With the RBNZ increasing the cash rate to 1.5 per cent in April, as a property or business owner what can you do to prepare for the increase in the cash rate and interest rates? The cash rate is even expected to reach 3 per cent by the end of the year, so this means you might need to switch from a variable-rate to a fixed-rate loan!


What is the official cash rate?

 

The official cash rate is the interest rate charged on loans made between financial institutions, but which are ultimately passed on to customers through loan interest rate changes. This time, the increase in the official cash rate aims to rein in the looming inflation.


What does this mean for property owners and business owners? You would then need to budget for higher financing costs in the next couple of years. If you’re on a fixed-rate loan, you won’t be adversely affected by the increasing cash rates but you will be if you’re on a variable interest rate loan.


What can you do to overcome these challenges?

 

Even with the increasing inflation, unpredictable business interruption, supply chain disruption, and interest rate increases, many businesses are still confident – with business growth and increasing sales as their priorities overall. To achieve these, small businesses can invest more in staff training, development and deployment, more advertising, internal system and process upgrades, customer engagement, and new business and product development.


If your business is facing the prospect of cash rate changes, you can prepare for this by putting some money aside to boost your cash reserves and using cash flow management tools to update your cash flow and profit and loss forecast. You can also consider switching from a variable rate to a fixed rate, so you know your repayments will be the same even if the cash rate continues to rise in the future.


Business


Do you have any questions about your cash flow and profit and loss projections? Do you need assistance with preparing for the possible cash rate and interest rate increases? Just sing out and our team will be in touch to help you out! These are exciting and challenging times for businesses, so make sure you get the right advice moving forward.


Your Outside Team

 

 

 

 Need a bit of assistance with your business? Contact an Outside Accounting team member today and learn more about our fixed fees. You won’t regret it.

Aside from business consultation, we are business accountants Wellington who offer accountingbookkeepingpayroll services designed to help you achieve greater financial success.

You can click here to speak to a businessaccounting and bookkeeping firm. We will give you a call to know more about your needs. We will explain to you how we can improve your business.



Contact 

Wellington Accountants | 

Business Accountants | 

Construction Accountants 

Property Accountants 

Contractor Accountants 

Hospitality Accountants |

Property Developer Accountants | Accountants Wellington | Wellington Accountant | Restaurant Accountants | Cafe Accountants |

Accounting Firms Wellington 

AddressLevel 2, 182 Vivian Street,
Te Aro, Wellington 6011, New Zealand 

Mail: PO Box 24-457, Wellington 6142

Phone04 889 2975

New Zealand Accounting, Bookkeeping & Property Business Consultancy Services | Wellington & Lower Hutt Xero Property Accountants Business coach business consultation business adviser

Business Accountants: Understanding Changes in Residential Property Taxation

Recent years have seen significant adjustments to the tax landscape, particularly concerning residential property. The government has responded to calls from various quarters to address investor demand in this sector. Notably, recent changes have been initiated to reverse tax policies affecting residential property, aligning with promises made by both National and ACT during their election campaigns.

Read More »