Have you just registered for the Bosspac and try to figure out how it works? Today I want to share some insights on how the Bosspac works to demystify the magic that is happening behind the scenes.
Is Bosspac an accounting platform?
The short answer is yes. We are storing financial information about your business (contracting and self-employment is a business) in a structured format to make the reporting to the IRD easy. Unfortunately, most of the accounting platforms look very technical. They are suited to be used in almost any country in the world. That introduces complexities and you will come across a lot of accounting jargon. People have to code things in ledgers or journals. People have to set up their own charted account, know which reports are required by the government and what goes into them.
Bosspac is different. First of all, we try to remove any accounting jargon. Secondly, the Bosspac is suited just for the Kiwis. And lastly, Bosspac does not look and feel like an accounting platform.
Why Bosspac is different from any other accounting platform?
We designed the Bosspac around the people and the business events not around the accounting. For example, if you buy a coffee there are two ways of thinking.
Option #1 – the old way. You go to the journal, find the correct accounts, figure out how much you can deduct as a tax-deductible expense, store the transaction and add some notes about the transaction. If you are GST registered, this one transaction will have an impact on at least 4 different accounts. I didn’t even mention debit and credit. That’s why the bookkeepers and accountants are amazing. They live and breathe this world.
Option #2 – the Bosspac way. You have to enter that you had a coffee with someone. We will ask how much you spend and some contextual information. That’s it. The Bosspac platform will magically store everything else in the background. Add the expense to the financial statements and use the information to estimate your payments to the government.
How Bosspac works?
The Bosspac is available only in New Zealand. It provides us with a unique opportunity to simplify the product and build in the smart rules engine.
Whenever there is a new business event the rules engine stores the information in the underlying cash book to be used in reporting later on. Now we have a clean data set of the income and expenses in the correct charted accounts. By the design, we have eliminated the most common mistakes that people make in the traditional accounting platforms.
The cool thing is that now we can calculate how much you will need to pay in various payments in the future. The information is stored in a nice way and most of the calculations are fairly simple like Income tax and GST.
Provisional payments are a bit more complex. Our rules engine is built in a way that it provides insights into how much you can earn before you will need to start to make these payments. We take into account the thresholds that can change every year.
For different payments, there can be different thresholds and our smart engine know the thresholds to accurately estimate your payments.
What happens with the tax returns?
Once the right time comes, we ask you to confirm that all the information is entered for the reporting period. After that, we run the recalculation one last time. It generates the latest information for you. Then we take the results and put it either in the GST form or annual return forms (accountants know them by name – IR3 and IR3B).
We want to help you even more and guide you through the filing process. We recently ran an experiment and the person who had never ever had to file a GST return managed to do it with the help of the Bosspac platform in 10 minutes. Half of the time was to figure out what was the password in MyIRD.