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The Silver Lining...
  
Accumulus Newsletter - November 2020                                                                                                                                                                                             

WORKING PATTERNS & STAFF TRAINING                                                                                                                                                                         

         

As with many businesses Covid and the lockdowns has resulted in changes in the way Accumulus works.

The move to cloud based software some four years ago proved its worth when the lockdown occurred as staff were easily able to work from home. The saving in travel time and the ability to work peacefully at home was a broadly positive experience.

Accumulus is still committed to a physical "retail" presence to service our clients, but decided that staff could work from home if they wished for a couple of days of their normal working week (except for the reception staff sorry Jodie and Carey!)

This has the somewhat disconcerting consequence that the office is on occasions relatively unpopulated and very quiet, however if staff are not in the office they are contactable at home by reception staff to call you back (on any of their normal working days).

We have decided to introduce monthly meetings where everyone attends to facilitate training and administration (and so we don't forget each other).


Accumulus will be closed tomorrow morning Tue 17 November 2020 until 10.30 am, 

so all staff can attend a training and administration session. The front door will be closed and the phones will be for messages only until 10.30.

These training sessions will be held at the same time on the third Tuesday of each month.

We apologise for any inconvenience this may cause, but the aim is to ensure that overall we provide a better service to our clients.

MONEY FOR NOTHING

   

The Dire Straits hit song only needs a small adaptation to its chorus lyrics to have a new relevance in the Covid age:

"Now look at them yo-yo's that's the way you do it

You play the keyboard at the GVT (government)
That ain't workin' that's the way you do it
Money for nothin' and the votes for free
Now that ain't workin' that's the way you do it
Lemme tell ya them guys ain't dumb
Maybe get a blister on your little finger
Maybe get a blister on your thumb"

 The blisters are from pressing the "Create Money" button on the Reserve Bank Computer keyboard rather than plucking the guitar strings.

 The reserve bank Monetary Policy Committee has decided to continue with its Large Scale Asset Purchase (borrowing/money creation) Program of up to $100 billion* and to keep the official cash rate "OCR" at 0.25% with the possibility of a negative OCR next year.

 

 *With a NZ population of 5 million this equates to $20,000 borrowed/created for every adult and child in NZ.


FUNDING FOR LENDING PROGRAM "FLP"

The Reserve Bank FLP is targeted to commence in December and consists of providing $28 billion of loans to banks in NZ (part of the $100 billion mentioned above) at the OCR interest rate. The idea is to depress interest rates and encourage banks to lend.

If you are a depositor life is presumably going to get worse! What bank will want to bother with the administrative hassle of small deposits from retail investors for their funding if they can borrow huge dollops of $ billions from the government at almost no cost?

SMALL BUSINESS CASHFLOW LOAN

The Government has announced some changes to the scheme, (which has so far loaned $1.6 billion with an average loan of $17,000):

  • The no interest period has been increased to 2 years (from one) as long as the loan is repaid within two years (previously one year).
  • The use of the loan has been extended from "core operating costs" to additionally include capital expenditure.
  • Applications can be made for the loan until 31 December 2023 (an extension of 3 years).

Otherwise eligibility for the loan and the terms of the loan are unchanged, as described in our May Newsletter available on the Accumulus website.

XERO STARTER PLAN                                                                                                     

Xero has for a long time had a Starter Plan (at $27.50 per month plus GST) version of its Standard ($60 per month plus GST) package which has invoicing and debtors features. However the failing was that the number of invoices and the number of bank transactions you were allowed to process each month was so small that it made the Starter Plan unworkable for all except a very limited number of businesses.

Xero have acknowledged this failing and have upgraded the Starter plan so that it now allows processing unlimited bank transactions each month and up to 20 invoices per month. This is a much more realistic proposition for smaller businesses.

We understand that a feature that is still missing is Cash Coding, which allows simpler bulk coding of bank transactions, but this is probably of little consequence to most clients routinely using Xero software.

These changes provide two opportunities:

  • For businesses that have registered for the Standard package to down grade to a Starter Plan if they issue 20 invoices or less per month achieving a saving of $32.50 per month.
  • For businesses that issue less than 20 invoices per month but did not feel the cost of the standard package was justified to upgrade from a GST cashbook package ($21 plus GST per month) to the Starter Plan for an increased monthly cost of only $6.50 plus GST.

The ease of issuing invoices and following the debtors in Xero is excellent so for many small businesses issuing small numbers of invoices this additional cost will be well worthwhile.

We will follow up with clients where either situation looks applicable but please don't hesitate to contact us beforehand if you believe a change would be of benefit to you.

We can only hope that the "guys" in parliament and at the reserve bank "ain't dumb" but historically the printing of fiat currency money has ended badly, though this was generally before the days when sovereign nations were routinely doing it.

If you want a really interesting read for Christmas get hold of a book called The Creature from Jekyll Island by Edward Griffin. It is a history of the banking system with an enormous conspiracy theory wound into it.

Please get in touch if you have any questions in respect of the contents of this newsletter.

 

Regards

 

The Team at Accumulus