7 minute read
YOUR MIDWIFERY BUSINESS
managing your self-employed business – time for a spring clean?
MICHAEL STIRLING FINANCE MANAGER, MMPO
Now that spring is upon us, it’s an ideal time to take stock and reevaluate areas of your business that have potentially been neglected, and could be costing you unnecessary money, time or energy. We suggest examining your business and personal situations by attending to the following obligations.
INSURANCE NEEDS When was the last time you reviewed, in earnest, both your business (including ACC) and personal insurance cover policies?
As part of managing your day-to-day risk, you should ideally engage with your broker on an annual basis, ensuring both you and your whānau are covered appropriately given your age, debt profile and stage of work. Further, your broker will also be able to confirm whether you may in fact be overinsured, and consequently paying too much.
Ideally, you should have a broad range of insurance that meets your needs, with a relevant mix of life cover, income and mortgage protection, personal trauma, and ACC Cover Plus Extra. Your broker will be able to assist in recommending a balanced package, considering all known factors, including affordability. Schedule a meeting today - the broker’s time and service is free of charge, so you have nothing to lose and plenty to gain.
LEGAL & TRUST CONSIDERATIONS Update your last will and testament, including memorandum of wishes. If you don’t have a will, contact your solicitor or Public Trust Office, and arrange to have one prepared. In turn, this will allow your whānau to relax somewhat, providing peace of mind. If you utilise a family trust, familiarise yourself with the new Trusts Act 2019, ensuring compliance and an assessment as to whether it remains a suitable structure going forward. HOME UTILITY BILLS When did you last deep-dive into the present cost of your phone, broadband and energy plans? Have you considered signing up for a bundled package instead, as they are often cheaper? Utility companies are continually marketing deals to attract new customers. Even if you don’t want to change vendors, you can still obtain a superior deal with your existing provider by leveraging those competitor offers. You may well be pleasantly surprised at the potential savings.
EXPIRY DATES Take a moment to check on expiry dates that can often creep up, including:
• CV check
• Vehicle registration and WOF
• If you own a diesel vehicle, ensure your Road
User Charges (RUC) are up to date.
• Driver’s licence and passport
• Vehicle logbook*
* A vehicle logbook is used to determine the correct proportion of business versus personal usage, for the purposes of claiming vehicle related expenses. Inland Revenue rules state a logbook must be maintained for 90 consecutive days; the calculation based on those 90 days may then be used for up to three years. After three years you need to keep a logbook for another 90 consecutive days.
HIRE PURCHASES/LEASES/LOANS In relation to credit contracts, operating leases and business loans, it’s very easy to lose track of where you are within the repayment plan cycle, which can often run over a series of months or years. Thus, review the original documentation, or contact the loan provider to confirm your current balance, including when your instalments are actually due to expire. Avoid late payment penalties and additional interest costs by paying on time, every time. KIWISAVER & OTHER INVESTMENTS Similar to insurance, review your KiwiSaver scheme, confirming you’re in the correct portfolio, considering your respective age and stage of life profile, as well as your overall risk appetite.
Place a note in your diary to confirm by 30 June each year that you have managed to contribute the minimum amount of $1,042.86 over the preceding 12-month period, in order to receive the maximum Government subsidy of $521.43 per annum. Further, if you want to keep it simple and not have to think about it, we recommend you set up an automatic payment of $90 per month, in order to secure this ‘free’ money each and every year.
The same principle applies to any other investments you may hold, whether it be term deposits or shares. It isn’t a ‘set and forget’ process; you need to review periodically for appropriateness, based on current level of interest rates, inflation, etc.
If you hold a residential mortgage for the home you personally reside in, remember the key to future prosperity is endeavouring to pay it off as quickly as possible.
HOME OFFICE CLAIM For tax purposes, you are entitled to claim a percentage of certain household expenses; namely broadband, energy bills, landline, rates, rent and/or mortgage interest, repairs/ maintenance, and consumables, such as lightbulbs and toilet rolls.The home office percentage allowable is based on the proportion of the total floor area of the house and garage that is utilised for running your business, which typically ranges from 10% to 40%, depending on the size of space used.
It’s a good idea to revisit this number each year, in case you have relocated to a new dwelling, moved office rooms within your
house, or recently renovated. Your accountant will be able to assist you in this regard, ensuring your tax claim is maximised.
YOUR BUSINESS FINANCES AND TAX POSITION If you are using online, cloud-based accounting software such as Xero, you can readily access reports, including profit and loss, statements of cashflow and balance sheets. These reports will assist you in tracking your financial performance for year-todate, versus both budget and the previous year’s actuals. Your decision-making will be enhanced once you understand the underlying variances, allowing potential cost savings to be made where appropriate.
Cash is king, so get into the habit of processing your Section 88 claims in a timely manner, in order to receive the pending funds more promptly - in turn boosting your cash coffers.
Understand your tax position, by logging into your myIR account and reviewing your balances for all tax types, including future payment dates; thus, no surprises when these commitments fall due.
BANK ACCOUNTS We strongly recommend keeping your personal and business transactions flowing through separate bank accounts. This will make coding within your accounting software much simpler, as well as giving you a better handle on where your hard-earned cash is being expended.
We continually advocate for midwives to operate a dedicated ‘tax’ savings account, in order to have ACC, GST, student loan and income tax obligations safely tucked away, until such time as they fall due. Again, no surprises, given you’ll possess clear funds in order to pay both ACC and Inland Revenue in full, and on time.
Review the bank fees you are currently being charged, and if warranted, chat to your bank to obtain a better deal, including rewards schemes associated with your credit card.
BE PREPARED AND STAY AHEAD OF THE GAME In summary, to maintain a stronghold on your business, undertake a spring clean and lean on your team to support you along the journey. Don’t be afraid to utilise the services of professional advisors to assist you with all key aspects of your profession, whether it be accounting, banking, insurance, legal, or personal-related advice. Further, it’s imperative you embrace digital technology, given such an investment will save you both valuable time and money going forward, enhancing your life/ work balance in the process.
Lastly, both the College and MMPO are right behind you every step of the way, so feel free to reach out as the need arises; we are more than happy to guide you in the right direction, as best we can. square
MMPO, the Midwifery and Maternity Providers Organisation provides self employed community midwives with a supportive practice management system.
www.mmpo.org.nz mmpo@mmpo.org.nz 03 377 2485
FREE Iron in Pregnancy booklet includes:
Evidence-based information Key iron facts Iron deficiency signs & symptoms Top dietary iron tips Iron-rich recipes
Order your copies at beeflambnz.co.nz/pregnancy OR contact heather@beeflambnz.co.nz
We’re looking for an experienced midwife to join our team
Are you an experienced midwife keen to join an outstanding team of committed rural midwives and health care professionals? We want to hear from you! We have a 12-month, fixed-term, full-time position available due to maternity leave. You will work alongside another midwife on a 24-hour roster — four days on, four days off providing continuity of care for
antenatal, labour and birth and rural/remote rural postnatal care.
We are looking for: + An experienced midwife seeking a move to a rural environment + Flexibility around working hours + Current Practicing Certificate + Start date is ASAP If you live outside the Tararua area, a midwife house is available on your rostered days. There may also be an opportunity to apply for a relocation grant from MMPO if you plan on moving to the region.
