On 11th September 2013 the Inland Revenue Department announced that Xero is now legally allowed to store taxpayers’ records outside New Zealand on behalf of its customers (click here for article). Xero was the first cloud-based accounting software company to become street legal and we understand that MYOB has also recently been approved.
The growth of Xero has been phenomenal with revenues hitting $39 million to 31 March 2013, up from $19.4 million on the prior year. Clearly the ‘software as a service’ model is popular with small businesses, Xero’s primary target market. Hopefully as their customer numbers continue to build they will eventually turn their $14 million loss into a profit.
Having live financial accounting information at your fingertips in this age of instant information is critically important. Why should it be necessary to wait for financial information when every other piece of information you have access to is live? Knowledge of your profits and cash flow can – and often does – make the difference between business success and failure.
One example that comes to mind is a client whose manufacturing business failed within 10 months of their in-house accountant leaving the business. In spite of our advice to reinvest in accurate monthly accounting information, the owners decided to save on the cost. The owners attempted to run the accounting system themselves but unfortunately did not have the time or the skills to do it. The irregular misinformation the client was producing led to bad decisions which very quickly proved fatal to the business. The company was placed into liquidation when the cash to pay wages ran out.
Profitability and cash flow management are paramount to business success. If small business owners do not know how much profit they are making or where their cash is going they should seriously consider investing in regular accurate accounting information.
Xero is one solution to this and UHY’s Xero team can help small businesses get up and running with this. Xero does not suit every business and there is a wide range of other accounting solutions available. If you would like more information about Xero or other accounting solutions please email me at firstname.lastname@example.org, or phone me on 09 839 0297.
We hope you enjoy the latest edition of our newsletter, as always we welcome any feedback you may have. Please contact us if you wish to discuss the topics covered in this issue or any other business or tax related matter.
This issue contains articles on:
- Rules That First Home Buyers Need to Know
- Agriculture News: Changes To The Dairy Cattle National Standard Cost System
- Westpac Auckland West Business Awards 2013 – The Winners
- Taxing Matters: Legal Fees / Vehicle Expenses / Paid Parental Leave
- Video Support from IRD for New Businesses
- Client News: Indigo New Zealand Celebrates US Partnership
- Client News: Babich’s Success At New Zealand International Wine Show Awards
- NZ Post’s History In The Making
- UHY Staff News October / November 2013
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M: 021 988 433