Networking is a hugely popular activity for entrepreneurs and managers, and there are many compelling business reasons why you need to spend more time, if you don’t already, you need to spend more time at your local group.
Networking groups attract people from all sorts of businesses, so the likelihood of finding new client leads and even opening up new opportunities is very high. And if yours is a B2C business, well, every single person at every single networking group is a consumer in their own right. If they like you, they’ll buy from you – so networking has got to make good business sense.
It’s not what you know, it’s who you know
You must have heard of the phrase ‘people buy people’. You could have the best product or service in the world, but if people don’t know about you, why would they buy it from you rather than someone else? By getting to know people at networking meetings, especially if you’ve earnt their trust and respect, you’re more likely to come first to mind when they realise they need/want what you provide.
If you have a growing business, you may well have taken on a bookkeeper to help you do the accounts. But grow the business a bit further and you will need to supplement the bookkeeping role with the services of an accountant.
The problem is that there is an in-between time when you need a management accountant, but cannot afford to employ someone on a full-time basis. This is when you need the services of a virtual financial director – a qualified accountant who will spend as much time and energy on your business as you need, but who will work only for the amount of time you need them.
In its 2017 annual Audit Quality Thematic Review, the Financial Reporting Council found nearly a third of audits carried out “required more than just limited improvements”. In reporting about the review, the Financial Times pointed out that recent high-profile accounting scandals “raise questions about whether auditors are being appropriately sceptical when they scrutinise company accounts”, quoting a £4m fine the FRC had charged Deloitte for its audits of Aero, and a £3m fine against PwC for its audits of Yorkshire-based sub-prime lender Cattles.
Relationship-building with clients
We understand that as the majority of companies start out small – many as sole traders – directors prefer to use the services of a sole practitioner accountant or a small accountancy practice. It’s understandable that the accountant and the client will build a very good relationship with each other, with a lot of trust and loyalty on both sides.
As a business expands, it is inevitable that the director will want that relationship with the accountant to continue – and so it should. The problem for the accountant is that if the company is ever in a position to need auditing, it could become problematic if they don’t have the training and experience to undertake the task.
Many accountants in this situation are hugely reluctant to introduce their client to another accountancy firm as there is a risk that their client could be poached by a larger company. Quite often they muddle through with their own audit – but without the specialist training, experience and accountability, it could leave them vulnerable.
The government has announced that all measures dropped from the Finance Act will be reinstated in a Second Finance Bill which will be introduced as soon as possible after MPs return to parliament in September.
All policies originally announced to start from April 2017, including the significant changes to the taxation of non-domiciled individuals and loss relief for companies, will be effective from this date.
The government has also confirmed an amendment to the implementation of Making Tax Digital (‘MTD’). Under the reformed timetable from 2019, businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, for VAT purposes only. (more…)
If you run a charity, you’ll know that when it comes to doing the accounts, there are more complications than a ‘for profit’ business. Charity Accountants do understand these complications and the most effective ways to address these without any interruption to your operation.
The accounting requirements for charities are onerous and apply to even the smallest charity. Visit the Charity Commission for England and Wales’ website for the rules around reporting, accounting and audits depending on the size and type of charity.
When it comes to finances, there is a basic requirement to submit accounts and returns to the Charity Commission, as well as a trustees’ annual report, a set of accounts and an annual tax return. The accounting process needed also depends on the type of charity, whether it’s a Trust, a Charity Incorporated Organisation (CIO) or a charitable company limited by guarantee.
We have for several years been reminding clients that “enjoying” free car fuel from their employer for their private mileage can often be a bad deal.
If, for example, you have a diesel car with CO2 emissions of 140 grams per kilometre, you pay 120 pence per litre for fuel, manage an average of 35 miles per gallon, and are a 40% taxpayer, you would need to drive more than 17,000 private miles during the current tax year before you were better off with the so-called benefit.
If, in the same situation, you are also the owner of the company, there would be the additional cost of Class 1A contributions on the benefit. After corporation tax relief this would cost the company an extra £758 so you would need to clock up private mileage of over 22,000 miles before you were ahead of the game.
Even with a petrol driven car with CO2 emissions of 105 g/km, you would still need to drive more than 11,500 private miles (or 14,500 private miles for the company owner) in order to really benefit from “free” fuel.
Under company law, all businesses must prepare annual accounts, as well as annual tax returns, to file with HMRC and Companies House. Many start-ups and small businesses hire an accountant to write these reports and leave it there, but when a company begins to expand, they tend to hire a management accountant to not only generate quarterly or monthly management accounts, but also to make the accounts more meaningful for the future success of the organisation. Below is a management accounting guide for small business owners:
With management accounting, the more frequent production of reports enables managers and directors to use the up-to-date financial information to help them make better-informed business decisions and maintain effective control over corporate resources.
After the production of each report, the accountant will help clients to analyse the figures in order to work out how well, or otherwise, the company is doing. The frequency of analysis can help flag up the products and services that bring in the greatest amount of money, and those that aren’t living up to expectations, as well as help, identify and control wastage, improve cash flow and reduce expenses.
The regularity with which management accounts are generated depends on the individual company. Most will only want quarterly figures, but larger companies tend to do theirs on a monthly basis.
Because of the forthcoming General Election, the Government have been forced to cut down the size of the Finance Act (to a mere 156 pages!) in order to get essential tax provisions into law before Parliament is dissolved.
One of the omissions is MTD, although it is widely expected that this will be reintroduced after the election.
However, there has been more criticism of the proposals. The Office of Budget Responsibility has said that HMRC’s estimates of the improved tax take from MTC were highly uncertain and the House of Lords Economic Affairs Committee has also cast doubt on the estimates.
The Federation of Small Businesses has estimated that the introduction of MTD could cost businesses around £3,000 per year in time, salaries and fees.
Some member of the Treasury Committee have suggested that the Government should delay any implementation until a full pilot scheme has been run and assessed.
As ever with MTD, we will have to wait and see!
As you drive across the border into the county of Hertfordshire, you’re greeted by a road sign which says “Hertfordshire. County of Opportunity”.
When Hertfordshire County Council (HCC) published its Corporate Plan for 2013-17, they explained why they came up with this slogan: “We want Hertfordshire to remain a county where people have the opportunity to live healthy, fulfilling lives in thriving, prosperous communities”.
In terms of prosperity, HCC stated it was working towards a “business-friendly environment where initiative is encouraged and celebrated” in order to create a strong, resilient and successful economy.
But the Corporate Plan went further than just making Hertfordshire a great place to do business, it also encompassed the community as a whole. The plan focused on giving residents the opportunity to maximise their potential by supporting those in difficulties, giving them a clean and green environment to live in, and tackling the overall health and wellbeing of everyone living in the county.
Knowing what your gross profit and net profit are is a fundamental part of running a business. In the simplest terms:
Gross profit – you calculate what your gross profit is by taking your total turnover, minus the costs of the goods sold.
Net profit – this is what’s also known as your bottom line. It’s what’s left after you’ve deducted all your costs from your total turnover, i.e. the costs to you of the goods as well as all your business overheads, staff costs, interest on any business loans etc.