accountant – Severn Valley Business Group
 

Tag: accountant

3 golden rules for success in business

| Comments Off on 3 golden rules for success in business

 

Being in business is a struggle at times. Read the stories of any successful business man or woman, and none of them will have had a smooth ride to the top.

It is very easy to get caught up in the day-to-day battles. This is especially true in a sole trader/owner-manager business. You often have no-one to tell you whether something is good or bad, someone to add perspective to a situation.

In the early days of my business a very wise friend gave me some advice. He said that when you are working by yourself it is easy to have huge swings of emotion – one day it is great, the next you want to give up. Something very small can tip your mood; one small thing can turn a great day into a disaster.

Often you will then look to blame yourself and come up with all the reasons why you are not capable of running a business. In reality it is probably nothing to do with anything you have or have not done.

But you don’t have anyone to tell you that.

These are my three pieces of advice to help smooth your journey through the ups and downs of business:

  1. Never make a decision off the back of a ‘bad day’. If you are having a bad day, step back and make your decisions later with a clear head.
  2. Always watch the tide and not the waves. Business can be rough and the waves can push you up and down but it is not the wave which we need to look out for. The wave will be here one moment and then will go past us. It is the tide that we need to be aware of, washing us out of our depth or up on to dry land.
  3. Always try to make decisions from a position of strength. We often make bad decisions when we are under pressure or forced into a corner. Just because it seems like a way out of a problem does not mean that it is the right way.

At Altus, we support clients by providing that listening ear and sense of perspective. We are at the end of the telephone line for that quick ‘can I just run this past you?’ call, while our Freelance FD services provide a critical friend on a regular, on-going basis. Click here to find out more.

Share

What you need to know about Making Tax Digital

| Comments Off on What you need to know about Making Tax Digital

money-256288

Making Tax Digital (MTD) is the latest brainwave from the Treasury, and is going to impact pretty much every business in the UK.

We are finally beginning to get some detail fleshed out on the bones of this tax announcement, originally made in the 2015 Budget. We accountants have been pouring over the responses to the consultation process that has been taking place. So what is the digital tax revolution all about?

Making Tax Digital requirements

  • All businesses with sales of more than £10,000 will be required to maintain their accounting records in a digital format, so out the window with those manual records.
  • In what has been termed ‘the end of the tax return’, not only will there be a requirement to complete an annual return but also quarterly returns with varying levels of detail depending on the size of the business.
  • This means that not only will your records need to be in a digital format but they will need to be up to date, at least on a quarterly basis. They will have to be in sufficient detail and accuracy that you will be able ­- and perhaps more importantly be happy – to complete a return to HMRC.

Accurate bookkeeping

This truly sounds the end of bringing a box of receipts to your accountant at the year end. All businesses will need to either maintain those records themselves or ask their accountant or bookkeeper to keep those digital records up to date.

It is understood that spreadsheets will be an acceptable method, but of course they do need to be accurate enough to produce the necessary quarterly reporting. HMRC states that free software will be made available for the smallest of businesses with the simplest affairs but it is unclear at this stage how comprehensive that will be.

It is likely that this is going to force more small businesses to move over to cloud-based bookkeeping systems as they try to balance the additional cost of maintaining their records to the required standard (read more on cloud bookkeeping here)

Many businesses, whether they currently use digital methods of bookkeeping or not, will have to significantly change their current processes to comply. Especially those that are below the VAT threshold and have not had to deal with any form of quarterly reporting before.

Tax timetable

When is all this happening? Well, not as far away as you might think. The current plan is that Making Tax Digital will apply from April 2018 – yes, just 12 months away. In a concession HMRC has announced that businesses below the VAT threshold will have a further 12 months to comply (April 2019).

However, this change is starting with sole traders and limited companies will follow on afterwards.

Of course all businesses should have accurate and up-to-date accounting records already, to provide good information for business decision making. Unfortunately, it is still all too common for business owners to ‘learn to their surprise’ about the results for the year when they sit down with their accountant 6 months after the year end!

Perhaps MTD will have a positive impact on businesses. There is so much information for making better, more informed business decisions hidden away in the accounts systems of small businesses.

Too many business owners see the bookkeeping as just a cost necessary to keep the taxman happy. This new requirement may be the catalyst needed to push that information into the light. Perhaps it will get business owners to seek some value from the extra work that undoubtedly will be required.

If you are worried about getting compliant with new digital requirements, want assistance with your bookkeeping or need more information to make better business decisions then Altus is here to help. Contact us here

 

Share

How to get the right work-life balance

| Comments Off on How to get the right work-life balance

see-saw-339504_1920

Remember your partner and kids? Chances are that if you run your own business, you don’t see as much of them as you’d like – or should.

Finding the right work-life balance is crucial for small business owners. The Mental Health Foundation calls the growing demands of work “perhaps the biggest and most pressing challenge to the mental health of the general population”.

Smartphones and tablets might help us keep in touch when we’re on the move during the working day, but unless we are strict with ourselves, they can extend our working week into 24/7 and intrude into our holidays.

When I set my accountancy business Altus up, I was determined I would not be one of the many business owners who blurred the lines between work and home. So the mobile phone is switched off at evenings and weekends, and I will respond to any messages as soon as I can next day. Of course there will be times when you need to work that bit longer to meet deadlines, but unless you are a brain surgeon on call, the chances are that whatever issues arise outside office hours will not be a matter of life and death.

Busy-ness doesn’t equal success

Working long hours and at weekends can become a habit and we need to stop and ask ourselves if it is necessary, or do we do it because we feel we should? Being busy is not a barometer of how successful we are or how well our business is doing. The order book and P&L account will tell us that. It may have much more to say about our effectiveness.

It’s essential to honestly analyse your time – do you actually know what you have spent your time on? Spend a week faithfully noting down what you do and for how long – it may give you a shock.

There’s an old and true saying that sales are vanity, profit is sanity but cash is king. Are you spending your time chasing sales, running quicker and quicker to keep up, when it is profit you should be focusing on?

If you cannot get everything done in a usual working week, it can point to one of three things:

  1. You are trying to do too much yourself
  2. You are not working efficiently
  3. There is something fundamentally wrong with your business model

Remember the 3 Ds – delegate, dump, do. When you have analysed what you are doing, identify the things you have to do.

Learn to step back

In my experience many business owners are by their nature control freaks – you have to learn to accept that someone else will not do it quite the way you would, but their way is not necessarily wrong. Do you think Richard Branson does his own payroll?

The age-old excuse is that ‘I can’t afford to pay someone to do it’ – no wonder when you are spending all your time doing ineffective, unnecessary things. Spend that time making profit and you will have plenty of cash!

I was delighted recently when one of my clients said that thanks to Altus, he was now able to spend more time with his family, doing the things he loved.

A good accountant should be someone who wants to support your business throughout the year, providing services that leave you free to focus on what you do best.

Having worked in companies of varying sizes, and building up my own business from scratch, I know the pull to put in long hours, but it should never become the norm. At Altus we work with businesses to provide the services that they don’t have the time or expertise for, and I can also act as a ‘critical friend’, advising clients on how to be more effective.

There is some more advice on adjusting your work-life balance here.

Click here to find out how Altus can help you spend more time doing what you really want to do.

Share

VAT changes are no April Fool’s joke

| Comments Off on VAT changes are no April Fool’s joke

matt-le-1127061st April sees what could be a significant change to the flat rate VAT scheme. It’s targeting what are being termed ‘limited cost traders’ – businesses where purchases of ‘goods’ are low. These are likely to be sole director/employee businesses, and in particular contractors providing services.

Small businesses can currently benefit from the ability to base their VAT liability, and therefore the amount of VAT they reclaim on purchases, on a fixed percentage depending on the nature of their business.

For many very small businesses this has meant a really quick and simple way to handle VAT and has seen some paying over less VAT than would have been the case under standard VAT accounting.

Changes were first mooted in the Autumn Statement, and we have been waiting to see the details before knowing how it would affect businesses. These details were finally revealed at the end of February.

The flat rate scheme remains in place but from 1st April a new higher rate (16.5%) is applicable to any business that is deemed to be a ‘limited cost trader’. The impact of this will be that for many the VAT flat rate scheme will no longer be beneficial.

You will be classed as a limited cost trader unless you have ‘goods’ in each VAT quarter of more than 2% of turnover (both calculated including VAT). You will also have to check each and every quarter whether this applies.

Goods are being defined as ‘moveable items or materials exclusively used in your business’. Critically for suppliers of services they do not include travel expenses, fuel, vehicle costs, telephone, rent, accountancy fees, training, memberships and also office equipment, computers and phones. This is not an exhaustive list, but you get the picture.

Clearly this excludes the vast majority of costs which many service businesses incur.

The options for a business caught by this change are:

1.      Continue with the flat rate scheme and apply the new higher percentage, which may not be beneficial

2.      If you are below the £83k VAT registration threshold then you could deregister for VAT

3.      Change over to standard accounting or cash accounting methods

The best option will vary on a business by business basis. If you are, or think you may be, affected by these changes, then please do get in touch, and we will be happy to talk it through with you.

 

Share

Is cloud bookkeeping right for you?

| Comments Off on Is cloud bookkeeping right for you?

 

man-person-clouds-apple

Cloud bookkeeping – it’s the sexy new kid on the accountancy block.

Put simply, it uses a secure website to store your records rather than your local server or PC. Of course there are pros and cons to this. First the good news:

  • You can get at the information wherever you are provided you have internet.
  • You can therefore review and input data any time, any place.
  • It’s backed up for you so you needn’t worry about data loss should your systems crash.
  • Having someone else do your bookkeeping remotely – such as your accountant – is a realistic and sensible option. You can still access the info at any time while the work is expertly and promptly done by people who know what they are doing, freeing you up to run your business.
  • Unlike traditional methods of outsourcing bookkeeping, eg taking your books to your accountant, you retain close contact with the info.

And now the bad:

  • You need decent broadband.
  • You don’t know where your data is being stored, which may be a data protection issue for certain industries.
  • You don’t have control over backup or security.
  • It is slower to use, simply because of the data transfer issue. Every time you do anything it has to go to the cloud and back again. However good your broadband, that is always going to take longer than it going to your hard drive. At Altus we have found that dealing with large volumes of transactions is a slow process.
  • Unless you are disciplined, you may find yourself taking your work home with you. It would be easy to sit in bed at night doing your bookkeeping, for instance. And that isn’t a good thing.

But truth to tell the whole cloud bookkeeping thing is a bit of a red herring, a distraction from the real issue. Which is, your records will only ever be as good as you are at keeping them up to date. Wherever they are.

Moving over to cloud bookkeeping will not help if everything is three months out of date. It might just as well be sitting in a plastic bag in the corner of the office.

So before you get your head in the clouds, put your feet firmly on the ground. Do you keep your records up to date? Then moving to a cloud-based system may work for you. If you don’t, then that is the first issue you need to sort. To manage your business, you have to know exactly where you are in real time, not where you were last time you did your books!

At Altus we provide full bookkeeping services, including a choice of cloud-based systems. We are always happy to advise.

Share

Severn Valley Business Group ©2017. All Rights Reserved.

newsletter software
Close
loading...