In a central city house painted "the colours of New Zealand", a small Whanganui accounting practice is leading the way for accountants around the country.

Prue Anderson Accounting is an early adopter of Inland Revenue's Accounting Income Method (AIM) for provisional tax and the firm's experience is being closely watched by other accountants and Inland Revenue.

Principal Prue Anderson's team is made up of accountant Maria Forlong and administration staff Sandy Sloan and Kaley Wainhouse.

The practice is Whanganui's first "Xero only" cloud-based accounting firm and the team prides itself on being open to new ways of doing business.

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Anderson says Inland Revenue's new provisional tax scheme is voluntary and is not suitable for all taxpayers but is a good option for small businesses and those with fluctuating incomes.

"It's a pay-as-you-go method based on the profit you are making this year," Anderson said.

"It's a different method of calculating provisional tax based on what you are earning now.

"We thought it would be quite popular with a number of taxpayers so we looked at our client base and contacted about 25 who would be eligible. Twenty-two of them said 'yes, that's a good idea'. We file returns for them every two months as we do with GST returns.

"I think from the client's perspective it's a really good scheme because there's certainty and they don't end up with a big tax bill at the end of the year."

Very few accountants in New Zealand had taken up the scheme, with many waiting to see if it was successful and ensure any issues were ironed out, Anderson said.

"IRD has identified us as the leading organisation in New Zealand and want to track with us to see how our clients go. They will interview us at the end of the year to see how it's gone and maybe talk to some clients to get their feedback.

"I think this probably will be the way of the future."

Anderson started out on her own in 2012 after Carey Smith, in which she was a partner, was dissolved. Sloan worked with Anderson for 15 years at Carey Smith.

Forlong joined Prue Anderson Accounting two years ago and Wainhouse has been with the practice for a year.

"We have a lot of women clients who want to work with women but also men who want to work with a small business," Anderson said.

"We're very client-focused. It's not unusual to be greeted with hugs."

Sloan said the team had a close relationship and it extended to clients.

"They are walking into our family, they are part of our team," Sloan said.

And the colours on that house on St Hill St near the Dublin St intersection?

"We painted the fence Xero blue and that got a lot of attention," Anderson said.

"The house colours are based on a scarf with favourite colours. It's a celebration of New Zealand with the colours of paua."