Question

Covid 19 is taking grip on many businesses . In New Zealand you hear about firms shutting down and downsizing while others running. at the same time provide opportunities for other new forms or setup.

with this in mind

please explain some key management accounting tools or techniques of New Zealand that might be handy for firms ( running firms and new setups) on 300 words.

2. and also in 200 words any other issue that ypu might deem relevant for tgeir success.

You may choose a particular industry or firm and focus on it.

Answer 1

Some key management accounting tools or techniques of New Zealand that might be handy for firms ( running firms and new setups)

1)Some of the important tools and techniques are briefly explained below.

1. Financial Planning

The main objective of any business organization is maximization of profits. This objective is achieved by making proper or sound financial planning. Hence, financial planning is considered as best tool for achieving business objectives.

2. Financial Statement Analysis

Profit and Loss account and Balance Sheet are important financial statements. These statements are analyzed for different period. This type of analysis helps the management to know the rate of growth of business concern. This analysis is done through comparative financial statements, common size statements and ratio analysis.

3. Cost Accounting

Cost accounting presents cost data in product wise, process wise, department wise, branch wise and the like. These cost data are compared with predetermined one. This comparison of two costs enables the management to decide the reasons responsible for the difference between these costs.

4. Fund Flow Analysis

This analysis find out the movement of fund from one period to another. Moreover, this analysis is very useful to know whether the fund is properly used or not in a year when compared to the previous year. The working capital changes and funds from operation are also find out through this analysis.

5. Cash Flow Analysis

The movement of cash from one period to another can be find out through this analysis. Besides, the reasons for cash balance and changes between two periods are also find out. It studies the cash from operation and the movement of cash in a period.

6. Standard Costing

Standard costing is predetermined cost. It provides a yard stick for measuring actual performance. It is used to find the reasons for the deviations if any.

7. Marginal Costing

Marginal costing technique is used to fix the selling price, selection of best sales mix, best use of scarce raw materials or resources, to take make or buy decision, acceptance or rejection of bulk order and foreign order and the like. This is based on the fixed cost, variable cost and contribution.

8. Budgetary Control

Under Budgetary control techniques, future financial needs are estimated and arranged according to an orderly basis. It is used to control the financial performances of business concern. Business operations are directed in a desired direction.

9. Revaluation Accounting

The fixed assets are revalued as per the revaluation accounting method so that the capital is properly represented with the assets value. It helps to find out the fair return on capital employed.

10. Decision-making Accounting

A business problem can be solved by choosing any one of the best and most profitable alternative. To select such alternative, the relevant costs are compared. Thus, accounting information are used to solve the business problem which are arising out of increasing complexity of nature of business.

11. Management Information System

The free flow communication within the organization is essential for effective functioning of business. Hence, the management can design the system through which every employee of an organization can assess the information and used for discharging their duties and taking quality decisions.

12. Statistical Techniques

There are a lot of statistical techniques used in removing management problems. Methods of least square, regression and quality control etc. are some examples of statistical techniques.

13. Management Reporting

The management accountant is preparing the report on the basis of the contents of profit and loss account and balance sheet and submit the same before the top management. Thus prepared reports disclose the strength and weakness indifferent areas of operating activities and financial activities. These identification are highly useful to management for exercising control and decision-making.

14. Historical Cost Accounting

It means that costs are recorded after being incurred. This is used for comparing with predetermined costs to evaluate performance.

15. Ratio Analysis

It is used to management in the discharge of its basic functions of forecasting, planning, coordination, communication and control. It paves the way for effective control of business operations by undertaking an appraisal of both the physical and monetary targets.

2)New Zealand ranks among the top five countries in the world for ease of doing business, but having insight to the investment environment and local knowledge of the legal, accounting and taxation framework is essential to succeed.

New Zealand has laid out a welcome mat for foreign direct investment, offering incentives, rewards and a stable business environment. But having local knowledge of the legal, accounting and taxation framework is essential to any overseas venture, and there are still several challenges to overcome when setting up in the Pacific island.

The World Bank and International Finance Corporation (IFC) rank New Zealand first in the world for protecting investors and starting a business, and within the top 10 places in the world in five of the 10 essential criteria. The Transparency International Corruption Index 2012 puts New Zealand in first spot for lack of corruption and the anti-corruption NGO Transparency International continued to rank New Zealand number one for honesty and integrity in its public sector in 2012, the seventh year in a row the country was either first or first equal in the Corruption Perceptions index.

Businesses are attracted to New Zealand because of its efficient monetary and fiscal incentives, as well as its sound corporate environment and trade links. Domestically, the tax system is far easier to navigate because headline rates are all-encompassing. There is no payroll tax to pay, no social security tax (voluntary KiwiSaver was introduced in 2007) and no capital gains tax. A wide range of free trade agreements and pro-competitive regulation make New Zealand an ideal base for expansion in the Asia Pacific region, with free trade agreements (FTAs) in place in many of the major economies.

But there are still several hurdles that must be overcome when starting a business venture in New Zealand, and having local help on hand can prove to be a real asset when setting up overseas.

Starting a Business

The World Bank and IFC rank New Zealand number one in the world for ease of starting up a business. Companies are required to apply for registration with the Companies Office online (for IRD number and GST registration), which takes only one day to complete.

Dealing with Construction Permits

There are six procedures involved when obtaining construction permits, taking 89 days in total. Companies must receive resource consent (planning), building consent and an inspection from the District Council, as well as getting CCTV approval by Watercare and getting phone, water and sewer connection.

Registering Property

It only takes two days and two steps to register property by obtaining a land information memorandum and registering a title through Land Information New Zealand (LINZ).

Getting Electricity

Getting electricity is the most arduous element of setting up a business in New Zealand, requiring five procedures that take 50 days to complete. Dealing with the utility provider can take some time, particularly in the early stages of the procedure.

Getting Credit and Protecting Investors

New Zealand’s robust financial services sector and strong regulatory environment give good protection to investors and make it relatively easy to obtain credit. The World Bank and IFC rank New Zealand fourth in the world for getting credit and first for investor protection.

Paying Taxes

The fiscal environment in New Zealand is dominated by headline payments, which streamlines the process substantially. However, there are certain taxes which can be quite time consuming, such as the accident compensation corporation (ACC) levy or VAT returns, which take well over 100 days combined to complete.

Trading Across Borders

As an island nation there is a strong reliance on fast and efficient cross-border trade. There are five documents to prepare when exporting and six when importing, taking ten days to complete on average.

Enforcing Contracts

There are 30 procedures involved when enforcing contracts, taking 216 days all together. The cost of the attorney amounts to around 22% of the claim, although the court costs are substantially lower, standing at around 2% of the overall claim.

Resolving Insolvency

It takes 1.3 years to resolve insolvency, with the average recovery rate around 83 cents on the dollar.

Culture

There are marked differences between Maori and NZ European (Pakeha) societies in New Zealand, and businesses should be mindful of these disparities. Other than that, companies can expect quite a warm and relaxed welcome in the country.