
“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

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?
The Accounting
System
(manual or computerised)
-
Cashbook
Tax Invoices
Credit notes
Bank statements
Customer accounts
Supplier accounts
These records must be:
 Accurate
 Up to date
 Must be kept for
minimum 7 years
 Legal requirements:
◦ English
◦ Legible
◦ Accurate
◦ Provable

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

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
Q. What language must
financial records be kept
in (in NZ)?
A. English
Q. How long must financial
records be kept for?
A. 7 yrs
Q. What is the
accounting system used
for?
A. Tax returns, bank,
making decisions about
the business
Q. Why shouldn’t you
let other people use
your cash register?
A. In case they
‘misplace’ some cash

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

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”
UNDER
$1000
GST # 39-664-592
347 Bedrock Drive
CASH SALE
WHO
DATE: 28 February, 2003
FOR:
Cleaning Rovers teeth
Canyon Creek
INVOICE NO: 325
$168.75
TOTAL $168.75
GST Inclusive
A copy for the customer, and a copy for the business records

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)





OVER
$1000
TO: Mr. P. Dotty
NEW
37 Middletown Way
Pittsville
DATE: 31 March, 2012
GST # 39-664-592
347 Bedrock Drive
Canyon Creek
INVOICE NO: 326
Amount
FOR: NEW 40 days Quarantine @ $30.00 a day
1 dose Praziquantel and 2 ectoderm treatments
NEW GST Excl.TOTAL
NEW GST
TOTAL TO PAY
$ 1200
$ 130
$ 1330
$ 199
$ 1529
00
00
00
50
50
A copy for the customer, and a copy for the business records

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

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
GST paid on this item
$78.26
$11.74
Total amount to be paid
$90.00

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
GST paid on this item
$78.26
$11.74
Total amount to be paid
$90.00
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)
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’

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
http://www.ird.govt.nz/yoursituationbus/running/recordkeeping/recordkeepingcashbookillustration.html
CASHBOOK
June: Income & Expenditure
Income
DATE
Ref#
1/06/2012
7/06/2012
15/06/2012
30/6/2012
Total
Out
In
Opening Balance
342.00 Eukanuba
Property
343.00 management
28/06/2012Dep43
20/02/06
Particulars
Closing Balance
GST out
GST In
Stock
Rent
1,325.80
450.00
875.80
562.00
Banking
Deposit
Balance
400.00
62.50
1,406.00
1,719.55
1406.00
1519.14
1, 719.55
Total
50.00
500.00
156.25


Why?
◦ It will identify errors in
the cashbook &/or by the
bank
◦ Proves accuracy of the
legible transaction
documents
Bank reconciliation
compares your cashbook
with your bank
statement

How often?
◦ Statement from bank sent
out monthly
◦ So done each month

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)
cashbook
Everything in and
out of the
cashbook

bank
Everything in
and out of the
Bank Statement
Making the Bank Statement the same as the Cashbook
2014
Date
The Cash Book
DESC
1 Apr
2 Apr
2 Apr
3 Apr
7 Apr
In
Out
O/ Bal
349
350
AP
351
7 Apr
30 Apr
BANK STATEMENT
352

Genesis 
Prop.Inc 
Paper Plus 
Deposit  1769.25
Telecom
Advantage
Balance Date
In
3,497.05
1 Apr
O/Bal
49.80
3,447.25
4 Apr
349
37.40
3,409.85
4 Apr
350
1150.00
2,259.85
5 Apr
AP
29.60
2,230.25
7 Apr
3,999.50
9 Apr
149.80
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
351
Out BAL
3497.05
49.80 3447.25

37.40 3409.85

1150.00 2259.85

4029.10
1769.25

29.60 3999.50
3,849.70
3999.50
BANK RECONCILIATION
Closing Balance:
Less Unpres. Chqs #352
Plus Uncleared Dep.
Cashbook Balance:
3999.50
149.80
0
3849.70




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

Must start with a “float”
◦ i.e. $50 cheque to be cashed

Three elements
◦ Lockable cash box
◦ Petty cash book
◦ Filing for receipts

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