Service-Specific Terms

Accounting Terms 

A1.0 DEFINITIONS 

A1.1 Xero support – anything we can help you with over the phone or by email in 10 minutes or less. For more detailed queries, we may quote to provide a one-on-one training session, or a customised instructional video. 

A1.2 General accounting advice – anything we can cover off over the phone or by email in 10 minutes or less. 

A1.3 Dealing with the IRD – any day-to-day situations, eg: payments allocated to the wrong account, requesting instalment arrangement, asking for credit of interest or penalties. It does not cover any prolonged communication, eg: audits, dealings with the recovery team, requests from IRD for information. 

A2.0 ASSUMPTIONS WE'VE MADE 

A2.1 We've made some assumptions when preparing our pricing, which are listed below. 

A2.1.1 That your Xero file will be in good order, including: 

A2.1.1.1 Copies of receipts/invoices attached to all purchase transactions over $1,000 in value. 

A2.1.1.2 Expenses categorised properly according to their purpose, ie not all to "Purchases" or "General" 

A2.1.1.3 Ensuring all company bank accounts are in Xero and are fully and properly reconciled, including transfers between bank accounts in Xero 

A2.1.1.4 Using proper contact names for all transactions, not creating contacts for the purpose of the transaction – ie: the contact name, eg: ABC Limited, not the purpose of the transaction eg: stationery 

A2.1.1.5 Not using your company bank accounts for personal transactions, ie personal transactions will be limited to lump sum transfers from the company to your personal account, not individual expense payments 

A2.1.2 That your previous accountant has kept the Xero Fixed Asset module up to date, and has entered aligning journals to ensure your Xero file matches your Financial Statements. 

A2.1.3 That previous periods have been correctly and completely lodged by your previous accountant. 

A2.1.4 That you are up to date with your payments to IRD. 

A2.2 Where we’re providing business owner tax returns as part of this service, we’ve assumed: 

A2.2.1 Your sources of income are limited to: 

A2.2.1.1 Employee-type activities from which tax has been deducted and/or 

A2.2.1.2 Income from this business and/or 

A2.2.1.3 Interest income reported to IRD 

A2.3 If any of these are not the case, we may need to quote you an additional amount to complete the service. Our delivery timeframes may also be affected. 

A3.0 INCLUSIONS 

A3.1 Reconciliation of up to four (4) bank accounts and up to two (2) loans or hire purchase agreements, ensuring interest deductions are accurately claimed 

A3.2 Calculation of your claimable home office expense where applicable 

A3.3 Preparation and reconciliation of your asset register and depreciation schedule 

A3.4 Where we’re providing business owner tax returns as part of this service: 

A3.4.1 This service applies only to business owners known or specified at the time the proposal is accepted. 

A3.4.2 New or replacement owners may be included at our sole discretion. 

A4.0 EXCLUSIONS 

A4.1 Excluded items will be quoted separately if required. 

A4.2 Examples of excluded items include but are not limited to: 

A4.2.1 Additional niche tax requirements, e.g. R&D tax, dividend payments, FBT, etc. 

A4.2.2 Dealing with the IRD recovery team, or in relation to an audit or review, or for additional information requests 

A4.2.3 Winding up the company 

A4.2.4 Purchasing another business 

A4.2.5 Selling this business 

A4.2.6 Adding or removing partners/shareholders/directors/trustees 

A4.2.7 Company administration tasks, eg: lodging the annual return or acting as the registered office 

A4.2.8 Anything not specifically mentioned in the proposal and engagement letter 

A4.3 Where we’re providing business owner tax returns as part of this service, examples of excluded items include (but are not limited to): 

A4.3.1 Dealing with the IRD on your behalf (aside from lodging the tax return) 

A4.3.2 Dealing with matters related to other tax types aside from Income tax, eg: Student Loan, Working for Families Tax Credits, child support 

A4.3.3 Other income sources 

A4.3.4 Internationally sourced income 

A4.3.5 Tax returns for partners not involved with the business any longer, or not involved in our engagement 

A5.0 NO AUDIT/REVIEW ENGAGEMENT UNDERTAKEN 

A5.1 We are not auditors. As accountants, we compile the information you provide us into financial statements. This means we don't carry out verification or validation procedures as part of this service. 

A5.2 We will not take active steps to identify weaknesses in your internal accounting system, errors, illegal acts or other irregularities, for example, fraud or non-compliance with laws and regulations. 

A6.0 PRIMARY ASSIGNMENT 

A6.1 Using information supplied by you, we will use our professional skills to compile annual financial statements and an income tax return for the period stated. 

A6.2 Financial statements will be prepared in accordance with the ATAINZ Reporting Standard 1 : Compilation Engagement. These are special purpose financial statements and as such are intended for the purposes of meeting income tax requirements and internal use, and should not be relied upon for any other purpose. 

A6.3 Period accounts for management are not governed by legislation and will be prepared on the basis requested by management. 

A6.4 The general basis of accounting used to compile the accounts will be described in the notes to the financial statements together with any significant departures from that basis. Significant departures will also be referred to in our compilation report. 

A6.5 In Appendix 1 to these terms we provide a copy of our compilation report reflecting these points, which will be issued on completion of the engagement and will be attached to your financial statements. 

A7.0 OUR COMMITMENT TO YOU 

A7.1 Tax return completion timeframe. 

A7.1.1 We aim to have your tax return finished within 12 weeks of the end of the financial year. 

A7.1.2 We will need information from you in order to complete the tax return. We'll send you a link to our queries within the first four weeks of the new financial year. 

A7.1.3 The 12 week timeframe may not be achieved if your complete query response is not received within the timeframe indicated by due dates on the requests when they are sent. Where no timeframe is indicated, the information is required within five (5) working days. Further information may be requested as our work progresses, and responses are expected within two (2) working days. 

A7.1.4 The delay in completion may not necessarily be equal to the delay in your submission, it may be longer. 

A7.1.5 We reserve the right to charge an additional fee if we do not receive information from you when requested within the given timeframes. 

A7.1.5.1 The minimum additional fee is $500 +GST when all information has not been received by 31 August, and an additional $1000 +GST if the information has not been received by 31 January. 

A.7.1.5.2 The maximum additional fee is a reversion to an hourly charge basis for the entire engagement. 

A7.1.5.3 Whether a fee is charged, and what option is taken, is entirely at Our discretion. 

A7.2 GST and AIM Return completion timeframe. 

A7.2.1 We aim to have your GST and AIM returns finished within 20 days of the end of the previous period. 

A7.2.2 To achieve this timeframe, we need you to have your Xero file completely reconciled within 7 days of the end of the period. 

A7.2.3 We'll send you reminder tasks to help you achieve this timeframe. 

A7.3 General communication 

A7.3.1 We'll respond to emails and phone calls/text messages within 1 business day. 

APPENDIX 1 : SAMPLE COMPILATION REPORT 

Compilation Report to [Client] 

Annual Financial Statements – Compilation 

For the year ended 31 March 20XX 

Reporting Scope 

On the basis of the information that you provided we have compiled, in accordance with the ATAINZ Reporting Standard 1 : Compilation Engagement, the Financial Statements of [Client] for the year ended 31 March 20XX as set out on the following pages. 

These statements have been prepared in accordance with the principles contained in current income tax legislation as described in Note 1 to the Financial Statements. 

These are special purpose financial statements and as such are intended for the purposes of meeting the income tax requirements and internal use and should not be relied upon for any other purpose. 

Responsibilities 

You are solely responsible for the information contained in the financial statements, and have determined that the financial reporting basis stated above is appropriate to meet your needs and for the purpose that the financial statements were prepared. The financial statements were prepared exclusively for your benefit. 

We do not accept responsibility to any other person for the contents of the financial statements. 

No Audit or Review Engagement Undertaken 

Our procedures use accounting expertise to undertake the compilation of the financial statements from information you provided. Our procedures do not include verification or validation procedures. No audit or review engagement has been performed and accordingly no assurance is expressed. 

Disclaimer 

A compilation is limited primarily to the collection, classification and summarisation of financial information supplied by the client. A compilation does not involve the verification of that information. We have not performed an audit or review engagement on the financial statements and therefore neither we nor any of our employees accept any responsibility for the accuracy of the material from which the financial statements have been prepared. Further, the financial statements have been prepared at the request of, and for the purposes of, our client only and neither we nor any of our employees accept any responsibility on any ground whatever, including liability in negligence, to any other person. 

Management Support Session Terms 

MSS1.0 TIMEFRAMES 

MSS1.1 The meetings will be held at the frequency stipulated in the service description.   

MSS1.2 No credit or refund is given for meetings cancelled by you.  A replacement date may be available, at our discretion.  

MSS2.0 LIMITATIONS 

MSS2.1 This service is intended as a support service, and no topic discussed shall be considered advice or direction. 

MSS2.2 The responsibility for management decisions in your business remains solely with you.  

Quarterly Accountability Session Terms 

QAS1.0 ASSUMPTIONS 

QAS1.1 That you have a current business plan for at least the next financial year. 

QAS2.0 TIMEFRAMES 

QAS2.1 The meetings will be held between the 15th and 25th of the month after the reporting period (a set date will be agreed between us). 

QAS2.2 You will receive reports and pre-work at least 5 working days prior to the meeting. 

QAS2.2.1 To prepare your reports within this timeframe, we rely on receiving certain information from you. 

QAS2.2.2 If information is not received from you on time, it could result in the meeting being rescheduled or cancelled. 

QAS2.3 The pre-work must be completed at least 2 working days prior to the meeting date.   

QAS2.3.1 Late pre-work may result in your meeting being rescheduled or cancelled. 

QAS2.4 No credit or refund is given for meetings cancelled due to a failure to provide information or complete pre-work.  

QAS3.0 EXCLUSIONS 

QAS3.1 Preparation of a business plan is not included in this service, although we can provide that service separately if required. 

Bookkeeping Terms 

B1.0 WORK STANDARDS 

B1.1 Our standard bookkeeping practices satisfy IRD requirements at the same time as delivering the information you need to run your business. 

B1.2 Unless you advise us in writing that you would like more or less detail, we will: 

B1.2.1 Require and attach copies of receipts/invoices to all transactions over $50 in value. 

B1.2.1.1 For purchases under $50 that are not easily classified without a receipt, we will require a receipt regardless of value. 

B1.2.1.2 We recommend and encourage attaching a receipt to all transactions regardless of value, which is a requirement of the IRD. 

B1.2.1.3 We take no responsibility for the consequences of not attaching paperwork if you instruct us to proceed without paperwork. 

B1.2.2 Categorise expenses properly according to their purpose, ie not all to "Purchases" or "General". This means we may need to ask you for clarification from time to time. 

B1.2.3 Enter line items only when they need to be coded to different accounts, or identified separately as fixed assets. 

B1.2.4 Code delivery / freight charges and credit card surcharges to the same account as the associated purchase. 

B1.2.5 Ensure all bank accounts in Xero are fully and properly reconciled, including transfers between bank accounts in Xero. 

B1.2.6 Use proper contact names for all transactions. 

B1.2.7 Create bills for any purchase that is granted credit terms. 

B1.2.8 Check statements for all suppliers who have had bills created. 

B1.2.9 Use tracking and billable expenses where appropriate and/or requested. 

B1.3 If you would like us to take a different approach to your bookkeeping, or have special requirements, you will advise us in writing. 

B2.0 TIMEFRAMES 

B2.1 Day to day processing 

B2.1.1 We will empty the Hubdoc inbox and clear the bank reconciliation once each agreed processing day, to the extent paperwork has been submitted. 

B2.1.2 Where we are using ApprovalMax to enable you to approve your invoices, you will review/approve invoices within 48 hours of their being uploaded to ApprovalMax. 

B2.1.3 We will email you/suppliers queries or paperwork requests, and leave items being queried in the inbox or bank reconciliation. 

B2.1.4 We will process replies on the next agreed processing day. 

B2.2 Month end processing 

B2.2.1 We will expect all paperwork (including statements) for the previous month to be supplied by the 5th day of the following month. 

B2.2.2 We will check supplier statements on receipt, at the latest the 6th day, and request missing paperwork from you/suppliers by email. 

B2.2.3 We will cut off the month on the 10th day regardless. This means any invoices or paperwork not received by this time will be entered in the following month, once received. 

B2.2.4 We will produce reports, where required, by the 15th day of the month, provided the cut off on the 10th day was achieved. 

B2.3 Your responsibility to submit paperwork 

B2.3.1 We have prepared our service pricing on the assumption that you provide your receipts and other paperwork by 5pm on the day prior to our agreed processing day/s. 

B2.3.2 We will contact you for missing paperwork, with the expectation that you will provide that paperwork by 5pm on the day prior to our next agreed processing day. 

B2.3.3 Where paperwork has been requested, and we have received no response, or inadequate response, from you in relation to that request, we may charge a Paperwork Delay Surcharge of $250 +GST. 

B3.0 EXCLUSIONS 

B3.1 This service is for bookkeeping, not accounting. 

B3.2 Bookkeeping services are limited to the collection, classification and summation of financial information you supply. 

B3.3 We will not take active steps to identify weaknesses in your internal accounting system, errors, illegal acts or other irregularities, for example, fraud or non-compliance with laws and regulations. 

B3.4 We will not register fixed assets in Xero unless we are also your Accountant, or we have written instructions from your Accountant to do so. 

B3.5 The service fee assumes we will be the only people reconciling transactions in your bank accounts. Having others reconcile as well can result in extra work, and any time spent identifying and correcting transactions not reconciled by us will be considered out of scope. 

B4.0 TRANSACTION LEVELS 

B4.1 We set our pricing based on your transaction levels and composition (bills, transfers, spend /receive money, complexity) at the time we are engaged. 

B4.2 From time to time, we may review your transaction levels and composition to ensure the pricing is still appropriate. 

B4.3 Should your pricing require adjustment, we will give you 30 days notice of the proposed new rate. 

Payroll Processing Terms (only apply if Payroll is a service we are providing, check the service description in your proposal)

P1.0 ASSUMPTIONS 

P1.1 Employees who are paid by the hour will record their hours worked directly into the payroll or rostering software on a daily basis. 

P1.2 New employee information will be forwarded to us at least one working day prior to their start date, including: 

P1.2.1 Employment contract, schedules and attachments 

P1.2.2 Completed employee details form (supplied by us) 

P1.3 Leave applications will be made by employees directly in the payroll software, and approved by you accordingly in the payroll software. 

P2.0 TIMEFRAMES 

P2.1 On the day following the end of the pay period, we will review timesheet entries and seek approval from you. 

P2.2 You will approve the timesheets on the same working day as they are received. 

P2.3 We will finalise the pays and provide the payment batch to you in a format that can be imported to your online banking website, or we will setup the batch for your approval, as agreed. 

P2.4 We will lodge the Payday Filing return with IRD within the required timeframe. 

P3.0 EXCLUSIONS 

P3.1 This service is for payroll processing only. We are not qualified to provide professional employment law advice on human resources situations. 

P3.2 The service does not include any software subscription. 

P3.3 Detailed reconciliations of leave history, or correction of payroll calculations due to incorrect information provided are specifically excluded. 

P3.4 Correction of any issues that occurred prior to the commencement of this service. 

P3.5 One-off payments or exercises, such as team wide bonuses, team-wide salary increases, etc.