November 21, 2017

Just take a picture of the bill and the machine will do the rest.

Accounts, receipt management, business owners, recieptbank

Wouldn’t it be great if you just take a picture of the bill and let the machine do the rest.

That’s how some people would like to see their book-keeping happen. Although it’s not quite that simple, but it can be nearly that easy.

Using an app on your phone from Receipt Bank ©, the picture goes up to the cloud. The picture is then read, classified and can automatically be pushed into QuickBooks, a book-keeping and accounts programme that you have probably seen advertised on TV over the last year. You know your business better than the machine so if it’s guessed wrong or it hasn’t a clue, then you can go through these items and tell it what they are. If you don’t know where they should go in the accounts, I set up a heading called ‘Ask Penny’. I can then go through these items so you, or the system, can get it right next time.

What’s the benefit? Keeping your books up to date means you don’t have that elephant in the corner waiting to be tackled that just gets bigger. Another reason is you can make decisions based on facts; another is you can track the bottom line as your business grows. Another benefit is you will be well used to your system when HMRC bring in their Making Tax Digital (MTD) for businesses requiring quarterly reporting and digital book-keeping. Each transaction in your system will be supported by a picture of the bill and this is acceptable to HMRC so you won’t have to keep all that paper.

If you want to know more about how this would work for you, or simply to understand the figures better, or want to grow your business, get in touch

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.

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 >

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.

Business Advice from Berkshire – What are you hiding ?

Do you sometimes wonder why things are not going to plan? Do you have a plan? If I gave you a wipe board and asked you to draw up where you were advertising, where your leads were coming from, what business you were getting from these leads, and what leads you were getting from this new business, would the board be big enough?

So, having drawn up what is actually happening, how does this compare to you plan? Sometimes doing this simple exercise highlights where assumptions have been made, where links are missing and where you could do better.

Penny tennisRecently I was asked how my Finance for Business Owners courses were selling. Not as well as I had hoped was my answer. I then did the exercise above, and guess what, I found out why. Having set up the details on several course sites, I had not set the course to ‘Live’. It is now on Eventbrite, with dates, and the ability for customers to pay. The next thing to do is make sure I tell people!

Another stage I was falling down on was referral business. I had good intentions to contact course attendees, but intentions don’t make things happen, actions do. I have contacted those I taught last month to ask them for feedback. The feedback included “Penny’s presentation was very practical with anecdotes relating to real situations.” And “I found it to be extremely helpful and gave me confidence when I provided training for our client.” This is from a firm of Chartered Accountants in Cornwall. Do I want lots of referral business in Cornwall? I do already have one client down there. But what it did mean was I could pass the contact details on to a firm of Accountants in Kent who were asking about my QuickBooks for Accountants course.

It is good to have an excellent product or service, but even better to tell people about it! That is the bit that makes the money. Just make sure you are charging enough and not just doing it because you enjoy it. See, I had to bring figures into it somehow.

Should you wish to attend the Business Owners course, either give us a call or go ahead and book via Eventbrite. https://pennylowe.eventbrite.co.uk

Advice from Berkshire: Doing it is not as bad as you think!

What jobs do you have that you keep putting off? What will it take to make you do them?

All of us have something where the thought of doing it is worse than the act itself. Business owners often put off doing the tasks that they believe are not why they went into business. For some this may be as simple as changing the ink in the printer, for others it could be chasing outstanding invoices, for me it was raising my presence on the internet by putting videos on YouTube.

wconI knew it needed doing, some years ago I went on a very good course that showed me all the way through from researching what I should focus on, to filming, to uploading onto YouTube. I did one ‘film’, struggled with technology so put off doing any more. Earlier this year I did another to promote my book ‘Understanding Accounts for the UK Business Owner’ (www.understanding-accounts.co.uk) but then stalled again. I was happy with content, happy with filming but didn’t want to waste my time if I couldn’t upload it.

The truth is that technology has moved on over recent years. Uploading is easy. There are options to automatically resize, trim and other editor type tasks. Employing a professional is the best option, but I can now say I am prepared to have a go. I know what is needed and could give them the best chance to produce an excellent job, or I can do an adequate job for my purpose. Take a look at my latest Youtube offering here

Yes, you know what I am going to say next. Keeping your books of account up to date are just the same. The thought is worse than the deed. Doing it little and often means it is not that giant intimidating you and causing you to be like a rabbit in the headlights and stand there immobilised. Technology has moved on. If someone can show you what to do each week, and after several weeks you realise that it is not as bad as you thought, you can then keep doing it. You then start to see the fruits of your labour. Keeping on top of customer debts, planning your cash flow, seeing which activities within the business are bringing in the money and which are costing you. I was training a dentist last Friday and I suggested having a heading called ‘don’t know’ so if he met a bank payment he didn’t recognise he could park it and come back to it later rather than having an excuse to abandon his work.

Who will you choose to help you get started? Wellington Consulting offer private and very small group classes on Finance for the Business Owner. If you compare the cost of a course with the extra profits you can make as a result, you would be making a wise business decision to come along. Contact us at info@wcon.co.uk to book your place.

The courses are mostly held in Wokingham, but if you would like me to travel to you, I am happy to do so, providing you cover the costs. Yesterday I had an enquiry from Truro in Cornwall today I am in Croydon and tomorrow in London. Thursday I have a course in Wokingham and Friday I will be doing accounts work – and replying to emails. Further filming may have to wait till Saturday, but I now know that I can do it.

Business Advice from Berkshire – Would you accept Cash ?

Would you accept cash…

And not put it through the books? With all the current discussion concerning tax evasion and tax avoidance there are still grey areas. You may say that the example above is clearly evasion i.e. personally pocketing money which correctly should be accounted for by the business and tax, and possibly VAT, paid over to HMRC.

Birmingham-20121029-00114What if the cash received is for something other than you usual business activity. An electrician takes some rubbish down to the tip for a neighbour and gets paid for it. Is that taxable income? If he trades as a sole trader, all activities should be included in his tax return – so yes. But is this fair?

If you are sticking to the rules, fairness does not come into it. The rules say that international firms can recharge for services within the group which then means there may be very little income left to charge under the UK tax regime – is this fair?

How well do you sleep at night? Does it matter what others do if you are happy with your decision and any consequences? Using an accountant will help you understand what the rules are. As with speeding, whether you stick to the rules is up to you. Is your accountant a passenger in your car, keeping an eye on your speed, or did you leave them at the last stop and are keeping him in the dark as to what speed you did?

Tax evasion is breaking the speed limit, tax avoidance is using the dual carriageway bypass to get to your destination faster. When you are Book coverpreparing your accounts or submitting your tax return, which route do you take to your destination?

Post your thoughts below

How NOT to make a loss

This week has not been the most productive for me with issues of expected deliveries not happening, computers not playing and tax offices asking for what they already have – and me spending over an hour on the telephone (mostly on hold) to read HMRC what they had been given two months ago. I am sure you have had weeks like this. You get to Friday and wonder how much money the business has made as a direct result of your efforts.

Blank view pennyOther weeks the opposite happens, I get through to the tax office within a couple of minutes, speak to a nice helpful person at HMRC who suggests they can do something for the benefit of the client before I even ask it. Clients turn up to an appointment with their cheque book in hand and request to settle their account at the end of the meeting and then agree the date of the next meeting – so it is not they want to dispense with my services! Others send an email the same day as I send them the invoice, saying they have transferred the money into the company bank account.

Which sort of week would you rather have? What has this got to do with making a loss? The fact of the matter is that life is not perfect and by accepting this, you can build in ‘slack’ to cover the cost of repairs, the lost time, the extra staff salaries. When some new business owners come to me, they have worked out their expected revenue without appreciating the time needed to do marketing, administration, documentation and other roles that may have been done for them in a corporate environment. Even in larger firms, senior staff seem to think that preparing for an exhibition and attending it can just be done in addition to the usual work. Staff cannot be making sales calls while driving to and assembling a stand. When looking at costs, the set up day needs to be taken into account as well as fuel, accommodation etc.

forecastAs with much of business success it is all down to planning. Plan for the unproductive time and associated costs and base the sales required on having to cover these costs as well as those of the ‘good’ sales. If you do this, you will avoid a loss and if the worst doesn’t happen, you can make an even bigger profit.

If you need help in identifying costs you need to include in your plans, get in touch. If you want to share some of the hidden costs you have discovered, please reveal all below.