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

Changing shareholders in your company? Make sure you know the key implications before implementing the change.

BUSINESS ADVICE  •  21 OCTOBER 2025  •  6 MIN READ

Thinking of changing shareholders in your NZ company? Learn the key accounting, tax and legal steps to take before transferring shares to avoid costly mistakes.

Changing Shareholders: Key Accounting & Tax Implications

Bringing a new partner into your business, rewarding a key employee with a stake, or passing the company down to the next generation are all exciting milestones. It’s easy to get caught up in the moment and think that changing who owns the shares is as simple as updating a form.

However, a change in shareholding is a major business decision with significant financial and legal implications. We’ve seen clients make a quick change, only to face unexpected tax bills or complications down the line.

Before making any shareholder changes, it’s crucial to understand what’s involved. Getting it right from the start protects everyone involved and saves a lot of future headaches. Here’s a simple rundown of the key things you need to consider.

Does your company have tax losses from previous years? Normally, you can carry these forward to reduce tax on future profits. However, if your company's ownership changes by more than 51% (known as a breach of 'shareholder continuity'), you could lose the right to use those losses. 

A ‘business continuity test’ may allow you to keep them, but only if there is no major change* in the business within 5 years of the change in shareholders/ownership.

* Inland Revenue’s website has information on what ‘major change‘ means, but of course, these factors can be subjective so it's recommended you get advice.

Think of imputation credits as a record of the tax your company has already paid on its profits. When the company pays out a dividend, these credits are attached to avoid double taxation and reduce the total tax shareholders pay on that income in their personal tax return.

If the shareholding changes by more than 34%, the company can lose the entire outstanding balance of imputation credits. For shareholders, this means if a dividend is paid later, there won't be any tax credit attached. As a result, you'll be respionsible for paying tax at your full personal tax rate on that income when you file your tax return.

You may think this isn't relevant if you don't regularly pay out dividends. However, on future wind up of the company, all company retained profits must be paid out to shareholders, so eventually it will cause a tax issue for you.

Often, shareholders lend money to the company or borrow from it. This is tracked in a Shareholder Current Account. Before a shareholder leaves, this account must be settled. If the company forgives a debt owed by the shareholder, that amount could be treated as a dividend and become taxable.

If your business is a look-through company, the profits and losses flow directly to the shareholders. A change in shareholders could affect this special tax status, so it’s vital to check with your accountant before making any changes.

All share transactions must be recorded at a realistic price for tax purposes. Even if you’re passing shares to a family member, the IRD requires the transaction to be based on ‘fair market value’.  Your accountant can help you carry out a business valuation to determine this figure. This ensures the transaction is officially recorded at its true commercial value, regardless of the actual price paid.

The number of shareholders also matters. If your company grows to have more than 10 shareholders, you could be required to prepare more complex and costly accounts under a standard called NZ IFRS. While you can opt out of this, you need to do so in time. It's a small detail that can create a big compliance headache if overlooked.

If shareholding changes result in more than 25% of your company being owned by an overseas person or entity and you qualify as a ‘large’ company*, you are required to file audited financial statements each year. This is a significant cost and rarely adds any useful information to the business.

* Large is where for two consecutive periods, the company’s assets are more than $60 million OR revenue is above $30 million.​

When you reward employees by offering them shares in the company, this often falls under Employee Share Schemes which carry their own tax rules.

If shares are gifted below market value, the difference between market value and what the employee actually pays for the shares is taxable for the employee. The discount is not a tax-free gift, but considered part of the employee’s income.

These schemes can be tricky, so please consult your accountant or tax advisor before making any shareholding changes.

While the tax and accounting side is critical, there are a few other things to be aware of when changing shareholders.

1. Updating the Companies Office: Any change in shareholding must be officially recorded with the Companies Office within 20 working days.

2. Shareholder Agreements: If you have a shareholder agreement, it’s a legally binding contract that must be followed. A good shareholder agreement outlines what happens if a shareholder wants to sell, passes away, or if there's a dispute. If you don't have one, now is the perfect time to get one drafted by a lawyer.

3. Get Legal Advice: While your accountant manages the valuation and tax implications, a lawyer should handle any legal paperwork that needs to be reviewed and updated as part of the process.

As you can see, there’s a lot to consider. Getting professional advice as part of the process helps ensure it’s a smooth and straightforward change and free of any surprises.

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Important considerations before changing your company shareholders

Business advice

The shareholder current account can be confusing to understand. Learn how it works and the risks to be aware of.

FINANCIAL LITERACY  •  21 OCTOBER 2025  •  7 MIN READ

Learn what a Shareholder Current Account is, how it works, and why it matters for business owners. Understand the risks of an overdrawn account and how to fix it.

What is a Shareholder Current Account?

The Shareholder Current Account (SCA) is a vital concept in business finance, yet it remains one of the most confusing, especially for newer business owners. We hear the question often "my company made a profit and declared a salary, but where is the cash?"

It's a completely fair question. It can feel like you are your company sometimes, but the reality is that the company has its own legal status.

In its simplest form, the Shareholder Current Account (SCA) is a record that tracks the movement of money between two separate legal entities: you (as the shareholder) and your company. Think of it as a flexible loan account between you and the business.

This account is particularly significant when the company is owned by more than one person, as it clearly defines what the company owes each owner, and vice versa.

Understanding the shareholder current account as a loan

When a company needs money, it essentially has 3 main ways to get it - from a bank, a third party or from shareholders.

The bank transfers the loan amount to the company’s operating account. The company owes money to the bank, shown as a Bank Loan on the Balance Sheet.

A third party transfers money to the company’s operating account. The company owes money to that individual/entity, shown as a Loan on the Balance Sheet.

You, the owner, deposit personal money into the company’s bank account (or pay for some company expenses personally). The company owes you that money. This is a liability on the Shareholder Current Account, and also shows on the Balance Sheet.

How your shareholder current account works in practice

The goal is always to have a positive SCA balance, where the company owes you money i.e. has a liability owing to you.

You'll usually see the 'Shareholder Current Account' as a key line item on a company's Balance Sheet. (A trust can have a Beneficiary Current Account, which is similar in nature).

The movement in the shareholder current account is made up of two types of transactions - cash transactions and year-end accountant adjustments.

These are straightforward as they involve direct movement in the company’s bank account.

Increases to the SCA (company owes you): when you deposit personal money into the company (known as Funds Introduced or Cash Deposits), or when you pay for company expenses yourself (not with company funds or card).

Decreases to the SCA (you owe the company): when you withdraw money from the company for personal use, or when the company pays for your personal expenses (known as Drawings).

As accountants, our aim is always for you to pay the least amount of tax legally possible, so at year-end we make adjustments to shareholder current accounts when preparing the company’s financial statements.

At the end of the year, we review the company's profit. As you likely have a lower personal tax rate than the company, we may allocate a salary to you out of the profit. This simply moves (part of) the profit from the company to you. Since no cash changes hands, the company still owes you that salary, and your SCA increases. This figure is included in your personal tax return.

If you use your home for business, the company needs to reimburse you for that privilege (rent, power, internet etc.). We calculate the business-use amount and include it as a Home Office Expense for the company. As no cash changes hands, the company owes you this money, which increases your SCA.
Need a refresher on what you can claim? See our guide on how to correctly claim your home office expenses.

This is a common adjustment when a vehicle is used for both business and personal travel. The impact on your shareholder current account depends on who legally owns the vehicle.

If you own the vehicle personally: you’re paying the running costs (fuel, insurance, maintenance etc) so the company needs to reimburse you for the business-use portion of these. We calculate the appropriate amount based on mileage/records. The company doesn’t physically pay you, so this increases your SCA (known as Motor Vehicle Expenses, but often grouped within Funds Introduced).

If the company owns the vehicle and it’s available for you to use for personal trips: this is considered a benefit to you as the company is covering the running costs. You need to reimburse the company for this benefit. We calculate the amount, and this figure decreases your SCA (known as Motor Vehicle Reimbursement, but often grouped within Drawings).

Curious about what's claimable? Read our post: What motor vehicle expenses can I claim for my business?

The diagram below combines what we’ve explained above into a simple visual to give you an idea of what causes an increase to a shareholder current account and what cases a decrease to the account.

The risks of an overdrawn current account

If you take more money from the company than you put in, you will have an overdrawn SCA. This means you owe the balance to the company (essentially, the company has given you a loan).

An overdrawn current account is almost always a warning sign of financial pressure. If your accountant says your SCA is overdrawn, please take it seriously and make time to understand what’s happening.

Interest on an overdrawn shareholder current account

The IRD requires the company to charge a shareholder interest on an overdrawn SCA, based on set IRD rates. You don’t physically pay this, it’s simply an adjustment made by your accountant at the end of the financial year. The interest becomes income for the company and is reflected in your shareholder current account. If interest isn't charged, then the company will need to pay fringe benefit tax on it instead.

Consequences of an overdrawn shareholder current account

For shareholders: there is a risk of losing the limited liability protection of a company. You may be personally liable up to the amount of the overdrawn SCA. If your company is placed into liquidation, the overdrawn shareholder current account is required to be repaid and from any personal assets you have, including personal bank accounts and property. If your SCA is not overdrawn, they can still require you to repay any drawings taken in the previous two years from the liquidation date.

For company directors: if the company becomes insolvent as a result of an overdrawn SCA, there could be serious personal consequences for breach of duty.

Insolvency risk: in the event that the company folds, the IRD may consider the overdrawn balance to be a dividend and you’d be required to pay tax on it.

If you find yourself with an overdrawn SCA, it's vital to address it quickly to avoid compounding interest charges and serious consequences. You have two primary ways to clear or reduce the balance:

Introduce Funds: The most straightforward way is for you to personally transfer money back into the company’s bank account. This acts as a cash repayment of the loan, immediately reducing the amount you owe.

Offset with Income: If the company is due to pay you money (such as an upcoming Shareholder Salary or reimbursement for expenses), you can choose to apply that payment directly to the outstanding SCA balance instead of receiving the cash. This uses the company's liability to you to offset your liability to the company.

Understanding your Shareholder Current Account is essential for business management. Here are a few important things to remember.

It’s a tracker, not a cash account. It simply records what the company owes you (positive balance) or what you owe the company (negative balance).

Aim for a positive balance. This is the safest position to be in rather than being overdrawn/in debt to the company

Act fast on a negative balance. An overdrawn SCA is a red flag so address it immediately by reducing drawings and introducing funds, or offsetting future income to avoid compounding interest charges and personal liability risks.

Keeping these in mind ensures good financial governance, reduces tax risks and strengthens the financial health of your business.

Financial literacy

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.

Financial statements vs management reports

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.

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