detailed schedules of assets and their depreciation rates.
Disputing an Assessment
Explains the process to follow if you want to dispute a tax assessment or some other determination.
Disputing a Notice of Proposed Adjustment
If we send you a notice informing you we are going to adjust your tax liability, you can dispute the notice. This booklet explains the process you must follow.
Employer's Guide
Explains the tax obligations of anyone who employs staff. Employers registering with Inland Revenue will receive a copy of this booklet.
Education Centres
Explains the tax obligations of schools and other education centres. Covers everything from kindergartens and kohanga reo to universities and polytechnics.
Entertainment Expenses
Covers the tax treatment of business entertainment expenses.
Grants and Subsidies
This booklet covers the tax responsibilities for organisations that receive a grant or subsidy.
Inland Revenue Audits
This booklet is for business people and investors. It explains what is involved if you are audited by Inland Revenue, who is likely to be audited, your rights during and after the audit, and what happens once an audit is completed.
Provisional Tax
Explains what provisional tax is, and how and when it must be paid.
Smart Business
A general introductory guide for businesses and non-profit organisations.
Taxpayer Obligations, Interest and Penalties
An introduction to the rules for business people applying from 1 April 1997.


Although credit card fraud is certainly on the rise -- and credit card fraud on the Internet is rising even more dramatically -- many savvy Internet shoppers know that the reality is that it's actually much safer to enter your credit card number on a secure online order form than it is to give your credit card to a waiter at a restaurant.

After all, what's to stop the waiter from writing down your credit card number and placing orders on the phone with it later?

And research shows that the rate of fraudulent purchases made by cell phones is much higher than credit card fraud on the Net.

Nevertheless, you are encouraged to take precautions when giving out any confidential information (including your credit card number) over the Internet, over the phone... or anywhere else for that matter!

Always use common sense -- it is the best rule of thumb.

Nonetheless, below are 21 tips to protect yourself from credit card fraud ..

First though, it is important to be aware of a  prevalent ,  and much less publicised , aspect of credit card fraud:   the dangers of credit card fraud for businesses who accept credit cards over the Net.       You can read more about 'Eight Sure-Fire Strategies Any Business Owner Can Use to Reduce Credit Card Fraud' by clicking here.



1. Keep an eye on your credit card every time you use it, and make sure you get it back as quickly as possible. Try not to let your credit card out of your sight whenever possible.

2. Be very careful to whom you give your credit card. Don't give out your account number over the phone unless you initiate the call and you know the company is reputable. Never give your credit card information out when you receive a phone call. (For example, if you're told there has been a 'computer problem' and the caller needs you to verify information.) Legitimate companies don't call you to ask for a credit card number over the phone.

3. Never respond to emails that request you provide your credit card info via email -- and don't ever respond to emails that ask you to go to a website to verify personal (and credit card) information. These are called 'phishing' scams.

4. Never provide your credit card information on a website that is not a secure site.

5. Sign your credit cards as soon as you receive them.

6. Shred all credit card applications you receive.

7. Don't write your PIN number on your credit card -- or have it anywhere near your credit card (in the event that your wallet gets stolen).

8. Never leave your credit cards or receipts lying around.

9. Shield your credit card number so that others around you can't copy it or capture it on a cell phone or other camera.

10. Keep a list in a secure place with all of your account numbers and expiration dates, as well as the phone number and address of each bank that has issued you a credit card. Keep this list updated each time you get a new credit card.

11. Only carry around credit cards that you absolutely need. Don't carry around extra credit cards that you rarely use.

12. Open credit card bills promptly and make sure there are no bogus charges. Treat your credit card bill like your bank account -- reconcile it monthly. Save your receipts so you can compare them with your monthly bills.

13. If you find any charges that you don't have a receipt for , or that you don't recognize , report these charges promptly (and in writing) to the credit card issuer.

14. Always void and destroy incorrect receipts.

15. Shred anything with your credit card number written on it.

16. Never sign a blank credit card receipt. Carefully draw a line through blank portions of the receipt where additional charges could be fraudulently added.

17. Carbon paper is rarely used these days, but if there is a carbon that is used in a credit card transaction, destroy it immediately.

18. Never write your credit card account number in a public place (such as on a postcard or so that it shows through the envelope payment window).

19. Ideally, it's a good idea to carry your credit cards separately from your wallet -- perhaps in a zippered compartment or a small pouch.

20. Never lend a credit card to anyone else.

21. If you move, notify your credit card issuers in advance of your change of address.



If your credit cards are lost or stolen, contact the issuer(s) immediately.

Most credit card companies have toll-free numbers and 24-hour service to deal with these emergencies -- they are eager to avoid credit card fraud.

It is the usual law that, once you have reported the loss or theft of your credit card, you have no more responsibility for unauthorized charges.  

If you follow all these tips, it will go a long way in protecting you from credit card fraud.


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: