Accountants are the key to small business success 1

Stick Figure Series Blue

Last week the ICAS reported based on IFAC research..

SMEs were shown to traditionally rely on accountants as a main source of business advice. One study identified an 8.1% average increase in sales growth and a 29% decrease in likelihood of failure for businesses using an external accountant.

Also last week smallbusiness reported that 1.3 million britons want to start their own business.

So when would a business need to contact an external accountant?

Picture 1

  • Business Plans
  • Budgeting and Forecasting
  • Cash Flow Management
  • Buy or Rent decisions
  • Capital Investment Appraisal
  • Accounting Procedures and Systems
  • Business Strategy
  • Busines Funding and Investment
  • KPI’s

For start ups its particularly important to ask your accountant to help with:

  • Choosing the right business structure for your business – most businesses start out as sole traders but once they start making profits convert to limited companies, this is because sole traders pay more tax than company structures
  • Choosing the best VAT Scheme you might be better off with Flat Rate or Cash Accounting
  • Choosing the most suitable accounting software
  • Creating a business plan and cash flow forecast – research shows that business that have a business plan make 20% more profit

steve@bicknells.net

 

HMRC changes the rules again on the Employment Allowance! Reply

Business team.

The employment allowance was introduced in April 2014 and employers can save up to £3000 in employers national insurance.

The problem is that HMRC wanted to stop one-person businesses from getting the allowance and from the 6th April 2016 new rules came into place.

However, many one-person business thought that employing another person, for example their Spouse would get round the rules.

So HMRC have tightened the rules a bit more in their Employer Bulletin April 2016 and set out the rules for employing another person.

employment allowance

steve@bicknells.net

Why doesn’t my accountant remind me to do things? 3

Calendar with thubmjacks

Every business has important dates to remember!

VAT Quarterly (or Monthly), filed one month and 7 days later paid by one month and 10 days later

PAYE/CIS Monthly – tax period to 5th of the month, filed by 19th paid by 22nd (you should remember monthly tasks without reminders)

RTI/FPS/EPS everytime you pay employees (you probably don’t need to be reminded to do this)

Company Accounts – due 9 months after year end, corporation tax payable 9 months and 1 day after year end

Self Assessment payments on account in January and July

Annual Returns on the 12 month anniversary of when the company started

Late Filing Stats

HMRC and Companies House apply tough penalties for filing late!

Its a common problem area, the fine comes in and then accountant and client blame each other

businesswoman is very multitasking

Its easy to understand how very large accounting practices simply lose track of when things need to be done

But it doesn’t have to be like this.

There are lots of ways your accountant could keep track of all the deadlines

Here is a list that I found on accountingweb posted by Howard Marks http://www.accountingweb.co.uk/anyanswers/question/practice-management-ultimate-list

AffinityLive (not accountant specific)

BTC PM Solution

Capium Practice Management

CCH Practice Management

CentreCRM

Digita Practice Management

Firmzen

Glide

HQ4A

Iris Practice Management

Logical Office

MB Practice Manager

OMS

Practice Flow

Practice Launchpad

Work etc (not accountant specific)

WorkflowMAX

My personal favourite is PracticeFlow, I have started using it for Bicknell Business Advisers.

Its not just dates you need to keep track of, if you are going to send out client reminders you will need UTR’s and amounts due. You Also need to track tasks and who has been allocated the work. PracticeFlow helps us do all of this and you can set sub-tasks and have 3 dates – start, planned to complete and deadline.

So why isn’t your accountant reminding you of important dates?

Last minute panics or penalties can be very stressful, makesure you know your deadlines or get reminders so that you can relax!

Working by the sea

 

steve@bicknells.net

Why your SME needs a CGMA CFO! 1

Flying Superhero

Many businesses require the skills of professionals to oversee and direct financial operations. These professionals are referred to CFOs, chief financial officers, or financial directors (FD).

So what should your Chief Financial Officer be doing for your business…..

1. The CFO should be able to look into to future to see what the future financial needs of the business will be
2. He/She should negotiate funding facilities to ensure the business can manage its cash flow needs
3. The CFO should be able to foresee the future tax consequences and risks of decisions
4. He/She should help the business to achieve the best possible credit scores
5. Identify ways to reduce costs and improve profitability
6. Understand the business owners objective and focus the business on achieving those objectives
7. Ensure financial and regulatory compliance
8. Ensure accurate and timely reporting of management information
9. Evaluate growth opportunities
10. Apply corporate governance

What key questions should you regularly ask your CFO…..

1. What is our cash cycle and how can we improve it – Cash Cycle Blog
2. What Key Performance Indicators should we use and what are they telling us – KPI Blog
3. How can we improve profitability – 15 ways to improve profitability Blog
4. What is our Business Plan and is it the right plan – How can you create a Business Plan
5. Can we reduce Overheads – 10 creative ways to reduce overheads Blog

Many smaller businesses and SME’s can’t afford a Full Time (or even in some cases a Part Time CFO or FD) but they need help with:
• Business Plans
• Budgeting and Forecasting
• Cash Flow Management
• Buy or Rent decisions
• Capital Investment Appraisal
• Accounting Procedures and Systems
• Business Strategy
• Busines Funding and Investment
• KPI’s

Expert Advice Fotolia

Virtual FD’s fill this gap because:
1. You only pay for what you need
2. There is no employment contract
3. It provides access to higher level of expertise (in theory)

But be careful who you choose. There is no law preventing anyone from calling themselves an accountant, and as a result small businesses are unknowingly paying someone without the necessary skills to handle their finances and help their business grow.

So what experience does your accountant have to show that they have the skills to be your Virtual FD?

I am sure that in theory they have the technical skills but is that enough?
With the exception of CGMA (CIMA) accountants many accountants in practice have never worked in business let alone been a Finance Director!

I happen to think that time served experience as a CFO does make a difference because it greatly improves your insight and skills.

Would you get on a plane with a Pilot who in theory knew how to fly but had never actually piloted a plane before?

When you choose a Virtual FD you are trusting them with the success of your business. Choose wisely!

CIMA operates a Masters degree standard scheme of qualifying examinations for prospective members. It is active in promoting local education, training and management development operations, the promotion of new techniques through its research foundation and the dissemination of management accounting practices through publications and other media related activities. WIKIPEDIA

Chartered Global Management Accountant™ (CGMA®) is the global designation for management accountants. It’s powered by the resources and expertise of AICPA and CIMA, two of the world’s leading accounting organisations.

steve@bicknells.net

 

How would you implement a new accounting system? Reply

methodology

Implementing a major accounting system is big undertaking which needs a lot of planning.

Top Tips for System Implementations:

  1. Start by drawing up a specification of your requirements – what do you want to achieve with the new system, what is the scope of the system, where will cost savings be made, how could more information lead to better decision making?
  2. Get Buy In – its really important that the system gets the support of the Senior Management Team and that key staff are given the chance to put forward their ideas and are involved in the project. People are often resistant to change and getting them involved early will breakdown barriers to change.
  3. Rationalise – changing systems is an ideal chance to look at how can you do things differently and stop doing things that don’t add value, this will also reduce potential customisation requirements
  4. Allocate time to the project – If you don’t allocate time to the implementation project you will regret it later but that doesn’t mean you need to do everything yourself, budget to bring in temps and consultants to help
  5. Measure the savings and benefits – make sure you achieve your goals

By using simple project management processes, tools and techniques you can achieve the best results.

Formal methods of project management offer a framework to manage this process, providing a series of elements to manage the project through its life cycle. The key elements consist of:

• Defining the project accurately, systematically clarifying objectives
• Planning the project by splitting it up into manageable tasks and stages
• Executing the project by carrying out actions
• Controlling the project through its stages using project definition as a baseline
• Closing/Handing Over the Project

steve@bicknells.net

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10 things a new business must do to pay less tax Reply

Entrepreneur startup business model

A record breaking 581,173 businesses were registered with Companies House in 2014 showing an accelerated increase on previous years with 526,447 and 484,224 recorded in 2013 and 2012 respectively.

In 2014 the UK had the fastest growth in Self Employed workers in Western Europe!

So what should start ups do to pay less tax?

  1. Choose the right business structure for your business – most businesses start out as sole traders but once they start making profits convert to limited companies, this is because sole traders pay more tax than company structuresComparison Calculator
  2. Choose the best VAT Scheme you might be better off with Flat Rate or Cash AccountingFlat Rate Calculator 2
  3. Get an Accountant and use accounting software – the penalties and fines for getting your tax wrong can be huge!
  4. Employ your family – Children can legally work from the age of 13 which means they can perform activities which are relevant and justifiable in your business. Each member of your family has a tax free allowance of £10,600 (2015/16).
  5. Avoid earning more than £100,000 – For all ages, the personal allowance reduces where taxable income is above £100,000 – by £1 for every £2 of income above this limit, so that the personal allowance is lost once taxable income exceeds £121,200 (2015/16).
  6. Pay into your Pension – Currently you can pay £40,000 per year into to your pension
  7. Pay Dividends – Generally directors will take a low directors fee and the rest of their income in Dividends
  8. Claim Expenses – You may well have an office at home and use your car for business
  9. Use Company Assets – Sometime the Benefit in Kind Tax works in your favour, so you could get the business to buy the assets for you to use for example a commercial vehicle or computer equipment
  10. Buy Assets – You should be able to buy assets with a loan or on credit but you will get the tax relief as soon as you take ownership

steve@bicknells.net

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Business Planning made easy with Apps 1

Apps

A business plan helps you to:

  • clarify your business idea
  • spot potential problems
  • set out your goals
  • measure your progress

 

Businessman get idea

The problem with Business Plans is that they are time consuming to produce, so business owners put off doing them.

But new Apps might change this and make it much easier to produce high quality Business Plans.

http://www.enloop.com/features

There are other Apps too for example..

Business Plan Premier

StratPad

steve@bicknells.net

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Would you like to pay less VAT? have you tried Flat Rate? 1

Flat Rate Calculator 2

Google Docs Link https://docs.google.com/spreadsheets/d/1NyVN2XW3hjpcAYFdjGPCrbeMa-HyfOcgy3eKnNj2wi0/edit#gid=68376799

Usually, how much VAT a business pays or claims back from HM Revenue and Customs (HMRC) is the difference between the VAT they charge customers and pay on their purchases.

With the Flat Rate Scheme:

  • you pay a fixed rate of VAT over to HMRC
  • you keep the difference between what you charge your customers and pay over to HMRC
  • you can’t reclaim the VAT on your purchases – except for certain capital assets over £2,000

To join the scheme your VAT turnover must be less than £150,000 (excluding VAT) and you must apply to HMRC.

You can join the scheme:

Confirmation you’ve joined the scheme is sent to your VAT online account (or in the post if you don’t apply online).

In your first year as a VAT-registered business the rate is reduced by 1% until the day before your registration anniversary.

The Flat Rate Scheme has its own Cash Basis and Retail Systems. (VAT Notice 733)

Try our calculator to see if you could save money!

steve@bicknells.net

The end of FRSSE here comes FRS102 and FRS105 Reply

junge frau lernt für eine prüfung

The Financial Reporting Council issued amendments (27th July 2015) to the UK accounting standards, ushering in a new financial reporting framework for small and micro-entities. The changes are mainly as a result of the new EU Accounting Directive.

The key changes are:

  • FRSSE has been withdrawn
  • FRS102 – A new section has been added to FRS102 with disclosure requirements for Small Companies
  • FRS105 will be the new reporting standard for Micro-Entities

The changes come into effect from 1st January 2016.

This is a big change, are you ready for it?

steve@bicknells.net

Small Business Saturday 2015 – Register Now! 2

Small-Business-Saturday-UK-Facebook-Banner-2015-White

The UK’s most successful small business campaign, Small Business Saturday, has been launched and this year it will be on Saturday 5th December.

In 2014, approximately 16.5 million adults supported at least one small business on Small Business Saturday, with almost two-thirds (64 per cent) of the British people aware of the campaign.

The organisers say…

We want all kinds of small businesses to get involved, so know that whether you are a family business, local shop, online business, wholesaler, business service or small manufacturer, Small Business Saturday is supporting you!

Small Business Saturday UK is a grassroots, non-commercial campaign, which highlights small business success and encourages consumers to ‘shop local’ and support small businesses in their communities. The day itself takes place on the first shopping Saturday in December each year, but the campaign aims to have a lasting impact on small businesses. In 2015 Small Business Saturday will take place on Saturday, December 5th.

Sign up and get involved https://smallbusinesssaturdayuk.com/

steve@bicknells.net