September 21, 2018

How time passes. Can’t believe I’m 15!

Open and honest note from my experiences.

This month is 15 years since I started Wellington Consulting. When I started I had been made redundant twice and decided to take my fate into my own hands and so the company was born.

Unlike many start-up businesses, I had the advantage of understanding the relationship between sales revenue and costs; the importance of cash flow; and the time it takes to generate income from a standstill. But knowing and applying is not the same thing!

When I started, much of my work was larger, on-going work for other businesses, but wanting to help struggling businesses and getting paid by them caused more than a few sleepless nights. This does not mean I avoid helping struggling businesses, but I do make sure that I also work with successful and growing businesses to protect cash flow and my own business.

Nowadays, I make sure I get paid even if it takes a while to turn a business around, so it is not as though the successful clients are subsidising the messy ones. My aim is to turn these ones around so that they too become successful and are less dependent on me for the day to day issues.

I am sometimes asked what sectors I deal with and my answer must be a wide variety, from heavy engineering to children’s play centre; from retail to consultant; from construction to homeopathy. I am lucky to have this diverse range of industry sectors to add variety to my work and also give me a broader view of life.

One of the biggest factors that has helped my business is knowing when to ask for help.

Although I can do a broad range of tasks within the business, I have, through networking, met people who can do some of these better and faster, because they have the skills and enjoy doing it. I am therefor happy to outsource some tasks as this frees me up to do what I enjoy while knowing it is done and done better than I could do. This even applies to cleaning the house. If I can free up 2 hours a week and earn more in those two hours than I am paying someone else, why wouldn’t I do what I enjoy and have a net income as a result. If you look upon it like that it would be madness not to.

For many business people, this is the view of book-keeping and accounts. In order to delegate well, you need to understand what is involved and the expected outcome. It is the task you are outsourcing, not the responsibility. Learn about the task so you can decide whether you enjoy it, how you can help someone you might engage to do it so you can achieve the best outcome for you and the business.

Remember a business is about its people as much as its products or services, so a big thank you to clients and suppliers alike who have helped me enjoy my business ad make it successful.

Do you want to increase your profits?

Wellington Consulting, accountant, business coach, herefordshire, monmouthshire

Wellington Consulting – helping you leap ahead in 2018

 

I assume the answer is yes, so the question is how? Well, to start with do you know what your profits were for 2017?

Now that 2017 is finished, do you know what your profits were for the calendar year? If your accounts year end is March, you may tell me that you know what that figure was, but we are nearly round to March again, so what is your year to date figure?

Business is ongoing, so your record keeping and review of your figures should be as well. Without this, how do you know if you are covering costs, if you are able to offer a discount, or need to raise your prices?

To increase your profits, you must know where you are starting from. Note, I have not said increase sales, like most other people you hear, because at the end of the day it is what you have left after costs that really matters. If you start getting more sales by selling at a loss, you have achieved increased sales, but you end up with less in your pocket for more ‘work’, so looking at costs is also important. Even, simply, cutting costs can improve your profits.

You probably have plans for 2018, have you discussed them with anyone else and had them validated? Who is going to make sure you stay on track? That is what working with a business coach can give you. Someone to help you clarify what you want to achieve and work with you to make sure you do achieve it.

Some coaches have ‘proven systems’, but this relies on you having the plans that fit their system. My approach is that each business owner is an individual, so listening and working with them is what is important. Understanding that ‘life’ can sometimes get in the way, but helping you keep focus so you can strike the right balance to still achieve what you want from your business.

If you want to know more about working with a business coach to improve your profits, give me a call or drop me a lime when it would be good to call you.

May I wish you a Happy and Profitable New Year

Piles of leaves in the garden. Piles of receipts in the office?

Piles of leaves in the garden. Piles of receipts in the office?

Piles of leaves in the garden. Piles of receipts in the office?

The leaves are falling and we are preparing for the colder months. Does this include making sure you have systems in place for recording your businesses receipts and payments?

Do you sometimes feel that as fast as you brush up the leaves the wind scatters them about, or do you have a leaf vacuum that gathers them all together leaving a neat looking garden or drive and a contained volume of leaves to file in the compost heap or bonfire.

Perhaps your book-keeping is the same. You dip into it on occasions but it keeps escaping. Wouldn’t it be better to have systems in place to capture the information. I am not suggesting you set light to the papers once they have been input, but as HMRC will accept electronic copies of documents now, you could do.

Some book-keeping systems, including QuickBooks, allow you to take a photo of the receipt with your phone and upload it to the cloud. You then tell the cloud what it was for and how it was paid and the software does the rest. Couldn’t really be simpler. The great thing is that you are doing little and often rather than having this elephant that is too big to eat.

In speaking to some non-clients, their view is that elephants are not just big and scary but have hidden tricks up their sleeve. What they meant by this is there are some payments that they just don’t know what to do with or how to classify. My suggestion is have a heading of ‘Ask My Accountant’. This means that the payment (or receipt) can be logged in your system with lots of notes to help remind you later and then you can move on. An accountant will be grateful for drawing ‘funnies’ to their attention in this way rather than they be missing, or hidden somewhere. Your accountant knows that, with information supplied by you, the buck stops with them regarding classification and whether an item is tax allowable or not. That is part of what you pay them for.

Enjoy your accounts and this will help you grow your business.

How much tax will you need to pay in January?

 

Tax, Weliington Consulting, Accountant

How much tax do I need to pay?

 

Every year I hear the same question:

 

‘Where am I going to get the money from to pay my tax bill?’

 

 This is closely followed by:

 

‘How much tax do I need to pay?’

 

The truth is, that from 6th April 2017 the calculation could have been done to establish how much tax you are required to pay. You may have had to wait for statement of interest from savings accounts, P11d forms, if you receive benefits from your employer, or rental statements, if you use an agent to manage your rental properties, but the truth is that by now you should have all the information available to complete it today.

 

If you haven’t, you need to ask ‘why not?’ because…

 

If you run a business, you need to know how profitable it is, where costs can be saved or what investment is needed. You need to be in charge. Leaving the calculations until after the end of the year is not good for sustainability. How do you know how much money to put aside for tax, unless you know what profits you are making? How do you know that you are charging enough to cover the costs, including paying you, unless you know what income and costs you have? If you are not up to date now, when will you be up to date?

 

Note: If you prefer to fill in a paper tax return, you have until 31st October to make sure it arrives with HMRC, otherwise it will have to be done on-line.

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Grow your business by understanding your accounts

Most business owners are not accountants. This may sound obvious but understanding your accounts is one skill that every business owner needs if they are going to succeed.

 

Employing an accountant is a good idea, but an even better one is for you, as the business owner to understand what the output that you pay for actually means.

 

At a meeting last week, a client said that they realised they needed to be more involved when the area manager ask them about sales figures – they were fine with that. They were then asked about the overheads, what size was the electricity bill typically? How much did they have to pay for waste removal? They realised that all this information went into a carrier bag and was passed to their accountant. Although all the information was input into an on-line system so they could see it whenever they wanted – they had purely focused on sales and never looked at the rest.

 

If you have not bothered, or were too scared to ask, I suggest you get a copy of Understanding Your Accounts for the UK business owner by going to www.understanding-accounts.co.uk and purchasing your own copy. This book explains what the figures mean, which to worry about by using plain English and examples.

 

IT has taken me a while to produce the book but it was released 7th February 2013 so is up to date and purely focuses on the UK.

 

So … Enjoy Accounts and Grow Your Business