IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.

On April 15 the government announced new loss carry-back rules designed to ease the tax burdens on businesses who end up with losses as a result of the COVID-19 crisis. Normally losses must be carried forward (with some limitations) to future years to be offset against future taxable earnings. This is of little help to a business right now, and there is no guarantee of future earnings, especially if a business ends up closing down. In some cases tax payments from last year are still due, despite the business losing money in the next. Loss carry-backs are common in many other jurisdictions and allow you to effectively apply the loss to a prior year’s taxable income and get a refund of taxes paid for that year.

IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.

The New Zealand government has announced some tweaks to the tax system to assist businesses. It’s not a benefit or cash bonus, but could reduce your tax bill for the 2021 tax year.
Here’s the outline from the video:

• For the 2021 financial year you can write off asset purchases of up to $5000 (usually $500)
• From April 2021 will reduce to $1000 permanently
• Doesn’t cover March 2020
• Not really a cash bonus

The New Zealand government has announced some tweaks to the tax system to assist businesses. It’s not a benefit or cash bonus, but could reduce your tax bill for the 2021 tax year.

Here’s the outline from the video:

The Canadian Federal government has announced a benefit program for those who are out of employment due to the COVID-19 lockdown.
Updates since the video was recorded:

• The Prime Minister announced 15 April that workers earning less that $1,000 a month can still apply for the CERB.  This will be great news for self-employed people as it takes away this “not working” and “no income” issue.  This has yet to be documented, so stay tuned for updates.
• The CERB program has now ended.  The EI program has been enhanced to offer ongoing assistance.  Workers not eligible for EI (such as self-employed persons) have a new CRB benefit (see here for a complete list of post-CERB options).

• Here’s the outline from the video:

  * = updates to the outline since the video was recorded

• Eligibility Criteria
  • Resident Individuals 15+ years old
  • At least $5000 in employment income in 2019 in 12 months prior to application
    • Can include dividends from Small Business Corps
  • Stopped work and not earning due to COVID-19 (not quit) (April 15: up to $1,000 is now permitted)
    • First application must satisfy for 14 consecutive days
    • Subsequent applications entire 4-week period

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.

Small Business Cashflow Loan Scheme

On 1 May the government announced a new Small Business Loan scheme because “it has become clear that the support that is available to our small and medium businesses from banks is not meeting their needs nor our expectations as a Government.” The details are:

• Eligibility
  • the same as for the Wage Subsidy Scheme (30% decline in revenue year-over-year for any ONE month between Jan to June 2020 or compared to Jan/Feb)
  • Employs 50 or fewer full time equivalent employees
  • Businesses will also have to declare that they are a viable business
• Application
  • Directly through Inland Revenue
  • Opening on 12 May – closing 24 July
• Benefit

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

The Canadian Federal government has announced a 75% wage subsidy designed to help businesses retain (and even rehire) staff during the lockdown.

The onset of the COVID-19 crisis has put many businesses into lockdown and severely restricted revenue. Here are some thoughts on what you should be doing NOW to ensure that your business not only survives this crisis, but can thrive through it.

If your company relies on suppliers in various geographic locations, it’s likely that at some point your business will face a supply chain disruption. Whether that disturbance is caused by a virus, regulatory lockdown, international tensions, changes in local laws or a natural disaster, there will probably be scenarios in which your suppliers or transporters face obstacles that affect your company.

Here are some steps you can take to respond to such situations and even prepare ahead of time for them.

Most small business owners face a time in their career when they have to communicate in ways or about topics they aren’t comfortable with. COVID-19 has put small business owners in the position of having many conversations that are uncomfortable and stressful.

Whether you’re communicating with employees about business issues during the pandemic, hoping to negotiate a rent reduction or changes to credit terms, or asking customers for help in keeping your store open, here are some strategies that will help you be more effective in your communications.

According to Wikipedia, bookkeeping is “the recording of financial transactions, and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation. “Simply put, bookkeeping is an organized recording of financial transactions made in an organization. Or you can say that bookkeeping is all about recording and tracking the financial data across the business. Apart from businesses, bookkeeping is important for non-profit organizations as well as individuals. Bookkeeping provides the information from which accounts are managed. Therefore, maintaining solid and systematic bookkeeping ensures that the records of your financial transactions are accurate, up-to-date and comprehensive. In this digital era, digital or online accounting software makes bookkeeping easy and quick. A bookkeeper is supposed to record all data that are related, including but not limited to loan payments, invoices, monitoring asset depreciation, generating financial reports, payments.

Contrary to popular belief, bookkeeping and accounting are not the same. Accounting is the overall practice of managing finances while bookkeeping deals with the tasks and practices involved in the recording of financial performance. Detailed and thorough bookkeeping is important for organizations of all sizes. Bookkeeping can become more complicated with the introduction of loans, assets, investments and taxes. Recording the financial activities of a business is the key purpose of bookkeeping, letting you keep up-to-date data of current incoming and outgoing amounts.

The COVID-19 pandemic has proven challenging for many small business owners. It’s difficult to run your business remotely, especially if you’re not set up to do so. If you run a business that requires customers or clients to come to you, you might be very concerned about how you can continue to operate without opening your premises.

If you have access to technology, are adaptable, and are willing to look into financial assistance, you can make it through this pandemic. Here are some ways to keep your business operational through COVID-19.

Things are moving fast. This page has already been superseded. Please consult our COVID-19 summary page for more direction.

What you need to know about COVID-19 for your businessCOVID-19 is hitting business owners really hard. In this video Fuel Accountant’s founder, Peter McCarroll, discusses what you need to be thinking about and doing right now and what government assistance is available to you and your staff in New Zealand. Based on data available to 19 March 2020.

IMPORTANT: This post is specific to Canada. If you are not a Canada business/taxpayer then it is probably not applicable to you.

Things are moving fast. This page has already been superseded. Please consult our COVID-19 summary page for more direction.

What you need to know about COVID-19 for your businessCOVID-19 is hitting business owners really hard. In this video Fuel Accountant’s founder, Peter McCarroll, discusses what you need to be thinking about and doing right now and what government assistance is available to you and your staff in Canada. Video is based on data available on 18 March 2020.

Gone are the days when accountants used to spend a month at the end of the year going through the piles of ledgers. Today even the smallest organization owns some form of accounting software to simplify and organize their bookkeeping. However, if you still rely on the traditional bookkeeping practices, you know better how challenging it is to keep up with the high volume accounting and finance records. It is quite overwhelming for you to manually process every monetary transaction at the end of each month from the financial data resting in various accounting systems. Worse yet, inaccurate accounting data can cause a rippling impact in your business operation, from inventory to sales. It simply means that you are wasting your time and even putting your enterprise in jeopardy.

Accounting software is a remedy to all these woes associated with finance management. Accounting software handles accounting and bookkeeping, including storing your enterprise’s financial data and business transactions. It’s an efficient solution that eliminates manual data entry, such as keying in data on the quote, processing the work order, and then performing the invoice. This way, it helps you with paying bills on time, invoicing customers, and managing your books. It also keeps you in compliance and avoids tax penalties. And the good thing is that you don’t need to be an accountant or a math freak to operate today’s accounting system. Thanks to their user-friendly interactive.

This crucial step is so often overlooked. But without knowing your starting point, you don’t know what your path to success looks like. It sounds obvious, but many business owners plan for the future without fully understanding where they are now.

Answer the following questions honestly to help define where you are now (warts and all):

1. How aligned are the owners / leaders of your business?
If asked independently, would the leaders have the same vision for the business? Conflict must be addressed and thinking aligned before we can plan the future.

It’s amazing what we, as humans, don’t even know that we don’t know. New learning opportunities are everywhere, and in this digital world, there’s simply no excuse to avoid new learning.

Consider how many new things a five-year-old learns each day. Children enthusiastically embrace the world of possibility and the desire to learn. Why is it that, the older we get, the more likely we are to close our minds to new learning?

We’re all busy, and sometimes we feel like we just don’t have the time to sit down and read a book. We need to make the time. Set yourself targets and share these with someone who will hold you accountable to achieving these.

What exactly does your better business look like? Be crystal clear on what you want from your business; it’s there to serve you, not the other way around.

The average person spends 40,000 hours at work over their lifetime and life is simply too short to be stuck doing things we don’t enjoy. Make the most of your time and do what you love doing.

We have lots of clients who do their own bookkeeping in Xero. Here are our Best Practices for managing your own bookkeeping:

• Keep your personal transactions out of the business bank account.  If you need to spend on something personal transfer funds to your personal account and pay from there!  The transfer to yourself (and any personal spending you do include) is Drawings/Shareholder Loan.
• Add your expenses as Bills or Spend money as you incur them.  This will avoid missing things.  Use Xero’s Email to Files or Email to Bills feature to get documents into the queue, or for more powerful features talk to us about Receipt Bank.

You’re in business, congratulations, that takes courage and commitment.

It’s not easy, and at times you might question why you’re even doing it, particularly after the impact Covid-19 and the associated lockdowns had on business.

But you’re here because you had a vision. You decided being in business was a better way to achieve that vision than working for someone else. And, you’re right; you just have to work on it.