Three Money Questions Every New Business Must Answer

Whether you're a sole trader, contractor, freelancer, or running a small business in New Zealand, the financial side of things can feel confusing — especially when everything is still new.

But the truth is, if you can answer three simple money questions, you'll have a solid handle on your business and avoid unexpected bills from IRD.

1. How much did I earn?

This is every dollar that comes into your business — whether it's paid by bank transfer, card, cash, or through an online platform.

For most small businesses and sole traders, income includes things like client payments, project fees, and retainers. If you sell products, it could be online sales through platforms like Shopify, Trade Me, or Etsy, or in-person sales at markets and events using EFTPOS, Square, or Stripe. It also covers side income like freelance work, tutoring, or creative services, as well as commissions, referral fees, and any taxable grants you've received.

The key point is this: if someone pays you for goods or services, it counts as income — regardless of how it lands in your account.

2. How much did I spend?

These are all the costs you pay to run your business. They add up quickly, and knowing what you're spending is just as important as knowing what you're earning.

Here's a practical breakdown of the most common expense categories:

Operating costs — rent, power, internet, phone, courier and postage, insurance, bank fees, and payment processing fees from providers like Stripe or PayPal.

Professional services and admin — accountant or bookkeeper fees, memberships, licenses, and software subscriptions such as Xero, Canva, Adobe, or Zoom. This also includes website, domain, and platform fees.

Marketing and sales — advertising on Facebook, Instagram, or Google, promotional tools, and any fees charged by sales platforms like Trade Me or Etsy.

Goods, materials, and supplies — stock, ingredients, raw materials, and tools or parts used for jobs or production.

Assets and equipment — laptops, printers, cameras, machinery, and office furniture. These may need to be depreciated rather than claimed as a lump sum, depending on the value.

Vehicle, travel, and training — mileage or running costs like petrol, repairs, WOF, and registration. Also parking, tolls, domestic travel for work, and any courses, workshops, or conferences.

Not every expense will apply to your business, but it's worth knowing what's out there so you don't miss anything when it comes time to file.

3. How much do I owe in tax?

Your tax isn't just one number. Depending on your situation, you may need to plan for several obligations.

Income tax (IR3) applies to everyone who is self-employed. It's calculated based on the difference between what you earned (question one) and what you spent (question two). This is the one you definitely need to be ready for.

GST applies if your turnover exceeds $60,000, or if you've voluntarily registered. If you're GST-registered, you'll need to file regular returns and set money aside to cover what you owe.

ACC levies are charged based on your earnings and cover you in case of injury. They're worth factoring into your costs so they don't catch you off guard.

The common thread here is that none of these should come as a surprise — and they won't, as long as you're tracking your income and expenses throughout the year.

Simple habits that make all of this easier

You don't need a complicated system to stay on top of things. These small habits go a long way:

• Use one dedicated business bank account so everything is easy to find.

• Store all receipts in a single digital folder — don't let them pile up.

• Do a five-minute weekly money check-in to stay across your numbers.

• Add GST filing dates to your phone calendar so deadlines don't sneak up on you.

• Review your pricing if your expenses keep rising — margins matter.

• Check your myIR account at least every couple of months to avoid surprises.

None of these take long on their own. But together, they're the difference between feeling in control and scrambling at tax time.

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This is what I help my clients get right from day one. If you're self-employed or running a small business and want help getting across your numbers, get in touch. I'd love to help you build a system that works for you.