Does using Xero mean Accountants can get fat and lazy because they’ve got less to do?  Heck no.  Long before the creation of Xero, smart Accountants used other clever systems to feed your transactions directly into their accounting software so little has changed there.

Another wildly incorrect rumour is believing everything’s in Xero and all that Accountants do is print some snazzy reports!  

Before Accountants go anywhere near that print button, they get a fair workout because here’s what generally goes into ‘The Making of Financial Statements‘:

• – Checking all sorts of legal stuff including whether you need:
•      > an audit
•      > consolidated group accounts
•      > to file your accounts with the Companies Office
•      > to prepare accounts within 5 or 9 months of year-end
•      > to comply with International Reporting Standards
• – Keeping you safe by preparing financial statements in line with the current financial laws
• – Doing zillions of safety checks as members of the NZ Institute of Chartered Accountants
• – Maximising your tax deductions
• – Stopping you losing hard earned tax credits by identifying when dividends are crucial
• – Calculating your continuity and market value circumstance
• – Reconciling transactions with associates & potentially preventing deemed dividend or RWT problems
• – Finding GST you’ve forgotten to claim & errors
• – Calculating, minimising and recording Income Taxation
• – Reducing your overall tax bill with Subvention Payments & Loss Offsets
• – Calculating unrealised foreign currency gains and base price adjustments for financial arrangements
• – Considering the dividend imputation streaming rules on distributions
• – Preparing an Imputation Credit account and reconciling it to retained earnings
• – Proving every single thing on your Balance Sheet stacks up & fixing any that don’t
• – Maximising your depreciation claim and calculating gains/losses from selling fixed assets
• – Reviewing your vehicle claim in relation to Fringe Benefit Tax laws
• – Testing whether your income needs to be returned under cash or accrual basis
• – Adjusting your Accident Compensation earner premium to non-deductible
• – Checking your solvency and drawing up certificates
• – Reviewing interest deductibility (particularly in Look Through Companies)
• – Recording loan interest claims and disclosing current/term debt portions
• – Reconciling Resident Withholding Tax to the Inland Revenue’s records
• – Adjusting losses for changes in shareholding changes, tax remissions etc
• – Payroll reconciliation and accounting for bonuses after year-end
• – Annual entertainment adjustment (& GST isn’t a straight forward 50%)
• – Reviewing leases for operating and finance and spreading interest charges
• – Checking your legal fees for tax deductibility
• – Shareholder market salary considerations, entries & certificates
• – Calculating interest on overdrawn shareholder loans
• – Reviewing your website costs for non-deductible and capital expenses
• – Capitalising assets costing more than $500
• – Ensuring you’ve retained your LAQC or LTC status, imputation credits or losses
• – Electronic storage of your financials
• – Meeting with you (or preparing a letter) to go over the accounts
• – Disclosing a host of things including restrictions on title, related party transactions, stock on hand, home office and business expenses not paid by the company

So, if you thought all Accountants did was “add up” then it’ll come as a shock to see we’re more Financial Lawyer than Mathematician!

 

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