Many groups use jargon to define an area of expertise
Accountants are no different than many other groups when it comes to using specialist jargon. The use of jargon is probably not going to change as the systems that use the jargon like banks, share markets and IRD are comfortable with the jargon.
What this means is that you need to spend some quality time with your Accountant & Business Advisor or on YouTube to understand the rules of Accounting and Business Reporting.
Here are a couple of questions you might like to consider:
Debit and Credit - Why are Debits and Credits the basis for all Accounting transactions?
On your GST return – what is the difference between “Invoice Basis and Payments Basis”
Reporting – What is the difference between a Balance Sheet and a Profit & Loss.
Understanding accounting jargon is a step towards becoming a more informed business owner. When you consider how important your business income is to you financially and the critical role that your accounting subscription plays in your business then it is time to act.
By acting I mean it is time that you starting learning about accounting, reporting and lending criteria before you NEED to. From my experience, the best time to review your business and look at your options (including Borrowing) is when you are at your strongest.
It is not by chance that bankers refer you back to your accountant when you make an application for external funding. Bankers want to know that you have accurate financial statements, that you understand you cash flow requirements and have a in depth understanding of your businesses current profitability and future profitability.
True jargon and the challenges.
When was the last time you sat down with your accountant and talked about my first two years of operation as a business, when do I have to pay tax and how much? What is Provisional Tax and Terminal Tax, why do people talk about the tax burden you have to pay in Year 3 of your new business?
If you do not understand about your tax liability, then your first thing in the new Year should be to talk to your accountant, build an understanding about what your Tax liability is and how it changes.
A couple of Big Tax Dates that are coming up.
January 15th 2018 - GST for October 2017 & November 2017 is Due
January 15th 2018 – 2nd Provisional Tax payment for the year ending 31st March 2018 is due.
March 31st 2018 – End of the Financial Year
April 7th 2018 – Terminal Tax for the Year ending 31st March 2017 is due.
Our Next Blog will be on Borrowing & Your Bank
Stewart is the Founding Partner at Good for Business, Accountants & Business Advisors.
As a Chartered Accountant and MBA graduate Stewart is able to give business owners clear insight into their business built on his experience as a Chief Financial Officer and Financial Controller in some of New Zealand’s iconic companies