We'll set up your Xero file from scratch, then give you the training you need to use it to its full potential.

Xero setup & training

Required for farming businesses that own livestock.

Livestock

A 12-month plan designed for new business owners starting out, who may want some extra guidance around business structure, accounting software setup and training, and more.

We will provide you with guidance and support on what you'll need to do to establish and commence running your new business

We can provide advice on the best business structure for your needs and take care of establishment and registrations

Set up your Xero file so it's optimised for you and give you initial training so you start off in the right way

Preparation of a budget tailored to your business and input into Xero so you can track how you're going

Starter pack

We prepare your GST returns ready for you to review and pay. We also remind you of when and how much to pay, and even send an alert if you forget! Requires Xero.

Prepare GST

If you would rather be doing something else, let us do your bookkeeping for you. We love coding and checking and you can relax knowing it's all done right, and on time. Requires Xero.

Bank reconciliation

We set you up with the right Xero subscription and manage your payments.

Xero monthly subscription

We set up your Xero file so it is optimised for you and your business.

Xero setup

An hour of training on how to use Xero to it's full potential.

Xero training

Compliance or strategy? Understand the difference between financial and management reports.

FINANCIAL LITERACY  •  1 OCTOBER 2025  •  5 MIN READ

One report is for tax authorities, the other is for you. We break down the key differences between financial statements and management reports for NZ business owners.

Management Accounts vs Financial Statements: Key Differences & Benefits

Financial reports are a fundamental part of running a business. However, not all reports are created equal. The key to decision-making is understanding the difference between the official financial statements prepared after year-end and the timely management reports needed to steer your business on a day-to-day basis.

Understanding both is essential. Financial statements are like a car’s WOF certificate, proving it’s compliant and roadworthy. Management reports are like your car’s dashboard (speedometer and fuel gauge) that help you on your journey. One ensures compliance and reflects where you’ve been, the other provides the insight you need to decide where you’re going.

In this article, we highlight the key features of each.

Financial statements are the official, formal record of your company’s financial performance and position for a particular financial year.  

Provide a high-level, trustworthy overview for external groups like the IRD, banks and investors

Are strictly governed by Financial Reporting Standards and Company Law

Present a historical view, showing a clear account of what has already happened

Are prepared annually primarily for compliance with tax and legal requirements

Year-end financial statements include the Profit and Loss Report and Balance Sheet and are fundamental to your business’s official reporting.

Management reports are internal, customised reports created specifically to help business owners and their team run the business more effectively.

Provide a customisable and tailored view of your business, often including operational data

Unlike official statements, they are flexible and not regulated so can be adapted to focus on the information you need most

Are prepared monthly or quarterly, giving you an up-to-date view of recent performance

Management reports often include Profit and Loss, Balance Sheet, and Cash Flow Statements on a smaller scale, but also operational metrics and variance analysis.

Think of it this way, the financial statements are the birds-eye view of your business, while the management reports are the zoomed-in street view.

These two types of reports are not mutually exclusive. You can use your official financial statements to set high-level goals, then use your management reports to track the monthly/quarterly progress and daily actions needed to achieve that goal.

Top tip: don’t just wait for your annual financial statements, but use regular management reports to keep your finger on the pulse of your business’s financials and the metrics that matter most.

Is your reporting giving you the full picture?

If you’re already a client, get in touch with your accountant to discuss your reporting strategy and how our management reports service can help keep track of your key metrics and goals.

New to Beany? Book a free consultation to discuss your compliance accounting requirements, and explore valuable add-on services like management reports.

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Financial statements vs management reports

Financial literacy

Understand the importance of management reports for tracking performance and making smarter decisions.

FINANCIAL LITERACY  •  29 SEPTEMBER 2025  •  5 MIN READ

Discover how regular management reports can help you track performance, improve cash flow, and make confident, data-driven decisions.

What are Management Accounts?

Many businesses only look at their financial position once a year, when the annual accounts are finalised. The problem? By then, the data is historical. Relying on this alone is like only getting a health check-up from your doctor once a year and receiving the results months later. The information is valuable, but not timely. A lot can change in a year and you can’t make choices based on old news.

Monthly or quarterly management accounts bridge the gap, giving you timely insights into performance so you can make decisions before opportunities pass or problems escalate. Think of them as your business’s regular health check-up that reviews the vital signs.

Management accounts bring together key financial data into a concise, decision-making tool. While every business’s management accounts will look slightly different depending on industry and goals, they often cover:

Profit and Loss statement - revenue, expenses and profitability

Balance sheet - assets, liabilities and equity snapshot

Cash flow statement - movement of cash in and out of the business, ensuring you have the funds to operate smoothly

Key Performance Indicators (KPIs) - metrics aligned to your goals, such as gross profit margin, customer acquisition cost, or revenue per employee

Variance analysis - where the magic happens, comparing actuals against budget or prior periods to answer the critical question ”are we on track?”

Understanding the key difference in how year-end and management accounts are used is a crucial part of running a business.

Annual accounts are essential for meeting tax obligations and local regulatory requirements but they are primarily historical records.

Management accounts focus on recent performance. They help you see trends, understand the drivers behind your numbers, and make adjustments while there’s time to influence outcomes.

Management accounts aren’t just about reporting numbers, they’re a strategic tool.

Informed decision-making - insights to guide growth, investments and costs

Improve cash flow management - anticipate shortages or surpluses before they impact operations

Spotting trends or problems early - identify rising costs, falling margins or seasonal changes and take corrective action

Stakeholder confidence - provides up-to-date information for investors, lenders, and partners

Tax planning - stay on top of obligations and optimise your tax position before year-end

Performance tracking - compare actual results against budgets or forecasts

The true value of management reports is in interpreting them. Clear analysis, relevant commentary and actionable recommendations are what turn the data into a useful roadmap.

At Beany, our accountants can help you understand the story behind your numbers. We turn your financial data into a practical conversation, giving you confidence and clarity to make better decisions for your business.

If you’re already a client and interested in management reporting, get in touch with your accountant for further information on cost, reporting frequency and what metrics will be the best fit for your business and goals.

New to Beany? Book a free consultation to discuss your compliance accounting requirements and explore valuable add-on services like management reports.

Learn how Type 1 and Type 2 farm classifications determine what farmhouse expenses you can claim at tax time.

EXPENSES  •  18 AUGUST 2025  •  3 MIN READ

Running a farm in New Zealand? Learn how Type 1 and Type 2 classifications work and what they mean for your deductions.

Claiming Farmhouse Expenses in New Zealand

If you’re running a farming business and live in (or use) a farmhouse on the property as part of business operations, you might be able to claim a portion of your household expenses against your farming income.

The rules were overhauled in 2017, when Inland Revenue released new guidance (Interpretation Statement IS 17/02), effective from the 2017/18 year. This removed the old 25% default farmhouse deduction and replaced it with a split system, where claims are based on whether the farm is classified as Type 1 or Type 2.

We've broken down the key information you need to know when claiming farmhouse-related expenses.

For the purposes of income tax deductibility, farms are categorised into 2 types. The difference depends on how much of the farm’s total value* is the farmhouse and curtilage (i.e. the house and land immediately around it, like lawns and garden).

*You can use rateable values, costs, or formal valuations to establish percentages.

Farmhouse and curtilage is less than 20% of the total value of the farm

Farmhouse expenses can be deducted using the simplified method

Farmhouse and curtilage is greater than 20% of the total farm value

Most likely for a lifestyle block or small farm

Farmhouse expenses need be calculated based on actual business use

Special case: sharemilkers and contract milkers who operate as a sole trader or partnership may be able to claim expenses using the simplified approach of a type 1 farm.

You can claim 100% of rates and mortgage interest on the farmhouse, 50% of phone rental charges, and 20% of operating costs such as electricity, insurance, repairs and maintenance.

Mortgage interest for the whole farm = $50,000 (fully deductible)

Rates for the whole farm = $10,000 (fully deductible)

Insurance, power, internet, repairs & maintenance for the house = $10,000 (20% claimable)

Total claimable: $50,000 + $10,000 + $250 + $2,000 = $62,250

You can claim 50% of phone rental charges, but all other farmhouse expenses must be apportioned based on how much of the farmhouse is used for business activities such as admin, meetings, or running the business.

Riley has a small farm where 60% of the value is attributed to the farm, while 40% is the farmhouse and curtilage.  He also uses 10% of the farmhouse for conducting business admin and meetings.

For expenses covering the whole property, the tax-deductible amount is based on the farm/business portion + the percentage of the farmhouse used for business activities. In this example, it's 60% + (10% x 40%) = 64%.

For expenses that relate to the farmhouse only, 10% is claimable (based on Riley using 10% of the farmhouse for business).

Mortgage interest for the whole farm = $50,000 (64% deductible)

Rates for the whole farm = $10,000 (64% deductible)

Insurance, power, internet, repairs & maintenance for the house = $10,000 (10% deductible)

Total claimable = $32,000 + $6,400 + $250 + $1,000 = $39,650

If the farmhouse is being used as a home office, the IRD’s fixed square metre rate can be used as a straightforward alternative method. This is the calculation often used by businesses in other industries where there’s a home office expense claim. View our home office expenses article for more information.

GST generally follows the same Type 1 / Type 2 treatment you’ve used for income tax. The key is that your claim must be fair and reasonable, and you should keep a simple note showing how you worked it out.

Heads-up on the farmhouse: if you’ve claimed any GST on the house/curtilage because it’s used in the farming activity, a future sale can bring a portion of the house into the GST net. Get advice from your accountant before you claim or sell so there are no surprises.

If you’re unsure which method applies to your farm, it’s helpful to speak with your accountant. Keeping good records such as valuations, floor plans, and usage logs will also help support any expense claims that are part of your farming business’s tax return.

If you're not working with an accountant or looking to switch, consider Beany. Our team work fully online from all over New Zealand, giving you access to local experts without needing to leave the farm. Book a call with us to discuss your farming business and explore how we can support your accounting requirements.

Claiming farmhouse expenses in New Zealand

Expenses

Compare NAMV and NSC livestock valuation methods to see which suits your tax and farm management strategy.

FINANCIAL LITERACY  •  18 AUGUST 2025  •  4 MIN READ

Understand New Zealand’s NAMV (Herd Scheme) and NSC livestock valuation methods. Learn the tax impacts, record-keeping demands, and which suits your farming goals.

NAMV vs NSC: Choosing the Right Livestock Valuation Method

When it comes to valuing livestock for end-of-year financial reporting and tax purposes, New Zealand farmers can choose from two main methods - National Average Market Value (NAMV, or sometimes called herd scheme) or National Standard Cost (NSC).

Each method has its own implications for tax, reporting, and long-term planning, so it’s important to understand the key aspects of each and how they might impact your farm’s financial position.

National Average Market Value / Herd Scheme

The NAMV (or herd scheme) is a valuation method based on the average market value of livestock as determined by Inland Revenue each year. These figures reflect actual market data and are published annually (in May) for different classes and categories of livestock.

1. Livestock is valued at the market average
Each year, the IRD sets the national average market value based on a survey throughout New Zealand at 30 April. Using this method, your livestock is valued based on these set rates, not the actual amount you paid or received for each animal.

2. Livestock is treated as a capital asset
Livestock is treated like an investment. Changes in value from year to year aren’t taxable or deductible unless you sell or dispose of the animals. 

3. Tax-free natural increase in herd numbers
Any animals bred on your farm (i.e. a natural increase) are added to the scheme at the NAMV, but you don’t pay any tax when they’re introduced*. You only pay income tax when you sell the animals for more than the recorded value.

*When you first elect into the herd scheme, your current livestock is revalued from its existing book value to the NAMV. If the NAMV is higher, the difference is treated as taxable income in the year you enter the scheme.

4. Simple record-keeping
Once livestock is in this scheme, you don’t have to track individual animal costs or production expenses for valuation purposes. This makes the end-of-year accounting processes simpler.

5. Generally considered a long-term decision
Once you’ve chosen to use this method for a livestock class, the animals in that class are required to remain in this scheme. This provides consistency in how they’re valued.

The NAMV method is best suited to farmers:

Wanting more consistent and less volatile year-end results

With the National Standard Cost (NSC) method, homebred animals are given the standard cost rates set annually by Inland Revenue for their class and age. If you’ve bought in young stock, they start off at their purchase price, and each year you add the published breeding, rearing and growing (BRG) costs as they move up through the classes. Once they hit the mature breeding stage, those annual additions stop and their value is locked in at the accumulated cost. That fixed cost then stays with the animal until it eventually leaves the herd.

1. Livestock is valued based on cost, not market prices
Each year the IRD sets the national standard cost based on what it typically takes to raise an animal to maturity. Once livestock reaches maturity, each animal holds its cost until sold or disposed of.

2. Livestock is treated as a trading stock
Livestock is treated similar to inventory. Changes in numbers and value from year to year are taxable/deductible, which can impact your profit.

3. Volatility
Because changes in livestock numbers and value are recognised as taxable income or deductions each year, your profit (and tax) can swing more than the NAMV method, especially if you have large numbers of mature or trading stock.

4. Can be used for more livestock classes
The NSC method can be used for livestock classes that aren’t part of the NAMV method like lambs, bobby calves or other young animals.

5. More admin
There is more detailed record-keeping involved in this method as you have to track costs and stock changes more carefully.

The NSC method is best suited to farmers:

Managing early-stage livestock that aren’t eligible for the NAMV method

Wanting to maximise deductible expenses (such as decreases in livestock value)

Herd Scheme vs National Standard Cost comparison

Choosing between National Average Market Value and National Standard Cost is a strategic decision that depends on your farming operation and goals.

The best option will depend on how you run your farm, how long you hold your livestock, your cash flow needs, and what you want to achieve (whether that’s building long-term value, managing short-term profits or planning for succession).

Your accountant can help assess which method aligns with your business model and goals, and ensure you’re taking a tax-efficient approach that works now and for the future.

Business advice

A step-by-step guide to creating a cash flow forecast with an example layout and tips for reading the results.

FINANCIAL LITERACY  •  16 JULY 2025  •  3 MIN READ

A step-by-step guide to creating a cash flow forecast, with an example layout and practical tips for reading and adjusting your forecast.

How to Create a Cash Flow Forecast

Making a cash flow forecast can be complicated, but it’s an invaluable tool for business planning and decision-making.

A simple forecast can give you a clear picture of what’s coming in and going out of your business and help avoid cash crunches before they happen.

While you can build one yourself (and we’ll guide you through how), if you’d rather have someone do it for you, an accountant is a huge help.

What you’ll need to prepare your forecast

Before we get started, you’ll need to gather the following information:

Your bank statements or accounting reports

Expected sales or income (including timing of payments)

A list of regular expenses (wages, rent, subscriptions)

Any one-off or seasonal expenses (e.g. insurance renewals)

Planned purchases, loan repayments, tax obligations, or hiring of staff

Steps to creating your cash flow forecast

Think about how far ahead you want to forecast. If this is your first time, it could be helpful to start small and forecast for the next 3-6 months. A 12-month period is great for accounting for any seasonality across a calendar year.

Pick a timeframe that suits your business and your cash flow rhythm.

Step 2: Run a historical cash flow report in your accounting software

To make forecasting easier, it’s best to start with actual data. Run a report that shows past cash movement in your business, broken down by month. 

Please note: the report name will vary by software, but will be something like Cash Summary or Cash Flow Statement.

If you use Xero, run the Cash Summary report with a monthly date range and compare with the last 12 months (under the ‘Compare with’ drop-down select ‘Enter a Different Number’ and then enter 12).

Step 3: Map out your expected cash inflows

Create a spreadsheet and list out the different forms of cash your business expects to receive during your forecast period (i.e. money coming into the business).

Add a summary row that calculates the total inflow (or ‘money in’).

Reference the historical data for insight into the type of cash inflows that the business has had previously, and use it as a guide for estimating future inflow amounts (and the timing of these).

Step 4: Map out your expected cash outflows

Underneath your list of inflows, list out all your payments that go out of the business.

Drawings or dividends to the owners/shareholders

Add a summary row that calculates the total outflow (or ‘money out’).

Reference the historical data for building out this list. For consistency, copy your expense categories into your forecast spreadsheet and then add any other cash outflows that the business has or is likely to have.

Now that you’ve listed out what money you predict is coming in and going out, you can bring it all together.

Net cash flow = total inflow minus total outflow (i.e. money in - money out)

Closing bank balance for each month (opening balance + net cash flow)

*For month one, the opening balance should be the expected bank balance for the start of the forecast period. The closing balance of month one becomes the opening balance for the second month and so on.

The above example is purely for informational and layout purposes only. The figures are entirely made up and are not based on any real business entity.

Have a look at your numbers. Do your income estimates look realistic? Have you missed any irregular or seasonal revenue or costs? Have you over- or under-estimated how long payments will take?

It pays to double-check you haven’t missed anything.

It’s also useful to test different scenarios, planning for the ‘what ifs’ of running a business.

Read our other cash flow forecasting article for some scenario planning examples and more details on what makes a good forecast.

Reading the results - what does your closing cash balance show you?

If your formulas are working correctly, changes to any figures will flow through to your forecasted closing cash balance.

The monthly closing cash balance may indicate that you need additional money. Will you go into overdraft (with high interest rates) or need to find another funding source?

In this scenario, talking to your accountant for options that are right for you can be helpful.

Too many periods of negative cash flow could cause trouble. What forward planning can you do to make sure you'll have enough cash to meet your everyday business needs?

Is there a build up of cash? What could you do with it? Upgrade assets, wage increases, pay off debt, put it aside for tax or savings?

What would happen if you brought forward or pushed back the date you purchase an asset? What would happen if you add a new employee to your team? 

Making decisions around the timing of certain inflows and outflows can make a big difference.

A forecast is most useful when it's reviewed and updated regularly.

It can be helpful to incorporate cash flow forecasting into your internal planning and strategy processes so that it becomes a standard operational task.

These days there are tools that can help, from forecasting apps to a simple spreadsheet template.

If it sounds too complicated or you’d rather have a professional look over your numbers, there is a lot of value in having an accountant create a cash flow forecast for you.

Make sure you haven’t missed any hidden or seasonal costs

Align your forecast with upcoming tax payments or other compliance deadlines

Suggest ways to improve your cash position or navigate tight spots

Think of it like this. You’re the expert in your business, and your accountant is there to help you understand what the numbers are really saying and keep things on track.

Understand what cashflow forecasting is, why it matters, and how to get it right.

FINANCIAL LITERACY  •  14 JULY 2025  •  5 MIN READ

Understand what cashflow forecasting is, why it matters, and how to get it right. Includes forecasting methods, tools, and how to use your forecast effectively.

Cashflow Forecasting Explained: How to Plan with Confidence

A cash flow forecast is a tool that helps you predict all cash movements in and out of your bank account over a set period of time.

It gives you visibility over when you might have cash available or when you might run short, by factoring in expected revenue, expenses and other financial activities.

In this guide, we'll cover the importance of forecasting and how to use your cash flow forecast to make business decisions.

It’s often easy to confuse cash flow with profit, but they’re not the same.

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