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It is hard to believe another year is coming to an end.
Recently I saw an explanation of this phenomenon that made sense to me. When you are three and a half and your fourth birthday is six months away, it seems like forever. Actually it is one-seventh or 14.3% of your life so far. When you are fifty, six months is only 1% of your life so far, so it seems like a much shorter period. The other reason is that our brain encodes new experiences, but not familiar ones, into memory, and our retrospective judgment of time is based on how many new memories we create over a certain period. In other words, the more new memories we build on a weekend getaway, the longer that trip will seem in hindsight. When you are young a far larger proportion of your experiences are new, so you feel the time is not going so fast, because so much is happening. The only lesson we can learn from that is to seize the day and create new memories by continuing to do new things.
Christmas is less than a month away, so I would like to wish all of you a wonderful Christmas with your loved ones and a great 2020!
Over Christmas, I will be taking my usual annual break. So between the 21st of December and the 13th of January, I will be enjoying some much needed time off. For an urgent matter, you can reach me by mobile phone or email, just do not expect an instant answer as I may be out of mobile phone or internet coverage.
From the 1st of October 2018 Accountants & Bookkeepers also fall under the Anti-Money Laundering and Countering Financing of Terrorism regulations. It does come with obligations for us to check those we do business with/for to make sure we do not assist money laundering or financing of terrorism. With this comes our duty to do Customer Due Diligence: checking that the person/business we are taking on as a client are who they say they are and their business is a legitimate business.
Yes, we all know the news is not good when it comes to the milk price this year and it does not look all that rosy for next year either. Yes, you are allowed to be seriously annoyed at loosing hard earned money and yes, you are allowed to be worried about the effect it has on your business and your personal life.
Yet at a time like this nothing is more important than budgeting, preferably for the next season, so you know where you stand and can consider strategies to minimise your loss and run your farm as economical as you can.
It is not an uplifting experience to forecast a loss, but it is much better to know how big the deficit will be beforehand. This way you are prepared. You know what you are dealing with instead of fearing the worst. This means you can take action to have strategies in place to manage and minimise your losses together with your staff, owners/share milkers, bank managers and farm consultant.
You have time to think about different ways to do things. Can you re-negotiate prices and contract with suppliers? Can changing to a different supplier (feed, grazing, chemicals) help you reduce cost? Would it help to change the way you do things? Rear less calves? Winter more animals at home? Are there neighbours who would let you use their land for grazing some young stock? Are you taking advantage of all discounts available to you by charging things to your Farmlands/PGG Wrightsons/ATS account? Are you claiming your excise tax on the petrol you use on the farm? Could you fill a temporary hole in your labour force with woofers? Could you supply winter milk or milk a smaller number of cows, so you can graze more stock at home? Or would be attractive to rear some bulls and sell them at 3 months?
Though it may be hard to sit down and ponder the financial ramifications of the current season and possibly one not much better to follow, you always feel better if you know rather then guess and have time to consider your strategies.
If you want help with this I am happy you be your sounding board, asks questions about your plans and think about their outcomes. Feel free to give me a call any time, I am usually able to come out to you on fairly short notice.
Although the end of the tax year for your farm is probably the end of May or June. For your employees, the new tax year starts on the 1st of April. March is the time to re-evaluate the pay rates/salaries for your current employees as the minimum hourly rate changes from the first of April. From the 1st of April 2020, it is increasing to $18.90 per hour (depending on confirmation by the government) and the aim is $20/hour by April 2021.
Make sure your payroll software is updated before you run your first payroll in April! There usually are some other small tax rates changes starting on the first of April, such as changes to the ACC rates and tax thresholds. So if you paying your salaries by automatic payment, please review and change the automatic payments before the 1st of April.
A new year, a fresh start.
Although I don't make new years resolutions professionally or in my private life, the start of a new year is a good time to make or adjust plans. Having time off and enjoying some family time/festivities gives us new energy and perspective. So it is a great time to action some overdue things on the 'To Do' list and look at ways to improve the way you go about your daily tasks.
One of the things on the 'To Do' do list for me this month is starting the Fuel Excise Tax returns for several of my new clients. Yes, there is some work involved in setting it up and doing the first lot of returns, but there is a good motivation for doing it. Earning money for relatively little effort is always worth it if you are running a business!
So what is your fresh start? Which item on your 'To Do' or wish list are you going to tackle this year?