Farming is an essential part of New Zealand’s economy and culture. However, managing finances and keeping proper records on a farm can be challenging. This is where farm accounting services become invaluable. They help farmers focus on running their operations smoothly while ensuring tax and legal compliance. This article discusses the various farm accounting services in New Zealand and how they support the agricultural industry.
What are Farm Accounting Services?
Farm accounting services refer to the financial recordkeeping and reporting work done by professional accounting experts specifically for farm businesses. These services help farmers manage their farm finances efficiently to focus on crop cultivation and livestock-rearing activities.
Accountants set up proper bookkeeping systems to track all income, expenses, and transactions relating to different farm enterprises. They regularly generate detailed profit and loss statements, balance sheets, and cash flow reports. Accounting service providers also manage tax filing and compliance work.
Factor To Consider Before Choosing Farm Accounting Services In New zealand
Farming in New Zealand is a complex business that requires meticulous record-keeping to manage finances effectively. Before choosing a farm accounting service provider in New Zealand, farmers must evaluate certain factors to select the right fit:
Cost and Pricing Models
Cost is an important consideration as farm income fluctuates. Accountants charge either on an hourly basis or a fixed monthly or annual fee. Hourly rates range from $50-80, depending on experience and specialization. Fixed fees are more suitable when the workload is predictable. Some accountants offer volume-based discounts for additional services like payroll and GST filing. It is wise to get quotes in writing from 2-3 providers to compare offerings and prices.
Experience In Farm Business
Choosing an accountant in New Zealand who is familiar with farm business norms saves time on training needs. Experienced farm accountants understand complex compliance requirements for different enterprises like dairy, livestock, horticulture, etc. They are aware of industry-specific deductions, depreciation norms, and tax incentives.
For example, an accountant in livestock farming can accurately calculate deductions claimed against animal feed and medical supplies. Farmers must check years of experience handling similar enterprises and portfolios of existing farmer clients.
Location and Accessibility
The accountant’s office location and meeting availability are crucial when scheduling is tight on the farm. Choose a provider within an hour’s travel to facilitate face-to-face interactions when needed. Conduct video or phone meetings otherwise.
After-hours and weekend availability suit farmers with long workdays. Consider response times for document submissions and queries. Poor accessibility delays vital financial decisions linked to seasonal operations and investments. Opt for accountants with flexible timings and prompt response commitments.
Software and Systems Used
Farm accounting software streamlines bookkeeping and generates reports. Compatible systems between farmers and accountants facilitate data sharing through cloud storage. Popular farm-focussed options include Xero, Bench, Clover, and FarmIQ. Accountants who are well-versed in different platforms minimize transition difficulties.
They should be open to using the farmer’s preferred software. Compliant digital invoicing, payment tracking, and inventory management features benefit both parties. Standardized formats for management reports showcase performance and scope for improvements.
Farm accounting services include
- GST compliance
- Preparation of financial statements
- Farm tax planning
- Farm sales and purchases
- Ownership structures
- Farm budgeting and cashflows
- Business monitoring
- Farm development (study of the past and present, predicting)
- Planning for succession and estates
How the Outsourcing Accounting Services Benefits Farm Sector In New Zealand
The farming sector is one of the busiest sectors. Outsourcing Farm accounting operations provides many benefits. A few of the crucial advantages are listed below:
Record Keeping
Farm accounting services maintain accurate financial records for clients. They set up systems to track income and expenses related to livestock sales, crop harvests, feed costs, wages, and equipment repairs. Records are kept electronically or manually depending on the farm’s needs. Accountants also file various documents like invoices and receipts systematically. Well-organized financial records save time during tax season and help farmers make informed business decisions.
Tax Compliance
During tax time, accountants prepare returns and ensure all duties are fulfilled. They are up to date on changing tax laws that impact agriculture. To avoid penalties, accountants submit PAYE, GST, and other required filings to Inland Revenue by due dates. Some accountants offer year-round tax planning services, too. This helps lower farmers’ tax burden through lawful deductions, rebates, and benefits. It gives peace of mind knowing tax responsibilities are properly addressed.
Financial Reporting
Farm accounting services go beyond bookkeeping. They analyze financial statements and produce tailored reports for farmers. Farm accountants Report benchmark key metrics like profitability, cash flows, and costs against industry standards.
This highlights areas needing attention. Customized monthly or quarterly reports keep owners updated on business performance. Accountants also provide budgeting and forecasting support. Accurate projections are invaluable for securing financing and making long-term plans.
Investment Analysis
When expansion opportunities arise, accountants help analyze the viability of investments. They assess the costs of new infrastructure, equipment, or technology against projected financial rewards. Other aspects like available financing options and tax deductions are also studied.
Detailed investment reports present a well-rounded picture for farmers to make informed choices. Ongoing monitoring tracks investment performance to maximize returns. This guided approach mitigates risks that could undermine future farm operations.
Succession Planning
Farm accountants are key in succession planning, especially when ownership is transferred to the next generations. They work with owners and legal advisors to structure businesses for seamless intergenerational transfers. This could involve restructuring companies or trusts to minimize tax burdens on heirs. Accountants also help young farmers secure start-up funding from banks and government schemes. Comprehensive succession blueprints ensure farms remain commercially strong and within long-term family control.
Risk Management
Mitigating unpredictable risks is crucial for farming viability. Accountants recommend risk management strategies, from basic insurance coverage to sophisticated hedging instruments. They keep clients updated about subsidy programs for disasters like droughts or floods.
Accountants may arrange lines of credit as a working capital backstop. During downturns, they seek taxation reliefs or apply for recovery packages on farms’ behalf. A prudent risk stance supported by experts protects cash flows and cushions farms from adverse conditions.
Payroll Management
Managing farm payroll needs specialized support due to seasonal hiring trends and complex employment laws. Accountants efficiently handle payroll processing, PAYE income tax deductions, and annual leave or sick pay payments. They file earnings reports with Inland Revenue on time.
When minimum wage rates change, accountants update payroll systems effortlessly. Hiring accounts experts provides compliance and peace of mind and frees farmers to focus on production without distraction. Timely, accurate payroll strengthens employee satisfaction, too.
Budgeting and Forecasting
Accountants develop customized annual budgets and cash flow forecasts for farm businesses. They factor in commodity prices, input costs, wages, expected outputs, and capital expenditures. Revisions occur throughout the production cycle.
Forecasts assist with procurement planning, loan applications, and evaluating new initiatives. Regular reporting compares actuals with projections to pinpoint variances. Remedial steps can restore budgets on track to meet yearly targets and maintain financial discipline.
Conclusion
Farm accounting services in New Zealand have become essential for Kiwi farmers facing complex regulatory and market conditions. Relying on qualified accountants to handle finances frees up time for core farm duties. It ensures that tax and legal obligations are met, too. With specialized agricultural knowledge and advisory resources, these professionals are valued partners for farms of all scales. Their services strengthen business management and help the industry remain profitable in the future.
Frequently Asked Questions
Q.1: What is Farm Accounting?
Ans 1: Farm accounting is maintaining track of, organizing, and evaluating financial transactions related to farming. It involves keeping account of all farm-related revenue and out-of-pocket expenses, such as crop yields, animal sales, equipment purchases, and other related costs.
Q.2: What is the need for Farm Accounting?
Ans 2: Accounting for farm businesses gives you a precise and transparent view of your operation’s financial situation. Farmers may learn much about their financial flow, production costs, and profitability by planning and monitoring their income and expenses. Making decisions based on solid financial facts is made possible as a result.
Q.3: Are accounting jobs in demand in New Zealand?
Ans 3: The government of New Zealand is actively promoting the employment of qualified foreign accountants. The following factors will likely contribute to the continued growth in demand for accountants: a growing need for analysts who can comprehend and interpret financial data to support decision-making by companies.
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