Is your Expense Checking System up to scratch? Reply

Angry tax inspector looking serious and determined

HMRC have guidance in EIM30275 and EIM30270 which set out what they expect, so for example, this is what they expect the expense checking process to be for a one man company

Model D – One man company

Single employee of a one man company working at a series of temporary workplaces. Claiming benchmark scale rates.

Employee maintains a diary and time sheet to confirm occasions when travelling in the performance of their duties and retains receipts in respect of subsistence costs.  An independent third party performs regular monthly checks on a sample of the employees’ records to confirm that the relevant conditions for the exemption were met on each occasion. Checks are performed at random and the employee does not know in advance which journeys will be checked.

Independent third party would generally mean your accountant, but as HMRC encourage people to file themself many One Man Companies won’t have an accountant, so who does the checking then?

Lets see what bigger companies need to do?

Model C – Small employer

Small employer with less than 100 employees who regularly travel in the duties of their employment. Employer pays benchmark rates

Employer checks a random 10% of all claims.  Checks to be independently checked and authorised, and vouched by reference to employee diaries, work schedules and time sheets to confirm that employees were travelling in the performance of their duties on the date of the claim, and receipts to demonstrate that employees had in fact incurred costs whilst travelling. Employees should be aware that they might be subject to review at any time, and not be given notice that any particular claim will be subject to review.

The employer will have to be able to satisfy HMRC that their 10% sample really is a random one – for example, every 10th claim received.  HMRC will accept the evidence produced by such an exercise as being random for the purposes of confirming that employees meet the qualifying conditions for payment of the scale rate.

Employees required to retain receipts for a period of twelve months from the date of expenditure.

I think for small employers this would probably work and is achievable.

What system do you use? Do you think HMRC would accept your system?

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

Contact Us

 

 

What do FD’s want their ERP system to do? Finance Transformation 1

ERP CIMA

The chart (Figure 8) is an extract from the CIMA report on Improving Decision Making in Organisations, it demonstrates the huge potential to reduce costs by implementing systems and shows how the role of FD’s is changing to become business partners participating in decision making.

So how does ERP reduce cost and improve profitability

Top Tips for your ERP Implementation:

  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 ERP 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

Below are details of the Dynamics NAV system I implemented in 2007

SJB Tekton

steve@bicknells.net