04 Jun Anti-Money Laundering & Countering Financing of Terrorism Act 2009
A law change (that will likely affect you)
Phase 2 of the Anti-Money Laundering and Counter Financing of Terrorism Act of 2009 comes into effect over the coming few months. This means that for many of our customers we will have to update the details that we hold on file for you. We will be in touch with you directly to make sure we have all the necessary info. You can expect the same from lawyers and real estate agents over the coming months.
More importantly…
For most of the businesses we work with, there is new requirements for us to notify the Department of Internal Affairs about certain transactions. This obligation is prescribed in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. In other words, we have no choice. We are required to disclose suspicious activity – this is activity that we are unable to explain. There are certain prescribed transaction values that we will need details for. They are transactions equal to or greater than:
- Wire transfers: $1,000 (transferring funds by electronic means excluding most debit/credit card payments)
- Cash transactions $10,000
- Currency exchange transactions $1,000
- Travellers Cheques $5,000
- Any transactions that are out of the ordinary for your business
If you have any of the above transactions, we will require invoices and/or supporting documentation. The easiest way to manage this is to upload them directly to Xero. Check out this link of how to do this.
We’re not all that excited about it either, but as of the 1st of October, it is the law, so we will be insisting upon having appropriate documentation.
Change of season – keep on top of your cash
As we roll from autumn into winter, different businesses will feel different effects. For some, winter signals a slowdown in work, with weather and daylight hours impeding the amount that can be done. For others, it is the time of year where there are few distractions such as long weekends (except for this one…), so time to focus on getting work done. Either way, this is one of the times of year that cashflow can come under pressure.
So, what can you do? First off understand your cash flow. How long does it take to get paid? What are your payment terms with your suppliers? Do you have finance payments or wages to pay? Does the money show up in your account on time to pay everyone?
Next up; be proactive about potential shortfalls. If you know that at a certain point money will be tight, the time to take action is NOW. Can you get some extra work in to cover the shortfall? Should you run a promotion or sale? Can you negotiate with suppliers for better payment terms? Or perhaps you need to arrange for a finance facility – the BEST time to arrange finance is before you need it.
Finally, get paid quickly. If you want to be paid quickly, invoice quickly. Invoice as soon as you can in accordance with your terms – usually on completion or at set progress stages. Check out the Xero blog for more advice around getting paid quickly.
What’s the point of the new Anti-Money Laundering legislation?
While there might not have been much fanfare about the recent Anti Money Laundering legislation, it is likely to affect you, through increasing costs and maybe through greater scrutiny of transactions you make.
As there are increased costs for a number of organisations to comply with these new requirements, it is likely that eventually, these will be passed on to consumers. We can’t help but ask why, when apparently precious little is being done to investigate or punish those that are already recognised as taking part in these illegal activities. Check out this article from the NZ Herald.
Have a great June
