3.  “Identify behaviours consistent with good customer service and business practice.” ◦ Topics: Tax, cash book and bank reconciliation.  This means… you process customer transactions ◦ Common methods of purchasing goods and services ◦ Writing receipts and GST calculation  You will maintain accurate business records ◦ Cash book records ◦ Bank reconciliation ◦ Tax records

4.  An accounting system (with it’s legible, accurate & provable documents) is a LEGAL REQUIREMENT for all businesses.  An accounting system is based on records of all the financial transactions that occur ◦ Such as?

5. The Accounting System (manual or computerised) - Cashbook - Tax Invoices - Credit notes - Bank statements - Customer accounts - Supplier accounts

6. These records must be:  Accurate  Up to date  Must be kept for minimum 7 years  Legal requirements: ◦ English ◦ Legible ◦ Accurate ◦ Provable

7.  What are some examples of financial transactions in an animal facility?  How can customers pay for things? ◦ Cash ◦ EFTPOS ◦ Credit card ◦ Cheques  Each sale is recorded by the cash register ◦ This is compared to the amount of money that you actually have at the end of your shift ◦ Ideally someone who was not handling the cash will total the shift

8.  Don’t let anyone else use your register ◦ You are responsible for any cash that goes missing  Don’t leave the register open!  Make sure there is somewhere safe to store the cash at the end of your shift ◦ The business will have a safe (or a cash box) for this

9. Q. What language must financial records be kept in (in NZ)? A. English Q. What is the accounting system used for? A. Tax returns, bank, making decisions about the business Q. How long must financial records be kept for? A. 7 yrs Q. Why shouldn’t you let other people use your cash register? A. In case they ‘misplace’ some cash

10.  Any tax invoice must have the following information:  The words ‘TAX INVOICE’ must be clearly visible ◦ This makes it a legal document  The tax invoice given to the customer is a copy of the original invoice recorded by the cash register ◦ This copy must have ‘COPY ONLY’ written on it

11.  The words ‘Tax Invoice’ (written clearly)  GST Number, name of supplier and reference number  Date  Description of goods or services  TOTAL Amount paid, with the words “GST INCLUDED”

12. GST # 39-664-592 347 Bedrock Drive Canyon Creek DATE: 28 February, 2003 FOR: INVOICE NO: 325 A copy for the customer, and a copy for the business records GST Inclusive TOTAL WHO Cleaning Rovers teeth $168.75 CASH SALE UNDER $1000

13.  The words ‘Tax Invoice’ (written clearly)  GST Number, name of supplier and reference number  Date  Description of goods or services  Plus  Name and address of customer  Quantity or volume of the goods or services  Amount: ◦ without GST (GST Exclusive) ◦ the GST amount shown separately, ◦ the TOTAL AMOUNT (GST Inclusive)

14. GST # 39-664-592 347 Bedrock Drive Canyon Creek TO: Mr. P. Dotty 37 Middletown Way Pittsville DATE: 31 March, 2012 FOR: INVOICE NO: 326 A copy for the customer, and a copy for the business records GST GST Excl.TOTAL TOTAL TO PAY Amount $ $ $ $ 40 days Quarantine @ $30.00 a day 1 dose Praziquantel and 2 ectoderm treatments 120000 $ 130 00 1330 00 19950 1529 50 OVER $1000 NEW

15.  Good and Services Tax ◦ 15% in NZ  If you have the GST INCLUSIVE price ◦ i.e. the cost of the item + GST: ◦ To calculate the amount of GST being paid, just:  Multiply the ‘GST Inclusive’ price by 3  Then divide by 23 = the amount of GST being paid

16.  So if an item cost $90 including GST, how much GST am I paying? $90 x 3 = 270 270 ÷ 23 = $11.74  What is the ‘GST EXCLUSIVE’ amount? ◦ GST Inclusive amount – GST ◦ $90 - $11.74 ◦ = $78.26 Actual cost of item $78.26 GST paid on this item $11.74 Total amount to be paid $90.00

17.  What if you have the ‘GST EXCLUSIVE’ amount and want to work out how much GST to charge? ◦ Multiply the ‘GST Exclusive’ amount by 0.15  $78.26 x 0.15 = $11.74 Actual cost of item $78.26 GST paid on this item $11.74 Total amount to be paid $90.00

18. Income: from the sale of products or services. (Will include GST except in exceptional circumstances) Expenditure: funds spent on running the business day to day. (eg stock, repairs, salaries, rent, power etc…) Other: funds spent on items the IRD does not recognize as ‘expenditure’ (eg capital items such as vehicles, office equipment, buildings etc. -not day to day)

19. Q. True or false? The business address only needs to be recorded on tax invoices that are over $1000 A. False – it must be recorded on all tax invoices Q. How do I calculate how much GST is being paid on something if I have the GST Inclusive price? A. Price x 3, then ÷ 23 Q. What are the 3 ways that money moves through a business? A. Income, expenditure and ‘other’

20.  The money that moves through a business is recorded in a cash book ◦ Can be electronic or manual  Can be ◦ Purchased ready-made ◦ Created using a “spreadsheet”  Properly kept will fill the requirements ◦ “to keep legible accurate and provable financial records  The ‘provable’ part comes when we look at reconciling the cash book with the bank statements

21. http://www.ird.govt.nz/yoursituation- bus/running/recordkeeping/recordkeeping- cashbookillustration.html

22. 20/02/06 Deposit 1406.00 Income 1519.14 CASHBOOK June: Income & Expenditure DATERef#ParticularsOutInBalanceGST outGST InStockRent 1/06/2012 Opening Balance 1,325.80 7/06/2012342.00 Eukanuba450.00 875.8050.00 400.00 15/06/2012343.00 Property management562.00 62.50 500.00 28/06/2012Dep43Banking 1,406.001,719.55 156.25 30/6/2012 Closing Balance 1, 719.55 Total

23.  Bank reconciliation compares your cashbook with your bank statement  Why? ◦ It will identify errors in the cashbook &/or by the bank ◦ Proves accuracy of the legible transaction documents  How often? ◦ Statement from bank sent out monthly ◦ So done each month

24.  Record in cash book ◦ Bank fees ◦ Any direct debits & Automatic payments  Ensure entries are EXACTLY the same in both cashbook and bank statements ◦ Tick off against statement – some may not get ticked off  Make two lists of unticked items 1.List deposits not cleared by the bank 2.List payments not made (usually unpresented cheques)

25. Everything in and out of the cashbook Everything in and out of the Bank Statement “Reconciling the Bank Statement”  Making the Bank Statement the same as the Cashbook cashbookbank

26. The Cash Book Date DESC InOutBalance 1 AprO/ Bal 3,497.05 2 Apr 2014 2 Apr 3 Apr 7 Apr Telecom 30 Apr Genesis Deposit Advantage Prop.Inc Paper Plus 49.80 37.40 1150.00 29.60 1769.25 149.80 3,447.25 3,409.85 2,259.85 2,230.25 3,999.50 BANK STATEMENT 1 Apr 4 Apr 5 Apr 7 Apr 9 Apr O/Bal 349 350 AP 351 352 349 350 AP 351 DateInOutBAL 1769.25 1150.00 37.40 29.60 49.80 3497.05 3447.25 3999.50 4029.10 2259.85 3409.85 3999.50 Closing Balance: 3999.50 Less Unpres. Chqs #352 149.80 Plus Uncleared Dep. 0 Cashbook Balance: 3849.70 BANK RECONCILIATION The only difference between your Cash book and your Bank Statement should be the deposits and the payments the bank has not received (or processed) yet 3,849.70

27. Petty Cash  Is an “expense” in the chart of accounts  Has a “float”, drawn from a cheque cashed at the bank  Requires a reciept  Petty Cash system must be in place

28.  Must start with a “float” ◦ i.e. $50 cheque to be cashed  Three elements ◦ Lockable cash box ◦ Petty cash book ◦ Filing for receipts

29.  All businesses must keep accurate, legible and provable records of their financial transactions  The information that is required on a tax invoice will vary with the amount of money spent  Cashbooks must be reconciled with the bank statement every month  Petty cash systems are set up for small purchases