July 27, 2017

Take a holiday, but make a back up!

 

WellingtonConsulting_SocialMediaGraphic_Holidays_180717-01Many smaller business owners either don’t get round to taking a holiday, but when they do I guarantee that most will take their laptops and iPads with them. But what happens if it gets lost, broken or stolen while you are away?

 

 

Not a problem, we all make back-ups… right? But…

 

  • Are the programs you use for work on another computer?
  • Where is your customer list held?
  • Have you made copies of all the information your business needs to operate?

 

Do you back up? And do you keep that back up somewhere safe?

 

I only ask because you really wouldn’t like me to tell you how much it would cost to try and recover or (more realistically) recreate your data. It takes time as well as money and that is without measuring the distress and disruption to your business. At least the costs of recovery would be allowable against tax!

 

On a happier note, the evenings are still light, woolly jumpers are a distant memory and the heating bills are lovely and low. If you haven’t done so already, you still have time to gather together the information for your tax return and find out how much tax you need to pay by 31st January. If you wanted to, you could start paying money to HMRC now so as to spread the cost. And did you know they pay you interest if there is money sitting in your tax account for taxes not yet due?

 

Happy holidays.

 

 

 

 

WellingtonConsulting_SocialMediaGraphic_Holidays_180717-01

Have you got 31st July in your diary?

tax, self-assessment, HMRC, 31st July, accountant, herefordshire, monmouthshire, gloucestershire

Have you got 31st July in your diary?

 

We may all have put this matter to one side, filing the reminder letter in the unshrinking in-tray, but staying on top of our taxes is vitally important to all small businesses and those who are self employed.

The key is to not fear them or forget them!

 

I know you are busy, time so often our enemy and much better spent delivering our goods and services, but time has to be taken to keep our business affairs in order and avoid any nasty penalties. And if you don’t have the time, engage with someone who has both the time and the expertise.

Diary dates.

So, let’s start by reminding ourselves of the key dates for your diaries regarding taxes:

  • 5th October – registration date for individuals who are self-employed
  • 31st October –paper tax returns completed submission deadline
  • 31st January – online tax returns submission deadline
  • 31st January – deadline to pay taxes you owe
  • AND if you paid more than £1,000 tax on 31st January 2017, you may have more to pay by 31st July 2017.

How do you know if the July 31st deadline is applicable to you?

HMRC state this: ‘If you are self employed and earn enough to pay over £1,000 in tax and you have not already settled all tax due for the year to 5th April 2017, you will need to make a payment by 31st July this year.’

Also, if you have rental income or large amounts of investment income such as dividends, you may also be affected.

There is further information on the gov.juk website, or if you are unsure talk to your/an accountant.

You still have time.

If you haven’t already completed your tax returns, don’t panic! You can still avoid HMRC’s late filing penalties just start taking action now.

  • Gather together all your receipts, bills, bank statements, mileage logs, sales invoices and takings summaries
  • If you have already entered these into a spreadsheet or accounts software, such as QuickBooks Online, well done. It will make your life easier, and you will have a better handle on how the business is doing.
  • Gather other details of income such as bank interest, rental income (and related expenses), P60s and P45s and P11ds from any employment or pension you have. Also pension payments if you can deduct those from your tax bill
  • If you are married, discuss with your spouse whether there is benefit in reallocating some of the personal allowance to the other spouse (10% can be moved although some rules apply)

Decide if you are going to feel brave and prepare your own tax return. If so

And if you would rather have help making sure you are declaring everything and claiming all you can, call me and we can get things sorted.

Penny Lowe, Wellington Consulting

Visit my website to find out more about how I can help you and your business >

Computer data – how safe is yours?

Do you back up your accounts data onto the same machine you run your accounts software on – even if we are only talking about Excel?

I recently had a call from a client asking them to send me the backup of the data they had sent me for their accounts as their computer had died and I had the only recent backup. Thankfully their systems are good, with this one exception, so they have been able to get up and running quickly.

What would you do?

What would you do?

Another client has sent me their books but had a fire during the year, which included the computer so half the information is in paper format only. It may take a bit longer than usual to prepare their accounts. At least the paper survived to allow me to create the missing bits.

I am not perfect. All the business machines we use on a regular basis are backed each night at 1:30am however, we realised last month that my PAs machine, which lives in its bag when not in use, was missing out. She now has an external disk so she can preserve her work that it not being done directly to the cloud. I also treated it to an external fan so it does not cook in this hot weather.

If you have ever had computer failure, you will understand how long it can take to get up and running. Its not just a case of restoring your computer data. The important thing to remember from an HMRC viewpoint is that you have to keep your records for 6 years plus current so if you change accounts systems over that time you might want to cut a CD/DVD of the data before moving on so that, should the need arise, it could be accessed with help if needed.

If you back up onto a memory stick, make sure it is not only one. One of my clients has a different colour one for each day of the week. Nice touch and certainly avoids confusion. The big question is how much data do you need? I know my backups take about an hour and a half to cloud each night but that includes emails, word documents, photos, spreadsheets as well as mine, and my clients, accounts data. Have a think on what you would struggle to recreate and make sure you don’t wish you had got round to it before.

Business Advice From Berkshire : How Easy it it to change accountant?

How easy is it to change accountant?

I have been asked this twice in the last week, so I thought I would explain the process.

Before changing, decide what you don’t like about the existing one which is causing you to consider moving. It is their fault or yours? This might sound harsh but if you find their bill high, is it the rates they charge per hour or, do you have to be chased and ask them to work miracles with an incomplete box of bills and till rolls? The reason I ask is what is going to change if you change accountant.

forecast

Another reason quoted for wanting to change accountant is that the existing firm only put together the accounts and tell you how much tax to pay. They do not advise or get involved on a more regular basis. Why is this? Is it because you are trying to keep your bills to a minimum and therefore just asked for the minimum legally required, or is the firm not set up to do more than a production line approach to your accounts? Even if you have decided to change accountant, you still need to answer these questions so you don’t replicate your unhappiness with the next one.

Having made your decision you can then proceed:

Step 1 – Find an alternative accountant who a) you feel happy with and that you find approachable; b) can provide the breadth of services you require; c) has the capacity to take on the work you want doing within the timescale you need d) that is open about their method of charging; e) that can provide references unless you have approached them through recommendation of a friend or business colleague; f) that is a member of one of the accounting bodies. This does not have to be Chartered or Certified (unless you have a big company that needs an audit) but some recognised organisation that you could complain to or contact if you are having difficulties. Mine is the Association of Accounting Technicians where I am registered as a Member In Practice and get checked up on by visits to my practice. I also have a registered ‘understudy’ in case I get run over by a bus. This means clients will get looked after until a long term solution is agreed. Ideally go and visit a couple of accountants so you can compare and contrast. Don’t forget to let the unsuccessful candidate know.

Step 2 – Notify your existing accountant that you no longer require their services and give them the details of your new accountant. This gives them authority to disclose the information. Let your new accountant know the details of the old accountant and that they have been notified of your intended move.

Step 3 – The new accountant will write to the old accountant asking for all relevant information and if there is any reason that the new accountant should not act for you. The old accountant should then send the new accountant ‘everything’ relevant. They may delay sending the information if there is an outstanding bill. They are entitled to do this.

Step 4 – The new accountant will send you an engagement letter setting out what services they have agreed to provide and any contractual type things such as payment terms.  You usually have to sign and return a copy. If not already done, you may also be asked to complete a form 64-8. This is sent/submitted to HMRC and gives HMRC  the authority to talk to the accountant about your/your business affairs.

And that’s it. Your new accountant does what is needed/requested and you pay them. Regarding timing, any time of year is possible but half way through the accountant preparing your annual accounts will cost you a little more as work may need to be done twice. The new accountant may want to redo the bit the old accountant had started. Payroll is better transferred in April but can actually be done at any time.

Let me know which of your questions I haven’t answered!

Business Advice from Berkshire: Embrace new technology

I tend to be hesitant to embrace technology, but once I try it, I often treat it as any other tool. One example is to use video to put across your message. I made a video to promote my book Understanding Accouts for the UK Business Owner (www.understanding-accounts.co.uk) when it first came out and that video took a lot longer to make than this.

Well, I have given it a go, and here is the result of my first attempt!

Click on the link below – its very short and to the point.

WCON 1

Business Advice From Berkshire: Increase Your Profits – The Easy Way

Many business owners can get in a rut and keep doing what they have always done. Now is the time to change. Whatever you are doing, there are some things that you should do differently. What are those things in your business?

Firstly, make sure you know what you are spending your money on. Do you know what all the payments are for? Are you still getting benefit from what you are paying out? Are you getting the best deal?

My broadbaIncrase Your Profitsnd was slowing down to the point it was becoming unusable. I have BT Infinity and so I believed it shouldn’t be that bad. I gave in, resigned myself to the fact I would spend hours on the phone and took up the challenge of getting back the speed I was used to. To cut a long story short, after a one hour three minute phone call, my service is working faster than it has done for some while, I am having a new ‘box’ delivered on Wednesday which is three models up from the one I have and will almost double the speed, I will have a year’s cover and my internet will cost me £2 per month less. Time well spent.

I have also reviewed the quality of service I was getting from some of my suppliers and have given them notice and currently sourcing different ones. I am now better educated as to what I need and in a stronger position as a customer than I was when I first needed their services. You may find yourself in a similar position.

Secondly, are you charging the right price? Have your costs, including delivery costs, risen gradually over time and you have not made the necessary adjustments to your prices? Have you clearly defined what you are supplying to your customers so they don’t keep getting free add-ons? I am not just talking about putting your prices up, but simply charging correctly for what you do supply.

If you want to hear more ideas look at the Dates and Events section of my business website at Wellington Consulting and see what takes your fancy. http://wcon.co.uk/dates-events

If you have any suggestions, please leave them below to share with others.

Business Advice from Berkshire – What will make the difference?

In many businesses the most precious asset is the staff. Without good, knowledgeable, dedicated staff you cannot expect to have an outstanding business.

 What do you put in place to ensure your business is the best it can be? It may be something as simple as a headset for the phone so that staff can easily make notes while talking to prospects and customers. This also means they don’t get a crick in their neck and are happy to keep working.

penx Another area that can make a difference is knowledge. Are your staff fully trained to do what you are asking them. I recently spent a day in Somerset with an experienced member of staff who felt she was not using her accounts software to the full so the business hired me for a day’s consultancy, including the cost of travel. They realised the benefit of using what they had better, rather than being average and struggling on as they were. I am often asked to work one to one with a firm as they ‘got the software some time ago but never had any formal training’. By the end of the day they kick themselves when they realise what they could have been doing and the time they could have been saving. All it took was a small investment to quickly get returns that would last them for many years. Even if they changed the software, they can never lose the skill and expectation of what can be achieved.

 As you know, I am a great believer in training and would ask you include it in your budget. You wouldn’t give someone a ball of wool and needles and expect them to knit a jumper. Even if they knew how to knit, they would need a pattern to follow and some guidance as to the expected shape and size. How often do you request something from your staff without giving them the skills and full picture of what is expected?

What can you think of that can make the difference between being an average and being a good supplier to your customers – and your staff? Remember, you are also staff of your business so this applies to YOU!

Business Advice from Berkshire – What lessons have you learned?

Having exhibited at The Business Show at Olympia recently, it gave me the opportunity to speak with many business owners and would be business owners.

Two topics kept re-occurring. The first was that many accountants are not good at communicating with their clients and the other was that successful businesses keep a careful eye on their figures. I believe both the above to be true, but what I found interesting is the number of times I heard them being said to be over the two days of the show.

Penny WellingtonTaking the first point, difficulty in communication, what can be done to address this? If you go on holiday to a country where a different language is spoken, you know it makes sense to learn a few words even if only to be polite and be able to say thank you. The more vocabulary you learn, the easier it is for you and the natives. In many countries, the local population have learned English which means we can take the lazy approach and still be understood without having to put in too much effort. Is it possible to take this approach with your accountant? Learn a bit about their language and what they are doing and it will be much easier for both of you.

The second topic really leads on from the first. By taking an interest in the figures – and by this I don’t mean you actually have to do them – you can monitor the current position of the business and realistically plan for the future. Many business owners would like to be in this position, but expect to do so without learning the basics.

If you do decide to learn the language – and a bit about the culture – I can guarantee it will make a difference to your business. Remember Finance for Business Owners is one of the courses I offer. I also work with larger businesses where the Finance Director believes ‘nobody understands him’. This can be true as the MD is too afraid to ask questions in case he can’t understand the answer. A course in language and Book coverculture can mean everyone can get the most from their holiday – oops I mean work on shaping the business and growing the profits.

Get in touch to book a bespoke course, or for the dates of the classroom courses. Also share your own thoughts on your learnings.

Business Advice from Berkshire – I’ve got round to it – when will you?

There are some things that sit towards the bottom of my ‘to do’ list as I know I ought to do them so won’t actually remove them. They won’t make me instant money nor will they, on the surface, cost me money by not doing them, so why don’t I choose to do them?

IntuitSometimes it just takes will power to go ahead. I have been training QuickBooks since 2004 and been listed as QuickBooks Advisor for many years. Last year they bought out an accreditation scheme so you could take an exam, and become a ‘certified’ version. I downloaded the course material, read it through, decided it was fine as I knew and taught most of it, but never did the exam. This year they have also bought out an accreditation for their On-Line QuickBooks so, as I am on the stand next to Intuit – authors of QuickBooks at The Business Show at Olympia, I thought perhaps I ought to go for it. I am glad to say I passed both exams to a high level so can now be one of their elite team. The only question now is why didn’t I get round to it before?

I have done my personal tax return, I have done my VAT return, how about you? Are there jobs that you don’t fancy that are not time critical yet but you will feel so much better when they are done. It may be they were part of this year’s New Year Resolution. There is still time to complete it before the end of this year.

Go on, take the plunge and share with me what you have or will achieve over the next month.

Business Advice from Berkshire – Are your Accounts in order ?

Earlier this year I wrote an article with the above title. Earlier this week, I was sent a copy. It had been reproduced in The Entrepreneur Magazine (November 2013 edition page 53).

The content is still true today. If you would like to get hold of a copy of the text, drop me a line and I can send it to you – or you could buy the magazine!

thumbsWhy do I mention this? Well, a client of mine, having signed the accounts emailed me and asked – what about the other £10,000 of dividends I took in March, where do they show in the accounts? I have looked at his bank statements, and can only see £2,500 taken during March. The answer is that it was June he actually withdrew the amount – his emails also confirm this. I do feel better now.

What this tells me is that he has looked at the accounts, he has understood them and although he leaves entering the transactions to me, he is aware of what has gone on. The only thing I would say is he could do with looking at them a little more often. How often do you look at yours? As we are nearing Christmas, he would like to know how large a dividend he can take. Although I can advise on the basis of profits to date and potential tax bill as a result, I do not know whether his main contracts are coming to an end, how much work he will be doing over Christmas? It is this sort of information that he, being closer to the business, knows which I don’t without quizzing him. What I can suggest is that he might consider not drawing some money now and waiting for his personal tax bill which will be due the end of January. Even as director of a company, his profits are high enough to potentially push him into higher rate tax when salary is added to dividends. Do you know how much you need to put aside for the end of January?

Book coverBy keeping your accounts up to date, you and your accountant can do tax planning. Another client asked how much he could back date in pension contributions to reduce his tax bill, having explained I was not an IFA and could not advise on pensions, I suggested he saw one soon rather than later. More opportunity for planning if you know where you are now.

I am looking forward to hearing what you have spotted in your accounts. Remember, if you want a copy of the printed article, let me know by dropping me an email or leave a message below.